Quarterly Report October – December 2009

Key Points

• Quarterly gold production of 19,228 oz
• Mine operating cashflow of $7 million
• Strong exploration results from Henty
• $54.8 million cash in bank

Summary

Rod Hanson, Managing Director & CEO comment: “Our Henty and Kangaroo Flat Mines generated $7 million operating cashflow during the December quarter and we remain firmly on track to achieve our production guidance of 80-90,000 oz of gold in FY10. The exploration results from Henty are impressive and exceed our  initial expectations. We have discovered additional gold mineralisation in all of the areas we have tested. Surface drilling is also underway targeting potential updip  repetitions of the main ore trend, so it is an exciting time for the mine. Exploration at Kangaroo Flat has confirmed the small high-grade nature of the Dumble reef” said Mr Hanson.

Production

• Total Company gold production of 19,228 oz at a cash operating cost of A$889/oz (23,389 oz gold Sep 09 qtr).
• The Henty Gold Mine produced 9791 oz at a cash cost of A$970/oz, whilst the Kangaroo Flat Mine delivered 9437 oz at a cost of A$806/oz. Henty production was impacted by a number of short term scheduling issues, whereas Kangaroo Flat production was in line with expectations.
• Production guidance of 80-90,000 oz for FY10 is unchanged, with 42,617 oz at A$763/oz delivered for 1H of FY10.
• The upgrading of the Henty mining fleet is under assessment.

Exploration

Exploration at Henty has delivered extensions in four main areas to date:  Tyndall up-dip, Darwin Mid up-dip, Darwin South down-dip (best intersection of 9.1 metres at 11.8 g/t gold) and the Read Target (0.75 metres at 13.6 g/t gold).

The first surface drill program in several years commenced late in the quarter to test the extensive Henty up-dip target.

Assays received this quarter from the Dumble reef at the Kangaroo Flat Mine confirm high grades.

Corporate

• Gold sales receipts were $23.0 million during the quarter from the sale of 19,069 oz gold at an average price of A$1208/oz. Mine operating cashflow was positive $7 million.
• Cash in bank increased to $54.8 million at 30 December 2009 ($52.2 million at 30 Sep 2009).
• The Company’s interim financial result for the six months to 31 December 2009 is planned for release to the ASX on 24 February 2010.