EVOLUTION MINING LIMITED — Regulatory Filings 2004

Jul 21, 2004

WESTONIA MINES LIMITED

QUARTERLY REPORT FOR THREE MONTHS ENDED 30 JUNE 2004

HIGHLIGHTS

• Global Resource upgrade of 27% after extensive re-sampling programmes.
• Mineable Reserves within the current pit design increased. Contained gold up 13%.
• Project financing advanced.

Enquiries:

Andrew Drummond Managing Director

Nestena Mines Linités (1511-674-684-151) 056
19 Havetock Street (1653) 5761 (174-686) (1655) 1655 – 173 8.9321 3985 – Facsimic 451 83321 8884
15 Zara (1500510) – 1730 – 1740 (1740) 1751 1762 1763 1775 (1764 1775 1786 1787 Ladar Castle

RESOURCE UPGRADE

The Company has previously advised that it considered the resource and reserve position at Westonia to be conservative. This advice was consequent upon recognition that the Company's drilling and sampling practices, which include a preference for wider diameter drilling and a larger assay sample were giving, on average, 20% higher assays than those resulting from previous practices. The independent resource estimation consultants informed the Company of this in their final report which was compiled for the Bankable Feasibility Study ("BFS"). During the Quarter and in consultation with those consultants, new comparative sampling and assaving programmes were undertaken. Resource and reserve estimates have been revised as follows:

Global Resources

The above observation was confirmed and a new global resource was estimated. It can be compared with the February 2004 estimate which was used as the Base Case in the BES

	Indicated	Inferred	Total	Qunces
July 2004	23.1 Mt @ 1.41 g/t	7.3 Mt @ 1.35 g/t	30.4 Mt @ 1.39 g/t	1.36M
BFS	19.4 Mt @ 1.36 g/t	5.1 Mt @ 1.33 g/t	24.5 Mt @ 1.36 g/t	1.07M

These estimates are to a depth of 300m at a cut-off of 0.7 g/t.

In-situ gold ounces have increased by 27%.

Mineable Reserves

Within the BFS pit. Reserves compare as follows:

July 2004	13.5 Mt @ 1.38 g/t	for	597,000 ozs
BFS.	12.8 Mt @ 1.29 g/t	for	529,000 ozs

Total ounces increase by 13%.

The new estimate contains 2.7 Mt $@$ 0.7g/t of low grade material which will initially be stockpiled while the mill will receive hard rock feed of about 1.55 g/t. There is an additional 1.1 Mt grading 1.7 g/t for a contained 60,000 ozs within the BFS pit which is currently classified as Inferred resources. The company is optimistic that much of that will convert to Reserves category when it can be drilled at a satisfactory density.

THE FUTURE

The improved ore situation within the BFS pit provides improved project economics. These will be calculated during the next quarter and will have a positive effect on the ability to secure increased debt funding.

The increase in average grade of the mineralized host will enable a new optimized pit design in the near future. It will most likely be larger and contain more ounces than the present BFS pit design.

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PROJECT DEVELOPMENT

RANKARLE FEASIRILITY STUDY

The completion of the Study ("BFS") has been previously announced. The Board has subsequently reviewed and approved it.

DEBT FINANCING

The BFS became the basis for a Debt Information Memorandum which was forwarded to resource finance lending institutions. Formal due diligence is now in progress.

TENDERS FOR MAJOR CONTRACTS

Tender documents are being prepared for the following major contract items:

• Open pit mining
• Power supply
• Village/camp
• Process plant relocation and construction

LAND ACQUISITION

The Company completed an Option to Purchase Agreement with the Shire of Westonia. the freehold owner of the farm over which the Company holds Mining Lease M77/110. This land will be used for waste dumps and a tailings facility and it also contains the evaporation ponds which will hold excess water resulting from mine dewatering operations.

UNDERGROUND POTENTIAL

The Company has previously stated its intent to resume underground mining at Westonia as soon as it is economically practicable. The aim is to maximise the returns from the Westonia orebody and the Company's infrastructure investment.

The underground potential has been considerably enhanced by the re-sampling and reassaying programmes discussed above.

The vast majority of the assay database at depths greater than 300m can likely now be factored upwards by over 20%.

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REGIONAL GOLD EXPLORATION

The Company has concentrated its efforts during the Quarter on mining matters rather than exploration. Nonetheless, exploration for gold and nickel has continued near the mine and elsewhere in the Westonia Greenstone Belt. Several areas have been defined as worthy of future follow-up. Details of results will be released upon programme completion.

Andrew Drummond Managing Director

Competent Person Declaration

The information on mineralization in this report accurately reflects information prepared by competent persons (as defined by the Australasian Code of Reporting of Identified Mineral Resources and Ore Reserves). It is compiled by A.J. Drummond, an employee of the Company who is a Fellow of The Australasian Institute of Mining and Metallurgy with more than requisite experience in the fields of activity in which he is reporting.

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