QUARTERLY REPORT January – March 2010

Key Points

• Quarterly gold production of 17,747 oz
• Positive mine operating cashflow of $5 million
• Henty Tyndall infill results include 11.4 m at 15.4 g/t gold
• Cash in bank increased to $57.4 million

Summary

Rod Hanson, Managing Director & CEO comment: “Gold production for the quarter of 17,747 oz delivered $5.0 million in operating cashflow, increasing our cash balance to over $57 million, despite lower grades at the Henty Gold Mine. We have increased capital investment at Henty to support near-term productivity and grade  improvements. Positive results from infill drilling in the Tyndall Zone at Henty, which is planned to be a major ore source, and the continuing good news from Henty exploration bodes well for the future.

“At Kangaroo Flat we are testing exploration targets near our mine workings. Once these have been tested, the exploration strategy is likely to evolve into a more field-wide approach” said Mr Hanson.

Production

• Total gold production of 17,747 oz at a cash operating cost of A$984/oz (19,228 oz gold Dec 09 qtr).
• Henty Gold Mine produced 9623 oz at a cash cost of $963/oz whilst the Kangaroo Flat Mine delivered 8124 oz at A$1009/oz. Transitional issues at Henty continue to impact on grade. A $3.8 million capital investment program was approved with a new loader delivered late in the quarter, along with a hired truck and jumbo drill.
• Kangaroo Flat production was affected by the addition of known lower grade reefs into the mining schedule.
• Company production guidance of 80-90,000 oz for FY10 is maintained but achievement depends on a strong June quarter and in particular the realised grade.

Exploration

• A decision was taken to increase exploration activity at Henty to 5 drill rigs.
• The first phase of Henty Up-dip drilling has successfully shown that the alteration zone remains open towards the surface. Alteration has not, as previously thought, been terminated by the Henty fault. Anomalous gold  (incl. 3.9 m at 2.7 g/t) in Henty-style alteration has been returned to date.
• Strong infill drilling results from Tyndall Zone support an increase in the expected head grade.
• Exploration at Kangaroo Flat is testing a number of significant targets near existing mine workings. Future exploration will focus to the north of the goldfield and on  the extensive exploration licence.

Corporate

• Gold sales receipts were $24.2 million during the quarter from the sale of 19,686 oz gold at an average price of A$1227/oz. Mine operating cashflow was positive $5.0 million.
• Cash in bank increased to $57.4 million at 31 March 2010 (was $54.8 million at 31 December 2009).
• On the 23 February 2010, the Company announced an interim profit of $5.2 million for the six months ending 31 December 2009.