CULLEN RESOURCES LIMITED

ACN.006045790 AB.N. 46 006 045 790

Level 4. 118 Christie Street St Leonards NSW 2065 P.O. Box 23, St. Leonards, 1590, Australia Telephone: (612) 9437 4588 Fov: $(612)$ 9437 4599 Email: [email protected] Website: www.cullenresources.com.au

QUARTERLY REPORT FOR PERIOD ENDING

31 DECEMBER 2005

HIGHLIGHTS

A total of \$~1.95M was spent by joint venture partners, sole funding on $\bullet$ Cullen-owned tenements during the Quarter;
IRON The West Pilbara Mt Stuart Iron Ore Joint Venture (API/Aquila) has completed a total of 235 RC holes for 5,625m to test two channel iron deposits – the results from 97 holes received to date include: 13m $\omega$ 56.54% Fe and 17m @ 54.69% Fe:
GOLD The Gunbarrel Gold Joint Venture (Newmont) has completed ~23.750m of RAB/air core drilling – significant results include 24m @ 1.00 $g/t$ Au and 11m $(a)$ 1.36 $g/t$ Au with six priority target areas for follow-up drilling;
NICKEL The Gunbarrel Nickel Joint Venture has identified one new EM $\bullet$ conductor from a 75 line kilometer survey designed to test the stratigraphy around the "AK47" nickel sulphide prospect;
NICKEL The Independence Group has identified a new bedrock EM $\bullet$ conductor within the Mt Tate JV tenement E53/1096:
NICKEL Nickel Australia Limited has completed ground EM surveying at $\bullet$ the Killaloe Project near Norseman and identified a number of conductors for further investigation;
NICKEL Cullen has completed a ground EM survey targeting nickel sulphide $\bullet$ mineralization at the Wonganoo project in the North Eastern Goldfields and identified two significant conductors for drill testing.

EXPLORATION ACTIVITIES - WESTERN AUSTRALIA

ASHBURTON PROVINCE

WEST PILBARA - MT STUART JOINT VENTURE (E08/1341, E08/1375, E08/1330, E08/1292 and E08/1135, API/Aquila earning 70% of iron ore rights)

Detailed mapping and RC drilling were completed over the Catho Well and Cardo Bore channel iron prospects during the period.

During mapping, selective rock chip sampling was conducted, on traverses not less than 500m apart. Iron grades varied between 54.0% and 56.4% at Cardo Bore and 53.3% and 57.1% at Catho Well. Iron grades are relatively consistent across a wide area with grades for both prospects averaging around 55% Fe.

To the end of the quarter, a total 197 RC holes $(CWRC004 - 200)$ for 4.456 metres had been completed at Catho Well, and 38 holes (CBRC001-021, 023-037, 051-052) for 1,169 metres at Cardo Bore. Drill spacing is generally on a $200 \times 100$ m grid. Results have been received for a third of the drill holes completed.

Significant Channel Iron Deposit (CID) material was intersected in all holes and these were dominantly comprised of ooids to pisoids of ochreous goethite $+/$ - hematite with vitreous goethite cortices. The CID material is clast-supported with the matrix comprised of ochreous goethite, goethite and clay. Clay interbeds are common and may be up to 8m thick.

Results from 79 holes (CWRC004 to CWRC082) have been returned from Catho Well.

No results have been received for the Cardo Bore drilling as yet.

Metallurgical samples have been collected from RC drill residues for the Catho Well prospect and submitted for beneficiation testwork (screening, scrub/screen and density separation).

Results were received at quarter end for the screen testwork and indicate a 0.5 to 1.5% upgrade in iron between size fractions; however grade improvement is variable between size fractions. A larger in-situ sample is required to produce a sample that will provide representative sizing following crushing. Scrubbing and density separation testwork remain ongoing.

Best results include:

			Significant Intercepts >54% Fe including zones up to 2m internal waste
Hole ID	From	To	Intercept	Width	Fe%	AI2O3 %	SiO ₂ ℅	P%	S%	Mn%
CWRC008	$\vert 4 \vert$		17 13.00 m @ 56.54 % Fe	13	56.54	3.08	5.71	0.040	0.020	0.050
CWRC009	$\overline{0}$		11 11.00 m @ 56.45 % Fe	11	56.45	3.08	5.49	0.040	0.010	0.140
CWRC012	$\overline{2}$ $\overline{18}$		12 10.00 m @ 55.76 % Fe 19 1.00 m @ 55.40 % Fe	10 ¹⁰ 1	55.76 55.40	2.29 2.17	8.25 6.41	0.030 0.030	0.010 0.010	0.080 0.510
CWRC058	6		16 10.00 m @ 55.73 % Fe	10	55.73	3.72	5.61	0.050	0.030	0.040
CWRC061	0		15 15.00 m @ 55.05 % Fe	15	55.05	3.81	7.11	0.040	0.020	0.040
CWRC063	$\overline{0}$ 7		44.00 m @ 54.65 % Fe 22 15.00 m @ 56.70 % Fe	4 $\overline{15}$	54.65 56.70	4.45 2.54	6.85 5.20	0.040 0.050	0.020 0.010	0.060 0.070
CWRC064	$\overline{0}$		12 12.00 m @ 55.43 % Fe	$\overline{12}$	55.43	3.93	6.30	0.040	0.020	0.060
CWRC067	0		11 11.00 m @ 57.59 % Fe	11	57.59	3.51	6.74	0.040	0.020	0.050
CWRC069	$\uparrow$		18 17.00 m @ 56.42 % Fe	17	56.42	2.86	5.86	0.040	0.020	0.080
CWRC070	$\overline{0}$		14 14.00 m @ 55.52 % Fe	14	55.52	3.06	6.39	0.040	0.010	0.070
CWRC071	$\overline{0}$		15 15.00 m @ 55.05 % Fe	15 ¹	55.05	3.08	7.78	0.040	0.010	0.050
CWRC072	$\overline{0}$		14 14.00 m @ 55.47 % Fe	4	55.47	3.26	6.63	0.040	0.010	0.080
CWRC074	$\overline{0}$		17 17.00 m @ 54.69 % Fe	17	54.69	2.49	9.07	0.040	0.010	0.070
CWRC080	$\overline{0}$		11 11.00 m @ 56.23 % Fe	11	56.23	2.83	6.98	0.040	0.000	0.060

HARDEY JUNCTION JOINT VENTURE (E08/1166; E08/1189 and E08/1145, Cullen 100%; with Nustar Mining Corporation Limited earning up to 80%)

Nustar has reported the completion of auger soil sampling at eight prospect areas (378 samples, 400 x 400m to 100 x 50m grid) where conventional surface soil sampling may have been ineffective.

A number of anomalous assays in gold, arsenic, lead, antimony and mercury were returned at the Paddy Well Prospect where a major northwest trending fault, with associated, quartz-biotite schist along its length, has been interpreted. This prospect is located at a flexure point along the fault, and is recognized as a "Geoscan" anomaly with widespread sericite, hematite minor silicification and magnetite alteration. This prospect area will be further tested with RAB and RC drilling.

Auger sampling also returned elevated gold assays from the western end of the Mt Edith prospect area. There are also elevated gold and arsenic values from rock chip sampling in the area, where the Mt McGrath Formation will be targeted.

YANKS BORE PROJECT - Yanks Bore (E08/1022, Cullen 51% and Udu Resources Ltd 49%, diluting; Red Hill West, E08/1135 and Cardo Bore E08/1341, Cullen 100%)

There was no field work completed during the Quarter. Udu Resources Ltd has been placed in Administration and the Managers have advertised the assets of Udu for sale. Cullen holds pre-emptive rights.

NORTH EASTERN GOLDFIELDS

GUNBARREL NICKEL JOINT VENTURE - (Eureka Group : E53/568, E53/535, E53/818, E53/837, MLA's 53/868-870, and 1021-1047 Cullen 100%, BHP Billiton has earned a 75% interest in nickel and base metal rights by spending \$1M, Cullen's 25% is free carried to Decision to Mine)

The Joint Venture completed 37 RC drill holes for 2,562m to test magnetic units and four geochemical anomalies. The drilling confirmed the presence of komatiitic ultramafic units in the Red Bluff and Doyle Bore areas. One komatiite horizon (intersected in hole GBRC4) had enriched PGE's (150ppb Pt+Pd) which requires further investigation. No anomalous nickel results were obtained from the geochemical anomalies tested.

A surface TEM survey was completed to test the prospective AK47 stratigraphy at Mt Eureka. A total of 75 line km of data was collected on 200m spaced E-W lines using GEOFERRET EM equipment. A new anomaly was located $\sim$ 2.4km along strike to the north of A2 on the western side of the ultramafic unit. Field checking of this anomaly is required prior to planning further work. Three other anomalies detected, were known from previous, standard EM surveys.

Work planned includes: further interpretation of the drilling results; completion of geochemical analysis of the ultramafic samples; completion of a hydrogeochemical survey around the AK47-Mt Eureka area; and, further evaluation of the regional stratigraphy and nickel sulphide prospectivity.

GUNBARREL GOLD/NEWMONT JOINT VENTURE - (Eureka Group, E53/568, E53/535, E53/818, E53/837, MLA's 53/868-870, and 1021-1047, Cullen 100%)

The Gunbarrel Gold Joint Venture with Newmont covers a portion of Cullen's Gunbarrel Project tenements (E53/535, E53/568, E53/837 and E53/818).

The Joint Venture commenced exploration drilling in September 2005, and to the end of the year a total of 4 RC holes $(676m)$ , 2 diamond tails $(603.3m)$ , 63 RAB holes $(3,046m)$ and 271 air core holes (20,529m) had been completed.

These first pass drilling programmes targeted the most significant known gold mineralization, especially the Southern Prospect, and a number of new targets marked by a combination of anomalous previous drill results; interpreted structures; and/or the position of interpreted intrusive bodies from newly-acquired gravity data. Results are regarded as significant and encouraging (Table and Figure).

Diamond drilling has located a broad shear zone (over an interval of approximately 130m) downhole in GUND002) with strong alteration (chlorite-sericite-fuchsite +/- biotite) and abundant quartz-pyrite veining trending NNE to NE through the Southern Prospect area. Although intersections from this mineralized zone and the drilling at Southern in general were of moderate grade and width (best intersections of $20m$ $\omega$ ) 0.33 $g/t$ Au from 108m), quartz veins with visible gold were intersected, with intercepts of 1.8m $(a)$ 3.9 g/t Au from 210m (including 0.8m @ 8.6 g/t Au) and 2m @ 1.8 g/t Au from 223m (including $0.4m$ (a) 5.2 g/t Au).

RAB and air core drilling returned numerous, low to moderate grade gold intersections from most of the target areas tested Eureka NW (29m $@$ 0.27 g/t Au); Eureka East (4m) @ 2.10 g/t Au with numerous porphyries, open to the north); Target 5 (32m @ 0.2 g/t) Au, NE structural trend with porphyry); Target 2 (12m $@$ 1.00 $g/t$ Au, porphyries with quartz veining and alteration) Target 11 (24m @ 1.00g/t Au in chert and open to the north); and Dugite (11m @ 1.36 g/t Au with 1m $@ + 5$ g/t Au in the bottom of two holes) as priority targets for follow up infill and deeper RC drilling. Dugite is the southern extension of the previously known Taipan prospect.

These results indicate that gold prospectivity occurs across a very broad area and in a variety of geological settings. Notably the northern half of the Joint Venture area, with +10km of strike of the greenstone belt, remains underexplored.

The 2006, exploration programme will commence in March, with approximately 20,000m of RAB/air core, up to 3,000m of RC drilling and some additional diamond drillholes planned.

TARGET ID	HOLE ID	FROM(m)	TO(m)	WIDTH(m)	Au GRADE (g/t)
Eureka NW	EURB029	36	65	29	0.27

Eureka NE (19)	EURB040	36	44	o	0.52

Eureka NW	EURA003	24	28		0.47

GUNBARREL GOLD JV - SIGNIFICANT INTERSECTIONS > 0.2g/t Au (RAB/AC/RC and DD)

Eureka East	EURB053	48	57	9	0.22
	EURB056	16	20	4	0.20
	EURB056	60	68	$\overline{8}$	0.25
	EURA019	28	32	4	0.22
	EURA021	$\overline{28}$	$\overline{32}$	4	0.78
	EURA021	40	48	$\overline{8}$	0.57
	EURA024	72	76	4	2.10
	EURA025	44	48	4	0.62
	EURA028	20	24	4	0.22
	EURA028	44	48	4	0.22
	EURA029	44	52	8	0.73
	EURA034	96	101	$\overline{5}$	0.23

Target 18	EURA040	56	68	$\overline{12}$	0.25
	EURA040	$\overline{72}$	$\overline{74}$	$\overline{2}$	0.32
	EURA045	36	$\overline{40}$	4	0.51
	EURA045	44	48	4	0.23
	GUNA024	36	40	4	0.21
Target 15
Target 5	GUNA046	52	60	8	0.33
	GUNA050	40	72	32	0.20
	GUNA061	16	20	4	0.20

Target 2	GUNA068	56	60	4	0.50
	GUNA070	28	32	4	3.00
	GUNA070	40	44	4	0.30
	GUNA076	68	$\overline{72}$	4	0.92
	GUNA080	44	47	3	0.42
	GUNA085	44	48	4	0.20
	GUNA085	68	72	4	0.43
	GUNA088	28	$\overline{32}$	$\overline{4}$	0.28
	GUNA089	24	28	4	0.30
	GUNA089	32	44	$\overline{12}$	1.00
			Including	4m $\overline{4}$	2.40
	GUNA094	56	60		0.34
Target 11	GUNA104	12	36	24	1.00
			including	8m	2.79
	GUNA110	44	48	4	0.22

Dugite	DUGA004	104	108	4m	1.0
	DUGA008	48	52	4m	0.28
	DUGA029	52	56	4	0.35
		92	96	4m	0.42
	DUGA009	80	84	4m	0.39
		116	122	6m	0.67
			including	1 _m	5.15(to EOH)

	DUGA013	52	63 including	11m 1 _m	1.36 5.71(to EOH)
	DUGA031	48	52	4m	0.27

Target 26	DUGA034	76	80	4m	1.22
Target 14	DUGA048	72	76	4m	0.31
		112	117	5 _m	0.28

Southern	GUND001	116	120	4m	0.22
		152	160	8m	0.21
		210	211.8	1.8 _m	3.9
		223	225	2m	1.8
	GUND002	224	225.6	1.6 _m	$\overline{1.7}$
		193	201	8m	0.87
		214.9	220.3	5.4 _m	0.92

	GUND003	108	128	$\overline{20}$	0.33

Galway	GUND004	28	32	4	0.20
	GUND004	60	64	4	0.76

Note: Drillholes at Southern and Galway include RC pre collars for deep diamond drilholes. EOH = end of hole

IRWIN BORE NICKEL JOINT VENTURE - (E53/403, 925 and 981, Cullen 90% Independence earning 65%, CO2 GROUP LIMITED 10%)

This Joint Venture is situated south of BHP Billiton's AK47 massive sulphide discovery. Joint Venture manager, Independence, has been testing the strike extension of the AK47 ultramafic stratigraphy for nickel sulphides using soil geochemistry and surface TEM surveys. Interpreted bedrock conductors and coincident soil geochemical anomalies have previously been reported.

During the quarter, 7 RC drill holes (IRRC001-007) tested seven high priority bedrock EM conductors. Drill holes IRRC001-IRRC006 were completed on E53/925; IRRC007 was completed on E53/403. All holes were drilled at -60 $\degree$ / 270 $\degree$ , with downhole EM surveying completed.

The best nickel assay interval is 8m $\omega$ 0.37% Ni in IRRC003, from 32-40m in oxidised cumulate ultramafic close to a mafic - ultramafic contact. Peak assay results for all drilling completed at Irwin Bore were Au 34ppb, Pt 35ppb, Pd 40ppb, Ni 3750ppm, Cu 1280ppm. The highest copper is associated with a shear zone within a carbonaceous black shale unit.

The results of this drilling programme and downhole EM results are currently under review.

MT TATE JOINT VENTURE (Independence Group can earn 70 % of the nickel rights in $E53/1096$ )

A bedrock conductor has been identified on three 200m spaced lines coincident with interpreted ultramafic stratigraphy. Historic reconnaissance RAB drilling across the ultramafic stratigraphy returned results of up to 0.52% Ni and 0.22% Cu strongly supporting the nickel sulphide prospectivity of this target. Infill EM will be completed over the conductor prior to drill testing.

WONGANOO GOLD/NICKEL PROJECT - (E53/1046, ELA's 53/1030, 1069, and 1083 Cullen 100%, Cullen 80% in E53/988 with Quantum Resources Limited)

A 25 line km ground EM survey tested a 4km trend of ultramafics within E53/988, where strong nickel (to 6405ppm) and copper (to 3525ppm) anomalies from previous RAB traverses occur on favourable komatiite contacts.

The survey identified two significant conductors associated with the interpreted basal contacts of the magnetic ultramatics. Follow up fixed loop EM surveys were coordinated by Southern Geoscience Consultants.

One conductor, WE1, is complex with an interpreted moderate (30-40°) westerly dip and comprises a relatively shallow $(+/-90m)$ to top) northern section, and a deeper $(+/-200m)$ to top) southern section. The second conductor, WE2, is east-west striking and of short strike length. It also appears to have a moderate dip ( $\sim 25^{\circ}$ to the south) with a depth to top of $\sim$ 170m.

These two conductors could represent either conductive sulphide mineralization or sulphidic metasediments. Drilling will be undertaken once access approval is obtained.

EASTERN GOLDFIELDS

KILLALOE GOLD PROJECT - (E63/722, E63/765, Ps 63/1131-1133, 1172-1174, Cullen 100%, * 7.5% NPI to Xplore Pty Ltd applies to these tenements)

Cullen has concluded that the Killaloe-Buldania break/shear zone in this project area is an extension of the Zuleika Shear, and that analogy to the Kundana, White Foil and Broads Dam gold deposits is valid. These deposits along the Zuleika shear, broadly consist of either high grade quartz veins, or moderate grade quartz stockworks and mineralized, silicified shear zones localized along lithological contacts, often near cross-cutting faults.

The Killaloe/Zuleika Shear extends for over 15km of strike within the Killaloe tenements and includes several prospect areas. A field review confirmed the areas for further work:

Killaloe - old gold workings (prospect pits and shafts) and abundant quartz veins $\bullet$ localized along a 300° structural trend/splay from the Killaloe/Zuleika shear $(330^{\circ})$ . This splay is coincident with a linear, aeromagnetic, "low" feature.

Cashel where gold mineralization (up to 6m $\omega$ 1.32 g/t Au from 30m) has been intersected in previous drilling in quartz veins hosted by sheared basalt close to the Killaloe/Zuleika shear, and a series of interpreted N and NNE trending faults. The discovery of a visible gold-bearing quartz vein (about 30cm wide) near surface from prospecting within the Cashel soil anomaly (a sample of this gold bearing quartz vein assayed 960 $g/t$ Au) is a significant indication of the high prospectivity of the target structural trend.
Windy Hill where gold mineralization, indicated by previous drilling, is coincident with the Killaloe/Zuleika Shear which in this section includes shale and conglomerate lithologies in contact with basalts, and faulting along N-S trends.

Over the coming two quarters, the interpreted N to NNE trending structural control at Cashel, and a possible similarly oriented structure linking the Killaloe workings and the Windy Hill prospect area will be further investigated with a combination of prospecting, detailed mapping, surface geochemistry and RAB traversing.

KILLALOE NICKEL PROJECT - (E63/722, E63/765, Ps 63/1131-1133, 1172-1174, Cullen 100%, Nickel Australia Ltd can earn 70% of the nickel rights; 7.5% NPI to Xplore Pty Ltd applies to these tenements)

Nickel Australia has completed compilation of previous work; review and interpretation of aeromagnetics data; and 17.2 line km of moving loop EM surveying. A number of conductor responses have been identified, although the majority of these appear to be However several short strike length features warrant follow up stratigraphic. investigation.

EXPLORATION ACTIVITIES - NEW SOUTH WALES

CENTRAL LACHLAN INTRUSIVE-RELATED GOLD PROJECT (EL's 6168, 6206, 6227, 6207, 6220, 6235, 6257, 6256, Cullen 100%; option to purchase - EL's 5891 and 6020 from Mr Denis Walsh, Yalgogrin Prospect Area)

The Company has applied for an additional area near Lake Cargelligo in the Central Lachlan Fold belt of NSW, at the northern extremity of the Ardlethan-Kikoria tin belt. This ELA adjoins Cullen's existing Minter tenement EL 6257 forming a project area of $\sim$ 165km². A review of open file exploration data shows the area is highly prospective for cupola-related stockwork/vein-type tungsten mineralization.

Previous exploration has discovered significant zones of tungsten mineralization including:

PDH 1 9 m $\omega$ 0.23% WO3 from 96m (primary scheelite-pyrite mineralization) PDH 2 27 m $\omega$ 0.16% WO3 from 95m (primary scheelite-pyrite mineralization) PDH 5 53 m @ 0.10% WO3 from 54m PDH 8 6 m @ 0.30% WO3 from 86 m PDH 10 27 m $@$ 0.17% WO3 from 1.5m (oxidised secondary mineralization)

Compilation of the previous data suggests that a 10km long trend of tungsten mineralization in the area is highly prospective for concealed cupola-related stockwork/vein type tungsten mineralization.

The application of geophysical techniques such as IP/Resistivity and Gravity could assist in defining new drill targets along the Trend.

EXPLORATION ACTIVITIES - QUEENSLAND

DUCHESS PROJECT AREA - Erle (EPM 11990) and Mayfield (EPM 12395), Minotaur Resources Ltd can earn 70% with expenditure of \$3M over 4 years.

Activities undertaken were limited to the renegotiation of agreements with Native Title claimants and landowners and planning of infill gravity surveys. The latter is now awaiting a suitable contractor.

FORRESTER PROJECT - (EPCA 1030, 100%)

The Company has made an application for an Exploration Permit for Coal (EPCA 1030) in western Queensland. The EPCA is located $\sim$ 75km north of the town of Alpha, and covers Late Permian Coal Measures on the Eastern margin of the Galilee Basin which correlate directly with the Bowen Basin stratigraphy and its host coal deposits. The company's EPCA application immediately adjoins to the north of Mineral Development Licence Application 333 held by Hancock Prospecting Pty Ltd.

Previous exploration in the EPCA 1030 area has proven that there are up to five seams present (A, B, C, D and E). These seams and associated sediments dip to the west, at about one degree. The A and B seams are considered to be a composite seam with the thickest intercepts and the better coal usually, whereas C seam is usually very high in ash. due to interbedded sediments. The D and E seams are also of mineable quality coal, although thinner than the A and B seams.

ATTRIBUTION

Information in this report which relates to mineralization is based on information compiled by Grahame Hamilton, a full time employee of Cullen Resources Limited who is a Member of the Australian Institute of Geoscientists and has relevant experience as a Competent Person as defined in the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves in relation to mineralization being reported oп.

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

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

Name of entity