CAZALY RESOURCES LIMITED — Capital/Financing Update 2003

Oct 22, 2003

MARKET RELEASE

23 October 2003

Cazaly Resources Limited

Cazaly Resources Limited has applied for admission to the official list of Australian Stock Exchange Limited and for quotation of its securities. It has been given a provisional ASX code. Provision of an ASX code and publication of the following information does not mean that the entity will be admitted or that its securities will be quoted.

Pam Ross Manager Company Announcements Office

For the Issue of 17,500,000 Shares at an issue price of 20 cents each to raise a total of \$3,500,000.

(Oversubscription of a further 2,500,000 Shares at an issue price of 20 cents each to raise up to a further \$500,000 may be accepted).

LEAD MANAGER: Paterson Ord Minnett Ltd ABN 69 008 896 311

CORPORATE DIRECTORY

Directors

Nathan McMahon - Managing Director Clive Jones - Non-Executive Director Kent Hunter - Non-Executive Director

Company Secretary Kent Hunter

Registered Office First Floor, 22 Oxford Close Leederville WA 6007

Contact Details

Website: Email:

www.cazalyresources.com.au admin@cazalyresources.com.au

Telephone:

Cazaly Resources Ltd $(08)$ 9380 4600

Share Registry (08) 9221 7288

Lead Manager $(08)$ 9263 1111

Facsimile:

Cazaly Resources Ltd $(08)$ 9381 5911

Share Registry (08) 9221 7869

Lead Manager (08) 9325 5123 Solicitors Reporting on Tenements

Price Seirakowski Level 24, St Martins Tower 44 St Georges Terrace PERTH WA 6000

Independent Geologist

Al Maynard & Associates Suite 9, 280 Hay Street SUBIACO WA 6008

Investigating Accountants

Rix Levy Fowler Level 1, 12 Kings Park Road WEST PERTH WA 6005

Lead Manager

Paterson Ord Minnett Level 23 Exchange Plaza 2 The Esplanade PERTH WA 6000

Share Registry

Advanced Share Registry Services Level 7, 200 Adelaide Terrace PERTH WA 6000

Auditors

Rix Levy Fowler Level 1. 12 Kings Park Road WEST PERTH WA 6005

INVESTMENT HIGHLIGHTS

KUNUNALLING PROJECT

A large project centred on the substantially under-explored Kununalling shear. There is a current resource estimate of 38,000 ounces with numerous targets ready for immediate drill testing. Previous results have included:

• 14m @ 7.31g/t Au;
• 16m @ 5.06g/t Au; and
• 5m @ 21.89g/t Au.

The project area is situated in close proximity to several treatment facilities and mining infrastructure.

EAST KALGOORLIE PROJECT

Significant project area covering 140 square kilometres strategically located just 15 kilometres east of Kalgoorlie and near the +5Moz Kanowna Belle gold mine. The project covers over 15 strike kilometres of the Kanowna Shear. The project is prospective for gold and nickel and includes the Blair sub-project where previous exploration has returned results of 4m @ 0.73% nickel.

MT. VETTERS

Immediately south of the Silver Swan nickel project and contains the southern extension of the Black Swan Komatite Complex (BSKC), host to the Silver Swan mine. The prospective footwall contact can be traced over 9 kilometres.

KALGOORLIE FOCUS

Large tenement holding over four key project areas with established resource base and prospective for gold, nickel and copper. The major projects are centred on the world class mining centre of Kalgoorlie in close proximity to existing mines and treatment facilities. This infrastructure advantage will expedite the development of any future resources.

MULTI-COMMODITY EXPOSURE

Gold and nickel are the major commodity focus centred around proven mineralised provinces however the Company is exposed, through a joint venture funded by a third party, to a potentially world class copper-gold prospect at Quartz Circle where previous exploration has returned highly promising results including 38m @ 4.04% Cu, 34m @ 5.51% Cu and 4m @ 9.3% Cu and 13.3g/t Au.

PROVEN MANAGEMENT TEAM

Highly experienced management team with a proven track record of economic gold discoveries, project development and successful company management. The Board aims to vigorously pursue exploration programmes aimed at adding to shareholder wealth.

Initial focus will be on the Kununalling and Mount Vetters projects.

The Board recognises that consolidated regional projects provides shareholders with maximum leverage to exploration succe and this strategy has historically resulted in significant returns to shareholders.

CONTENTS

ELES TRANS

I

	Details of the Offer
	1.1 Shares Offered for Subscription
	1.2 Oversubscriptions
1.3	Minimum Subscription
1.4	Purpose of the Issue
1.5	Rights Issue of Options after Listing
1.6	Underwriting
1.7	Arrangements with Lead Manager
1.8	Indicative Timetable
1.9	Capital Structure
	1.10 Allotment and Allocation of Shares
	1.11 Applicants outside Australia
	1.12 ASX Listing
	1.13 CHESS
	1.14 Enquiries in Relation to the Offer
	1.15 How to Apply
	1.16 Escrow Provisions
	1.17 Electronic Prospectus
	1.18 Privacy Disclosure
	2. Project Review
2.1	8
2.2	9.
2.3 2.4	The Kununalling Project East Kalgoorlie Project
2.5	Mt Vetters Nickel Project
2.6	Quartz Circle Project
2.7	Mount Carrington Project
2.8	Greater Bardoc Tectonic Zone Project
2.9	Other Projects
	2.10 Exploration Expenditure
	2.11 Summary
	3. Board and Management (Allert Allert Allert Allert Allert Allert Allert Allert Allert Allert Allert Allert A
3.1	Board of Directors
3.2	Corporate Governance
	4. Risk Factors
5.	Independent Geologist's Report (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1999) (1
	6. Investigating Accountant's Report (1999)
	Solicitor's Report on Tenements 8. Additional Information
8.1	Rights Attaching to Shares
8.2	Summary of Material Contracts
8.3	Interests of Directors of the Company
8.4	Interests of Persons Named
8.5	Consents
8.6	Expenses of the Issue manufacture contains and the Issue manufacture of the Issue manufacture of the Issue manufacture of the Issue manufacture of the Issue manufacture of the Issue manufacture of the Issue manufacture of
8.7	Taxation
8.8	Exposure Period
8.9	Litigation
	8.10 Electronic Prospectus
	8.11 Forecasts
	8.12 Terms and Conditions of Options
Ϋ,	8.13 Employee Incentive Scheme Glossary of Names & Terms
	10. Consent by the Directors Service	70
	Annication Equal & Ligencities	$\frac{m}{\epsilon}$ . $\epsilon$

IMPORTANT NOTICE

This Prospectus is dated 14 October 2003.

A copy of this Prospectus was lodged with the ASIC on 14 October 2003. Neither the ASIC nor ASX take any responsibility for the contents of this Prospectus.

This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at www. cazalyresources.com.au or www.patersonord.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic version of this Prospectus in Australia. The Corporations Act 2001 prohibits any person from passing onto another person the Application Form unless it is attached to or accompanied by the complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at admin@cazalyresources.com.au or sc@patersonord.com.au.

No person or entity is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

No Shares will be issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus. Application will be made within seven (7) days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for Quotation.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make an offer.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for Shares. There are risks associated with an investment in Cazaly and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Shares.

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 9 of this Prospectus.

3

DETAILS OF THE OFFER

$1.1$ Shares Offered for Subscription

This Prospectus invites investors to apply for a total of 17,500,000 Shares at an issue price of 20 cents per Share to raise \$3,500,000 before expenses of the Issue. All Shares issued pursuant to this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares already on issue.

Applications must be for a minimum of 10.000 Shares and thereafter in multiples of 1,000 Shares, and can only be made by completing the Application Form artached to this Prospectus.

The Company reserves the right to reject any Application or to allocate to any investor fewer Shares than the number applied for.

$1.2$ Oversubscriptions

The Company reserves the right to accept oversubscriptions of up to \$500,000 through the issue of up to a further 2,500,000 Shares at an issue price of 20 cents per Share. The maximum amount which may be raised under this Prospectus is therefore \$4,000,000.

Minimum Subscription $1.3$

The minimum subscription to the Issue is 15,000,000 Shares raising \$3,000,000 before expenses of the Issue. If the minimum subscription has not been raised within four (4) months after the date of this Prospectus all applications will be dealt with in accordance with the Corporations Act 2001.

If less than the full subscription of \$3,500,000 is raised. (by up to \$500,000 in accordance with the minimum subscription) the expenses of the Issue will be reduced by up to \$25,000 (reduced commission payable) and exploration expenditure and additional working capital as shown in Section 1.4 below will be reduced by up to \$475,000. The Directors have identified certain tenements as secondary exploration targets, expenditure on which may be scaled back, or farmed out to external parties should less than the full subscription be received. These secondary tenements contain no identified resources, plant or advanced targets.

$1.4$ Purpose of the Issue

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In the two years after listing on ASX the funds raised from the Issue will be applied as follows:

Use of Funds	Minimum Subscription	Fully Subscribed
Pre-Offer cash and receivables	210,000	210,000
Total raised in the Offer	3.000.000	3.500.000
Total Funds Available	3,210,000	3,710,000
Exploration expenditure (refer Section 5)	1,725,000	1,875,000
Acquisition costs of tenements (including stamp duty)	358,745	358,745
Expenses of the Issue, including broker fees	294.000	319.000
Additional working capital	832.255	1,157,255
Total Funds Applied	3,210,000	3,710,000

Note: Total funds raised of \$3,500,000 assumes that the Offer is fully subscribed. Oversubscriptions raised will be applied as additional working capital. If less than the full subscription is received, the shortfall of up to \$475,000 will be rationalised against exploration and administration expenditures as shown above.

4

DETAILS OF THE OFFER

The Directors are of the opinion that on completion of the Issue, Cazaly Resources will have sufficient working capital to carry out its objectives.

Rights Issue of Options after Listing $1.5$

All Shareholders (excluding vendors in relation to Vendor Shares) registered on the share register of Cazaly at the date six (6) weeks after Cazaly's Shares are quoted on ASX will be entitled to participate in a proposed non-renounceable rights issue of Options on the basis of 1 Option for every 3 Shares then held. The Options are proposed to be issued at one (1) cent each with an exercise price of 20 cents and an expiry date of 31 January 2006.

The terms and conditions of the Options are set out in Section 8.12.1 of this Prospectus.

$1.6$ Underwriting

The Issue is not underwritten.

$1.7$ Arrangement with Lead Manager

Cazaly will pay the Lead Manager, Paterson Ord Minnett, a fee of \$20,000 per month prior to listing commencing from 1st October 2003, plus 5% on all applications lodged. In addition, Cazaly will pay a commission of 5% of the amounts subscribed (and accepted by the Company) to any licensed security dealer in respect of valid Applications bearing their stamp (including any oversubscriptions).

I.R Indicative Timetable Date of Prospectus:	14 October 2003
Subscription lists open for Applications / Opening Date:	22 October 2003
Closing Date for Applications / Closing Date	14 November 2003
Dispatch of Statements of Share Holdings:	18 November 2003
Quotation of Shares on ASX expected to commence:	24 November 2003

· These dates are indicative only and may vary. As mentioned above, Cazaly in conjunction with the Lead Manager reserves the right to close the Issue early, or extend the Closing Date without prior notice. Applicants are therefore encouraged to submit Applications as soon as possible after the Opening Date.

SECTION

DETAILS OF THE OFFFR

1.9 Capital Structure

The pro-forma capital structure of Cazaly is set out below to reflect the issued and paid-up capital of the Company assuming the Offer is fully subscribed and no oversubscriptions are accepted.

PRO-FORMA CAPITAL STRUCTURE

Issued and paid-up capital	Number
Shares presently on issue	11,150,000	37
Shares to be issued as vendor consideration Shares now offered	1,800,000 17,500,000	O.
Total Issued Capital	30,450,000	100

Shares

A total of 30,450,000 Shares will have been issued by the Company at the successful conclusion of the Offer, assuming no oversubscriptions are accepted. Of these, 1,800,000 Shares will have been issued to vendors of assets to be acquired by Cazaly. A total of 2,500,000 Shares have been issued as seed capital shares. Other Shares have been issued to Directors (refer to Section 8.3 for details of Directors' Interests) and parties who have assisted with the float process.

Options

The Company has issued the following options:

3,500,000 options exercisable at \$0.35 cents by 28 February 2005; and 3,500,000 options exercisable at \$0.40 cents by 30 June 2005.

Approximately 9,550,000 Options (and up to 10,383,333 Options if all oversubscriptions are accepted) (exercisable at 20 cents each on or before 31 January 2006) are proposed to be issued under a rights issue of Options after the Company is listed on ASX (refer Section 1.5 of the Prospectus).

Oversubscriptions

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Oversubscriptions of up to a further 2,500,000 Shares may be accepted (refer Section 1.2 of the Prospectus).

1.10 Allotment and Allocation of Shares

Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Issue is closed, following which statements of Shareholdings will be dispatched. It is the responsibility of Applicants to determine their allocation prior to trading in Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk.

Pending the issue of the Shares, or return of the Application Monies, the Application Monies will be held in trust for the Applicants.

The Company in consultation with the Lead Manager, has the right to allocate Shares under the Offer. The Company may reject any Application or allocate any investor fewer Shares than applied for under the Offer.

If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will be refunded. Interest will not be paid on Application Monies refunded.

ά

DETAILS OF THE OFFER

1.11 Applicants outside

Australia

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who is resident outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted Shares.

No action has been taken to register or qualify the Shares or the Offer or otherwise to permit a public offering of the Shares in any jurisdiction outside Australia.

1.12 ASX Listing

Within seven (7) days after the date of this Prospectus, application will be made for the Shares offered by this Prospectus to be granted Quotation.

If approval for Quotation is not granted within three (3) months after the date of this Prospectus, the Company will not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit Cazaly to its Official List is not to be taken in any way as an indication of the ments of the Company or the Shares offered pursuant to this Prospectus.

1.13 CHESS

Cazaly will apply to participate in the Clearing House Electronic Subregister System ("CHESS"), operated by ASX Settlement and Transfer Corporation Pty Ltd ("ASTC") (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and SCH Business Rules. On admission to CHESS, the Company will operate an electronic issuersponsored subregister and an electronic CHESS subregister. The two subregisters together will make up the Company's principal register of securities.

Under CHESS, the Company will not issue certificates to investors. Instead, the Company will provide investors with a holding statement (which is similar to a bank account statement) that sets out the number of Shares allotted to that investor under this Prospectus.

This statement will also advise investors of either their Holder Identification Number (HIN) in the case of a holding on the CHESS sub-register or Security Holder Reference Number (SRN) in the case of a holding on the issuer-sponsored sub-register.

A statement will be routinely sent to holders at the end of any calendar month during which their holding changes. A holder may request a statement at any other time, however a charge may be incurred for additional statements.

1.14 Enquiries in Relation to the Offer

This Prospectus provides information for potential investors in Cazaly, and should be read in its entirety. If, after reading this Prospectus, you have any questions about any aspect of an investment in Cazaly, please contact your stockbroker, accountant or independent financial adviser.

SECTION

DETAILS OF THE OFFER

1.15 How to Apply

Applications for Shares under the Offer can only be made on the Application Form attached to this Prospectus.

The Application Form must be completed in accordance with the instructions set out on the back of each Application Form. Completed Application Forms and accompanying cheques should be lodged at any time after the Opening Date with:

Cazaly Resources Limited C/- Advanced Share Registry Services P O Box 6283 EAST PERTH WA 6892

Paterson Ord Minnett GPO Box W2024 PERTH WA 6846

or delivered to:

Cazaly Resources Limited C/- Advanced Share Registry Services Level 7 200 Adelaide Terrace PERTH WA 6000

Paterson Ord Minnett Level 23 Exchange Plaza 2 The Esplanade PERTH WA 6000

Cheques must be made payable to "Cazaly Resources Limited - Subscription Account" and crossed "Not Negotiable".

No brokerage or stamp duty is payable by Applicants.

Applications must be for a minimum of 10,000 Shares at the issue price of 20 cents per Share. Applications for more than 10,000 Shares must be in multiples of 1,000.

1.16 Escrow Provisions

Securities on issue as at the date of this Prospectus to promoters and seed capital investors, and the issue of Shares to be made to the vendors of exploration and other assets acquired, may be subject to the restricted securities provisions of the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to 24 months and may not be transferred, assigned or otherwise disposed of during that period. Agreements will be entered into in accordance with the Listing Rules.

1.17 Electronic Prospectus

This Prospectus is available on-line at www.cazalyresources.com.au and www.patersonord.com.au.

1.18 Privacy Disclosure

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The Company collects information in relation to each Applicant as provided on an Application Form (Information) for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicant's security holding in the Company (Purposes).

The Company may use the Information for the Purposes and the Company may disclose the Information for the Purposes to the Lead Manager, Share Registrar, the Company's related bodies corporate, agents, contractors and third party service providers, and to ASX, ASIC and other regulatory authorities.

The Information may also be used and disclosed to persons inspecting the register, including bidders for your securities in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including the Australian Taxation Office.

AN THUR BELLEVILLE THE REPORT OF A LIGHT COMMUNIST

$2.1$ Background

Cazaly's ultimate goal is to achieve recognition as a premier Australian owned and controlled mining company, based on the quality of its operations and growth potential of its assets.

The Company aims to achieve this goal through;

• (i) active drill based exploration programmes on its existing projects; and
• (ii) consolidation of its substantial tenement holdings on both the Kanowna and Kununalling shear zones within the world class Kalgoorlie mineral province; and
• (iii) utilisation of our proven project acquisition skills to provide the Company with exposure to high quality exploration projects at a cheap entry price; and
• (iv) utilising the collective experience of the Board and management team to advance its existing resource base through cashflow opportunities.

Cazaly was incorporated in June 2002 as a public company for the purposes of acquiring several mineral exploration projects within Western Australia that were deemed to be highly prospective yet generally under-explored.

The Board has a proven track record of recognising and rapidly advancing under-explored mineral projects and these skills shall ensure maximum returns from the substantial exploration portfolio.

It is the primary objective of Cazaly to become a successful and profitable exploration and mining company. The Company aims to achieve this objective through utilising its industry experience to advance its existing resource base to reserve status and to exploit under-explored project areas in mineral provinces with demonstrated gold endowment. The projects detailed below represent the first substantial steps toward achieving this goal.

$2.2$ Project Review

THE KUNUNALLING PROJECT

The Kunanalling project covers a large portion of the prospective Kunanalling Shear situated to the west of Kalgoorlie in the Eastern Goldfields of Western Australia.

Previous work in the project has identified a number of prospect areas and has delineated resources which total approximately 38,000 ounces of gold. These resources are yet to be JORC classified and require further drilling before being re-classified.

The project area comprises two key geological domains separated by the dominant structure in the region, the Kunanalling Shear Zone (KSZ). In the west a sequence of mafic and ultramafic rocks of the Coolgardie Domain (part of the Kalgoorlie Terrane) are separated by the KSZ from a package of sedimentary rocks to the east which are the probable equivalent of the Black Flag Beds. These sediments are intruded by a major differentiated gabbroic sill, the Powder Sill, and is the host sequence for much of the Kundana (+7Moz. Au) goldfield situated immediately to the east of the project.

The resource exists within the 'Burgundy', area which occurs within lithologies of the Black Flag association to the east of the KSZ. Mineralisation occurs within bleached mafic units in the area and total 534,000T @ 2.1 g/t gold (37,800 ozs Au). The company controls over 70 square kilometres of prospective ground in the region much of which remains to be explored. Potential exists to extend the Burgundy resource at depth whilst several soil anomalies and conceptual targets exist elsewhere within the project.

In summary, the Kunanalling Project is a significant land holding situated in a highly mineralised belt located just 30 kilometres from the world class mining centre of Kalgoorlie. The area is dominated by the Kunanalling Shear, a well mineralised regional structure which trends parallel to the Zuleika Shear host to the +7Moz Kundana mine field.

Numerous gold resources exist in the region and much scope remains to explore the project with a view towards production in the short to medium term.

si, b EXPENDITURE	YEAR 1	YEAR 2:	TOTAL
Wages/ Salaries/ Contractors	150.000	100.000	250,000
Surface Exploration	25.000	0	25,000
RAB / AC Drilling	40,000	50,000	90,000
RC Drilling	50.000	100.000	150,000
Diamond Drilling	25,000	0	25.000
Assays	10.000	20,000	30,000
Field Costs/ Consumables	7.000	8,000	15,000
Data Compilation	5.000	3,000	8.000
Tenement Costs	75,000	75,000	150.000
Administration	38,000	34,000	74,300
Total	425,000	390,000	815,000

$2.4$ East Kalgoorlie Project

The East Kalgoorlie project comprises a large semi-contiguous tenement holding situated immediately to the east of Kalgoorlie in the Eastern Goldfields of Western Australia. The project covers over 140 square kilometres and is strategically located just 15 kilometres to the east of Kalgoorlie (+60Moz Au) and around the +5Moz Kanowna Belle gold mine. The project is particularly prospective for gold and nickel and includes the Blair sub-project.

Gold Prospectivity

The historical gold mining centres within the district typically coincide with areas of outcropping greenstone lithologies. With the majority of the project area being under surficial cover much of the project remains highly prospective. This is particularly the case along the Mount Monger Fault and the Kanowna Shear and within the Corsair and Harper Lagoon structural zones (figure).

A significant conceptual target exists at the junction of the Kanowna shear with the Mount Monger Fault, which has also demonstrated significant gold mineralisation. This target, which exists within the project, has yet to be tested whilst the Kanowna shear has only been tested by relatively shallow drilling and is predominantly an area of much sediment cover.

Previous work elsewhere in the project area has comprised aeromagnetic surveying, soil surveying and RAB and Aircore drilling with several significant drill results being returned including; 45m @ 1.65g/t Au Several gold in soil anomalies were also generated from this work including a particularly extensive anomaly (1.5km by 1.0km) called the Gnamma prospect.

The large (+5Moz) Kanowna Belle (KB) mine owned by Placer Dome Asia Pacific (PDAP) is situated immediately to the north of the project area within the Harper Lagoon structural zone.

Nickel & Base Metal Prospectivity

A significant portion of the project area in the south is underlain by ultramafic lithologies of the Bulong Complex which are prospective for nickel sulphides and volcanogenic massive sulphide (VMS) Cu-Zn mineralisation. The southern end of the project is situated just 3km to the north of the Blair nickel mine which is the subject of a feasibility study by another company.

The area is dominated by a sequence of komatitic lithologies which are the main host rocks to the bulk of nickel sulphide mineralisation in the Kambalda to Bulong districts. The basal section of one particular komatititic flow, to

the south of the project area, is in contact

with felsic sediments and extends for over 4 kilometres. Initial

drilling along the contact has yielded several drill results of up to 4m @ 0.73% Ni.

A VMS target has also been identified from drilling with coincident multi-element results

including; $0.12\%$ Cu, 575 ppm Zn, 1.8 g/t Ag and 680 ppm Pb.

EXPENDITURE	YEAR I	YEAR 2	TOTAL
Wages/ Salaries/ Contractors	15.000	12.000	27,000
Surface Exploration	20,000	10.000	30,000
RAB / AC Drilling	20,000	20,000	40,000
Assays	5.000	5.000	10,000
Field Costs/ Consumables	2.000	2,000	4,000
Data Compilation	2.000	2,000	4.000
Tenement Costs	20,000	20,000	40.000
Administration	8,000	7.000	15.000
Total	92,000	78,000	170,000

$2.5$ Mt Vetters Nickel Project

The Mt Vetters project comprises one Exploration Licence 27/277 and Prospecting Licences 27/1563 to 27/1565 and 27/1608 to 27/1610 situated approximately 39km NNE of Kalgoorlie and abuts the southern project boundary of the MPI Mines Ltd. owned Silver Swan Nickel project.

The area is located within the Boorara Domain of the Eastern Goldfields Kalgoorlie Terrane in the NW striking Kanowna greenstone belt. The stratigraphic sequence within the project comprises the Gindalbie Formation, a sequence of felsic volcanics and sediments with minor felsic porphyry intrusives, and the overlying Highway Ultramafic. Exposure in the area is very limited and is largely covered by young transported cover. The project covers the southern extension of the Black Swan Komatiite Complex (BSKC), host to the Silver Swan mine and is the favoured host rock for nickel sulphide mineralisation in the district.

The prospective footwall contact can be traced over 9km, with additional structural duplication and unit thickening extending the prospectivity of the area.

The target area has received very little exploration in the past, particularly for nickel mineralisation. Depth of cover, virtually no outcrop and an extensive weathering profile has hampered previous exploration efforts that principally focused on identifying potential gold and Cu-Pb-Zn mineralisation.

In summary the project offers excellent scope for the discovery of massive nickel sulphide mineralisation of the same type and style as at Silver Swan which is situated immediately to the north.

EXPENDITURE	YEAR I	YEAR 2	TOTAL
Wages/ Salaries/ Contractors	7.500	9,000	16,500
Geophysics	25,000	0	25,000
RC Drilling	0	40,000	40,000
Assays	0	2.000	2,000
Field Costs/ Consumables	500	1.000	1,500
Data Compilation	500	500	1.000
Tenement Costs	2.500	2.500	5,000
Administration	3.500	5.500	9.000
Total	39,500	60,500	00,000

2.6 Ouarle Circle Project

电平压 医精神平滑膜 医单性细胞瘤 医牙

The Quartz Circle project is situated in the Eastern Pilbara Region of Western Australia and covers approximately 1,430 hectares of ground prospective for base metals and gold. Currently an independent third party is earning a 70% equity in the majority of the project through the expenditure of \$1,000,000. A significant geophysical target coincident with surface and shallow copper-gold mineralisation exists within the project.

Mineralisation throughout the area is peripheral to a large syn-voltanic tonalite porphyry intruded into a sequence of felsic volcanics. A classic base metals zonation is observed around the intrusive with firstly a halo of Cu-Au mineralisation, as defined by an extensive Cu-Au soil anomaly and the presence of widespread copper oxides (malachite) observable at the surface, surrounded further out by a large Pb-Zn soil anomaly. In the 1970's percussion drilling within the Pb-Zn anomalous zone intersected significant zones of sulphide with traces of galena and sphalerite. Intercepts included; 17.74m @ 16.1% Zn and 7.5m @ 16.0% Zn with elevated lead and cadmium.

Later drilling by previous explorers throughout the anomlaous Cu-Au area resulted in the delineation of a shallow, small secondary copper resource estimated to be approximately 127,100T @ 4.1% Cu (inferred) with associated low grade gold. Primary mineralisation appears to be associated with a hydrothermal quartz-sulphide vein system. Significant intercepts within this zone include; 38m @ 4.04% Cu and 34m @ 5.51% Cu. Very little exploratory drilling around this resource and at depth has been undertaken. Where drilling has occurred, for example 230 metres along strike to the south, significant copper and gold results have been recorded including; $4m @ 9.3\% Cu + 13.3 g/t$ Au and $4m \& 1.96\%$ Cu + 11.6 g/t Au.

In 2002 a geophysical survey was conducted to acquire Induced Polarisation data in the search for deeply buried disseminated base metal deposits. The survey was particularly successful and delineated a coincident IP chargeable and resistive body at depth roughly down plunge of the surface Cu-Au mineralisation previously discovered.

The Quartz Circle project clearly demonstrates 'textbook' style base metal zonation around a syn-volcanic intrusive within a felsic volcanic pile. Surface and near surface secondary mineralisation is suggestive of a large mineralised system while the results from recent geophysical surveys have highlighted a very large anomaly consistent with a disseminated sulphide rich orebody occuring at depth. This target has yet to be drill tested.

There is no budget as under the terms of the Joint Venture Agreement the farminee is obliged to spend \$1,000,000 prior to Cazaly having the right to contribute.

$2.7$ Mount Carrington Project

The Mount Carrington project is a polymetallic (primarily gold and silver) project situated within the north-central part of the New England Fold belt in the northern goldfields of New South Wales. The project is located 270 km southwest of Brisbane and 45 km east of Tenterfield. The area has a long history of mining dating back to the late 19th century. During the 1980's large scale open cut gold mining operations were undertaken with mining ceasing in 1990 following increasing metallurgical and grade control difficulties encountered once the mining reached the primary ore zones.

Mineralisation in the area is typical 'low sulphidation' epithermal style excepting that it has a distinctively higher silver to gold ratio with respect to similar other systems in Australia.

Additionally there is much potential within the field to discover further mineralisation, particularly higher grade vein sets which would greatly enhance the economics of any future development.

EXPENDITURE	YEAR I	YEAR 2	TOTAL
Wages/ Salaries/ Contractors	35,000	20,000	55,000
RC Drilling	85,000	50,000	35,000
Assays	5.000	3.000	8,000
Field Costs/ Consumables	2.000	1.000	3,000
Data Compilation	3.000	1.000	4,000
Tenement Costs	25,000	25,000	50,000
Administration	15.000	10,000	25,500
Total	170.000	110.000	280,000

Greater Bardoc Tectonic Zone ("GBTZ") Project $2.8$

The GBTZ project comprises three sub-project areas: Bardoc, Goongarrie and Menzies.

At Bardoc recent previous work has delineated several areas prospective for the discovery of further gold mineralisation. A north trending shear interpreted from aeromagnetics has repeatedly recorded lower order gold values from drilling over a strike length of 1.5km.

The Goongarrie project comprises covers 972 hectares over the historic Goongarrie mining centre which has been mined as recently as 1988 by a previous owner. It is considered that further significant gold resources may exist within the area including the potential for both open cut, oxide and narrow veined, high grade gold resources. In particular potential exists below the Frank's Dam and New Boddington pits, around numerous drill intercepts not as vet followed up and at several aeromagnetic 'look-alike' anomalies.

Results from deeper drilling below the Frank's Dam and New Boddington pits include; 0.75m @ 75.4 g/t Au, 1.10m @ 21.3 g/t Au, 2m @ 18.0 g/t Au and 14m @ 4.93 g/t Au. Additionally a number of significant RAB results have been recorded from previous drilling away from the old open cut pits and have yet to have been followed up. These results include; 4m @ 21.59 g/t Au, 5m @ 1.39 g/t Au and 4m @ 3.58 g/t Au.

The Menzies project covers a host of historic workings over an approximate 10 km strike extent situated to the southeast of the township of Menzies. Previous drilling in the area has returned some high grade intercepts and there is the opportunity to locate small, narrow veined, high grade gold mineralisation in the area.

BUDGET - Greater Bardoc Tectonic Zone Project Year 1 and Year 2

EXPENDITURE	YEAR I	YEAR 2	TOTAL
Wages/ Salaries/ Contractors	25,000	30.000	55,000
RAB / AC Drilling	35,000	0	35,000
RC Drilling	50,000	90,000	140.000
Assays	12,000	6.000	18.000
Field Costs/ Consumables	5.000	3.000	8,000
Data Compilation	2.000	2.000	4.000
Tenement Costs	20,000	20,000	40,000
Administration	15.000	15.000	30,000
Total	164,000	166,000	330,000

2.9 Other Projects

Cazaly has also acquired to rights to several other project areas that are at varying stages of prospectivity within the Eastern Goldfields. These projects are mostly at the application stage but the Company believes that there is the potential for value-adding to these prospects and upon granting target generation will commence. These project areas Mt. Clifford, Cosmos North, Mt. Howe, Jutsons Rocks, Mt. White, Wilga Hill, Yerilla, Yilgangi and Merolia.

EXPERIMENT	MENGI	MENRIKA	IO 144
Wages/ Salaries/ Contractors	15.000	15.000	30,000
Surface Exploration	12.000	12.000	24,000
RAB / AC Drilling	10.000	10.000	20,000
RC Drilling	0	25,000	25,000
Assays	4.000	5.000	9.000
Field Costs/ Consumables	2.000	2.000	4.000
Tenement Costs	12.000	12.000	24.000
Administration	6.000	8.000	13.600
Total	61,000	89,000	150.000

Currently only the Yilgangi project is granted and will be subject to exploration during the forthcoming year.

2.10 Exploration Expenditure

Cazaly proposes to fund its intended exploration programs as outlined in the table below from the proceeds of the Issue. The actual manner in which the exploration expenditure is incurred may be varied by the Company having regard to numerous factors, including the results of ongoing exploration activities and other matters as outlined in Section 4 of this Prospectus.

EXPENDITURE SUMMARY - All Projects

PROJECT	YEAR I	YEAR 2	TOTAL
Kunanalling Shear	425,000	390,000	815,000
East Kalgoorlie	92,000	78,000	170.000
Mount Vetters	39,500	60,500	100,000
Greater Bardoc Teconic Zone	164.000	166.000	330,000
Yilgangi	! 1,000	19,000	30,000
Mount Carrington	170.000	110.000	280,000
Other	75,000	75,000	150.000
Total	976,500	898,500	1,875,000

2.11 Summary

In summary the Company has the rights to acquire interests in an extensive portfolio of highly prospective exploration projects with the potential to host gold, nickel and copper resources. Given the opportunity the Company will strive to join the ranks of a full time gold producer. This goal will be achieved by the efforts of a diligent and focussed exploration team combined with prudent financial management and administration. The Company will aim to increase its production portfolio through ongoing tenement acquisition and project generation.

$\mathbf{1}$

BOARD & MANAGEMENT

$3.1$ Board of Directors

Managing Director (Corporate and Administration)

Mr Nathan McMahon, B.Com

Mr McMahon has provided tenement management advice to the mining industry for approximately 12 years to in excess of 15 public listed mining companies. Mr McMahon has specialised in native title negotiations, joint venture negotiations and project acquisition due diligence. He is a director of several unlisted mining and exploration companies with interests in platinum group elements, base metals, industrial minerals and diamond exploration. Mr McMahon was also one of the founding directors of ASX listed company Hamill Resources Limited. Mr. McMahon was directly responsible for the project acquisition and consolidation of the Mt. Ida and Evanston projects.

Non-Executive Director (Exploration)

Mr Clive Jones, B.App.Sc(Geol), M.AusIMM.

Mr Jones has been involved in mineral exploration for 20 years since graduating from Curtin University of Western Australia in 1982. He has worked in the exploration for a wide range of commodities including gold, base metals, mineral sands and industrial minerals. Much of Mr Jones' time has been spent as a consulting geologist working in Western Australia and overseas. He joined Mt Burgess Gold Mining NL in 1993 and was appointed to that Board in January 1995. At Mt Burgess, he oversaw exploration over all the company's projects which included the discovery of the high grade Red October gold deposit situated in the Eastern Goldfields region of Western Australia. Mr Jones is also a director of International Goldfields Limited (formerly Hamill Resources Limited) and Jackson Gold Limited.

Non-Executive Director & Company Secretary

Mr Kent Hunter, B.Bus, CA.

Mr Hunter is a chartered accountant with more than ten years' experience including more than 8 years as director and company secretary to several listed resources companies. His experience has included involvement in capital raisings. ASX compliance and ASIC regulatory requirements. Mr Hunter is also a director of International Goldfields Limited (formerly Hamill Resources Limited).

$3.2$ Corporate Governance

The Board is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of behaviour and accountability.

The primary responsibilities of the Board include:

• formulation and approval of the strategic direction, objectives and goals of the Company;
• · monitoring the financial performance of the Company, including approval of the Company's financial statements;
• · ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
• the identification of significant business risks and ensuring that such risks are adequately managed;
• the review of performance and remuneration of executive Directors;
• the establishment and maintenance of appropriate ethical standards and
• the adoption of the major recommendations of the ASX Corporate Governance Council.

The Board also recognises its duty to ensure that its Shareholders and the other stakeholders are informed of all major developments affecting the Company's state of affairs.

RISK FACTORS

4.Û investment Risks

An investment in the Company has risk and prospective investors in the Company should consider the risk factors described in this section, together with the information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.

$4.1$ Exploration Success

The mineral tenements of the Company as described in this Prospectus are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of the project areas described in this Prospectus, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

Operating Risks $4.2$

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits; failure to achieve predicted grades in exploration and mining; operational and technical difficulties encountered in mining; difficulties in commissioning and operating plant and equipment; mechanical failure or plant breakdown; unanticipated metallurgical problems which may affect extraction costs; adverse weather conditions; industrial and environmental accidents; industrial disputes; and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

Having been incorporated in June 2002, Cazaly does not have any operating history, although it should be noted that the Company's Directors have between them significant operational experience. No assurances can be given that Cazaly will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until Cazaly is able to realise value from its projects, it is likely to incur ongoing operating losses.

$4.3$ Resource Estimates

Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company's operations.

Commodity Price Volatility and Exchange Rate Risks $4.4$

If Cazaly achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks.

Commodity prices fluctuate and are affected by many factors beyond the control of Cazaly. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

$4.5$ Environmental Risks

The operations and proposed activities of the Company are subject to State and Federal laws and regulation concerning the environment. As with most exploration projects and mining operations, the Company's activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company's intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

RISK FACTORS

$4.6$ Title Risks and Native Title

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, Cazaly could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of Cazaly to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Reference should be made to the relevant section of the Solicitor's Report on Tenements set out in Section 7 of this Prospectus for information on the issue of title and a description of the native title regime in Western Australia.

$4.7$ Share Market Conditions

The price of the Shares when quoted on ASX will be influenced by international and domestic factors affecting conditions in equity, financial and commodity markets. These factors may affect the general level of prices for listed securities of mining and exploration companies quoted on ASX.

General Investment Risks 4.8

There is a risk that the price of Shares and returns to Shareholders may be affected by changes in:

• · local and world economic conditions;
• interest rates;
• levels of tax, taxation law and accounting practice;
• government legislation or intervention;
• · inflation or inflationary expectations; and
• · natural disasters, social upheaval or war in Australia or overseas,
• as well as other factors beyond the control of the Company.

4.9 Specific Risks associated with the Company

There are also a number of specific risks associated with the Company which may adversely affect the Company's financial position, prospects and price of its listed securities. In particular, the Company is subject to risks relating to the exploration and development of mineral properties which are not generally associated with other businesses.

Set out below are specific risks that may adversely affect the Company:

• 4.9.1 the Company cannot guarantee that those Project Tenements that are applications for tenements will ultimately be granted in whole or in part pursuant to the Mining Act;
• the Western Australian Department of Industry and Resources ("Department") from time to time reviews the 4.9.2 environmental bonds that are placed on tenements. The Directors are not in a position to state whether a review is imminent or whether the outcome of such a review would be detrimental to the funding needs of the Company; and
• 4.9.3 the exploration costs of the Company described in the Project Review section of this Prospectus are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company's viability.

a na katalon ng tanggalang mga mga magamatan ng sang ng magamatan ng mga magamatan ng mga kasa

	Contents	Page
$\pm 0$	INTRODUCTION AND TERMS OF REFERENCE	19
2.0	THE MINERAL EXPLORATION PROFERTIES	20
2.1	KUNANALLING PROJECT	20
2.1.1	Introduction	20
2.1.2	Tenements	20
2.1.3	Geology	21
2.1.4	Previous Exploration	21
2.1.5	Conclusions	23
2.2	EAST KALGOORLIE PROJECT	23
2.2.1	Introduction	23
2.2.2	Tenements	23
2.2.3	Geological Setting	23
2.2.4	Target Mineralisation	24
2.2.5	Previous Exploration	25
2.2.6	Known Mineralisation In The Area	25
2.2.7	Conclusions	25 26
2.3	MOUNT VETTERS PROJECT
2.3.1	Introduction	26 27
2.3.2	Geological Setting	27
2.3.4	Adjacent Mineralisation (Excluded from Cazaly ground).	27
2.3.5	Previous Exploration	27
2.3.6 2.4	Conclusions QUARTZ CIRCLE PROJECT	28
2.4.1	Introduction	28
2.4.2	Geological Setting	28
2.4.3	Mineralisation	28
2.4.4	Previous Exploration	28
2.4.5	Conclusions	29
2.5	MOUNT CARRINGTON PROJECT	30
2.5.1	Introduction	30
2.5.2	Previous Exploration	30
2.5.3	Mineralisation Style	30
2.5.4	Resource Description	30
2.5.6	Conclusions	30
2.6	GREATER BARDOC TECTONIC ZONE ("GBTZ") PROJECT	31
2.6.1	Introduction	31
2.6.2	Geological Setting	31
2.6.3	Previous Exploration	31
2.6.4	Conclusions	32
2.7	OTHER PROJECTS	32

$1.0$ INTRODUCTION AND TERMS OF REFERENCE

This Independent Geologists' Report on Mineral Properties ("the Report") of six principal mineral exploration properties plus a group of secondary prospects has been prepared at the request of Cazaly Resources Limited ("Cazaly)". Four of the main properties (Kunanalling, East Kalgoorlie, Mt Vetters and GBTZ are located in the Yilgarn Craton and one (Quartz Circle) in the Pilbara Craton of Western Australia. Mt Carrington is located in the northern goldfields of New South Wales. This Report is to be included in a prospectus to be issued by the Company to be dated 14th October, 2003 for the offer of 17.5 million New Shares each at an issue price of 20 cents per New Share to raise \$3.5 million. The Company may accept oversubscriptions of up to \$0.5 million.

The six main mineral prospects reported on herein are all considered to be highly prospective for the occurrence of precious and/or base-metals (gold, nickel, silver, copper, ) as evidenced by their actual or deduced occurrence and their location adjacent to existing mining operations described below.

Kunanalling is considered likely to be developed from exploration to production status within a reasonably short timeframe, subject to further exploration drilling, suitable scoping and feasibility studies and joint venture negotiations.

This Report has been prepared in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the "JORC Code"), and Australian Securities & Investments Commission ("ASIC") Practice Notes 42 (Independence of Experts' Reports) and 43 (Valuation Reports and Profit Forecasts).

Al Maynard and Associates ("Maynard") is an independent geological and exploration consultancy established 21 years ago and has operated continuously since then. The firm has been responsible for the preparation of a considerable number of independent geological reports and valuations for prospectuses and other appraisal purposes relating to precious (gold & PGM) and base metals, diamond and industrial mineral prospect areas in Australia, Canada, China, Egypt, Greenland, Indonesia, Malaysia, Mauritania, Mozambique, Peru, Philippines, Portugal, South Africa and Zimbabwe.

Mr Allen J. Maynard, Principal geologist of Maynard gained a Bachelor of Applied Science Degree in geology from Curtin University in 1978 and has been engaged continuously since then in mineral exploration and prospect evaluation. Mr Maynard has co-authored the general geology and valuation sections of this Report. He is a Corporate Member of the Australasian Institute of Mining and Metallurgy ("AusIMM") and a Member of the Australian Institute of Geoscientists ("AIG"). Mr Maynard has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 1999 Edition of the JORC Code. Maynard consents to the inclusion in the Report of the matters based on its information in the form and context in which it appears.

Mr Maynard accepts overall responsibility for this Report. The information in this Report that relates to mineral resources is based on information compiled by various sources as acknowledged in the text below.

Neither Maynard nor any of its associates have any material interest direct, indirect or contingent in the Company (nor any of its subsidiaries or associated entities of the Company) nor in the mineral properties the subject of this Report nor in any other Cazaly asset nor has any such interest existed in the past. Maynard has had no input into the formulation of any of the mineral tenements under review and has prepared this report strictly in the role of an independent expert.

SECTION 5

The Company has warranted to Maynard that full disclosure has been made of all material in its possession and that information is complete, accurate and true. None of the information provided by the Company has been specified as being confidential and not to be disclosed in our Report. Fees for the preparation of this report are being charged at normal commercial rates whilst expenses are being reimbursed at cost. Payment of fees and expenses is in no way contingent upon the conclusions neither of this document nor on the outcome of the Report.

Mr Maynard has worked in the Yilgarn and Pilbara regions repeatedly over the last two decades on various gold and base-metal projects and has a familiarity with the occurrences and styles of mineralisation relating to the Cazaly prospect areas. Thus, specific site visits were not made for the purpose of this report as detailed technical information, particularly drilling data, airborne geophysical data and surface mapping and sampling information, has been provided that would not be expanded upon by a site visit. Information used in the preparation of this Report has been derived primarily from technical information provided by Cazaly and other publicly available and unpublished data. The Company did not engage the writer during any part of its exploration effort.

Maynard was involved only in the preparation of this "Independent Geologists' Report on Mineral Properties" and has authorised or caused the issue of this part of the report on behalf of the Company. Maynard has given consent in writing to the issue of the report with this Independent Report in the form and context in which it is included and has not withdrawn its consent before the lodgement of the report with the ASIC.

Normal risk factors outside the scope and expertise of this Report such as commodity price variations, currency fluctuation, mining development risks, sovereign risk, market risk and other factors such as legal, environmental and social considerations must be taken into account when appraising these prospect areas by the interested reader.

Yours faithfully

al Magno

A.J. Maynard B.APP.SC. (Geol.), M.Aus.I.M.M.,M.A.IG.

Maynard is of the opinion that Cazaly has in place satisfactory and clearly defined exploration and expenditure programs, which are reasonable, having regard to the stated objectives of the Company. Sufficient exploration work has taken place within the last two years, including research for this Report, to justify the budgeted exploration and expenditure program

$2.0$ THE MINERAL EXPLORATION PROPERTIES

$2.1$ KUNANALLING PROJECT

2.1.1 Introduction

The Kunanalling Project comprises an extensive tenement holding located approximately 30 kilometres west of Kalgoorlie and 30 km north of Coolgardie in the East Coolgardie Mineral Field of Western Australia. Access is via the unsealed Coolgardie North Road and then via numerous local tracks.

2.1.2 Tenements

The Kunanalling Project comprises a total of 13 mining tenements, 8 granted (M16/199, M16/200, E16/0302, E15/820, P16/2193, P16/2194, P16/2195 and P16/2196) and 5 tenement applications (M16/253, M16/343, M16/353, M16/356, M16/357). Of these E16/0302 is subject to an option agreement with International Goldfields Ltd and the 7 Mining Leases are subject to an option agreement with Eldorado Mines NL, Croesus Mining NL and Mines and Resources Australia Pty. Ltd. Cazaly has the right under both agreements to obtain 100% interest in the tenements.

The tenements can be considered as occurring in three groups as shown in Figure 1. These comprise; The Burgundy Group, which includes tenements of the Eldorado/Croesus/MRA agreement; West Kundana (E16/302) and Bonnievale/Star of Fremantle (E15/820 and P16/2193 to 2196). A detailed tenement schedule and description of the purchase agreements is included in the Solicitors Report on Mining Tenements located elsewhere in the prospectus.

2.1.3 Geology

The Kunanalling project comprises two key geological domains separated by the dominant structure in the region, the Kunanalling Shear Zone (KSZ). In the west a sequence of mafic and ultramafic rocks of the Coolgardic Domain (part of the Kalgoorlie Terrane) are separated by the KSZ from the Ora Banda greenstone belt which comprises a package of sedimentary rocks which are intruded by a major differentiated gabbroic sill, the Powder Sill. and is the host sequence for much of the Kundana (+7Moz. Au) goldfield situated immediately to the east of the project.

Structural elements of the project include the Telegraph Dam syncline plunging shallowly to the southeast, the northeast trending Castor and Pollux faults and the Crest and Carbine shear zones trending southeast and causing local repetitions of the greenstone sequence. The Telegraph Dam syncline is located at the western boundary of the project while the Crest Shear lies just within the eastern boundary. The axis of the syncline is cross cut by late stage tensional quartz veins displaying epithermal textures. These veins trend northeast and represent late extensional tectonics along intensely deformed units at the synclinal axis.

2.1.4 Previous Exploration

The great majority of previous work conducted over the project has been completed by Mines and Resources Australia Ltd over the 'Burgundy' Group of tenements. The following summary of work largely refers to this work.

From 1990 to 1992 Afmeco (now Mines and Resources Australia Ltd) acquired the 'Burgundv' area from Barrack Exploration. Work comprised geological mapping, gridding, soil sampling, aeromagnetic surveying and RAB drilling. This work outlined the broad geological setting of the area and highlighted areas of particular interest. Broad zones of anomalous geochemistry were recognised at the Cashew prospect. In 1992 further ground was acquired from Anglo American in the area and further soil sampling and RAB drilling conducted.

This work located two large (>2km) sub-parallel gold anomalies with numerous holes recording anomalous gold. The Burgundy prospect was discovered from RAB drilling of a soil anomaly in 1993 with mineralisation identified over 400 metres of strike.

Further gridding, mapping and drilling was conducted in 1994-95 over the Crest shear, Telegraph Syncline and Burgundy areas. The Crest Shear was shown to represent a major strike parallel shear marking the eastern margin of the Telegraph Syncline.

Mineralisation along the shear is represented by numerous soil anomalies and includes the Macaroni prospect. RAB drilling over the prospect included wide low grade intercepts (16m at 0.58 g/t Au). Within the Telegraph Syncline a soil survey at the Cashew prospect confirmed a significant anomaly whilst immediately to the south historical drilling by Anglo American Ltd had returned results including; 10m at 1.56 g/t, 3m at 5.35 g/t, 13m at 1.95 g/t and 4m at 8.14 g/t Au.

	third cause of the also Head Grade spin proves a spiritual constitution of the results								解释 计半空间 经已经经
Reagents			Residue Extraction		$(g/t \text{Au})$				Sample # Test # Table#
	NaCN g/t Lime g/t	%	$(g/t \text{ Au})$	$\left($ g/t Au $\right)$	Calc.	$(g/t \operatorname{Au})$
4.17	IJ	86.9	4.81	0.73	5.54	5.93		LB266	382913
4.27	1.18	87.6	2	0.29	2.29	1.33	2	LB267	382970
4.27	1.02	91.1	1.9	0.17	2.08	1.92	3	LB268	382976
10.22	0.65	96.2	1.54	0.06	I.6	1.17	4	LB271	382906
13.88	0.76	91.7	2.04	0.19	2.23	2.02	5	LB272	382922
10.87	0.62	88.7	2.95	0.38	3.33	2.72	6	LB273	382948
8.29	0.56	86.6	1.52	0.24	1.76	1.62		LB274	388996

In 1995 exploration comprised gridding,

ground magnetics, mapping, soil surveying, RAB, RC and

Diamond drilling. The magnetics survey identified the presence of several key

structures within the Telegraph Syncline which were then verified by the geological mapping. Several new anomalous gold zones were recognised from RAB drilling in the south and drilling and some preliminary metallurgical test work commenced at Burgundy. Significant results from the RAB drilling over prospects within the Telegraph Syncline included; 1m at 23.8 g/t, 10m at 3.3 g/t, 2m at 8.52 g/t and 9m at 2.00 g/t Au. At Burgundy the Diamond drilling confirmed the geological setting of the prospect and the tenor of the mineralisation

with better intercepts including; 8m at 3.17 and 2m at 4.97 g/t Au.

In 1996 work comprised gridding, RAB/Aircore, RC and Diamond drilling and resource estimation. RAB drilling to the north and south of Burgundy defined further mineralisation. Results included numerous narrow, 1 to 3 metre, intercepts of 1 to 3 g/t Au indicating the potential for more resources in the region. RC drilling in these areas returned intercepts including; 9m at 2.08 g/t, 6m at 3.53 g/t, and 3m at 4.59 g/t Au. In the south RAB drilling intersected mineralisation associated with the predicted extensions of the Crest Shear at Star Dam whilst two other soil anomalies drilled only returned low order gold anomalism. At Star Dam drilling of a large soil anomaly returned intercepts including; 12m at 3.02 g/t, 5m at 6.42 g/t and 12m at 2.61 g/t Au. It was at this time that a resource estimate was made for the Burgundy mineralisation.

The Burgundy resource area lies within the western limb of the Telegraph syncline and occupies a stratigraphic horizon of mafic flows bounded by footwall black shales and hanging wall Black Flag Association volcanogenic and volcaniclastic sediments. The mafic flows comprise three units of dolerite and has a true thickness of approximately 50 metres. A major northwest trending structure, characterised by sporadic quartz blows at the surface, strikes through the prospect oblique to the stratigraphy. A complex interplay between this structure, stratigraphy and a host of northeast trending structures seems to be a key part on the controls of mineralisation in the area.

Mineralisation at Burgundy occurs over approximately 400 metres of strike and is typically associated with quartz veining and moderate chlorite-carbonate-sericite alteration with coarse euhedral arsenopyrite. In 1996 a resource estimate for Burgundy was made by consultants Resource Service Group. A three dimensional interpretation was made and five mineralised zones determined. Upper cuts of 3, 12, 12, 4 and 12 g/t Au were selected for the zones and Specific Gravity factors of 2.62 and 1.8 was used for the primary and weathered zones. Results using these factors, utilising proprietary Micromine software produced an estimate of 563,370T at 2.09 g/t Au (37,952 ounces Au).

Metallurgical test work was conducted on seven samples of mineralised half core by consultants Oretest. The samples represented mineralisation from the strongly oxidised, moderately to weakly oxidised and fresh zones. Three fresh zone samples were submitted representing varying amounts of arsenopyrite levels. The results indicate good recoveries with reasonably fast leach kinetics. Results were as follows;

Metallurgical Testwork Results - Burgundy Samples

Work from 1997 to 1999 concentrated on trying to delineate further resources to supplement the Burgundy mineralisation. Several prospects were drilled (Cashew, Macaroni, Star Dam, North Crest) with sporadic mineralisation being discovered. During 2002 a detailed interpretation of airborne geophysical data, acquired in 2001, produced 26 conceptual targets for Archaean lode-style gold deposits. A review of the targets revealed that a number of them had already been tested by previous exploration activities whilst a number of other targets lay outside of the project tenements. Furthermore, as only M16/199 and M16/200 were granted tenements, only four of the conceptual targets were available to be tested. Several targets yet to be drill tested remain in the project in tenements yet to be granted.

RAB drilling conducted over the four accessible targets intersected a deep weathering profile before progressing into fresh rock. Primary rock types included schistose mafic to ultramafic schists and minor sediments. Strong chlorite alteration

复活

a de la composición de la composición de la composición de la composición de la composición de la composición

prevailed with a variable amount of quartz veining. Several significant intercepts were made including; 5m at 1.77, 6m at 1.31 and 2m at 1.37g/t Au. Demonstrated potential remains over these targets and they require further drilling.

2.1.5 Conclusions

In summary, following an extensive amount of work over the 'Burgundy' Group of tenements a significant resource of 534,000T @ 2.1g/t gold has been discovered. Additionally the project displays much widespread gold mineralisation. Several of these areas have been sufficiently tested however several other areas require further work and scope remains for the discovery of further gold resources in the area. These targets include soil and RAB anomalies and some conceptual targets based. Further work is also required to more fully determine the key controls on mineralisation in the district.

EAST KALGOORLIE PROJECT $2.2$

2.2.1 Introduction

The East Kalgoorlie project comprises a large semi-contiguous tenement holding situated immediately to the east of Kalgoorlie in the Eastern Goldfields of Western Australia. The project area is prospective for both nickel and gold occurrence, covers over 140 square kilometres and is strategically located just 15 kilometres to the east of Kalgoorlie (+60Moz Au) and around the +5Moz Kanowna Belle gold mine. The Blair (nickel) sub-project is located in the southern part of the area.

2.2.2 Tenements

There is a large number of tenements (64) comprising this project which are set out fully in the Solicitors Report elsewhere in this prospectus. The reader is referred to that section for full details on tenement application and granting dates and conditions of grant, encumbrances, etc.

In summary they are Mining Leases: ("MLs") M27/177, M27/187, M27/201, M27/236, M25/237, Exploration Licences: (ELs") E26/112, E25/268, E26/87 and Prospecting Licences (PLs"): P25/1270-1274, P25/1663, P25/1730-1734, P25/1738, P25/1746-1751, P25/1789-1794, P25/1800-1801, P26/3076, P26/3116, P26/3128, P26/3163, P26/3195-3199, P26/3205-3211, P27/1193-1194, P27/1567-1571, P27/1601-1607.

2.2.3 Geological Setting

The East Kalgoorlie project area is underlain by Archaean greenstones (including part of the Bulong Complex) comprising mafic, ultramafic and felsic volcanics intercalated with younger sedimentary sequences. There are granitic intrusions to the southeast, porphyry intrusions and widespread Quaternary sediment cover throughout the region. The Kanowna Shear is a dominant regional structural arcuate feature trending north-westerly from the south-eastern section right through and beyond the north-western section. The Mt Monger Faults is another major feature that intersects with the Kanowna Shear in the centre of the properties and provides a prime gold exploration target.

The geology of the area is dominated by greenstone lithologies of the Boorara Domain (part of the Kalgoorlie Terrane) and the Balagundi and Bulong Domains (of the Kurnalpi Terrane). The Boorara domain comprises tholeiitic basalt, felsic volcanics and sedimentary units while the Balagundi and Bulong domains comprise mafic and ultramafic volcanics (Refer Figure xx). Intrusive porphyrys occur throughout the region. Structurally the area is dominated by several regionally significant north to northwest faults and may be subdivided into three areas; the Corsair, Harper Lagoon and Hampton Hill zones.

These are separated by the highly prospective Mount Monger and Kanowna Fault/Shear zones. The Mount Monger fault is the defining structure separating the Kalgoorlie and Kurnalpi Terranes whilst the Kanowna shear is associated with the Kanowna Belle, Panglo and Crossroads gold deposits to the north. Numerous gold mining centres exist in the region including Kanowna, Balagundi, Boorara, Golden Ridge and Bulong. The region also contains komatiitic sequences hosting significant nickel sulphide mines (eg: Silver Swan and Blair).

2.2.4 Target Mineralisation

Gold Prospectivity

The historical gold mining centres within the district typically coincide with areas of outcropping greenstone lithologies. With the majority of the project area being under surficial cover, which precluded conventional prospecting by the "old-timers", much of the project remains highly prospective.

This is particularly the case along the Mount Monger Fault and the Kanowna Shear and within the Corsair and Harper Lagoon structural zones (Refer Figure 2). A significant conceptual target exists at the junction of the Kanowna shear with the Mount Monger Fault, which has also demonstrated significant gold mineralisation.

This target, which exists within the project, has yet to be tested whilst the Kanowna shear has only been tested by relatively shallow drilling and - is predominantly an area of much sediment cover.

Project Area Nickel & Base Metal Prospectivity

A significant portion of the project area in the south is underlain $bv$ ultramafic lithologies of the Bulong Complex which are prospective

for nickel sulphides and volcanogenic

massive sulphide (VMS) Cu-Zn mineralisation. The southern end

of the project is situated just 3km to the north of the Blair nickel mine. Blair was

discovered in 1982 and mined between 1989 to 2001. Currently there is a resource of 263,500T

at 2.6%Ni with another mining company conducting a feasibility study into re-establishing the underground development.

SECTION 5

The area is dominated by a sequence of komatiitic lithologies which are the main host rocks to the bulk of nickel sulphide mineralisation in the Kambalda to Bulong districts. The basal section of one particular komatiitic flow, to the south of the project area, is in contact with felsic sediments and extends for over 4 kilometres. Initial drilling along the contact has yielded several drill results of up to 4m at 0.73% Ni from 32 metres in hole EBR 108. A VMS target has also been identified from drilling with coincident multi-element results which include 0.12% Cu, 575 ppm Zn, 1.8 g/t Ag and 680 ppm Pb.

2.2.5 Previous Exploration

Previous work elsewhere in the project area has comprised aeromagnetic surveying, soil surveying and RAB and Aircore drilling with several significant drill results being returned including an intercept of 45m at 1.65g/t Au from 24 metres

in Hole BHR 042. Several gold in soil anomalies were also generated from this work including a particularly extensive anomaly (1.5km by 1.0km) called the Gnamma prospect.

2.2 6 Known Mineralisation In The Area (Excluded from Cazaly ground).

The large (+5Moz) Kanowna Belle ("KB") mine owned by Placer Dome Asia Pacific (PDAP) $is$ situated immediately to the north of the project area within the Harper Lagoon structural zone. Mineralisation at KB is associated with $\overline{a}$ large intrusive porphyry unit intruded into a reactivated regional D1 thrust fault. Interpretation of regional magnetic and geological data suggests that numerous other D1 thrusts and numerous porphyry units exist under cover in the region. One such thrust has been recognised within the northern block of tenements situated just 3km to the north of KB while it is believed that several other thrusts occur within the Corsair and Harper Lagoon structural zones within the company's project area.

2.2.7 Conclusions

The East Kalgoorlie project area has a demonstrated potential for the occurrence of gold, nickel and other base-metal mineralisation. This is exemplified by drill results of up to 4m at 0.73% Ni from 32 metres in hole EBR 108.

A VMS target has also been identified from drilling with coincident multi-element results which include 0.12% Cu, 575 ppm Zn, 1.8 g/t Ag and 680 ppm Pb.

Gold exploration returned encouraging results including an intercept of 45m at 1.65g/t Au from 24 metres in Hole BHR 042.

The Company has planned an extensive exploration program designed to enhance and expand upon the known results of previous work which justifies the budgeted future exploration.

2.3 MOUNT VETTERS PROJECT

2.3.1 Introduction

The Mt Vetters project comprises one Exploration Licence 27/277 and Prospecting Licences 27/1563 to 27/1565 and 27/1608 to 27/1610 situated approximately 39km north-northeasterly of Kalgoorlie and abuts the southern project boundary of the MPI Mines Ltd. owned Silver Swan Nickel project.

2.3.2 Geological Setting The area is located within the Boorara Domain of the Eastern Goldfields Kalgoorlie Terrane in the NW striking Kanowna greenstone belt. The stratigraphic sequence within the project comprises the Gindalbie Formation, a sequence of felsic volcanics and sediments with minor felsic porphyry intrusives, and the overlying Highway Ultramafic.

Exposure in the area is very limited and is largely covered by young transported cover.

The easiem part of the project area comprises a covered unramale sequence, as defined from regional aeromagnetics, interpreted to be the southern extensions of the BKSC.

As at Silver Swan the sequence is bound to the west along the prospective footwall contact with felsic volcanics and sediments of the Gindalbie Formation. Regionally, east over west thrust faults have produced structural repetition of the stratigraphy as evidenced by repetitions of at least four distinct ultramafic horizons within the region.

The prospective footwall contact can be traced over 9km, with additional structural duplication and unit thickening extending the prospectivity of the area.

2.3.4 Adjacent Mineralisation (Excluded from Cazaly ground).

The project covers the southern extension of the Black Swan Komatiite Complex (BSKC), host to the Silver Swan mine (Indicated resource 640,000t at 9.5% Ni), Black Swan (probable reserve of 10.4Mt at 0.83% Ni) and adjacent Cygnet deposit (probable reserve of 1.1Mt at 2.1% Ni) and is the favoured host rock for nickel sulphide mineralisation in the district.

2.3.5 Previous Exploration

The target area has received very little exploration in the past, particularly for nickel mineralisation. Depth of cover, virtually no outcrop and an extensive weathering profile has hampered previous exploration efforts that principally focused on identifying potential gold and Cu-Pb-Zn mineralisation. Ultramafics have been identified in the area interpreted to be the BKSC by shallow drilling in the past by Tern Minerals.

2.3.6 Conclusions

The Mt Vetters project provides immediate potential for the discovery of massive nickel sulphide mineralisation of the same type and style as at Silver Swan which is situated immediately to the north.

2.4 QUARTZ CIRCLE PROJECT

2.4.1 Introduction

BURG 1-1 MER COLLAR DRIMMINISHIRININININ

The Quartz Circle project is situated in the Eastern Pilbara Region of Western Australia and covers approximately 1,430 hectares of ground prospective for base metals and gold. Currently a third party is carning a 70% equity in the project through the expenditure of \$1M. A significant geophysical target coincident with surface and shallow coppergold mineralisation exists within the project. Tenements comprising the project include P46/1360 to 1366 and E46/541. The Company has a 100% interest in E45/2495 and P46/1385 and P46/1386.

2.4.2 Geological Setting

The area lies within the McPhee Dome of the Archaean Pilbara

Craton of Western Australia. The McPhee Dome comprises volcanic rocks of the

Warrawoona Group, and hosts a variety of hydrothermal vein, stratabound volcanic and porphyry hosted gold and base metal styles of mineralisation. In particular the project comprises rocks of the Duffer Formation which comprises a succession of dacitic tuffs, lavas and agglomerates with subordinate rhyolite, basalt and chert.

2.4.3 Mineralisation

Mineralisation throughout the area is peripheral to a large syn-volcanic tonalite porphyry intruded into a sequence of felsic volcanics. A classic base metals zonation is observed around the intrusive with firstly a halo of Cu-Au mineralisation, as defined by an extensive Cu-Au soil anomaly and the presence of widespread copper oxides (malachite) observable at the surface, surrounded further out by a large Pb-Zn soil anomaly.

2.4.4 Previous Exploration

Alcoa in the 1907's conducted some percussion drilling within the Pb-Zn anomalous zone intersecting significant zones of sulphide with traces of galena and sphalerite (the Pb/Zn prospect). Intercepts included; 17.74m at 16.1% Zn and 7.5m at 16.0% Zn with elevated lead and cadmium.

Later drilling by RGC and Herald throughout the anomalous Cu-Au area resulted in the delineation of a shallow, small secondary copper resource estimated to be approximately 127,000T at 4.1% Cu with associated low grade gold.

Primary mineralisation is associated with a hydrothermal quartz-sulphide vein system. Significant intercepts within this zone include; 38m at 4.04% Cu and 34m at 5.51% Cu. Very little exploratory drilling around this resource and at depth has been undertaken. Where drilling has occurred, for example 230 metres along strike to the south, significant copper and gold results have been recorded including; 4m at 9.3% Cu + 13.3 g/t Au and 4m at 1.96% Cu + 11.6 g/t Au.

In 2002 MIM Exploration conducted a geophysical survey utilising their state-of-the-art geophysical data acquisition system (MIMDAS). MIMDAS is primarily used to acquire Induced Polarisation data in the search for deeply buried disseminated base metal deposits. The survey was particularly successful and delineated a coincident IP chargeable and resistive body at depth roughly down plunge of the surface Cu-Au mineralisation previously discovered (figure).

2.4.5 Conclusions

The Quartz Circle project clearly demonstrates 'textbook' style base metal zonation around a syn-volcanic intrusive within a felsic volcanic pile. Surface and near surface secondary mineralisation is suggestive of a large mineralised system while the results from recent geophysical surveys have highlighted a very large anomaly consistent with a disseminated sulphide rich orebody occurring at depth. This target has yet to be drill tested.

2.5 MOUNT CARRINGTON PROJECT

2.5.1 Introduction

The Mount Carrington project is a polymetallic (primarily gold and silver) project situated within the north-central part of the New England Fold belt in the northern goldfields of New South Wales. The project is located 270 km southwest of Brisbane and 45 km east of Tenterfield. The area has a long history of mining dating back to the late 19th century.

2.5.2 Previous Exploration

During the 1980s large scale open cut gold mining operations were undertaken with mining ceasing in 1990 following increasing metallurgical and grade control difficulties encountered once the mining reached the primary ore zones. These difficulties were believed to be largely due to the polymetallic nature of the orebody, with respect to the CIL plant being used, and a poor understanding on the geological controls at the time.

2.5.3 Mineralisation Style

Mineralisation in the area is a typical 'low sulphidation' epithermal style excepting that it has a distinctively higher silver to gold ratio with respect to similar other systems in Australia.

2.5.4 Resource Description

Current, non-JORC, resources for the project have been estimated using set metal prices for Au (US\$275/oz), Ag (US\$4.94/oz), Cu (US\$1922/t), Pb (US\$466/t) & Zn (US\$1224/t). Block models were generated for the resources and a dollar value assigned to each block as above. Resources were then estimated for a range of block values ranging from A\$20 to A\$50. The current resources are as follows:

Mt Carrington Resources (non-JORC)

	A\$20 Cut Off Value
Gold Resources	18.8Mt at $1.16$ g/t Au
Silver Resources	6.77Mt at 86.6 g/t Ag, $0.42$ g/t Au
	A\$50 Cut Off Value
C 1 11D 222	$6.73M_{\odot}$ at 1.89 $\sigma$ /t Au

6.73Mt at 1.89 g/t Au Gold Resources 2.67Mt at 147 g/t Ag, 0.65g/t Au Silver Resources

The gold resources come from 6 separate prospects while 4 other prospects comprise the silver resources. The opportunity exists to re-evaluate the existing resources utilising current metal prices and to potentially commence a viable operation utilising a suitable plant.

2.5.6 Conclusions

There is strong potential within the field to discover further mineralisation, particularly higher grade vein sets which would greatly enhance the economics of any future development.

It is particularly important to note that the failure of the earlier operation was principally due to a lack of understanding on the controls of mineralisation in the field, something which has now been advanced considerably given that the mineralisation has been exposed through the mining, and that the mill being used at the time was solely built for oxide gold ores. During the earn in period Cazaly will fully access the environmental liabilities associated with the project with relation to the previous mining operation.

2.6 GREATER BARDOC TECTONIC ZONE ("GBTZ") PROJECT

2.6.1 Introduction

The GBTZ project comprises three smaller sub-project areas comprising; Bardoc, Goongarrie and Menzies. The tenement status is more fully detailed in the Section 8 of this Prospectus. The project areas are centred approximately 45 kilometres north of Kalgoorlie on the Great Eastern Highway.

2.6.2 Geological Setting

The tenements are located within the western portion of a narrow linear greenstone belt, bound both east & west by granitoid domes. The greenstone sequence correlates to the Ora Banda stratigraphy (Swager et al 1990) of the Kalgoorlie terrane within the NNW striking Norseman-Wiluna greenstone belt.

The sequence is comprised of east younging, steeply dipping volcanic units, separated by contact parallel shears that commonly show reverse movement along fold limbs. The regional features that bind the narrow greenstone sequence (-5km) in the vicinity of the tenements are the Bardoc Tectonic Zone, a wide zone (-1km) of strongly deformed rocks, to the east, and the Mt Pleasant granitic dome to the west.

2.6.3 Previous Exploration

At Bardoc recent previous work has delincated several areas prospective for the discovery of further gold mineralisation. A north trending shear interpreted from acromagnetics has repeatedly recorded lower order gold values from drilling even a strike length of 1.5km.

The Goongarrie project comprises covers 972 hectares over the historic Goongarrie mining centre which has been mined as recently as 1988 by a previous owner. It is considered that further significant gold resources may evist within the user including the potential for bein open can oxide and narrow venica, ingli grade gold resources.

In particular, potential exists below the Frank's Dam and New Boddington pits, around

numerous drill intercepts not as yet followed up and at several aeromagnetic 'look-alike' anomalies.

Results from deeper drilling below the Frank's Dam and New Boddington pits include; 0.75m at 75.4 g/t Au. 1.10m at 21.3 g/t Au, 2m at 18.0 g/t Au and 14m at 4.93 g/t Au. Additionally a number of significant RAB results have been recorded from previous drilling away from the old open cut pits and have yet to have been followed up. These results include; 4m at 21.59 g/t Au, 5m at 1.39 g/t Au and 4m at 3.58 g/t Au.

2.6.4 Conclusions

The GBTZ project covers a multitude of historic workings over an approximate 10 km strike extent situated to the southeast of the township of Menzies. Previous drilling in the area has returned some high grade intercepts and there is a good potential to locate small, narrow veined - high grade gold mineralisation in the arca.

$2.7$ OTHER PROJECTS

Cazaly Resources has also acquired to rights to several other project areas that are at varying stages of prospectivity within the Eastern Goldfields. These projects are mostly at the application stage but the Company believes that there is the potential for value-adding to these prospects and upon granting target generation will commence. These project areas include Mt. Clifford, Cosmos North, Mt. Howe, Jutsons Recks, Mt. White, Wilga Hill, Yerilla, Yilgangi and Merolia.

Selected Bibliography

Anon., 2003: Goongarrie Project. P29/1744 to 1753. Unpub Rep. for Hamill Resources Ltd. Anon, 2003: Project Summary, Quariz Circle Project, 246/ (360-1366, c.46/46),

fones, C.R. 2003: The Kunanaising Project - Prospectivity. Unbub Rep for Cazaiv Resources, Fig. Jones, C.R. 2003: Information Memorandum for Cazaly Resources Ltd. Unpub.

Glossary of Terms

Anorthosite	Rock consisting mainly of plagioclase feldspar.
Assay	To determine mineral content.
Au	Chemical symbol for Gold
Bulk sample	Large sample, which is processed through a small-scale plant, not a laboratory.
Craton	A major structural unit of the earth's crust, consisting of a large stable mass of rock, generally igneous and/or meramorphic. sometimes with a thin veneer of sediment.
Chromite	An ultramafic igneous mineral which occurs often as small grains (spinel group).
Cut-off grade	The grade at which the ore body is mined with no profit or loss, i.e. the breakeven grade.
Diamond Drilling	A drilling method, where the rock is cut with a diamond tipped bit, to extract cores for sampling purposes.
Dilution	Waste, which is mixed with ore in the mining process.
Dìp	Angle that a structural surface, i.e. a bedding or fault plane, makes with the horizontal
	measured perpendicular to the strike of the structure.
Dolerite	A medium grained igneous rock, which is emplaced within the earth's crust in the form of dykes and sills, and has the same mineralogy as basalt.
Dyke	Intrusive igneous rock vertically or sub-vertically emplaced.
Exploration	Activities associated with ascertaining the existence, location, extent or quality of mineralised material, including economic and technical evaluation of mineralised material.
Facies	The sum total of features which are particularly characteristic of a rock type and which are
	considered to have been formed under similar conditions.
Faulting	The process of fracturing that produces a displacement of rock.
Feasibility study	A definitive engineering estimate of all costs, revenues, equipment requirements and
	production levels likely to be achieved if a mine is developed. The study is used to define the economic viability of a project and to support the search for project financing.
Felsite	A fine evenly grained acid or intermediate igneous rock, forming dykes and veins.
Footwall	The underlying side of a fault, ore body of stope
Graben	A downthrown block between two parallel faults.
Grade	The quality of metal per unit mass or ore expressed as a percentage as grams per tonne of ore.
Granite	A coarse-grained igneous rock consisting of quartz, feldspar, mica and a number of accessory minerals.
Granophyres	A fine-grained granite rock.
Gravel	Loose material from underlying rock.
Grinding	Reducing mineralised rock to the consistency of tine sand by crushing and abrading in a rotating steel grinding mill.
Hanging wall	The overlying side of a fault, ore body or stope.
Head grade	The grade of the ore as delivered to the metallurgical plant. Rocks resulting from the crystallisation of molten magma, either intrusive or volcanic.
Igneous In situ	In place, i.e. within unbroken rock, most often used to refer to the location of mineral resources.
Mafic	Rocks consisting mainly ferromagnesian minerals, plagioclase feldspar and minor proportions of quartz.
Mantle	Portion of the earth's interior extending from a depth of 35 - 2900km
Marker	A well defined band of mineralisation that is used to identify the platinum-bearing reef.
Metallurgical plant	Processing plant used to treat ore and extract the contained metals.
Metamorphic	The process by which changes is brought about in rocks by the agencies of heat, pressure and chemically active fluids.
Mineable	That portion of a mineralised deposit for which extraction is technically and economically feasible.

Glossary of Terms (cont'd)

Mineralisation	The presence of a target mineral in a mass of host rock.
Mineralised area	any mass of host rock in which minerals of potential commercial value occur.
Mt	Million tonnes.
Norite	Mafic rock consisting of a mixture of pyroxenite and anorthosite.
Optimisation	Creating the best mining scenario while taking into account the economic parameters of the deposit.
0re	A mixture of mineralised material from which at least one of the contained minerals can be mined and processed at an economic profit.
Ore-body	A continuous well-defined mass of material of sufficient ore content to make extraction economically feasible.
Overburden	The alluvium and rock that must be removed in order to expose an ore deposit.
Pegmatoidal	A very coarse-grained igneous rock.
Percussion drilling	A drilling method, where the rock is penetrated to obtain loose material to examine potential of a particular rock
Pyroxenite	An ultramafic igneous rock consisting of pyroxenes. Their presence in a rock indicates a high temperature of crystallization with a lack of water.
Prospecting	Activities associated with ascertaining the existence, location, extent or quality of mineralised material, including economic and technical evaluation of mineralised material.
Recovery grade	The actual grade of ore realized after the mining and treatment process.
Reef	A mineralised horizon.
Rehabilitation	The process of restoring mined land to a condition approximating to a greater or lesser degree its original state. The South African Department of Mineral and Energy Affairs, address ground and surface water, topsoil, final slope gradients, waste handling and re- vegetation issues and determine reclamation standards.
Sample	The removal of a small amount of rock or soil pertaining to the target zone, which is used to estimate the grade of the deposit and other geological parameters.
Sandstones	Detrital (particles of minerals, or rocks, which have been derived from pre-existing rock by processes of weathering and/or erosion) sedimentary rocks.
Sedimentary	Formed by the deposition of solid fragmental or chemical material that originates from weathering of rocks and is transported from a source to a site of deposition.
Shale	A group of very fine-grained sedimentary rocks (clays, shale's, mudstones, siltstones and marls).
Sill	Intrusive igneous rock horizontally or sub-horizontally emplaced and usually consisting of dolerite.
Specific gravity	Measure of quantity of mass per unit of volume, density.
Strike	The direction in which a horizontal line can be drawn on a plane.
Tonne	One tonne is equal to 1 000 kilograms (also known as a metric ton).
Trenching	Making elongated open-air excavations for the purpose of mapping and sampling.
Ultra basic	Igneous rocks consisting of ferromagnesian minerals and plagioclase feldspar, to the virtual exclusion of quartz.
Ultramafic	See Ultra basic
Volcanic	Igneous rocks that have reached or nearly reached the earth's surface before solidifying, for example lavas.
Waste rock	Rock with an insufficient metal content to justify processing.
Weathered rock	Rock which have been broken down by the influences of water and air and which have become softened and partially decomposed.
Yield/Recovered grade	The actual grade of ore realised after the mining and treatment process.

na ka ang pangang pangang panganganan 36

Level 1, 12 Kings Park Road WEST PERTH WA 6005

14 October 2003

The Directors Cazaly Resources Limited Level 1 22 Oxford Close LEEDERVILLE WA 6007

Dear Sirs

RE: INVESTIGATING ACCOUNTANT'S REPORT

Introduction

This report has been prepared at the request of the Directors of Cazaly Resources Limited ("Cazaly Resources" or "the Company"), for inclusion in a prospectus to be lodged with the Australian Securities and Investment Commission ("ASIC") on or around 15 October 2003 ("Prospectus"), relating to the proposed issue of 17,500,000 ordinary shares at an issue price of 20 cents each to raise a total of \$3,500,000.

The Company reserves the right to accept oversubscriptions of up to a further 2,500,000 ordinary shares at an issue price of 20 cents each to raise a further \$500,000.

The minimum level of subscription under the Prospectus is \$3,000,000.

The maximum amount which may be raised under the Prospectus is \$4,000,000.

Basis of Preparation

The report has been prepared to provide investors with information on historical results and the financial position of Cazaly Resources, and to provide investors with a pro forma statement of financial position of Cazaly Resources as at 8th October 2003 adjusted to include funds raised by this Prospectus and the completion of exploration interest acquisitions and other transactions as referred to in Note 2 of Appendix 2.

This Report does not address the rights attaching to the Shares to be issued in accordance with the Prospectus, the risks associated with the investment, nor form the basis of an Expert's opinion with respect to a valuation of the Company or a valuation of the Share issue price of 20 cents per share.

Rix Levy Fowler ("RLF") has not been requested to consider the prospects for Cazaly Resources nor the merits and risks associated with becoming a shareholder and accordingly, has not done so, nor purports to do so. RLF accordingly takes no responsibility for those matters or for any matter or omission in the Prospectus, other than responsibility for this report.

Background

Cazaly Resources was incorporated on 20 June 2002 with the intention to seek official quotation on the Australian Stock Exchange Limited ("ASX") in November 2003 as a gold explorer.

37

SECT ION 6

Muce incorrommons, he only activities undertaken in the Company have been the acquisition of options over exploration into sty are tenements and the preparation for the problem. Itsting of clavake sessions,

From the cate of incorporation to 8 October 2003, Section/the complete section of the content of the and 2 S00,000 were issued to seen canitalists at 10 cents per south.

Scope of Report

CAZALY

ENDIREES EIMPTED

RLF has been requested to:

• (a) report whether anything has come to our attention which would cause us to believe that the historic, through information disclosed in the appendices to this report is not fairly presented in accordance with scherally accepted accounting principles as applied in Australia for reporting on financial information in a public offer document; and
• (b) report whether anything has come to our attention which would cause us to believe that the pro-forma financial information disclosed in the appendices to this report is not proposite flaws up in a coordance writer. The arpreparation and assumptions set out therein and with generaliz accepted precises as applied in Ansion and presenting pro-ferma financial internaction in a public cilies a supervis

Carab. Resources has prepared, and la responsible for the objective and programs. Generation of common the appendices to this report.

Scope of Review

RLF has not audited the financial statements of Cazaiv Resources as at 8 October 2005. We have conducted at the orien of the historical financial information in accordance with Apdroid probability in the finance of historic We made such enquiries and performed such procedures as well in our professional in factored considerable in the circumstances, including:

• (i) enquiry of directors, management and others:
• (ii) review of contractual arrangements; and
• ant a review of workpapers, accounting records and other distanced

The review procedures were substantially less in scope than an audit examination conducted in accordance with generally accepted auditing standards.

Having regard to the nature of the review, which provides less assurance than an audit, and to the nation of the historical and pro-forma financial information, this report does not express an audit opinion on the historical and proforma financial information included in the appendices to this report.

Valuation of Exploration Interests

Fee principal assets of Canaly Resources will be its exploration multest.

• 6

The exploration interests have been included at cost in the projectional successor of final cases of the term performed our own valuation of the exploration interests. We are unable to form a view on who overloe camena will as in the exploration interests are tairly stated.

Opinion

(a) Historical Financial Information

Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that the historical financial information, as set out in Appendix 1 of this report is not presented fairly in accordance with generally accepted accounting principles as applied in Australia for reporting on financial information in a public offer document.

(b) Pro-Forma Financial Information

Based on our review, which is not an audit. nothing has come to our attention which causes us to believe that the proforma financial information, as set out in Appendix 1 and 2 of this report is not properly drawn up in accordance with basis of preparation in Appendix 1 and 2 and assumptions set out to this report and with generally accepted practice as applied in Australia for presenting pro-forma financial information in a public offer document.

Subsequent Events

To the best of RLF's knowledge and belief, there have been no material items, transactions or events subsequent to 8 October 2003 not otherwise disclosed in this report, that have come to our attention during the course of our review which would cause the information included in this report to be misleading.

Independence

RLF does not have any interest in the outcome of the listing of the shares, other than in connection with the preparation of this report for which normal professional fees will be received.

RLF sere not involved in the preparation of any part of the Prospectus, and accordingly, make no representations or warranties as to the completeness and accuracy of any information contained in any other part of the Prospectus

RLF consents to the inclusion of this report in the Prospectus in the form and content in which it is included. At the date or this report, this consent has not been withdrawn.

Yours family

Arlengtande

RIX LEVY FOWLER Chartered Business Advisors

GEORGE LAZAROU Partner

SECTION 6

39

APPENDIX 1 HISTORICAL FINANCIAL INFORMATION

STATEMENT OF FINANCIAL PERFORMANCE

RESOURCES EIMITED

	Unuadited 20 June	Pro-forma 20 June
	2002 to 8 October 2003	$2002$ to 8 October 2003
Revenues from ordinary activities	37	37
Other expenses from ordinary activities	305	305
Loss from ordinary activities before income tax expense	268	268
Income Tax expense relating to ordinary activities
Loss from ordinary activities after related income tax expense	268	268
Total changes in equity	268	(268

STATEMENT OF FINANCIAL POSITION AND PRO-FORMA STATEMENT OF FINANCIAL POSITION

		Unuadited	Pro-forma
	Note	8 October 2003	8 October
			2003
CURRENT ASSETS
Cash	3	211,799	3,067,054
Other		1,017	1,017
Deferred Share Issue Costs	4	3,000
TOTAL CURRENT ASSETS		215,816	3,068,071
NON CURRENT ASSETS
Exploration expenditure	5	42,566	731,311
TOTAL NON CURRENT ASSETS		32,566	731,311
TOTAL ASSETS		258, 382	3,799,382
NET ASSETS		258,382	3,799,382
EQUITY
Contributed Equity	6	258,650	3,799,650
Accumulated Losses		(268)	(268)
TOTAL EQUITY		258,382	3,799,382

The statement of financial position as at 8 October 2003 is in accordance with the Company's unaudited financial position at that date. The pro-forma statement of financial position at 8 October 2003 represents the unaudited financial position as at that date adjusted for the transactions discussed in Note 2 of Appendix 2 to this report. These statements of financial position are to be read in conjunction with the notes set out in Appendix 2.

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APPENDIX 2 - NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note | Summary of Significant Accounting Policies

The significant accounting policies adopted in the preparation of the historical information and the pro-forma statement of financial position (collectively referred to as the "financial statements") are:

$(a)$ Basis of Accounting

The financial statements have been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board with the exception of AASB 1026 - Statement of Cashflows.

The financial statements have been prepared on an accruals basis, are based on historical cost and except where stated do not take into account changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

$(b)$ Exploration Interests

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:

• (i) such costs are expected to be recouped through successful development and exploitation or from sale of the area; or
• (ii) exploration and evaluation activities in the area have not, at balance date, reached a stage which permit areasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing.

Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Going Concern $(c)$

The financial statements have been prepared on a going concern basis, which anticipates the ability of the company to meet its obligations in the normal course of business. The ability of the Company to meet its existing obligations and those relating to recent acquisitions (as detailed in the Prospectus) will depend on the ability to raise funds pursuant to the Prospectus, and raise further funds through the issue of additional share capital to meet future exploration commitments, as and when required.

Deferred share issue costs $(d)$

In accordance with UIG Abstract 23 (Transaction costs arising on the issue of equity instruments) all transaction costs on the issue of equity instruments are to be recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate.

Note 2. Actual and Proposed Transactions to Arrive at Pro-forma Statement of financial position

The pro-forma statement of financial position as at 8 October 2003 has been included for illustrative purposes to reflect the position of the Company on the basis of the following transactions which occurred subsequent to 8 October 2003 and transactions that are proposed to occur after the Company has issued shares subject to this Prospectus:

• a) the proposed issue and allotment by Cazaly Resources of 1/,500,000 shares at an issue price of 20 cents each to raise a total of \$3,500,000;
• b) the estimated expenses associated with the preparation, sponsorship and issue of the Prospectus of \$319,000 have been offset against the share capital raised. Of this amount \$3,000 had been incurred and paid by Cazaly Resources as at 8 October 2003;
• c) the purchase of exploration interests or options to acquire exploration interests. Consideration is settled through the issue of 1,800,000 shares at 20 cents each and the payment of \$305,000 cash. Other amounts payable have already been accounted for in the historical financial information at 8 October 2003;
• d) the payment of an estimated \$23,745 stamp duty on the transfer of exploration interests from third parties to Cazaly Resources: and

e) transfer of deferred issue costs to issued capital on the successful raising of \$3.500,000

	Note 2	Unaudited 8 October 2003	Pro-forma 8 October 2003
Cash at Bank – unaudited 8 October 2003		211.799	211.799
Issue of 17,500,000 shares pursuant to this prospectus	(a)		3,500,000
Prospectus issue costs	(b)		(316,000)
Payment of exploration interests pursuant to
option agreements	(c)		(305,000)
Payment of stamp duty	(d)		(23, 745)
		211,799	3,067,054

Note 3 Cash

CAZALY

RESOURCES LIMITED

Note: The effect of oversubscriptions has not been accounted for. In the event that oversubscriptions are received, the pro-forma cash balance would be increased to the extent of the oversubscription (adjusted for any increase in Prospectus issue costs arising from the oversubscription). Similarly, should the Company's total raising fall between the minimum subscription of \$3.000.000 and the full Issue of \$3,500,000, the pro-forma cash balance would decrease to the extent of the shortfall (adjusted for any savings in Prospectus issue costs arising from the shortfall).

Note 4 Deferred Share Issue Costs

	The State of Lat	Note	Unaudited	Pro-forma Octobe
		There are a program and the most control	2003	2003.
	Balance at 8 October 2003 - unaudited		3,000	3,000
Further float costs		(b)		316,000
Transfer to Issued Capital		(e)		(319,000)
			3,000

Note 5 Exploration Expenditure

	Note 2	Unaudited 8 October 2003	Pro-forma 8 October 2003
Capitalised exploration expenditure: at cost
- unaudited 8 October 2003		12.566	12.566
Payments for exploration interests pursuant
to option agreements	(c)	30.000	695,000
Payment of stamp duty	(d)		23.745
		42,566	731,311

Note 6 Share Capital

	Note 2	Unaudited 8 October 2003	Pro-forma 8 October 2003
Balance at 8 October 2003 - unaudited		258,650	258,650
Issue of 17,500,000 shares pursuant to this prospectus	(a)		3,500,000
Prospectus issue costs	(b)		(319,000)
Issue of 1,800,000 shares for interest in mineral
tenements	$\left( c\right)$	a.	360,000
		258,650	3,799,650

In the event of oversubscriptions being accepted, the issued capital would increase by a maximum of \$500,000 and the costs of the issue would increase by a maximum of \$25,000.

Note 7 Commitments

$(a)$ Exploration

The Company has minimum obligations pursuant to the terms and conditions of Tenement Licences in the forthcoming year of \$1,014,100 for exploration commitments and \$17,181 rental commitments. These obligations are capable of being varied from time to time, in order to maintain current rights of tenure to mining tenements.

$(b)$ Native Title

The Company's mining tenements may be subject to native title applications in the future. At this stage it is not possible to quantify the impact (if any) that native title may have on the operations of the Company. Refer to Section 7 of the prospectus for further details on Native Title.

Note 8 Options on Issue

Refer to Section 8.12 of the Prospectus for details of options on issue.

Note 9 Contingent Liabilities

As noted in Section 7 of this prospectus, Cazaly Resources has entered into a number of joint ventures, options to acquire tenement interests, and royalty arrangements with various parties. These arrangements provide for additional amounts to be paid if certain conditions are met or if the Directors of Cazaly Resources decide to take certain action.

43

At the date of our report, the Directors have not made any specific undertakings regarding the amounts which may become payable in the future. The following amounts represent the maximum amounts that may become payable in the future (as can be reasonably measured at the time) if the Directors decide to acquire the maximum available holdings in their existing tenements:

Amounts payable on exercise of options to acquire tenement interests total \$695,000 (of this amount, \$695,000 has been included in the pro-forma statement of financial position).

In addition, royalty payments may be payable if certain conditions are met in the future. At this time, these payments are uncertain and cannot be measured reliably.

Further details and specific arrangements are contained in Section 7 of this Prospectus.

Note 10 Related Party Transactions

CAZALY

RESOURCES LIMITED

Refer to Section 8.3 of the Prospectus for details of other related party transactions and shareholdings.

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LAWYER

6 October 2003

The Directors Cazaly Resources Limited PO Box 396 WEST PERTH WA 6872

Dear Sirs

SOLICITORS' REPORT ON MINING TENEMENTS - CAZALY RESOURCES LIMITED

This report has been prepared for inclusion in the prospectus to be issued by Cazaly Resources Limited ("the Company") dated on or about 10 October 2003 to raise up to \$3.5 million with an allowance of over subscriptions of additional \$500,000.00 ("the Prospectus"). The offer in the Prospectus comprises the issue by the Company of 17,500,000 fully paid ordinary shares at \$0.20 each.

We have been requested to report on the various mining tenements, listed in the Schedule of Mining Tenements, to which the Company is entitled to or has acquired rights ("Mining Tenements"). Details of these mining tenement interests are listed in the attached Schedule of Tenements ("the Schedule") which, together with the notes to the Schedule ("the Notes") and the Material Contracts Summary forms part of this report.

All of the Mining Tenements are located in Western Australia and New South Wales and are identified in the Schedule.

This report consists of the Schedule, the Notes to the Schedule and the Schedule of Material Contracts ("the Contracts").

1. SEARCHES

We conducted searches of the Mining Tenements listed in the Schedule in the registers maintained by the Western Australian Department of Industry and Resources ("DIR") pursuant to the Mining Act 1978 (WA) ("WA Act") on 3 September 2003. We have also reviewed searches of the National Native Title Tribunal's ("NNTT") Perth register in relation to the Tenements as at 3 September 2003.

We have also received copies of searches conducted on tenements in New South Wales from the register maintained by the Department of Mineral Resources (NSW) ("DMR") pursuant to the Mining Act 1992 (NSW) ("the NSW Act").

As a result of those searches and our perusal of the material contracts set out in the Contracts, we consider this report provides an accurate statement, as at the date of the respective searches, as to the status of the Mining Tenements and the interests of the Company in those Mining Tenements. We have assumed the information in the registers maintained by DIR, DMR and the NNTT is accurate. The references in the Schedule to the areas of the Mining Tenements are taken from details shown on DIR's, DMR's and NNTT's registers. No survey was conducted to verify the accuracy of the Mining Tenement areas.

We have further assumed that the Company's seals and signatures on all the Contracts are authentic, and that the Contracts are and were within the capacity and powers of those who executed them. We assume that all of the Contracts were validly authorised, executed and delivered by and are binding on the parties to them and comprise the entire agreements of the parties to each of them with respect to their respective subject matters.

2. COMPLIANCE

The Company's interest in or right in relation to the granted Mining Tenements is subject to the holder continuing to comply with the respective terms and conditions of the respective granted Mining Tenements under the provisions of

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the WA Act and NSW Act, and any regulations made pursuant to those Acts, together with the conditions specifically applicable to any granted Mining Tenement. We have sought and received confirmation from the Company that the various conditions in respect of each granted Mining Tenement have been met in all material respects.

3. ABORIGINAL SITES

There may be sites of Aboriginal heritage or significance located on the land on which the Mining Tenements are situated.

The Aboriginal Heritage Act 1972 (WA) ("WA Heritage Act") applies to all of the Mining Tenements located in Western Australia and makes it an offence to alter or damage an Aboriginal site or object on or under an Aboriginal site. An Aboriginal site is defined to include any sacred, ritual or ceremonial site which is of importance and special significance to persons of Aboriginal descent.

There is no requirement or need for an Aboriginal site to be registered in any public manner, or indeed, to be in any way acknowledged as an Aboriginal site for it to qualify as an Aboriginal site for the purposes of the WA Heritage Act. The Mining Tenements are also subject to the provisions of the Aboriginal and Torres Strait Islander Heritage Protection Act (1984) (Cth) (the "Commonwealth Heritage Act"). This Act contains provisions designed to preserve and protect from injury or desecration areas and objects which are of particular significance to Aboriginal people in accordance with Aboriginal tradition. An area or object is found to be desecrated if it is used or treated in a manner inconsistent with aboriginal tradition.

In respect of any Aboriginal sites that are identified on any of the Mining Tenements, the Company must ensure that any interference with such sites is in strict conformity with the provisions of the Commonwealth Heritage Act and the WA Heritage Act.

4. NATIVE TITLE LEGISLATION

Judicial recognition of native title at common law occurred in Mabo v Queensland (No 2) ("Mabo"), a decision of the High Court of Australia on 3 June 1992. Generally these native title rights to land will be recognised where:

• a) the claimants can establish that they have maintained a continuous connection with the land in accordance with their traditional laws and customs since British settlement in 1788; and
• b) the native title rights have not been lawfully extinguished.

The High Court held that native title rights can be lawfully extinguished by certain government legislation and executive actions which are not inconsistent with native title. In order for extinguishing of native title rights to be lawful, it must comply with the obligations imposed by the Racial Discrimination Act 1975 (Cth) ("RDA").

After Mabo considerable uncertaintics existed about the validity of proprietary rights in Australia, including mining tenements. To address those uncertainties the Commonwealth Parliament responded by passing the Commonwealth Native Title Act 1993 (Cth) ("NTA"). The NTA commenced on January 1994.

The NTA was substantially amended in 1998 in response to the 1996 High Court decision of Wik v Queensland ("Wik"). Wik recognised that the granting of a pastoral lease did not necessarily extinguish all native title rights, some of which could co-exist with rights held under a pastoral lease. The NTA was amended to provide a legislative scheme that set out how native title can be validly extinguished. In summary the NTA:

a) provides for recognition and protection of native title;

b) sets up mechanisms for determining claims for native title such as the "right to negotiate" which allows native title claimants to be consulted in relation to certain mining and other developments;

• c) make valid certain "past acts" which would otherwise be invalidated because of native title;
• d) establish ways in which "future acts" (eg the granting of mining tenement applications and converting exploration licences and prospecting licences to mining leases) affecting native title may proceed and how native title rights are protected, including rights to compensation; and
• e) provides a process by which claims for native title and compensation can be determined.

The NTA also allows the States, among other things, to make laws for the validation of past acts and intermediate period acts which are attributable to that State. The Western Australian parliament passed the Land (Title and Traditional Usage) Act 1993 (WA) ("WA Land Act") prior to the NTA, however on 16 March 1995 the High Court found that the WA Land Act was invalid. This means that Western Australia must comply with the NTA.

In New South Wales, the NTA procedures continue to apply in conjunction with the Native Title (New South Wales) Act 1994 (NSW) and the Native Title (New South Wales) Amendment Act 1998 (NSW). The DMR has stated that it will generally assume that the grant or renewal of any exploration title will affect some potential native title land and therefore that the requirements of the NTA will need to be satisfied in every case.

It remains to be seen whether recent important native title decisions of the High Court and Federal Court will result in further legislative amendments.

5. NATIVE TITLE CLAIMS

Persons claiming to hold native title may lodge an application for determination of native title with the Federal Court. Once a native title claim has been lodged, the Court will refer the application to the Native Title Registrar. The Native Title Registrar must determine whether the claim meets certain conditions concerning the merits of the claim, and certain procedural and other requirements set out by the NTA.

If the Native Title Registrar is satisfied the lodged claim meets the registration requirements set out in the Commonwealth Act ("Registration Test") it will be entered on the Register of Native Title Claims maintained by the National Native Title Tribunal ("Register"). Claimants of registered claims are afforded certain procedural rights under the Commonwealth Act including the "right to negotiate".

Claims that fail to meet the Registration Test are recorded on the Schedule of Applications Received. Such claims may be entered on the Register at a later date if additional information is provided by the claimant that satisfies the Registration Test.

The recent High Court decision of Ward v Western Australia and South Australia, handed down on 8 August 2002, established that where tenure such as a pastoral lease is granted, native title is extinguished to the extent that it is inconsistent with the rights conferred by the pastoral lease. The effect on any of the Mining Tenements located on a pastoral lease is to extinguish the right of native title claimants to control the land, restrict access to the land and require permission for acts to be done.

A number of the Mining Tenements relate to land that is currently the subject of one or more native title claims. These claims are identified in the Schedule. The fact that a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor does the absence of a claim necessarily indicate that no native title exists over that area.

We have not undertaken the considerable historical, anthropological and ethnographic work that would be required to determine the likelihood that existing claims may be successful, or the possibility of any further claims being made in the future.

6. VALIDITY OF THE MINING TENEMENTS

The existence of native title to an area as at the date of grant of a mining tenement may render the tenement invalid. For example, if the provisions of the RDA or the NTA are ignored. We have reviewed the validity of each of the Mining renements and made notations as to their validity (from a native title perspective) in the Schedule, having regard to the following:

$a)$ Tenements granted prior to 1 January 1994

Tenements granted prior to 1 January 1994 are either valid as at the date or were subsequently validated by the combined operation of the NTA and Western Australian or New South Wales native title legislation, depending on their location.

As set out in the Schedule the Company has ten Mining Tenements in Western Australia that were granted prior to 1 January 1994 as follows:

$\cdot$ M27/177 $\cdot$ P25/1271 $\cdot$ P27/1193 $-$ P₂₅/1272 $• P27/1194$ $\cdot$ P25/1273 $• P31/1420$ $\cdot$ P25/1274 $\cdot$ P25/1270

All of the Mining Tenements located in New South Wales were granted prior to 1 January 1994 and are therefore considered valid.

Tenements granted between 1 January 1994 and 23 December 1996 $\mathbf{h}$

48

Tenements granted between 1 January 1994 and 23 December 1996 (being the date on which the High Court handed down the Wik decision) will either be:

• Valid as at the date of grant; or
• · Invalid because they fail to comply with certain provisions of the NTA or for any other reason because of native title.

The combined operation of the Commonwealth and Western Australian native title legislation will have validated such invalid acts, if certain statutory criteria are met (such as, where applicable, the payment of compensation and notification requirements). We assume that, if applicable to the Mining Tenements, all such statutory criteria have been met.

The Company has only two Mining Tenements that were granted during this period, M27/187 and M27/201. the grant is considered to be valid.

Tenements granted since 23 December 1996 $\mathbf{c}$

Mining Tenements granted since 23 December 1996 which affect native title rights and interests will be valid provided that the future act procedures set out in (d) below were followed by the relevant parties. We have not been instructed to analyse whether or not the relevant NTA procedures were followed in relation to each tenement, but are of the opinion that they were validly granted.

The following tenements are all granted tenements that are classified as valid future acts under the NTA:

• $\cdot$ P26/3076 $\cdot$ P29/1748
• $\cdot$ P26/3116 $• P29/1749$
• $\cdot$ P26/3128 $- P29/1750$
• $E26/87$ $\cdot$ P29/1751
• $\cdot$ P25/1663 $\cdot$ P29/1753
• $\cdot$ E27/277 $\cdot$ P29/1732
• $\cdot$ P27/1563 $\cdot$ P29/1733
• $\cdot$ P27/1564 $\cdot$ P29/1776
• P27/1565 • $P29/1777$
• $P29/1744$ $\cdot$ P29/1778
• · P29/1745 $\cdot$ P29/1779
• $\cdot$ P29/1746 $\cdot$ P29/1780
• $-$ P29/1747

d) Future Tenement Grants

The valid grant of any mining tenement that may affect native title requires full compliance with the provisions of the NTA. The primary procedure prescribed under the NTA is the "right to negotiate" process.

The right to negotiate process involves the publishing or advertising of a notice of the proposed grant of a tenement followed by a 6 month period of negotiation between the Territory Government, the tenement applicant and the relevant registered native title claimant. If agreement is not reached to enable the grant to occur. the matter may be referred to arbitration before the National Native Title Tribunal ("NNTT"), which has a further 6 months to reach a decision. The decision of the NNTT may be reviewed by the relevant Federal Minister.

The right to negotiate process is not required to be followed in respect of a proposed future act in instances where the expedited procedure applies. Under the NTA, a future act is an act attracting the expedited procedure if:

• (i) the act is not to interfere directly with the carrying on of the community or social activities of the persons who are the holders of native title in relation to the land; and
• (ii) the act is not likely to interfere with areas or sites of particular significance, in accordance with their traditions, to the persons who are holders of the native title in relation to the land; and
• (iii) the act is not likely to involve major disturbance to any land or waters concerned or create rights whose exercise is likely to involve major disturbance to any land.

When the proposed future act is considered to be one that attracts the expedited procedure, persons have until 3 months after the notification date to take steps to become a native title party in relation to the relevant act (for example the proposed granting of an exploration licence). The future act may be done unless, within four months after the notification day, a native title party lodges an objection with the NNTT against the inclusion of a statement that the proposed future act is an act attracting the expedited procedure.

If there are no native title parties or no objections lodged within the four month period, the act may be done. If one or more native title parties object to the statement, the NNTT must determine whether the act is an act attracting the expedited procedure. If the NNTT determines that it is, the State may do the future act (ie grant an exploration licence).

In NSW, the granting or renewal of a mining title will be dealt with in accordance with the 'right to negotiate' process unless it can be demonstrated that native title has been extinguished over the title or that the grant is excluded from the 'right to negotiate' process by the NTA.

The NSW Act further provides that the applicant for, or holder of, a mining tenement is liable for compensation payable to native title-holders in connection with the grant of a mining tenement.

The right to negotiate process does not have to be pursued in cases where an indigenous land use agreement ("ILUA") is negotiated with the relevant Aboriginal people and registered with the NNTT. In such cases, the procedures prescribed by the ILUA must be followed to obtain the valid grant of the tenement. These procedures will vary depending on the terms of the ILUA.

We have not been provided with any information on any negotiations relating to any ILUA for any of the Mining Tenements.

7. RENEWALS AND EXTENSIONS OF TENEMENTS

As with the granting of mining tenements, renewals and extensions of mining tenements granted prior to 1 January 1994, to the extent the renewals were invalid due to native title, have been validated by legislation.

Renewals of mining tenements granted between 1 January 1994 and 23 December 1996 have been similarly validated provided certain statutory criteria have been met.

Renewals made after 23 December 1996 of tenements validly granted before that date will not be subject to the right to negotiate process provided:

• (i) the area to which the earlier right is made is not extended;
• (ii) the term of the new right is not longer than the term of the earlier right; and
• (iii) the rights to be created are not greater than the rights conferred by the earlier grant.

There is doubt as to whether the right to negotiate process applies to second and subsequent renewals but this matter is yet to be determined by the Courts.

Other than as stated above, renewals of mining tenements are subject to the same right to negotiate process as is described in (d) above.

COMPLIANCE 8.

The Company's interest in or rights in relation to the granted Mining Tenements are subject to the holder continuing to comply with the respective terms and conditions of the respective granted Mining Tenements under the provisions of the WA Act and NSW Act and regulations made pursuant to that legislation, together with the conditions specifically applicable to any granted mining tenement. We have not received confirmation from the Company that the various conditions in respect of each granted mining tenement have been met in all material respects.

9. QUALIFICATIONS

While the status of the Tenements is dealt with in detail in the Schedule and the Notes to the Schedule we point out by way of summary, that:

• we have assumed that all searches conducted on our behalf by the departments are complete and accurate as at the time the searches were conducted;

• we have assumed that all information or advice, whether oral or written provided to us by the Company, its officers, employees, agents or representatives is accurate and complete;

• in relation to each tenement application we express no opinion as to whether such tenement application will ultimately be granted, (including whether relevant Ministerial consent will be obtained) nor the conditions to which such tenement application may be granted or may not be granted subject to; and
• in relation to each native title claim outlined in this report we do not express an opinion on the merits of such native title claim.

10. CONSENTS

This report is given solely for the benefit of the Company and the directors of the Company in connection with the issue of the Prospectus and is not to be relied on or disclosed to any other person or used for any other purpose or quoted or referred to in any public document or filed with any government body or other person without our prior consent.

Yours faithfully

PRICE SIERAKOWSKI

ā		$\mathbf{B},\mathbf{C}$ O æ	$\frac{C}{n}$				$\leq$	$\prec$ $\,<\,$	$\sim$	$\leq$		$\prec$	⋖ $\prec$	$\prec$	≺	⋖	⋖	≺	$\,<\,$	$\tilde{\phantom{a}}$	₹	$\prec$ ≺	$\prec$	÷.	€	$\prec$ ≺	$\tilde{\mathcal{L}}$	÷,	文	⋖	≺	$\prec$	$\lt$ ≺	$\leq$	$\prec$	$\prec$	$\,<\,$
		1, 7, 8, 9, 10 1, 2, 3, 5, 6		1, 5, 6, 8, 11, 12, 13 , 8, 14, 15, 16	, 8, 14, 15, 16			1,17,18						1, 25, 26 , 25	1, 25, 26	1, 19, 20, 21, 22	24 1, 23,		$\mathbb{Z}$ $\sim$	1, 28	1, 29 1,30	$\overline{1,31}$	1, 32	$\tilde{c}$ $\ddot{\phantom{0}}$
Minimum Expenditure		\$19,800 \$5,000	\$12,200	\$4,880	\$4,840	Not Applicable.	Not Applicable	\$7,480	Not Applicable Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable	Not Applicable	\$4,120	\$4,280	Not Applicable	Not Applicable	Not Applicable	\$7,000 \$7,000	\$7,400	\$7,720	\$5,120	Not Applicable	Not Applicable Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable
鞸 镇		197.5 Ha $3.63$ Ha	121.25 Ha	121.15 Ha	120.95 Ha	561 Ha	3 S/B	19111a 187 Ha	167 Ha	200 Ha	197 Ha	191 Ha	183 Ha 01Ha	$117$ Ha	121Ha	102.16 H a	107 Ha	118 Ha	9 Blocks	829 Ha	175 Ha 175 Ha	$184.5$ Ha	193 Ha	128 H a	188 H a	20011a 150 H a	144 Ha	200 H a	6.6 Ha	$121$ Ha	196 Ha	$182$ Ha 187 Ha	181 Ha	45 Ha	200 H a	199 Ha	199 Ha
N iry Date $\tilde{\tilde{\mathbf{z}}}$		24/10/15 27/10/14		Converted to M27/236 14/02/16	Converted to M27/236	Not Applicable	Not Applicable	Not Applicable 19/09/2005	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable	Not Applicable	21/07/07	21/07/07	Not Applicable	Not Applicable	Not Applicable	To M25/237 To M25/237 Conv. Conv.	To M25/237 Conv.	To M25/237 Conv.	Conv. To M25/237	Not Applicable	Not Applicable Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable Not Applicable
GrandRenewal Application		25/10/94 28/10/93	15/02/95	29/08/91	31/7/91	(12/07/95)	(29/05/03)	(24/07/03) 20/09/01	(24/07/03)	(24/07/03)	(24/07/03)	(24/07/03)	(24/07/03) (24/07/03)	(24/07/03)	(24/07/03)	22/07/03	22/07/03	(17/12/02)	(26/3/02)	(10/03/97)	30/07/93 30/07/93	30/07/93	30/07/93	30/07/93	(21/01/02)	(21/01/02) (21/01/02)	(21/01/02)	(21/01/02)	(22/02/02)	(02/04/02)	(02/04/02)	(02/04/02) (02/04/02)	(02/04/02)	(02/04/02)	(09/07/03)	(09/07/03)	(60/7/03) (60/70/60)
Shares Pie F		100% 100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100% 100%
O)		KLSL KLSL		KLSI. KLSL	KLSL	KLSL	E	ED IGEL	IGFL	IGFI.	IGFL	IGFL	IGFL E	IGFI.	E	IED	IGFL	GFL	IGFL.	GFL	IGFL GFL	GFL.	IGFL	E	GFL	E GFL	IGHL	GFI.	IGFL	EDI	C H	E IGF1.	GFL	E	IGFL	ECC	E ECCL
	East Kalgoorlie Project	M27/187 M27/177	M27/201	P27/1193	927/1194	M27/236	1:26/112	P 26 /3076 P 25 /1800	1081/52	P26/3205	P26/3206	P 26 /3207	P26/3208 126/3209	P26/3210	P 26 /3211	226/3116	26/3128	126/3163	125/268	M25/237	P 25 /1270 125/1271	P 25 /1272	P25/1273	P25/1274	P25/1730	P25/1732 125/1731	125/1733	P 25 /1734	P 25 /1738	P25/1746	125/1747	P25/1748 P25/1749	25/1750	P25/1751	P25/1789	25/1790	P25/1792 125/1791

"抽样"说话:"赚出 三元 事。

	ŧ.								Other Relevant
	Project Name & Tenement	Registered Holder or	Shares Held	Grant/Renewal Application	Expiry Date		Expenditure Minimum	Notes	Information
	No. & Type	Applicant		Date
	P25/1794	IGFL	100%	(60/20/60)	Not Applicable	199 Ha	Not Applicable
	P26/3195	IGFL	100%	(09/07/03)	Not Applicable	170 Ha	Not Applicable		¢
	P26/3196	IGFL	100%	(60/20/60)	Not Applicable	191 Ha	Not Applicable		≺
	P26/3197	ECEL	100%	(09/07/03)	Not Applicable	149 Ha	Not Applicable		$\prec$
	P 26 /3198	IGFL	100%	(60/10/60)	Not Applicable	200 Ha	Not Applicable		≺
	P26/3199	IGFL	100%	(69/07/03)	Not Applicable	119 Ha	Not Applicable		Ą
	P27/1567	IGFL	100%	(22/02/02)	Not Applicable	200 Ha	Not Applicable		≺
	P27/1568	IGFL	100%	(22/02/02)	Not Applicable	200 Ha	Not Applicable		$\prec$ $\prec$
	P27/1569	IGFL	100%	(22/02/02)	Not Applicable	200 Ha	Not Applicable
	P 27 /1570	IGFL	100%	(22/02/02)	Not Applicable	187 Ha 200 Ha	Not Applicable Not Applicable		$\prec$ ≺
	P27/1571	IGFL	100%	(22/02/02)	Not Applicable	154 Ha	Not Applicable		$\prec$
	P27/1601	IGFL	100%	(09/07/03)	Not Applicable	157 Ha	Not Applicable		$\prec$
	P27/1602	IGFL	100%	(09/07/03)	Not Applicable				≺
	P27/1603	IGFL	100%	(09/07/03)	Not Applicable	165 Ha	Not Applicable		≺
	P27/1604	IGFL	100%	(09/07/03)	Not Applicable	183 Ha	Not Applicable
	P27/1605	IGFL	100%	(09/07/03)	Not Applicable	171 Ha	Not Applicable		≺
	P27/1606	IGFL	100%	(09/07/03)	Not Applicable	147 Ha	Not Applicable		≺ ≺
	P27/1607	IGFL	100%	(09/07/03)	Not Applicable	165 Ha	Not Applicable
	E26/87	WRAE	100%	21/12/00	20/12/05	6S/B	\$20,000	1,34	$\Omega$ in
	P25/1663	LOMOD	50%	09/10/00	0/01/20	198 Ha	\$7,920	1,35, 36, 37, 38
		WGOD	50%
	Mt Vetters Project
	E27/277	E	100%	21/11/02	20/11/07	9 Blocks	\$20,424	39, 40, 41, 42, 118	⋖
	P27/1563	E	100%	24/09/02	23/09/06	135 Ha	\$5,400	118, 119	$\prec$
53	P27/1564	IGFI	100%	24/09/02	23/09/06	190 Ha	\$7,600	118, 120	$\prec$
	P27/1565	IGFL	100%	24/09/02	23/09/06	182 Ha	\$7,280	41, 118, 121	$\prec$
	P27/1608	IGFL	100%	(21/07/03)	Not Applicable.	188 Ha	Not Applicable.	118	4
	P27/1609	IGFL	100%	(21/07/03)	Not Applicable.	58 H a	Not Applicable.	118	$\prec$
	P27/1610	IGFI	100%	(21/07/03)	Not Applicable	60 H a	Not Applicable.	118	≺
	Quartz Circle Project
	E45/2495	IGFL	100%	(13/05/03)	Not Applicable.	16 Blocks	Not Applicable.	43	⋖
	E46/541	IGFL	100%	(11/02/02)	Not Applicable.	2 Blocks	Not Applicable.	43	$\prec$
	P46/1360	IGFL	100%	(11/02/02)	Not Applicable.	108.8 Ha	Not Applicable.	43	$\prec$
	P46/1361	IGFL	100%	(11/02/02)	Not Applicable.	107.7 Ha	Not Applicable.	43	$\prec$
	P46/1362	LGFL	100%	(11/02/02)	Not Applicable.	114.11 Ha	Not Applicable.	$43$	$\prec$
	P46/1363	ESI	100%	(11/02/02)	Not Applicable.	114.14 Ha	Not Applicable.	$43$	$\prec$
	P46/1364	IGFL	100%	(11/02/02)	Not Applicable.	119.26 Ha	Not Applicable.	43	$\prec$
	P46/1365	IGFL	100%	(11/02/02)	Not Applicable.	118.49 Ha	Not Applicable.	43	$\prec$ $\prec$
	P46/1366	IGFL	100%	(11/02/02)	Not Applicable.	192 Ha	Not Applicable.	43
	P46/1385	IGFL	100%	(02/04/03)	Not Applicable.	114.62 Ha	Not Applicable.	43	$\prec$ $\prec$
	P46/1386	IGFL	100%	(02/04/03)	Not Applicable.	86.68 Ha	Not Applicable.	43
SECTION

δ				$\prec$	≺.	⋖	⋖	⋖	≺ ≺	≺⊂	≺	≺	≺	$\prec \zeta$	$\prec$ $\prec$	$\prec$	$\prec$	$\prec$	$\prec$	$\prec$	$\,<$ $\prec$	$\prec$	≺									$\prec$ $\,<\,$	$\prec$	$\prec$	$\prec$	$\prec$ $\prec$
Notes		14, 45, 46, 47, 51, 67, 124	45, 46, 50, 53, 54, 67, 126 45, 46, 48, 49, 52, 67, 125	45, 46, 55, 56, 57, 58, 67, 127	45, 46, 59, 60, 61, 62, 67, 72	45, 46, 63, 64, 65, 67	45, 46, 67, 68, 69	70, 71, 72	45, 46, 67, 75, 76 46,74	46, 74	77, 78, 79	78, 80, 81	123	82, 120	83, 120 84, 120	85, 120	78, 122	78	$\overline{78}$	123	123 123	123	123	78	$78\,$ 78	$\overline{78}$	$78$	78	78
Expenditure Minimum		\$4,800	\$4,760 \$4,800	\$4,800	\$4,560	\$2,000	\$3,760	\$4,840	Not Applicable. \$2,000	Not Applicable.	\$4,840	\$4,800	Not Applicable.	\$7,600	\$6,360 \$7,040	\$4,840	\$4,840	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	\$25,200	\$10,000 \$19,000	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.
Area		$120$ Ha	$119$ Ha 120 Ha	$120$ Ha	114 Ha	29 H a	94 Ha	121 Ha	121 Ha 14 Ha	12H a	120.66 Ha	119.9 Ha	161 Ha	190 Ha 159 Ha	176 Ha	121 Ha	121 Ha	77 H a	10 H a	29.13 Ha	193 Ha 188 Ha	115 Ha	$8$ Ha	162 Ha	200 H a	166 Ha 170 Ha	176 H a	176 Ha	182 Ha	124 Ha	252 Ha	190 Ha 58 Ha	5 H 4	43 Ha	200 Ha	20011a 40 Ha
Expiry Date		21/02/06	21/02/06 21/02/06	21/02/06	21/02/06	21/02/06	21/02/06	29/04/06	Not Applicable. 21/02/06	Not Applicable.	05/02/06	05/02/06	Not Applicable.	19/06/07 19/06/07	19/06/07	19/06/07	19/06/07	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable.	11/04/12	08/12/13 14/02/16	Not Applicable.	Not Applicable.	Not Applicable.	Not Applicable. Not Applicable.
Breval tion Date Applicat Grant/R		22/02/02	22/02/02 22/02/02	22/02/02	22/02/02	22/02/02	22/02/02	30/04/02	(11/07/01) 22/02/02	(03/10/02)	06/02/02	06/02/02	(30/08/02)	20/06/03 20/06/03	20/06/03	20/06/03	20/06/03	(30/08/02)	(30/08/02)	(02/10/02)	(28/04/03) (28/04/03)	(28/04/03)	(50/90/82)	(19/08/03)	(19/08/03) (19/08/03)	(19/08/03)	(19/08/03)	(19/08/03)	(19/08/03)	(19/08/03)	12/04/91	09/12/92 15/02/95	(11/06/01)	(19/12/02)	(19/12/02)	(19/12/02) (29/01/02)
Shares Held		100%	100% 100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100% $100\%$	100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100% 100%	100%	100%	100%	100%	100%	100%	100% 100%	100%	100%	100%	100% 100%
older or		IGFL	ICFL E	LGEL	EEDI	EDI	ISC	IGFI	ESI ECE	IGFL	ISE	IGFI	IGFL	ICFL ICFL	IGFL	IGFL	IGFL	EED	IGFL	IGFL	IGFL IGFL	IGFL	ICFL	CAZR Gold Ltd	CAZR Gold Ltd CAZR Gold Ltd	CAZR Gold Ltd	CAZR Gold Ltd	CAZR Gold Ltd	CAZR Gold Ltd	CAZR Gold Ltd	I'ARM TARM	TARM	IGFL	IGHL	IGH ICFL.	IGFL
	Greater BTZ Project	P29/1744	P29/1745 P29/1746	P29/1747	29/1748	129/1749	129/1750	P 29 /1751	P29/1752 29/1753	129/1785	P29/1732	P29/1733	P29/1775	129/1776 P29/1777	P29/1778	P 29 /1779	129/1780	129/1781	129/1782	P29/1784	P29/1793 129/1794	129/1795	229/1796	129/1802	129/1803 29/1804	P29/1805	P29/1806	129/1807	29/1808	P 29 /1809	M24/380 M24/400	M24/429	124/3757	124/3801	124/3802	P24/3829 124/3803

								Other Relevant
Project Name & Tenement No. & Type	Registered Holder or Applicant	Shares Held	Grant/Renewal Application Date	Expiry Date		Expenditure Minimum	Note 2	Information
Other Projects
E39/986	IGFL	100%	(23/07/02)	ot Applicable. zz	12 Blocks	Vot Applicable.	$\frac{8}{10}$
E38/1540	IGFL	100%	23/12/02)	lot Applicable.	70 Blocks	Not Applicable.	102 102	⋖
E38/1541	LGFL	100%	23/12/02	Not Applicable.	42 Blocks	Not Applicable.		⋖
P26/3149	E	100%	(22/10/02)	Not Applicable.	195 Ha	Not Applicable.		⋖
P26/3150	IGFL	100%	(22/10/02)	Not Applicable.	8 Ha	Not Applicable		≺
P27/1581	ECEL	100%	22/10/02	Not Applicable.	153 Ha	Not Applicable.		C
P27/1582	E	100%	(22/10/02)	Not Applicable.	170 Ha	Not Applicable.
127/1583	ED	100%	22/10/02	Not Applicable	182 Ha	Not Applicable.	$\mathbf{S}$
E38/1524	IGFL	100%	(16/10/02)	Not Applicable.	3 Blocks	Not Applicable.
E38/1555	IGFL	100%	(03/04/03)	Not Applicable.	3 Blocks	Not Applicable.	100, 103
E38/1556	EDI	100%	(03/04/03)	Not Applicable.	2 Blocks	Not Applicable.	$\approx$ 100
P38/3106	IGEL	100%	18/10/02)	Not Applicable.	98.77 Ha	Not Applicable.	100
P38/3107	EGEL	100%	(18/10/02)	Not Applicable.	72.36 Ha	Not Applicable.	100
P38/3108	IGFL	100%	(18/10/02)	Not Applicable.	98.39 Ha	Not Applicable.	104, 105
E36/501	IGFL	100%	(10/03/03)	Not Applicable.	6 Blocks	Not Applicable. Not Applicable.	107
E37/740	IGEL	100%	(13/12/02)	Not Applicable.	0 Blocks	Not Applicable.	107
P37/6322	IGFL	100%	(07/03/02)	Not Applicable.	186 Ha		107
P37/6323	IGEL	100%	(07/03/02)	Not Applicable.	.79 Ha	Not Applicable.	107
P37/6557	IGFL	100%	(601403)	Not Applicable.	190 Ha	Not Applicable.	1,108
P27/1587	ESI	100%	(17/01/03)	Not Applicable.	109 Ha	Not Applicable.	1,108
P27/1588	IGFL	100%	(17/01/03)	Not Applicable.	146 Ha	Not Applicable.	1,108
P27/1589	EGFL	100%	(17/01/03)	Not Applicable.	197 Ha	Not Applicable.	1,108
P27/1590	EDI	100%	(17/01/03)	Not Applicable.	$172$ Ha	Not Applicable.
P27/1591	GFL	100%	(17/01/03)	Not Applicable.	104 Ha	Not Applicable.	1,108	c
P27/1592	EGFL	100%	(17/01/03)	Not Applicable.	172 Ha	Not Applicable.	1,108	⋖
P27/1593	E	100%	(17/01/03)	Not Applicable.	163 H a	Not Applicable.	1,108	⋖
E36/506	IGFL	100%	(01/05/03)	Not Applicable.	8 Blocks	Not Applicable.	105, 109
E38/1466	IGFL	100%	(05/10/01)	Not Applicable.	4 Blocks	Not Applicable.	100,	ď.
P38/3070	ESI	100%	(05/11/01)	Not Applicable.	41.66 Ha	Not Applicable.	100	⋖
P38/3071	IGFL	100%	(05/11/01)	Not Applicable.	30.25 Ha	Not Applicable.	100	⋖
E31/626	IGFL	100%	(19/12/02)	Not Applicable.	9 Blocks	Not Applicable.	$\frac{8}{10}$	≺
E31/627	GFL	100%	(19/12/02)	Not Applicable.	5 Blocks	Not Applicable.	$\frac{1}{11}$	⋖
M31/175	EDI	100%	(27/02/96)	Not Applicable.	200 Ha	Not Applicable.	$\frac{0}{110}$	⋖
P31/1420	EDI	100%	06/03/92	Сопч. То МЗ1/175	200 Ha	\$8,000	110, 111, 112, 113, 114
Kununalling Project		100%		Not Applicable.	22 S/B	Not Applicable.
E16/0302	CAZR IGFL	100%	(02/09/03)	Not Applicable.	8 S/B	Not Applicable.
E15/820	CAZR	100%	(62/09/03)	Not Applicable.	122 Ha	Not Applicable.
P16/2194 P16/2193	CAZR	100%	(02/09/03)	Not Applicable.	$122$ Ha	Not Applicable.
P16/2196	CAZR	100%	(02/09/03)	Not Applicable.	122 Ha	Not Applicable.
P16/2195	CAZR	100%	(02/09/03)	Not Applicable.	122 Ha	Not Applicable.
M16/199	ELDO	49%	04/08/94	03/08/15	199 Ha	\$19,900	1,86,87

55

SECTION $\overline{I}$

Other Relevant																		迳							⊻	室	⊻			≃	∠	⊻
Notes		1, 86, 87		1,88		1, 89, 90		1, 91		1,92		1, 93				115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	116, 117 115.1	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	115, 116, 117	15, 116, 117	115, 116, 117	115, 116, 117		115, 116, 117 15, 116, 117	115, 116, 117
Expenditure Xinimum		\$31,100		Not Applicable.		Not Applicable.		Not Applicable.		Not Applicable.		Not Applicable.			\$35,000	\$35,000		\$20,000	\$35,000	\$20,000	\$20,000	\$20,000	\$30,000	\$30,000	\$20,000	$\overline{\overline{z}}$	\$40,000	\$40,000	\$20,000	\$140,000	\$35,000	\$70,000	\$65,000	\$35,000	$\overline{\overline{z}}$	运	E
Area		310 Ha		93 Ha		778 I-Ia		$302$ Ha		181 H a		695 Ha			2.466 Ha	$3996$ sq m	$2.68\ \mathrm{Hz}$		11.3312 Ha	16.16 Ha	8.1 Ha	$16.19$ Ha	25.9 Ha	23.88 Ha	19.51 Ha	$8094$ sq m	47.45 Ha	56.66 Fla	2.14 Ha	356.4 Ha	3.15 Ha	51.19 Ha	$30$ Ha	8.75 Ha	51.19 Ha	54.73 Ha	151.4 Ha
Expiry Date		3/08/15		Not Applicable.		Not Applicable.		Not Applicable		Not Applicable.		Not Applicable.			4/12/97	4/12/97	7/01/96		3/06/94	1/07/95	1/07/95	9/09/90	5/05/91	16/5/91	0/04/92	5/10/08	8/09/87	6/07/89	10/10/89	14/12/97	6/11/95 $\bar{\sim}$	26/11/95 26/11/95 22/03/92 01/04/97				14/12/97	14/12/97
Grant/Re		04/08/94		(09/08/95)		(24/03/97)		(03/07/97)		(08/07/97)		(08/07/97)			9561/01/86	996111186	07/01/55	04/06/64		12/07/65	29/06/64	09/09/70	25/05/71	24/05/71 20/04/72		26/10/67	08/09/67	16/07/69	10/10/69	27/11/85	27/11/85	27/11/85	27/11/85	23/03/88	02/04/76	25/02/87	23/03/88
	51%	49%	51%	49%	51%	$49\%$		$51%$ 49%	51%	49%	51%	49%	51%		100%	$100\%$	100%	100%		100%	100%	100%	100%	$100\%$	100%	$100\%$	100%	$100\%$	100%	$100\%$	100%	100%	100%	100%	100%	100%	00%
	MRAU	FLDO	MRAU	ELDO	MRAU	OCTH	MRAU	CROE	MRAU	CROE	MRAU	CROE	MRAU	Mt Carrington Project (NSW)	ξÌ	$\overline{z}$	$\overline{5}$	ξĒ,	$\overline{5}$		$\Xi$		FEE			$\overline{5}$		AER		$\Xi$	另 又		$\overline{5}$	$5\overline{ }$	$\overline{z}$	$\overline{5}$
		M16/200		M16/253		M16/343		M16/353		M16/356		M16/357			GI. 5477 (06)	GL 5478 (06)	ML 5444 (06)	ML 5883 (06)	ML 6004 (06)	ML 6006 (06)		ML 6242 (06) ML 6291 (06)		MI. 6295 (06) ML 6335 (06)		MPL 1345 (06)	SL 409 (06)	SL 471 (06)	SL 492 (06)	ML 1147 (73)	ML 1148 (73)	ML 1149 (73)	ML 1150 (73)	ML 1200 (73)	MPL 24 (73)	VIPL 256 (73)	VIPL 259 (73)

Key to Abbreviations
ACEL:	Australian Consolidated Equities Ltd
CAZR:	Cazaly Resources Ltd
CLC:	Central Land Council
CROE:	Croesus Mining NL
EL:	Exploration Licence
ELA:	Exploration Licence Application
ELDO:	Eldorado Resources NL
ERL:	Exploration Retention Licence
GL:	Gold Lease
IGFL:	International Goldfields Ltd
ILUA:	Indigenous Land Use Agreement
ML:	Mineral Lease
MLA:	Mineral Lease Application
MPL:	Mining Purposes Lease
MRAU:	Mines and Resources Australia Pty Ltd
WGOD:	William George O'Donnell
PWOD:	Patrick William O'Donnell
SEL:	Exploration Licence - Substitution
SL:	Special Lease
TARM:	Tarmoola Australia Pty Ltd
the Company:	Cazaly Resources Limited (ACN 101 049 334)
VIL:	Virotec International Ltd
WRAE:	Western Resources and Exploration Pty Ltd

Notes

• This tenement is affected by the native title claims WC98/27 Widji, WC95/27 Gubrun, WC99/29 Central $\mathbf{1}$ . West Goldfields and WC99/09 Maduwonga.
• 1. The construction and operation of the project and measures to protect the environment being carried out generally in accordance with the document entitled:
• . "Notice of Intent to Work Alluvial, and Open Shallow Declines to approximately 10 to 15 feet on Mining Lease 27/177" dated 23 February 1994 and 24 February 1994 signed by K Messenger, received at the Kalgoorlie Inspectorate on 24 February 1994;
• . "Notice of Intent Low Impact Mining Operation" dated 24 May 1996 and signed by Rick Birch and retained on Department of Industry and Resources File No. 2065/94;
• "Notice of Intent Low Impact Mining Operation Scraping and Detecting on Mining Leases 27/187, 27/177 and 27/201" dated 10 April 2001 and signed by Kel Edwards, Secretary for Kanowna Lights Limited; and
• . "Low Impact Mining Notice of Intent for Scraping and Detecting on Mining Leases 27/177, 27/187 and 27/201" dated 13 February 2003 and signed by Mr Robert Kirk (NOI 4222) and retained on Department of Industry and Resources File no. E2562/2003.
• The Lessee providing a Bond in Favour of the Minister for Mines in the sum of \$4,000 for due compliance with 3. the environmental conditions of the lease.
• Number not used. $4₁$
• The Environmental Officer is to be notified immediately following the reconstitution of each 1 hectare of area 5. worked, by scraping and detecting and work not proceeding further until his/her approval is granted.

1. The environmental officer is to be notified on the completion of the Low Impact Mining Operation project and arrangements made for an inspection.

2. 1. Surrender Conditional KA 1/956 lodged on 24/07/95 in favour of M27/236.
3. 1. Agreement 118H/967 (Joint Venture) Kanowna Lights NL and Aberfoyle Resources Ltd registered 31/07/97.
4. 1. Bond 8190 for \$2,000 (Security).
5. 1. The construction and operation of the project and measures to protect the environment being carried out generally in accordance with the document titled:
6. · "Notice of Intent Low Impact Mining Operation Scraping and Detecting on Mining Leases 27/187, 27/177 and 27/201" dated 10 April 2001 and signed by Kel Edwards, Secretary for Kanowna Lights Limited; and
7. . "Low Impact Mining Notice of Intent for Scraping and Detecting on Mining Leases 27/177, 27/187 and 27/201" dated 13 February 2003 and signed by Mr Robert Kirk (NOI 4222) and retrained on Department of Industry and Resources File No. E2562/2003.
8. 1. Bond 8191 for \$2,000 (Security).
9. 1. Exemption KA743/023 for year ended 14/02/03 is currently pending.
10. 1. Surrender Conditional KA2/956 lodged on 24/07/95 in favour of M27/236.
11. 1. Rights of ingress to and egress from Miscellaneous Licence 27/45 being at all times preserved to the Licensee and no interference with the purpose or installations connected to Miscellaneous Licence 27/45.
12. 1. Agreement 354H/934 (Sale) Michael Bryan Foley, Kanowna Lights NL and Melville Raymond Dalla-Costa registered 9 July 1994.
13. 1. Conversion 23831 lodged 12 July 1995 with M27/236 applied for pursuant to Section 49 of the Mining Act (WA) 1978.
14. 1. The right to ingress to and egress from Miscellaneous Licence 26/77, 133 and 134 being at all rimes preserved to the Licensee and no interference with the purpose or installations connected to the licence.
15. 1. Cavear 89H/034 by Cazaly Resources Ltd registered 8 September 2003.
16. 1. The grant of this licence does not include any ground the subject of Mining Lease 26/318.
17. 1. The grant of this licence does not include any portion of Hampton G 32 Location which is referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.
18. 1. The prior written consent of the Minister for State Development being obtained before commencing mining on Race Course 4356.
19. 1. Cavear 90H/934 by Cazaly Resources Ltd registered 8 September 2003.
20. 1. The prior written consent of the Minister for State Development being obtained before commencing mining on Boorara townsite.
21. 1. Cavear 91H/034 by Cazaly Resources Ltd registered 8 September 2003.
22. 1. This licence affects L26/239.

58

• 1. This licence does not have priority and will only succeed in being granted should the previous application lodged by a third party not succeed in being granted.
• 1. The grant of this licence will not include any ground the subject of Section 19/17.
• 1. This lease is a Section 49 of the Mining Act (WA) 1978 conversion of P25/1270 to P25/1274 inclusive.
• 1. Caveat 83H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 84H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 85H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 86H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 87H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 80H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 81H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. "Notice of Intent Low Impact Mining Operation Scraping and Detecting on Prospecting Licence 25/1663" dated 12 February 2001 and signed by William O'Donnell and Patrick O'Donnell, and retained on Department of Industry and Resources File No. 7491/99.
• 1. Extract of an additional 2500 tonnes approved on 20 July 2001 pursuant to Section 48(c) of the Mining Act (WA) 1978.
• 1. Objection KA63/023 registered 29/07/03 by William George O'Donnell to forfeiture.
• 1. Subject to Amalgamation KA1/034 recorded 17 July 2003.
• 1. Caveat 82H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. The rights of ingress to and egress from miscellaneous Licence 27/50 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.
• 1. In the event of land currently comprised in Exploration Licence 27/67 later being included in this licence pursuant to the Savings and Transitional Provisions of the Mining Amendment Act 1990, then the following condition shall apply in respect of that land:
• 1. "The rights of ingress to and egress from miscellaneous Licence 27/57 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence."
• 1. This tenement is affected by native title claim WC99/08 Njamal.
• 1. The rights of ingress to and egress from Miscellaneous Licenses 29/19, 29/21, 29/22, 29/24 and 29/29 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.
• 1. In respect to the area outlined in red and designated as Proposed State Forest 87, in TENGRAPH hereinafter referred to as the designated area, the following additional conditional shall apply:

Prior to any disturbance to vegetation the Licensee preparing a detailed program for each phase of proposed exploration for written approval of the State Mining Engineer in agreement with the Regional/District Manager, Department of Conservation and Land Management (CALM). This programme to include:

· maps and/or aerial photographs showing the proposed locations of all ground activities and disturbances;

• the purpose, specifications and extent of each activity and disturbance;

• · details on proposals which may disturb sensitive terrestrial habitats including any declared tare flora and fauna; and
• techniques, prescriptions and timetable for the rehabilitation of all proposed disturbances and historic ground disturbances the Licensee has agreed to rehabilitate.

The Licensee, at his/her expense, rehabilitating all areas cleared, explored or otherwise disturbed during the term of the licence to the satisfaction of the State Mining Engineer in agreement with the Regional/District Manager, CALM. Such rehabilitation as is appropriate and may include:

• · stockpiling and return of topsoil;
• · backfilling all holes, trenches and costeans;
• · ripping;
• contouring to the original landform;
• revegetation with seed; and
• capping and backfilling all drill holes.

Prior to the cessation of exploration/prospecting activity the licensee notifying the Regional Environmental Officer, Department of Mineral and Petroleum Resources and Regional/District Manager, CALM and arranging an inspection as required.

In consultation with the Regional/District Manager, CALM, machinery or equipment being cleaned of all soil, mud and plant propagules prior to entering the reserve.

• 1. This tenement is affected by native title claims WC99/30 Central East Goldfields and WC99/09 Maduwonga.
• 1. Exemption KA692/023 for the year ended 21 February 2003 is currently pending.
• 1. The rights of ingress to and egress from Miscellaneous Licenses 29/19, 29/21 and 29/22 being at all times preserved to the licensee and no interference with the purpose or installations connected to the licence.

The prior written consent of the Minister of State Development being obtained before commencing mining on Water Reserve 5065.

• 1. Exemption KA693/023 for the year ended 21 February 2003 is currently pending.
• 1. The rights of ingress to and egress from Miscellaneous License 29/19 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.
• 1. Cavear 97H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 98H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 99H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Exemption KA694/023 for the year ended 21 February 2003 is currently pending.
• 1. The rights to ingress to and egress from Miscellaneous Licenses 29/19, 29/20, 29/53 and 29/54 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.

1. No interference with Geodetic Survey Station SSM - Kalgoorlie 249 and 250 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.

No mining on a strip of land 60 metres wide with the Kalgoorlie-Leonora Railway Line as the centreline and materials being deposited or machinery or buildings being erected on such strip of land.

Blasting operations being controlled so that no damage or injury can be caused by fly rock, concussion, vibration or other means.

• 1. Caveat 100H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Exemption KA695/023 for the year ended 21 February 2003 is currently pending.
• 1. The rights of ingress to and egress from Miscellaneous Licences 29/19 and 29/52 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.
• 1. No mining on Cemetery Reserve 10369 and mining within a distance of 140 metres laterally from the reserve being confined to below a depth of 50 metres from the lowest part of the surface of the land with rights of ingress to and egress from the said Reserve being at all times preserved to the public.

No interference with Geodetic Survey Station SSM - Kalgoorlie 248 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.

No mining on a strip of land 60 metres wide with the Kalgoorlie-Leonora Railway Line as the centreline and no materials being deposited or machinery or buildings being erected on such strip of land.

Blasting operations being controlled so that no damage or injury can be caused by fly rock, concussion, vibration or other means.

• 1. Caveat 101H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Exemption KA696/023 for the year ended 21 February 2003 is currently pending.
• 1. The rights of ingress to and egress from Miscellaneous Licence 29/52 being at all times preserved to the Licensee and no interference with the purpose or installations connected to the licence.
• 1. Caveat 102H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Exemption KA697/023 for the year ended 21 February 2003 is currently pending.
• 1. The grant of this licence does not include the land the subject of General Purpose Leases 29/17, 29/18 and 29/19.
• 1. In respect to the area outlined in red and designated as Proposed State Forest 87, in TENGRAPH hereinafter referred to as the designated area, the following additional endorsements shall apply:

The grant of this license not inferring automatic approval to mine or the subsequent grant of a mining lease in accordance with Section 75 of the Mining Act (WA) 1978.

The Licensee's attention is drawn to the provisions of:

• the Conservation and Land Management Act, 1984 and the Regulations thereunder;
• the Bush Fires Act, 1954 and the Regulations thereunder; and
• the Wildlife Conservation Act, 1950, as amended and the Regulations thereunder.

1. Caveat 103H/034 by Cazaly Resources Ltd registered 8 September 2003.

2. Exemption KA698/023 for the year ended 21 February 2003 is currently pending.

3. The rights of ingress to and egress from Miscellaneous Licence 29/52 being at all times preserved to the licensee and no interference with the purpose or installations connected to the licence.

The prior written consent of the Minister for State Development being obtained before commencing mining on Goongarrie Townsite, Unnumbered Land Act Reserves 6 and 7.

No interference with Geodetic Survey Station SSM - Kalgoorlie 247 and mining within 15 metres thereof being confined to below a depth of 15 meters from the natural surface.

No mining on a strip of land 60 metres wide with the Kalgoorlie-Leonora Railway Line as the centreline and no materials being deposited or machinery or buildings being erected on such strip of land.

Blasting operations being controlled so that no damage or injury can be caused by fly rock, concussion, vibration or other means.

• 1. Caveat 104H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. The prior written consent of the Minister for State Development being obtained before commencing mining on Unnumbered Land Act Reserve 7.
• 1. This application encroaches upon General Purpose Leases 29/11, 29/12, 29/14, 29/15 and 29/16.
• 1. This application encroaches on Proposed State Forrest 87.
• 1. Caveat 105H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Exemption KA699/023 for the year ended 21 February 2003 is currently pending.
• 1. The prior written consent of the Minister of State Development being obtained before commencing mining on Menzies Water Reserve.
• 1. This tenement is affected by the native title claim WC99/01 Wongatha.
• 1. Caveat 95H/034 by Cazaly Resources Ltd registered 8th September 2003.
• 1. The grant of this license does not include land the subject of applications for Mining Lease 29/238 and application for Prospecting Licence 29/1638.
• 1. Caveat 96H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 106H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 107H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 108H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Caveat 109H/034 by Cazaly Resources Ltd registered 8 September 2003.
• 1. Agreement 113H/912:

Agreement (Transition Dee) Afmeco Pty Ltd, Croesus Mining Nk, Eldorado Resources Nl, Berven Consutants Pty Ltd and Leeman Pty Ltd Lodged 10:00:00 AM on 17 Aug 1994. Registered 10:00 AM 17 Aug 1994.

1. Agreement 114H912:

Agreement (Joint Venture) Afmeco Pty Ltd, Croesus Mining NL and Eldorado Resources NL Lodged 10:00:00 AM on 17 August 1994. Registered 10:00 AM 17 Aug 1994.

• 1. This application is a Section 49 of the Mining Act (WA) 1978 conversion of former P16/1385.
• 1. This application is a Section 49 of the Mining Act (WA) 1978 conversion of former P16/1569 and P16/1484 to P16/1487.
• 1. This application encroached upon L16/50.
• 1. This application is a Section 49 of the Mining Act (WA) 1978 conversion of former P16/1607 to P16/1609.
• 1. This application is a Section 49 of the Mining Act (WA) 1978 conversion of former P16/1614.
• 1. This application is a Section 49 of the Mining Act (WA) 1978 conversion of former P16/1610 to 1613.
• 1. The grant of this lease does not include land the subject of Prospecting Licence 16/3033, Mining Lease 15/114 and Exploration Licence 15/284.
• 1. This tenement is affected by native title claim WC99/001 Wongatha.
• 1. The following tenements may be excised from the grant of this licence E31/433, E39/475, E39/721, E39/810, E39/927, E39/833, E39/925, E39/943 and M39/822.
• 1. This Tenement is affected by native title claims WC96/17 Cosmo Newberry and WC99/01 Wongatha.
• 1. The Company has been advised that this application does not have priority over the area applied for.
• 1. The following will be excised from the grant of this licence E36/418, M36/162, M36/266, M36/328, M36/349, M36/371, M36/441 and Wiluna 3031.
• 1. This tenement is affected by native title claim WC95/1 Koara.
• 1. This tenement is affected by native title claims WC95/42 Koara, WC99/10 Wutha, WC95/1 Koara, WC99/001 – Wongatha.
• 1. This tenement is affected by native title claims -WC99/10 Wutha, WC95/1 Koara, WC99/001 Wongatha.
• 1. This application is affected by compelling applications and the Company has confirmed that they will not have priority to the ground applied for.
• 1. Any encroachments upon the following tenements will be excised from the grant of the licence E36/399, M36/362, E36/213, M36/20, M36/116, M36/120, M36/182, M36/234, M36/301 and P36/1464.
• 1. This tenement is affected by native title clamis WC99/01 Wongatha and WC99/9 Maduwonga.
• 1. Agreement 123H/934 (Joint Venture) Renison Ltd and Bamboo Gold Mines NL registered 8 November 1993.
• 1. Agreement 328H/934 (Joint Venture) North Coolgardie Resources NL and Bamboo Gold Mines Nl registered 9 May 1994.
• 1. Agreement 99H/956 (Deed of Assumption / Joint Venture) North Coolgardie Resources NL, Renison Ltd, Goldfields Exploration Pty Ltd and Bamboo Gold Mines NL registered 20 September 1995.

1. Caveat 111H/034 by Cazaly Resources Ltd registered 8 September 2003.

The Second Second

1. Equitable Charge between Mount Carrington Mines Limited and the National Australia Bank dated 7 November 1988.

2. 1. Equitable Charge between Mount Carrington Mines Limited and Rothschild Australia Limited dated 7 November 1988.
3. 1. Deed of Charge between Norminco Limited and SFE Investment Limited dated 10 November 1996.
4. 1. This tenement is affected by native title claims WC98/27 Widji, WC99/030 Central East and WC99/009 -Maduwonga.
5. 1. Caveat 92H/034 by Cazaly Resources Ltd registered 8 September 2003.
6. 1. Caveat 93H/034 by Cazaly Resources Ltd registered 8 September 2003.
7. 1. Caveat 94H/034 by Cazaly Resources Ltd registered 8 September 2003.
8. 1. Caveat 110H/034 by Cazaly Resources Ltd registered 8 September 2003.
9. 1. This tenement is affected by native title claims WC99/0001 Wongatha and WC99/009 Maduwonga.
10. 1. The prior written consent of the Minister of State Development being obtained before commencing mining on Water Reserve 5065.
11. 1. The prior written consent of the Minister of State Development being obtained before commencing mining on Water Reserve 5065.
12. 1. The prior written consent of the Minister for State Development being obtained before commencing mining on Water Reserve 5065, Unnumbered Land Act Reserve 7 and Unnumbered Land Act 8.

Other Relevant Information

• A. This is tenement is subject to the Tenement Purchase Agreement dated 28th July 2003 between Cazaly and International Goldfields Ltd.
• This tenement is subject to the Kanowna Lights Letter agreement dated 10th September 2003 between Cazaly $B₁$ and Kanowna Light Ltd.
• C. This tenement is subject to the Tribute Letter Agreement dated 12th February 2003 between Kanowna Lights Ltd and R Kirk.
• D. This tenement is subject to the Letter Agreement Exploration Licence 26/87 dated 30th August 2003 between Cazaly and Western Resources and Exploration Pty Ltd.
• This tenement is subject to the Letter Agreement Prospecting Licence 25/1663 dated 22nd August 2003 between E. Cazaly and William George O'Donnell and Patrick William O'Donnell.
• $E_{\perp}$ Not used
• G. Not used
• H. This tenement is subject to Agreement for Sale of Geological Data -- Bonnievale dated 29th August 2003 between Cazaly Resources Limited and Reefron Mining NL.

• This tenement is subject to $\mathbf{I}$ Agreement for Sale of Geological Data - Star of Fremantle dated 29th August 2003 between Cazaly Resources Limited and Reefron Mining NL.
• This tenement is subject to the Option Agreement Kunanalling Joint Venture dated 8 September 2003 between L Cazaly and Mines and Resources Australia Pty Ltd, Eldorado Resources NL and Croesus Mining NL.
• K. This tenement is subject to Mt Carrington Project Agreement dated 1 September 2003 between Virotec International Ltd and Cazaly Resources Limited.

Schedule of Material Contracts

Set out below is a summary of the contracts to which the Company is a party that may be material or otherwise may be relevant to a potential investor in the Company.

The whole of the provisions of the Agreements are not repeated in this Prospectus and any intending Applicant who wishes to gain a full knowledge of the content of the Agreements should inspect the same at the Company's registered office.

1. International Goldfields Tenement Purchase Agreement

The Company entered into a Tenement Purchase Agreement on 28 July 2003 with International Goldfields Ltd ("IGL"). The Tenement Purchase Agreement is expressly intended by the parties to be a legally enforceable agreement. By the Tenement Purchase Agreement, IGL granted the Company the sole and exclusive right, upon the Company completing of due diligence, to acquire certain mining tenements on the payment of a \$10,000 Option Fee. The tenements are all located in Western Australia and are listed in the Schedule.

The Company can exercise its right to purchase the tenements by:

• (1) paying to IGL a sum of \$165,000 (exclusive of the \$10,000 Option Fee) no later than eight months after the due diligence period;
• (2) issuing 750,000 shares in the Company to IGL at an issue price of \$0.20 per share upon the listing of the Company on the ASX prior to 15 June 2004; and
• (3) issuing IGL a royalty of \$1.00 per dry tonne mined and milled on any future production on the tenements.

If the Company does not pay \$165,000 within 8 months of the due diligence being completed and achieve listing on the ASX prior to 15 June 2004, the Company will be deemed to have elected not to exercise its right to purchase the tenements.

The Company may withdraw from the Agreement at any time during the period in which it prospects and explores for minerals on the tenements.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and has been duly stamped. It contemplates that the parties will complete a more formal document to record the agreement it contains.

CAZAL ESOURCES LIMITED

SOLICITOR'S REPORT ON TENEMENTS

2. Heads of Agreement -Kanowna Lights Ltd

The Company entered into a Heads of Agreement on 10 September 2003 with Kanowna Lights Ltd ('Kanowna'). The Heads of Agreement is expressly intended by the parties to be a legally enforceable agreement.

By the Heads of Agreement Kanowna granted the Company an option to acquire a share in the ownership of certain tenements. Those renements are listed in the Schedule to the Heads of Agreement as M27/177, M27/187, M27/201, M27/236, P27/1193 and P27/1194 all of which are in Western Australia.

The option expires if the Company does not list on the ASX prior to 28 February 2004. It is exercisable by notice but may only be exercised on the condition that the Company is admitted to the ASX.

The Company can exercise its option by issuing to Kanowna 200,000 fully paid ordinary shares at an issue price of \$0.20 per share prior to 28 February 2004. The Company will then acquire a 90% interest in the tenements. Kanowna will retain a 10% interest which shall be free-carried through to the completion of a bankable feasibility study at which stage it will become a joint venture between the Company and Kanowna.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and has been lodged for assessment. It contemplates that the parties will complete a more formal document to record the agreement it contains.

3. Heads of Agreement - Western Resources and Exploration Pty Ltd

The Company entered into a Heads of Agreement on 30 August 2003 with Western Resources and Exploration Pty Ltd ('WRE'). The Heads of Agreement is expressly intended by the parties to be a legally enforceable agreement.

By the Heads of Agreement WRE granted the Company, on the payment of a non-refundable \$5,000 fee, an option to acquire Exploration Licence 26/87 which is located in Western Australia. The option is open until the Company lists on the ASX or 31 December 2003, whichever is sooner.

The exercise price is the payment of a further \$15,000.00 by the Company and on exercise, WRE will also retain a 1.5% Net Smelter Royalty on all base metals produced.

The Heads of Agreement is conditional upon the Company completing a due diligence check on the tenements and approval of the transaction by the Board of the Company.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and has been duly stamped. It contemplates that the parties will complete a more formal document to record the agreement it contains.

Heads of Agreement - William George O'Donnell and Patrick William O'Donnell $\boldsymbol{4}$

The Company entered into a Heads of Agreement on 22 August 2003 with William George O'Donnell and Patrick William O'Donnell ('O'Donnell'). The Heads of Agreement is expressly intended by the parties to be a legally enforceable agreement.

By the Heads of Agreement O'Donnell granted the Company, on the payment of a non-refundable \$5,000 fee, the right to acquire a 100% interest in Prospecting Licence 25/1663 which is located in Western Australia. The option is open until the Company lists on the ASX or 31 December 2003, whichever is sooner.

The exercise price is the payment of a further \$15.000 by the Company and on exercise. O'Donnell will retain the right to prospect and mine the top 2 metres from the natural surface for a period of five years.

The Heads of Agreement is conditional upon the Company completing a due diligence check on the tenements and approval of the transaction by the Board of the Company.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and has been duly stamped. It contemplates that the parties will complete a more formal document to record the agreement it contains.

5. Option Agreement - Mines and Resources Australia Pty Ltd, Eldorado Resources NL and Croesus Mining NL

The Company entered into a Heads of Agreement on 8 September 2003 with Mines and Resources Australia Pty Ltd, Eldorado Resources NL and Croesus Mining NL (together 'the Vendors'). The Heads of Agreement is expressly intended by the parties to be a legally enforceable agreement.

By the Heads of Agreement O'Donnell granted the Company, on the payment of a non-refundable \$10,000 Option Fee, payable within two days of the completion of a due diligence check of the tenements, the sole and exclusive right to acquire a 100% interest in mining tenements owned by the Vendors. Those tenements are listed in the Schedule of the Option Agreement as M16/199, M16/200, M16/253, M16/343, M16/353, M16/356 and M16/357 which are located in Western Australia. The option is open until the Company lists on the ASX or 31 December 2003, whichever is sooner.

The exercise price is the payment of a further \$90,000 on or before 30 March 2004 from the Company to the Vendors together with the issue of 500,000 shares at an issue price of \$0.20 per share from the Company to the Vendors upon the listing of the Company on the ASX prior to 30 March 2004.

The Heads of Agreement is conditional upon the Company completing a due diligence check on the tenements and approval of the transaction by the Board of the Company.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and has been lodged for assessment. It contemplates that the parties will complete a more formal document to record the agreement it contains.

6. Agreement for Sale of Geological Data - Bonnievale

The Company entered into an Agreement on 29 August 2003 with Reefton Mining NL "Reefton"). The Heads of Agreement is intended by the parties to be a legally enforceable agreement.

By the Agreement Reefton sold to the Company all of the Geological Data as defined in the Agreement in respect of E15/284 and M15/1324-5 (applications).

The sale price is \$5,000 by way of company cheque, a further \$5,000 upon grant of any new tenements together with a royalty in respect of any ores produced from the tenements on the following terms:

• (a) in the event that mining operations are conducted upon or within the tenements, \$1.00 per dry metric tonne of ore from the tenements mined and treated through a CIP-CIL treatment facility; and
• (b) the royalty due in respect of any quarter shall accrue and become payable within 45 days of the last day of the quarter.

For the purposes of determining the royalty, Reefton maintains the right to audit, at its own expense, and inspect all records of the Company that relate to the royalty.

The Agreement is a dutiable instrument under the Stamps Act WA and has been duly stamped.

7. Agreement for Sale of Geological Data - Star of Fremantle The Company entered into an Agreement on 29 August 2003 with Reefton Mining NL ("Reefton"). The Heads of Agreement is intended by the parties to be a legally enforceable

agreement.

By the Agreement Reefton sold to the Company all of the Geological Data as defined in the Agreement in respect of P16/1410-1412 and P15/3037.

The sale price is \$5,000 by way of company cheque, a further \$5,000 upon grant of any new tenements together with a royalty in respect of any ores produced from the tenements on the following terms:

• (a) in the event that mining operations are conducted upon or within the tenements, \$1.00 per dry metric tonne of ore from the tenements mined and treated through a CIP-CIL treatment facility; and
• (b) the royalty due in respect of any quarter shall accrue and become payable within 45 days of the last day of the quarter.

For the purposes of determining the royalty, Reefton maintains the right, at its own cost to audit and inspect all records of the Company that relate to the royalty.

The Agreement is a dutiable instrument under the Stamps Act WA and has been duly stamped.

8. Heads of Agreement - Mt Carrington Project

The Company entered into a Heads of Agreement on 1 September 2003 with Virotech International Ltd ("Virotech"). The Heads of Agreement is intended by the parties to be a legally enforceable agreement.

By the Heads of Agreement Virotech granted the Company an option to purchase the tenements in the Mt Carrington Project Area ("the Project Area") by:

• (a) the expenditure of \$125,000 within six months of 5 September 2003 on the the Project Area;
• (b) a further expenditure of \$125,000 between six months and 12 months of 5 September 2003 on the Project Area; and
• (c) issuing Virotech 350,000 shares in the Company at an issue price of \$0.20 upon listing on the ASX, which must be achieved prior to 31 December 2003.

The tenements are listed in the Schedule to the Heads of Agreement as:

$\cdot$ SL 492	$\cdot$ ML 6295	$\bullet$ ML 6006
$\bullet$ ML 1147	$\bullet$ ML 6335	• ML $6004$
$\bullet$ MPI. 259	• MPL 1345	$\cdot$ MPL 258
$\bullet$ ML 1148	$\cdot$ SPL 409	$\cdot$ GL 5478
$\cdot$ ML 1200	$\cdot$ ML 5883	$\bullet$ ML 6242
• ML $6291$	$\cdot$ ML1149	$\cdot$ SL 471
• ML 5444	• ML 1150
$\cdot$ GL 5477	$\bullet$ MPL 24

Within 12 months of 5 September 2003 the Company will notify Virotech whether they will exercise the option to purchase the tenements by:

• (a) refunding a sum equivalent to the environmental bond for the tenements to Virotech within 30 days of the lease transfers being approved;
• (b) issuing a royalty in respect of all products sold from the tenements to Virotech of 2% of the net smelter returns for all products sold from all mining operations conducted on the tenements payable within 45 days of the end of every quarter.

Virotech retains the right to audit, at its own expense, or inspect all of the Company's records relating to the calculations of the royalty for the purposes of verifying the amount of the royalty payable.

The Heads of Agreement is a dutiable instrument under the Stamps Act WA and will need to be lodged for assessment of stamp duty. It contemplates that the parties will complete a more formal document to record the agreement it contains.

8.1 Rights Attaching to Shares

Full details of the rights attaching to Shares are set out in the Company's Constitution a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Sharcholders.

All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the Company's existing Shares.

Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at meetings of Shareholders of Cazaly:

• (a) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
• (b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
• (c) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall. in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes as bears the same proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).

Rights on Winding Up

Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of fully paid shares held by them (and a partly paid share is counted as a fraction of a fully paid share equal to the amount paid on it, divided by the total issue price of the share).

Transfer of Shares

Subject to the Constitution of the Company, the Corporations Act 2001, and any other laws and SCH Business Rules and ASX Listing Rules, Shares are freely transferable.

Future Increases in Capital

The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the allotment of Shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company and the Corporations Act 2001, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

Variation of Rights

Under the Corporations Act 2001, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to shares. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

) Ü

Dividend Rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of the Company which the Directors determine to distribute by way of dividend are divisible among the holders of ordinary Shares in proportion to the number of Shares held by them.

$8.2$ Summary of Material Contracts

Set out below is a summary of the contracts to which the Company is a party which may be material in terms of the Offer or the operation of the business of Cazaly, and which are not otherwise summarised in the Solicitor's Report on Tenements in Section 7 (Part II - Summary of Agreements).

8.2.1 Deeds of Indemnity and Access

The Company has entered into, or will enter into, a deed of indemnity and access with each of its Directors and the Company Secretary ("Deeds").

Under the Deeds, the Company indemnifies each officer to the extent permitted by the Corporations Act 2001 against any liability as a result of the officer acting as an officer of the Company. The Company is required under the Deeds to maintain insurance policies for the benefit of the relevant officer for the term of the appointment and for a period of seven (7) years after retirement or resignation.

The Deeds also provide for the right to access Board papers.

Interests of Directors of the Company $8.3$

Directors' Shareholdings

At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are as follows:

Director	No. of Shares	No. of Options (i) 28Feb05 35c (ii) 30Jun05 40c
N. McMahon (a)	2,800,000	(i) 1,500,000
		(ii) 1,500,000
$C.$ Jones (b)	3,000,000	(i) 1,000,000
		(ii) $1,000,000$
K. Hunter (c)	750,000	$(i)$ -
		$(ii) -$

Notes:

a) All Shares and options held personally.

All Shares and options held personally. b)

All Shares and options held personally. c)

Nothing in this Prospectus will be taken to preclude Directors, officers or employees of Cazaly or the Lead Manager from applying for Shares under this Prospectus.

$71$

Directors' Remuneration

Non-executive directors' fees not exceeding an aggregate of \$150,000 per annum have been approved by the Company in general meeting. The levels of these may be varied by the Company in general meeting in accordance with its Constitution.

The remuneration of executive Directors will be fixed by the Directors and may be paid by wav of fixed salary.

Other Interests of Directors

Other than as set out elsewhere in this Prospectus, no Director has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:

• (a) the promotion or formation of the Company;
• (b) property acquired or proposed to be acquired by the Company in connection with its promotion or formation or the offer of Shares under this Prospectus; or
• (c) the offer of Shares under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director:

• (a) to induce him to become, or to qualify him as, a Director; or
• (b) for services rendered by him in connection with the formation or promotion of the Company or the offer of Shares under this Prospectus.

8.4 Interests of Persons Named

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, promoter or stockbroker to the Company or Lead Manager has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:

• (a) the formation or promotion of the Company;
• (b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the offer of Shares under this Prospectus; or
• (c) the offer of Shares under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by them in connection with the formation or promotion of the Company or the offer of Shares under this Prospectus.

Rix, Levy Fowler will receive professional fees of approximately S2,500 for accounting services in connection with this Prospectus including the provision of the Investigating Accountant's Report.

Rix, Levy Fowler will also act as auditors of the Company. The Company will pay for auditing or related services in the normal course of business.

Al Maynard & Associates will receive professional fees of approximately \$15,000 for the provision of the Independent Geologist's Report.

Price Seirakowski will receive professional

fees of approximately \$20,000 for legal work undertaken by them

in connection with this Prospectus, including the provision of the Solicitor's Report on Tenements included in Section 7 of this Prospectus and for work performed in relation to the due diligence process.

Paterson Ord Minnett Limited is acting as Lead Manager and will receive a fee of \$20,000 per month commencing form 1st October 2003 (continuing until listing up to a maximum of 3 months) with a commission of 5% in respect of funds raised by the allotment of Shares pursuant to application forms bearing their stamp (including any oversubscriptions).

$8.5$ Consents

The following persons have each consented to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with the ASIC:

• · Price Seirakowski Solicitor's Report on Tenements;
• Al Maynard & Associates Independent Geologist's Report; and
• Rix Levy Fowler Investigating Accountant's Report.

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the statements referred to above and the statements identified in this Prospectus as being based on statements made by those persons.

The following persons have consented to being named in this Prospectus but have not made any statements that are included in this Prospectus or statements identified in this Prospectus as being based on any statements made by those persons, and have not withdrawn their consent before lodgement of this Prospectus with ASIC:

• Rix Levy Fowler as Auditors of Cazaly;
• Advanced Share Registry Services as Share Registrar; and
• Paterson Ord Minnett as the Lead Manager.

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the references to their name.

8.6 Expenses of the Issue

It is estimated that approximately \$319,000 will be payable by the Company in respect of broking, legal, accounting, experts' fees, printing, ASIC and ASX fees and other costs arising from this Prospectus and the Issue.

$8.7$ Taxation

The acquisition and disposal of Shares in Cazaly will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in Cazaly are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, Cazaly, its officers and each of their respective advisors accept no liability or responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

73

8.8 Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any Application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act 2001. Applications for Shares under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge Applications prior to the expiry of the Exposure Period.

$8.9$ Litigation

The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

8.10 Electronic Prospectus

Pursuant to Class Order 00/044 the ASIC has exempted compliance with certain provisions of the Corporations Act 2001 to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please email the Company at admin@cazalyresources.com.au and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus or both. Alternatively, you may obtain a copy of the Prospectus from the Company's website at: www.cazalyresources.com.au or the Lead Manager's website at: www.patersonord.com.au.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

8.11 Forecasts

Cazaly is an exploration company with intention to become a gold producer in the medium term. Given the speculative nature of exploration, mineral development and production, there are significant uncertainties associated with forecasting future revenue. On this basis, the Directors believe that reliable forecasts can not be prepared and accordingly have not included forecasts in this Prospectus.

8.12 Terms and Conditions of Options

8.12.1 Options to be offered for subscription under proposed non-renounceable rights issue

As detailed in Section 1.5 of this Prospectus, it is proposed that all Shareholders (excluding Vendors in relation to Vendor Shares) registered on the share register of Cazaly at the date six (6) weeks after Cazaly Shares are granted Quotation will be entitled to participate in a non-renounceable rights issue of Options on the basis of 1 Option for every 3 Shares then held.

A summary of the terms and conditions of the Options is as follows:

• Each Option entitles the holder to acquire one fully paid ordinary share in the Company. 1.
• $2.$ The Options may be exercised at any time until 31 January 2006. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of twenty cents (20c) per Option exercised. The Options will lapse at 5.00pm WST on 31 January 2006.

• The Options may be transferred $3.$ by an instrument (duly stamped where necessary) in the form commonly used for transfer of Options at any time until 31 January 2006. This right is subject to any restrictions on the transfer of an Option that may be imposed by ASX in circumstances where the Company is Listed on ASX.
• Optionholders shall be permitted to participate in new issues of securities on the prior exercise of options in $\overline{4}$ . which case the Optionholders shall be afforded the period of at least nine (9) business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.
• Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a 5. properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act 2001 and the Listing Rules.
• In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued 6. capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.
• If there is a bonus issue to shareholders, the number of shares over which the Option is exercisable may be $7.$ increased by the number of shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.
• In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in 8. the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

8.12.2 February 2005 Options

As noted in Section 1.10 of this Prospectus, a total of 3,500,000 February 2005 Options have been granted to existing Shareholders prior to the issue of this Prospectus. The exercise price of the February 2005 Options is 35 cents each, and the expiry date is 28 February 2005.

Apart from the abovementioned variations, the terms and conditions of the February 2005 Options are the same as those applicable to the Options to be offered for subscription and to be issued under the proposed non-renounceable rights issue (refer 8.12.1 above), except for (i) the exercise price; and (ii) the option expiry date.

8.12.3 June 2005 Options

As noted in Section 1.10 of this Prospectus, a total of 3,500,000 June 2005 Options have been granted to existing Shareholders prior to the issue of this Prospectus. The exercise price of the June 2005 Options is 40 cents each, and the expiry date is 30 June 2005.

Apart from the abovementioned variations, the terms and conditions of the June 2005 Options are the same as those applicable to the Options to be offered for subscription and to be issued under the proposed non-renounceable rights issue (refer 8.12.1 above), except for (i) the exercise price; and (ii) the option expiry date.

A total of 7,000,000 Options have been granted to existing Shareholders prior to the issue of this Prospectus.

$8.13$ Employee incentive Schame

As an incentive to employees of Cazaly, the Company has adopted a scheme called the Cazaly Employee Incentive Scheme ("Scheme"). At the date of this Prospectus, no options have been granted under this Scheme.

The purpose of the Scheme is to give employees, directors, executive officers and consultants of the Company an opportunity, in the form of options, to subscribe for ordinary shares in the Company. The Directors consider the Scheme will enable the Company to retain and attract skilled and experienced employees, board members and executive officers and provide them with the motivation to make the Company more successful.

Brief Overview of the Scheme

A summary of the Terms and Conditions of the Scheme is set out below:

1. Participants in the Scheme

The Board may offer free options to persons ("Eligible Persons") who are:

• Full-time or part-time employees;
• · directors; or
• · consultants and any persons who are concerned, or take part in the management, of the Company or any subsidiary.

Upon receipt of such an Offer, the Eligible Person may nominate an associate acceptable to the Board to be issued with the options.

Terms of Options

There is no issue price for the options. The exercise price for the options will be:

• . 125% of the market value (as defined in the attached Terms and Conditions) of the Company's shares on the date on which the options are issued;
• $\cdot$ 20 cents; or
• any greater price determined by the Board,

whichever is the greatest.

Shares issued on exercise of options will rank equally with other ordinary shares of the Company.

Options may not be transferred without the approval of the Board. Quotation of options on the Australian Stock Exchange ("ASX") will not be sought. However, in the event that the Company is listed on ASX, it will apply to ASX for official quotation of shares issued on the exercise of options.

Restrictions on Issues and Exercise of Options

The Board may not offer options under the Scheme if the total number of shares which would be issued were each option accepted, together with the number of shares in the same class or options to acquire such shares issued pursuant to all employee or executive share schemes during the previous five years, exceeds 5% of the total number of issued shares in that class as at the date of the offer.

Options may only be issued or exercised within the limitations imposed by the Corporations Act 2001 and the Australian Stock Exchange Listing Rules.

The Directors will not be able to participate in the Scheme without shareholder approval being first obtained in a General Meeting.

76

Exercise of Options

Options may be exercised at any time between 2 and 5 years after the date of grant of the options.

If an Eligible Person leaves the employment of the group:

• 2 years or more after options are issued; or
• · because of retirement at or after 55 years of age, disablement, retrenchment, death or any other circumstances approved by the Board, the options may be exercised within 30 days (or 3 months in the case of death), or any longer period permitted by the Board. If not exercised in that time, the options lapse.

If an Eligible Person leaves the employment of the group earlier than 2 years after options are issued and (ii) above does not apply, the options lapse.

If an Eligible Person acts fraudulently, dishonestly or in breach of obligations to the Company or any subsidiary then, at the Board's discretion, options issued for that person will lapse.

Unexercised options will automatically lapse five years after they are issued.

Participation in Future Issues

The holders of options will only participate in new issues, including bonus issues, if they have exercised the options at that time and provided such exercise is permitted by the terms of the option.

If there is a bonus issue to shareholders, the number of shares over which the option is exercisable may be increased by the number of shares which the holder of the option would have received if the option had been exercised before the record date for the bonus issue.

In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities in the Company, the exercise price of the options may be reduced in accordance with Listing Rule 6.22.

Capital Reconstruction

In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

SECTION 8

GLOSSARY OF NAMES & TERMS

Applicant means a person who submits an Application. Application means a valid application to subscribe for Shares.

Application Form means the application form attached to and forming part of this Prospectus.

ASIC means Australian Securities and Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Ptv Ltd (ACN 008 504 532).

ASX means Australian Stock Exchange Limited (ACN 008 624 691).

Auditors means Rix Levy Fowler.

Board means the board of Directors unless the context indicates otherwise.

Business Day means a day other than a Saturday or Sunday on which banks are open for business in Perth, Western Australia.

Cazaly or the Company means Cazaly Resources Limited (ABN 23 101 049 334).

CHESS means ASX Clearing House Electronic Subregistry System.

Closing Date means the date on which the Offer closes.

Company means Cazaly Resources.

Corporations Act 2001 means the Corporations Act 2001 of Australia.

Directors means the directors of the Company from time to time.

Dollars or \$ means Australian dollars unless otherwise stated.

Exposure Period means the period of seven (7) days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than seven (7) days pursuant to Section 727(3) of the Corporations Act 2001. Glossary means this glossary.

Independent Accountant means Rix Levy Fowler.

Independent Accountant's Report means the report contained in Section 6 of this Prospectus.

Independent Geologist means Al Maynard & Associates.

Independent Geologist's Report means the report contained in Section 5 of this Prospectus.

Issue means the issue of 17,500,000 Shares pursuant to this Prospectus.

Lead Manager means Paterson Ord Minnett Limited. (ACN 008 896 311)

Listing Rules means Listing Rules of the ASX.

Offer means the offer of Shares pursuant to this Prospectus.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official List means the Official List of the ASX.

Opening Date means the date on which the Offer opens.

Option means an option to subscribe for a Share.

Prospectus means this prospectus dated 14 October for the issue of 17,500,000 Shares (together with the right to accept oversubscriptions of 2,500,000 Shares), including any electronic or online version.

Quotation means quotation of the Shares on ASX.

Roy means namesake legend of the Company.

Share means 1 fully paid ordinary share in Cazaly Resources Limited.

Shareholder means a holder of Shares.

Edition of the Act of Photo that the property of the Act of The Theory of the United States

Selle III dalam sama di di alah sama altik alti issil ilik di sebeluk berikul dalam dalam inggali

Solicitor's Report on Tenements means the report contained in Section 7 of this Prospectus.

Vendor means a person from whom the Company acquired exploration assets.

Vendor Shares means shares issued as consideration for the acquisition of exploration assets.

CONSENT BY THE DIRECTORS

Each of the Directors of Cazaly Resources Limited has consented to the lodgement of this Prospectus in accordance with Section $720$ of the Corporations Act 2001.

Dated the 14th October 2003.

Signed for and on behalf of CAZALY RESOURCES LIMITED by Nathan McMahon Managing Director

SECTION 10

THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY

The production of the production of the product of the product of the product of the product of the product of the product of the product of the product of the product of the product of the product of the product of the p 80 Broker/Dealer Stamp

CAZALY RESOURCES LTD ABN 23 101 049 334

Share Registrar Use Only

Post code

Before completing this Application Form, you should read the Prospectus dated 14 October 2003 and the instructions overleaf. No Shares will be issued pursuant to the Prospectus later than thirteen (13) months after the date of the Prospectus.

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM.

I/We apply for

Shares in CAZALY RESOURCES LTD at 20 cents per Share.

or such lesser number of Shares which may be allocated to me/us by the Directors.

I/We lodge full application monies of \$

Full Name (PLEASE PRINT)

Joint Applicant #2 or

Joint Applicant #2 or

Postal Address (PLEASE PRINT) Street Number Street

Suburb/Town

Contact Name

E-mail address

Applicant #2

Telephone number - Business hours

State

Telephone number - After hours

CHESS HIN (where applicable)

Tax File Number or Exemption

CHEQUE DETAILS

Drawer

Ļ

Bank

BSB

Amount of cheque

Applicant #3

Declaration and Statements:

By lodging this Application Form:

I/We declare that all details and statements made by me/us are complete and accurate;

I/We agree to be bound by the terms and conditions set out in the Prospectus and by the Constitution of the Company;

I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus;

I/We authorize the Company to complete and execute any documentation necessary to effect the issue of Shares and Options to me/us; and

I/We have received personally a copy of the Prospectus accompanied by or attached to this Application Form or a copy of the Application Form or a direct derivative of the Application Form before applying for Shares and Options.

I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in Cazaly Resources Limited and that no notice of acceptance of the application will be provided.

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 14 October 2003.

Applications must be made on the Application Form attached to this Prospectus. Please complete all relevant parts of the Application Form using BLOCK LETTERS

• Enter the NUMBER OF SHARES you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples a) of 1,000 Shares.
• Enter the TOTAL AMOUNT of application money payable. To calculate the amount, multiply the number of Shares applied for by \$0.20. $\mathbf{h}$ Enter the FULL NAME(S) of all legal entities that are to be recorded as the registered holder(s). Use correct forms of registrable name (see below). c)
• Applications using the wrong form of name may be rejected. Enter the POSTAI ADDRESS for all communications from the Company. Only one address can be recorded. d) Enter a CONTACT NAME and TELEPHONE NUMBER(S) of a person the share registry can speak to regarding any queries they may have on the Application.
• The Company will become an Issuer Sponsored participant in the Australian Stock Exchange CHESS System. This enables a holder to receive a statement of their shareholdings from the Company's share registrar. If you are already a Broker Sponsored participant in this system, enter your Holder Identification Number (HIN). Otherwise, leave this box blank and your Shares will automatically be issuer sponsored on allotment.
• Enter the TAX FILE NUMBER(S) of the Applicant(s). Collection of Tax File Numbers is authorised by taxation laws. Quotation of Tax File $f$ Number(s) is not compulsory and will not affect the Application.
• Enter the details of cheque(s) accompanying the Application Form in payment of application monies. $g)$

DECLARATION AND STATEMENTS

Before completing the Application Form the Applicant(s) should read the Prospectus dated 14 October 2003. The Applicant(s) agree(s), upon and subject to the terms of the Prospectus, to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to the Applicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the Application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the Application.

If your Application Form is not completed correctly, it may still be treated as valid. The Company's decision as to whether to treat your Application as valid, and how to construe, amend or complete it, shall be final.

There is no requirement to sign the Application Form.

PAYMENT

Applications for Shares must be accompanied by the application money of \$0.20 per share (in Australian currency). Cheques should be made payable to Cazaly Resources Limited - Subscription Account and crossed "Not Negotiable".

LODGING OF APPLICATIONS

Completed Application Forms and accompanying application monies must be: Posted To:

	Or	Delivered to:
Cazaly Resources Limited		Cazaly Resources Limited
C-/ Advanced Share		C/- Advanced Share Registry
Registry Services		Services
PO Box 6283		Level 7, 200 Adelaide Terrace
EAST PERTH WA 6892		PERTH WA 6000
$\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$

Applications must be received by no later than 5.00pm WST on the Closing Date, currently 14 November 2003 (unless varied by the Company).

CORRECT FORM OF REGISTRABLE TITLE

Note that only legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Cazaly Resources Limited. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR	CORRECT FORM OF and the process and REGISTRABLE TITLE	INCORRECT FORM OF FILLE AND RESIDENCE REGISTRABLE TITLE
Individual Use given names, not initials	Peter David Jones	PD Jones
Company Use Company title, not abbreviations	AAA Pty Ltd	AAA P/L AAA Co
Trusts Use trustee(s) personal name(s), Do not use the name of the trust	Michelle Jones	Michelle Jones Family Trust
Deceased Estates Use executor(s) personal name(s)	James Jones	Estate of late James Jones
Partnerships Use partners' personal names , do not use the name of the partnership	James Jones and Peter Jones	James Jones and Son
Clubs/Incorporated Bodies/Business Names Use office bearer(s, personal name(s). Do not use the names of the clubs etc.	Michael Jones	BBB Cricket Association

Superminishing tunds for glasses of anders also poles to the educate and moles of fund, do not use the name of the fund.

luss jones bty Ltd Superannuation Fund

Broker/Dealer Stamp

CAZALY RESOURCES LTD ABN 23 101 049 334

Share Registrar Use Only

Before completing this Application Form, you should read the Prospectus dated 14 October 2003 and the instructions overleaf. No Shares will be issued pursuant to the Prospectus later than thirteen (13) months after the date of the Prospectus.

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM.

I/We apply for

Shares in CAZALY RESOURCES LTD at 20 cents per Share.

or such lesser number of Shares which may be allocated to me/us by the Directors.

I/We lodge full application monies of <

Full Name (PLEASE PRINT)

Joint Applicant #2 or

Joint Applicant #2 or

Postal Address (PLEASE PRINT) Street Number Street Post code State Suburb/Town Telephone number - Business hours Contact Name Telephone number - After hours E-mail address CHESS HIN (where applicable) Applicant #3 Applicant #2 Tax File Number or Exemption CHEQUE DETAILS Bank BSB Amount of cheque Drawer

Declaration and Statements:

$\mathcal{P}$

By lodging this Application Form:

I/We declare that all details and statements made by me/us are complete and accurate;

I/We agree to be bound by the terms and conditions set out in the Prospectus and by the Constitution of the Company;

I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus;

I/We authorize the Company to complete and execute any documentation necessary to effect the issue of Shares and Options to me/us; and

I/We have received personally a copy of the Prospectus accompanied by or attached to this Application Form or a copy of the Application Form or a direct derivative of the Application Form before applying for Shares and Options.

I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in Cazaly Resources Limited and that no notice of acceptance of the application will be provided.

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 14 October 2003.

Applications must be made on the Application Form attached to this Prospectus. Please complete all relevant parts of the Application Form using BLOCK LETTERS.

• Enter the NUMBER OF SHARES you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples $a)$ of 1,000 Shares.
• Enter the TOTAL AMOUNT of application money payable. To calculate the amount, multiply the number of Shares applied for by \$0.20. $h$
• c) Enter the FULL NAME(S) of all legal entities that are to be recorded as the registered holder(s). Use correct forms of registrable name (see below). Applications using the wrong form of name may be rejected.
• Friter the POSTAL ADDRESS for all communications from the Company. Only one address can be recorded. $\overline{A}$ Enter a CONTACT NAME and TELEPHONE NUMBER(S) of a person the share registry can speak to regarding any queries they may have on the Application.
• The Company will become an Issuer Sponsored participant in the Australian Stock Exchange CHESS System. This enables a holder to receive a $e)$ statement of their shareholdings from the Company's share registrar. If you are already a Broker Sponsored participant in this system, enter your Holder Identification Number (HIN). Otherwise, leave this box blank and your Shares will automatically be issuer sponsored on allotment.
• Enter the TAX FILE NUMBER(S) of the Applicant(s). Collection of Tax File Numbers is authorised by taxation laws. Quotation of Tax File f) Number(s) is not compulsory and will not affect the Application.
• $g)$ Enter the details of cheque(s) accompanying the Application Form in payment of application monies.

DECLARATION AND STATEMENTS

Defore completing the Application Form the Applicant(s) shound read the Frospectus dated 14 October 2005. The Applicant(s) agree(s), upon and subject to the terms of the Prospectus, to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to the Applicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the Application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the Application.

If your Application Form is not completed correctly, it may still be treated as valid. The Company's decision as to whether to treat your Application as valid, and how to construe, amend or complete it, shall be final.

There is no requirement to sign the Application Form.

PAYMENT

Applications for Shares must be accompanied by the application money of S0.20 per share (in Australian currency). Cheques should be made pavable to Cazaly Resources Limited - Subscription Account and crossed "Not Negotiable".

LODGING OF APPLICATIONS

Completed Application Forms and accompanying application monies must be: Posted To:

()r	Delivered to:
Cazaly Resources Limited	Cazaly Resources Limited
C-/ Advanced Share	C/- Advanced Share Registry
Registry Services	Services
PO Box 6283	Level 7, 200 Adelaide Terrace
EAST PERTH WA 6892	PERTH WA 6000

Applications must be received by no later than 5.00pm WST on the Closing Date, currently 14 November 2003 (unless varied by the Company).

CORRECT FORM OF REGISTRABLE TITLE

Note that only legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Cazaly Resources Limited. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR	REGISTRABLE TITLE	$\frac{1}{2}$ CORRECT FORM OF EREGISTRABLE THEFT!
Individual Use given names, not initials	Peter David Jones	PD Jones
Company Use Company title, not abbreviations	AAA Pty Ltd	AAA P/L AAA Co
Trusts Use trustee(s) personal name(s), Do not use the name of the trust	Michelle Jones	Michelle Jones Family Trust
Deceased Estates Use executor(s) personal name(s)	James Jones <est A/C>	Estare of late James Jones
Partnerships Use partners' personal names , do not use the name of the partnership	James Jones and Peter Jones $\le$ James Jones and Son A/C>	James Jones and Son
Clubs/Incorporated Bodies/Business Names Use office beatients' personal name t., Do not use the navues of the clubs etc.	Michael Iones	BBB Cricket Association

and complete the control of the state of the control of the state of the complete state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of t of fund, do not use the vaine of the fund.

sala jednosti je dad tegovira na slove izvede

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na a

and the state of the state of the state of the state of the state of the state of the state of the state of the

CAZALY RESOURCES LIMITED

Ist Floor 22 Oxford Close

Leederville WA 6004

P: +61 8 9380 4600 F: +61 8 9381 5911

E:admin@cazalyresources.com.au

www.cazalyresources.com.au

THE REPORT OF THE REPORT OF THE REPORT OF THE REPORT OF THE REPORT OF THE REPORT OF THE REPORT OF THE REPORT OF