Welcome and Introduction 2004 Annual General Meeting - 21 October 2004

Ladies and Gentlemen.

May I add my welcome to the Chairman's.

Lodestone has 502 shareholders, many of whom have been with us since we listed 18 months ago. Some of you have been with us even longer. We are grateful for this staunch support.

35 of our shareholders live in and around Mount Morgan, and another 70 live in other parts of Central Queensland.

This local presence encourages us, and adds to our determination to succeed.

Thank you for supporting the reappointment of John Shaw and Martin Ackland. These gentlemen have vast experience and remarkable achievements in the mining industry, and Lodestone is most fortunate to attract and maintain their interest, and to benefit from their expertise and judgement.

Eighteen months ago, when we listed, Lodestone tenements covered 600 sq kms in the Mount Morgan district, including 150 sq kms that were of particular interest.

Since then, we have added to our Mount Morgan tenement package and narrowed our search for another "Mount Morgan" to a 30 sq kms belt running south, southeast from the former Mount Morgan minesite.

We have 3 target zones within that belt.

In short, our work in the past twelve months has added to our prospective ground, narrowed our focus and made it much more likely that we will recognise prospective horizons within that ground. A rig is now onsite at the Mt Victoria epithermal gold target and drilling is imminent. The 1105 gravity target will be drilled immediately after Mt Victoria.

Lodestone's field office at Mount Morgan provides a convenient base for exploration south of Cracow, and east of Rockhampton: where have farmed into the Quadrio project.

Mark Dugmore, Lodestone's General Manager, will now make a technical presentation that has just been lodged with the Australian Stock Exchange, and can be seen on Lodestone's website: www.lodestonex.com

John Meadley

John McCawley Executive Director

Lodestone Exploration Limited Exploring the Mount Morgan metals region with advanced technologies Lodestone Exploration Limited GPO Box 762 Brisbane QLD 4001 Australia

Lodestone Exploration Limited

Exploring the Mount Morgan mineral province with advanced technologies

Annual General Meeting 21 October 2004

Introduction & Overview

Mount Morgan was historically Queensland's premier Gold mine, producing more than 9.5 million ounces
Traditionally, these types of deposits (VMS) occur in clusters
Lodestone is seeking similar deposits in the local area using advanced technologies under the wide spread cover rock in the target areas
$\bullet$ Lodestone now has exploration permits covering ~1700 sq.km in Central Queensland

Presentation Overview

Strategy & Objectives
Milestones / Exploration Work To Date
Future Programs

Mt Morgan - The Target

"....find another Mount Morgan VMS deposit"

9.5 million Oz gold produced
Average 5 g/t Gold
360,000 tonnes Copper
1.6 million Oz Silver
Gross Value
- $>$ A$6.4billion

World class gold-copper deposit

"Australia's premier VMS deposit"

De postilui de	AulGrade gyfri	Militon Ozam
1989 - Johann Stein, fransk politik formannsnafn
Kalgoorlie	4.3	54
Telfer	1.3	26
MountMorgan	5.0	G, Ç
Boddington	4	8.6
St Ives	3.7

Lodestone's Strategic Objectives

During the past year Lodestone has maintained its focus on the Mount Morgan area, with our four objectives continuing to be:

Discovering major gold and/or gold-copper deposits similar to ۰ Mount Morgan
Generating drill targets by using advanced exploration tools and concepts
Enhancing our strategic tenement holding in the Mount Morgan ۰ region. Assessing new opportunities in Central Queensland.
Maintaining, where possible, a tight capital structure intended to $\qquad \qquad \bullet$ maximise shareholder wealth in the event of exploration success

Portfolio

Mt Morgan Project • VMS/epithermal copper/gold
Bajool Project

IODESTONE

Intrusion-related gold (eg Kidston, Mt Leyshon)
Quadrio JV UMS/epithermal copper/gold
Cracow South Project High grade epithermal gold
Limestone Creek Project Sediment hosted gold

2004 Milestones

In line with strategic objectives, Lodestone achieved significant milestones during 2004:

Properly resourced our second year search
- Added to our knowledge, narrowed our focus, reinforced our hopes for success
Continued detailed assessment of 3 distinct Areas at Mt Morgan • Mt Morgan South, Mine Corridor & Mt Victoria-Mt Battery
← Drill targets were defined at Mt Morgan
- •1 gravity target & 2 geochemical targets confirmed for drilling
← Eight additional tenements were acquired in Central Queensland Covering >800 square kilometres that offers prospective geological targets

2004 Program Summary

DRILLING

Results advanced our understanding of local geology and provided data for refinement of ongoing programs

GEOPHYSICS

Ground gravity survey at Mt Morgan over $\sim$ 100 km2 identified 10 anomalies.

TARGET GENERATION & AREA ACQUISITION

Engaged consultants to progress new target generation in Central Qld
New tenement applications over 800 square Km
- $\cdot$ covering Mt Morgan and Mt Leyshon/Kidston type targets to the W, N and E of Mt Morgan.
- · Acquired Cracow South tenements, Quadrio JV and Mt Victoria farm-in

BHP BILLITON ALLIANCE

Strategic alliance with BHP Billiton on the Mount Morgan project

Mt Morgan Project & VMS Deposits

Mt Morgan Cross-Section

ALTERISTONE

Mt Morgan Regional Geology

Prior exploration restricted by overlying cover rocks and the prior limitations of exploration technology.

Mt Morgan Gravity Survey

Ground gravity survey over >100 sq.km south of Mt Morgan (inset)
10 anomalies

ACIDESTONE

Planned Drill testing of Main target ("1105")

Mt Victoria Prospect

Mineralised structure extends from Mt. Morgan mine to Mt Victoria (1.5km)
Previous Newcrest drilling intersected 30m averaging 0.26g/t gold (including 6m) @ 0.58 g/t gold). Upper intersection of 2m averaging 9.49 g/t gold.
Strong gold anomalies in rocks, soils & stream sediments surround area

Bajool Project

Intrusion-related gold targets
- Eg Kidston, Mt Leyshon
Area immediately east of Mt Morgan
A number of magnetic targets similar to Kidston/Mt Leyshon with associated gold anomalism
One area with strongly anomalous Cu & Zn adjacent to covered target
Targets are under Recent alluvium

Quadrio Joint Venture

JV with Dominion Mining Ltd.
Mt Chalmers was attractive Au-rich VMS orebody
- 250,000 ounces gold equivalent
Clusters of similar orebodies are possible
Past drilling effectively tested only 10% of prospective area
Main target is blind mineralisation close to prospective stratigraphy

AUDESTONE

Cracow South Project

Magnetic signature similar to Cracow deposit setting
Magnetics show alteration along faults
Covered by younger rocks therefore escaping effective previous exploration
30km south of Cracow Gold Mine Development
Potential for high-grade gold deposit

ATTESTONE

Image: colour TMI wetlook magnetics Lodestone tenements in pink outline Blue/Yellow squares: old gold workings

Limestone Creek Projecti

N. Queensland location
Sedimenthosted gold target in Chillagoe Formation
Silicified zones up to 20km length
Surface gold grades $<$ 1.3 $g/t$
No exploration since mid- $1990's$

ATTESTONE

LIMESTONE CREEK GEOLOGY

Future Work Planned - Next 12 months

• Mt Morgan Project

Drill test "1105" gravity target and Mt Victoria Gold Prospect; 800m
Fly detailed aeromagnetic survey in northern permits

• Quadrio Joint Venture

Refine 9 drillhole targets for drill testing: 1,200m
Surface stream, soil & rockchip geochemical sampling for gold

Cracow South Project

Fly detailed aeromagnetic survey
← Detailed aeromagnetic interpretation and target evaluation/selection
Solution Drill targets

Limestone Creek Project

Await permit grant
Surface sampling to define mineralised zones
rill best mineralised zones

AI assistant

PACIFIC RESOURCES LIMITED AGM Information 2004