ORA BANDA MINING LTD — Interim / Quarterly Report 2004

Jul 26, 2004

QUARTERLY ACTIVITIES REPORT FOR THE OUARTER ENDED 30 JUNE 2004

Summary of the quarter

The following is a summary of the exploration and corporate activities of Monarch Resources Limited for the quarter ended 30 June 2004.

• Follow-up RC drilling at the Mt Day project was frustrated by poor weather and unavailability of drill rigs, because of exceptional demand. Attempts to procure a suitable drill rig in the September quarter, once the weather abates, will continue.
• Consultants undertook a review of the Mt Gordon geochemistry. The review was used as an input to assist a revised geological interpretation of the Mt Gordon area and which is still in progress. The general theme emerging is that the basement is prospective but because of the nature of the targets, exploration will be expensive.
• RAB drilling at Londonderry East has located an area of anomalous bottom-of-hole gold anomalism associated with fine-grained sulphides. A program of infill RAB drilling is planned to follow up these results.
• RC drilling at Yerilla to determine whether Monarch will exercise its option was postponed due to heavy rain and the unavailability of a drill rig for a small contract.
• During the quarter Monarch advanced negotiations to undertake due diligence on a group of tenements which are considered prospective for gold. The evaluation will occur in the September quarter.
• After the end of the quarter, Monarch announced the introduction of share purchase plan, whereby shareholders will be able to subscribe for up to \$5,000 worth of shares, at an issue price of 16 cents per share.

Shareholder approval will also be sought for the issue of options to those shareholders who subscribe for shares under the share purchase plan, on the basis of one option for every two shares subscribed for.

EXPLORATION ACTIVITIES

Monarch holds interests in a portfolio of mining tenements located within Western Australia. Five projects are situated in the geologically prospective Lake Johnston Greenstone Belt, located 540 kilometres east of Perth. A further three projects are located in the Eastern Goldfields, near historical gold and nickel mining centres.

At Lake Johnston, the northern tenements embrace the Mt Day, Round Top Hill and Plover Rock projects, while the southern tenements cover the Mt Gordon and Lake Hope project.

Monarch's primary exploration targets are nickel and gold.

A review of the Lake Johnston tenement portfolio was undertaken during the quarter. The review highlighted a number of tenements along the western side of the Lake Johnston Greenstone Belt that are largely underlain by granite and gneiss. These tenements will be surrendered in the next quarter.

Lake Johnston project

Mt Day (Northern Tenements)

The Mt Day project area is located on the northern end of the Lake Johnston Greenstone Belt. The tenements cover mafic and ultramafic rocks along strike from the Emily Ann nickel mine.

Nickel exploration is currently focused on two high priority nickel targets within the Mt Day project area.

In the previous quarter, Monarch reported the results of RC hole MDRC 012 that targeted a conductive anomaly located by a previous time domain electromagnetics (TEM) survey. MDRC 012 intersected two zones of disseminated sulphides associated with narrow ultramafic units at down-hole intervals of $170m - 174m$ and $183m - 189m$ .

Three follow-up RC holes planned for completion during the June quarter were delayed by a combination of bad weather and unavailability of a drill rig.

Two of the follow-up holes will target strike extensions of the mineralisation intersected by MDRC 012 at anomaly T-1 North and a third RC hole will target down-dip extensions of nickel mineralisation (1 metre $\omega$ 0.8% Ni) intersected by MDRC 002 at Anomaly T-1.

It is anticipated that these three holes will be completed during the September quarter.

Mt Gordon (Southern Tenements)

The Mt Gordon project area is located around 50 kms south-east of Mt Day. The tenements cover a broad belt of mafic and ultramafic greenstones. At Mt Gordon, the greenstones are intruded by small, irregular granite stocks and the ultramafic Medcalf Sill. The greenstones and intrusives are extensively covered by aeolian sand and alluvial sediments.

Combined interpretation of soil geochemistry, drilling and geology has identified a number of possible styles of gold targets in the area and 5 anomalous gold zones.

During the quarter, 8 RC holes were completed. The holes targeted anomalous gold outlined by a previous surface sampling program and further defined by RAB drilling. Two anomalies, Anomaly C and Anomaly D were each tested with four RC holes. The best results, reported last quarter, were from Anomaly C where MGRC 003 intersected 2 metres @ 6.9g/t Au from 70 metres, in highly altered granite.

Monarch has now drilled 118 RAB and RC holes at Mt Gordon of which 22 have intersected anomalous gold defined as greater than 50 ppb Au. Of these intersections 10 were in granite and the balance were in mafic and ultramafic rocks.

To assist Monarch's geological interpretation of these results, a geochemical review of all surface and downhole geochemistry was undertaken. The review has highlighted two anomalous gold trends at Mt Gordon. A major north-south trend and a 315° trend. The review and newly reprocessed aeromagnetics are being used as major inputs into a reinterpretation of the Mt Gordon project area.

Londonderry project

The Londonderry project area is located 10 kms south of Coolgardie. The main target sought is hardrock gold mineralisation analogous to that found at the Bayleys Reward, Three Mile Hill and Tyndals gold deposits.

During the quarter, 109 vertical RAB holes were drilled for a total of 4.248 metres. The holes targeted three gold and nickel/gold anomalies located by previous drilling. The holes were drilled through alluvial cover that occurs over most of the area.

Three adiacent holes (LEB 043, 044 and 045) all intersected anomalous bottom-of-hole gold values of $>0.1$ ppm Au. In addition, the anomalous gold in LEB 043 was associated with finegrained sulphides.

No zones of anomalous nickel, typical of massive nickel sulphide mineralisation, were intersected. A follow-up program of RAB drilling is planned for the area around LEB 043, 044 and 045 to assess if the mineralisation footprint is significant and if higher gold grades exist.

Yerilla project

Monarch holds an option to acquire 11 prospecting licences totalling 18.5 square kms, located east of the old Yerilla mining centre, some 150 kms north-northeast of Kalgoorlie in Western Australia. The option period has been extended to 31 October 2004.

In order to determine whether to exercise the option, it was planned to twin an RC hole that had earlier intersected 17 metres $(a)$ 5.7 g/t Au. Due to high demand for drill rigs, Monarch was unable to procure the services of a suitable drill rig during the quarter.

Republican nickel project

Monarch and Bullion Minerals Limited (Bullion) jointly hold an option over the Republican project, which consists of exploration licence E15/661 and is located 45 kms south-east of Kalgoorlie, in the Eastern Goldfields of Western Australia. Bullion is operator of the project and is responsible for gold exploration. The rights for nickel exploration have been farmed out to Equinox Resources Limited.

Exploration by both companies is in the compilation stage, with fieldwork expected to commence later this year.

CORPORATE ACTIVITIES

On 19 July 2004, Monarch announced the introduction of a share purchase plan, whereby shareholders have the opportunity to subscribe for up to \$5,000 worth of shares in Monarch, at an issue price of 16 cents per share.

If all shareholders subscribe for the maximum number of shares offered under the share purchase plan, Monarch would issue approximately 10 million shares. If there is a shortfall, Monarch proposes to issue further shares via a placement, so that the combined subscriptions under the share purchase plan and the placement will be at least a total of 6,400,000 shares, raising \$1,024,000.

Monarch also proposes to issue options to those shareholders that subscribe for shares under the share purchase plan, on the basis of 1 option for every 2 shares subscribed. The option issue is subject to shareholder approval and the issue of a prospectus for the options.

During the quarter, Monarch received repayment in full of an unsecured loan of \$100,000 from Anzoil NL.

The issued share capital of Monarch at the end of the quarter comprised 42,871,002 shares and 20,965,250 options.

Michael Kiernan Director

So far as it relates to ore and mineralisation, this report is based on information compiled by Mr John Mill, who is a Fellow of the Australian Institute of Geoscientists and who has had more than five years relevant experience in the field of activity being reported on. This report accurately reflects the information compiled by Mr Mill. Mr Mill has consented to the inclusion of this information in the form and context in which it appears in this report.

Contact details for Monarch Resources Limited
Postal address:	PO Box 870 West Perth Western Australia 6872
Telephone:	$(+618)$ 9481 6422
Facsimile:	$(+618)$ 9481 6433
E-mail:	admin@mrl.net.au
Web-site:	www.mrl.net.au

Appendix 5B

Mining exploration entity quarterly report

Name of entity

Monarch Resources Limited

ACN or ARBN

100 038 266

Quarter ended ("current quarter")

30 June 2004

Г

Consolidated statement of cash flows

				Year to date
			Current quarter \$A'000	$(12$ months)
	Cash flows related to operating activities			\$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for:	(a) exploration and evaluation	(158)	(840)
		(b) development
		(c) production
		(d) administration	(83)	(321)
1.3	Dividends received
1.4	Interest and other items of a similar nature received		6	19
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other: net cash flow from goods and services tax		17	5
	Net operating cash flows		(218)	(1, 137)
	Cash flows related to investing activities
1.8	Payment for purchases of:	(a) prospects	(10)	(70)
		(b) equity investments		(55)
		(c) other fixed assets
1.9	Proceeds from sale of:	(a) prospects
		(b) equity investments		578
		(c) other fixed assets
1.10	Loans to other entities		(10)	(110)
1.11	Loans repaid by other entities		100	100
1.12	Other
	Net investing cash flows		80	443
1.13	Total operating and investing cash flows (carried forward)		(138)	(694)

1.13	Total operating and investing cash flows (brought forward)	(138)	(694)
1.14 1.15 1.16 1.17	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings	$\mathbf{w}$ $\mathbf{w}$ $\star$ $\mathbf{w}$	63
1.18 1.19	Dividends paid Other	$\mathbf{w}$ $\overline{a}$
	Net financing cash flows		63
	Net increase/(decrease) in cash held	(138)	(631)
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	288 $\mathbf{r}$	781
1.22	Cash at end of quarter (Note 1)	150	150

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	29
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

Payments to directors and director-related entities for directors fees and the provision of technical advisory and management services to the consolidated entity.

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

Not applicable.

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

Not applicable.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used \$A'000
	Loan facilities	٠
3.2	Credit standby arrangements	$\mathbf{r}$

Estimated cash outflows for next quarter

		\$A'000
4.1	Exploration and evaluation	150
4.2	Development	$\sim$
	Total	150

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	33	(27)
5.2	Deposits at call	117	315
5.3	Bank overdraft
5.4	Other	$\overline{\phantom{a}}$
	Total: cash at end of quarter (item 1.22)	150	288

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 relinguished, reduced or lapsed
6.2	Interests in mining tenements acquired or increased

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.

				Issue price	Amount paid up
				per security	per security
		Total number	Number quoted	(see note 3)	(see note 3)
				(cents)	(cents)
7.1	Preference *securities (description) Redeemable convertible preference shares
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3	*Ordinary securities Fully paid shares	42,871,002	22,871,002
7.4	Changes during quarter (a) Increases through issues (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 (description and conversion factor)			Exercise price	Expiry date
	Options over fully paid shares	20,965,250	20,965,250	20 cents	31.07.06
7.8	Issued during quarter
	Options over fully paid shares
7.9	Exercised during quarter
7.10	Expired during quarter
	Options over fully paid shares
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Compliance statement

• This statement has been prepared under accounting policies which comply with accounting standards as $\mathbf{1}$ . defined in the Corporations Law or other standards acceptable to ASX (see note 4).
• $\overline{2}$ . This statement does Hoves not^* (delete one) give a true and fair view of the matters disclosed.

Sign here:	Frank Campagna
	(Director/Company Secretary)

Date: 27 July 2004

FRANK CAMPAGNA Print name:

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.
• The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements $2.$ 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.
• Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 $3.$ for fully paid securities.
• $4.$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• Accounting Standards. ASX will accept, for example, the use of International Accounting Standards 5. for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

$= 1.72$