QUARTERLY REPORT July – September 2010

Key Points

•  Quarterly gold production of 14,992 oz
• Discovery of Newton and Read Zones at Henty
• FY10 profit of $11.2 million and 0.5 cent dividend declared

Summary

Rod Hanson, Managing Director & CEO comment “Gold production for the September quarter was 14,992 ounces at a cash cost $1218/oz, in line with guidance. As  previously indicated the quarter was affected by lower than planned ore grades at Henty and Kangaroo Flat. Recently, ore grades have improved and our FY11  production guidance for the Company remains at 70-75,000 ounces.

“With the proposed BCD merger now behind us, we will continue to explore other options to grow the Company. The excellent drilling results from the Newton Zone at Henty demonstrate the exploration potential of our existing operations and our strong balance sheet will continue to support our plans to extend mine life and grow the Company” said Mr Hanson.

Production

• Total gold production of 14,922 oz at a cash operating cost of A$1218/oz (19,463 oz gold at A$976 in Jun 10 qtr). The Henty Gold Mine produced 8007 oz at a cash cost of $1306/oz, whilst the Kangaroo Flat Mine delivered 6915 oz at a cost of A$1116/oz.
• FY11 production guidance remains at 70-75,000 oz gold at cash cost of around $980/oz.

Exploration

• Drilling at the Newton Zone at Henty has exceeded early expectations, with a best result this quarter of 10.2 m at 12.2 g/t gold. This zone is potentially of a similar scale to the Tyndall Zone (Tyndall Zone resource of 72,700 oz at 30 June 2010).
• Early drilling at the Read Zone at Henty returned some outstanding results (including 5 m at 105 g/t gold). Follow up drilling has confirmed an extensive alteration zone, and also indicated that further drilling is required to better understand the potential of this zone.

Corporate

• Cash in bank was $37.6 million at 30 September 2010 ($57.2 million at 30 June 2010). Major cash outflows during the quarter related to the BCD merger $10.2M  ($5.2M equity acquisition plus $5M loan), dividend $2.5M, capital and exploration $6.6M and changes in working capital.
• FY10 profit result of $11.2 million and final unfranked dividend of 0.5 cent per share.
• The Company terminated the proposed merger with BCD, with BCD repaying its loan and accrued interest on 14 October.
• Announced a proposed name change to Unity Mining Ltd