GREENWING RESOURCES LTD — Interim / Quarterly Report 2006

Jan 30, 2006

31 January 2006

The Manager Companies Company Announcements Australian Stock Exchange 20 Bridge St Sydney NSW 2000

Dear Sir

DECEMBER 2005 QUARTERLY REPORT OF ACTIVITIES

Bass Metals Ltd is pleased to provide its first activities report for the Quarter ending 31 December 2005.

HIGHLIGHTS

• Positive drill results at the Mt Charter Gold-Silver Project:

• 52.5 metres downhole at 2.0 g/t gold and 39 g/t (>1 oz./t) silver from 1.7 metres (MCD020).

• $\geq$ 80 metres downhole grading 1.6 g/t gold and 61 g/t (2 oz./t) silver from surface (MCD021) including 12.9 metres downhole at 2.7g/t gold and 96 g/t (>3 oz./t) silver from 9.6 metres downhole.
• $\geq$ 15.4 metres grading 2.1 g/t gold, 38 g/t (>1 oz./t) silver 4.8% zinc and 1.9% lead from 56 metres downhole, and 8.0 metres grading 2.1 g/t gold, 27 g/t silver 2.9% zinc and 1.0% lead from 83.9 metres downhole within a broader zone of 49.4 metres downhole at 1.4 g/t gold, 22 g/t silver 2.6% zinc and 1.0% lead from 49.2 metres downhole (MCD022).
• Positive drill results at Que River base metals project
• $\geq 2.8$ metres grading 3.9% copper. 93g/t silver (3 oz./t) and 3.0% zinc within a broader 8.4 metre intersection grading 1.3% copper, 35g/t silver and 2.0% zinc from 32.0m downhole (QRD1223).
• $\geq 4.7$ metres at 1.7% copper, 33 g/t (1.0 oz./t) silver from 97.7 metres downhole and 4.4 metres at 12.5% zinc. 3.3% lead and 57 g/t silver from 108.7 metres downhole (QRD1224).
• $\ge$ 6.5 metres at 3.4% copper, 67 g/t (2.o oz./t) silver from 73 metres downhole (QRD1225).
• $\triangleright$ 5.6 metres grading 1.1% copper and 16 g/t silver from 113.2 metres (QRD1226).
• Hellyer Corridor compilation and targeting work in association with Geoinformatics Exploration Inc. and Zinifex Limited progressing well and on schedule to deliver new targets in early 2006.
• Regional exploration and target generation work has commenced including regional soil sampling 4km east of the Henty Gold mine.
• Successful listing on the ASX in October raising \$3.5 million.

The following report aims to summarise the Company's activities through the December 2005 Quarter and provide some insight into the significance of the results generated to date

1.0 EXPLORATION ACTIVITIES

1.1 ADVANCED PROJECTS

Mt Charter Gold Project - activities & results

The Mt Charter gold project is an extensive outcropping gold-silver mineralised system that until Bass Metals involvement has never been systematically evaluated as a gold project. Drilling and sampling in the area by previous explorers was directed towards the discovery of Hellyer-type base metals deposits, but during the course of this historic work significant gold-silver results were returned. Bass Metals was attracted to the prospect by the large areal extent of significant surface gold samples and wide gold-silver mineralised drill intercepts highlighting the potential of a large scale gold-silver deposit.

In October 2005 Bass Metals completed a first pass soil programme designed to test the extent of the gold mineralisation and provide information on the possible trends of the gold-silver mineralisation. This programme highlighted a large coherent gold-in-soil anomaly extending for over 700 metres in a northwest-southeast trend defined at a 100ppb gold contour. This contour encloses several higher order (500ppb gold) contours which surround the area of historic drilling and new extensions not yet drill tested. These are high grade gold in soil anomalies with coherent anomalies outlined at a 1000ppb (1 g/t) gold contour. The anomalies remain open to the north, north east and south west. The results are summarised in Figure 1, which is a composite plan showing soil geochemistry and drill hole locations with simplified geology.

Encouraged by these high tenor gold-in-soil results Bass Metals commenced diamond core drilling in late October to test the central area of the indicated gold mineralisation to confirm the soil anomalies and verify some of the previous drill hits. A five hole diamond core drilling programme was completed in early December. The results of this drilling programme are summarised in Table 1 below.

	To	, and a community of goody reading for the strategy structed to the diverged and one of the Downhole	Gold	Silver	Zinc	Lead	Gold	Insitu Bulk
From		Interval						Density
							Equiv.
(m)	(m)	(m)	(g/t)	(g/t)	(%)	(%)	(g/t)	(g/cm 3 )
MCD020
1.7	54.2	52.5	2.0	39	nsr *	nsr	2.6	2.8
Including
6.2	9.2	3.0	5.3	200	nsr	nsr	8.6
MCD021
0	80.0	80.0	1.6	61	nsr	nsr	2.6	3.2
Which includes
9.6	22.5	12.9	2.7	96.	nsr	nsr	4.3
48.5	54.5	6.0	2.7	37	nsr	nsr	3.3
MCD022
56.0	71.4	15.4	2.1	38	4.8	1.9	9.6	3.6
83.9	91.9	8.0	2.1	27	2.9	1.0	6.6	3.7
		Within a broader zone defined at a 0.5 g/t Au cut-off
49.2	98.6	49.4	1.4	22	2.6	1.0	5.4
$MCD023-$
84.0	85.0	1.0	4.6	16	nsr	nsr	8.6	3.0
		Within a broader zone defined at a 0.5 g/t Au cut-off
84.0	88.6	4.6	1.6	8	nsr	nsr	5.4	2.8
		MCD024 - No significant intercepts

Table 1: Summary of assay results for Mt Charter Drilling Programme (1.0 git gold cut-off)

* nsr indicates no significant result

This intercept summary has been selected using a 1.0 g/t gold lower assay cut with no upper cut applied to the assays. The maximum gold assay from this programme is 6.53 g/t reflecting an overall low variability for the distribution of gold assays.

The results in Table 1 highlight the important contribution of the silver and zinc endowment to the potential value of the mineralisation. This is demonstrated with the estimates of the gold equivalent grades presented which are based on recent gold, silver, zinc and lead prices and yield a silver to gold equivalency ratio of 60:1. These are indicative only, as smelter-related costs affect net revenues from base metals in particular.

Figure 2 depicts drill cross-section 4630mN with drillholes MCD020, MCD021 and MCD024 drilled by Bass Metals to test a wide zone of intense sericite-silica-pyrite alteration and barite-silica-pyrite veining in an area with significant surface gold results (such as 50 metres of continuous channel samples grading 2.1g/t Au and 70 g/t Ag). Both MCD021 and MCD020 intersected wide zones of barite veining associated with the gold-silver mineralisation presented above. MCD024 located the contact of the silica-sericite-pyrite altered volcanics which is also coincident with margin of the 0.5ppm gold in soil contour; no significant barite veining was intersected in the altered bottom portion of the drillhole.

Drillholes MCD022 and 023 are located on drill cross section 4730mN located 100m north of MCD020 and MCD021, refer Figure 3. The MCD022 intercept indicates that the gold-silver mineralisation is approximately 50 metres wide in this area, and is 'open' to the north and at depth. Bass Metals drill hole. MCD023 is collared approximately 110 metres to the west of MCD022 to test for the margins of the intense alteration and mineralisation. No significant widths of gold mineralised barite veining were intersected, but a narrow zone of lower grade gold mineralisation at 84 metres was hit, and with mineralisation in historic drillhole MAC023 may indicate potential for shallower, higher grade mineralisation between MCD022 and MCD023. MAC023 is drilled obliquely to the current drill orientation and has several mineralised intercepts including a broad zone beneath the MCD022 intercept of 41 metres at 1.0 g/t gold and 4.3 g/t silver (at a 0.5 g/t Au cut-off) likely confirming the continuity of mineralisation to that depth.

Details of the completed programme are presented in Table 2 below. All drill hole collars have now been located by survey control and the accompanying sections and location diagrams have been adjusted accordingly. The drill sections, presented in previous releases, were on nominal local grid sections lines (4650mN and 4750mN), they are now referred to by the actual local grid section lines 4630mN and 4730mN. A total of 541.9 metres of NTW (slightly smaller than HQ diameter) diamond core drilling was completed during the Quarter. Assay results have been received for all the drill holes except MCD024 which were submitted as a lower priority because no significant intercepts are expected based on the lack of noticeable barite veining. Barium assays have also been requested for all the mineralised intercepts and these are still pending. Barite could have economic value as a by-product.

			radie Z. Ini Charler Drimity Frogramme flore gelatis
Hole	Grid North	Grid East	Depth(m)	Inclination	Progress/results
MCD020	4631	4254	100.6	-60	Complete/received
MCD 021	4629.	4318	120.2	-60-	Complete/received
MCD 022	4738	4309	120.2	-60	Complete/received
MCD 023	4735	4201	100.7	-60	Complete/received
MCD 024	4630	4177	100.2	-60	Complete/pending

Toble 2x Mt Charter Drilling Programme Hole detaile

Mt Charter - Commentary

This initial drill programme confirms a wide shallow interval of gold-silver (+/-zinc and lead) mineralisation. On section 4630mN the mineralisation is interpreted as nearly 200 metres wide with a vertical extent ranging from 50 to greater than 100 metres. To the north 100 metres, on line 4730mN, a similar style of mineralisation has been intersected in a 50 metre wide zone likely to extend at least 150 metres vertically. This zone also has significant zinc mineralisation. The Directors consider that the results generated to date confirm the potential for Mt Charter to develop into a large scale, shallow gold-silver resource with zinc. lead and maybe barium credits.

Mt Charter is located only 1km from the sealed Murchison Highway and 7km south of the Hellyer processing plant. Conceptually, and subject to significantly more drilling and the full range of technical studies, processing options include utilisation of the nearby Hellyer flotation concentrator.

The work programme for the first half of 2006 includes detailed 3-dimensional geological modelling to understand the controls and geometry of the mineralisation, further drilling and a preliminary resource estimate for the central portion of the mineralisation drilled to date. The initial resource target is 250,000 ounces of gold and the Directors believe the project has potential to develop into a plus 1 million ounce deposit.

Que River Project - activities and results

Que River was a high grade base metals mine with a total endowment of 3.3 million tonnes at 13.3% zinc, 195 g/t silver 3.3 g/t gold 7.4% lead and 0.7% copper. Ore from the mine was trucked to Rosebery for processing and the mine was closed in 1991 as the reserves were depleted and the Hellyer Mine came on stream. Copper rich mineralisation such as occurs at S-lens was left because Rosebery did not have a copper recovery circuit at the time.

Que River mineralisation is hosted in a series of stacked and folded massive sulphide lenses. Bass Metals considers that there is excellent potential to delineate further resources on known, unmined massive sulphide lenses such the S-Lens and Nico lens as well as to make new lens discoveries. It is the Company's view that as the Que River reserves were declining at the time that the largescale high grade Hellyer base metals deposit was being developed that much of the "exploration" focus" was at Hellyer rather than looking for extensions to increase reserves at Que River. This creates an opportunity for Bass Metals to delineate further high grade resources amenable for early small scale mining.

Prior to listing the Company estimated a Mineral Resource for the S-lens which comprises 370,000t at 1.7% copper, 64 g/t silver 4.2% zinc and 0.3 g/t gold which is reported in accordance with 2004 JORC Code and described fully in the Company's Prospectus dated 16 August 2005. Since listing a total of 4 diamond drillholes have been completed; 3 testing within the southern portion of the Mineral Resource envelope (QRD1223-25) and the most recent (QRD1226) testing for extensions to the resource. The extensional drilling is still in progress. The results of this drilling are summarised in Table 3 below:

From (m)	To $(m)$	Downhole Interval	Horizontal Width (m)	Cu (%)	$Zn$ (%)	Ag $(g/t)$	Au $(g/t)$	Pb(%)
		(m)
QRD1223
32	34.8	2.8	2.0	3.9	3.0	93	0.35	0.9
	Within a zone comprising
32	40.4	8.4	5.9	1.3	$\overline{2.0}$	35	0.2	0.4
	Other noteworthy intercepts include
10.6	11.6	1.0	0.7	0.1	4.0	18	0.33	3.1
18.6	22.5	3.9	2.7	0.1	1.7	11	0.57	0.5
53.4	56.15	2.75	1.9	0.2	2.9	$\overline{8}$	0.1	0.5
QRD1224
97.7	102.4	4.7	3.4	1.7	.2	34	0.2	.2
108.7	113.1	4.4	3.2	0.7	12.5	57	$\overline{.2}$	3.3
	Within a zone comprising
97.7	113.1	16.4	11.8	0.8	3.6	33	0.2	1.0
QRD1225
72.8	79.3	6.5	3.2	3.4	0.6	67	0.4	0.1
QRD1226
113.20	118.75	5.55	2.70	1.1	0.1	16	0.3	0.1

Table 3: S-Lens Summary of Assay Results

Interval selection was broadly based on lower assay cuts of 0.5% for Cu and 1.0% for Zn and Pb and is designed to provide a quide to the width and tenor of the mineralised system.

Mineralisation in the main S-Lens target position comprises veins and disseminated chalcopyrite. sphalerite and galena within a vertical massive to semi-massive pyrite zone hosted by altered volcanics and volcaniclastics.

Overall the drill results from within the Mineral Resource envelope have been positive confirming and enhancing the widths and grades intersected in historic adjacent drillholes.

• The QRD1223 results indicate potential extension of the S-Lens mineralisation at shallow levels to the south bevond the current resource outline.
• ORD1224 intersected distinct copper and zinc rich zones within a broader 16.4 metre long $\bullet$ massive sulphide intercept grading 0.8% copper, 3.6% zinc and 33 g/t silver. The QRD1224 intercepts occur approximately 90 metres vertically from surface and enhances the grade and width of mineralisation in this portion of the Inferred Mineral Resource (as currently estimated) given that the nearest intercept (QR045), which lies approximately 20 metres above and 30 metres to the north of QRD1224, grades 2.0% copper over 3 metres horizontal width.
• The third drill hole, QRD1225 intersected strong copper and silver mineralisation on the southern Mineral Resource boundary. These results extend the mineralisation at shallow levels further south at similar grades but at a greater width than QRD1223. (3.2 metres compared to 2.0 metres horizontal width), which lies 40 metres above and 20 metres to the north of this intercept

The first drill hole to test for southerly plunging extensions to the S-Lens Mineral Resource is QRD 1226 which intersected 5.6 metres at 1.1% copper and 16 g/t silver. A deflection at the hole collar caused the hole to intersect the S-Lens target zone approximately 15 metres vertically higher than planned, placing the intersection on the margin of the high grade copper zone interpreted to plunge southwards as shown in Figure 4. It was pleasing to encounter an unexpectedly thick (12.6 metres downhole) zone of S-Lens massive sulphide with a broad copper mineralised interval. There is also potential to extend the mineralisation intersected in QRD1226 vertically upwards to shallower levels.

Drill hole QRD1227 is also designed to test for southerly extensions outside of the current S-Lens Mineral Resource beneath QRD1226, and is currently at a depth of 158 metres (approximately 15 metres from the interpreted target position). Drilling of this hole is planned to resume on the 30^th January.

The current drilling status is summarised in Table 4 below. All of the drill holes have been survey located. During the quarter a total of 653.5 metres has been drilled comprising 126.6 metres of HQ diameter core and 526.9 metres of NQ diameter core. All assay results for completed drillholes have been received and reported.

Hole	Number	Grid	Grid East	Hole Dip	Planned	Progress/results
		North	(m)		hole
		(m)			depth (m)
	QRD 1223	7347	5257	-45	80	Complete/received
2	QRD 1224	7324	5240	-60	143.5	Complete/received
3	QRD1225	7324	5241	-45	98.	Complete/received
4	QRD1226	7250	5221	-61	173.3	Complete/received
5	QRD1227	7250	5221	-70	250	In Progress-158m
6	Р6	7300	5220	-66	200
	P7	7525	5278	$-68$	90
8	P8	7525	5278	-55	160

Table 4: S-Lens First Pass Diamond Drilling Programme

Que River - commentary

The Que River drilling programme has to date vielded positive results. Intercepts from within the Mineral Resource envelope have generally enhanced both the widths and grades of the

mineralisation modelled at those points previously. The results from QRD1226 confirm the potential to extend the resource to the south.

The S-Lens mineral resource is just one prospect within the Que River project area. The Company has also identified the Nico lens as a shallow unmined zinc mineralised massive sulphide lens with historic drilling which requires further work. There is also potential to discover new mineralised lenses and extensions to existing previously mined lenses. Que River has significant underground mining infrastructure which may be appropriate to utilise to restart mining. The Company aims to commence a scoping study examining mining and treatment options for Que River resources at the earliest practical opportunity this year. The objective is to commence production from Que River before the end of this vear to generate cash flow to accelerate exploration programmes.

The Company has a QA/QC procedure for all assaying runs which involves submission of "blank" samples, assay standards and repeat samples at a frequency of approximately 1 per 25 samples submitted comprising approximately 10% of samples submitted. To date all results returned have been within acceptable limits.

The maiority of samples submitted are half core, but several core grind samples from MCD024 at Mt Charter which appeared very weakly mineralised were also despatched. All sample preparation and analyses were carried by Ammtec Laboratories at its Burnie Research Laboratory. Gold and silver were analysed by fire assay using a 50q charge with base metals analysed using a triple acid digest and AAS finish.

1.2 GENERAL EXPLORATION

Hellver Corridor Leases

The Hellyer Corridor leases refer to the tenements surrounding the Company's core Hellyer project which were acquired from Intec Ltd prior to listing and cover 10 mineralised targets defined to date including the Hellyer and Que River base metal deposits and the Mt Charter Gold-Silver Project.

The Company has entered into an exploration alliance with Zinifex Limited (refer to Prospectus 16 August 2005) over these leases, which will see both Companies contribute a total of \$2.0 million dollars to exploration activities to be managed by Bass Metals. Zinifex has the right to earn a 70% interest in up to 3 discrete project areas by funding work through to completion of a bankable feasibility study. The Zinifex rights exclude the 100% owned Mt Charter and S-Lens prospects. Whilst the alliance is still subject to completion of final documentation, preliminary work has commenced on the 3 dimensional geological modelling and mineralised target generation being undertaken by Geoinformatics Exploration Inc. (TSX.V:GXL). The work is progressing well, and is ahead of schedule. The first round of target verification and identification, looking for repeats of the high grade Hellyer and Que River base metals deposits is planned to be completed in February.

Regional Exploration

The Company has the largest tenement position, illustrated in Figure 5, in the highly mineralised Mt Read Volcanic belt which has the potential to host additional large scale ore deposits such as those already occurring in that geological terrain such as the Hellyer, Que River, Rosebery, Mt Lyell, Renison Bell and Henty deposits. Working collaboratively with Geoinformatics, Bass Metals has commenced the task of compiling, analysing and modelling all the historic data relating to all of its regional tenements.

Two of the Company's tenements (Selina and Bonds Range) are held through a joint venture agreement with Adamus Resources Ltd. At Selina, which lies 4km east of the Henty Gold mine (a plus 1 million ounce gold deposit) owned by Placer Dome Asia Pacific, regional scale soil sampling work has commenced specifically targeting gold mineralisation on structures interpreted to be related to the gold mineralisation at Henty. At the end of the quarter approximately 6km of

griding and access had been completed and the programme will continue in January and is due for completion in early February.

Some preliminary compilation work was also completed on the two tenements held in joint venture with Pioneer Nickel Limited (Whyte River and Heazlewood). The Whyte River lease is approximately 10km south of the Savage River Iron ore mine and covers the host sequence to the mineralisation at the mine. Several zones of magnetite-pyrite iron mineralisation have been identified at Whyte River and will be followed up to assess their potential to host magnetite rich iron ore mineralisation as is mined at Savage River. Preliminary work at Heazlewood has identified a large gravity anomaly coincident with a regional scale lead-zinc-silver anomaly over a stacked sequence of ultramafic rocks which in the area are known to host platinum metal group and nickel occurrences. The confluence of these geological "anomalies" at a regional scale makes for an exciting grass-roots exploration play.

During the quarter the Company applied for two additional exploration licences;

• The Paradise River application is immediately south of the Whyte River EL and covers southern extensions of the Savage River host unit.
• A discrete potential electromagnetic conductor coincident with prospective host rocks and $\bullet$ barite occurrences immediately to the northwest of the Leven River EL has been covered by an EL application referred to as Grass Ridge.

The Company also reviewed several joint venture and acquisition opportunities in the region which it declined to progress.

2.0 CORPORATE

The highlight of the Quarter was the successful listing of the Company on ASX with the subscription offer closing early and substantially oversubscribed. A total of \$3.5 million was raised via an Initial Public Offer (IPO) of 17.5 million shares at \$0.20 each. Shares were also issued to Geoinformatics Exploration Australia Ltd pursuant to the Tasmania Alliance Agreement and to the Managing Director under an Employee Share Purchase Plan approved by shareholders on the 21 March 2005. A balance of 36,300,003 ordinary shares is on issue at the end of the Quarter.

During the Quarter 4,525,000 options exercisable at \$0.25 and expiring on the 31^st July 2007 were also issued. This comprised 4,375,000 issued pursuant to the IPO Prospectus on the basis of one option for every 4 shares subscribed, for no consideration. Pioneer Nickel Ltd was issued 150,000 options under the Staged Farm-in Agreement covering the Heazlewood and Whyte River tenements. Additional options issued comprise:

• 50,000 exercisable at \$0.25 and expiring 31 December 2007 issued to Geoinformatics Exploration Australia Ltd
• Three tranches of Incentive Options were issued to the Managing Director totalling $\bullet$ 1,050,000 exercisable at prices between \$0.25 and \$0.35, pursuant to shareholder approval granted on 21 March 2005.

The balance of options at the end of the Quarter is 8,275,000 listed options and 3,100,000 unlisted options.

At the annual general meeting of shareholders approval was granted to change the Company's name from Resource Finance & Investments Limited to Bass Metals Ltd. The new ASX codes are BSM for the shares and BSMO for the options.

At the end of the quarter the company's financial position stands at \$2.7 million cash at bank. The company accelerated its exploration programme immediately following listing by having two drill rigs operating on each of its two advanced projects and fast tracking the Geoinformatics compilation and targeting process. Total exploration expenditure for the Quarter was \$0.53 million. An accelerated rate of exploration activity is also planned for the early part of this year to provide a better understanding of the resource potential at Mt Charter and Que River and some insight into the targets being generated from the Geoinformatics targeting process.

Corporate - Commentary

Bass Metals completed a very busy December Quarter; achieving outstanding drilling results. initiating several new exploration programmes to identify new mineralised targets and establishing both its corporate office and Hellver exploration base.

The Company accelerated its exploration activities in the December Quarter recognising the potential at Mt Charter indicated by its soil sampling results and the need to identify new targets in the vicinity of the Hellyer and Que River deposits. The current plan is to maintain an increased exploration momentum through the early part of 2006 at least, to delineate resources at Mt Charter and examine production opportunities at Que River. The Directors would like to acknowledge their appreciation of the contribution from each member of the Bass Metals team and look forward to an exciting year ahead.

Yours sincerely

Mike Rosenstreich Managing Director

The information within this report that relates to exploration results is based on information compiled by Mr Mike Rosenstreich who is a full time employee of the Company and Mr Steve Richardson who provides geological services to the Company on a 50% basis. Both are Members of The Australasian institute of Mining and Metallurgy and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as Competent Persons as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and both consent to the inclusion of this information in the form and context in which it appears in this report.

Figure 1: Summary Plan of Mt Charter Project illustrating Bass Metals' first pass drill programme and a summary of the surface geochemical anomalies.

Figure 2: Mt Charter Cross Section at 4630m North (Local grid) looking north.

Figure 3: Mt Charter Cross Section at 4730m North (Local grid) looking north.

Figure 4: Long Section of the S-lens showing Bass Metal's Drilling and historic drilling results.

Figure 5: Tenement Location Plan showing simplified geology, major deposits and Bass Metals' tenement interests.

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Bass Metals Ltd

Current quarter

ABN

31 109 933 995

Quarter ended ("current quarter")

31 December 2005

Year to date

Consolidated statement of cash flows

Cash flows related to operating activities

Cash flows related to operating activities		\$A'000	$($ $6$ , months) \$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) exploration and evaluation (b) development	(530)	(619)
	(c) production
	(d) administration	(108)	(289)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	32	40
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)	(10)	(10)
	Net Operating Cash Flows	(616)	(878)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects	(23)	(43)
	(b)equity investments
	(c) other fixed assets	(15)	(16)
1.9	Proceeds from sale of:
	(a)prospects
	(b) equity investments
	(c)other fixed assets
1.10	Loans to other entities
1.11	Loans repaid by other entities	ă.
1.12	Other (provide details if material)
	Net investing cash flows	(38)	(59)
1.13	operating and investing cash flows Total
	(carried forward)	(654)	(937)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(654)	(937)
1.14	Cash flows related to financing activities Proceeds from issues of shares, options, etc.	3,500	3,500
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings	w
1.17	Repayment of borrowings	w
1.18	Dividends paid
1.19	Costs of share issues	(254)	(349)
	Net financing cash flows	3,246	3,151
	Net increase (decrease) in cash held	2,592	2,214
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	139	517
1.22	Cash at end of quarter	2,731	2,731

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter \$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

All transactions with directors and their related parties are on normal commercial terms

Non-cash financing and investing activities

$2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

300,000 ordinary fully paid shares issues as consideration for tenement purchases

Loan of \$37,500 pursuant to the Employee Share Purchase Plan approved by shareholders at a general meeting held 21 March 2005

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

⁺ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used SA'000
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

	Total	613
4.2	Development
4.1	Exploration and evaluation	613
		\$A'000

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter \$A'000	Previous quarter \$A'000
5.1	Cash on hand and at bank	131	139
5.2	Deposits at call	2,600
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	2,731	139

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed
6.2	Interests in mining tenements acquired or increased	ELA36/2005 ELA38/2005	Application Application	$0\%$ $0\%$	$0\%$ $0\%$

$+$ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per	Amount paid up per
				security (see note $3)$ (cents)	security (see note 3) (cents)
7.1	Preference
	*securities
	(description)
7.2	Changes during
	quarter (a) Increases
	through issues
	(b) Decreases
	through returns
	of capital, buy-
	backs,
	redemptions
7.3	+ Ordinary securities	36,300,003	27,171,949
7.4	Changes during
	quarter
	(a) Increases through issues	550,000 17,500,000	150,000 17,500,000	15 cents 20 cents	15 cents 20 cents
	(b) Decreases
	through returns
	of capital, buy-
	backs
7.5	+ Convertible debt securities
	(description)
7.6	Changes during
	quarter
	(a) Increases
	through issues (b) Decreases
	through
	securities
	matured,
	converted
7.7	Options			Exercise price	Expiry date
	(description and conversion	8,275,000 2,400,000	6,104,375	25 cents 25 cents	31.07.07 31.12.07
	factor)	350,000	w	30 cents	31.12.07
		350,000		35 cents	31.12.07
7.8	Issued during	4,525,000	4,375,000	25 cents	31.07.07
	quarter	400,000		25 cents	31.12.07
		350,000 350,000		30 cents 30 cents	31.12.07 31.12.07
7.9	Exercised during
7.10	quarter Expired during
	quarter
7.11	Debentures
	(totals only)

⁺ See chapter 19 for defined terms.

7.12	Unsecured
	notes (totals
	only)

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does / (delete one) give a true and fair view of the matters disclosed.

$1.1$ January 2006................................... Sign here: (Company secretary)

Print name: Desmond Kelly

Notes

• $\mathbf{I}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and $6.2$ .
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• $\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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⁺ See chapter 19 for defined terms.