TASMAN RESOURCES LTD — Interim / Quarterly Report 2004

Jul 29, 2004

TASMAN RESOURCES NL

ACN 009 253 187

Level 40, Exchange Plaza 2 The Esplanade, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866

Website: www.tasmanresources.com.au

ASX QUARTERLY EXPLORATION REPORT FOR PERIOD ENDED 30TH JUNE 2004

HIGHLIGHTS

• $\bullet$ Minerals
• o Several new high-grade iron oxide Cu-Au (IOCG) targets have been identified at Titan and the first two are scheduled to be drill tested commencing $24^th$ August 2004;
• An IOCG target recognized at Marathon South, 24km northeast of Olympic Dam. $\circ$
• Energy
• Tasman established a wholly owned subsidiary Eden Energy Pty Ltd ("Eden") to target $\circ$ several highly prospective and strategic sectors of the rapidly emerging green energy market and the enormous economic potential of the global transition from a hydrocarbon to a hydrogen-based economy
• Seven geothermal exploration applications were lodged for South Australia. $\circ$
• Eden has entered into farm-in agreements that give it the right to acquire a 50% interest $\circ$ in a 230km² licence covering Coal Seam Methane/Coal Mine Methane and Natural Gas in the South Wales coal fields and a £1M farm-in to earn $50-60\%$ on a deeper natural gas play over the same area.
• Eden Energy also signed an MOU with Irish-based Brehon Energy PLC ("Brehon") to $\circ$ . acquire up to 20% of the issued shares in Brehon and form a 49:51 company known as Brehon Far-East Pty Ltd (Brehon Far-East) for the investment of US\$1M over nine months. Brehon Far-East will have the exclusive rights to market and distribute leading edge Hydrogen storage and Hythane® products owned or developed by Brehon throughout Asia and Australasia -these products are positioned to form a bridge between fossil fuels and the hydrogen economy.
• Corporate
• $\circ$ During the quarter, Tasman raised \$60,000 by way of placement of four million 20° options exercisable by 28^th February 2006.
• Since the end of the quarter, Tasman has agreed to place five million shares at 7.5c each $\circ$ to raise a further \$375,000.

REVIEW OF OPERATIONS

Tasman Resources NL holds a 100% interest in the "Lake Torrens Project " comprising Exploration Licences 2988, 2989, 2642, 2733, 2772, 2832, 3006, 3007, 3109, 3123, 3140, 3174, 3175, 3176, 3177 and 3209 (formerly 2594) as well as a number of licence applications (see Figure 1).

Tasman also holds a 100% interest in Eden Energy Pty Ltd, a new company as detailed below, which is investing in a range of energy related projects.

Mineral Exploration Activities

Titan Prospect

Ongoing technical assessment of the Titan Prospect by Tasman during the quarter has reinforced the prospectivity of this large underexplored iron oxide copper gold system and resulted in high priority drill targets being selected for drilling in late August 2004.

Further AMT geophysical surveying has identified a number of conductive zones of varying strength which coincide with other geophysical anomalies, highlighting the prospectivity of these zones.

As previously reported, two holes targeting high-grade copper $\pm$ gold mineralisation are planned based on Tasman's geological model of the Titan system, and recently acquired encouraging electrical geophysical data from several independent techniques.

Hole TI7 will be drilled 80m southeast of TI6, and, based on the geological model, is designed to follow up the higher-grade mineralised zone intersected near the top of T16. In addition, the potential for a sulphide-rich ore zone at this location is supported by:

• A conductive geophysical response from recent AMT surveys and, $\bullet$
• An anomalous geophysical response from a MALM survey conducted from within drill hole TI6. $\bullet$

Hole TI8 will be drilled approximately 500m east of TI6, in a new target area, based again on the geological model, supported by a number of essentially coincident geophysical anomalies obtained from separate and independent geophysical techniques. TI8 will test for high grade, sulphide-rich ore, targeting:

• A large area of relatively dense, but non-magnetic rocks, likely to be hematite-rich and ideal hosts for high grade copper-gold mineralisation in such iron-oxide systems. This target is identified by a significant gravity anomaly or "bulge" outside the main magnetic anomaly.
• A very strong and relatively wide, recently defined AMT anomaly, indicating a strongly conductive zone coincident with this gravity anomaly or bulge.
• A substantial IP geophysical anomaly, located in an earlier survey, indicative of a chargeable $\bullet$ geological feature, possibly disseminated sulphides, and
• MALM geophysical anomalies from surveys conducted within drill holes TI4 and TI6. $\bullet$

Marathon South

A single AMT geophysical traverse was completed across a residual gravity anomaly, coincident with a relative magnetic low, within a much larger (10km by 25km) regional northeast trending magnetic and gravity feature. The Waterman's Plains copper occurrence, located within the Andamooka Limestone at the top of the overlying sedimentary sequence is 2.4 km northeast along this trend.

Geophysical modelling suggests that the source of the gravity anomaly at Marathon South could be an iron-rich body within the basement at a depth of about 450m to 500m. The recent AMT geophysical traverse indicates that the northwestern margin of the gravity anomaly is electrically conductive, and this could be due to sulphides hosted within a modest-size, iron-oxide copper gold system.

Follow-up work, including possible additional geophysics, to assess this moderately dense, conductive anomaly and refine drill targeting is currently underway. Drill testing of the Marathon South area is proposed for the latter half of 2004 subject to heritage clearances and rig availability.

Energy Activities

During the quarter, Tasman established a 100% subsidiary company, Eden Energy Pty Ltd, as the focus for a range of new 'green' energy opportunities. Eden will manage interests:

• in geothermal energy;

• in coal bed/coal mine methane; and,
• in hydrogen fuels, transport and storage; $\bullet$
• in a conventional oil/gas play. $\bullet$

Geothermal Applications (TAS 100%)

Eden has applied for seven geothermal licenses in South Australia. Eden's strategy will be to test the suitability of the target areas, drill test wells and, if successful, establish a power generation facility that can be used to either generate electricity or produce clean hydrogen for use as a fuel or additive to methane to produce Hythane®. It is proposed that both of these products will be marketed through the down-stream technology developed by Brehon.

South Wales JV (TAS earning 50%)

Tasman entered into a joint venture with Welsh-based Coastal Energy LLC that will give Tasman the right to acquire a 50% interest in Coal Bed Methane (CBM)/Coal Mine Methane (CMM) and Natural Gas ("NG") in part of the South Wales coalfields. The Petroleum Exploration and Development License (PEDL 100) covers an area of approximately $230 \text{ km}^2$ .

In addition Tasman has also entered into a JV to acquire a 50% interest (up to 60% if expenditure >£1M) in an interpreted Oil/Natural Gas target situated within Devonian age rocks beneath the South Wales coalfields.

Both of these potential gas resources are strategically located in and around a number of industrial sites that are potential end users.

Brehon Energy plc (TAS option to acquire 20%) / Brehon Far East P/L (TAS 49%)

Eden has signed an MOU with Irish-based Brehon Energy PLC ("Brehon") to form Brehon Far-East Pty Ltd (Brehon Far-East) in which Eden will hold 49% of the issued capital. Tasman through Eden will also subscribe for up to 2.5M shares (representing 20% of Brehon) in Brehon via the investment of US\$1.0M in instalments over nine months. Brehon Far-East will have an exclusive license to market and distribute all Hydrogen and Hythane® (a mixture of methane or natural gas and hydrogen) products owned or developed by Brehon throughout Asia, Australasia and the Pacific.

Brehon owns or has rights to a range of leading edge patented Hydrogen and Hythane® technologies that address several major issues facing the transition to the Hydrogen economy. The Hythane® technology has been successfully trialled and is ready for commercialisation particularly in the expanding CNG vehicle markets. Brehon is also in discussions in respect to sales with several substantial end users in Europe.

Brehon's Technology

• Hythane reduces $CO_2$ , $NO_X$ and other greenhouse gas, generating carbon credits;
• Incremental amounts of hydrogen can be added to CNG up to a solution limit in excess of 75% hydrogen;
• $\bullet$ Brehon's Hydrogen technology involves the cryogenic storage of hydrogen & other gases, enabling higher amounts of hydrogen to be stored in smaller sized tanks;
• Brehon has applied for patents having the potential to produce a more effective cryogenic storage tank:
• An immediate application for this new patent may be in hydrogen-powered vehicles that currently $\bullet$ have a limited range.

A summary of Brehon Products in the alternative fuels, tanks and systems market that will be marketed by both Brehon and Brehon Far-East are outlined in Table 1.

|--|--|

	CNG (Methane)	Hythane®	Hydrogen
Application	Cars, Trucks, Buses, Rail, Ships	Cars, Trucks, Buses	Cars initially
Fuel		Hythane®
Tanks	Methane CNG LNG light weight tanks	Hythane® Tanks Supercritical Liquid Compressed gas	Hydrogen Tanks Supercritical Liquid Compressed gas
Fuel Systems	Refuelling Pumps Conversion kits	Refuelling Pumps Conversion kits Reliquefaction	Refuelling Pumps Reliquefaction & on board systems
R&D	Light weight tanks	Advanced Hythane®	Advanced hydrogen tanks Power distribution

Brehon's Strategy

• Brehon proposes to focus on the production, storage and use of alternate fuels, including Hythane®, CNG and hydrogen;
• The strategy is to offer appropriate fuels and systems to customers depending upon available infrastructure and market conditions:
• Brehon is in discussions with automobile manufacturers to design $\&$ build prototype cryogenic $\bullet$ storage tanks for developmental hydrogen vehicle programs;
• It is proposed the distribution of Hythane® will begin where existing CNG vehicle markets exist, $\bullet$ where there is a lack of oil but availability of CNG, and in regions that value reduced emissions;
• Brehon will seek to have Hythane® offered as an alternative fuel at vehicle fuelling stations in the $\bullet$ same way that higher-octane fuel is currently available.

Corporate

Share Placement

During the quarter, Tasman raised \$60,000 by way of placement of four million 20¢ options exercisable by 28th February 2006. Since the end of the quarter, Tasman has agreed to place five million shares at 7.5¢ each to raise a further \$375,000. Both placements were to fund ongoing exploration in South Australia and expenditure by Eden Energy Pty Ltd.

Finance

At 30th June 2004, Tasman had cash reserves of \$457,000. As noted above, an additional \$375,00 was raised after the end of the quarter.

Gregory H. Solomon EXECUTIVE CHAIRMAN

The interpretations and conclusions reached in this report are based on current geological theory and the best evidence available to the authors at the time of writing. It is the nature of all scientific conclusions that they are founded on an assessment of probabilities and, however high these probabilities might be, they make no claim for complete certainty. Any economic decisions that might be taken on the basis of interpretations or conclusions contained in this report will therefore carry an element of risk.

South Australian Mineral Exploration - Lake Torrens Project

Figure 1: South Australia - Lake Torrens Project Location and tenement map, showing granted Tasman exploration licences (Green) and Tasman licence applications (Pink).

South Wales Energy Projects Farm-in Area

Figure 2: South Wales Project Location and tenement map; PEDL covers Coal Bed/Coal Mine Methane and conventional hydrocarbon plays.

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

TASMAN RESOURCES NL

ABN

85 009 253 187

Quarter ended ("current quarter") 30 JUNE 2004

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter \$A'000	Year to date $(12$ months) \$A'000
1,1	Receipts from product sales and related debtors	$\Omega$	0.
1.2	Payments for (a) exploration and evaluation (b) development (c) production (d) administration	(278) (127)	(1,324) (560)
1.3	Dividends received	0	$\Omega$
1.4	Interest and other items of a similar nature received	9	34
1.5	Interest and other costs of finance paid	0	$\Omega$
1.6	Income taxes paid - GST Paid	(32)	(168)
	Income Taxes - GST Refunds Received	39	175
1.7	Other (provide details if material)	0	$\Omega$
	Net Operating Cash Flows	(389)	(1, 843)
	Cash flows related to investing activities
1.8	Payment for purchases of: (a)prospects	0	0
	(b)equity investments	0	0
1.9	(c)other fixed assets Proceeds from sale of:	0	(8) 0
	(a) prospects (b)equity investments	0 0	0
	(c) other fixed assets	0	0
1.10	Loans to other entities	0	0
1.11	Loans repaid by other entities	0	0
1.12	Other (provide details if material)	0	0
	Net investing cash flows	$\mathbf 0$	(8)
1.13	Total operating and investing cash flows (carried forward).	(389)	(1.851)

1.13	Total operating and investing cash flows (brought forward)	(389)	(1,851)
1.14	Cash flows related to financing activities Proceeds from issues of shares, options, etc.	60	2,118
1.15	Proceeds from sale of forfeited shares	0	0
1.16	Proceeds from borrowings	0
1.17	Repayment of borrowings	0
1.18	Dividends paid	0	0
1.19	Other (provide details if material)
	Share Issue Costs	0	(101)
		60	2,017
	Net financing cash flows
	Net increase (decrease) in cash held	(329)	166
1.20	Cash at beginning of quarter/year to date	786	291
1.21	Exchange rate adjustments to item 1.20	0	0
1.22	Cash at end of quarter	457	457

Payments to directors of the entity and associates of the directors

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

		Current quarter \$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	90
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions Management Fees, as per agreement, were paid during the quarter to a company of which Mr GH Solomon and Mr DH Solomon are directors. Bona-fide reimbursement of expenses for the period to 30 June 2004 Directors Fees and Superannuation paid during the period.

Non-cash financing and investing activities

$2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Not applicable

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used \$A'000
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

\$A'000

$4.2$ Development

Total

$300$

$300$

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.		Current quarter \$A'000	Previous quarter \$A'000
-5.1	Cash on hand and at bank	107	86
5.2	Deposits at call	350	700
5.3	Bank overdraft	0
5.4	Other (provide details)	0
	Total: cash at end of quarter (item 1.22)	457	786

Note: Since the end of the quarter, Tasman has agreed to place five million shares at 7.5c each to raise a further \$375,000

Changes in interests in mining tenements

	Tenement reference	Nature of interest (note (2))		Interest at beginning of quarter	Interest at end of quarter
6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased	EL 2988 EL 2989 EL 3123 EL 3140 EL 2642 EL 2733 EL 2772 EL 2832 EL 3006 EL 3007 EL 3109 EL 3174 EL 3175 EL 3176 EL 3177 EL 3209 Outstanding Applications: GELA 177	Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted Licence granted ELA 62/04, ELA 63/04, ELA 64/04, ELA 65/04, ELA 66/04, ELA 67/04, ELA 81/04, ELA 82/04, ELA 204/04, ELA 205/04 New Applications this quarter: GELA 166, GELA 167, GELA 168, GELA 169, GELA 175, GELA 176,	(formerly) (EL 2339) (EL 2340) (EL 2507) (EL 2543) (EL 2594)	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	price Issue per security (see note $3)$ (cents)	Amount paid up per security (see note 3) (cents)
$\overline{7.1}$	Preference *securities (description)	NOT APPLICABLE
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3	*Ordinary securities	66,752,515	66,752,515
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	NIL.	NIL.
7.5	*Convertible debt securities (description)	NOT APPLICABLE
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options	34,630,849	34,630,849	Exercise price 20 cents	Expiry date 28 Feb 2006
7.8	Issued during quarter	4,000,000	4,000,000
7.9	Exercised during quarter	NIL	NIL
7.10	Expired during quarter	NIL	NIL
7.11	Debentures (totals only)	NOT APPLICABLE
7.12	Unsecured notes (totals only)	NOT APPLICABLE

Compliance statement

$\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

$\overline{2}$ This statement does give a true and fair view of the matters disclosed.

GREGORY H SOLOMON - DIRECTOR Date: 30 JULY 2004

Notes

$\ddagger$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

$\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

Issued and quoted securities The issue price and amount paid up is not required in 3 items 7.1 and 7.3 for fully paid securities.

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

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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