CORAZON MINING LIMITED — Interim / Quarterly Report 2006

Oct 30, 2005

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Graynic Metals Limited

ABN

87 112 898 825

Quarter ended ("current quarter")

Current quarter

\$A'000

30 September 2005

Year to date (3 months) $$A'000$

Consolidated statement of cash flows

Cash flows related to operating activities

1.1	Receipts from product sales and related debtors
1.2	Payments for
	(a)exploration and evaluation	(301)	(301)
	(b) development
	(c) production
	(d) administration	(100)	(100)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	19	19
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)	3	3
	Net Operating Cash Flows	(379)	(379)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects
	(b) equity investments	(16)	(16)
	(c)other fixed assets
1.9
	Proceeds from sale of:
	(a)prospects
	(b)equity investments
	(c)other fixed assets
1.10	Loans to other entities
1.11	Loans repaid to other entities	(14)	(14)
1.12	Other (provide details if material)
1.13	Net investing cash flows Total operating and investing cash flows	(30) (409)	(30) (409)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(409)	(409)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	123	123
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other - Capital raising costs	(11)	(11)
	Net financing cash flows	112	112
	Net increase (decrease) in cash held	(297)	(297)
1.20	Cash at beginning of quarter/year to date	2,217	2,217
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	1,920	1,920

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter
		\$A'000
		46
1.23	Aggregate amount of payments to the parties included in item 1.2
1.24	Aggregate amount of loans to the parties included in item 1.10

^1.25 Explanation necessary for an understanding of the transactions 1.23 includes directors fees and salaries

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• $2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used SA'000
3.1	Loan facilities	AM
3.2	Credit standby arrangements	AM

⁺ See chapter 19 for defined terms.

Estimated cash outflows for next quarter

4.1	Exploration and evaluation	\$A'000 250
$4.2^{\circ}$	Development
	Total	250

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter \$A'000	Previous quarter SA'000
Cash on hand and at bank 5.1		655	961
5.2	Deposits at call	1,265	1,256
5.3	Bank overdraft
5.4	Other
	Total: cash at end of quarter (item 1.22)	1,920	2,217

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed
6.2	Interests in mining tenements acquired or increased	P46/1441 P46/1442 E45/2602	100% 100% 100%	$0\%$ $0\%$ $0\%$	100% 100% 100%

$+$ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per security (see note	Amount paid up per security (see note 3)
7.1	Preference			$3)$ (cents)	(cents)
	*securities (description)
7.2	Changes during quarter
	(a) Increases through issues
	(b) Decreases
	through returns of capital, buy-
	backs,
	redemptions
7.3	+ Ordinary securities	24,500,003	20,332,955
7.4	Changes during
	quarter (a) Increases
	through issues
	(b) Decreases through returns
	of capital, buy-
7.5	backs + Convertible
	debt securities
	(description)
7.6	Changes during quarter
	(a) Increases
	through issues
	(b) Decreases through
	securities
	matured, converted
7.7	Options			Exercise price	Expiry date
	(description and	12,250,118	12,250,118	20 cents	31/10/07
	conversion	2,000,000		20 cents	28/03/07
	factor)	2,000,000 2,000,000		30 cents 30 cents	28/03/08 30/04/08
7.8	Issued during quarter	12,250,118	12,250,118	20 cents	31/10/07
7.9	Exercised during quarter
7.10	Expired during
7.11	quarter Debentures
	(totals only)
7.12	Unsecured
	notes (totals only)

⁺ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Sign here:

(Company Secretary)

Date: 31 October 2005

Print name:

Kent Hunter

Notes

• $\mathbf{I}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{\mathcal{L}}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• $\overline{3}$ Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

---

⁺ See chapter 19 for defined terms.