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a) fully paid ordinary shares of NuStar using the following formula: 

i) up to 30 June 2004 at $0.05 per NuStar Share; and 

ii) after 30 June 2004 but before 30 September 2004, the lower of: 

1. $0.065 per NuStar share; and 

2. 85% of the volume weighted average price of the NuStar shares on ASX during the 30 day period prior to the Conversion Date provided that the minimum strike price calculable is $0.05; or 

b) fully paid ordinary shares of the Company at $0.08 per share. 

At the Annual General Meeting of NuStar held on 12 December 2003, shareholders approved the issue of shares to Claymore should Claymore elect to convert the convertible note into fully paid shares in NuStar. Following this, Claymore converted $100,000 of the convertible note into 2,000,000 shares in NuStar which were issued on 23 December 2003. 

(4) On 9 July 2003, $5 million of the RCF Facility was repaid on receipt of the proceeds of the sale of the shares in Dioro Exploration NL. 

On 28 November 2003, the balance of the $7 million RCF Facility was converted at $0.08 per share into 87,500,000 fully paid ordinary shares. Interest and fees due were also converted at $0.08 into 8,184,932 fully paid ordinary shares. 

(5) On 8 May 2004, the Company entered into a margin lending facility with Galviston Pty Limited for $3,500,000. The amount is secured over the investment in NuStar. The market value of NuStar at 30 June 2004 was $18.4 million. 

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