CORE ENERGY MINERALS LTD — Management Reports 2006

Aug 17, 2006

CIORAL ARROACHETD

Level 13, 340 Adelaide St Brisbane Old 4000

GPO Box 966 Brisbane Old 4001

T:61-7-3831-5650 F: 61-7-3831-5694

ABN 27 009 113 861

LETTER FROM THE NEW MANAGING DIRECTOR

$\begin{minipage}{.4\linewidth} \begin{tabular}{ c c c c c c c c c c c c c c c c c c c$																												KEY POINTS
																												.			.

• $\Rightarrow$ Strength in numbers as new sites added
• $\Rightarrow$ Leverage to explosive industry growth
• $\Rightarrow$ Casinos boast an unbeatable edge
• $\Rightarrow$ Poker the new profit powerhouse

Dear Shareholder,

The online gaming industry, which generates a mammoth \$US14 billion a year in revenues, is a busy and exciting business and as the new Managing Director of Global Approach I can tell you that the past month or so has been no exception.

On June 30 this year we announced the acquisition of industry frontrunner Tusk Corporation for \$A19.3 million. Before the purchase. Global owned two Casino sites and one Poker site. Now we boast six Casinos and 12 Poker sites.

I was Managing Director of Tusk, which ran Global's sites as well as our own, so I have a deep knowledge of the combined group's products and the sound logic behind the deal.

The acquisition, which settled successfully, was designed to deliver two key benefits:

• It created the critical mass needed to smooth the volatility inherent in the Casino business.
• And it allowed the company to greatly expand its leverage to the online Poker boom where an estimated \$US200 million is wagered daily.

The strategy is working. With the Casinos, our broader player base has steadied the ship when High Rollers have gotten lucky, It's important to remember, however, that nobody beats the Casino over the long term. Our "house edge" is immutable.

Poker too is proceeding according to plan. The Poker model is fascinating and potentially very lucrative. Poker room operators such as Global receive a percentage of every dollar wagered without risking their own money in the transaction. It's low risk but it must also be high volume, and our 50-strong team in Brisbane are expert at attracting players from all over the world to our tables.

So, the house edge and the poker percentage combined with our rigorous attention to cost control and the healthy state of the internet gaming industry make me very excited about the future of our company.

But there was a dampener or two in the past few weeks. In mid-July, US officials targeted a Costa Rican-based Internet gambling site, BetOnSports, and its CEO was arrested in Dallas. The alleged offences involved taking sports bets from US citizens.

News of the arrest hurt online gaming stocks around the world but we believe the sell-off was unwarranted.

In fact, US Department of Justice spokesman Brian Sierra has played down suggestions the indictment signals a clampdown on the online gaming sector. "I wouldn't read too much into one indictment," he said.

Another spokeswoman, Jaclyn Lesch, emphasised that the department did not intend to go after all US-facing operators: "Priorities haven't changed. This is not a change of gear for us."

Anyway, the charges concern sports betting, a service that Global does not offer, and there exists legal opinion that the law enacted does not cover other types of Casino betting.

Unfortunately, there was another disturbance from the US with news that the House of Representatives had passed a bill that would prohibit credit cards and other payment forms from being used to settle internet wagers. The legislation specifically says that most gambling is illegal online.

The bill is awaiting Senate approval but it is our belief, and the opinion of many experts, that the bill lacks the support to become law when it's voted on in the coming months.

We believe that both these issues will pass without affecting Global's operations. Nevertheless, at this time of activity by US law makers and enforcers, it bears remembering that Global is incorporated in Australia and licensed in Kahnawake, Canada. It also bears noting that Global is actively seeking more customers in Europe and Asia as part of its growth strategy.

Global is a fantastic business with tremendous potential in a thriving industry.

We are energised about the future and are working hard to ensure we secure for you as big a slice of the \$US14 billion a year online gaming industry as possible.

Thank you for your time and I look forward to communicating more with you.

Yours faithfully,

JAMES CANNING-URE Managing Director Global Approach

9218

Revenues have exploded in the Internet gaming industry. They have rocketed from \$US2 billion a year in 2000 to more than \$US14 billion in 2006. We predict they'll keep climbing. An investment in Global provides leverage to one of the world's great growth industries.

Sire of Reservoir

Global recently bought fellow gaming operator Tusk. We projected net profit after tax of \$2.1 million for the 2007 financial year, and we stand by that forecast. Of course, the odd High Roller on a lucky streak can cause us some angst but it's always reassuring to know that over the long-term the house always wins.

a a shekarar na matsa na matsa na matsa na matsa na matsa na matsa na matsa na matsa na matsa na matsa na mats

	Thenex Communist Communist Property
	Gross Revenue	Net Revenue	% Growth	npat	% Growth
FY07	SA CYARE	\$A 8.1m	公認合意論	$SA$ 2.1 $m$	SIMILAR
FY08		SA 10.5m	2763320000000000000000000000000000000000	SA 3.4m
	koguda kamanan kalendar $\sim 7.513$ , $\sim 2.013$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ , $\sim 1.213$ ,				in the company of the company of the company of the company of the company of the company of the company of the The company of the company of the company of the company of the company of the company of the company of the c

Global operates in established, proven markets such as Europe and the US. But it's also targeting Asia, an area of huge potential that has been badly serviced by Western Casino operators. Global recently launched www.ibigcasino.com for the Japanese market, where there is little competition and a golden opportunity.

Fusi viinsuoss

America and Europe, in particular, are in the grip of a poker boom. Worldwide, an estimated \$US200 million is wagered daily and last year revenues from online poker were estimated at \$US200 million a month. Global boasts 12 poker sites with more coming so it's beautifully positioned to extract maximum profits.

lt's a trust issuell

Several Global sites have received the official "Play it Safe" seal of approval from eCOGRA (Commerce and Online Gaming Regulation and Assurance). The eCOGRA Chief Executive, Andrew Beveridge, has said: "Seal-bearing Casinos attract more players and create additional revenue opportunities." We agree.

Securities on Issue (ASX:GLO).

• 219,467,545 Ordinary Shares post 1st July 2006
• 155,000,000 Vendor Shares in escrow to 1st July 2008

10,000,000 two-year Staff Options at 15 cents