SAVANNAH GOLDFIELDS LIMITED — Interim / Quarterly Report 2006

Oct 31, 2006

ACN 003 049 714

Mail Address GPO Box 5268 Brisbane Old 4001 Level 5, Santos House 60 Edward Street Brisbane Old 4000

Phone: (07) 3303 0630 Fax: (07) 3303 0601 Email: admin@rcm.com.au

QUARTERLY REPORT OF OPERATIONS FOR THE PERIOD ENDED 30 SEPTEMBER 2006

Highlights of the Quarter's Activities

TOM'S GULLY GOLD

• Tom's Gully Gold Mine commissioned and poured first gold at the end of July $\bullet$
• Maiden reserve statement of 258,000 ounces to be mined over 4 years with an additional production of 121,000 ounces scheduled over a further 2 years. Total current Life of Mine production of 1.8 million tonnes at 6.5 $g/t$ head grade
• Design processing throughput rate achieved through grind-CIL circuits in September
• Flotation and regrind circuits commenced commissioning at the end of September
• During the quarter a total of 1,820 ounces of gold was recovered during the processing plant commissioning phase
• The production rate is expected to ramp up over next two quarters with improvements in underground production rate, grade and recovery

AGATE CREEK GOLD

• Further exploration drilling success including new gold discovery at Zig Zag prospect
• The estimated Mineral Resource increased to 421,000 ounces of gold
• Potential to significantly increase the mineral resource through further drilling at the new Zig-Zag discovery area and other targets which remain to be tested
• Feasibility studies into the development of an open cut/CIP mine scoped at producing 60,000 ounces gold per annum continued

ASHFORD COAL

New discovery area with multi coal seam sequences intersected by drilling at Atholwood

ARRAWATTA COAL

Upcoming drilling program planned to allow an initial resource estimate to be made

CORPORATE

• Underwriting Agreement entered into for the exercise of options expiring 31 July 2006 raised $$2.1m.$
• Appointment of Peter Isles as General Manager Operations
• Placement of unlisted convertible notes to raise \$4.4m completed after the end of the quarter

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Tom's Gully Gold Mine - Northern Territory

Tom's Gully Gold Mine

The Tom's Gully Gold Mine is located approximately 90kms south-east of Darwin in the Including Quest 29 and exploration licenses, the Company holds Northern Territory. approximately 1000 sq kms of tenure in the vicinity of Tom's Gully. The mine is operated as a residential mine with the majority of the workforce traveling to and from the mine daily. To assist in establishing operations the locally based workforce has been supplemented by contractors on a fly-in fly out roster.

The 100% owned mine is being developed and operated under an Alliance Agreement with PT Petrosea Tbk, a subsidiary of one of Australia's largest multidisciplinary engineering, construction and operations and maintenance groups, Clough Ltd.

Tom's Gully reef is a relatively shallow and flat lying orebody with dips ranging from 0 to The gold mineralisation is associated with sulphides and although 20 degrees. predominantly occurring as free gold it is also partly refractory with liberation and recovery dependent on grind size. The gold reports with high recoveries to a sulphide concentrate allowing finer grinding of a concentrate rather than whole of ore.

Underground Mine Development and Production

Underground mine development continued during the quarter with the decline, being mined by the twin boom jumbo, advancing 165m during the quarter and reaching 540m from the portal. Including other areas such as the 910 ventilation drive, twin boom jumbo development totaled 243m for the quarter (June quarter 109m). In addition, 437m of contour drives in ore (June quarter 378m) were also developed by single boom jumbo. Ore mined totaled 20,145 tonnes at 4.1 $g/t$ gold (June quarter 18,134 tonnes at 3.2 $g/t$ ).

Although the underground performance increased compared to the previous quarter, the ramp up did not achieve production expectations due to more difficult ground conditions in the decline and 910 ventilation drive. Constraints in the availability of experienced operators caused by a tight mining labour market in the Northern Territory and Western Australia added to production delays.

Ground conditions in the decline significantly improved in September and are expected to improve further as development moves further south into Block 2 over the next 4 months. New ground support techniques have also been introduced into areas with difficult ground conditions, also improving production rates.

The tightness in the labour market resulted in the introduction of a new underground roster to take effect from mid November, to match changing industry labour conditions. This roster change has assisted recruitment of experienced personnel and will also increase face operating times. Full production teams for the twin boom jumbo and one single boom jumbo will be operating from mid November. Significant improvements in development rates and

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The delays in advancing development and consequential production levels are expected. impacts on areas available for production stripping has delayed underground production ramp up by three months compared with plan.

Only diluted development road ore at a grade of $3-5$ g/t was mined during the quarter. Production stripping of higher grade ore, from the ore drives was trialed in September and introduced into production post the end of the quarter. The ore breaks to a clean roof contact with lower dilution than planned. With the commencement of production stripping underground grades are scheduled to rise in the coming quarters.

Processing Plant Upgrade and Production

Rehabilitation and expansion of the existing plant commenced in November 2005. The works have been extensive and have included.

• the rebuilding of the crushing circuit and the replacement of secondary crusher, twin $\bullet$ deck screen control room and MCC.
• installation of a new 1MW primary grinding mill, loading bin and feed conveyors, and mill tower.
• installation of a flotation circuit.
• rehabilitation of existing CIL circuit, elution circuit and gold room.
• installation of a new MCC

In July the primary grind – CIL circuit was commissioned allowing production of gold to commence with the first gold pour occurring on 28 July. The plant was operated in this simple configuration until the end of September when commissioning of the flotation and regrind circuits commenced. Production for the quarter totaled $37.842$ tonnes at $2.7g/t$ and 55% recovery for 56.4 kgs (1.820 ounces) of gold recovered.

Ramp up in tonnage through the grind- CIL circuit was completed in September with over 19,075 tonnes treated, rising from 14,535 tonnes in August and 4,232 tonnes in July. Completion of this ramp up allowed the focus to move onto the commissioning of flotation and re-grind circuits which commenced at the end of September.

A number of commissioning issues impacted recovery on the initial primary grind-CIL circuit including classification issues on the primary mill circuit affecting grind, carbon activity levels and fluctuating cyanide levels. Recoveries have improved significantly in October and are expected to reach design (84%) through this quarter through further improvements in grind with the optimization of flotation/re-grind circuit, improved carbon management and optimization/stabilisation of cyanide levels.

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Ouarterly Production Summary

		Quarter
	September	June
Twin Boom Jumbo Development	243m	109m
Single Boom Jumbo Development	437m	378m
Tonnes Mined	20,145 tonnes	18,134 tonnes
Grade	$4.1$ g/t gold	$3.2$ g/t gold
Tonnes Processed	37,842 tonnes
Grade	$2.7$ g/t
Recovery	55%
	56.4 kgs (1,820
Gold Recovered to carbon	ounces)

Ramping up of gold production is expected to continue throughout the December quarter with overall substantive improvements expected in underground jumbo performance, tonnage/grade mined and recoveries. Gold produced over the current quarter is expected to almost treble to around 5,000 ounces, rising to 7,250 ounces and $10,250$ ounces over the following two quarters prior to reaching full production rate in Block 2.

Maiden Reserves and Mine Plan

During the quarter, a revised life of mine plan was completed. Total production is scheduled at 1.82 million tonnes at a head grade of 6.5 $g/t$ gold (after dilution) over a period of 6 years. At a design 84% recovery this will produce an average 51,500 ounces per annum with total production of 320,000 ounces over $+6$ years. This is an increase in both production rate and mine life compared to the Feasibility Study (1.2 million tonnes at 7.2 $g/t$ over 5 years at an average 45,000 ounces per annum.) Over four years of production is based on the Probable Reserve with an additional two plus years on the current inferred resources.

The reduction in head grade is due to allowing for increased dilution with a more productive mining method in Block 2 and a drop in mining cut-off with increased gold price.

Ore Reserves and Mineral Resources Table
		Probable Reserves				Mineral Resources
		g/t	000 oz				g/t	000 oz
	Tonnes	gold	Gold			Tonnes	gold	Gold
Development /Stoping	1,175,156	6.5	244,152
Recoverable Pillars	76,043	6.0	14,767
Total	1,251,199	6.4	258,918		Indicated	1,420,000	8.1	369,792
Scheduled Production
from inferred
Resources	567,106	6.6	121,064		Inferred	595,000	7.4	141,557
Total Production	1,818,305	6.5	379,983		Total Resources	2,015,000	7.9	511,349

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The identified mineral resource in the Tom's Gully reef totals over 500,000 ounces of gold and the overall project resources is over 615,000 ounces of gold as set out in the table below.

		Indicated			Inferred		Total
	Tonnes	g/t Au	Oz Au	Tonnes	g/t Au	lOz Au	Tonnes	lg/t Au	lOz Au
Tom's Gully
Underground	.420.000	8.1	369,000	595,000	7.4	142.000	2,015,000	79	511,000
Tailingsl	250,000	2.5	20.000				250,000	2.5	20,000
Quest 29
Koolpin Sedimentsl	85.000	1.8	5.000	105,000	1.3	4.000	190.000	1.5	9,000
Zamu Doleritel				1.050.000	2.3	78.000	1.050.000	2.3	78,000
Total							3,505,000	5.5	618,000

Stage 2 Expansion

The stage two development feasibility studies to increase production to over 65,000 ounces per annum through open cut ore feeds, tailings re-treatment and increased recoveries through proposed changes to the treatment route are progressing well with testwork at Independent Metallurgical Laboratories and engineering design studies by GHD. All testwork has been completed with the exception of the large diameter column leach due to commence shortly. GHD have completed capital cost estimates. The technology to be used to increase recovery is GeoCoat which oxidises the sulphide concentrate in a "bolt on" circuit. This will allow recovery from underground ore to be increased to approximately 95%, enable treatment of the tailings resource and other refractory open pit resources.

Tom' Gully Exploration

The Tom's Gully reef is open to the south, south east and south-west. Further drilling in these areas is expected to increase the overall resource and extend the mine life. In addition a number of other targets have been delineated including:

• sulphidic mineralised dykes
• splays from the main reef to the footwall (multiple reefs)
• the reef east of the Crabb faults where TGD 435 intersected 2.5m of reef (without mineralisation) potentially dipping up towards surface south of the granite in an area previously considered unprospective
• the Crabb Fault for gold and base metals mineralisation

Drilling is planned on both the Crabb Fault target and the potential for Tom's Gully Reef near surface east of the Crabb Fault.

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Agate Creek Epithermal Gold Project - North-East Queensland (RSN $+65\%$

Substantive progress was made during the quarter on the Agate Creek Epithermal gold project in North-East Oueensland located approximately 50 kms west of Kidston and covers an area of approximately 465 sq kms. Work in the quarter, included further drilling programs, an updated resource estimate and continuation of the Feasibility Studies into the development of an open cut mine scoped to produce 60,000 ounces gold per annum. Further drilling programmes will be occurring to increase the current resource.

Continuing Exploration Success

The Company had continuing exploration success with the reverse circulation drilling programmes carried out during the quarter.

Sherwood West

Drilling on the northeast margin of the Sherwood West deposit intersected $24m (a) 1.1g/t$ gold from 76m within CCRC315. This result indicates a continuous easterly dipping zone of mineralisation extending over a distance of 200m down dip from surface. This is further enhanced by a considerable thickening of the mineralisation down dip as the zone extends towards the Zig Zag Fault.

Zig Zag

Drilling within the Zig Zag Fault during the quarter resulted in the discovery of a new steeply dipping mineralised zone with an intercept of 61m $\omega$ 0.9g/t gold from 4m within CCRC324 including $26m$ at $1.5g/t$ gold. Shallow flat lying narrow zones of high grade gold mineralisation have been intersected within three holes within the hanging wall of the Zig Zag Fault. These being 1m @ 18.4g/t gold from 54m in CCRC327, 1m @ 25.9g/t gold from 36m in CCRC328 and 2m @ 31.0g/t gold from 37m in CCRC231. These narrow flat lying veins have also been observed in faces exposed during drill pad access track construction in the hanging wall of the Sherwood West main mineralised zone to the west and have been intersected in Sherwood West drill holes e.g. $2m \omega/2.0$ gold from 18m in CCRC314.

Potential for Sherwood West and Zig-Zag to link up

The drilling so far has significantly enhanced the potential of the Sherwood West to Zig-Zag area. The thickening of the easterly dipping Sherwood West with depth and the high grade horizontal mineralisation above it suggest mining could go deeper and potentially link up with the newly discovered Zig-Zag Fault mineralisation

The intersection point between the easterly dipping Sherwood West lode and the steeply dipping Zig-Zag fault mineralisation is also a significant target. "Blow outs" of mineralisation commonly occur at the intersection point of mineralised structures. If this style of mineralisation were to be present, it would add to the potential for the whole area to become a single large mining area.

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These targets will be drill tested as soon as drilling equipment capable of drilling these depths arrives on site.

CCR328, 1m @ 25.9g/t gold from 36m and CCRC231 2m @ 31.0g/t gold from 37m are approximately 40m and 60m respectively to the south-east of the section line.

Sherwood

Recent drilling within the Agate Creek Fault, $10m$ ( $\alpha$ ) 0.8g/t gold from 40m in CCRC330, has extended the zone of mineralisation within the fault to a strike length of approximately 300m. The mineralisation is consistently located along the western margin of the fault zone. Further drilling to determine the depth extent of this mineralisation will be carried during the next phase of this current drilling campaign.

Holes CCRC 298 and 299 have extended the upper and lower mineralised zones until they subcrop on the side of the hill. This area is outside the current resource. Hole CCRC298 contains 9m $@$ 1.10g/t gold from surface and 5m $@$ 1.26g/t gold from 25m. Hole CCRC299 was collared 35m to the east of CCRC298 and returned 2m $(a)$ 0.63g/t gold from 7m for the upper zone and 4m $\omega$ 0.70g/t gold from 21m for the lower zone.

Holes CCRC 305 $\&$ 309 were drilled to test for extensions of mineralisation in the Agate Creek Faults (previous intercepts 98CCRC48 - 19m @ 1.3g/t gold from 57m and CCRC287 -5m (a) 2.3g/t gold from 41m and ending in mineralisation). Hole CCRC305 returned 14m (a) $0.72g/t$ gold from 67m and Hole CCRC309 returned 10m @ $0.90g/t$ gold from 9m. The gold

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mineralisation within the Agate Creek Fault Zone can now be traced over a strike length of 200m within a zone with an interpreted true width of approximately 10m.

The remaining holes have been testing for mineralisation within stockwork veining to the southwest of the Agate Creek Fault. These holes are CCRC 300, 304, 306, 306 and 310. A number of above cut-off zones have been intersected with additional zones just below cut-off. Best results are from the southern most hole, CCRC310 intercepting $2m \omega$ 8.19g/t gold from 66m to 68m

Full details of the Agate Creek drilling results during the quarter are contained in the ASX announcements released on 18 July, 27 July, 14 August and 14 September 2006.

Mineral Resource Estimates

A combined Indicated and Inferred Mineral Resource of 13.2 million tonnes at 1.0 g/t gold for 428,000 ounces has been estimated at a 0.3 $g/t$ gold cut-off. This is an increase of 10% on the previous estimate at this cut-off. At a 0.5 $g/t$ gold cut-off, a combined Indicated and Inferred Resource of 7.5 million tonnes at 1.5 g/t gold for 350,000 ounces was also estimated. This is an increase of 9% on the previous estimate at the same cut-off. Details are in the tables below:

TAS GAT CATE: OB	11023. TE			SHAMOOD			SHERWOOD soibhn			sharvood west
Resource	Mt	Gold	Gold	Mt	Gold	Gold	Mt	Gold	Gold	Mı	Gold	Gold
Classification		g/l	'000e		g/t	000c		g/t	000		g/t	0000'
			Ż			Ż			z			z
Indicated	8.8	.0.1	289	5.3	1.0	-76	0.0			3.6	1.0	-16
Inferred	4.4	.0.1	136	2.5	1.0	80	0.1	1.2	4	o . .	0.9	52
Total	3.2	$.0 \,$	428	$.8\,$	. 0	255	0.	-2	4		1.0	168

ASGROUP on N		ekoemi			SHRAMOOD			SHERWOOD SOLEN!			SILENOOD ans est e
Resource Classification	Mt	Gold g/t	Gold 000	Mt	Gold g/t	Gold $000*$	Mt	Gold g/t	Gold $000*$	Mt	Gold g/t	Gold $000^{\circ}$
Indicated	5.1	1.5	ΟZ 238	3.0	1.5	ΟZ .44	0.0		ΟZ	້.	1.4	ÖZ 95
Inferred	2.4	1.4	110	.4	1.4	65	0.1	1.6	3	09	1.4	42
Total	'.5	1.5	350	4.4	1.5	210	0.1	1.6	Λ	3.1	$\cdot$ 4	136

Grade and tonnage rounded to one decimal place. Ounces calculated prior to rounding and reported to nearest 1000 ounces.

The estimate is based on a total of 333 drill holes of which 41 have been completed in the current drilling programme.

The increase in the Gold Resource can be attributed predominantly to continued extensions in the Sherwood West structure, the new discovery at Zig-Zag and nearby sub-horizontal high grade mineralisation, together with continuous mineralisation being delineated in the Agate Creek Fault.

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At current gold prices, the $0.3$ g/t gold grade cut-off is considered to approximate the variable cost component of processing ore via a CIP processing plant and the $0.5$ g/t gold grade cut-off would approximate the total cost of CIP processing at a 1 to 1.5 million tonne per annum processing rate. Metallurgical test work to date has shown the ore to be very amenable to carbon in pulp processing with high recoveries at moderate grinds and low reagent consumptions.

Further details on the resources estimate are contained in the ASX announcement of 25 September 2006.

Potential for Increased Resources

The current drilling programme has been very successful in achieving its objectives with additional mineralisation delineated at Sherwood West, Sherwood - Agate Creek Fault and the new discovery at Zig-Zag. A number of major targets remain untested or to be tested further with the current drilling programmes, including extensions of Zig-Zag and the intersection point with Sherwood West with Zig-Zag, the Friar Tuck prospect south east of Sherwood, and Nottingham, east of Sherwood.

Testing of these targets will occur as part of the ongoing drilling programme and it is expected that a further increase in the Gold Resource will occur by the end of the programme and be incorporated into the Feasibility Study currently being undertaken into a potential 60,000oz pa low strip ratio open cut gold mine.

Feasibility Study

The feasibility study into a 60,000 oz pa open cut mine advanced during the quarter with work focusing on longer lead time issues such as electricity supply and water supply. The work is being undertaken by GHD.

Eidsvold

No field work was undertaken at Eidsvold Gold Project (EPM13121) during the quarter.

Targets have been delineated for drilling which will be undertaken after native title processes have been completed.

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Renison Coal Projects - Northern New South Wales

Ashford Coking Coal Project

The Ashford Coking Coal Project comprises two 50% joint ventures with Northern Energy Corporation ("NEC"). The first is the Ashford Mine Area, a joint venture on EL 6234 and EL6428 where NEC is funding exploration and a feasibility study to earn an additional 25%. The second is the Ashford Exploration Area, which covers other exploration licenses (including Atholwood (EL 6526) and Ashford North (EL 6539)) which are being funded on a co-contributing basis. NEC is managing both areas of activity where significant progress was made during the quarter.

Ashford Exploration Area

Ten holes were drilled in Atholwood EL6526 during the quarter. Results of the drilling are summarized in the table below and the location of these 10 holes is on the below map. A multi-seam sequence, similar to the coal measures at Ashford was found. Cumulative coal thickness of approximately 10m was intersected in one borehole.

Chip samples have been taken from 2 holes and show low moisture, high fixed carbon, low volatiles and no swell. These results indicate that the coal has also been geologically heat affected. The level of heating in Atholwood coal appears to be less than at Appletree Flat, to the south and although, the Atholwood coal would not produce a hard coking coal, it could produce a low volatile PCI coal.

Borehole	Jurassic/Arkose	Granite	Permian	Coal	Basement	Comments
NAT001	$0 - 48m$					Lost circulation
						48 m
NAT001	$0 - 79m$	79-84m	u.	u.	ш.	Granite
R
NAT002	$0-30m$		u.	u.	u,	Lost circulation
						30 m
NAT002	$0 - 58m$	$\overline{\phantom{a}}$	u.	u.	58-66m	Arkose on Granite
R
NAT003			$0 - 55m$	33.65 to	55-96m	Drilled on Myall Ck
				35.55m		conglomerate
						outcrop
NAT004	$0 - 45m$		45-54m			Abandoned at 54m.
						Hammer stuck in
						hole
NAT004	$0 - 45m$	u.	$45 - 132m$	67-69m		Hole blocked at
R				$114-$		114m abandoned
				120m		and redrilled at
						NAT008
NAT005	$0 - 30m$	$30 - 42m$	u.	u.	u,	Granite
NAT006			$0 - 11m$	$9-11m$	$11-16m$	Thin skin of
						Permian over
						basement $(?)$
NAT007	$0 - 60m$		$60 - 94m$	ш.	94-100m	Hornfels, heat

Drilling intersection summary EL6526 October 2006

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					affected, no coal
NAT008	$0 - 68m$	68-192m	81.4 to	w	Terminated in
			83.5m		Permian at 192m
			112 to
			116m
			155m
			165m
			179.4 to
			181m
NAT009		$0 - 59m$		59-84m	Permian sandstone
					over basement (?)
NAT010	$0 - 26m$		58 to		Incomplete To be
			61m		deepened

Coal quality results

Hole	Sample	Moisture	Ash %	Vols %	Fixed	SЕ	Swell
	(metres)	$AD\%$			$Carbon\%$	Mj/kg
NAT003	$33 - 34m$	0.9	25.3	8.5	65.3	26.22	0
NAT003	34-35m	0.8	59.4	6.6	33.2	13.16	0
NAT008	179-180	3.1	12.2	2.9	81.8	28.97	0
NAT008	180-181	1.6	24.7	9.7	64.0	26.31
l nato10	58-59	2.0	31.6	19.9	46.5	20.77	0
NAT010	59-60	1.4	17.0	10.6	71.0	26.31

Qualities are reported on an air dried basis (shown). Depths are as sampled and have not been corrected to geophysics.

There remains at Atholwood the potential to discover a coal bearing area of dimensions similar to the Ashford Project to the south. The area, adjacent to the sub crop at Atholwood, has not yet been drilled. Very thick pods of coal have been found in this setting in other areas of the Ashford region.

Following receipt of results of all tests and completion of structural interpretation, an assessment of a follow up programme for Atholwood will be made.

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Location of Boreholes Atholwood

Two boreholes were drilled in the Ashford North area (EL6539) during the quarter and no coal was found. The two holes drilled both went into granite. No further work is currently planned for EL6539.

Ashford Mine Area

An inferred resource of 18mt of hard coking coal has been outlined from previous drilling programs on the Ashford Mine Area.

No drilling activity took place at Ashford Mine Area during the quarter. Discussions with infrastructure providers for potential transport options for the export of Ashford coal continue.

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The Federal Government funded North - South Rail Corridor study has submitted a report which identified the need for an alternative to the current coastal rail haulage network between Brisbane and Melbourne. The "Far West" corridor, which passes through the Moree - North Star region and through Renison's Ashford project area, appears to offer the lowest capital solution, while achieving the required intercity transit time. The addition of coal haulage to this rail project would enhance its viability, while establishment of a high standard heavy haul rail link to the Ashford area would enhance the Ashford project's viability.

Arrawatta Coking Coal Exploration Project (RSN 100%) (ELs 6433, 6434, 6521 & 6568)

Results from the RC drilling program completed at the beginning of the quarter and geological mapping results within EL6433 and more recently granted EL6521 have identified significant thicknesses of coal bearing Permian sediments to the north and south of the original Arrawatta discovery area.

Thirteen drill holes have now intersected Permian sediments with coal over a strike of approximately 3 km with the sequence open to the north and potentially to the south also. A further hole intersected Permian sediments with coal approximately 2 kilometres to the west.

The last four holes were terminated whilst still in Permian sediments due to rig depth capabilities. These holes have been left open and will be completed when the drilling programme resumes.

Coal bearing strata are contained within two to three sequences within the Permian sediments. Cumulative thicknesses of coal in the holes drilled ranges from approximately 3m to almost 18m. Details of the drilling results are contained in the ASX announcement of 21 July 2006.

There is only very limited exposure at surface of Permian sediments. Drilling has therefore been "blind", testing for the Permian coal measures commonly through Tertiary sediments/basalts and recent alluvials. As drilling has progressed, the disposition of the coal measures is becoming better understood. The Permian coal measures strike almost northsouth and have a westerly dip.

Forward Programme

Arrawatta is a regional scale exploration project covering over 240 square kilometres of granted exploration licenses. Drilling at Arrawatta will resume, together with drilling at Renison's 50% Atholwood license when the rig returns from NEC's current drilling programmes in Queensland. Upon recommencing drilling at Arrawatta, the priority for exploration will be the tracking of the Permian coal measures to the north of the current area with broader spaced drilling including the area 2km to the west, and other targets in the licence area including the recently granted EL6568 (Long Plain). In addition, holes which did not penetrate the Permian sequence fully will be extended and further holes drilled to the west to allow an initial resource estimate to be made.

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Corporate

Appointment of General Manager - Operations

Peter Isles was appointed as the Company's General Manager – Operations during the quarter. Peter will be responsible for the optimisation and growth of the Tom's Gully Gold Mine and the management of the Agate Creek Gold Project feasibility study and subsequent development.

Peter is a high calibre senior executive with a strong operational management background in both metalliferous and coal mining. From 1994 to 1998 he was General Manager -Operations for BHP Coal Central Region, a business unit with 3 mines and revenues of over \$1bn per annum. Prior to this he held other senior positions with BHP and Consolidated Goldfields including ten vears experience with metalliferous underground mining operations. He has also previously held board positions with numerous industry bodies including Chairman of the Australian Coal Association and Vice President of the Queensland Mining Council. Most recently, he has been Project Manager for a new mine development in Oueensland making him ideally suited to manage the feasibility study and permitting process for Agate Creek.

Capital Raisings

The company entered into an underwriting agreement with Bell Potter Securities Limited during the quarter with respect to the Company's outstanding 31 July 2006 twenty five cent options. The total number of outstanding options was 8,409,095 and the total amount raised was \$2,102,274.

The Company also entered into binding placement agreements for a placement of unlisted convertible notes that will result in \$4.4 million being raised by the company before issue costs. The placement raising was completed subsequent to the end of the quarter and was undertaken by way of the issue to a small number of institutional and sophisticated investors of 20,000,000 convertible notes at an issue price of 22 cents per convertible note. The convertible notes are unlisted, unsecured, have a term of 1 year with a yield of 10% per annum and have the right to convert into ordinary shares at a conversion price of 22 cents per share.

The capital raised from the entitlement issue and unlisted convertible note issue is being applied to further advance the Company's existing projects including ongoing development and gold production at the Tom's Gully gold mine, current feasibility studies and drilling programs at Agate Creek gold project and ongoing exploration programs at the company's coal projects in NSW and will enable the Company to continue its rapid development as an emerging mining group.

For and on behalf of the Board

JPK Marshall Company Secretary

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For further information contact: Richard Seville or Stephen Bizzell Phone: (07) 3303 0630 Fax: $(07)$ 3303 0601 E-Mail: admin@rcm.com.au Website: www.rcm.com.au

David Waterhouse Waterhouse Investor Relations 0407 880 937

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Messrs Chris Creagh, Barry Willott and Scott Hall who are members of the Australian Institute of Mining and Metallurgy. Messrs Creagh, Willot and Hall are full-time employee of Renison Consolidated Mines NL and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person's as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Messrs Creagh, Willott and Hall consent to the inclusion in the report of the matters based on his information in the form and context in which it appears.