SABRE RESOURCES LTD A.C.N. 003 043 570

NOTICE OF GENERAL MEETING

$-$ and $-$

EXPLANATORY STATEMENT

Including the Expert's Report of Stanton Partners Corporate Pty Ltd and Independent Geologist's Report and Valuation of the Gnamma Dam Nickel Project Prepared by Malcolm Castle

$-$ and $-$

PROXY FORM

The Independent Expert has concluded the proposal the subject of Resolution 1 is fair and reasonable to the non-associated shareholders of the Company

DATE AND TIME OF MEETING: Friday, 29 April 2005 at 2:00pm

VENUE: Presidents Room, The Celtic Club, 48 Ord Street, West Perth WA 6005

These documents should be read in their entirety. If shareholders are in any doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional advisor.

SABRE RESOURCES LTD A.C.N. 003 043 570

Notice of Meeting
Explanatory Statement
Proxy Form .
Schedule 1: Expert's Report of Stanton Partners Corporate Pty Ltd
Schedule 2: Independent Geologist's Report and ValuationOf the Gnamma Dam Nickel Prospect

SABRE RESOURCES LTD A.C.N. 003 043 570 NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of Members of Sabre Resources Ltd, will be held at the Celtic Club Inc, 48 Ord Street, West Perth, Western Australia on Friday, 29 April 2005 at 2:00pm.

An Explanatory Statement containing information in relation to each of the following Resolutions accompanies this Notice of General Meeting.

AGENDA

ORDINARY BUSINESS OF THE MEETING

$\mathbf{1}$ . Acquisition of the Gnamma Dam Nickel Project.

To consider and if thought fit to pass the following resolution as an ordinary resolution:

"That for the purposes of ASX Listing Rules 7.1 and 10.1 and Section 611 Item 7 of the Corporations Act and all other purposes the Company approves and agrees to:

the acquisition by the Company of Gnamma Dam Nickel Project in consideration for the issue to Coniston a) Pty Ltd ("Coniston") of a total of 1,500,000 ordinary fully paid shares in the Company ("Shares") and 3,500,000 options to acquire ordinary fully paid shares in the Company on or before 30 June 2006 at 10 cents each ("Options") together with a cash payment of $15,000 for reimbursement of previous expenditure:
b) the Directors issuing and allotting to Coniston the 1,500,000 Shares and 3,500,000 Options referred to in paragraph (a):
c) the acquisition by Coniston and its associates (as described in the Explanatory Statement accompanying this Notice of Meeting) by way of allotment referred to in paragraph (b) of the 1,500,000 Shares; and
d) the acquisition by Coniston and its associates (as described in the Explanatory Statement accompanying this Notice of Meeting) of a further 3.500.000 Shares on exercise of the 3.500.000 Options referred to in paragraph (b).

in each case on the terms and conditions more particularly described in the Explanatory Statement accompanying this Notice of Meeting."

NOTES

1. No votes can be cast on Resolution 1 by Coniston or any associates of Coniston.
Further details of the above acquisitions are set out in the Explanatory Statement accompanying this Notice of Meeting. $\overline{2}$ including further information required to be disclosed to shareholders under Australian Securities & Investments Commission Policy Statement 74 and the Listing Rules of Australian Stock Exchange Limited.
1. Shareholders are urged to read the Independent Expert's Report prepared by Stanton Partners Corporate Pty Ltd which report is attached to the Explanatory Statement accompanying this Notice of Meeting. The Independent Expert has concluded that the proposal the subject of Resolution 1 is fair and reasonable to the non-associated shareholders of the Company

BY ORDER OF THE BOARD

B R McCullagh COMPANY SECRETARY 21 March 2005

SABRE RESOURCES LTD A.C.N. 003 043 570 EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of Shareholders of Sabre Resources Ltd ("Company") in connection with Resolution 1 of the Meeting of Members to be held at the Celtic Club Inc, 48 Ord Street, West Perth, Western Australia on Friday, 29 April 2005 at 2:00pm.

An Independent Expert's Report prepared by Stanton Partners Corporate Pty Ltd comments on whether the proposal the subject of Resolution 1 is fair and reasonable to the non-associated shareholders of the Company.

Shareholders should note that Stanton Partners Corporate Pty Ltd has concluded that the proposal the subject of Resolution 1 is fair and reasonable to the non-associated shareholders of the Company.

The Directors recommend that shareholders read this Explanatory Statement and the Independent Expert's Reports in full before making any decision in relation to the Resolution.

This Explanatory Statement should be read in conjunction with the accompanying Notice of Meeting. Please refer to Page 9 of this Explanatory Statement for a Glossary of Terms.

Resolution 1 - Acquisition of Gnamma Dam Nickel Project

Introduction

On 25th February 2005 the Company announced that it had agreed to purchase the Gnamma Dam Nickel Project from Coniston Pty Ltd ("Coniston") for a consideration comprising 1.500,000 fully paid ordinary shares in the capital of the Company ("Shares") and 3,500,000 options to acquire Shares, each with an exercise price of 10 cents and an expiry date of 30 June 2006 ("Options") and a cash payment of $15,000.

Resolution 1 seeks shareholder approval for the acquisition, the issue of the Shares and Options, and the Cash Payment.

The Project

The Gnamma Dam Project is located approximately 26 kilometres to the east of Kalgoorlie. The Project consists of fourteen prospecting licences (P25/1766 to P25/1775 and P25/1783 to P25/1786) that straddle the Bulong Road and include the Hampton Hill Homestead (see Location Plan). A compilation of historical geological mapping and aeromagnetic interpretations indicates that the tenements overlie a sequence of ultramafic, mafic and volcanogenic sediments (Figure 1).

The ultramafic stratigraphy is mapped as a komatiitic sequence and is interpreted to be the same stratigraphy that hosts the Duplex Hill and Blair nickel sulphide mines to the south. The tenements cover over seven kilometres of strike of this komatiitic sequence, and the limited historical exploration data shows elevated surface nickel geochemistry.

A review of the historical open file data shows that the project area has only had cursory exploration for nickel. In the 1970's and early 1980's various groups, including Seltrust Mining Corporation and WMC Resources, conducted geological mapping & reconnaissance sampling.

WMC Resources also undertook a program of shallow drilling on its 'Virgin Dam' project, which overlapped the northeastern corner of the current project area. This drilling intersected a number of anomalous zones of mineralisation within the regolith, with grades up to 0.74% nickel.

A number of groups, including Archaean Gold and Asian Mining, explored the project area in the late 1980's through to the 2002, with the focus of their work being gold and volcanogenic massive sulphide (VMS) mineralisation (namely copper, zinc & lead); this exploration data has been digitally compiled to assist in the future exploration of the project.

Asian Mining NL undertook wide spaced, multi-element soil sampling in 1994 as part of their gold exploration program and while this sampling program did not cover the basal ultramafic stratigraphy within the project area, the results did record elevated nickel values of up to 800 ppm nickel on the eastern side of the project area.

Once the acquisition is approved by shareholders the Company will commence initial field work including an infill and extensional soil sampling program to further test the project area for its nickel potential, followed by geophysical surveys and drill testing of any targets delineated.

Further details of the project are set out in the Independent Geologists Report attached as Schedule 2 to this Explanatory Statement.

The acquisition and payment of the consideration is subject to shareholder approval. Resolution 1 seeks shareholder approval for the acquisition and the issue of the 1,500,000 Shares and 3,500,000 Options, and the reimbursement of $15,000 for previous expenditure on the Project, to Coniston.

ASX Listing Rule 7.1

Shareholder approval is being sought pursuant to Listing Rule 7.1 for the issue of the 1,500,000 Shares and 3,500,000 Options. This Rule generally prohibits a company from issuing more than 15% of its share capital within a 12 months period without shareholder approval. Listing Rule 7.3 specifies that certain information be provided to shareholders in respect of such approval.

Information required by ASX Listing Rule 7.3 for the purposes of shareholder approval under ASX Listing Rule 7.1 is provided below:

$\mathbf{1}$ . The maximum number of securities to be issued under Resolution 1 is 1,500,000 Shares in the Company and 3,500,000 Options to acquire Shares in the Company;
$2.$ The securities will be issued within 10 days after the date of the Meeting;
1. The Shares are to be issued at a deemed issue price of 12.5 cents each and the options issued at a deemed price of 1 cent each;
The 1,500,000 Shares and 3,500,000 Options are to be issued to Coniston; 4.
1. The Shares to be issued are fully paid ordinary shares which will, from their date of allotment, rank pari-passu in all respects with all other fully paid ordinary shares in the Company then on issue. The terms of the options are set out in Annexure A to this Explanatory Statement;
1. There are no funds to be raised by the issue; and
$\overline{L}$ The Shares and Options will be allotted within 10 days after the date of the Meeting.

ASX Listing Rule 10.1

Shareholder approval is also being sought pursuant to Listing Rule 10.1 for this transaction.

ASX Listing Rule 10.1 requires a company to obtain prior shareholder approval before acquiring a substantial asset (representing more than 5% of the equity interests of the Company) from a substantial holder or an associate of a substantial holder. The acquisition of the Gnamma Dam Nickel Project from Coniston involves such an acquisition from an associate (Coniston) of a substantial holder ("KMM").

ASX Listing Rule 10.10.2 requires that the Company provide an independent expert's report addressing whether the transaction the subject of shareholder approval under ASX Listing Rule 10.1, is fair and reasonable to disinterested shareholders. The report prepared by Stanton Partners Corporate Pty Ltd and included as Schedule 1 to the Notice of Meeting is provided to Shareholders for this purpose. An independent geologist's report and valuation of the Gnamma Dam Nickel Project prepared by Malcolm Castle is included as Schedule 2.

Escrow of Consideration Shares and Options

ASX has ruled that the shares and options to be issued to Coniston will be classified as restricted securities and will be held in escrow for a period of 12 months from the later of the date of issue or when ASX receives both a restriction agreement and written confirmation from the share registry that a holding lock will be placed on the restricted securities.

Section 611 Item 7 of the Corporations Act

Shareholder approval is also being sought pursuant to Section 611 Item 7 of the Corporations Act.

Pursuant to Section 606(1) of the Corporations Act, an entity must not acquire a relevant interest in issued voting shares in a listed company if the entity acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the entity and because of the transaction, that entity's or another's voting power in the company increases:

from 20% or below to more than 20%; or a)
b) from a starting point above 20% and below 90%.

The voting power of an entity in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of an entity's voting power in a company involves determining the voting shares in the company in which the entity and the entity's associates have a relevant interest.

An entity has a relevant interest in securities if it:

a) is the holder of the securities;
b) has the power to exercise, or control the exercise of, a right to vote attached to securities; or
c) has the power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more entities can jointly exercise one of these powers, each of them is taken to have the power.

There are various exceptions to the prohibition in section 606, including under section 611 item 7 of the Corporations Act. Section 611 item 7 provides an exception to the prohibition in section 606, in circumstances where the shareholders of the company approve an acquisition of shares by virtue of an allotment or acquisition at a meeting at which no votes are cast by parties involved in the proposed acquisition, including their associates.

Pursuant to the terms of the Acquisition Agreement, the Company has agreed (subject to shareholders approval) to allot and issue a total of 1,500,000 shares and 3,500,000 Options to Coniston. An associate of Coniston, KMM currently holds 1,300,000 Shares representing 6.6% of the voting power of the Company and Mr James del Piano currently holds 970,020 Shares representing 4.9% of the voting power of the Company. Mr del Piano controls both Coniston and KMM.

Shareholder approval under Item 7 of Section 611 of the Corporations ACT is required for the issue of 1,500,000 Shares to, and the exercise of 3,500,000 Options by Coniston because Coniston and its associates will acquire a relevant interest in those Shares, which along with the interest of KMM and Mr Del Piano will be in excess of 20% of the issued capital of the Company.

The following information is required to be provided to shareholders under ASIC Policy Statement 74. Shareholders are also referred to the Independent Expert's Report prepared by Stanton Partners Corporate Pty Ltd. which forms part of this Explanatory Statement.

For the purposes of Item 7 of Section 611 of the Corporations Act and Policy Statement 74, the following information is disclosed:

The identity of the acquirer is Coniston. Coniston is a private company, controlled by Mr James del a) Piano, which invests in listed securities and property. It also has mineral exploration interests in Western Australia.

KMM, an associate of Coniston is also controlled by Mr del Piano. KMM provides management services to public companies and invests in listed companies.

Mr James del Piano, LLB, is a private investor in property and listed securities with over 25 years experience investing in the mining industry.

b) Coniston currently directly holds no Shares or Options in the Company. KMM and Mr del Piano, associates of Coniston currently directly hold 1,300,000 Shares and 970,020 Shares respectively representing 6.6% and 4.9% of the voting power of the Company. If the 1,500,000 Shares are issued to Coniston, Coniston will directly hold 7.06% of the voting power of the Company and Coniston, KMM and Mr del Piano will hold a relevant interest in 17.73% of the voting power of the Company. If the 3,500,000 Options are exercised by Coniston and assuming no other Options are exercised, Coniston will directly hold 20.20% of the voting power of the Company and KMM, Coniston and Mr del Piano will hold, in total a relevant interest in 29.37% of the voting power of the Company. The relevant interest of the parties are discussed in further detail in Section 2 of the Experts Report.

c) There are no new proposed directors as a result of the proposed transaction.
ď) Future intentions of the Acquirers for Sabre Resources Ltd

The Company understands Coniston and its associates have the following intentions for the Company:

D. It will remain in the resource exploration industry.
ii) The current Board of Directors; Messrs DN Zukerman, A Clemen and B McCullagh will continue and at this time there is no intention to increase the Board.
iii) it will maintain its gold exploration activities in Western Australia and upon approval of the Gnamma Dam Nickel Project will commence initial field work including an infill and extensional soil sampling program to further test the project area for its nickel potential, followed by geophysical surveys and drill testing of any targets delineated.
At this time it is not intended to inject further capital into the Company. iv)
The Company has no employees but engages consultants when required. Coniston and its V) associates intend to maintain this policy.
It is not the intention of Coniston or its associates to change significantly the financial or $Vi$ dividend policies of the Company.
It is not the intention of Coniston or its associates to re-deploy any assets or property of the vii) Company.
e) Allotment of the Shares and Options is to be effected within 10 days of Shareholders approval.
f) The Directors of the Company have no interest in the outcome of the proposed issue of Shares and Options to Coniston.
g) The Directors of the Company have commissioned Stanton Partners Corporate Pty Ltd to prepare a report on the question of whether the proposal is fair and reasonable to shareholders not associated with Coniston and its associates. An Independent Geologist's Report and Valuation prepared by Malcolm Castle has also been commissioned. Those reports are attached to this Explanatory Statement. Shareholders are urged to read the Independent Expert's Report and Independent Geologist's Report and Valuation.
The Directors intend to vote and cause their associates to vote in favour of Resolution 1. h)
i) No votes can be cast on Resolution 1 by Coniston or its associates.

Financial Effect of the Acquisition

a) Proforma Capital Structure

Set out below is a proforma capital structure of the Company taking into account the transaction contemplated by Resolution 1.

Shares currently on issue	19,754,851
Shares to be issued to Coniston pursuant to Resolution 1	1,500,000
Total	21,254,851
OptionsOptions on issueOptions to be issued to ConistonTotal	17,500,0003,500,00021.000.000

The options are exercisable @ 10c before 30 June 2006.

b) Proforma Statement of Financial Position (as contained in the Independent Expert's Report)

Set out below is an unaudited Statement of Financial Position of Sabre as at 31 December 2004, adjusted for the capital raising of $270,000 in February 2005 and allowing for administration costs for the two months ended 28 February 2005 estimated at $45,000, along with a pro-forma Statement of Financial Position assuming the following:

The acquisition of Gnamma Dam from Coniston by way of an issue of 1,500,000 shares at 12.0 cents $\blacksquare$ each (and 3,500,000 share options at a deemed value of $208,950) plus the reimbursement of $15,000 to Coniston; and
$\bullet$ Assuming the incidental acquisition costs of Gnamma Dam are $20,000 but are expensed.

	Sabre31 December (asadjusted) 2004$'000's	Pro-forma31 December2004
		$000's
Current AssetsCash	273	238
Receivables	4	4
	277	242
Non Current Assets
Capitalised exploration costs		404
		404
Total Assets	277	646
Current Liabilities
Payables	20	20
Provisions
Total Liabilities	20	20
Net Assets	257	626
Equity
Contributed Equity	14,877	15,057
Share option reserve	95	304
Accumulated losses	(14, 715)	(14, 735)
Net Equity	257	626

Independent Expert's Report

Additional information relevant to the proposed acquisition is contained in the Independent Expert's Report attached as Schedule 1 to the Explanatory Statement and the Independent Geologist's Report and Valuation attached as Schedule 2 to the Explanatory Statement.

Conclusion and Directors' Recommendation

All the current Directors are considered independent for the purposes of Resolution 1, as they do not have any personal interest in the outcome of that resolution. They have the same interest as other non-associated shareholders in the Company to the extent that they, or companies associated with them, hold shares in the Company.

The Directors are unanimously of the opinion that the proposed transaction is in the best interests of the Company and its shareholders and accordingly recommend that shareholders vote in favour of Resolution 1.

The Directors recommendation that you vote in favour of Resolution 1 is based on the following reasons:

The Independent Geologist believes the Gnamma Dam Project would be well regarded by a $\bullet$ prospective purchaser/investor as it represents a project with good potential to discover further mineralisation. Recent exploration has confirmed the presence of gold and base metal mineralisation anomalous zones that require further drill testing at depth.
Additionally, nickel potential in the ultramafic units has been recognised and evidence of sulphides has been observed in bedrock outcrops but no significant exploration for this commodity has yet been carried out.
The independent expert has concluded that the transaction is fair and reasonable to the nonassociated shareholders.

ANNEXURE 'A'

SABRE RESOURCES LTD TERMS AND CONDITIONS OF OPTIONS

The terms and conditions of the Options are as follows:

A certificate will be issued for the Options. $(a)$
$(b)$ The Options shall expire on 30 June 2006 ("Expiry Date").
Subject to paragraph (f), the Option is a right in favour of the option holder to subscribe for one fully paid ordinary share in the $\langle 0 \rangle$ capital of the Company ("Share").
$(d)$ Shares allotted to option holders on exercise of the Options shall be issued at a price of 10 cents each ("Exercise Price").
$(e)$ The Exercise Price of Shares the subject of the Options shall be payable in full on exercise of the Options.
(f) Options shall be exercisable by the delivery to the registered office of the Company of a notice in writing stating the intention of the option holder to:
- (ii) exercise all or a specified number of the Options: and
- (ii) pay the subscription monies in full for the exercise of each Option.

The notice must be accompanied by an Option certificate and a cheque payable to the Company for the subscription monies for the Shares. An exercise of only some Options shall not affect the rights of the option holder to the balance of the Options held by him.

$(g)$ The Company shall allot the resultant Shares and deliver the share certificate or holding statement within five business days of the exercise of the Option.
$(h)$ Options may, if the Company so decides (in its sole discretion), be listed for official quotation on ASX.
$(i)$ The Options shall be freely transferable.
0 Shares allotted pursuant to an exercise of Options shall rank, from the date of allotment, equally with existing ordinary fully paid Shares of the Company in all respects.
$(k)$ The Company shall in accordance with the Listing Rules make application to have Shares allotted pursuant to an exercise of Options listed for official quotation.
(f) In case of any entitlements issue (other than bonus issue) the Exercise price of the Option may be reduced according to the following formula: $\alpha$

$$ = O \qquad \frac{-E[P - (S + D)]}{N + 1} $$

the new Exercise Price of the Option. $\mathcal{O}^*$ $\equiv$
$\mathcal{O}$ the old Exercise Price of the Option. $\equiv$
$\mathsf{E}% _{T}$ the number of underlying securities into which one Option is exercisable.
p the average market price per share (weighted by reference to volume) of the underlying securities during the 5 $\equiv$ trading days ending on the day before the ex rights date of ex entitlement date.
$\mathbb S$ the subscription price for a security under the pro rata issue. $\equiv$
D the dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata $\equiv$ issue).
N $\equiv$ the number of securities with rights or entitlements that must be held to receive a rights to one new security.

In the case of a bonus issue the number of Shares over which the Option is exercisable may be increased by the number of Shares which the option holder would have received if the Option has been exercised before the record date for the bonus issue. The Company shall notify the ASX of the adjustments in accordance with the Listing Rules.

In the event of any reconstruction (including consolidation, subdivisions, reduction or return) of the authorised or issued capital of $(m)$ the Company, the number of the Options or the exercise price of the Options or both shall be reconstructed (as appropriate) in accordance with the Listing Rules.
The Options will not give any right to participate in dividends until Shares are allotted pursuant to the exercise of the relevant (n) Options.
$(0)$ The Options do not give any right to participate in new issues unless the option holder exercises the Option.

SABRE RESOURCES LTD A.C.N. 003 043 570 GLOSSARY OF TERMS

In this Explanatory Statement:

"ACN"	Australian Company Number
"ASIC"	Australian Securities and Investments Commission
"ASX"	Australian Stock Exchange Limited (ACN 008 624 691)
	"ASX Listing Rules" or "Listing Rules" The Official Listing Rules of ASX as amended from time to time.
"Company"	Sabre Resources Ltd (A.C.N. 003 043 570)
"Corporations Act"	The Corporations ACT 2001 (Commonwealth)
"Director"	A director of Sabre Resources Ltd.
"Experts Report"	The report dated March 2005 by Stanton Partners Corporate Pty Ltdwhich is annexed to this Explanatory Statement.
"Notice of Meeting"	The notice convening the Meeting, which accompanies thisExplanatory Statement.
"Option"	An option to subscribe for a Share at an exercise price of 10 centsper Share on or before 30 June 2006 and otherwise on the terms setout in Annexure "A" to this Explanatory Statement.
"Resolution"	Resolution in the Notice of Meeting.
"Share"	A fully paid ordinary share in the capital of the Company.
"Shareholder"	The registered holder of a Share in the Company.

SABRE RESOURCES LTD A.C.N. 003 043 570 FORM OF PROXY

Facsimile No: 08-94817835

The Secretary, Sabre Resources Ltd 1st Floor, 8 Parliament Place, WEST PERTH WA 6005

I/We, , , , , , , , , , , , , , , , , , , of.................................... shares in the capital of Sabre Resources Ltd hereby appoint being a holder of ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, of ....................................

or failing him, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the General Meeting of the Company to be held on Friday, 29 April 2005 and at any adjournment thereof, in the manner indicated below, or in the absence of indication as he or she thinks fit.

A statement of the Chairman's voting intentions in relation to undirected proxies.

If you do not wish to direct your proxy how to vote, please place a mark in the box. $\Box$

By marking this box you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

The Chairman intends to vote for the resolutions.

Ordinary Business

Approval issue of Shares and Options - Coniston	For □	Against ロー	Abstain □

(Shareholders to indicate by a tick in the box above how a proxy holder is to vote in respect of the above resolutions).

Signed by the said member this	day of	2005.
Shareholders Signature	Witness
or
The Common Seal of the memberwas hereunto affixed in accordancewith its Constitution	Director
	Director Secretary

Attendance and Voting Eligibility

For the purposes of the meeting, securities will be taken to be held by the persons who are registered holders at 2:00pm on Wednesday, 27 April 2005. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Proxies

A member of the Company entitled to attend and vote at the meeting shall be entitled to appoint not more than two other persons (whether members of the company or not) as the member's proxy or proxies, to attend and vote on the member's behalf. Where two proxies are appointed the appointments shall be of no effect unless each proxy is appointed to represent a specified proportion of the member's voting rights. Forms of proxy must be deposited at the registered office of the company in Perth not less than forty-eight (48) hours before the time appointed for the holding of the meeting.

Schedule 1

Expert's Report of Stanton Partners Corporate Pty Ltd

STANTON PARTNERS CORPORATE PTY LTD

A.C.N 063 036 331 1 HAVELOCK STREET WEST PERTH 6005 WESTERN AUSTRALIA

TELEPHONE: (08) 9481 3188 FACSIMILE: (08) 9321 1204

e-mail: [email protected]

14 March 2005

The Directors Sabre Resources Limited Level 1 8 Parliament Place WEST PERTH WA 6005

Dear Sirs

Re: SABRE RESOURCES LIMITED ("SABRE" OR "COMPANY") (ACN 003 043 570) ON THE PROPOSAL TO ACQUIRE THE GNAMMA DAM GOLD-NICKEL PROJECT IN AUSTRALIA FROM CONISTON PTY LTD PURSUANT TO LISTING RULE 10.1 AND SECTION 611 (ITEM 7) OF THE CORPORATIONS ACT 2001

$\mathbf{1}$ . Introduction

$1.1$ We have been requested by the Directors of Sabre to prepare an Independent Expert's Report to determine the fairness and reasonableness relating to the proposal to issue shares and options for Sabre to acquire the Gnamma Dam Gold-Nickel Project ("Gnamma Dam") (14 Prospecting licenses) near Kalgoorlie Western Australia as noted below and in resolution 1 in the Notice of Meeting of Shareholders and Explanatory Statement to Shareholders of Sabre of March 2005.
$1.2$ It is proposed that Sabre will acquire a 100% interest in Gnamma Dam from Coniston Pty Ltd ("Coniston"), a company that is associated and controlled by Mr Jim Del Paino ("Del Piano") and is associated with Kalgoorlie Mine Management Pty Ltd ("KMM")(controlled by Del Piano), a substantial shareholder of Sabre. For the purpose of this report the proposed acquisition is known as the Proposed Transaction.

The purchase consideration payable to Coniston by Sabre is:

$\blacksquare$ 1,500,000 shares in Sabre;
3,500,000 options in Sabre, exercisable at 10 cents each on or before 30 June 2006; and
$\bullet$ the payment of $15,000.

On 25 February 2005, Sabre entered into a contract with Coniston to acquire Gnamma Dam on the terms noted above.

$1.3$ For the purposes of Listing Rule 10.1, a substantial shareholder is defined as a person and a person's associates who had a relevant interest prior to the Proposed Transaction of at least 10% of the voting shares of the Company. At the date of this report Coniston Pty Ltd ("Coniston") owns nil% of the ordinary shares in Sabre. Coniston is a company controlled by Mr J Del Piano who also controls KMM. KMM and Del Piano combined own 2.270,020 shares in Sabre representing approximately 11.49% of the issued shares in Sabre. Furthermore, KMM provides administrative and management services to Sabre. We have been advised that Coniston and KMM are deemed related parties and act in concert with each other.

Under Section 606 of The Corporations Act ("TCA"), a person must not acquire a relevant interest in issued voting shares in a company if because of the transaction, that persons or someone else's voting power in the company increases:

From $20%$ or below to more than $20%$ ; or $(a)$
$(b)$ From a starting point that is above 20% and below 90%.

Under Section 611 (Item 7) of the TCA, Section 606 does not apply in relation to any acquisition of shares in a company approved by resolution passed at a general meeting at which no votes were cast in favour of the resolution by the acquirer or the disposer or their respective associates. An independent expert is required to report on the fairness and reasonableness of the transaction pursuant to a Section 611 (Item 7) meeting.

If the Gnamma Dam acquisition proceeds, Coniston and KMM combined will control approximately 17.74% of the issued capital of Golden Deeps. However, if only Coniston exercises its share option $(3,500,000)$ to be issued pursuant to the acquisition) and no other share issues are made, Coniston and KMM combined may increase their shareholding in Sabre to approximately 29.37%. For the purposes of this report we have referred to Coniston and KMM as the Coniston Group.

Therefore a notice prepared in relation to a meeting of shareholders convened for the purposes of Listing Rule 10.1 and Section 611 (Item 7) of TCA must be accompanied by an Independent Expert's Report stating whether the Proposed Transaction noted under resolution 1 is fair and reasonable. To assist shareholders in making a decision on the Proposed Transaction, the directors have requested that Stanton Partners Corporate Pty Ltd prepare an Independent Expert's Report, which must state whether, in the opinion of the Independent Expert, the Proposed Transaction is fair and reasonable to the non-associated shareholders of Sabre (not associated with the Coniston Group).

$1.5$ Apart from this introduction, this report considers the following:
- Summary of opinion
- Implications of the proposals ۰
- Corporate history and nature of business of Sabre
Future direction of Sabre
Basis of valuation of Sabre shares and options $\bullet$
Value of consideration $\bullet$
Basis of valuation of Gnamma Dam ٠
Conclusion as to fairness
Reasonableness of the offer $\bullet$
Conclusion as to reasonableness
Sources of information
Appendix A and Financial Services Guide
1.6 In determining the fairness and reasonableness of the Gnamma Dam acquisition, we have had regard for the definitions set out by the Australian Securities and Investments Commission ("ASIC") in its Policy Statements 75 and 74. Policy Statement 75 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price and the value that may be attributed to the securities under offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness). Policy Statement 74 states that, where an acquisition of shares by way of an allotment is to be approved by shareholders pursuant to Section 611 (Item 7) of TCA, it is desirable to commission a report by an independent expert stating whether or not the proposal is fair and reasonable, having regards to the proposed allottee (in this case Coniston) and whether a premium for potential control is being paid by the allottee.

Accordingly, our report relating to the issue of shares and options to Coniston as part of the Gnamma Dam acquisition is concerned with the fairness and reasonableness of the proposals with respect to the existing non-associated shareholders of Sabre (not associated with the Coniston Group) and whether the Coniston Group is paying a premium for potential control.

1.8 In our opinion, the proposals as outlined in paragraph 1.2 and resolution 1 are fair and reasonable to the shareholders of Sabre not associated with the Coniston Group.

The opinions expressed above must be read in conjunction with the more detailed analysis and comments made in this report, including the March 2005 Independent Geologist's Valuation Report on Gnamma Dam prepared by Malcolm Castle, a copy of which is attached as an appendix to the Notice of Meeting and Explanatory Statement.

$2.$ Implications of the Proposals

$2.1$ As at 28 February 2005, there were 19,754,851 ordinary fully paid shares on issue in Sabre. The significant fully paid shareholders as at 28 February 2005 were believed to be:

	No. of fullypaid shares	% of issuedfully paid
		shares
Bow Lane Nominees Pty Ltd	7,550,000	38.22
KMM and Del Piano combined	2,270,020	11.49
Todea Holdings Pty Ltd	1,050,000	5.32
World Power Pty Ltd	979,000	4.96
Balfes (Qld) Pty Ltd	500,000	2.53
Piat Corp Pty Ltd	500,000	2.53
	12,849,020	65.05

The top 20 shareholders currently own approximately 80.75% of the Company.

$2.2$ If the Gnamma Dam acquisition is completed, the Coniston Group would own $3,770,020$ shares and $3,500,000$ share options (exercisable at 10 cents each, on or before 30 June 2006) representing an approximate 17.74% interest in the expanded capital of the Company (before the exercise of any share options). There would be a total of 21,254,851 shares on issue. Coniston on its own would own 1,500,000 shares (7.06%). If only Coniston exercised its share options, the Coniston Group would own approximately 29.37% of the issued capital of Sabre. Coniston on its own would own approximately 20.20% of the expanded issued capital. Coniston would pay $350,000 to the Company to exercise the 3,500,000 options. If only the Coniston options are exercised, there would be 24,754,851 shares on issue.
$23$ The current Board of Directors is not proposed to change in the near future and no change is contemplated as a result of the acquisition of Gnamma Dam.
$2.4$ Coniston is also to be paid $15,000 as part consideration for Sabre to acquire Gnamma Dam.

3. Corporate History and Nature of Business

$3.1$ Sabre is on the Mining Board of the ASX and is currently a mineral explorer. The Company has a number of interests in mineral tenements including inter-alia, the following areas of interest:
- Jitaring South East near Lake Grace in Western Australia a gold play
- Neendaling near Lake Grace in Western Australia a gold play.

Future Directions of Sabre $4.$

$4.1$ We have been advised by the directors and management of Sabre that:
- There are no proposals currently contemplated either whereby Sabre will $\bullet$ acquire any further properties or assets from the Coniston Group (however Sabre will issue shares to Coniston as outlined above) or where Sabre would transfer any of its property or assets to the Coniston Group (other than through KMM acting as manager for Sabre at the rate of approximately $102,000 per annum plus reimbursement of expenses);

The composition of the Board will not change in the short term;
$\bullet$ No dividend policy has been set and it is not proposed to be set until such time as the Company is profitable and has a positive cash flow; and
The Company will endeavour to enhance the value of its interests in the current $\bullet$ gold properties and will evaluate the Gnamma Dam Gold-Nickel Project if acquired.

5. Basis of Valuation of Sabre Shares and Options

$5.1$ Shares
$5.1.1$ In considering the proposals to acquire Gnamma Dam, we have sought to determine if the considerations payable by Sabre to Coniston are fair and reasonable to the existing non-associated shareholders of Sabre.
5.1.2 The offer would be fair to the existing non-associated shareholders if the value of the assets (tenement interests known as the Gnamma Dam Gold-Nickel Project) being acquired by Sabre are greater than the implicit value of the shares, options and cash being offered as consideration. Accordingly, we have sought to determine a theoretical value that could reasonably be placed on Sabre shares and options for the purposes of this report.
$5.1.3$ The valuation methodologies we have considered in determining a theoretical value of a Sabre share are:
- Capitalise maintainable earnings/discounted cash flow;
- Takeover bid the price at which an alternative acquirer might be willing to $\bullet$ offer:
- Adjusted net backing and windup value; and
- The weighted average market price of Sabre shares. $\bullet$
$5.2$ Capitalise maintainable earnings and discounted cash flows.
$5.2.1$ Due to Sabre's operations, a lack of profit history arising from business undertakings and the lack of a reliable future cash flow from a current business activity, we have considered these methods of valuation not to be relevant for the purpose of this report.
5.3 Takeover Bid
It is possible that a potential bidder for Sabre could purchase all or part of the 5.3.1 existing shares, however no certainty can be attached to this occurrence. To our knowledge, there are no current bids in the market place and the directors of Sabre have formed the view that there is unlikely to be any takeover bids made for Sabre in the immediate future. The Coniston Group's interest in Sabre is currently 11.49% (refer paragraph 2.1 of this report), however after the acquisition of

Gnamma Dam, the Coniston Group's interest increases to approximately 17.74% before the exercise of any share options.

$5.4$ Adjusted Net Asset Backing
We set out below an unaudited Statement of Financial Position of Sabre as at 31 $5.4.1$ December 2004, adjusted for the capital raising of $270,000 in February 2005 and allowing for administration costs for the two months ended 28 February 2005 estimated at $45,000, along with a pro-forma Statement of Financial Position assuming the following:
- The acquisition of Gnamma Dam from Coniston by way of an issue of $\blacksquare$ $1,500,000$ shares at $12.0$ cents each (and $3,500,000$ share options at a deemed value of $208,950) plus the reimbursement of $15,000 to Coniston; and
- Assuming the incidental acquisition costs of Gnamma Dam are $20,000 but are expensed.

$'000's$000'sCurrent AssetsCash273238Receivables44277242Non Current Assets404Capitalised exploration costs÷404277646Total AssetsCurrent Liabilities2020PayablesProvisions$\ddot{\phantom{a}}$Total Liabilities2020257626Net AssetsEquityContributed Equity14,87715,057Share option reserve30495Accumulated losses(14, 715)(14, 735)257626Net Equity	Sabre31 December(as adjusted)2004	Pro-forma31 December2004

5.4.2 Based on the book values, this equates to a value per fully paid ordinary share post the Proposed Transaction $(21,254,851)$ shares on issue) of approximately 2.9 cents (ignoring the value, if any, of non-booked tax benefits). If the 3,500,000 share options were not costed, the book asset backing would be approximately 1.9 cents.

The book net tangible asset backing as at 31 December 2004 (as adjusted) equates to $1.3$ cents $(19,754,851$ shares on issue).

$5.4.3$ We have accepted the amounts for all current assets, current liabilities and fixed assets. However, the most significant assets of Sabre are their interests in several gold exploration projects in Western Australia.
5.4.4 No detailed review was made by us on the assets and liabilities disclosed in the statement of financial position as at 31 December 2004. We have been assured by the management of Sabre that they believe the carrying value of all current assets, fixed assets and liabilities at 31 December 2004 are fair and not materially misstated.
5.4.5 No independent valuations have been prepared on the mineral prospects of Sabre (other than Gnamma Dam proposed to be acquired) and we do not consider it necessary to obtain an independent valuation of the mineral prospects for the purposes of this report (other than relying on the independent valuation of Gnamma Dam prepared by Malcolm Castle in March 2005). We note that the market has been informed of all of the current projects, joint ventures and farm in/farm out arrangements entered into between Sabre and other parties. The latest quarterly report on the Company's prospects was for the quarter to 31 December 2004 and was released to the market on 27 January 2005 by lodging the report with the ASX. We also note it is not the present intention of the Directors of Sabre to liquidate the Company and therefore any theoretical value based upon wind up value or even net book value (as adjusted), is just that, theoretical. The shareholders, existing and future, must acquire shares in Sabre based on the market perceptions of what the market considers a Sabre share to be worth.

The market has either generally valued the vast majority of mineral exploration companies at significant discounts or premiums to appraised technical values and this has been the case for a number of years although we also note that there is an orderly market (albeit on low turnover) for Sabre shares and the market is kept fully informed of the activities of the Company. Furthermore, for accounting purposes, the consideration for the issue of Sabre shares to acquire 100% of Gnamma Dam will be booked at market value and not any perceived technical value. Accordingly, for the reasons outlined above, we believe that for the purpose of this report, it is not appropriate to use any technical value of a Sabre share in assessing whether the proposal to acquire Gnamma Dam is fair and reasonable. We believe a pre-announcement market-based approach is a more suitable basis of assessing whether the proposal is fair and/or reasonable.

$5.5$ Weighted Average Market Price of Sabre fully paid shares

We set out below a summary of the fully paid share prices of Sabre since 1 August $5.5.1$ 2004 to the date immediately prior to the announcement of the proposal to acquire Gnamma Dam (24 February 2005).

2004	High Cents	Low Cents	Last SaleCents	VolumeTrade(000's)
August	10.0	9.0	9.0	55
September	10.0	7.0	7.5	160
October	10.0	8.1	10.0	256
November	15.0	7.9	15.0	910
December	15.0	12.0	12.0	411
2005
January	13.0	11.0	13.0	338
February (to 24th)	18.0	12.0	18.0	1,108

For the most of the time in February 2005, the shares in Sabre traded in the 12.0 cents to 15.0 cent range. The shares increased to 18 cents several days before the announcement and this could have been speculation of an imminent announcement. On 4 February 2005, Sabre notified the ASX that it was proposing a capital raising of a minimum of 2,500,000 shares and options to raise approximately $250,000. A placement of 2,160,000 shares was made to investors on 25 February 2005. Since the announcement, Sabre shares have significantly increased in price and have traded in the 20.0 cents to 23.5 cents range (last sale 10 March 2005, 20.0 cents).

$5.5.2$ Generally, the market is a fair indicator of what a share is worth, however the theoretical technical value based on the underlying value of assets and liabilities may be lower or higher.

In the case of Sabre, current liquidity is not high and the Company, will soon need to:

Undertake a capital raising of some significance (or a series of smaller capital $\bullet$ raisings) and / or
Sell or dilute its interest in existing mining interests.

It is noted that over the past several years, the vast majority of mineral exploration companies listed on the ASX are trading at significant discounts or premiums to appraised technical values and in some cases have traded at a discount to cash asset backing. In the case of Sabre, the monthly volume of trades on the ASX is small but large enough to argue that an orderly market exists for the Company's shares. The "market" arguably is fully informed of the Company's activities and in view of the immediate and near future lack of a mineable gold or base metal mine in Australia, it is our opinion appropriate to use a range of recent pre-announcement trading market values as fair values to attribute to the 1,500,000 ordinary shares (possibly restricted for 12 months) to be issued to the Coniston Group (actual shares issued to Coniston).

5.5.3 The future value of a Sabre share will depend upon, inter alia:
- The future prospects of its gold mineral prospects in Australia and the $\bullet$ Gnamma Dam Gold-Nickel Project if acquired;
- The state of the gold and base metal markets (and prices) in Australia and ă. overseas:
- The state of Australian and overseas stock markets; $\bullet$
- Membership of the Board: $\bullet$
- General economic conditions; and
- Liquidity of shares in Sabre.
5.5.4 Using the last two months trade prices (to 31 January 2005) and for the period to 24 February 2005), the market value was in the range of $11.0$ cents to 15.0 cents with many trades around 12.0 cents. The prices above 15 cents we believe were as a result of market speculation of an imminent announcement of the Proposed Transaction and we have therefore ignored such prices. As noted above, we are of the opinion that the pre-announcement of proposal market based approach is more appropriate to use for the purposes of this report.
The above values apply to the 1,500,000 ordinary shares to be issued to Coniston. $5.5.5$ Arguably the shares to be issued to Coniston have a lesser value, as they will be restricted from trading for a period of 12 months. A discount of 10% to 20 % per annum is commonly applied to shares that have a restriction on trading and if this applied to the 1,500,000 shares to be issued to Coniston, the discounted market value would approximate 9.6 cents to 13.5 cents assuming an $11.0$ cent to $15.0$ cents non-restricted share price. Using a 12.0 cent price would result in a discounted range of 9.6 cents to 10.8 cents. For the purposes of this report, we have used a 12.0 cent share price.

5.6 Options

$5.6.1$ The Company will issue 3,500,000 options to Coniston as part consideration to acquire Gnamma Dam. Using a Black Scholes option pricing model, results in the value of one option to be issued of 5.97 cents. The basic assumptions used were:

• preferred market share price (pre announcement)	$12.0$ cents
$\blacksquare$ interest rate	5.85%
• volatility factor	100%
exercise price	10 cents
• option term	$1.25$ years

However, as a result of the substantial increase in the share price of a Sabre share since the announcement of the Proposed Transaction, the value of the 3,500,000 options would now be worth more. Assuming a share price of 23 cents and a volatility of 50%, the technical value (not necessarily the market value) of a share option to be issued to Coniston may be worth around 13.88 cents. The options to be issued to Coniston will not be listed and will not be tradeable for a period of 12 months.

Under current Australian Accounting Standards applying for the year ended 30 June 2005, the options do not need to be costed as part of the acquisition price, however if this was undertaken (and we have disclosed the value of the options in the pro-forma Statement of Financial Position as set out in paragraph 5.4.1), the 'additional' cost to acquire 100% of Gnamma Dam would be approximately In accordance with International Financial Reporting Standards $208,950. ("IFRS"), the 'cost' of issuing the options would be accounted for as part of the consideration. Adoption of IFRS pertaining to equity based compensation will come into affect in the year ended 30 June 2006. It is noted that if KMM exercised the 3,500,000 options, Golden Deeps would receive $350,000 additional cash funds.

6. Value of Consideration

6.1 Using 12.0 cents as the preferred pre-announcement fair market issue price for the shares proposed to be issued to Coniston results in a consideration payable (effectively to acquire 100% of Gnamma Dam) of $195,000 (including cash of $15,000). Although the accounting cost may only be the cost of issuing the shares plus the cash disbursement, the true cost is as follows:

	Low	Preferred	High
1,500,000 shares	144,000	180,000	225,000
3,500,000 options	208,950	208,950	208,950
Cash	15,000	15,000	15,000
Consideration payable to Coniston	367,950	403,950	448,950
Share price assumed to be	9.6 cents	$12.0$ cents	$15.0$ cents
If the post announcement share pricesare used, the consideration would be:
Shares	300,000	330,000	352,500
Options	485,800	485,500	485,500
Cash	15,000	15,000	15,0000
	800,800	830,500	853,000
Share price assumed to be	20 cents	22 cents	$23.5$ cents

As noted above, we do not consider it appropriate to use the post announcement of the Proposed Transaction share price as without the transaction the share price of Sabre shares would almost certainly retreat to pre announcement levels.

$7.$ Basis of Valuation of the Gnamma Dam Gold-Nickel Project

$7.1$ The usual approach to the valuation of an asset is to seek to determine what an informed, willing but not anxious buyer would pay to an informed, willing but not anxious seller in an open market.
$7.2$ The Company has commissioned Malcolm Castle ("Castle") to prepare a Valuation Report of the Gnamma Dam Gold-Nickel Project owned by Coniston. The Castle Valuation Report of March 2005 should be read in its entirety and a full copy of the Castle Valuation Report is attached as an appendix to the Notice of Meeting and

Explanatory Statement to Shareholders. The Valuation Report ascribes a range of values to the interests to Gnamma Dam and for the purposes of our report, we have used the low, high and preferred market valuations referred to in the Castle Valuation Report.

$7.3$ We have used and relied on the Castle Valuation Report on Gnamma Dam and have satisfied ourselves that:
- Mr Castle is a suitably qualified geologist and has relevant experience in $\bullet$ assessing the merits of mineral projects and preparing mineral asset valuations;
- Castle is independent from Sabre and Coniston; and
- Castle has employed sound and recognised methodologies in the preparation of the valuation report on Gnamma Dam.
$7.4$ Castle has provided a range of market values of the interests in Gnamma Dam. After taking into account the past exploration commitments, Castle has ascribed a range of values to Gnamma Dam as follows:

	L0W	Preferred	High

Gnamma Dam	793,000	877,000	967,000

8. Conclusion as to Fairness

8.1 The proposal to acquire Gnamma Dam for the consideration noted in paragraph 1.2 is believed fair to Sabre's non-associated shareholders if the value of the consideration offered is equal to or less than the value of Gnamma Dam being acquired.
8.2 Due to the nature of the business of Sabre, valuations are dependent upon the value placed on the mineral interests of Sabre. The valuation of mineral interests and valuing future profitability and cash flows is extremely subjective as it involves assumptions regarding future events that are not capable of independent substantiation.
8.3 We have examined below the values attributable to the shares proposed to be issued and the value of the consideration offered by Sabre to Coniston.

Assessed "gross value" based onindependent valuations of mineral	Low$	PreferredS	High$
interests	793,000	877,000	967,000
Value of consideration beingoffered by Sabre using a pre-announcement market basedapproachPayable to Coniston (refer	367,950	403,950	448,950

	Low	Preferred	High

paragraph $6.1$ )
Other incidental costs	20,000	20,000	20,000
	387,950	423,950	468,950

8.4 On a pre-announcement market value approach which is considered more relevant, for the reasons outlined in section 5 of this report, the proposed Gnamma Dam acquisition is considered fair. It should also be acknowledged that the shares to be issued to Coniston for the acquisition of Gnamma Dam are likely to be classified as 'restricted securities' by the ASX and escrowed from trading for a period of 12 months.

$91$ Reasonableness of the Offer

9.1 We set out below some of the advantages and disadvantages and other factors pertaining to the Gnamma Dam proposal.

Advantages

9.2 According to the Castle Valuation report "the Gnamma Dam project would be well regarded by a prospective purchaser/investor as it represents a project with good potential to discover further mineralisation."
9.3 The proposal is considered fair as noted in paragraph 8.4 of this report.
9.4 The Company has very few remaining mineral areas of interest and requires a new area to augment its existing tenement holdings. The Gnamma Dam Gold-Nickel Project adds value to the Sabre tenement holding.
$9.5$ The Company may be able to raise further funds by way of share equity as a result of acquiring Gnamma Dam. The share price in Sabre has risen considerably as a result of the expectations of acquiring Gnamma Dam and the shares have risen from the 10 cent to 15 cent range to 20 cent to 23.5 cent range. We consider that the Proposed Transaction has been the only significant factor in the share price rise. If the Proposed Transaction is not consummated, there is a very high likelihood of a large retreat in the share price of Sabre to pre announcement levels.
9.6 On a asset backing approach, the consideration proposal is minimal and far below market value (pre announcement) approach.

Disadvantages and Other Factors

9.7 If the 3,500,000 share options proposed to be issued to Coniston are exercised, the Company would receive $350,000 in new cash funds. The exercise price of 10 cents each is well below the current (post announcement of the Proposed Transaction) share price (around 20 cents to 23.5 cents) and there may be an

opportunity cost if the options are exercised (at 10 cents) whilst the share price of a fully paid Sabre share is materially in excess of 10 cents. Normally, share placements in junior mineral exploration are made at between 80% and 100% of market prices of a fully paid share.

9.8 The number of fully paid shares on issue rises by $1,500,000$ to $21,254,851$ (before exercise of any share options). This represents a $7.6%$ increase in the ordinary shares of the Company.
9.9 Currently, the Coniston Group owns 11.49% of the Company and if resolution 1 is passed, the Coniston Group will increase its shareholding to 17.74% and potentially to 29.37% (if Coniston exercises the 3,500,000 options and there are no other share issues). KMM owns $10,300,000$ share options (out of $17,500,000$ ) in Sabre and such options are exercisable at 10 cents each, on or before 30 June 2006. It is possible that if KMM exercised such options along with Coniston exercising the 3,500,000 options, the Coniston Group could own up to 50.12% in Sabre. However if all 10 cent share options were exercised by 30 June 2006, the percentage shareholding of the Coniston Group would reduce to 41.58%. It is noted that KMM (associated with Coniston and Del Piano) is the current manager of Sabre and thus operational control is already in the hands of the Coniston Group. The Coniston Group is paying a premium for control in that it is receiving consideration of say $423,950 (refer paragraph 6.1) (but as high as $853,000 on a post announcement basis) but is giving up an asset deemed to be valued at between $793,000 and $967,000. However, all of the shareholders of Sabre are benefiting as they are acquiring an asset that is valued at a figure that is greater than the consideration being paid (on a pre announcement basis).
9.10 Sabre will need to raise further working capital to spend on exploration and evaluation of Gnamma Dam (and its other projects). The number of shares that may be issued to raise additional capital is not yet ascertained however any future capital raisings will further dilute the current non associated shareholders interests in Sabre. As noted above, if Gnamma Dam is acquired the shares may be able to be issued at prices greater than the pre announced share prices of Sabre.

10. Conclusion as to Reasonableness

After taking into account the factors referred to in 9 above and elsewhere in this $10.1$ report, we are of the opinion that the Proposed Transaction as noted in paragraph 1.2 and resolution 1 in the Notice may be considered reasonable to the nonassociated shareholders of Sabre.

11. Sources of Information

$11.1$ In making our assessment as to whether the Proposed Transaction as noted in paragraph 1.2 is fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company and Gnamma Dam that is relevant to the current circumstances. In addition, we have held discussions

with the management of Sabre about the present and future operations of the Company. Statements and opinions contained in this report are given in good faith but in the preparation of this report, we have relied in part on information provided by the directors and management of Sabre.

$11.2$ Information we have received includes, but is not limited to:
- Draft Notice of General Meeting of Shareholders of Sabre and draft Explanatory Statement To Shareholders prepared in March 2005;
- Discussions with management and directors of Sabre;
- Details of historical market trading of Sabre ordinary fully paid shares recorded by ASX for the period February 2004 to 10 March 2005.
- Shareholding details of Sabre as supplied by the company's share registry at 28 February 2005;
- Annual report for Sabre for 2003/05;
- Un-audited management accounts of Sabre for the 6 months ended 31 December 2005:
- Announcements made by Sabre to the ASX from 1 January 2004 to 10 March $2005:$
- The Sale Deed between Coniston and Sabre of February 2005;
- The Independent Valuation Report of Malcolm Castle dated March 2005 relating to Gnamma Dam; and
- Discussions with the author of the Castle Valuation Report.
Our report includes Appendix A and our Financial Services Guide attached to this $11.3$ report.

Yours faithfully STANTON PARTNERS CORPORATE PTY LTD

Man In

JP Van Dieren Director

AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stanton Partners Corporate Pty Ltd dated 14 March 2005, relating to the issue of shares and options as part consideration for the Gnamma Dam acquisition proposal as outlined in paragraph 1.2 of the report and resolution 1 in the Notice of Meeting to Shareholders of March 2005.

At the date of this report, Stanton Partners Corporate Pty Ltd does not have any interest in the outcome of the proposal. There are no relationships with Sabre, Coniston, KMM or Del Piano other than acting as an independent expert for the purposes of this report. There are no existing relationships between Stanton Partners Corporate Pty Ltd and the parties participating in the transaction detailed in this report which would affect our ability to provide an independent opinion. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at $5,500. The fee is payable regardless of the outcome. With the exception of the fee, neither Stanton Partners Corporate Pty Ltd or John P Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report. Stanton Partners, the partners of whom control Stanton Partners Corporate Pty Ltd are the auditors and tax agents of Sabre.

Stanton Partners Corporate Pty Ltd does not hold any securities in Sabre, Coniston or KMM. There are no pecuniary or other interests of Stanton Partners Corporate Pty Ltd that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stanton Partners Corporate Pty Ltd and Mr J Van Dieren have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stanton Partners Corporate Pty Ltd is the holder of an Investment Advisers Licence (no 231201) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. A number of the partners of Stanton Partners and Stantons International are the Directors' of Stanton Partners Corporate Ptv Ltd. Stanton Partners, Stantons International and Stanton Partners Corporate Pty Ltd have extensive experience in providing advice pertaining to mergers, acquisitions and strategic and financial planning for both listed and unlisted companies and businesses.

Mr John P Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

DECLARATION

This report has been prepared at the request of the Directors of Sabre in order to assist them to assess the merits of the Gnamma Dam acquisition proposal (outlined in resolution 1) to which this report relates. This report has been prepared for the benefit of Sabre's directors and shareholders and does not provide a general expression of Stanton Partners Corporate Pty Ltd's opinion as to the longer term value of Sabre or the Gnamma Dam Gold-Nickel Project. Stanton Partners Corporate Pty Ltd does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of Sabre (other than Stanton Partners conducting an audit of Sabre for the year ended 30 June 2004 and undertaking a half year audit review for the six months ended 31 December 2004). Stanton Partners are also the tax agents for Sabre. Neither the whole nor any part of this report, nor any reference thereto may be included in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stanton Partners Corporate Pty Ltd to the form and context in which it appears.

DISCLAIMER

This report has been prepared by Stanton Partners Corporate Pty Ltd with due care and diligence. However, except for those responsibilities, which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omission (including responsibility to any person for negligence) is assumed by Stanton Partners Corporate Pty Ltd, Stanton Partners, its partners, employees or consultants for the preparation of this report.

DECLARATION AND INDEMNITY

Recognising that Stanton Partners Corporate Pty Ltd may rely on information provided by Sabre and its officers (save whether it would not be reasonable to rely on the information having regard to Stanton Partners Corporate Pty Ltd experience and qualifications), Sabre has agreed:

To make no claim by it or its officers against Stanton Partners Corporate Pty Ltd (and a) Stanton Partners and Stantons International) to recover any loss or damage which Sabre may suffer as a result of reasonable reliance by Stanton Partners Corporate Pty Ltd on the information provided by Sabre; and
(b) To indemnify Stanton Partners Corporate Pty Ltd (and Stanton Partners) against any claim arising (wholly or in part) from Sabre or any of its officers providing Stanton Partners Corporate Pty Ltd any false or misleading information or in the failure of Sabre or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stanton Partners Corporate Pty Ltd.

A draft of this report was presented to Sabre directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

STANTON PARTNERS CORPORATE PTY LTD

A C N 063 036 331

1 HAVELOCK STREET WEST PERTH 6005 WESTERN AUSTRALIA

TELEPHONE: (08) 9481 3188 FACSIMILE: (08) 9321 1204

e-mail: [email protected]

FINANCIAL SERVICES GUIDE Dated 14 March 2005

STANTON PARTNERS CORPORATE PTY LTD $\mathbf{I}$ .

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$\overline{4}$ . GENERAL FINANCIAL PRODUCT ADVICE

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$9.$ COMPLAINTS RESOLUTION

$9.7$ Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to:

The Complaints Officer Stanton Partners Corporate Pty Ltd Level 1 1 Havelock Street WEST PERTH WA 6005.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

$9.2$ Referral to External Dispute Resolution Scheme

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Toll Free: 1300 78 08 08 Facsimile: (03) 9621 2291

10. CONTACT DETAILS

You may contact us using the details set out at the top of our letterhead on page 1 of this FSG.

Schedule 2

Independent Geologist's Report and Valuation of the Gnamma Dam Nickel Prospect

P.O. Box 473, South Perth WA 6951 Phone: 08 9368 4923 Fax: 08 9368 4932 Mobile: 04 1234 7511 Email: [email protected]

2nd March 2005

The Directors Sabre Resources Limited 8 Parliament Place West Perth WA 6005

Dear Sirs.

Re:

INDEPENDENT GEOLOGIST'S REPORT AND VALUATION OF THE GNAMMA DAM GOLD - NICKEL PROJECT, WESTERN AUSTRALIA

I have been commissioned by Sabre Resources Limited ("Sabre") to provide an Independent Mineral Asset Valuation ("Valuation") of the Gnamma Dam Project in Western Australia ("Gnamma Dam").

Sabre will be the beneficial owner of the project subject to shareholder approval and I have based this review on exploration work on the property, information provided by the title holders, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area. I have endeavoured, by making all reasonable enquiries, to confirm the authenticity and completeness of the technical data upon which this Report is based. A final draft of this Report was also provided to Sabre, along with a written request to identify any material errors or omissions prior to finalising the Report. Where and if appropriate, consent has been obtained to quote data and opinions expressed in unpublished reports prepared on the properties concerned by other professionals.

The mineral assets comprise fourteen granted Prospecting Licences (P25/1766-1775 and P25/1783-1786) registered in the name of Coniston Pty Ltd in the Bulong area, east of Kalgoorlie.

The present status of tenements listed in this report is based on information provided by Department of Industry and Resources, WA and the Report has been prepared on the assumption that the tenements are lawfully accessible for evaluation.

This Report has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports ("The Valmin Code") effective April 1998, which is binding upon Members of the Australasian Institute of Mining and Metallurgy (AusIMM), and the rules and quidelines issued by such bodies as ASIC and Australian Stock Exchange (ASX), which pertain to Independent Expert Reports. Where Mineral Resources have been referred to in this Report, the classifications are consistent with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA), effective December 2004. The report complies with section 716(2) of the Corporations Act 2001 where consent is required if statements have been attributed to third parties.

Under the definition provided in the JORC and Valmin Codes the properties are classified as "Exploration" projects, which are inherently speculative in nature. The properties are considered to be sufficiently prospective, subject to varying degrees of risk, to warrant further exploration and development of their economic potential, consistent with the programs proposed by Sabre.

The Independent Valuation Report has been compiled based on information available up to and including the date of this Report. I have given my consent for the distribution of this report in the form and context in which it appears.

I am not, nor intend to be, a director, officer or other direct employee of Sabre and have no material interest in the Project or Sabre. My relationship with Sabre is solely one of professional association between client and independent consultant. The review work and this Report are prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Yours faithfully

Malcolm Castle B.Sc. (Hons) MAusIMM GCertAppFin (Sec Inst)

1.0		INTRODUCTION
2.0		LOCATION AND ACCESS
	2.1	TENURE ………………………………………………………………………………………………
3.0		REGIONAL GEOLOGY
4.0		MINERALIZATION STYLE
5.0		RECENT EXPLORATION ACTIVITIES
	5.1.	EXPLORATION EXPENDITURE
6.0		PROJECT SUMMARY
7.0		MINERAL ASSETS VALUATION METHODOLOGY
	7.1	FAIR MARKET VALUE OF MINERAL ASSETS
	7.2	REGULATORY AUTHORITIES
	7.3	METHODS OF VALUING EXPLORATION TENEMENTS
	74	VALUATION OF RESOURCES BY COMPARABLE TRANSACTIONS 13
	7.5	APPLICATIONS OF DISCOUNTED CASH FLOW ANALYSIS 13
	7.6	CONCLUSIONS
	7.7	CALCULATING PROPERTY VALUES
8.0		VALUATION OPINION
	8.1	MARKET VALUE
	8.2	VALUATION OF THE EXPLORATION POTENTIAL – GEOSCIENTIFIC RATING METHOD


	8.3	VALUATION OF THE EXPLORATION POTENTIAL - MULTIPLE OF EXPLORATION
		EXPENDITURE METHOD
	8.4	SUMMARY OF VALUATION

$1.01$ INTRODUCTION

This valuation assesses the exploration potential of the project area based on two methods commonly used to value mineral assets without stated resources. The Geoscientific Rating Method emphasises the potential for further discoveries in the tenements. The Multiple of Exploration Expenditure method emphasises the potential to expand on existing zones of mineralisation. The valuation allows for a market premium in the range of 25 to 35%. In my opinion, the market value of the Gnamma Dam project lies in the range $793,000 to $967,000 with a preferred value of $877,000.

$2.0$ LOCATION AND ACCESS

The 14 Prospecting Licences are centred at 121° 44' East, 30° 45' South and cover a total of 2004 hectares or 20.05 square kilometres. The PLs, on the southwest portion of the Kurnalpi 1 :250,000 scale Sheet SF51-10, are located about 25 kilometres east of Kalgoorlie and between the old gold mining areas of Bulong and Balagundi.

Access from Kalgoorlie is provided by the sealed Bulong Road and thence via pastoral and prospecting tracks through the project area.

$2.1$ TENURE

$\mathbf{r}$

Contract Contract Contract

$\sim$

Current lenements
No	Holder	Grant	Tem	Area Ha	Rent	Expendiure
P25/1766	Coniston Pty Ltd	4/06/2004	4 years	120.950	226.27	4,840
P 25 /1767	Coniston Pty Ltd	4/06/2004	4 years	121.340	228.14	4,880
P25/1768	Coniston Pty Ltd	4/06/2004	4 years	121.050	228.14	4,880
P25/1769	Coniston Pty Ltd	4/06/2004	4 years	121.335	228.14	4,880
P25/1770	Coniston Pty Ltd	4/06/2004	4 years	121.363	228.14	4,880
P25/1771	Coniston Pty Ltd	4/06/2004	4 years	121.000	226.27	4,840
P 25 /1772	Coniston Pty Ltd	4/06/2004	4 years	121.100	228.14	4,880
P25/1773	Coniston Pty Ltd	4/06/2004	4 years	121.250	228.14	4,880
P25/1774	Coniston Pty Ltd	4/06/2004	4 years	176,000	329.12	7.040
P25/1775	Coniston Pty Ltd	4/06/2004	4 years	121.350	228.14	4.880
P25/1783	Coniston Pty Ltd	4/06/2004	4 years	200.000	374.00	8,000
P25/1784	Coniston Pty Ltd	4/06/2004	4 years	198,000	370.26	7.920
P25/1785	Coniston Pty Ltd	4/06/2004	4 years	140.000	261.80	5,600
P25/1786	Coniston Pty Ltd	4/06/2004	4 years	200.000	374.00	8,000
Totals				2,004.738	3,758.70	80.400

$3.0$ REGIONAL GEOLOGY

The Gnamma Dam project area covers Archaean mafic, ultramafic and felsic volcanic rock types as well as sedimentary suites, comprising the Bulong Greenstone Belt. Younger dolerites have intruded the sequence.

The Bulong mining area lies in a belt of north-trending greenstones in the western part of the Gindalbie Terrane. The greenstones dip moderately to steeply to the west, with the top of the sequence in the same direction. It is located on the western limb of the Bulong Anticline and within 11km of the north-north-westerly striking Kanowna Shear. Ultramafic rocks of the Bulong Complex are interbedded with mafic rocks and metamorphosed felsic volcaniclastic rocks. This package of interbedded units was thrust over the vounger felsic volcanic complex in the core of the Bulong Anticline. The presence of andalusite in

weathered, metamorphosed volcaniclastic sedimentary rocks suggests that the metamorphic grade in this area is mid- to upper greenschist facies. The greenstones are dissected by numerous north-trending faults, although they were almost certainly active during the later stages of regional deformation, probably as splays off the Kanowna Fault.

Alteration of metamorphosed felsic volcaniclastic rocks at Bulong is generally restricted to narrow zones of bleaching adjacent to quartz veins, and a broader, more diffuse halo of disseminated carbonate and pyrite. Biotite is unstable within the bleached zones, which consist predominantly of quartz, plagioclase (albite), and carbonate, with minor chlorite and pyrite. Ultramafic rocks are intensely carbonated, and although the timing of this carbonation is uncertain, it appears to pre-date gold mineralization. The brittle, carbonate-rich rocks are commonly traversed by a network of quartz (-carbonate) veins that have introduced a second generation of carbonate and disseminated pyrite.

The Gnamma Hole Dam base metal prospect area, in the southern part of the project area, includes prominent stratiform ferruginous gossans of several metres thickness hosted by fine-grained felsic volcanic sediments.

4.0 MINERALIZATION STYLE

There is no recorded history of production from the tenements although anecdotal evidence has it that many nuggets have been found by metal-detector operators, particularly from the northern tenements.

Gold is also produced from quartz-vein systems in less-deformed rocks adjacent to the sheared contacts. Mineralization is most intense where closely spaced cross-faults have isolated relatively brittle metabasalt units within more-ductile metasedimentary rocks.

The Gnamma Hole gossans, in the southern tenement area, have coincident 200ppb silver and 35ppb lead soil anomalies which have yielded encouraging results from drilling as tabulated below.

$5.0$ RECENT EXPLORATION ACTIVITIES

The most recent work carried out followed many years of intermittent and sporadic exploration for nickel, copper, zinc and finally gold and silver. From 1965 until 1990 work was conducted around, near to and over parts of the current project area by a number of major mining groups and smaller companies.

An unlisted public company acquired the ground in 1994 and exploration undertaken during 1994/1995 included research and compilation of previous exploration, regolith map production from aerial photography and design of a minus 2mm soil sampling program which was carried out in December, 1995. Exploration during 1996 included 60 RAB drill holes for a total of 3,922 metres over the Gnamma Hole Dam and Mt Youle geochemical anomalies and four RC drill holes for 502 metres over the Gnamma Hole anomaly. Other work included geomorphological and regolith mapping, aeromagnetic data interpretation and acquisition of Digital Elevation Mapping Survey (OEMS) data.

Hole	From	Width	Copper	Zinc	Silver
No.	(metres)	(metres)	(%)	( %)	g/t
V IB 1	52		٠	$\ddot{\phantom{0}}$	15
VIB4		48	0.2	$\tilde{\phantom{a}}$	$\tilde{\phantom{a}}$
VIB 15	28	19	0.3	$\tilde{\phantom{a}}$	MA
Includes	35		1.3	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$
VIB 18	20	24	0.2	-	$\tilde{\phantom{a}}$

Significant results from drilling at the Gnamma Hole Dam include:

	ונס ווטחו שחווות טכנוכ וונ וטטוכ מוכמ ווטוטטכו
Hole	From	Width	Gold
No.	(metres)	(metres)	g/t
VIB 22	52		0.64
VIB 44		48	0.68
VIB47	28	19	1.39
Includes	35		4.25

Significant results from drilling at the Mt Youle area include:

Wide spaced multi-element soil sampling was completed in 1994 as part of a gold exploration program with elevated nickel values up to 800 ppm nickel over the eastern side of the project area. Exploration for nickel has been largely ignored in the area despite the presence of favourable host rocks with evidence of sulphides and elevated assay values. A number of anomalous zones of nickel mineralization were encountered within the regolith with grades up to 0.74% nickel. The ultramafic unit hosts the Duplex Hill and Blair nickel sulphide deposits to the south.

Between 1998 and 2002 the same tenement area was previously held as the Victory Dam gold base metal project located 26 km east of Kalgoorlie and 6 km west of the abandoned Bulong townsite.

Exploration between 1998 and 1999 comprised a review of previous data, geological/regolith mapping, aerial photo interpretation and geological reconnaissance. Deeper RC drilling of the Mt Youle gold anomaly and the Cu-Zn-Ag mineralisation at Gnamma Hole Dam Anomaly were recommended.

In 1999 to 2000 exploration comprised data compilation, geological mapping, aeromagnetic/geological interpretation and soil sampling. The maximum soil sampling assays returned 28 ppb Au, 15 ppb Pt, 5 ppb Pd, 0.5 ppm Ag, 210 ppm As, 5.1 ppm Bi, 46 ppb Cu and 442 ppm Mn. It was concluded that soil sampling in the north of the lease confirmed the previous gold and base metal anomalies at Mt Youle and Gnamma Hole Dam respectively and further drilling at depth was recommended.

Between 2000 and 2001 exploration comprised geological reconnaissance, data review, aerial photo/aeromagnetic interpretation, geological/regolith mapping and prospecting. Metal detecting and scraping on the southern part of the tenements produced 35 oz of gold nuggets. Further work was recommended which included soil and rock chip sampling, however, the tenements were surrendered in 2002.

$5.1$ EXPLORATION EXPENDITURE

Base metal and gold mineralization have been targeted in the project area in the past. Prior expenditure in excess of $90,000 was estimated to have been incurred during 1965 to 1989. More recent expenditure in the period from 1995 to 1996 of $210,000 was incurred. The previous tenement holder reported expenditure of $291,000 from 1999 to 2002. The exploration commitment for the current 14 prospecting licences is $80,400 for the first year.

6.0 PROJECT SUMMARY

Although exploration has been carried out in this region, mainly around and near to the current project area, since 1965, the early explorers failed to either achieve significant results or to follow up on anomalous zones when actively exploring.

The first phase of exploration did not carry out structural interpretation that would have helped quide them to the more prospective areas.

Results from more recent exploration confirm the presence of gold and base metal mineralisation anomalous zones that require further drill testing at depth and highlight the exploration potential that has not previously been realised.

The Mt Youle gold anomalous zone has not been subject to deeper RC drilling which is recommended as the next exploration step.

The Gnamma Hole Dam base metal anomalous zone has only four RC holes and also requires further drilling to investigate the mineralised zones at depths greater than that of the previous program.

Nickel potential in the ultramafic units has been recognised and evidence of sulphides has been observed in bedrock outcrops but no significant exploration for this commodity has vet been carried out.

$7.0$ MINERAL ASSETS VALUATION METHODOLOGY

$7.1$ Fair market value of mineral assets

Mineral assets include, but are not limited to, mining and exploration tenements held or acquired in connection with the exploration, the development of, and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

Mineral assets classification
Exploration areas	Mineralisation may or may not have been identified, but where a mineral resourcehas not been defined.
Advanced exploration areas	Mineral resources have been identified and their extent estimated (possiblyincompletely). This includes properties at the early stage of assessment.
Pre-development projects	A positive development decision has not been made. This includes propertieswhere a development decision has been negative, properties on care andmaintenance and properties held on retention titles.
Development projects	Committed to production, but which, are not yet commissioned or not initiallyoperating at design levels.
Operating Mines	Mineral properties, particularly mines and processing plants, which have been fullycommissioned and are in production.

The fair market value of a mineral asset is the estimated amount of money or the cash equivalent or some other consideration for which the mineral asset should change hands between a willing buyer and a willing seller in an arms length transaction. Each party is assumed to have acted knowledgeably, prudently and without compulsion.

The value of a mineral asset usually consists of two components,

The underlying or Technical Value which is an assessment of a mineral asset's future net economic benefit under a set of appropriate assumptions, excluding any premium or discount for market, strategic or other considerations.
The Market Component, which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or zero.

When the technical and market components of value are combined the resulting value is referred to as the market value. A consideration of country risk should also be taken into account.

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change.

$7.2$ Regulatory Authorities

Mineral asset valuations are governed by the VALMIN code and ASIC Practice Note 43 in Australia.

The VALMIN Code

The four main requirements of the VALMIN Code are:

Transparency. The report needs to explain how the valuation was done and the assumptions used in calculating the value. The objective is to provide sufficient information that other people can come up with the same answer.

Materiality. This means the valuer has to ensure that all important data that could have a significant impact on the valuation is included in the report.

Competence. The valuer must be competent at doing valuations. The person needs to be an expert in the particular exploration target being evaluated. Typically the person needs at least 5 years experience in that commodity.

Independence. The valuer must act in a professional manner and not favour the buyer or the seller. In other words the price must be set at a "fair market value". To achieve independence, the valuer must not receive any special benefit from doing the study.

The decisions as to the valuation methodology or methodologies to be used and the content of the Report are solely the responsibility of the Expert or Specialist whose decisions must not be influenced by the Commissioning Entity. The Expert or Specialist must state the reasons for selecting each methodology used in the Report. Methods chosen must be rational and logical and be based upon reasonable grounds.

The Expert or Specialist should make use of valuation methods suitable to the Mineral or Petroleum Assets or Mineral or Petroleum Securities under consideration. Selection of the appropriate valuation method will depend on, inter alia:

(a) the purpose of the valuation;
(b) the development status of the mineral or petroleum assets;
(c) the amount and reliability of relevant information;
(d) the risks involved in the venture; and
(e) the relevant market conditions for commodities and/or shares.

The expert or specialist should choose, discuss and disclose the selected valuation methods appropriate to the mineral or petroleum assets or mineral or petroleum securities under consideration, stating the reasons why the particular valuation methods have been selected and to the adequacy of available data. It may also be desirable to discuss why a particular valuation method has not been used. The disclosure should give a sufficient account of the valuation methods used so that another Expert could understand the procedure used and assess the valuation. Should more than one valuation method be used and different valuations result, the Expert or Specialist should comment on the reasons for selecting the value adopted.

Australian Securities and Investment Commission - Practice Note 43

It is not the ASIC's role or intention to limit the expert's exercise of skill and judgment in selecting the most appropriate method or methods of valuation. However, it is appropriate for the expert to consider:

(a) the discounted cash flow method:
(b) the amount which an alternative acquirer might be willing to offer if all the securities in the target company were available for purchase;

The ASIC does not suggest that this list is exhaustive or that the expert should use all of the methods of valuation listed above. The expert should justify the choices of valuation method and give a sufficient account of the method used to enable another expert to replicate the procedure and assess the valuation. It may be appropriate for the expert to compare the figures derived by more than one method and to comment on any differences.

The complex valuations in an expert's report necessarily contain significant uncertainties. Because of this an expert who gives a single point value will usually be implying spurious accuracy to his or her valuation. An expert should, however, give as narrow a range of values as possible. An expert report becomes meaningless if the range of values is too wide. An expert should indicate the most probable point within the range of values if it is feasible to do so.

The expert should carry out sufficient enquiries or examinations to establish reasonable grounds for believing that any profit forecasts, cash flow forecasts and unaudited profit figures that are used in the expert's report, and have been prepared on a reasonable basis. If there are material variations in method or presentation the expert should adjust for or comment on them in the report.

The expert should discuss the implications to his or her valuation if:

(a) the current market value of the subject of the report is likely to change because of market volatility (for example, boom or depression); or
(b) the current market value differs materially from that derived by the chosen method.

$7.3$ Methods of valuing exploration tenements

When valuing an exploration tenement the estimate is attempting to arrive at a value that reflects:

The potential of the tenement to yield newly discovered zones of mineralisation.
The potential of the tenement at the valuation date to yield a mineable ore reserve
In line with what the tenement will be judged to be worth when assessed by the market.

The Fair Market Value of Exploration Properties and Advanced Exploration Properties can be determined by several general approaches: Geoscience Factor; Cost; Market; or Income. For properties without mineral reserves, the income (DCF) approach is not appropriate and the following approaches are used by the geologist to establish value for exploration and advanced exploration areas:

Ranked and weighted geological aspects, including proximity to mines, deposits and the significance of the mining area and the commodity sought. (Geoscience Factor Method). The method focuses on the potential of the property to yield newly discovered zones of mineralisation leading to a mineable ore reserve. This method is commonly used in Australia but is not acceptable to the TSX Venture Exchange.

Results and costs of historic exploration and the program and cost of future exploration, if warranted (Appraised Value Method). The method focuses on historical exploration costs and the potential to build on past results to enhance existing mineralisation and to yield a mineable ore reserve. Enhancement factors are commonly used in Australia but are not acceptable to the TSX Venture Exchange that requires a modified version of the method.
Prior transactions for the property and recent arm's-length transactions for comparable properties, (Comparable Transaction). The method seeks to compare prices paid in recent sales of mineral assets, often on a dollar per ounce basis, and relies on a database of published information. It is acceptable in Australia and to the TSX Venture Exchange.

There is a large element of subjectivity involved in arriving at a value of a tenement no matter which method is selected. It is obvious that the geologist must be aware of all valuation methods and actual transactions taking place in the industry in general to ensure that value estimates are realistic.

In the preparation of a tenement valuation, a geologist must give consideration to a range of technical issues as well as make a judgment about the "market". Key technical issues that need to be taken into account include:

Geological setting of the property and style of mineralisation.
Results of exploration activities on the tenement usually data from soil mapping, trenching, mapping and drilling.
Interpretation of geophysical data and remotely sensed information.
Evidence of mineralisation on adjacent properties.
Proximity to existing infrastructure and production facilities to the property.

In addition to these technical issues the geologist has to take particular note of the market's demand for the type of property being valued. An adjustment of the technical value of a mineral tenement should only be made if the technical and market values are obviously out of phase with each other.

A. Geoscience factor method

The Geoscience Factor method determines a base dollar value per unit area (Base Acquisition Cost - BAC), which is dependent on the tenement type, to arrive at an overall property value which is upgraded by various elements of perceived prospectivity. The method is based on four main characteristics of mineral properties: location; inclusion of valuable mineralization; inclusion of geophysical and/or geochemical targets; and inclusion of favourable geological lithologies and structures.

The subcategories are prioritized and assigned relative value factors. Factors are generally expressed as a range of values to reflect the uncertainties in estimation. The four factors are multiplied together to provide the Technical Factor or Prospectivity Index.

The Base acquisition cost represents the minimum reasonable exploration budget a tenement holder would be prepared to commit for a new tenement and should be determined on a case by case basis. This will include costs of researching and applying for the tenement and government charges and exploration commitments over the first year of tenure. Experience in Australia and overseas and a review of the requirements set out in regulations and legislature suggests that the following ranges are appropriate.

Tenement Type	Expenditurepersquarekilometre (BAC)
Exploration Licence andequivalents	$350 to $450
Prospecting Licence andequivalents	$4,000 to $4,500
Mining Lease and equivalents	$10,000 to $12,500

The technical value of each mineral tenement is determined by applying the appropriate technical Factor to the BAC. Property value is calculated by totaling the values of the tenements in the project area. The value of a property is ultimately influenced by additional, subjective factors to arrive at a fair market value; the expertise of geologists and engineers, commodity markets, financial markets, stock markets, mineral property markets, metal prices and political and economic conditions which vary with time.

Geoscientific Rating Criteria - simplified
Rating	Off Property Factor	On Property Factor	Anomaly Factor	Geological Factor
0.1				Unfavourable lithology
0.5			Extensive previousexploration with poorresults - noencouragement	Generally favourablelithologies on 25% of thelease area
0.9			Extensive previousexploration withencouraging results -regional targets	Generally favourablelithology on 50% of thelease area
	No knownMineralization in District	No knownMineralization	No targets outlined	Generally favourablelithology on 70% of the lease area
2	Several old workings inDistrict	Several old workingson leases	Several well definedsurface targets	Generally favourablelithology with structuresthroughout the lease area
3.5	Historical production>200,000 oz	Historical production>100.000 oz
5	Historical production >1million oz	Historical Production>500,000 oz	Several ore grade Drillintersections

A major disadvantage of the method is that the degree of dependence of the property value on the assumed basic value of each tenement. Large properties would tend to have very high values and very small properties would tend to have very low values, which may not reflect the real exploration potential. This is allowed for to some extent by the Geological Factor.

The preferred method of accounting for prospectivity is to subdivide tenements into blocks based on geological signatures and value each separately. This assists in accounting for large tracts of land with little or no potential surrounding prospective areas.

B. Appraised Value Method (Multiple of Exploration Expenditure)

The method is a cost approach to valuation and a basic tenet is that an exploration property is worth 'meaningful past exploration expenditures plus warranted future costs'. The latter represent a reasonable budget to advance the property to the next decision stage as determined by a prudent and responsible explorationist, i.e. a seasoned

exploration geologist. The appraised value may have to be adjusted to market value if the local market for properties is elevated or depressed.

In this method a property is deemed to be worth what has been spent on it, with a premium if results are positive, or a discount if results are poor. Sometimes costs are adjusted for inflation, although, if applied indiscriminately to old costs, this can result in an overly large value bonus for inflation. Replacement costs to carry out the relevant work may be more appropriate in some cases.

The method is based upon the cost of conducting exploration on a current standard contract basis, which accounts for the effects of inflation. The purpose is to provide a standard basis for valuing historical work on large property positions where there is a wide range in historic costs for similar work completed. Costs, particularly for RC and diamond drilling, are then factored for significance. Some allowance may also be made for drilling which provides useful geological data aiding target selection.

The TSX Venture Exchange requires a modified version of the method where only the historical costs or replacement costs are included. The Exchange does not generally accept the inclusion of warranted future expenditures or administrative costs. No allowance is made for positive encouragement from the results as is the case in some other jurisdictions.

In Australia, a premium or discount may be allocated to the relevant and effective Expenditure Base (represented by the past and future expenditure) through the use of the Prospectivity Enhancement Multiplier (PEM), a factor directly related to the success (or failure) of the exploration completed to date and to an assessment of the future prospects of the tenements. The multiples generally range from 0.5 to 3.0 with zero representing a complete write-off and values greater than 1 applying where exploration had successfully upgraded the property.

Typical Adjustment Factors
	The Prospectivity Enhancement Multipliers (P.E.M.) can range from 0.5 to 5 but is
	usually in the range 0.5 to 3.0. The average is $~1.8$ .
$\times 0.5$	Previous exploration indicates that the area has limited potential for a
	major discovery.
x 1.0	Existing data is sufficient to warrant further exploration. Further work is
	expected to define interesting targets.
x 1.5	Have direct evidence of an interesting target. Further work is warranted
	to evaluate the target.
x20	The tenements contain a defined drill target with significant geochemical
intersections.
x25	Exploration is well advanced and limited infill drilling is likely to define a
	resource.
x3.0	Have already found a substantial resource (that is likely to lead to a
	mine). Further exploration is likely to lead to an increase in the size and
	quality of the resource.

The principal shortcomings of this method are that there is no constant base from which to commence the valuation, as there is with the base cost used in the Geoscience Rating Method, and, secondly, there is no systematic approach taken in arriving at the exploration multiplier. A judgment is required, therefore, at both the start and end of the valuation. An estimate of unit costs for various stages of exploration (eq. acquisition, office studies, regional mapping and geochemistry, geophysics, trenching, RAB and drilling) could be used as an estimate, as a check on actual, stated expenditure.

In other words, what current budget would be required to accomplish the encouraging results presently available? This conceptual budget should be upgraded by the success of the exploration by the use of prospectivity multipliers.

C. Market Approach Method (Comparable Transactions for exploration ground)

If a property in the recent past was the subject of an arms-length transaction, for either cash or shares (i.e. from a company whose principal asset was the mineral property) then this forms the most realistic starting point, provided that the deal is still relevant in today's market. Complicating matters is the knowledge that properties rarely change hands for cash, except for liquidation purposes, estate sales, or as raw exploration property when sold by an individual prospector or entrepreneur.

Any underlying royalty or net profits interests or rights held by the original vendor of the claims should be deducted from the resultant property value before determination of the company's interest. Also, reductions in value should be made where environmental, legal or political sensitivities could seriously retard the development of exploration properties.

It should be noted again that exploration is cyclical, and in periods of low metal prices there is often no market, or a market at very low prices, for ordinary exploration acreage (inventory property) unless it is combined with a significant mineral deposit, or with other incentives.

Truly comparable transactions are rare for early stage properties without defined drill targets. This is natural in a recession, as companies focus on brownfields exploration. Inflated prices paid for property in fashionable areas should not be discounted because they reflect the true market value of a property at the transaction date. If however, the market sentiment is not so buoyant then adjustments must be made.

7.4 Valuation of Resources by Comparable Transactions

When only a resource has been outlined and its economic viability has still to be established (i.e. there is no ore reserve) then a Comparable Transactions approach is usually applied, often stated as a percent of metal value.

With gold projects the method requires allocating a dollar value to resource ounces of gold in the ground. The dollar value must take into account a number of aspects of the resources including:

The confidence in the resource estimation (the JORC Category).
The quality of the resource (grade and recovery characteristics).
Possible extensions of the resource in adiacent areas.
Exploration potential for other mineralisation within the tenements.
Presence and condition of a treatment plant within the project.
Proximity of toll treatment facilities, infrastructure, development and capital expenditure aspects.

There is a wide variety of prices paid for mineral resource transactions in Australia and world wide ranging from less than $5 to over $40 per ounce of gold. Projects may include significant exploration potential and/or a treatment plant.

$7.5$ Applications of Discounted Cash Flow Analysis

Discounted cash flow analysis is a forward-looking methodology which requires that forecasts be made with respect to technical and economic conditions which will prevail in the future. All predictions of the future are inherently uncertain, but the level of uncertainty will be materially reduced if adequate data are available from which to project future rates of production and future costs. The more comprehensive the available data, the more reliable will be the discounted cash flow valuation.

These observations suggest that the most definitive application of discounted cash flow analysis will be in the valuation of an existing mining operation with a well-defined mineable reserve, no potential for additional discoveries, and an established history of consistent production rates and cash costs, sufficient to permit the confident projection of future operating conditions.

One step removed from this is the property for which a favourable bankable feasibility study has been prepared. Almost invariably, such a feasibility study will use discounted cash flow techniques to assess the economic viability of the proposed development, based on the current reserve estimate, comprehensive engineering studies, detailed estimates of capital expenditure and operating cost, and rational projections of product revenues. In this instance, however, the resultant net present value at any selected discount rate may not, by itself, provide an accurate measure of the value of the property.

It is not uncommon for a mining company to commission a bankable feasibility study and commit to production from a new property as soon as a sufficient tonnage and grade of mineralization has been identified to warrant development, but before the entire property has been fully explored. In such cases, the feasibility study will typically make provision, within the original design, for the possible future expansion of the productive facilities to accommodate the definition of additional mineable reserves. Under these circumstances, the net present value derived in the feasibility study will represent a base, demonstrated value for the property, but it is clear that some additional value must be attributed to any inferred resources and unexplored geological potential.

Since discounted cash flow analysis is fully capable of assessing the profitability of various levels of expansion, or increases in operating life, associated with various levels of additional ore discovery, it remains the preferred method for valuing properties which are at the stage of a bankable feasibility study. The value derived, however, will not be as definitive as that for a producing mine, and will be heavily influenced by informed geological judgment as to the most likely level of future discovery.

At a lower level of definition come those properties which have been subjected to preliminary or conceptual feasibility studies, on the basis of a resource which has been identified to a greater or lesser degree of assurance. In these cases, the economic viability of the property will typically be assessed by discounted cash flow analysis, based on preliminary estimates of production, revenue and cost. Despite the preliminary nature of the underlying estimates, it is still generally accepted that discounted cash flow analysis is the best method of valuing mineral properties at this stage of development.

Ultimately, as long as a resource has been identified, it is possible to make a reasoned estimation of production rates, revenues and costs. Discounted cash flow analysis, therefore, can be validly applied to the valuation of any property with an identified resource. In the absence of an identified resource, however, there simply are no data to support the application of discounted cash flow analysis, and such properties must be valued using other methodologies.

7.6 Conclusions

Valuation reports must be prepared by a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and who is therefore obligated to prepare tenement valuations in accordance with the Australian reporting regulrements as set out in the VALMIN Code and Guidelines for assessment and valuation of mineral assets and mineral securities for

independent expert reports (AusIMM, 1995). This code is binding upon members of the AusIMM, who are "competent persons", when preparing public reports concerning the valuation of mineral assets.

Valuation Methods
Exploration areas	> Geoscience Factor Method which rates the perceivedprospectivity of mineral tenements (Australia),> Appraised Value Method which considers past expendituresand applies a multiplier depending on the results obtained(Australia).
	> Modified Appraised Value Method which considers pastexpenditures (Canada)
Advanced exploration areaswith defined resources	> Comparable Transactions method which considers sales ofsimilar deposits to select an appropriate dollar per ounce rate,and> Conceptual Discounted Cash Flow method which is basedon an estimate of future earnings.
Pre-development projects	> Discounted Cash Flow method which is based on apreliminary feasibility study
Development projects	> Discounted Cash Flow method which is based on a fullfeasibility study
Operating Mines	> Discounted Cash Flow method which is based on anoperating records and experience.

Mineral property can be categorised into five groups and methods will vary depending on the data available.

Calculating property values $7.7$

This report uses a stochastic approach to calculating project values incorporating Monte Carlo Simulations based on the ranges chosen in the various methods.

Preferred values are reported as the 50th percentile value with lower and higher values at the 10th and 90th percentile. Statistics of the resulting probability distribution are included for each method over a large number of simulations designed to represent "real life" conditions.

The statistics include maximum and minimum values and range, measures of central tendency including mean, median and mode and measures of variance including standard deviation. Kurtosis and skewness are reported which are measures of 'peakedness or flatness' of the probability distribution and the asymmetry of the distribution. These last two give an indication of the risk involved in the valuation conclusions. A range of percentiles and a histogram are presented.

VALUATION OPINION 8.0

There are no defined resources estimated to JORC standard in any of the tenements within the Gnamma Dam Project. Having considered the various methods used in the valuation of exploration tenements, I am of the opinion that two methods provide the most appropriate approach to the technical valuation. Geoscientific Rating method and the multiple of exploration expenditure (MEE) methods have been applied to the tenement areas and past expenditures to arrive at a range of values and a preferred valuation for the project area. Both methods reflect the current state of knowledge of the prospectivity at Gnamma Dam and the preferred value lies between the two techniques.

The methods emphasise different aspects of the project area, though with significant overlap. The Geoscientific rating method focuses on the exploration potential and the opportunity to make new discoveries. The MEE method focuses on expenditure on the existing target areas and the opportunity to turn these to account.

In arriving at a technical value for a particular exploration tenement, I have taken into consideration the company's equity in the tenement and have only considered the net area of a tenement if it overlaps with any pre-existing titles.

$8.1$ MARKET VALUE

In arriving at a fair market value for a particular exploration tenement, I have considered the current market for mineral exploration properties in Australia and overseas. It is considered appropriate to apply a market premium of 25% to 35% to the technical value of the Sabre's interest in the exploration potential of its tenements given the recent significant improvement in the market for advanced gold exploration properties and the low perceived country risk associated with investments in Australia.

This valuation is based on an assessment of the exploration potential of the project. No resources have been delineated at the project at this stage and no financial studies are possible to assess the impact of the net profits interest and royalty at this stage.

VALUATION OF THE EXPLORATION POTENTIAL - GEOSCIENTIFIC RATING 8.2 METHOD

Elements of the valuation are as follows.

Area - Total area for the fourteen temnements is calculated to be 2,004.738 hectares (20.05 square kilometres). All tenements cover the prospective ultramafic unit and the boundary thrust zones.

BAC - Base acquisition cost is estimated at $4000 to $4500 per square kilometre for the tenements.

Regional Setting - Metal Endowment (Off Property) - The Gnamma Dam tenements are located in the Bulong greenstone belt, east of Kalgoorlie. The tenements are considered prospective for gold, base metals and nickel mineralization though no deposits are known to exist on adjacent tenements. The factor is considered to be 1.00 to 1.25.

Local Setting - Metal Endowment (On Property) - no deposits are known to exist on the tenements though some minor workings are present. The factor is considered to be 1.25 to 1.50.

Anomaly Factor - The area has been explored within the surface environment and several drill targets are known to exist. Several areas require further work and a ratings are set at 2.25 to 2.50.

Geology Factor - The tenements lies on highly prospective lithologies of ultramafic rocks bounded by thrust zones, possibly representing conduits for mineralising fluids. Ratings are set at 2.00 to 2.25.

Prospectivity Index - This index is calculated by multiplying the four factors together. The Index is then multiplied by the BAC and the tenement area to arrive at a valuation. A series of cases have been considered ranging from a Lower case with an index value of 5.63 to an Upper case with an index value of 10.55.

All PLs	Low	High
Area	20.05	20.05
BAC	4,000	4,500
Off Site	1.00	1.25
On Site	1.25	1.50
Anomaly	2.25	2.50
Geology	2.00	2.25
PI	5.63	10.55
Market Factor	1.25	1.35

8.3 VALUATION OF THE EXPLORATION POTENTIAL - MULTIPLE OF EXPLORATION EXPENDITURE METHOD

An assessment of the previous exploration expenditures and the indications of worthwhile exploration targets have been completed. Drill targets have been developed within the ultramafic unit and further regional exploration is warranted. A small allowance has been made for expenditure to date on the current tenements. The

Past Expenditure and PEM values
Expenditure	Low PEM	High PEM
90,000	0.75	0.85
210,000	0.80	1.20
290.000	1.20	1.40

80.400	0.25	0.40

8.4 SUMMARY OF VALUATION

In this report, I have systematically established the value of the mineral assets as at 28 February 2005. After careful consideration of the current market for exploration properties in Australia, I am of the opinion that it is appropriate to apply a market premium of 25% to 35% to the technical value of mineral assets interest in the exploration potential of its project areas for the following reasons:

the recent improvement in the market for exploration properties and demonstrated market interest in small exploration companies exploring for highquality resources;
. the Gnamma Dam project would be well regarded by a prospective purchaser/investor as it represents a project with good potential to discover further mineralization.

A Monte Carlo Simulation method was used to arrive at an appropriate valuation range for the Gnamma Dam project and the results are shown in the following graph.

Valuation Range - Gnamma Dam

A summary estimate of the current market value of the Gnamma Dam Project is presented in the following table. The Low range estimate is taken at the 10th percentile and the high range estimate at the 90th percentile. The preferred valuation is taken at the $50th$ percentile.

Summary of Valuations
MethodTechnical Value	No. ofTenements	Areakm 2	Lower	Upper	Preferred
GeoscientificRatingMethod	14	20.05	752,000	984.000	862.000ja ka ka ka kaban ka kaban ka ka ka ka ka ka ka ka ka ka ka ka ka
	Expenditure	PEM	nwer	Upper	Preferred
Multiple ofExplorationExpenditureMethod	$671,000	1.34	835,000	950,000u dada dada da daga da dada da dada dagaana dagaana dagaana dagaan dagaana dagaana dagaana dagaana dagaana dagaana d	893,000
Average Value			793.000	967.000	იიი

Sabre will hold 100% equity in the Gnamma Dam Project and the valuation has been prepared on that basis.

In my opinion, the market value of the Gnamma Dam project lies in the range $793,000 to $967,000 with a preferred value of $877,000.

CONSENT OF MALCOLM CASTLE

Pursuant to Listing Rule 10.1 and section 611 (Item 7) of the Corporations Act 2001 (Cth) and in relation to the Independent Experts Report to be issued by Sabre Resources Limited ACN 054 570 777 ("Company") and dated in the year 2005 ("Report"), Malcolm Castle consents to the inclusion in the Report, together with any electronic versions of the Report, of all statements made by Malcolm Castle or attributed to or derived from those statements in the form and context in which they are included.

This consent is given on the basis a statement appears in the Report to the effect that:

"Malcolm Castle:

does not make, or purport to make, any statement in this Report or on $(a)$ which a statement made in the Report is based other than as specified in this Section: and
$(b)$ to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Report other than a reference to its name and a statement included in this Report with the consent of Malcolm Castle as specified in this Section."

Dated: 28 February 2005

Signed for and on behalf of Malcolm Castle by:

Signature

Malcolm Castle B.Sc.(Hons) MAusIMM GCertAppFin (Sec Inst)

Malcolm Castle has 38 years experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company 18 years ago and specializes in exploration management, technical Audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including gold, base metals and mineral sands. He has been responsible for project discovery through to feasibility study in Indonesia and technical Audits in many countries.

Mr Castle completed a Batchelor's Degree in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc (Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment.

The information in this report that relates to Resources has been compiled by Malcolm Castle who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM), and has the appropriate relevant qualifications, experience, competence and independence to be considered as a" Qualified Person" as defined in the National Instrument 43-101, Canada as well as an "Expert" and "Competent Person" the Valmin and JORC Codes, respectively.

PO Box 473, South Perth, WA, 6951, Australia Phone: + 61 8 9368 4923, Fax: + 61 8 9368 4932 Mobile: + 61 4 1234 7511, email: [email protected]

AI assistant

SABRE RESOURCES LIMITED — Proxy Solicitation & Information Statement 2005

65750_rns_2005-03-22_396b753b-aa25-4419-86df-1db3a2dcd9b5.pdf

SABRE RESOURCES LTD A.C.N. 003 043 570

NOTICE OF GENERAL MEETING

$-$ and $-$

EXPLANATORY STATEMENT

PROXY FORM

SABRE RESOURCES LTD A.C.N. 003 043 570

CONTENTS

SABRE RESOURCES LTD A.C.N. 003 043 570 NOTICE OF GENERAL MEETING

AGENDA

ORDINARY BUSINESS OF THE MEETING

$\mathbf{1}$ . Acquisition of the Gnamma Dam Nickel Project.

NOTES

SABRE RESOURCES LTD A.C.N. 003 043 570 EXPLANATORY STATEMENT

Shareholders should note that Stanton Partners Corporate Pty Ltd has concluded that the proposal the subject of Resolution 1 is fair and reasonable to the non-associated shareholders of the Company.

Resolution 1 - Acquisition of Gnamma Dam Nickel Project

Introduction

The Project

ASX Listing Rule 7.1

ASX Listing Rule 10.1

Escrow of Consideration Shares and Options

Section 611 Item 7 of the Corporations Act

Financial Effect of the Acquisition

Shares

Independent Expert's Report

Conclusion and Directors' Recommendation

ANNEXURE 'A'

SABRE RESOURCES LTD TERMS AND CONDITIONS OF OPTIONS

SABRE RESOURCES LTD A.C.N. 003 043 570 GLOSSARY OF TERMS

SABRE RESOURCES LTD A.C.N. 003 043 570 FORM OF PROXY

Ordinary Business

Attendance and Voting Eligibility

Proxies

Schedule 1

STANTON PARTNERS CORPORATE PTY LTD

$\mathbf{1}$ . Introduction

1.8 In our opinion, the proposals as outlined in paragraph 1.2 and resolution 1 are fair and reasonable to the shareholders of Sabre not associated with the Coniston Group.

$2.$ Implications of the Proposals

3. Corporate History and Nature of Business

Future Directions of Sabre $4.$

5. Basis of Valuation of Sabre Shares and Options

5.6 Options

6. Value of Consideration

$7.$ Basis of Valuation of the Gnamma Dam Gold-Nickel Project

8. Conclusion as to Fairness

$91$ Reasonableness of the Offer

Advantages

Disadvantages and Other Factors

10. Conclusion as to Reasonableness

11. Sources of Information

Yours faithfully STANTON PARTNERS CORPORATE PTY LTD

AUTHOR INDEPENDENCE AND INDEMNITY

QUALIFICATIONS

DECLARATION

DISCLAIMER

DECLARATION AND INDEMNITY

STANTON PARTNERS CORPORATE PTY LTD

FINANCIAL SERVICES GUIDE Dated 14 March 2005

STANTON PARTNERS CORPORATE PTY LTD $\mathbf{I}$ .

$\overline{2}$ . FINANCIAL SERVICES GUIDE

3. FINANCIAL SERVICES WE ARE LICENCED TO PROVIDE

$\overline{4}$ . GENERAL FINANCIAL PRODUCT ADVICE

5. BENEFITS THAT WE MAY RECEIVE

6. REMUNERATION OR OTHER BENEFITS RECEIVED BY OUR EMPLOYEES

7. REFERRALS

8. ASSOCIATIONS AND RELATIONSHIPS

$9.$ COMPLAINTS RESOLUTION

$9.7$ Internal complaints resolution process

$9.2$ Referral to External Dispute Resolution Scheme

10. CONTACT DETAILS

Schedule 2

INDEPENDENT GEOLOGIST'S REPORT AND VALUATION OF THE GNAMMA DAM GOLD - NICKEL PROJECT, WESTERN AUSTRALIA

TABLE OF CONTENTS

$1.01$ INTRODUCTION

$2.0$ LOCATION AND ACCESS

$2.1$ TENURE

$3.0$ REGIONAL GEOLOGY

4.0 MINERALIZATION STYLE

SABRE RESOURCES LIMITED Proxy Solicitation & Information Statement 2005