TANAMI GOLD NL — Capital/Financing Update 2003

Aug 13, 2003

14 August 2003

The Manager Company Announcements Office Australian Stock Exchange Limited PO Box H224 Australia Square SYDNEY NSW 2000

Dear Sir

PLACEMENT IN PILBARA MINES LTD

The Directors are pleased to announce that Tanami Gold NL (Tanami Gold) has taken a 15% placement (\$1,110,600) in Pilbara Mines Limited (Pilbara) made up of 12.34 million shares at 9 cents each to fund ongoing exploration and to continue the feasibility study (including drilling) of Pilbara's high grade Jaguar Project (1.7 million tonnes at 3.6% Cu, 11.9% Zn and 127 g/t Ag) located 60 kilometres NNW of Leonora and 30 kilometres SSE of the Lion Ore/Dalrymple Thunderbox (gold) and Waterloo (nickel) deposits.

In addition to the high grade Jaguar Project (Pilbara 100%), Tanami Gold rates Pilbara's Teutonic Bore Joint Venture tenement package as highly prospective for the discovery of further high grade copper-zinc-silver deposits and gold and nickel mineralisation. The Teutonic Bore Joint Venture is managed by the Canadian based Inmet Mining Corporation (Inmet) and is held lnmet (65%) and Pilbara (35%). Drill testing of additional targets is planned in coming months.

As a result of the placement, Tanami Gold's Managing Director, Denis Waddell will be appointed Managing Director of Pilbara and John Davis (Managing Director) and Ross Smith (Director) will stand down as Pilbara directors. Mr Ross Kestel, Pilbara's Company Secretary, will be appointed a non-executive director pending appointment of an additional director with operational/mining experience. Mr Gary Comb who has extensive mining operations experience, will remain nonexecutive Chairman of both Tanami Gold and Pilbara.

Tanami Gold's investment in and management of Pilbara offers the Company an excellent opportunity to take a position in a high grade deposit and a highly prospective tenement package located in Western Australia's Eastern Goldfields.

Tanami Gold's investment in Pilbara resulted from the Company's ongoing assessment of acquisition opportunities aimed at taking the Company to producer status. The objective in taking a position in Pilbara is to provide Tanami Gold with an opportunity in the medium to long term, to fund future exploration and development of the Company's projects located in the Tanami Province.

Tanami Gold's investment in Pilbara is consistent with the Board's intent of seeking methods of developing internal cash flow and adding shareholder value. Similarly, AngloGold's recent decision to divest itself of its western Tanami tenements including the high grade Coyote deposit, presents an excellent opportunity for Tanami Gold to progress to producer status should the Company be the successful bidder for the AngloGold package. Importantly, such an acquisition would complement Tanami Gold's Larranganni resources located 35 kilometres to the north of Coyote.

Notwithstanding the Company's commitment to the Tanami Province, opportunities such as the investment in Pilbara enables the Company to further add shareholder value and to generate funds to grow the Company.

The outgoing directors of Pilbara, Mr John Davis and Mr Ross Smith have welcomed Tanami Gold's investment in and management of the company given the further technical and commercial expertise and shareholder base which Tanami Gold brings to Pilbara.

Set out below is a summary of the exploration and development potential offered by Pilbara.

Base Metal Potential

Pilbara have recently announced an inferred resource of 1.72m tonnes $@3.66\%$ Cu, 11.9% Zn and 127 g/t Ag at the Jaguar Project.

The Project is hosted by a mixed package of mafic-felsic volcanic/metasediment rocks to the east of the major regional structure, the Keith-Kilkenny Fault.

Jaguar was discovered by Pilbara's joint venture partner, Inmet, a Canadian base metal producer. Jaguar, now 100% owned by Pilbara, is located 4 kilometres directly along strike south from the previously mined (open pit/underground) Teutonic Bore deposit $\approx 1.5$ m tonnes @ 3.5% Cu, 11.9% Zn and 150 g/t Ag recovered).

Tanami Gold has reviewed the resource block model developed by Snowdens (ASX April 2003) and the later infill drill program carried out by Pilbara and are confident that a robust tabular massive sulphide deposit has been outlined by the drill program. Infill drilling has added tonnes internally, leaving edge definition drilling of the body to be carried out to take it into the indicated resource category.

There is also a possibility of a further increase in tonnage internally and both up and down plunge from the deposit. The along strike margins of the deposit are well defined by diamond drilling whereby the central 5 to 8 metre massive sulphide ore body has thinned to $\pm 0.5$ metres at the margins.

The deposit together with Teutonic Bore is classified as a Volcanogenic Massive Sulphide Cu-Zn-Ag deposit which typically (in Canadian Archaean terranes) cluster as a 'camp' over $\pm 30$ kilometres radius.

Additional base metal anomalies plus EM conductors generated by lnmet on joint venture ground (Pilbara 35%) are considered to be highly prospective for further discovery of high value base metals lenses.

Nickel Potential

The Pilbara tenements straddle the Keith-Kilkenny Fault (KKF) zone. To the east of the KKF is the mafic-felsic package which hosts the Teutonic Bore and Jaguar base metal deposits. To the west of the KKF lies the ultramafic-mafic package which hosts the major disseminated nickel deposits, Perseverance, Yakabindie and Mt Keith and the newly discovered massive sulphide nickel deposits at Jubilee's Cosmos and Cosmos Deeps and Lion Ore/Dalrymple's Waterloo and Amorac deposits.

Importantly, the new massive sulphide discoveries are blind deposits located by electromagnetic (EM) surveys and the resultant deep drilling of EM conductors. Within the Pilbara/Inmet Joint Venture tenement EL 57/258, the Joint Venture partners have located an EM conductor close to a 4 kilometre long zone of elevated nickel values (to 0.35% Ni) in ultramafics. In addition, a series of undrilled EM conductors were located by previous tenement holders within the tenements.

The nickel prospectivity of the Pilbara/Inmet tenement package is considered to be very high.

Gold Potential

The mafic-ultramafic package to the west of the KKF zone is a major gold producer with significant past and present production based on centres at Leonora-Tarmoola-Bannockburn and the Lion Ore/Dalrymple Thunderbox deposit 20 kilometres to the NNW of the Joint Venture tenements.

Within both Pilbara's 100% ground and Pilbara/Inmet's tenements, there are a number of significant intersections by previous tenement holders (4 metres $\hat{a}$ 5.8 g/t Au, 4 metres $\hat{a}$ 2.9 g/t Au and 16 metres $(a)$ 1.8 g/t Au). Importantly, gold anomalous zones discovered by Pilbara in the northern tenements returned up to 20 metres $\hat{\omega}$ 0.2 g/t Au in composite sampling with a number of 1 metre $\hat{\omega}$ $0.5$ $\omega$ /t Au being returned from resampling.

The extensive $700 \times 600$ metre and $600 \times 400$ metre surface gold anomalies occur in colluvial/alluvial cover and require systematic follow-up drilling. Gold mineralisation occurs throughout the 30 kilometre strike of the mafic package within the tenements.

Infrastructure

Mine development at the Jaguar Project greatly benefits from existing established infrastructure. A bitumen road passes just east of the proposed plant site and the Goldfields gas pipeline is located approximately 20 kilometres west of the Project. In addition, concentrate handling facilities are already in place at the Leonora railhead, 60 kilometres to the SSE of the Project. Leonora also provides local services to the Project.

In summary, the Pilbara tenements are considered highly prospective for further discoveries of gold, nickel and copper-zinc-silver deposits given:

• the previous base metal production from Teutonic Bore and the new resource delineated at the Jaguar Project:
• existing base metal surface anomalies and EM conductors ready for drill testing;
• the prospective ultramafic rock package with known surface nickel geochemical anomalies and EM conductors; and
• the extensive gold mineralisation and newly discovered surface geochem gold anomalies.

Yours faithfully Tanami Gold NL

Remi Wada

Denis Waddell Managing Director

j08asx762003

Note:

This information, so far as it pertains to Ore Reserves or Identified Mineral Resources is based on and accurately reflects, information compiled by members of the Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists, each of whom has had at least five years relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined in the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves.

FIGURE 1

TANAMI GOLD MOVES TO POSITION ITSELF AS A POTENTIAL PRODUCER BY TAKING 15% INVESTMENT IN AND MANAGEMENT OF PILBARA MINES

FUNDS TO PROGRESS FEASIBILITY STUDY INTO DEVELOPMENT OF HIGH GRADE JAGUAR DEPOSIT

Tanami Gold NL (ASX Code: TAM), has taken a significant step in positioning itself as a potential producer after acquiring a 15% interest in fellow Western Australian minerals explorer, Pilbara Mines Ltd (ASX Code: PIL). Pilbara is currently carrying out a feasibility study on its 100% owned high grade Jaguar polymetallic deposit located 60 kilometres NNW of Leonora in the North-Eastern Goldfields region of Western Australia.

The Perth based precious metals explorer - which holds a major ground position in the Tanami-Arunta Province of northern Australia - said today (Thursday) that it taken a placement of 12.34 million shares in Pilbara at 9 cents per share for a total investment of A\$1,110,600. Funds from the placement will be used to advance exploration and progress the Jaguar feasibility study, including further drilling, with a view to increasing the current inferred resource of 1.72 million tonnes at $3.66\%$ copper, 11.9% zinc and 127g/t silver.

In addition to the Jaguar deposit, Pilbara has a 35% interest in a 200 square kilometre package of tenements held under the Teutonic Bore Joint Venture with Canadian based Inmet Mining Corporation of Canada (65%) which is considered highly prospective for the discovery of further high grade copper-zinc-silver, gold and nickel mineralisation.

As a result of the placement, Tanami Gold's Managing Director, Mr Denis Waddell will be appointed Managing Director of Pilbara with the current Managing Director, Mr John Davis and Director, Mr Ross Smith, both standing down from the Board. Pilbara's Company Secretary. Mr Ross Kestel, will be appointed a non-executive director pending the appointment of an additional director with experience in mining operations. Mr Gary Comb who has extensive operational experience in the mining industry will remain as a non-executive director of both Tanami and Pilbara.

Tanami Gold Managing Director, Mr Denis Waddell said that the investment in Pilbara offered the company an excellent opportunity to take a position in a high grade mineral deposit with near-term development potential as well as an interest in a highly prospective tenement package located in one of Western Australia's most attractive mineral provinces.

"The Board of Tanami rates the potential of this area very highly with Jaguar being located just 30 kilometres south-south-east and on the same structure as the LionOre/Dalrymple discoveries at the Thunderbox gold mine and the Waterloo and Amorac nickel deposits," he said.

"The decision to invest in Pilbara is a result of our ongoing assessment of acquisition opportunities aimed at taking Tanami Gold to producer status," Mr Waddell added. "It in no way diminishes our commitment to the Tanami Province, but rather presents an opportunity to provide medium to long-term funding for our ongoing exploration and development in that region."

"We are currently looking at a number of opportunities to develop internal cash flow and add shareholder value, including the acquisition of the high grade Coyote gold project which has been put out to tender along with the rest of AngloGold's western Tanami land package following their recent decision to withdraw from the area. Should we be the successful bidders, this acquisition will complement our Larranganni gold resource located just 35 kilometres to the north."

Pilbara's Managing Director, Mr John Davis and Director, Mr Ross Smith said that they welcomed Tanami Gold's investment in and management of the company, particularly given the technical and commercial expertise which Tanami was able to bring to Pilbara.

Background Information:

Jaguar Project (100% Pilbara)

The Jaguar deposit was discovered in February 2002 with a current resource of 1.72 million tonnes ( $\hat{a}$ ) 3.6% Cu, 11.9% Zn and 127 $\varrho$ /t Ag, 0.9% Pb and 0.18 $\varrho$ /t gold. This represents 204,680 tonnes of contained zinc. 61,920 tonnes of contained copper and 7.0 million ounces of contained silver.

An independent preliminary scoping study on the Jaguar deposit conducted by Snowden Mining Consultants earlier this year confirmed its potential to support a profitable underground mining operation, subject to further definitive studies, representing a 5 to 6 year mine life. Pilbara is currently completing a pre-feasibility study incorporating project specific costs and metallurgical recoveries for the Jaguar resource, which will better define the scope and life of the project.

There is also a possibility to further increase tonnage internally and both up and down plunge from the existing resource.

$-$ ENDS $-$

Released by: Jan Hope / Nicholas Read Jan Hope & Partners Telephone: (08) 9388-1474

On behalf of: Mr Denis Waddell Managing Director Tanami Gold NL Telephone: (08) 9381-2296 Mobile: (0408) 081 229