CORAZON MINING LIMITED — Interim / Quarterly Report 2005

Jul 28, 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")

30 June 2005

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter \$A'000	Year to date (12 months) \$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for
	(a)exploration and evaluation	(265)	(265)
	(b) development
	(c) production
	(d) administration	(50)	(50)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	8	8
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(307)	(307)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects
	(b) equity investments (c)other fixed assets	(2)	(2)
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 by other entities
1.12	Other (provide details if material)
	Net investing cash flows	(2)	(2)
1.13	Total operating and investing cash flows (carried forward)	(309)	(309)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	$^{(309)}$	(309)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	2,651	2,651
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	(129)	(129)
	Net financing cash flows	2,522	2,522
	Net increase (decrease) in cash held	2,213	2,213
1.20	Cash at beginning of quarter/year to date
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	2,213	2,213

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
1.23	Aggregate amount of payments to the parties included in item 1.2	40
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

As described in the Prospectus, the Company issued 10,000,000 shares to Cazaly Resources Ltd for the purchase of exploration interests known as Quartz Circle, Jutson Rocks and Northampton, as detailed in the company prospectus dated 13 April 2005

$2.2$ 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	÷

⁺ 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
5.1	Cash on hand and at bank	957
5.2	Deposits at call	1,256
5.3	Bank overdraft
5.4	Other
	Total: cash at end of quarter (item 1.22)	2,213

Changes in interests in mining tenements

		Tenement	Nature of interest	Interest at	Interest at
		reference	(note (2))	beginning	end of
				of quarter	quarter
6.1	Interests in mining
	tenements relinquished,
	reduced or lapsed
6.2	Interests in mining	Quartz Circle
	tenements acquired or	E46/541	Acquiring 100%	$0\%$	20%
	increased	ELA 45/2602	Acquiring 100%	$0\%$	20%
		P46/1360	Acquiring 100%	$0\%$	20%
		P46/1361	Acquiring 100%	$0\%$	20%
		P46/1362	Acquiring 100%	$0\%$	20%
		P46/1363	Acquiring 100%	$0\%$	20%
		P46/1364	Acquiring 100%	$0\%$	20%
		P46/1365	Acquiring 100%	$0\%$	20%
		P46/1366	Acquiring 100%	$0\%$	20%
		PLA46/1385	Acquiring 100%	$0\%$	20%
		PLA46/1386	Acquiring 100%	$0\%$	20%
		PLA46/1441	Acquiring 100%	$0\%$	20%
		PLA46/1442	Acquiring 100%	$0\%$	20%
		Jutson Rocks
		ELA38/1540	Acquiring 100%	$0\%$	20%
		ELA38/1541	Acquiring 100%	$0\%$	20%
		Northhampton
		ELA66/49	Acquiring 100%	$0\%$	20%

⁺ 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	Amount paid up per
				security (see note $3)$ (cents)	security (see note 3) (cents)
$7.1\,$	Preference *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	20,250,003	20 cents	20 cents
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	24,500,003	20,250,003	20 cents	20 cents
7.5	+ Convertible debt securities (description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options (description and conversion factor)	2,000,000 2,000,000 2,000,000		Exercise price 20 cents 30 cents 30 cents	Expiry date 28/03/07 28/03/08 30/04/08
7.8	Issued during quarter	2,000,000 2,000,000 2,000,000		20 cents 30 cents 30 cents	28/03/07 28/03/08 30/04/08
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	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).
• This statement does give a true and fair view of the matters disclosed. $\overline{2}$

$\mathbb{Z}/\mathbb{Z}$

Sign here:

"Kent Hunter" (Company Secretary)

Date: 29 July 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.
• $\overline{2}$ 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.
• The definitions in, and provisions of, AASB 1022: Accounting for Extractive 4 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.