QUARTERLY REPORT April – June 2008

Key Points

• Trial mining and processing commences as planned
• First Gill reef ore parcel grade is within expected range
• Regional exploration commences with promising results

Summary

Rod Hanson, Managing Director & CEO comment: “The trial mining and production phase at Bendigo is underway. Activities are occurring to plan and our data collection systems are working extremely well. Treatment of the first parcel of Gill reef ore, the new reef on the Garden Gully line, commenced late in the quarter and continued into the new quarter.

“Encouraging results have also been received from our first phase of regional exploration drilling at Eaglehawk. This program is the first step in widening our exploration effort to test targets across the goldfield.

“The next few quarters will be an important time for the Company. A positive result from trial mining will confirm that we have developed a reliable method of
determining grade from drilling. This activity is critical to unlocking the value of the Bendigo Goldfield.

“Looking outside Bendigo, the weak equity market is increasing the number and quality of opportunities available to the Company. I am keen to leverage our
mine development and operating skills on other assets, so long as these assets add significant value for our shareholders.”

Exploration & Development

• Trial mining commenced as planned late in the June quarter. The trial campaign is progressing well with high quality and consistent data being collected.
• Development within Gill reef over a length of 53 metres displays robust, quartz rich mineralisation.
• The Kangaroo Flat plant was commissioned on low grade stocks, with the first ore being processed through the plant late in the quarter.
• The grade of the first Gill reef mining block was 5.7 g/t gold, which is within the expected range for this small parcel of ore.
• Regional exploration has commenced with the initial holes completed at Eaglehawk, north of Bendigo. Target rocks were intersected as planned, along with prospective features such as laminated quartz veins. Follow-up drilling is underway.

Corporate

• Cash in bank at 30 June 2008 was $48.6 million ($53.0 million as at 31 March 2008).
• Revenue from planned gold sales is expected to substantially cover the cost associated with trial mining and processing.
• External opportunities continue to be carefully assessed.