TASMAN RESOURCES LTD — Interim / Quarterly Report 2005

Jan 30, 2005

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

ASXQUARTERLY EXPLORATION REPORT FOR PERIOD ENDED 31^ST DECEMBER 2004

HIGHLIGHTS

Minerals

• Identification of strongly haematite-altered and leached breccias in drill hole MS-1 at Marathon South. ٠ The rocks have very strong affinities with the types of rocks at both the Olympic Dam and Prominent Hill deposits and may represent part of a major new, untested, diatreme/volcanic complex hosting copper and/or gold mineralisation, located 24km northeast of Olympic Dam.
• Tasman raised \$1.8 million to further exploration at Marathon South and elsewhere. $\bullet$

Energy

• \$2 million seed capital raised by Eden Energy.
• MOU signed to convert 10,000 buses in Beijing to use Hythane® in time for the 2008 Olympics. $\bullet$
• $\bullet$ MOU signed to convert 10 buses as a pilot project in Guangzhou.
• Negotiations commenced in India for additional Hythane® projects. $\bullet$
• Two new Petroleum Exploration and Development Licences were granted in South Wales.
• Preliminary technical review of the South Wales coal bed methane project very encouraging. The coal $\bullet$ seams in the Lower and Middle Coal Measures have appropriate rank, thickness and gas contents at suitable depths to be potential significant gas producers. Eden will be moving to begin the test drilling over the next six months.

MINERAL EXPLORATION ACTIVITIES

Tasman Resources NL holds a 100% interest in the "Lake Torrens Project" comprising Exploration Licences 2988, 2989, 2594, 2733, 2772, 2832, 2835, 3006, 3007, 3109, 3123, 3140, 3174, 3175, 3176 and 3177 (see Figure 1). ELs 3254, 3260 and 3261 have recently been granted to cover areas being investigated for diamond targets.

Titan Prospect

Two holes, TI7 and TI8, targeting high-grade copper-gold mineralisation were completed during the quarter. The targets tested were identified from Tasman's geological modelling of the Titan system and from coincident, strong geophysical anomalies derived from several independent electrical geophysical techniques.

Hole TI7 failed to intersect higher grade mineralization than that hit in the adjacent encouraging hole TI6.

Hole TI8 drilled into unmineralised Pandurra Formation. Apart from a narrow zone (about 5m thick) of probably late stage, remobilised sulphide mineralisation at the upper contact of the Pandurra Formation, no significant sulphides were intersected. At this stage the cause of the strong AMT anomaly (and the anomalous IP response) is not apparent from the drill hole, and the narrow zone of sulphides seems too thin and weak to be the cause of this strong anomaly. It seems likely that the target may have been just missed by TI8. Tasman is reviewing options such as downhole geophysics to address this question.

A review of the geophysical modeling and drilling results is underway. A revised model of the Titan system will be completed to guide further exploration

Marathon South Prospect

Tasman drilled hole MS1 at its 100%-owned, previously undrilled, Marathon South prospect, located approximately 24km northeast of WMC Resources' Olympic Dam Cu-U-Au-Ag deposit in South Australia. The hole intersected a thick zone of haematite-altered and leached breccias. The hole was testing an AMT conductive zone on the margin of a residual gravity high.

MS1 was completed at a depth of 830.8m, finishing in altered breccias containing weak sulphide mineralisation. A total thickness of over 272.8m (from 558m to 830.8m downhole) of variably haematite-altered breccias and rocks of probable igneous origin were intersected in the hole.

The breccias consist of a variety of matrix and clast support styles, with clasts of meta-sedimentary and igneous rocks within a haematite-dominated matrix. Some breccias contain a variety of clast types, with evidence of more complex rebrecciation. Variable amounts of sericite, carbonate and silica alteration also occur throughout.

The thickness and areal extent of the breccias is not known, but the gravity anomaly being targeted is a complex feature, about 4km by 6km in size, and MS1 has intersected the extreme southwest margin of it (see Figure 3).

Weak sulphide mineralisation, consisting of minor pyrite and lesser chalcopyrite (overall estimated at less than one percent sulphides) was intersected over numerous zones within the hole.

Assay results showed no significant mineralisation was intersected, as expected from the visual logging. The results are consistent with what is currently interpreted to be evidence of strong leaching of the breccias by geological processes not uncommon in volcanic calderas and diatremes.

However, some anomalous values were returned for gold (up to 0.1 $\alpha$ /t Au in individual 2m samples) and copper (up to several hundred ppm with a maximum of 1600ppm over 2m from 804m) for individual samples, despite the strongly leached character of the breccias. All samples were composited over 2m intervals from one-third core fillets.

Tasman believes however it may have located a new large iron-oxide system, potentially mineralised and a relatively short distance from Olympic Dam.

Despite the lack of economic grades in this first hole, Tasman is encouraged by the potential for Marathon South to host significant mineralisation as underlined by the following:

The significant nature and thickness of the breccias. The breccias consist of a variety of matrix $\bullet$ and clast support styles, with clasts of both sedimentary and igneous origin. They exhibit a variety of alteration styles with haematite, sericite, silica and carbonates the principal alteration minerals, and are interpreted as having formed in a subvolcanic diatreme environment.

• The presence of significant igneous and volcanic components in the breccias. Brecciated, $\bullet$ layered tuffaceous rocks, altered dykes of varying composition and altered igneous clasts within the breccias provide further evidence of igneous and volcanic processes during formation of the breccias.
• The rocks in MS1 are undeformed. The lack of deformation of the breccias is consistent with their $\bullet$ formation at Hiltaba age or younger (i.e. ~1600 million years old). Olympic Dam, Prominent Hill and other deposits in the region are undeformed and believed to have formed at this time.
• The size and location of the geophysical gravity anomaly, MS1 has been drilled on the southwest $\bullet$ margin of a large and complex gravity feature. Apart from drill hole MS1, the feature is completely untested. The prospect is located in a highly prospective part of the Olympic copper-gold province of the Gawler Craton. Furthermore, Marathon South is adjacent to a cluster of known IOCG deposits (Olympic Dam, Wiirda, Acropolis and Titan - see figure 1).

Since the completion of MS1, additional gravity data has been collected over the southern part of the anomalous feature. Refined geophysical modeling will be used to select drill targets.

Follow-up drilling of at least four drill holes is expected to commence at Marathon South in March 2005, subject to heritage clearances, preparation of access routes and drill rig availability.

ENERGY ACTIVITIES

Eden Energy Ltd (Tasman 64.33%)

Seed Capital Raising

Eden Energy Ltd ("Eden") has completed a seed capital raising and has entered into an agreement with a party from The Peoples Republic of China and received A\$2,000,000 into the capital of Eden.

The subscription was for the issue of $20,000,000$ shares at 10 cents each together with $10,000,000$ free attaching options to acquire fully paid ordinary shares at 20 cents each on or before $30^th$ September 2009.

Additionally, Tasman Resources NL ("Tasman") has agreed, out of its holding of 50,000,000 shares and 50,000,000 options in Eden, to transfer to the incoming party (which will establish an Australian company to hold the investment) 4,200,000 shares and 2,100,000 options.

The capital structure of Eden is shown in Table 1.

Table 1

	Shares	$\frac{1}{2}$	Options	$\%$
Tasman	45,800,000	64.33	47,900,000	79.04
Incoming Party	24,200,000	33.99	12,100,000	19.97
Existing Seed Shareholders	1,200,000	1.68	600,000	0.99
$r_{\mathrm{otal}}$	71,200,000	100.00	60,600,000	100.00

The purpose of the seed capital raising was to:

• enable Eden to complete the acquisition of the 20% interest in Brehon Energy plc (and the $\bullet$ corresponding 49% interest in Brehon Far East Pty Ltd ("Brehon Far East"));
• fund the ongoing exploration work in South Wales on the coal bed methane and conventional $\bullet$ hydrocarbon joint ventures;
• progress the work in respect of the geothermal licences in South Australia; ٠
• meet the costs of the capital raising; and, $\bullet$

fund the preparation of a prospectus in due course for the listing of the securities of Eden on an $\bullet$ appropriate stock exchange.

Hydrogen Projects $\bullet$

Beiling Bus Project

Brehon Energy plc (Brehon) has entered into a Memorandum of Understanding (MOU) with four leading Chinese groups to establish in China a project to replace 10,000 diesel buses in Beijing with very low emission Hythane® powered buses. These buses will burn Hythane®, a US patented mixture of hydrogen in natural gas, which Brehon acquired from Hydrogen Components Inc. in April 2004.

Tasman Resources NL (Tasman), through its subsidiary Eden Energy Ltd (Eden) is currently acquiring a 20% interest in Brehon and a 49% interest in Brehon Far East Pty Ltd, through which the Project will be under taken.

The Hythane® technology was developed by Frank Lynch (owner of Hydrogen Components Inc.) starting in the 1980s. Hythane® involves the addition of a small percentage of hydrogen (usually about 7% by energy) to natural gas to create a highly efficient very low emission vehicle fuel. Hythane® reduces $NO_x$ emissions by 95%, relative to diesel and significantly reduces $CO₂$ .

Hythane® has been successfully demonstrated in Denver (Colorado) in 1991, Erie (Pennsylvania) in 1993, in Montreal (Quebec) in 1995, and Coachella Valley California in 2003.

Hythane® technology builds upon existing compressed natural gas (CNG) infrastructure and equipment, is fully developed, and available for immediate rollout.

The Beijing Bus Project, which is anticipated to be the first in a series to be undertaken in many major cities in China, will dramatically reduce atmospheric pollution and greenhouse gas emissions in Beijing. It will be the world's first rollout of hydrogen as a vehicle fuel on a major scale.

The other parties to the MOU comprise the following:

• 1. China Association for Hydrogen Energy (CAHE);
• 1. China Electronic Engineering Design Institute (CEEDI);
• 1. Tsinghua University, a leading Chinese university; and,
• 1. Shougang Technology Research Institute (STRI).

STRI is part of the giant Shougang Group of companies that includes Capital Steel Company, a major Chinese steel manufacturer that produces 8 million tonnes of steel per year and has available as a by-product a large quantity of hydrogen. This hydrogen will be used in the blending of Hythane® for the Beijing Bus Project.

The first stage of the project will be a pilot project to develop and test 25 buses using a variety of engines and developing the necessary infrastructure for the entire project. Negotiations with the relevant parties to commence Stage 1 are well advanced and work on Stage 1 is expected to commence in the first half of 2005.

Upon successful completion of the Stage 1, which is expected to take approximately six months, the rest of the Project will be progressively undertaken on a timetable to be completed before the 2008 Olympic Games in Beijing, commencing with a second stage of 2000 buses.

The project has the preliminary approval of the Energy and Transportation Division of the Chinese Ministry of Science and Technology and will seek certification under the Clean Development Mechanism (CDM) of the Kyoto Protocol.

The project is expected to generate substantial tradeable carbon credits from the huge reduction in greenhouse gas emissions by replacing 10,000 diesel buses with Hythane ® buses operating seven days per week in Beijing. These carbon credits are anticipated to form a significant part of the funding package for the project under negotiation. During the negotiation period, the parties intend to finalize the full details of the project and execute a formal contract.

The Beijing Bus Project will represent the first major use of hydrogen as a vehicle fuel and heralds the start of the anticipated global transition to a hydrogen-based fueleconomy. Furthermore, Brehon Far East has now commenced negotiations with several major parties in India for a similar project to introduce Hythane® into the Indian market.

Guangzhou Bus Project

Eden entered into a second MOU with the Guangzhou Motor Vehicle Emission and Notice Control Co-Operative Office in December 2004. The agreement is to establish a pilot project to test two different engines to operate on a combination of hydrogen and LPG for use in ten buses in Guangzhou. The parties propose to negotiate a contract within three months.

Further negotiations on the contract for the Beijing project and the establishment of a joint venture Chinese company are continuing.

۰ South Wales Projects

Two new tenements have been added to the South Wales Project. PEDL 148 and PEDL 149 have been granted and will form part of the project that Eden is acquiring (see Figure 2). These additional tenements are contiguous and immediately north of the existing PEDL 100.

During the quarter, a detailed due diligence and project review was completed by Eden's independent consultants. In summary, the consultant reports that:

• There is significant coal remaining in PEDL 100 to underpin a CBM project despite coal mining having been carried out for over 100 years;
• The coals in PEDL 100 are sufficiently thick, up 20m in some areas, and over a significant portion of the permit are at an optimal CBM development depth range of $200m - 1000m$ ;
• The coals of PEDL 100 range from bituminous in the south through to anthracite in the north. The $\bullet$ target for exploration will be the bituminous coals. Many economic CBM developments have occurred around the world in bituminous coals;
• Gas content determinations from individual locations in the southern portion of PEDL 100 confirm coal bed gas contents ranging from 5 m³/t to over 10 m³/t.
• The coal seams are reported to be interbedded with low permeability sand and siltstone lithologies, which are ideal for CBM extraction with low water production;
• The significant number of abandoned coal mines in the region have also established a further potential $\bullet$ gas extraction opportunity from abandoned mine methane (AMM).

Eden will adopt the following process in assessing the CBM exploration potential of PEDL 100:

• Phase 1: Data review evaluating all appropriate coal and petroleum exploration holes/seismic and mining operations to generate drilling/assessment targets.
• Phase II: Target test drilling and sampling that will provide further data about gas contents; saturations; coal quality; permeability; reservoir properties; preliminary productivity.
• Phase III: Pilot testing of a successful target to assess well spacing; pattern; completion; response time; stimulation effectiveness; water trends; gas rates; history matching.

Phase IV: Field development of a pilot gas producing operation

A similar process will be followed for AMM but be focussed on historic mine workings. Economic development of the project will be dependent upon the recognition of high permeability, low stress structures. Further area specific data will also be required regarding gas content, sorption rate, saturation, reservoir pressures and distribution of historic underground mining workings.

The exploration process being considered by Eden will address the above and progress the CBM/AMM evaluation of PEDL 100 in a staged, risk-minimised, basis.

Geothermal Exploration

During the quarter, Eden was granted three geothermal exploration licences in South Australia. The remaining five applications are expected to be offered in February 2005. An integrated work programme to assess the geothermal targets in the GELs has been developed and will be commenced following grant of all the tenements.

CORPORATE

Share Placement

Tasman closed a placement on 22^nd December 2004 to raise \$1,816,820 via the issue of 8,258,273 shares and 2,064,568 options to acquire fully paid ordinary Shares at 20 cents each on or before 28^th February 2006.

Finance

At 31^st December 2004 Tasman had cash reserves of \$1.89 million.

At 31^st December 2004 Eden had cash reserves of \$1.29 million.

Corporate Structure

As detailed above, the seed capital raising for Eden Energy resulted in Tasman Resources share of Eden diluting to 64.33%.

Guy T. Le Page DIRECTOR

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.

The information in this announcement, insofar as it relates to Mineral Exploration activities, is based on information compiled by Graham M. Jeffress, who is a member of the Australian Institute of Geoscientists, and who has more than five years experience in the field of activity being reported on. It should not be assumed that the reported Exploration Results will result, with further exploration, in the definition of a Mineral Resource.

South Australian Mineral Exploration Lake Torrens Project

Figure 1: South Australia - Lake Torrens Project Location and tenement map, showing granted Tasman exploration licences.

South Wales - Energy Projects Farm-in Area

Figure 2: South Wales Project Location and tenement map; PEDLs cover Coal Bed/Coal Mine Methane and conventional hydrocarbon plays

Marathon South Prospect

Figure 3: Marathon South Residual Gravity Image (residual of 128 pass hanning filtered variable density bouguer gravity, using December 2004 infill gravity data) showing existing drilling and proposed collars for follow-up drilling

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") 31 December 2004

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter \$A'000	Year to date (6 months) \$A'000
1.1	Receipts from product sales and related debtors	0	0
1.2	Payments for (a) exploration and evaluation (b) development (c) production	(463)	(624)
	(d) administration	(151)	(331)
1.3	Dividends received	0	0
1.4	Interest and other items of a similar nature received	14	19
1.5	Interest and other costs of finance paid	0	$\Omega$
1.6	Income taxes paid - GST Paid	(62)	(89)
	Income Taxes - GST Refunds Received	19	33
1.7	Other (provide details if material)	0	0
	Net Operating Cash Flows	(643)	(992)
	Cash flows related to investing activities
1.8	Payment for purchases of: (a)prospects	0	0
	(b) equity investments	(346)	(781)
	(c) other fixed assets	(2)	(3)
1.9	Proceeds from sale of: (a) prospects	0	0
	(b) equity investments	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	Ω
	Net investing cash flows	(348)	(784)
1.13	Total operating and investing cash flows (carried forward)	(991)	(1,776)

1.13	Total operating and investing cash flows (brought forward)	(991)	(1,776)
1.14	Cash flows related to financing activities Proceeds from issues of shares, options, etc.	3,820	4,772
1.15 1.16	Proceeds from sale of forfeited shares Proceeds from borrowings	0
1.17 1.18	Repayment of borrowings Dividends paid	O Ð	0
1.19	Other (provide details if material) Share Issue Costs	(233)	(273)
	Net financing cash flows	3.587	4,499
	Net increase (decrease) in cash held	2,596	2,723
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	584 0	457 0
1.22	Cash at end of quarter	3,180	3,180

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	Addreaate amount of payments to the parties included in item 1.2	219.
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.

Legal Fees paid during the quarter to a firm of which Mr GH Solomon and Mr DH Solomon are partners.

Commissions and fees paid during the quarter to a company of which Mr GT Le Page is a director.

Bona-fide reimbursement of expenses for the period to 31 December 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

$2.2^{\circ}$ 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

	Total	200
-4.2	Development
4.1	Exploration and evaluation	200
		SA'000

and a strong strong part of the strong strong part of the strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong strong st

Subsequent to end of quarter additional capital has been raised to fund part of this expenditure.

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	1.680	484
5.2	Deposits at call	1,500	100
5.3	Bank overdraft	0
5.4	Other (provide details)	0
	Total: cash at end of quarter (item 1.22)	3,180	584

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beainning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed
6.2	Interests in mining		(formerly)
	tenements acquired or	EL 2988	Licence granted (EL 2339)	100%	100%
	increased	EL 2989	Licence granted (EL 2340)	100%	100%
		EL 3123	Licence granted (EL 2507)	100%	100%
		EL 3140	Licence granted (EL 2543)	100%	100%
		EL 2733	Licence granted	100%	100%
		EL 2772	Licence granted	100%	100%
		EL 2832	Licence granted	100%	100%
		EL 3006	Licence granted	100%	100%
		EL 3007	Licence granted	100%	100%
		EL 3109	Licence granted	100%	100%
		EL 3174	Licence granted	100%	100%
		EL 3175	Licence granted	100%	100%
		EL 3176	Licence granted	100%	100%
		EL 3177	Licence granted	100%	100%
		EL 3209	Licence granted (EL 2594)	100%	100%
		EL 3254	Licence granted	100%	100%
		EL 3260	Licence granted	100%	100%
		EL 3261	Licence granted	100%	100%
		Outstanding Applications:
			ELA 62/04, ELA 63/04, ELA 64/04, ELA 65/04, ELA 66/04, ELA 204/04,
			ELA 205/04, ELA 682/04, ELA 685/04, ELA 777/04
			New Applications this quarter:
		Geothermal Licences held in the name of Eden Energy Ltd
		GEL 166	Licence granted	100%	100%
		GEL 167	Licence granted	100%	100%
		GEL 177	Licence granted	100%	100%
			Outstanding Applications in Name of Eden Energy Ltd
			GELA 167, GELA 169, GELA 175, GELA 176, GELA 185

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	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference scurities scription)	NOT APPLICABLE
7.2	Changes during arter (a) Increases bugh issues (b) Decreases bugh returns of iital, buy-backs, lemptions
7.3	*Ordinary securities	86,160,788	86,160,788
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	8,308,273	8,308,273
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	43,795,417	43,795,417	Exercise price 20 cents	Expiry date 28 Feb 2006
7.8	Issued during quarter	3,064,568	3,064,568
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

• $\ddagger$ 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.

RAYMOND FRANCIS BUSCALL - COMPANY SECRETARY 31 JANUARY 2005 Date:

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.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• Accounting Standards ASX will accept, for example, the use of 5 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.

$== == == == == ==$