EVOLUTION MINING LIMITED — Interim / Quarterly Report 2005

Jul 28, 2005

WESTONIA MINES LIMITED

QUARTERLY REPORT FOR THREE MONTHS ENDED 30 JUNE 2005

SUMMARY

• Proceeds of the recent capital raising of \$6.6 million net of expenses were received.
• All statutory permits for Westonia site activities are in place, with the exception of the Department of Environmental Protection Licence to Operate, which is expected during the latter half of August.
• Contracts have been awarded for the site earthworks and dewatering aspects of the Company's overall programme.
• Site works commenced on 18 July 2005 immediately following Notice of Intent approval by the Department of Industry and Resources.
• Drilling in the Westonia pit is expected to commence in November 2005.
• The Company finalised its exploration strategy.

Westonia Mines Limited ABN 974-084-669-036
9 Havelock Street, West Perth, WA 6000 Telephone: +61-8-9321-3088 Facsimile: +61-8-9321-8804
Email: manager@westoniamines.com.au Web site: www.westoniamines.com.au
ASX Codes: WEZ e de la component

CAPITAL RAISING

As advised in the announcement of 17 May 2005, the terms of the Company's capital raising were amended from those described in the March 2005 Quarterly Report.

This was necessary for the Company to cover the tenement holders increased mine closure rehabilitation risk in return for a time extension to remove the Big Bell mill until 30 April 2007. Following successful negotiation of terms, a Replacement Prospectus was issued and the capital raising proceeded on the basis of a fully underwritten renounceable 11 for 10 rights issue at 6 cents per share.

The Company is pleased to announce the successful completion of its capital raising. with proceeds of \$6.6 million, net of expenses being received into the Company's accounts prior to the end of June. In accordance with the Big Bell plant removal extension and Department of Industry and Resources (DOIR) environmental bonding requirements associated with temporary evaporation bonds. Westonia Mines has almost completed the posting of a further \$1.6 million in performance bonds, thereby satisfying all statutory and commercial compliance criteria.

The Company's management team has begun to implement its dewatering programme, with progress to date described below.

BIG BELL MILL

Westonia Mines will post a new total of \$1.5 million in performance bonding in the next few days in order to secure the asset in place until 30 April 2007. This bond is fully refundable once the mill has been removed and the Company has rehabilitated the site in accordance with the tenement holders obligations.

Westonia Mines has complied with its previous commitments to remove all tailings delivery and return water pipeline from the Tailings Storage Facility. This pipe has been transported to Westonia for use in the dewatering programme.

Westonia's only remaining short term commitment is the cleanup of a storage area at Big Bell, which is scheduled to be completed by the end of August 2005.

SAFETY

The Company has attempted to establish the appropriate safety culture in its site activities by the introduction of ID tags, formal inductions and task documentation to reflect the Company's activity risk profile.

WESTONIA

Permitting

The Company is pleased to announce that it has received an ongoing high level of support and co-operation from the statutory authorities and the Shire of Westonia in seeking the necessary permits to conduct its dewatering and drilling programmes. At the time of writing, all permits are in place with the exception of the Department of

William Milliam

Environmental Protection Licence to Operate. This application will be submitted once the dewatering line and first evaporation pond is complete. Submission of the application is expected during the first week of August and the approval process will take approximately 3 weeks.

Geological Reviews

During the past quarter, the Company has engaged two experienced geologists on a consulting basis to undertake specific tasks aimed at focussing the forthcoming grade control and resource infill drill programmes.

Apart from ensuring the Company's limited funds are utilised to maximum effect in drill targeting, steps are being taken to ensure all QA/QC aspects are addressed and that ultimately, the Company's new resource model will accurately reflect the true grade distribution within the orebody.

Contracts

Following completion of the capital raising, the contracts for earthworks and dewatering have been awarded.

Westonia Civil Earthmoving (WCE) will undertake access road and evaporation pond refurbishment, as well as remove topsoil and construct new, temporary evaporation pond capacity. Pit floor cleanup in preparation for drilling will also be carried out by WCE. The principal of WCE was previously contracted to ACM, which operated the Westonia open pit mine in the late 1980's.

Polymer Welding Services (PWS), which is headquartered in Tasmania has been awarded the dewatering scope of work on a design and construct basis. The proposed single pump installation is much simpler and cheaper to operate than other proposed alternatives. Westonia's cost over-run exposure is limited, as the majority of expenditure will not be invoiced until PWS have demonstrated system capacity and availability compliance. Westonia has the option to purchase the pump installation at any point in time.

Siteworks Progress

Site works commenced in earnest on 18 July 2005, immediately following DOIR approval of the Notice of Intent.

PWS commenced the scope of work within the dewatering contract by welding the lengths of HDPE pipe which were recovered from Big Bell. Pipe welding is expected to be completed by the first week in August and at the time of writing, the pipeline between the mine and the evaporation ponds has been installed in an excavated trench and covered. The diesel engine and pump are scheduled to arrive at Westonia during the second week of August, with pumping due to commence prior to the end of August. The commissioning date is a little later than previously advised due to the time taken to finalise the dewatering contact and the longer than anticipated approval process for the Licence to Operate. It is expected that drilling will commence in November.

Martin Martin

WCE also commenced earthworks activities on 18 July. Work undertaken to date includes making the pit slope above the haul road safe, refurbishment of the haul road down to the water level, refurbishment of the access road to the evaporation ponds and topsoil and seed stock removal from existing evaporation ponds. The main focus of earthworks activity during August will be construction of temporary evaporation pond capacity.

Stabilising slope above pit ramp

Excavating pipe trench

Grading haul road into the pit

Welding evaporation pond pipework

EXPLORATION

During the quarter, the Company's management developed an exploration strategy, which was subsequently approved by the Board. The significant number of exploration targets were ranked and the top 3 targets identified.

Work is continuing with a view to selectively committing expenditure on the top ranked targets being mindful that the primary short term focus remains the Westonia project.

BOARD MEMBER

Due to his work commitments David Macoboy resigned from the Board in June. The Board would like to thank David for his contribution and support. The Company is in discussions with a potential replacement board member.

For further information: David Hatch, Managing Director (08) 9321 3088 29 July 2005

William March