SAVANNAH GOLDFIELDS LIMITED — Capital/Financing Update 2003

Feb 2, 2003

ACN 003 049 714

Mail Address PO Box 7066 Riverside Centre Brisbane Old 4001

Level 30 Riverside Centre 123 Eagle St Brisbane Old 4000

Phone: (07) 3832 6488 Fax: (07) 3832 6261 Email: admin@rcm.com.au

ASX ANNOUNCEMENT

3 February 2002

NORTHERN TERRITORY GOLD PROJECTS UPDATE

The Directors of Renison Consolidated Mines N.L. are pleased to provide an update on the current status of the Company's Northern Territory Gold Projects and the plans for the development of these projects.

At the Tom's Gully and Quest 29 gold projects the Company has identified nearly 330,000 ounces of gold in various resource categories and there is potential for significant additional gold resources at Tom's Gully, Ouest 29 and the Company's other Northern Territory tenements.

Resources Summary:

	Tonnes	Grade (g/t gold)	Contained ounces gold	Classification
Tom's Gully
Underground	894.000	7.0	201.200	Inferred Resource
Tailings	250,000	2.4	19,300	Inferred Resource
Quest 29
West Koolpin Zone	306,000	1.0	9,770	Measured and Indicated Resource
North Koolpin	672,830	0.9	18,500	Measured and Indicated Resource
Zamu	1.050.000	2.3	77,300	Inferred Resource

At the Tom's Gully project the Company has an established 250,000 tonne per annum CIP gold treatment plant with associated infrastructure and services. The Company also has established dump leach processing infrastructure at the Quest 29 project.

There are a number of development opportunities that the Company is progressing:

• Dump leaching of ore from North Koolpin (Quest 29). Final design studies are currently underway with the objective (subject to successful completion and a decision to mine) of commencing mining in April/May of this year. Existing leaching pads and facilities would be used. Production would be in the vicinity of 4,000 ounces of gold over 10 months and assist in funding the drilling and ongoing development activities at Tom's Gully and Quest 29.
• Underground Mining at Tom's Gully. Scoping studies have indicated the potential to establish an operation producing 35,000 to 40,000 ounces of gold per annum, generating annual revenues of approximately \$20 million and with an EBITDA of between \$6 and \$7million per annum at a A\$540 per ounce gold price (current gold price is A\$620 per ounce). Treatment of

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the existing tailings resource could also enhance the economics of the project. This outcome is predicated on confirming, in a generalised sense, the resource grade upgrade model and further drilling is required together with metallurgical testwork to optimise the process route. A programme involving drilling 2 or 3 shallow dipping diamond drill holes, with five daughter holes to intersect the reef at a low angle off each, is planned. It is envisaged that this work would be undertaken immediately after the current wet season.

Open cut mining at Quest 29 (and/or other NT projects) in conjunction with underground mining at Tom's Gully. At Ouest 29 there is a 4,000 metre mineralised zone on which a number of resources have been delineated so far. These include an inferred resource of over 1,000,000 tonnes at 2.3 g/t gold at Zamu (contained predominantly within sulphide mineralisation and partly refractory). However, with the finding of additional resources it may be possible to justify the establishment of an additional processing route at Tom's Gully (such as bacterial leaching) to allow the processing of such materials. This would result in an operation based around both underground mining at Tom's Gully and open cut mining at Ouest 29 or elsewhere. The Company plans to assess the feasibility of this further open cut development.

Whilst the Northern Territory Gold Projects will provide the company with an immediate focus with the potential for gold production in the short term with the dump leach and medium term with Tom's Gully underground and potentially additional Quest 29 open cut ore, it is important that the Company develops a strategy for growth past this stage. Consequently, the Company also continues to actively pursue acquisition opportunities for further resource development projects.

For and on behalf of the Board

JPK Marshall Company Secretary Brisbane, 3 February 2003

For further information contact:

Richard Seville or Stephen Bizzell Phone: (07) 3832 6488 $(07)$ 3832 6261 Fax: E-Mail: admin@rcm.com.au

The information on ore reserves and mineral resources contained in this report is based on information compiled by Mr Chris Creagh who is a member of the Australian Institute of Mining and Metallurgy. Mr Creagh has relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined by the Australasian Code for Reporting of Mineral Resources and Reserves.

ACN 003 049 714

Background Information

Tom's Gully

The Tom's Gully mine is located 100kms east south east of Darwin in the Northern Territory. It was mined by Carpentaria Exploration Company Pty Ltd, a subsidiary of MIM Holdings Ltd from 1988 to 1991 by open cut methods, with total production of 356,651 tonnes at 9.23g/t Au to produce approximately 75,000oz of gold.

Gold mineralisation at Tom's Gully for the most part occurs within the eastern part of a solitary quartz-pyrite reef. The reef is 800 metres long at surface and extends down dip for at least 1,500 metres. It strikes east-west and dips to the south initially at about 30 degrees, but gradually flattens to sub-horizontal. Only the eastern half of the reef is mineralised and the mineralised shoot pitches to the south-west parallel to the fold axis in the enveloping sediments. The ore reef pinches and swells gently between 0.5 and 4 metres in the mine area. Gold also occurs in the enveloping sheared and brecciated wall rocks so that the ore zone averages around 2 metres in thickness.

In the primary zone pyrite and arsenopyrite are the main sulphide minerals in the reef. These occur in the ratio of 2:1 to 5:1 and together make up $10-40\%$ of the ore. Gold occurs as microscopic blebs (10 to 12 microns) of electrum in the arsenopyrite in the mineralised section of the reef. Minor gold mineralisation also occurs in pale altered tuff layers, a few metres into the hanging wall of the reef. Minor base metal mineralisation also occurs in the Crabb Fault zone.

In 2002 the Company completed various studies undertaken on the Tom's Gully project. The results and conclusions of these studies included:

• There is an inferred resource of 894,000t @ 7.0g/t Au (201,200 ounces of gold based on a 5 gram-metre cut-off and ordinary kriging).
• The gold mined by MIM was 32% greater than that now modelled as their pre-mining reserve.

	Tonnes	Grade	Ounces Gold
Modelled	366,690	$6.80 \text{ g/t}$	80,073
Mined*	356,651	$9.23 \text{ g/t}$	105,712
Difference	$-10,039$	$+2.43$ g/t	$+25,639$
%	$-2.7\%$	$+36%$	$+32%$
A REPORT OF A RIVER	---------------------------------------

^(*MIM Open Cut Mining)

• The implication is that the gold content of the Inferred Resource stated above is possibly underestimated. A review of Tom's Gully open cut production records showed during the first 12 months of operating, MIM had recognized a similar discrepancy between ore reserves and gold produced.
• Variography undertaken on both grade control drilling data from the open cut and the wider spaced exploration drilling data gave inconsistencies in dominant trend directions between the two sets of data. In the exploration data there was only one trend at 225 degrees apparent,

ACN 003 049 714

whilst in the grade control data there was a dominant short-range trend at 205 degrees and a lesser long-range trend at 225 degrees.

• Historical exploration drilling programmes at Tom's Gully have been widely spaced and predominantly vertical or oriented at 60 degrees to the north. If short range vertical structures contain higher grade gold mineralisation within the reef system, then the drilling would not have adequately determined the gold content of the reef and the reconciliation problems experienced by MIM and the modelling can be explained.
• The scoping study undertaken indicated that the on the basis of a 6.5g/t diluted headgrade, at a production rate of 207,000 tpa, a profitable mining operation could be established producing approximately 35-40,000oz per annum with annual revenues of approximately \$20 million and EBITDA of \$6 to \$7million at a gold price of \$A540/oz (current gold price is A\$620/oz). Capital costs are estimated at \$2m to \$3m.
• The mineralised structure containing the current resource is of a size and extent to potentially contain significantly larger resources than those currently estimated.
• Acceptably high levels of recovery (around 85%) should be achievable on the Tom's Gully $\bullet$ sulphide ore without bacterial leaching or prior oxidation. Based on historical performance and metallurgical testwork it is considered that recoveries around 95% could be achieved with bacterial or pressure oxidation leaching.

Mapping of the high wall (hanging wall) and low wall (footwall) of the open cut identified an increase in structural activity directly above and below the known high grade shoots within the Tom's Gully Reef. This is represented by tight folding and intense steeply dipping cleavage and shear zones. Coincident with the shear zones are steeply dipping boundainaged sulphidic quartz veins and veinlets oriented at 205°, i.e. with the same trend as the short range structures noted in variography. Sampling of these structures on the low wall showed they were gold bearing with values from 0.1g/t to 12.5g/t. A channel sample on the low wall in waste gave $37m$ @ 0.45g/t Au.

This discovery is encouraging as earlier research work on Tom's Gully has identified the sulphidic quartz phase to be the principle gold mineralising event within the reef system. Not only has this confirmed a mechanism for upgrading the reserve grade but also there are potentially significant implications on the dilution grade in an underground mining environment.

De-watering of the open cut was completed in late 2001 and little work is required to either establish drilling sites to undertake drilling from the pit or to access the orebody for underground bulk sampling purposes.

In the event that an underground mine is established at Tom's Gully there is potential to re-treat the tailings from MIM's earlier operation. There is currently an Inferred Resource of 250,000 tonnes at $2.4$ g/t Au (19,300 oz) of tailings.

ACN 003 049 714

Ouest 29

Open cut mining was undertaken at Ouest 29 in 2000 and 2001. Approximately 350,000 tonnes of ore at 1 g/t Au was mined from a number of deposits and treated by dump leaching. An additional 50,000 tonnes of ore at 2.3 g/t Au was treated through the Tom's Gully CIP plant. A total of 6,758 ounces of gold was produced.

Quest 29 Resources
	Tonnage	Grade	Ounces	Classification
Deposit	(tonnes)	(g/t)
West Koolpin Zone	306,000	1.0	9770	Measured and Indicated Resource
North Koolpin	672.830	0.9	18500	Measured and Indicated Resource
Zamu	1,050,000	2.3	77300	Inferred Resource

The following resources remain at Quest 29

The resources in the West Koolpin Zone remain from the mining and dump leaching project undertaken in 2000 and 2001 and are predominantly non-oxide ore types. Consequently, there is only limited potential to mine more than a small proportion (10-15%) of these resources for treatment by dump leaching. The North Koolpin deposit however has not been mined and contains a significant proportion of oxide material which is potentially treatable by conventional methods such as dump or heap leaching.

The majority of the Zamu resources are associated with sulphide mineralisation and not considered amenable for treatment by dump leaching. However, processing at Tom's Gully with a modified circuit in conjunction with Tom's Gully underground ores is worthy of investigation.

West Koolpin, North Koolpin and Zamu are contained within a mineralised trend that has been traced over 4,000m of strike and has the potential to contain resources additional to those stated above.

The Company has approximately 26 square kilometres of granted mining tenements around Quest 29 and Tom's Gully which warrant further exploration for mineralisation of similar style to Quest 29 or Tom's Gully. In addition the Company holds approximately an additional 100 square kilometres of granted exploration licenses with approximately a further 1,100 square kilometres under application which are considered prospective for both gold and base metals but have not been explored by modern methods.