IGO LIMITED — Interim / Quarterly Report 2003

Apr 29, 2003

QUARTERLY REPORT FOR THE

THREE MONTHS ENDED

31 MARCH 2003

HIGHLIGHTS

FINANCE

\$4.0 million cash at the end of the quarter (budget: \$2.6 million) plus \$3.1 million in receivables.

LONG NICKEL MINE

• The mine reached full production in late March.
• A total of 30,593 dry tonnes of ore averaging $\bullet$ 3.74% Ni (Independence Gold NL's share: 678.9 Ni tonnes) produced during the quarter.
• Exploration drill intercept of 5.2m @ 8.16% Ni (true width = 5m) at Victor South.
• The Victor South resource has increased to $\ddot{\phantom{1}}$ 324,000t @ 3.9% Ni (undiluted). The resource has increased by 950 Ni tonnes and reserves are likely to increase significantly from the previously reported 6371 Ni tonnes. This resource does not include a possible deeper third shoot which includes an open WMC intersection of 5.35m @ 13.41% Ni.
• Untested underground EM anomaly suggests potential to discover new massive nickel sulphides south of Victor South's current resources.
• Development continued at Gibb South with ore production to commence in the June quarter. Gibb South is not presently in stated reserves.

EXPLORATION

Tropicana East Joint Venture

Very encouraging gold results reported by farminee AngloGold Australia Limited from infill RAB/AC drilling around previously announced virgin gold discovery over a 1km strike length.

Results included:

7m @ 2.04g/t (1m re-sample from Dec. Qtr) 21m @ 1.35g/t including 5m @ 2.45g/t $(E.O.H. - 4m$ composite) 12m @ 1.25g/t (E.O.H. - 4m composite)

Southstar Joint Venture

New nickel sulphide targets identified in the Yilgarn Craton from the WMC Diamond Division database using chromite analysis.

A large virgin gold anomaly was pegged at Prairie Downs

100% Independence Gold NL

A large virgin gold anomaly was pegged at Dalwallinu.

CORPORATE

Research studies by Keith Goode and Huntleys were published, valuing the Long project at 59 and 64 cents per IGO share respectively. Goode's evaluation assumed a six year mine life and a 3.8% Ni head-grade. Huntleys' evaluation assumed a five vear mine life and was based on current nickel prices. These valuations did not include any amount for the remaining gold and nickel exploration projects in the Independence stable.

The December 2002 half-yearly report was lodged with the ASX and is available on the Company's website.

The Company continues to carry out ongoing reviews of other projects and corporate acquisitions with a view to enhancing company growth.

CASH AND DEBT

• The Company had cash reserves of \$4.0 million at the end of the quarter (\$2.8 million December quarter). \$3.1 million nickel revenue, accrued but not yet received, is not included in the cash reserve figure.
• The Long nickel mine contributed a cash surplus of \$1.8 million for the quarter which included payment of \$0.7 million stamp duty on acquisition of the project (budget: \$2.3 million).
• The Company invested \$0.3 million in exploration at Long and \$0.3 million in regional exploration during the quarter. In line with the Company's aggressive exploration write-off policy, a further \$0.3 million was written off during the quarter.
• At the end of the quarter the Company's debt profile comprises:
• \$14.4 million to BankWest for Long purchase, working capital and environment bond costs:
• \$4.8 million for hire purchase on Long mining equipment.

MINING OPERATION

LONG NICKEL MINE

IGO 100%

TARGETS: I) SAFELY PRODUCING \$60 MILLION NET CASH FLOW AFTER DEBT REPAYMENT AND TAX OVER 5 YEARS II) DOUBLING CURRENT MINING RESERVES TO +50.000 TONNES NICKEL METAL

The Long nickel mine, operated by Independence Gold's wholly owned subsidiary Lightning Nickel Pty Ltd, completed its first full quarter of production since mining commenced on 24 October 2002. The company is extremely pleased with the progress of the mine which completed the ramp up phase to an annualised production rate of 150,000 tonnes of ore per year in late March. April production is currently on budget. The mine is now in full production, and the Board thanks our employees for their hard work in achieving this excellent result, whereby the cashflow is significantly higher than the feasibility forecast.

SAFETY

The mine plan adopted by the company has involved a number of procedures and policies to ensure the safety of our team is not jeopardised. A significant amount of work was undertaken during the quarter setting up and rehabilitating old stoping blocks, some of which have not been mined for over ten years. One Lost Time Incident (LTI) occurred during the quarter whereby one of our team members was cut on the finger by a falling rock fragment. This is the first LTI recorded since re-opening the mine in October 2002 and is a credit to the involvement of all personnel on site.

PRODUCTION

A number of mining techniques have been employed at Long during the quarter. The common elements of all methods relate to the safety of our employees, the focus on the quality of ore produced and the establishment of a consistent production profile for the future.

Production during the quarter comprised 30,593 tonnes @ 3.74% Ni (Independence Gold's share: 678.89 Ni tonnes) of which 51% was produced from mechanised flat backing, 30% from long hole stoping and 19% from handheld mining. Ore tonnes mined outside the current ore reserve comprised 35% of production.

A total of two stopes have been set up for long-hole extraction with another four in various stages of set up. Long-hole production commenced from the first stope on 20 March 2003.

The quarter's direct mining cash cost of AU\$1.63/lb Ni is expected to fall as a higher percentage of lower cost pillar ore is mined in the coming quarters and the mine consistently produces budget tonnes.

The higher than anticipated head grade is pleasing given the mill-reconciled production grade from the Long reserves mined to date (3.71% Ni) is 19% higher than the ore reserve grade (3.13% Ni). This continues to reflect the focus on minimum mining widths and dilution reduction achieved with smaller profile ore drives.

The mine has commenced rehabilitation of areas that were last in production up to ten years ago. The work is slow and causes a short-term increase in production costs. However, the objective is to 'carry' at least two areas requiring rehabilitation early in the life of the mine so that there is greater flexibility in the mining options available in the next budget year and bevond.

The re-commissioning of the underground operation has been more successful and less expensive than anticipated in the original technical study that recommended the purchase of the mine; the establishment of numerous operating areas has reduced the congestion of activity that is typical in the 'start-up' of any mine. The prognosis is positive for a consistent, predictable production profile for the foreseeable future.

GROUND CONDITIONS AND SEISMICITY

The risks of "mine-induced" seismicity are well known and understood at Long. The orebody is disrupted by a swarm of cross-cutting porphyries: these bodies have reacted in a consistent and predictable geotechnical fashion. When mining the discrete ore blocks that constitute the Long Shaft mining inventory today, the tools to manage these events are far more 'ingrained' into the operating standards of Lightning Nickel Pty Ltd and are better understood by our mining personnel than in previous eras.

Ground Support: A combination of mesh and rockbolting, cone & cable bolting and shotcrete, form the standard practice for excavations of varying size and accessibility. No person is allowed to perform their duties beyond safe and secured, overhead support.

Consultants: Lightning Nickel Pty Ltd has retained the expertise of BFP (Melbourne) and Dempers & Seymour (Perth) and has received advice from Professor Will Bawden (Canada), to ensure that the mining methods, ground support and the sequence of activities at Long provide a low risk workplace for our employees whilst enabling optimum extraction of the ore-bodies.

Sponsorship: Lightning Nickel Pty Ltd is a sponsor of the Australian Centre of Geomechanics' seismicity research study.

Outcomes from these studies have allowed a change in ore block extraction sequencing. A number of blocks have been successfully mined in advance of the inherited conservative mine plan, whilst others have been mined in higher risk extraction areas. Importantly in both cases extraction has had no ill effects on ground control in the mine.

DEVELOPMENT

* Gibb South

Development continued during the quarter to access the high grade Gibb South nickel resource (4,022 Ni tonnes). Production from this position, which is not included in the company's previously reported reserves, is expected to contribute to the ore supplies in the June quarter and beyond.

Victor South

Mine planning and geotechnical studies are continuing with the aim of commencing development of this high grade nickel resource in the September quarter.

Mine Reserves/Resources

Calculation of a new mine reserve/resource figure will be completed in the June quarter. Additional recoverable reserves are expected to be added in the Long upper levels and at Gibb South.

Re-interpretation of the Victor South nickel sulphide shoots, coupled with the results of drill hole VR15-027 (Table 1) have increased the resource from 11,550 Ni tonnes to 12,500 Ni tonnes as follows:

Victor South Inferred resources:

Shoots 1 & 2 324,000t @ 3.9% Ni (12.500 Ni tonnes) undiluted.

1% Ni/basal contact lower cut; no upper cut; SG calculated using wet and dry method; 3t/m³ used when no SG available.

Shoot 3 Resources will be calculated after additional drilling is completed to follow-up the open 5.35m @ 13.41% Ni drill hole intercept (Figure 1).

Preliminary studies indicate eventual reserves will contain significantly more nickel metal than the current mining inventory of $155,000$ t @ 4.1% Ni (6,371 Ni tonnes).

Other significant previous WMC Victor South diamond drill results are shown in Table 1.

EXPLORATION

Victor South

Underground diamond hole VR15-027 was completed during the quarter to confirm the new Victor South ore block model and test for new sulphide mineralisation east of Victor South. The hole confirmed and added additional high-grade massive and matrix nickel sulphide mineralisation to the model $(5.20m \t@.8.16\t% Ni$ and 1.8m $@.$ 4.97% Ni). Significant results are shown in Table 2 and depicted on Figure 1.

The first two intersections in the drill hole confirmed and extended Shoots 1 and 2. However, the lower grade occurrence of blebby

sulphide mineralisation (1.75m @ 0.50% Ni) in ultramafics above the prospective basal contact represents a previously unknown nickel sulphide position. Downhole EM logging will be completed in the June quarter to determine if massive nickel sulphides occur on the basalt contact adjacent to this mineralisation.

A review of previous drilling by WMC highlighted a significant nickel sulphide intercept below Victor South Shoots 1 and 2, assaying 5.35m @ 13.41% Ni. This drill intercept is open to the north and south and is the only hole which has tested this prospective ultramafic-basalt contact to date. However, the 1.75m intercept at 0.50%, 300m to the south-east could represent the top of the southern continuation of this shoot.

Re-interpretation of WMC geophysical drill hole logging suggests another large conductor occurs to the south of Victor South and could represent additional nickel sulphides in the high tenor Gibb-Victor lava channel (Figure 1).

Gibb South

Three core holes for up-hole EM logging were completed 50m, 100m and 150m south of the 7.1m @ 12.1% Ni intercept reported last quarter at the southern end of the Gibb South resource. These holes, drilled in the footwall basalt immediately beneath the postulated channel position, have vet to be probed to test for the southern continuation of high tenor nickel sulphide mineralisation south of Gibb South.

Long Lava Channel - Southern Extension Drilling to test for a possible repetition of the 1.6km long and 0.5km high Long orebody (past production: 4.66Mt @ $3.7\%$ Ni - 173,600 Ni tonnes) beneath Victor and Victor South will commence in the June quarter. Previous WMC drilling intersected 0.76m @ 8.12% Ni in KD6067B 0.6km south along strike from the most southerly known point of the Long orebody. No previous drilling has tested the 1.2km of prospective Long Lava Channel south of this hole (Figure 2). The discovery of another large nickel sulphide orebody in this position would have a significant impact on the mine life and NPV of the Long project.

An increase in production rate could easily be handled by the Long Shaft which can haul up to 3,000 tonnes per day (currently hauling an average of 430 tonnes per day).

GEOPHYSICS

A surface electromagnetic survey was conducted over the strike length of the Long and Gibb-Victor lava channels where previously undiscovered, shallow, blind nickel sulphide shoots could occur. A total of six small surface conductors were identified north of Gibb and south of Gibb South. Further geophysical surveying and assessment is planned to detail these anomalies before drill testing.

FIGURE 1: VICTOR SOUTH LONGITUDINAL PROJECTION SHOWING SHOOTS 1 & 2 UNDILUTED RESOURCE, POSSIBLE NEW SHOOT 3 AND OFF HOLE EM CONDUCTOR SOUTH OF VICTOR SOUTH

	ו משכב ב. זוטו טול טטטווו שהחווטוזט שולכו טובב זוויט עבו
$\sim$ North $(KN)$ and $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$			10000000000000000000000000000000000000
547766	374989	1355		-350.86m AHD
	$\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$		a TracMata compared

HolesNo $\overline{\text{VR15-027}}$ Flori

	TABLE 2: VICTOR SOUTH DIAMOND DRILL HOLE VR15-027

342.5	347.7	5.20	8.16% Ni	5	Zone 1 massive contact mineralisation
430.4	432.2	1.80	4.97% Ni	1.7	Zone 2 massive and disseminated contact
					mineralisation
561.45	563.2	1.75	0.52% Ni	2	Blebby hanging wall mineralisation
		548000mN			. 1 550000mN
	VICTOR SOUTH - March 2003
	Shoots 1 & 2			GIBB SOUTH - June 2002	Long Shaft
	324,000t @ 3.9% Ni (12,500Ni t)			:93,700t @ 4.29% Ni (4,022Ni t)
				7.1m @ 12.1% Ni\$	a-sar Decilios
				4.7m @ 9.3% Ni
00mRL					GIBB
			3.15m@ 3.16% Ni
		VICTOR -8			-81
	Lava				LONG - June 2002
	Channel 1		Victor - Long Decline		913,000t@ 5.85% Ni (53,411Ni t).
					16
	5.53m@ 13.41% Ni
	ヌアベンスへびき		0.76m @ 8.12% Ni	Lava
	LONG SOUTH TARGET			Channel 2	LEGEND
					Nickel mineralisation
	$-1000mRL$
					Lava channel
			500m		Drill hole pierce point

FIGURE 2: LONG MINE LONG-SECTION SHOWING UNDILUTED NICKEL RESOURCES, SIGNIFICANT DRILL HOLE INTERCEPTS OUTSIDE RESOURCE AREAS AND THE LONG SOUTH TARGET AREA

						TABLE 1: LONG NICKEL MINE PRODUCTION SUMMARY
--	--	--	--	--	--	----------------------------------------------	--

		March '03	2002/03	March '02
	Note	Quarter	FY to Date	Prev.Quarter
Mining Inventory/Reserve (Wet Tonnes)
Start of Period	$(t)$	735,671	746,345	n/a
- ROM Production from Reserves	$(t)^{\wedge}$	(19,994)	(30, 668)	n/a
+/- Reserve Addition/(Subtraction)	$(t)$	۰.		n/a
End of Period	$(1)$	715,677	715,677	n/a
Production Details:
Ore Mined (Dry Tonnes)	(t)	30,593	46,582	n/a
Ore Milled (Dry Tonnes)	$(1)$	30,593	46,582	n/a
Nickel Grade (Head)	(Ni%)	3.74	3.84	n/a
Copper Grade (Head)	$(Cu\%)$	0.32	0.31	n/a
Metal in Ore Production
Nickel delivered	$(t)$ $(1)$	1,143.52	1,786.77	n/a
Copper delivered	$(t)$ $(1)$	99.27	146.07	n/a
Metal Payable IGO share
Nickel	(t)	678.86	1,061.72	n/a
Copper	$(1)$	40.20	59.16	n/a
Average Spot Price for period
Nickel LME Official Close	US\$/t	8,337	7,716	n/a
Hedging
Tonnes delivered into Hedge	Τ	162	162	n/a
Average Price	A\$/t	12,145	12,145	n/a

Note ^. Production comes from both reserves/inventory and outside reserves.
Note 1. The Recovery Rate is fixed with WMC depending on head grade. For grades from 3.0% to
3.5% recovery is 92%, for grades in excess of 3.5% re

RevenuelCost Summary	A\$'000's
Sales Revenue (incl.hedging)	2	9.859	14.731	n/a
Cash Mining/Development Costs		(4, 116)	(6,586)	n/a
Other Cash Costs	3	(1,403)	(2,386)	n/a
Depreciation/Amortisation		(1, 383)	(2, 198)	n/a
Total Unit Cost Summary	A\$ilb Total Metal Produced
Cash Mining/Development Costs		1.63	1.67	n/a
Other Cash Costs		0.56	0.61	n/a
Depreciation/Amortisation		0.55	0.56	n/a
RevenuelCost Summary	A\$ilb Payable Metal
Sales Revenue (incl.hedging)		6.59	6.30	n/a
Cash Mining/Development Costs		2.75	2.81	n/a
Other Cash Costs		0.94	1.02	n/a
Depreciation/Amortisation		0.92	0.94	n/a

Note 2. Revenue is conservatively valued at AUD13,227/tonne. Proceeds actually received are likely to be higher based on current market expectations of the nickel price and AUD/USD exchange rate.
Note 3. Other Cash Costs include milling, royalties and site administration.

Safety and Productivity
- Lost Time IFR		24	13	n/a
- Medically Treated IFR		47	26	n/a
- Nickel Productivity Rate		69.22	62.07	n/a
Nickel Productivity Rate = Productivity measured as annualised nickel tonnes per full-time-equivalent-employee. Development/Exploration Drilling
Development	metres	1.252	1.521	n/a
Production		727.2	727.2	n/a

SOUTHSTAR JV (IGO -12.5%, earning an additional 75%) WMC Diamond Regional Database Sample Points

FIGURE 3: INDEPENDENCE GOLD PROJECTS

EXPLORATION

TROPICANA EAST PROJECT ANGLOGOLD (MANAGER) EARNING 70% TARGET: NEW GOLD CAMP

AngloGold Australia Limited can earn a 70% participating interest by spending \$2 million on the four tenements within eight years. AngloGold will sole fund all expenditure to the completion of a prefeasibility study.

2002 EXPLORATION

An initial 106-hole vertical aircore programme on a 1000m x 200m grid was completed at the Tropicana

East Project during November of last year, with drilling and assays reported in the December 2002 This drilling tested the first of three quarterly. undrilled geochemical gold target anomalies defined by WMC in 1997 while exploring for nickel (Figure 4). A number of significant intercepts was reported, including:

• TPA0010: 4m @ 1.34a/t Au from 41m
• TPA0027: returning 9m $@$ 1.04g/t Au, with the $\sim$ hole ending in mineralisation at 37m.

AngloGold has subsequently reported 1m fire assays which respectively returned

• TPA0010: 1m @ 2.15g/t Au
• TPA0027: 7m @ 2.04g/t Au (end of hole).

DRILLING

A follow-up RAB/AC programme of 82 mostly vertical holes for 3,644m was completed at the Tropicana East Project during early March 2003 (Figure 5). Fifteen traverses 100m to 300m apart of 50m to 100m spaced holes were completed to infill existing 1km spaced drill lines.

Infill drilling targeted the areas of mineralisation around existing holes TPA0010 AND TPA0027. Several 50m spaced inclined holes were drilled either side of these to directly follow-up known mineralisation

Other 50m spaced infill holes were added to the programme whilst in the field, directly following up intersected quartz veining or zones of alteration that were encountered whilst drilling.

RESULTS

Infill drilling intersected variably sheared and altered granitic, granodioritic and dioritic rocks beneath a thin cover (5-20m) of transported colluvium. Most holes were hammered 10m past refusal to provide effective geochemical coverage into and past the fresh rock boundary.

Composite results from the infill drilling are shown in Table 3 and depicted on Figure 5.

Significant gold mineralisation (>1g/t) has now been intersected in one area in mostly vertical holes over a 1km strike lenath. Another zone of gold mineralisation has now been defined by two holes, 2km to the east. The extent of this mineralisation may be indicative of a large virgin gold system. AngloGold plan further drilling to test this exciting new Western Australian gold discovery.

TABLE 3: SIGNIFICANT TROPICANA EAST RESULTS

Hole ID	AMETI	AMG E	Total Depth (m)	Azimuth	UB	Reakingwin Hole Assay (Au) zvolu)
TPA0120	6,762,918.0	649,969.0	61.0	360.0	$-90.0$	2.52
TPA0125	6,762,989.0	650,181.0	60.0	315.0	$-60.0$	1.59
TPA0129	6,763,130.0	650,323.0	43.0	360.0	$-90.0$	1.02
TPA0133	6,763,340.0	650,538.0	46.0	360.0	$-90.0$	2.01
TPA0136	6,763,625.0	650,676.0	49.0	360.0	$-90.0$	1.56
TPA0182	6,763,410.0	652,306.0	72.0	360.0	$-90.0$	0.81
TPA0185	6,763,026.0	649,995.0	62.0	360.0	$-90.0$	0.62
TPA0193	6,763,160.0	650,290.0	52.0	360.0	$-90.0$	0.67
TPA0010*	6,763,727.0	652,273.0	47.0	360.0	$-90.0$	2.15
TPA0027*	6.763.024.0	650 146 0	37 O	360 O	-90.0	4.65

Drill hole coordinates (All holes > 0.5g/t Au)

* Holes drilled in 2002 and re-sampled on 1m intervals in 2003. All other holes 4m composites

Results from 2003 RAB drilling (4m composites, >0.5g/t Au, A.A. analysis)

Hole ID	From (m)	To (m)	Width (m)	Aufara	Comment
TPA0120	40.0	61.0	21.0	1.35	End of hole
including	56.0	61.0	5.0	2.45	End of hole
TPA0125	48.0	60.0	12.0	1.25	End of hole
TPA0129	36.0	40.0	4.0	1.02
TPA0133	40.0	46.0	6.0	1.38	End of hole
TPA0136	20.0	24.0	4.0	1.55
TPA0182	36.0	44.0	8.0	0.67
TPA0185	52.0	56.0	4.0	0.62
TPA0193	32.0	40.0	8.0	0.59

Results from re-sampled 2002 AC drilling (1m samples, >0.5g/t Au, F.A. analysis)

	n wa wasa distantante	STORY THINK	272 B.R ees en inilinnanaadhdniniife milnaac	SECTION
TPABET	- 43.U	-44.U	$\cdot$	2.15
⊶ΩΩ∩∩	30.0			2.04	ووجه سيا hole

FIGURE 4: TROPICANA EAST & WEST PROJECTS GOLD SOIL ANOMALIES AND LOCATION OF ANGLOGOLD DRILLING

FIGURE 5: TROPICANA EAST PROJECT SHOWING SIGNIFICANT DRILL HOLE GOLD RESULTS

SOUTHSTAR JOINT VENTURE PROJECTS IGO 12.5% DIRECT, EARNING 75% PURCHASING 12.5% FROM PERILYA LIMITED

GOLD EXPLORATION

Work by Independence utilising the unique WMC Diamond Division geochemical database has generated numerous quality projects. Independence believes that this database provides an enormous competitive advantage over other explorers by providing a significant head start at the all important targeting and area selection stage of the exploration process. The advantage of the database is that it provides both a direct lead in, and a layer of empirical data to refine conceptual targets, and allows Independence to focus on the most prospective areas. The ability to better refine targets allows IG to focus its efforts and precludes the need to acquire extensive and ultimately costly ground holdings at the early exploration stage.

Work on the WMC Diamond Division database since August 2001 has produced a total of 10 active Independence projects secured by tenure. An additional 16 targets are currently undergoing ongoing assessment (13 of which are considered high priority). Currently there are over 40 targets yet to be assessed and 24 targets have been assessed with no further work required. Additional assaying of the sample archive has the potential to generate additional targets. To date Independence has completed assaying for Au and pathfinder elements on an additional 1388 samples from the sample archive. Currently 15,050 samples have not yet been assayed for Au. Re-assaying of the sample archive is prioritised based on the geological prospectivity of the regions in which the samples occur.

NICKEL EXPLORATION

Based on the success of the work on the WMC Diamond Division database to date when applied to gold exploration, Independence has initiated a significant new internal research study and nickel sulphide project generation strategy. Along with the more standard stream and surface geochemistry, this study will incorporate an extensive (in excess of 30,000 mineral grains) database of microprobe data for individual chromite grains collected during diamond assessment of the database. Preliminary studies and literature review suggests that chromites intimately associated with nickel-bearing sulphides have a distinctive geochemistry. Similarly, using a number of elemental ratios as discriminators, it is also possible to identify prospective ultramafic komatiitic rock units from non-prospective units.

Whilst the science behind this strategy has been documented for many years, Independence believes this is the first time it will have been applied to regional nickel sulphide exploration in Australia. This combination of chromite probe geochemistry and regional surface geochemistry has the potential to generate many high quality nickel sulphide projects in a very cost effective manner.

To date, as well as identifying known nickel camps, including Cosmos (anomalous chromite 3km directly down stream from the mine), with this technique, 13 Class I and 15 Class II anomalies with no previously known nickel sulphides have been defined in favourable geological environments.

The Company has previously entered into an agreement with WMC, whereby WMC has the first right of refusal on any nickel-specific projects generated from the database that Independence wishes to joint venture out.

BASE METALS AND OTHER COMMODITIES

Work to date has focused primarily on gold. The strategy for exploiting the considerable non-nickel base metal and other commodity potential of the database is still being considered, although a number of major mining companies have expressed considerable interest in the database.

PRAIRIE DOWNS PROJECT

TARGET: VIRGIN ARCHAEAN/ PROTEROZOIC GOLD CAMP

A new Exploration Licence was pegged at Prairie Downs on the western end of the Sylvania Dome to cover a recently generated WMC Diamond Division database target. Prospective lower Fortescue Group rocks which host significant gold mineralisation on the margins of other Pilbara basement domes are largely concealed by recent transported cover in this area of no previous exploration. Elevated Au values of up to 20ppb in stream samples and 15ppb in soil samples, with associated high Pb values up to 100ppm and Cu up to 263ppm, were returned from Southstar database samples in the area. This area is interpreted to be an excellent structural position for potential large tonnage gold deposits.

TAMARIN PROJECT

TARGET: VIRGIN ARCHAEAN GOLD CAMP

The Tamarin Project covers a cluster of anomalous samples returned from the WMC Diamond Division database 4km west of the Marvel Loch gold mining centre and 30km south of Southern Cross. Follow-up work by Independence has outlined significant gold in soil anomalism (+20ppb gold contour) over a strike of at least 2.5km. Aeromagnetic interpretation suggests the gold anomaly overlies a concealed linear magnetic anomaly (possibly banded iron formation or ultramafic) close to a granite/greenstone contact.

Many of the large gold deposits in the Southern Cross region occur in a similar geological setting. Negotiations with freehold land owners are underway to gain drill access during the June Quarter.

TROPICANA WEST PROJECT TARGET: NEW GOLD CAMP

The Tropicana West Project tenements, located 230km east-southeast of Laverton in Western Australia within the Archaean Yilgarn Craton (Figure 4), are expected to be granted next quarter. The tenements at Tropicana West are contiguous with the IG/AngloGold Tropicana East project area. WMC Resources' diamond exploration undertook bulk soil sampling that defined several single point gold anomalies ranging from 3ppb to 236ppb within the project area in 1983. Exploration by WMC Resources' nickel group in 1997 returned elevated background gold in a number of areas, including a 10km long anomalous corridor on wind-blown sand cover peaking at 770ppb gold. None of these anomalies has been drill tested. Independence plans to commence exploration in the June quarter.

WESTERN AUSTRALIA RECONNAISSANCE IGO 100%

JEERINAH PROJECT TARGET: NEW GOLD CAMP

Results from the December Quarter regional soil sampling program, which consisted of 200 samples taken on 800 x 200m and 400 x 100m spacings over the central core of the Jeerinah dome have been received. The sampling followed up previously identified highly anomalous stream sediment results (peak value of 73.1ppb gold). Results highlighted a number of anomalies up to 46ppb, which although of relatively small areal extent, are considered significant given the immature weathering profile in the region. Further infill sampling will be completed during the June quarter.

WACKILINA PROJECT TARGET: NEW GOLD CAMP

Two additional Exploration Licences were applied for to cover extensions of prospective stratigraphy where previous reconnaissance has returned stream values up to 827ppb Au.

DALWALLINU PROJECT TARGET: NEW GOLD CAMP

Four contiguous full size Exploration Licence applications have targeted a complex structural corridor close to the north-eastern wheatbelt town of Dalwallinu. Preliminary roadside reconnaissance sampling returned elevated gold in soil values to 61ppb over north-trending gneissic rocks. Elevated molvbdenum. bismuth. lead and areenic geochemistry were associated with the anomalous The target zone is predominantly sand gold. covered. Small Archaean greenstone belts

comprising of amphibolite occur throughout the area of interest.

YALGOO WEST PROJECT TARGET: OPEN CUT GOLD MINERALISATION

Follow up infill drilling although strongly anomalous, failed to intercept any economic gold mineralisation. The project has been offered for Joint Venture.

GOLDSEARCH MUSGRAVE JOINT VENTURE IGO EARNING 51% IN GOLDSEARCH'S EQUITY TARGET: WORLD CLASS COPPER-GOLD AND NICKEL DEPOSITS

An orientation geochemical sampling program and study completed during the December Quarter enabled Independence to formulate an effective and logistically simple sampling strategy for this region. Results from this study confirm the viability of wide spaced reconnaissance sampling techniques which will allow rapid assessment of areas where
prospective targets are typically covered by
significant amounts of wind blown, aeolian desert sands

In South Australia, heritage clearance for first-pass geochemical sampling in the DeRose Hill area (EL2910) was completed late in March. Sampling, which will commence in April 2003, is following up extensive Ni and Co geochemical anomalism defined by previous explorers in the early 1970's.

Previous sampling on a mile by half mile grid defined Ni values up to 60ppm (background <5ppm) and Co 50ppm (background <5ppm) over many kilometres in the sand dominated terrain. The anomalies are open into ungranted JV tenure to the west. Sampling techniques used at the time were not considered optimal in aeolian sand dominated terrains. This anomalism is associated with a number of magnetic features which are thought to represent buried mafic to ultramafic intrusives equivalent to the Giles Complex bodies targeted at WMC's Nebo - Babel prospects and elsewhere in the Musgrave for Ni. Cu. Co. PGE and Au mineralisation.

Following an assessment of reprocessed geophysical data and based on ground observations made during the reconnaissance visit undertaken in the December 2002 Quarter, Independence rationalised its ground position in the Musgrave to focus on high priority gold, silver, nickel and copper prospects. Accordingly Independence has handed back to Goldsearch 11 of the total 31 licences and applications which comprised the Musgrave JV.

Independence is now earning an interest in approximately $23,000 \text{km}^2$ of this under-explored terrain.

GOLDSWORTHY JOINT VENTURE IGO EARNING 80% TARGET: VIRGIN ARCHAEAN GOLD CAMP

Independence Gold NL signed a Joint Venture agreement covering two Exploration Licences contiguous with the existing Goldsworthy tenure during the last quarter. Independence can earn 80% in all tenements by free-carrying Revesco Group Limited to pre-feasibility.

The project is centred on the interpreted extension of the regionally significant Mallina Shear Zone which is related to significant gold mineralisation at the Indee gold project (0.5M oz in situ resource).

An airborne EM survey is planned for the June quarter to outline cover thickness, buried stratigraphy and alteration zones/faults possibly associated with gold mineralisation.

CHESTERFIELD JOINT VENTURE IGO EARNING 70% TARGET: +200,000 TONNES AT +10G/T OPEN CUT ORE

Discussions with potential purchasers are ongoing and expressions of interest are still being sought for the project.

INDEPENDENCE GOLD NL

CHRISTOPHER M. BONWICK MANAGING DIRECTOR

Information in this report relating to geological data has been compiled or reviewed by Mr Christopher M. Bonwick who is a Member of the Australasian Institute of Mining and Metallurgy and information in this report relating to ore reserve data has been compiled or reviewed by Ms Somealy Sheppard who is a Member of the Australian Institute of Geoscientists. Both have had sufficient relevant experience in the reported fields of activity.

INDEPENDENCE GOLD NL

PO Box 893 SOUTH PERTH WA 6951

• T: (08) 9367 2755
• $F: (08) 9367 3288$
• E: contact@independencegold.com.au
• W: www.independencegold.com.au

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

Independence Gold NL

ABN

46 092 786 304

Quarter ended ("current quarter") 31 March 2003

Year to date

(9 months)

Current quarter

\$A'000

Consolidated statement of cash flows

Cash flows related to operating activities

				\$A'000
1.1		Receipts from product sales and related debtors	9,860	14,731
1.2	Payments for evaluation	(a) exploration and	(538)	(1, 149)
		(b) development	(2,022)	(3,079)
		(c) production	(3,915)	(6,307)
		(d) administration	(262)	(830)
1.3	Dividends received
1.4		Interest and other items of a similar nature
	received		25	68
1.5	Interest and other costs of finance paid		(356)	(709)
1.6	Income taxes paid
1.7	Other
	Net Operating Cash Flows		2,791	2.725
		Cash flows related to investing activities
1.8	Payment for purchases of:	(a)prospects		(10, 850)
		(b)equity
	investments
		fixed other $\left( \text{c} \right)$	(888)	(6,269)
1.9	assets Proceeds from sale of:	(a)prospects
		(b)equity
	investments
		(c)other fixed
	assets
1.10	Other -- Pre-production costs		(19)	(1, 284)
1.11	Loans repaid by other entities			7
1.12	Other – Costs relating to $1.8(a)$		(666)	(1,462)
	Net investing cash flows		(1, 573)	(19, 858)
1.13		Total operating and investing cash flows
	(carried forward)		1,219	(17, 133)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	1,219	(17, 133)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	4	7,009
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings		13,000
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other – Costs relating to $1.14$		(274)
1.19	Other - Cash Deposit - Bond		(980)
	Net financing cash flows	4	18,755
	Net increase (decrease) in cash held	1,223	1,622
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	2,809	2,410
1.22	Cash at end of quarter	4,032	4,032

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	179
1.24	Aggregate amount of loans to the parties included in item 1.10	$\mathbf{r}$

1.25 Explanation necessary for an understanding of the transactions

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

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

Financing facilities available

Add notes as necessary for an understanding of the position.

⁺ See chapter 19 for defined terms.

		Amount available SA'000	Amount used SA'000
-3.1	Loan facilities (a) Cash Advance Facility (b) Working Capital Facility (c) Bond Facility	10,000 3,000 2,000	10,000 3,000 1,389
3.2	Credit standby arrangements

Estimated cash outflows for next quarter

	Total	1,300
4.1 4.2	Exploration and evaluation Development	800 500
		\$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 SA'000	Previous quarter SA'000
5.1	Cash on hand and at bank	79	106
5.2	Deposits at call	3.953	2,703
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	4.032	2.809

Changes in interests in mining tenements

		Tenement reference	Nature of interest $(\text{note}(2))$	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	EL10315,22687, 22688,22689,22 690,22710,6847 , 9636, 9740, 9741 and 9863	Relinquished to JV partner	38.25%	$0\%$
6.2	Interests in mining tenements acquired or increased	ELA47/1245 ELA47/1246 ELA52/1693	New application New application New application	$0\%$ $0\%$ $0\%$	$100\%$ $100\%$ 100%

⁺ 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 security (see note $3)$ (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference
	*securities
	(description)
7.2	Changes during
	quarter
	(a) Increases
	through issues
7.3	(b) Decreases +Ordinary	9,955,000		10	0.1
	securities	68,155,750	50,465,750
7.4	Changes during
	quarter
	(a) Increases
	through issues
	- contrib.shares converted	45,000	45,000	10	10
	(b) Decreases
	through returns
	of capital, buy-
	backs
$7.5$	+ Convertible
	debt securities (description)
7.6	Changes during
	quarter
	(a) Increases
	through issues
7.7	(b) Decreases			Exercise price	Expiry date
	Options (description and	Ordinary options to subscribe for 1
	conversion	ordinary share
	factor)
		28,739,250	28,739,250	20	31 January 2005
		300,000 2,000,000		34 45	30 June 2006 30 June 2007
		1,200,000		35	31 July 2007
7.8	Issued during
	quarter
7.9	Exercised during
7.10	quarter Expired during
	quarter
7.11	Debentures
	(totals only)
7.12	Unsecured
	notes (totals
	$\omega$ d $\psi$

$+$ See chapter 19 for defined terms.

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).
• This statement does give a true and fair view of the matters disclosed. $\overline{2}$

Nund

Sign here:

...................................... (Director)

Print name:

.Christopher Bonwick...................

Notes

• $\mathbf{1}$ 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.

= == == == == ==

⁺ See chapter 19 for defined terms.