EVOLUTION MINING LIMITED — Regulatory Filings 2004

Apr 13, 2004

WESTONIA MINES LIMITED

BANKABLE FEASIBILITY STUDY COMPLETED

HIGHLIGHTS

• Feasibility study on open cut mining and CIP processing has been completed.
• Project financing will now be sought.
• Considerable upside potential is demonstrable.
• The Project is strongly leveraged to any future Australian gold price rise.
• Mid 2005 production commencement is planned.
• Now to turn to appraisal of the underground potential.

Enquiries: Andrew Drummond, Managing Director

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Westonia Mines Limited is pleased to announce completion of its Bankable Feasibility Study (BFS) into resumption of gold mining and processing at its wholly owned Westonia Project, Western Australia. Final documents will be delivered by 30 April 2004 for assessment by the Board.

The Company intends immediately to initiate negotiations to secure Project finance. These will be subject to Board and shareholder approval, as required.

$1.$ Base Case Operation

For project financing purposes, the Company has designed an interim pit based only on Indicated Resources and on a realized gold price of \$575.

The BFS has been completed for the following Base Case:

• Ore Reserve 12.8 Mt $@$ 1.3 g/t (mining diluted) $\bullet$
• Recovered gold 520,000 ounces (including 40,000 ozs from 2.4 Mt of oxide stockpiles)
• Hardrock throughput 2.2 Mtpa
• Waste to Ore Ratio 2.2:1
• Mine life 6.3 years
• Average gold production approximately 90,000 ozs/yr
• Cash cost \$420/oz
• Maximum pit depth 205 metres

It will be recalled that subsequent flooding of the previous operator's open pit has precluded WEZ drill access to the zone immediately below that pit. This results in estimation of resources at the Inferred category in much of that interval. The Base Case Pit contains a further 1.1 Mt $@$ 1.3 g/t in the Inferred category. Full conversion of this to ore during the mining operation would:

• recover a further 45,000 ounces
• decrease waste to ore ratio to 1.9:1
• lower cash costs by about \$15/oz
• increase mine life by 6 months.

2. Capital Costs

The Big Bell processing plant has already been purchased for \$2.5M and will be relocated to site.

Capital costs for construction and 10% contingency total \$34.5M.

Current plans for pre-production mining and for prudent working capital total \$9.0M.

3. Project Financing

The Company is now seeking Project financing via a mix of debt and equity. Prime Corporate Finance Pty Ltd (PCF) has been engaged to manage the debt finance component. WEZ and PCF are currently and jointly finalizing a Debt Information Memorandum which will be made available to lending institutions next week.

4. Hedging Policy

The relatively low estimated grade of Westonia ore makes Project economics particularly sensitive to gold price. The Company intends to optimize the balance between appropriate hedging protection against a fall in the gold price, while maintaining a exposure to any future increases.

Potential Upsides 5.

The Westonia mineralized system is large, continuous to at least 700 m depth and can be open pit mined with a low waste to ore ratio. Indicated and Inferred resources to a depth of 300 m have been revised upwards to 24.5 Mt @ 1.4 g/t for a contained 1,070,000 ozs.

Increases in any of grade, gold price, operating margins or convertability of Inferred to Indicated status resources would lead to improved Project economics, mine life and margins. Some illustrative examples follow:

Grade Increase $(a)$

The resources have been estimated by independent consultants. The approach to grade estimation has been conservative, and the Company considers that there is reasonable potential for it to increase by up to 10%.

$(b)$ Conversion of Inferred Resources

At current (over AUD550/ounce) spot gold price and allowing for a reasonable hedging performance to give an average hedged price of approximately \$600/oz, a larger pit designed to capture Indicated and Inferred resources would recover 610,000 ozs at only marginally increased operating costs compared to the Base Case Pit.

$(c)$ Price Increase

Should gold regain its maximum Australian price of the last 12 months, and allowing for a reasonable hedging programme, a yield of \$750/oz would result. A pit based on Indicated and Inferred resources would allow recovery of 840,000 ozs (including from the oxide stockpiles) again at about the same operating cost as the Base Case, and with a waste to ore ratio of 1.85:1.

6. Start up

Allowing for the time to obtain Project finance and for a 10 month construction period, the Company is aiming for first gold pour in mid 2005.

7. Underground Mining

The key to longevity of the Westonia operations is a resumption of underground mining of its large mineralized system. During 2003, the Company was heartened by:

• Results from the Big Pit Initiative drilling numerous strong gold intersections (as previously reported) are not captured by current pit designs.
• Results from its Deeps Initiative drilling, e.g.:

WDD096	$632.7 - 652$ m	19.3 m @ 5.5 g/t
Including	$632.7 - 633.6$ m	$0.9 \text{ m}$ @ 51.4 g/t
	$649.5 - 652$ m	$2.5 \text{ m} \textcircled{2} 21.1 \text{ g/t}$
WDD097	$608.4 - 614.2$ m	5.8 m @ 20.6 g/t

The Company is looking to recommence deep drilling later in the year. The aim will be to test for the continuity of the mineralized host system to a depth of about 1000 m. It also intends to establish an underground resource that could be accessed using the existing decline, which is currently at a depth of 264 m.

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.