LEFROY EXPLORATION LIMITED — Interim / Quarterly Report 2004

Feb 29, 2004

Rules 4.1, 4.3

Appendix 4B

Half yearly report

Introduced 1/7/96. Origin: Appendices 3, 4. Amended 1/7/97.

ACN or ARBN	Half yearly (tick)	Preliminary final (tick)	period')			Half year/financial year ended ('current
A.R.B.N. 052 123 930			Half year 31.12.2003
For announcement to the market Extracts from this report for announcement to the market (see note 1).						SUS'000
Sales (or equivalent operating) revenue (item 1.1)			up/down	℅	lo.	NIA
Abnormal items after tax attributable to members (item 2.5)			gain (loss) of	N/A
*Operating profit (loss) after tax (before amortisation of goodwill) attributable to members (item 1.26)			up	%	to	(4)
*Operating profit (loss) after tax attributable to members (item 1.10			up	₩	lo.	(4)
Extraordinary items after tax attributable to members (item 1.13)			gain (loss) of	N/A
*Operating profit (loss) and extraordinary items after tax attributable to members (item 1.16)			up	%	to	(4)
Dividends (distributions)			Amount per security			Franked amount per security at 36% tax
Final dividend (Preliminary final report only - item 15.4) Interim dividend (Half yearly report only - item 15.6)				N/A ¢		N/A ¢
Previous corresponding period (Preliminary final report - item 15.5; half yearly report - item 15.7)				N/A ¢		NA ¢
*Record date for determining entitlements to the dividend, (in the case of a trust, distribution) (see item 15.2)			N/A
Short details of any bonus or cash issue or other item(s) of importance not previously released to the market:

⁺ See chapter 19 for defined terms.

Statement of Financial Performance

(The figures are not equity accounted)

		Current period-\$US'000	Previous corresponding period-\$US'000
1.1	Sales (or equivalent operating) revenue
1.2	Other revenue	(13)	26
1.3	Total revenue	(13)	26
1,4	*Operating profit (loss) before abnormal items and tax	(42)	(4)
1.5	Abnormal items before tax (detail in item 2.4)
1.6	*Operating profit (loss) before tax (items $1.4 + 1.5$ )	(42)	(4)
1.7	Less tax
1.8	*Operating profit (loss) after tax but before outside "equity interests	(42)	(4)
1.9	Less outside +equity interests
1.10	*Operating profit (loss) after tax attributable to members	(42)	(4)
1.11	Extraordinary items after tax (detail in item 2.6)
1.12	Less outside "equity interests
1.13	Extraordinary items after tax attributable to members
1.14	Total +operating profit (loss) and extraordinary items after tax (items $1.8 + 1.11$ )	(42)	(4)
1.15	*Operating profit (loss) and extraordinary items after tax attributable to outside "equity interests (items $1.9 + 1.12$
1.16	*Operating profit (loss) and extraordinary items after tax attributable to members (items 1.10 + 1.13)	(42)	(4)
1.17	Retained profits (accumulated losses) at beginning of financial period	(11, 727)	(11, 711)
1.18	If change in accounting policy as set out in clause 11 of AASB 1018 Profit and Loss Accounts, adjustments as required by that clause (include brief description)
1.19	Aggregate of amounts transferred from reserves
1.20	Total available for appropriation (carried forward)	(11,769)	(11, 715)

⁺ See chapter 19 for defined terms.

$(4)$

Statement of Financial Performance continued

	Profit restated to exclude amortisation of goodwill	Current period SUS'000	Previous corresponding period SUS'000
1.23	Retained profits (accumulated losses) at end of financial period	(11,769)	(11, 715)
1.22	Aggregate of amounts transferred to reserves
1.21	Dividends provided for or paid
1.20	Total available for appropriation (brought forward)	(11, 769)	(11,715)

1.24	*Operating profit (loss) after tax before outside equity interests (items 1-8) and amortisation of goodwill
ぅ つぼ	ana labuah autoida tamuhu interacto

1.25	Less (plus) outside "equity interests"
1.26	+ Operating profit (loss) after tax (before amortisation of aoodwill) attributable to members

Intangible, abnormal and extraordinary items		Consolidated - current period
		Before tax \$US'000	Related tax \$US'000	Related outside "equity interests SUS'000	Amount (after tax) attributable to members \$US'000
2.1	Amortisation of goodwill	N/A
$2.2\phantom{0}$	Amortisation of other intangibles
2.3	Total amortisation of intangibles
2.4	Abnormal items
2.5	Total abnormal items
2.6	Extraordinary items
2.7	Total extraordinary items

Comparison of half year profits

(Preliminary final report only)

• Consolidated *operating profit (loss) after tax $3.1$ attributable to members reported for the 1st half year (item 1.10 in the half yearly report)
• Consolidated +operating profit (loss) after tax $3.2$ attributable to members for the 2nd half year

Current year - \$US'000	Previous year - \$US'000
N/A

$(42)$

⁺ See chapter 19 for defined terms.

Statement of Financial Position

(See note $5$ )

		At end of current period \$US'000	As shown in last annual report	As in last half yearly report
	Current assets		\$US'000	\$US'000
4.1	Cash	491	1,122	580
4.2	Receivables
4.3	Investments	630	42	591
4.4	Inventories
4.5	Other (provide details if material)
		1,121	1,164	1,171
4.6	Total current assets
	Non-current assets
4.7	Receivables
4.8	Investments
4.9	Inventories
4.10	Exploration and evaluation expenditure
	capitalised (see para .71 of AASB 1022)
4.11	Development properties (*mining entities)
4.12	Other property, plant and equipment (net)
4.13	Intangibles (net)
4.14	Other (provide details if material)
4.15	Total non-current assets
		1,121	1,164	1,171
4.16	Total assets
	Current liabilities	20	21	16
4.17 4.18	Accounts payable
4.19	Borrowings Provisions
4.20	Other (provide details if material)
		20	21	16
4.21	Total current liabilities
	Non-current liabilities
4.22	Accounts payable
4.23	Borrowings
4.24	Provisions
4.25	Other (provide details if material)	۰
4.26	Total non-current liabilities		×
		20	21	16
4.27	Total liabilities
		1,101	1,143	1.155
4.28	Net assets

⁺ See chapter 19 for defined terms.

Statement of Financial Position continued

	Equity
4.29	Capital	1,215	1,215	1,215
4.30	Reserves	11,655	11,655	11,655
4.31	Retained profits (accumulated losses)	(11,769)	(11, 727)	(11, 715)
4.32	Equity attributable to members of the parent entity	1,101	1,143	1,155
4.33	Outside +equity interests in controlled entities
		1,101	1,143	1,155
4.34	Total equity
4.35	Preference capital and related premium
	included as part of 4.32

Exploration and evaluation expenditure capitalised

To be completed only by entities with mining interests if amounts are material. Include all expenditure incurred regardless of whether written off directly against profit.

		Current period \$US'000	Previous corresponding period-\$US'000
5.1	Opening balance	N/A
5.2	Expenditure incurred during current period
5.3	Expenditure written off during current period
5.4	Acquisitions, disposals, revaluation increments, etc.
5.5	Expenditure transferred to Development Properties
5.6	Closing balance as shown in the consolidated balance sheet (item 4.10)

Development properties

(To be completed only by entities with mining interests if amounts are material)

Current period \$US'000 Previous corresponding period-\$US'000 N/A Opening balance Expenditure incurred during current period Expenditure transferred from exploration and evaluation Expenditure written off during current period Acquisitions, disposals, revaluation increments, etc. Expenditure transferred to mine properties Closing balance as shown in the consolidated balance sheet (item 4.11)

$6.1$

6.2

6.3

$6.4$

6.5

$6.6\,$

6.7

⁺ See chapter 19 for defined terms.

Consolidated statement of cash flows

(See note $6)$

		Current period \$US'000	Previous corresponding
			period-\$US'000
	Cash flows related to operating activities
7.1	Receipts from customers
7.2	Payments to suppliers and employees	(42)	(41)
7.3	Dividends received		2
7.4	Interest and other items of similar nature received	$\overline{c}$	3
7.5	Interest and other costs of finance paid
7.6	Income taxes paid
7.7	Other (provide details if material) Forex
7.8		(40)	(36)
	Net operating cash flows
	Cash flows related to investing activities
7.9	Payment for purchases of property, plant and
	equipment
7.10	Proceeds from sale of property, plant and equipment
7.11	Payment for purchases of equity investments	(2, 184)	(5,267)
7.12	Proceeds from sale of equity investments
7.13	Loans to other entities	1,593	4,725
7.14	Loans repaid by other entities
7.15	Other (provide details if material) Treasury Stock
7.16	Net investing cash flows	(591)	(542)
	Cash flows related to financing activities
7.17	Proceeds from issues of *securities (shares, options,
	etc.
7.18	Proceeds from borrowings
7.19	Repayment of borrowings
7.20	Dividends paid	u.
7.21	Other (provide details if material)	٠
7.22	Net financing cash flows
	Net increase (decrease) in cash held	(631)	(578)
7.23	Cash at beginning of period	1,122	1,158
	(see Reconciliation of cash)
7.24	Exchange rate adjustments to item 7.23.
7.25	Cash at end of period	491	580
	(see Reconciliation of cash)

⁺ See chapter 19 for defined terms.

Non-cash financing and investing activities
Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but
did not involve cash flows are as follows. If an amoun

$N/A$

Reconciliation of cash

Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.		Current period \$US'000	Previous corresponding period-\$US'000
8.1	Cash on hand and at bank	491	580
8.2	Deposits at call
8.3	Bank overdraft
8.4	Other (provide details)
8.5	Total cash at end of period (item 7.25)	491	580

Ratios		Current period	Previous corresponding period
9.1	Profit before abnormals and tax / sales Consolidated +operating profit (loss) before abnormal items and tax (item 1.4) as a percentage of sales revenue (item 1.1)
9.2	Profit after tax / *equity interests Consolidated +operating profit (loss) after tax attributable to members (item 1.10) as a percentage of equity (similarly attributable) at the end of the period (item 4,32)	$(3.81)$ %	$(0.35)$ %

	Earnings per security (EPS)	Current period	Previous period	corresponding
10.1	Calculation of basic, and fully diluted, EPS in accordance with AASB 1027: Earnings per Share Basic EPS (a)	(0.02)		(0.002)
	Diluted EPS (if materially different from (a)) (b)	NIA

NTA backing (see note 7)	Current period	Previous corresponding period
Net tangible asset backing per "ordinary security 11.1	0.45	0.48

⁺ See chapter 19 for defined terms.

Details of specific receipts/outlays, revenues/expenses

12.1	Interest revenue included in determining item 1.4
12.2	Interest revenue included in item 12.1 but not yet received (if material)
12.3	Interest expense included in item 1.4 (include all forms of interest, lease finance charges, etc.)
12.4	Interest costs excluded from item 12.3 and capitalised in asset values (if material)
12.5	Outlays (except those arising from the "acquisition of an existing business) capitalised in intangibles (if material)
12.6	Depreciation and amortisation (excluding

Current period \$US'000	Previous corresponding period-\$US'000
2	3

Control gained over entities having material effect

N/A

(See note 8)

Name of entity (or group of entities) $13.1$

amortisation of intangibles)

• 13.2 Consolidated +operating profit (loss) and extraordinary items after tax of the entity (or group of entities) since the date in the current period on which control was +acquired
• 13.3 Date from which such profit has been calculated
• ** Operating profit (loss) and extraordinary items after tax of the 13.4 entity (or group of entities) for the whole of the previous corresponding period

,,,,,,,,,,,,,,,,,,,,,,,,,,,, \$			_________
	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,		--------------------------------------
		---------------------------------------		,,,,,,,,,,,,,,,,,,,,,,,,
$\ddot{!\delta}$ .
		--------------------------------------		---------

⁺ See chapter 19 for defined terms.

Loss of control of entities having material effect

NIA

(See note 8)

• 14.1 Name of entity (or group of entities)
• $14.2$ Consolidated *operating profit (loss) and extraordinary items after tax of the entity (or group of entities) for the current period to the date of loss of control
• 14.3 Date to which the profit (loss) in item 14.2 has been calculated
• $14.4$ Consolidated *operating profit (loss) and extraordinary items after tax of the entity (or group of entities) while controlled during the whole of the previous corresponding period
• 14.5 Contribution to consolidated *operating profit (loss) and extraordinary items from sale of interest leading to loss of control

		---------------------	______
S
		-----------
\$
		,,,,,,,,,,,,,,,,,,,,,,,,
\$

Reports for industry and geographical segments

Information on the industry and geographical segments of the entity must be reported for the current period in accordance with AASB 1005: Financial Reporting by Segments. Because of the different structures employed by entities, a pro forma is not provided. Segment information should be completed separately and attached to this report. However, the following is the presentation adopted in the Appendices to AASB 1005 and indicates which amounts should agree with items included elsewhere in this report.

Segments	Investments
Operating Revenue
Sales to customers outside the economic entity		$\bullet$
Inter-segment sales			26
Unallocated revenue		(13)
Total revenue (consolidated total equal to item 1.3)		(13)	26
Segment result (including abnormal items where relevant)		(42)	(4)
Unallocated expenses
Consolidated *operating profit after tax (before equity accounting)		(42)	(4)
Segment assets		1,101	1,155
Unallocated assets
Total assets (equal to item 4.16)		1.101	1,155

Dividends (in the case of a trust, distributions)

15.1	Date the dividend (distribution) is payable	N/A
15.2	*Record date to determine entitlements to the dividend (distribution) (le, on the basis of registrable transfers received up to 5.00 pm if paper based, or by "End of Day" if a proper "SCH transfer)
15.3	If it is a final dividend, has it been declared?

(Preliminary final report only)

⁺ See chapter 19 for defined terms.

Amount per security

		Amount per security	Franked amount per security at 36% tax
	(Preliminary final report only)
15.4	Final dividend: Current year	c
15.5	Previous year
	(Half yearly and preliminary final reports)
15.6	Interim dividend: Current year	- C
15.7	Previous year

Total dividend (distribution) per security (interim plus final)

(Preliminary final report only)

		Current year	Previous year
15.8	*Ordinary securities	c.
15.9	Preference +securities	a

Half yearly report - interim dividend (distribution) on all securities or Preliminary final report - final dividend (distribution) on all securities

		Current period \$US'000	Previous corresponding period-\$US'000
15.10	*Ordinary securities
15.11	Preference *securities
15.12	Total

The +dividend or distribution plans shown below are in operation.

The last date(s) for receipt of election notices for the "dividend or distribution plans

Any other disclosures in relation to dividends (distributions)

⁺ See chapter 19 for defined terms.

Equity accounted associated entities and other material interests

Equity accounting information attributable to the economic entity's share of investments in associated entities must be disclosed in a separate note. See AASB 1016: Disclosure of Information about Investments in Associated Companies.

	Investments in associated entities	Current period \$US'000	Previous corresponding period-\$US'000
16.1	Statutory carrying value of investments in associated entities (SCV)	N/A
16.2	Share of associated entities' retained profits and reserves not included in SCV:
	Retained profits
	Reserves
16.3	Equity carrying value of investments

Material interests in entities which are not controlled entities

The economic entity has an interest (that is material to it) in the following entities.

Name of entity		Percentage of ownership interest (ordinary securities, units etc) held at end of period		Contribution to +operating profit (loss) and extraordinary items after tax
17.1	Equity accounted associated entities	Current period	Previous corresponding period	Current period - \$US'000	Previous corresponding period-\$US'000
		N/A			Equity accounted
17.2	Other material interests			Not equity accounted (ie part of item 1.14)

⁺ See chapter 19 for defined terms.

Issued and quoted securities at end of current period

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Category of *securities	Number issued	Number quoted	Par value (cents)	Paid-up value (cents)
18.1	Preference *securities (description)	$\blacksquare$	$\overline{a}$	$\overline{a}$
18.2	Issued during current period		٠		$\ddot{\phantom{1}}$
18.3	*Ordinary securities	2,429,826	2,429,826	0.50	0.50
18.4	Issued during current period		÷	u,	$\ddot{\phantom{a}}$
18.5	*Convertible debt securities (description and conversion factor)	$\ddot{\phantom{1}}$	$\ddot{\phantom{1}}$	÷	$\pmb{\ast}$
18.6	Issued during current period				÷
18.7	Options (description and conversion factor)			Exercise price	Expiry date
18.8	Issued during current period	٠	$\blacksquare$	w	$\bullet$
18.9	Exercised during current period	÷	$\tilde{}$	á,	ă,
18.10	Expired during current period	$\overline{\phantom{a}}$	÷,	4	$\check{\phantom{a}}$
18.11	Debentures (totals only)	$\ddot{\phantom{1}}$	$\overline{\phantom{a}}$
18.12	Unsecured notes (totals only)	$\star$	$\ddot{\phantom{0}}$

⁺ See chapter 19 for defined terms.

Comments by directors

Comments on the following matters are required by ASX or, in relation to the half yearly report, by AASB 1029: Half-Year Accounts and Consolidated Accounts. The comments do not take the place of the directors' report and statement (as required by the Corporations Law) and may be incorporated into the directors' report and statement. For both half yearly and preliminary final reports, if there are no comments in a section, state NIL. If there is insufficient space to comment, attach notes to this report.

Basis of accounts preparation

If this report is a half yearly report, it is a general purpose financial report prepared in accordance with the listing rules and AASB 1029. Half-Year Accounts and Consolidated Accounts. It should be read in conjunction with the last annual report and any announcements to the market made by the entity during the period. [Delete if preliminary final statement.]

Material factors affecting the revenues and expenses of the economic entity for the current period

The Company was holding 57% of total assets in U.S. marketable securities at the end of the period.

A description of each event since the end of the current period which has had a material effect and is not related to matters already reported, with financial effect quantified (if possible)

NIL

Franking credits available and prospects for paying fully or partly franked dividends for at least the next year

$\text{NIL}$

Changes in accounting policies since the last annual report are disclosed as follows.

$NIL$

⁺ See chapter 19 for defined terms.

٦

Additional disclosure for trusts

• 19.1 Number of units held by the management company or a related party of it
• 19.2 A statement of the fees and commissions payable to the management company.

Identify:

• initial service charges ٠
• management fees
• other fees

$\overline{\text{NIL}}$		--------------------------------------
	_________
	--------------------
$1\%$

20% of profits, if any

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:

Place

Date

Time

Approximate date the annual report will be available

Compliance statement

This report has been prepared under accounting policies which comply with accounting $\overline{\phantom{a}}$ standards as defined in the Corporations Law or other standards acceptable to ASX (see note 13).

Identify other standards used

-------------------------------------- ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,
----------------------- --------------------------------------- . --------------------------- ______ E. . __

• This report, and the financial statements prepared under the Corporations Law (if separate), $\overline{2}$ use the same accounting policies.
• This report does/does not* (delete one) give a true and fair view of the matters disclosed 3 (see note $2$ ).

⁺ See chapter 19 for defined terms.

Appendix 4B Half yearly Report

This report is based on formulat statements to which one of the following applies. (Tick one)

The financial statements have been audited.

The Imancial statements have been subject to review.

The financial statements are in the process of being audited or subject to review.

The financial statements have not yet been audited or reviewed.

5

4

The audit report of review by the audium will follow immediately they are available? (dolute one). (Half yearly report only - the audit report or review by the auditor must be attached to this report if this report is to satisfy the requirements of the Corporations Law.)

The cutity landfoor not have? (defect every a formally constituted sudit committee. 6

Sign here:

Print name:

SUBDOOR DAIN HDuector/Company se

Notes

ł,

• For announcement to the market The percentage changes referred to in this section are $\mathbf{I}$ . the percentage changes calculated by comparing the current period's figures with those for the prettions normaponding peaced. De all show possessions of anges if the change is from profit to loss or loss to profit, but still show whether the change was up or down.
• True and fair view If this report does not give a true and fair view of a matter (for $\overline{2}$ . example, because compliance with an Accounting Standard is required) the entity must attach a note providing additional information and explanations to give a true and fair view.
• Consolidated profit and has account
  • Item 1.1 The definition of "operating revenue" and an explanation of "sales revenue" (or its equivalent) and "other revenue" are set out in AASB 1004: Disclosure of Operating Revenue.
  • liam 1.2 "other rownmo" insludes above and dones, but carlades assessed hany revenue items.
  • Item 1.4 "-operating profit (loss) before abnormal items and tax" is calculated before dealing with outside 'equity interests and extraordinary items, but after deducting interest on borrowings, depreciation and amortisation.
  • Item 1.7 This item refers to the total tax attributable to the amount shown in item 1.6. Tax includes income tax and capital gains tax (if any) but excludes taxes treated as operating experises (eg, fringe benefits rax).

31/12/2003

Appendix 4B Page to

⁺ See chapter 19 for defined temps.

Income tax If the amount provided for income tax in this report differs (or would differ 4. but for compensatory items) by more than 15% from the amount of income tax prima facie payable on the profit before tax, the entity must explain in a note the major items responsible for the difference and their amounts.

Consolidated balance sheet 5.

Format T he format of the consolidated balance sheet should be followed as closely as possible. However, additional items may be added if greater clarity of exposition will be achieved, provided the disclosure still meets the requirements of AASB 1029. Banking institutions and trusts may substitute a clear liquidity ranking for the Current/Non-Current classification.

Basis of revaluation If there has been a material revaluation of non-current assets (including investments) since the last annual report, the entity must describe the basis of revaluation adopted. The description must meet the requirements of paragraphs 19-21 of AASB 1010: Accounting for the Revaluation of Non-Current Assets. If the entity has adopted a procedure of regular revaluation, the basis for which has been disclosed and has not changed, no additional disclosure is required. Trusts should also note paragraph 10 of AASB 1029 and paragraph 11 of AASB 1030.

• Statement of cash flows For definitions of "cash" and other terms used in this report see $6.$ AASB 1026: Statement of Cash Flows. Entities should follow the form as closely as possible, but variations are permitted if the directors (in the case of a trust, the management company) believe that this presentation is inappropriate. However, the presentation adopted must meet the requirements of AASB 1026. *Mining exploration entities may use the form of cash flow statement in Appendix 5B.
• Net tangible asset backing Net tangible assets are determined by deducting from total $7.$ tangible assets all claims on those assets ranking ahead of the 'ordinary securities (ie, all liabilities, preference shares, outside *equity interests etc). *Mining entities are not required to state a net tangible asset backing per "ordinary security.
• Gain and loss of control over entities The gain or loss must be disclosed if it has a 8. Details must include the material effect on the consolidated financial statements. contribution for each gain or loss that increased or decreased the entity's consolidated *operating profit (loss) and extraordinary items after tax by more than 5% compared to the previous corresponding period.
• If an entity adopts equity accounting, no comparative equity 9. Equity accounting accounting figures are required in the first period following its adoption.
• Rounding of figures This report anticipates that the information required is given to the $10.$ nearest \$1,000. However, an entity may report exact figures, if the \$US'000 headings are amended. If an entity qualifies under an ASC Class Order dated 17 August 1994, it may report to the nearest million dollars, or to the nearest \$100,000, if the \$US'000 headings are amended.
• Comparative figures Comparative figures are normally the unadjusted figures from the 11. previous corresponding period. However, if the previously reported figures are adjusted to achieve greater comparability, a note explaining the adjustment must be included with this report. If no adjustment is made despite a lack of comparability, a note explaining the position should be attached.

⁺ See chapter 19 for defined terms.

• Additional information An entity may disclose additional information about any matter, $12.$ and must do so if the information is material to an understanding of the reports. The information may be an expansion of the material contained in this report, or contained in a note attached to the report. The requirement under the listing rules for an entity to complete this report does not prevent the entity issuing reports more frequently. Additional material lodged with the *ASC under the Corporations Law must also be given to ASX. For example, a directors' report and statement, if lodged with the *ASC, must be given to ASX.
• Accounting Standards ASX will accept, for example, the use of International Accounting 13. Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if one) must be complied with.
• Borrowing corporations A s at $1/7/96$ , this report may be able to be used by an entity $14.$ required to comply with the Corporations Law as part of its half yearly financial statements if prepared in accordance with Australian Accounting Standards. However, borrowing corporations must comply with Schedule 5 of the Corporations Regulations. See regulation $3.6.02(4)$ .

⁺ See chapter 19 for defined terms.