PACIFIC RESOURCES LIMITED — Interim / Quarterly Report 2005

Jan 30, 2005

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")

31 DECEMBER 2004

Year to date

$(6$ 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	15	31
1.2	Payments for (a) exploration and evaluation	(361)	(455)
	(b) development
	(c) production
	(d) administration	(122)	(219)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	8	18
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	(460)	(625)
	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)	(3)	(8)
	Net investing cash flows	(3)	(8)
1.13	Total operating and investing cash flows (carried forward)	(463)	(633)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(463)	(633)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	410	410
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other – Share issue costs	(20)	(20)
	Net financing cash flows	390	390
	Net increase (decrease) in cash held	(73)	(243)
1.20	Cash at beginning of quarter/year to date	724	894
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	651	651

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	48
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

Nil

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

Nil

⁺ See chapter 19 for defined terms.

Financing facilities available
Add notes as necessary for an understanding of the position.

		Amount available Amount used \$A'000 \$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	160
4.2	Development
		160
	Total

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	8
5.2	Deposits at call	643	723.
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	651	724

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	EPM 13743- Queenslander EPM 13637- Black Mountain	100% Equity 100% Equity	5 sub-blocks 52 sub-blocks	3 sub-blocks 19 sub-blocks
6.2	Interests in mining tenements acquired or increased	NIL.

$\overline{\text{+ See chapter 19}}$ 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	34,967,404	22,284,117	Fully paid	Fully paid
7.4	Changes during
	quarter
	(a) Increases	51,250	51,250	20 cents	20 cents
	through options
	exercised
	(b) Decreases through returns of
	capital, buy-backs
	(c) Shares issued	4,000,000	4,000,000	10 cents	10 cents
7.5	+ 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	100,000		30 cents	30/09/05
	conversion factor)	800,000 N/A		30 cents	30/09/07
7.8	Issued during quarter
7.9	Exercised during quarter	51,250	51,250	20 cents	07/12/04
7.10	Expired during quarter	6,193,750		20 cents	07/12/04
7.11	Debentures (totals only)	N/A
7.12	Unsecured notes	N/A
	(totals only)

⁺ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{1}$ 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).
• $\overline{\mathcal{L}}$ This statement does give a true and fair view of the matters disclosed.

Sign here:

John Mawley

Date: 31 January 2005

(Executive Director)

Print name: John McCawley

Notes

• The quarterly report provides a basis for informing the market how the entity's $\mathbf{1}$ 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 $6.2$ .
• $\overline{3}$ 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.

$\frac{1}{2}$

⁺ See chapter 19 for defined terms.