PRODIGY GOLD NL — Interim / Quarterly Report 2005

Oct 30, 2005

AUSTRAILA $N₁$

QUARTERLY REPORT

For the 3 Months Ended 30 September 2005

HIGHLIGHTS

CORPORATE

Sale of gold assets to Accent Resources NL (ACS) completed for total consideration of \$1million and 7.5 million shares (19.3% of ACS).

Company announces a strategic review of operations.

OPERATIONS

Tantalum metal trial melt completed during July 2005 and material shipped to customer for quality analysis.

Processing of African sourced tantalum concentrates completed.

EXPLORATION

Drilling at Erayinia project was successful in that four holes, covering 200 metres of strike, made significant base metal intersections including:

ERC 14 7 metres of 4.38 % Zn, 0.28% Pb and 31 ppm Ag Incl. 1 metre of 8.40% Zn. 0.86% Pb. 93 g/t Ag and 0.16 g/t Au

31 October 2005

The Listing Manager Australian Stock Exchange Limited $10^{th}$ Floor 10 Bond Street Sydney NSW 2000

Dear Sir.

OUARTERLY REPORT FOR THE 3 MONTHS ENDED 30 September 2005

OPERATIONS

Africa

Negotiations continued with local suppliers of tantalum concentrates as part of the effort to establish a raw material supply chain. Discussions have commenced with one local partner regarding the establishment of a procurement joint venture whereby the local partner will focus on collection and purchasing while Tantalum Australia will focus on distribution and sales. Each party will fund their respective parts of the JV and share profits on a 50:50 basis after reimbursement of the respective costs.

Balcatta Mineral Dressing Facility

Processing of the first container (20 tonnes) of concentrates that commenced during June was largely completed by the end of the quarter. The processed material is being prepared for an independent assayer to complete weighing, sampling and assaying prior to provision of a quality certificate. On receipt of the certificate the material will be presented to customers for sale.

EXPLORATION & DEVELOPMENT

Tantalum

Meetings to advance discussions with tantalum industry participants on a range of issues were organised for the recently completed World Tantalum and Niobium General Assembly and Symposium held in Thailand 16-20 October 2005.

A program of milestone related metallurgical test work was prepared for the Brockman project. The first stage of the program has been approved subject to approval of a detailed program.

This metallurgical work will follow on from the gravity separation test work completed previously and will commence during the December quarter.

Base Metals

Erayinia

Exploration was initiated during the quarter by the completion of a short reverse circulation (RC) drilling program totalling 1012m in 10 drill holes (ERC 14 to 23; including one water bore, ERC 20, established to aid future diamond drilling) at the E1 anomaly.

The Erayinia project area is located about 150km east south east of Kalgoorlie, within an Archaean greenstone belt at the southeast margin of the Yilgarn Craton. Exploration carried out 13 to 14 years ago identified copper-zinc mineralisation in a possible volcanic-massive-sulphide (VMS) environment. The current exploration tested the concept with respect to lithology and base metal content. Massive sulphides were intersected in several drill holes targeted at E1 which is reflected by coincident, "bullseye" magnetic and electromagnetic anomalies about 400m long.

The RC drilling program was successful in that four holes, covering 200m of strike, made significant base metal intersections as listed below:

Hole ID	MGA North	MGA East	Declination	Azimuth	Total Depth	Down hole Interval (m)	Width (m)	$\mathbf{Zn}$ (%)	Рb (%)	Cu $( \% )$	Аg (g/t)	Au (g/t)
ERC 14	6538646	484569	60	270	140.	103-107	3.	0.66	0.10	0.13	7.0	0.11
						107-114	7	4.38	0.28	0.01	33.1	0.10
					incl	108-109		8.40	0.86	0.01	93.0	0.12
ERC 17	6538595	484543	60	270	120	103-106	3	2.19	0.27	0.03	18.7	0.04
ERC 21	6538742	484501	90		55	40-44	4	1.75	0.12	0.02	18.8	0.03
ERC 23	6538594	484510	90		153	134-151	18	0.38	0.07	0.17	5.8	0.18
						148-149		1.11	0.13	1.24	29	1.65

(1 metre samples - Au/Aq by aqua-regia/AAS, other by multi acid digest/ICP-OES)

A detailed announcement was released on 29 September 2005 outlining the results of the drilling campaign. An RC program of approximately 1000 metres to test along-strike and downdip of these intersections is planned for the December quarter.

Gold

The sale of the company's Norseman (not including the Norseman plant and site). Meekatharra. Mt Gibson and Clermont gold projects to Accent Resources NL was completed. TAA received the balance (\$0.75 million) of the cash consideration of \$1 million and was issued 7.5 million shares (escrowed for 12 months, representing a 19.3% shareholding) in Accent. Accent was listed on the ASX (Code: ACS) on Friday 26 August 2005.

BUSINESS DEVELOPMENT

The first trial melt of tantalum metal was completed by the company's metal customer and super alloy was shipped to the end user customer for quality analysis. Results of the qualification program with this material are expected in the December Quarter. Further trial melts are planned by the company's metal customer with the remaining tantalum metal supplied by the company.

STRATEGIC REVIEW

The company announced on 12 October 2005 it was undertaking a strategic review of the company's business in Australia and Africa. The key change was the appointment of Imants Kins as Managing Director. Michael Fotios will continue in a consulting role. In addition Peter Farrah stepped down as Company Secretary to focus on his position as Managing Director of Accent Resources NL. The Chairman, Timothy King assumed the additional duties of Company Secretary. Outcomes of the review are expected to be announced in the December Quarterly report.

CORPORATE

During the quarter the following ASX announcements were released regarding the Company's projects:

6 July 2005	Entitlement Issue
25 July 2005	Change of Director's Interest Notice
25 July 2005	Becoming a Substantial Shareholder
25 July 2005	Change of Director's Interest Notice
25 July 2005	Becoming a Substantial Shareholder
25 July 2005	Appendix 3B
25 July 2005	Issue of Securities Without a Disclosure Document
29 July 2005	Fourth Quarter Activities & Cashflow Report
22 August 2005	Sale of Gold Assets to Accent Resources NL
29 September 2005	Erayinia JV Drilling Results
29 September 2005	Competency Statement - Drilling Results at Erayinia Project

3 October 2005	2005 Annual Financial Report
12 October 2005	Strategic Review of Operations
12 October 2005	Final Director's Interest Notice
18 October 2005	Initial Director's Interest Notice
27 October 2005	2005 Annual Report
27 October 2005	Notice of 2005 Annual General Meeting

Yours faithfully,

Imants Kins Managing Director

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.

Name of entity

TANTALUM AUSTRALIA NL

ACN or ARBN

A.C.N. 009 127 020

Quarter ended ("current quarter")

30 September 2005

1. Consolidated statement of cash flows

			Current quarter	Year to date
	Cash flows related to operating activities		\$A'000	(3 months)
				\$A'000
1.1		Receipts from product sales and related debtors -	$\overline{38}$	38
	Receipts from product sales - prepaid
1.2	Payments for	(a) exploration and evaluation	(327)	(327)
		(b) development & R&D	(197)	(197)
		(c) production	(239)	(239)
		(d) administration & corporate	(498)	(498)
1.3	Dividends received
1.4		Interest and other items of a similar nature received	13	13
1.5	Interest and other costs of finance paid		(3)	(3)
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net operating cash flows		(1213)	(1213)
	Cash flows related to investing activities
1.8	Payment for purchases of:	(a) prospects
		(b) equity investments
		(c) other fixed assets	(14)	(14)
1.9	Proceeds from sale of:	(a) prospects	834	834
		(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)
	Net investing cash flows		820	820
1.13	forward)	Total operating and investing cash flows (carried	(393)	(393)

Appendix 5B Form

31/10/05

• See chapter 19 for defined terms.

		\$A'000	(3 months)
			\$A'000
1.13	Total operating and investing cash flows (brought forward)	(393)	(393)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	1193.	1193
1.15	Proceeds from sale of forfeited shares
1.16	Payment for borrowings/environmental bonds
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (provide details if material)	(83)	(83)
	Net financing cash flows	1111	1111
	Net increase (decrease) in cash held	718	718
1.20	Cash at beginning of quarter/year to date	175	175
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	893	893

Current quarter

ı

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

• $1.23$ Aggregate amount of payments to the parties included in item 1.2
• 1.24 Aggregate amount of loans to the parties included in item 1.10
• 1.25 Explanation necessary for an understanding of the transactions $1.19$ = Share issue expenses

2. 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 In the quarter ending 30 September 2005 the directors or the company proceeded with a debt to equity conversion for a total amount of \$ 425 959 as part of the underwriting agreement in relation to a non-renounceable rights issue capital raising by the company.
• $2.2^{\circ}$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Year to date

3. 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

4. Estimated cash outflows for next quarter

4.1	Exploration and evaluation	\$A'000 125
4.2	Development	50
	Total	175

5. Reconciliation of cash

accounts is as follows.	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the	Current quarter \$A'000	Previous quarter \$A'000
5.1	Cash on hand and at bank	893	175
5.2	Deposits at call
5.3	Bank overdraft
5.4 Other (provide details)
	Total: cash at end of quarter (item 1.22)	893	175

6. 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	Refer attached
6.2	Interests in mining tenements acquired or increased	Refer attached

Appendix 5B Form

⁺ See chapter 19 for defined terms.

1. 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 3) (cents)	Amount paid up per 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,	120, 112, 228	120, 112, 228	1.5 cents	$1.5$ cents
	redemptions
7.3	+Ordinary securities	405,949,730	405,949,730
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs
7.5	+Contributing shareas(description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options (description and conversion factor)
7.8	Issued during quarter
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Appendix 5B Form

⁺ 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 Law 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:

....................................... (Company Secretary)

Date: 31 October 2005

Print name: Timothy King

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.
• $\mathcal{L}$ 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.
• The definitions in, and provisions of, AASB 1022: Accounting for Extractive $4.$ Industries and AASB 1026: Statement of Cash Flows apply to this report.
• $\mathcal{L}_{\mathcal{L}}$ 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.

SUMMARY OF MINING TENEMENTS AND AREAS OF INTEREST

Note 6

FOR THE QUARTER ENDED 30 September 2005

Areas of interest	Tenements	Economic Entity's	Joint Venture Partners
		Interest
WESTERN AUSTRALIA
Broads Dam	G16/11	100	Kinross Option
	G16/12	100	Kinross Option
	G16/13	100	Kinross Option
	G16/14	100	Kinross Option
	M16/88	100	Kinross Option
Dalgaranga	M59/106	100
	MLA59/553	100
	MLA59/554	100
Norseman	L63/46	100
	M63/172	100
Binneringie	M15/217	100
	M15/468	100
Mt Deans	P63/758	100
	P63/945	100
	P63/946	100
	P63/947	100
	P63/948	100
	P63/949	100
	P63/950	100
	MLA63/397	100	Formerly P63/740,741,758
	MLA63/513	100	Formerly P63/945 - 950
	MLA63/541	100	Formerly P63/1074,1075
Gascoyne	ELA09/1136	100
	ELA09/1137	100
	M09/62	100
	M09/75	100
	EL09/1047	100
	PLA09/417	100
Brockman	MLA80/509	78	Brockman Minerals Pty Ltd and Aztec
	MLA80/510	78	Resources Limited
ERAYINIA	E28/912	$\pmb{0}$	Great Gold Mines NL
	E28/1228	$\overline{0}$	Great Gold Mines NL