• On 20 September 2004, NuStar announced that an agreement was reached in principle to acquire a royalty over the Paulsens Gold Project and an interest in the Wyloo Joint Venture – both held by the Company. 

• On 20 September 2004, the new Board announced that it had completed a review of the fi  nancial position and operations of the Company and had decided to divest a substantial part of its shareholding in NuStar with the following four separate but interrelated transactions: 

(a) an initial sale of 100 million NuStar shares to third parties at not less than $0.04 per share within seven business days; 

(b) the sale of the Paulsens 5% royalty owned by the Company to NuStar for not less than $5.1 million and the sale of the Company’s interest in the Pelican Joint Venture (adjacent to Paulsens) to NuStar; 

(c) the grant of an option to Claymore (as arranger of these transactions) to purchase 100 million NuStar shares at $0.05 per share at any time up to three months after the initial sale; and 

(d) a Share Swap of NuStar shares for Company shares on the basis of 1.25 NuStar shares for each Company share. The Company intends to offer a maximum of 240 million NuStar shares and to cancel the Company shares received through the Share Swap by way of a capital reduction. Should more shareholders wish to accept the Share Swap than the number of NuStar shares available, then shareholder acceptances will be scaled back on a pro rata basis. 

The transactions described in (b) and (d) are subject to shareholder approval and the completion of an independent expert’s report. Shareholders will be asked to approve these transactions at the company’s AGM to be held in late November 2004 subject to all necessary statutory procedures being completed within this time. 

As a consequence of the above transactions, the Company will: 

- immediately retire an existing secured debt of $3.5 million; 

- have cash of approximately $8 million after payments to creditors and other liabilities; 

- retain approximately 102 million NuStar shares or just over 10% of the issued capital; and 

- have reduced the issued capital of the Company from 715 million shares to 523 million shares, should the maximum of 240 million NuStar shares be swapped. 

In addition to the above transactions, the Company has: 

- commenced a comprehensive review and data compilation of the Paddy’s Flat tenements (100% owned) in the Meekatharra region; 

- reviewed the Aurogenic and Elara joint ventures which require the joint venture partners to spend approximately $6.5 million during the coming twelve months; and 

- entered into negotiations with a third party for the use of the Blue Bird plant at Meekatharra which will at least cover the care and maintenance costs, while the operations are suspended. 

Other than the matters above, there has not arisen in the interval between the end of the fi  nancial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect signi fi  cantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity, in future fi  nancial years. 

