PACIFIC RESOURCES LIMITED — Interim / Quarterly Report 2004

Jan 12, 2004

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

LODESTONE EXPLORATION LIMITED

ABN

20 075 877 075

Quarter ended ("current quarter")

Year to date

$(6$ months)

31 DECEMBER 2003

Current quarter

SA'000

Consolidated statement of cash flows

Cash flows related to operating activities

			\$A'000
1.1	Receipts from product sales and related debtors	27	57.
1.2	Payments for (a) exploration and evaluation (b) development	(329)	(479)
	(c) production
	(d) administration	(107)	(220)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	23	37
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(386)	(605)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects
	(b)equity investments
	(c) other fixed assets
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
1.12	Other (provide details if material)	(8)	(8)
	Net investing cash flows	(8)	(8)
1.13	Total operating and investing cash flows (carried forward)	(394)	(613)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing eash flows	(394)	(613)
	(brought forward)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings	w
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other – Share issue costs
	Net financing cash flows
	Net increase (decrease) in eash held	(393)	(612)
1.20	Cash at beginning of quarter/year to date	1,738	1,957
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	1,345	1,345

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	39.
1.24	Aggregate amount of loans to the parties included in item 1.10	Nil

Explanation necessary for an understanding of the transactions 1.25

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

$\rm{Ni}$

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

$NiI$

$+$ 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 \$A'000
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

		\$A'000
4.1	Exploration and evaluation Development	300
$4.2^{\circ}$
	Total	300

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of eash 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	9
5.2	Deposits at call	1,336	1,736
5.3	Bank overdraft	÷
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	1.345	1,738

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	NIL.
6.2	Interests in mining tenements acquired or increased	EPM14435 Station EPM13743 Ulam	EPM application 100% equity. lodged 10 December 2003. Transfer subject to $100%$ equity. approvals.	Nit Nit	14 sub-blocks $(43 \text{ sq km})$ 5 sub-blocks $(15 \text{ sq km})$

⁺ 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	Amount paid up per security (see note 3)
7.1	Preference			$3)$ (cents)	(cents)
	+ securities
	(description)
7.2	Changes during
	quarter
	(a) Increases
	through issues
	(b) Decreases
	through returns of capital, buy-backs,
	redemptions
7.3	+ Ordinary	30,916,154	18,105,786	Fully paid	Fully paid
	securities
7.4	Changes during
	quarter
	(a) Increases	5,000	5,000	20 cents	20 cents
	through options exercised
	(b) Decreases
	through returns of
	capital, buy-backs
	(c) Shares		182,667	Fully paid	Fully paid
	previously
7.5	escrowed now listed + Convertible debt	N/A
	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	6,245,000	6,245,000	20 cents	07/12/04
	conversion factor)	100,000 800,000	w	30 cents 30 cents	30/09/05 30/09/07
7.8	Issued during	N/A
	quarter
7.9	Exercised during	5,000	5,000	20 cents	07/12/04
	quarter
7.10	Expired during quarter	N/A
7.11	Debentures	N/A
	(totals only)
7.12	Unsecured notes	N/A
	(totals only)

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

Sign

here: hew Starty

Date: 13 January 2004

(Company secretary)

Print name: Leni Stanley

Notes

• $\begin{array}{c} \end{array}$ 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.
• $\lesssim$ 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.