TESORO GOLD LTD — AGM Information 2006

Oct 30, 2006

CHAIRMAN'S ADDRESS Annual General Meeting of Shareholders Tuesday, 31 October 2006

van Eyk Three Pillars had a strong year in terms of absolute returns and increase in share price.

The Company earned a profit after tax of \$14 million, compared to a profit after tax of \$7.8 million for the year to 30 June 2005. Movements in the investment portfolio are recognised in the Income Statement.

The Net Tangible Asset backing per share (net of tax) has increased from \$1.07 at 30 June 2005 to \$1.20 at 30 June 2006, after payment of fully franked dividends of 8 cents per share.

van Eyk Three Pillars is not a traditional Listed Investment Company

• It has an actively traded portfolio, unlike the long-term buy and hold portfolios of the traditional Listed Investment Companies.
• The aim of the Company is to pay a portion of the gains on the increased value of the investment portfolio as dividends, thereby enhancing the yield above that of the underlying yield of the portfolio.

In the market announcement of 30 October 2006 the directors advised an increased targeted annual dividend total of 9 cents per share fully franked, up from the previous targeted rate of 8 cents per share. Annual dividends of 9 cents fully franked – is worth 12.85 cents before tax to an individual and more to a superannuation fund

The payment of these dividends is supported by the accumulated profits net of tax of 23 cents at 30 September 2006 and the ongoing receipt of dividends on the shares in the investment portfolio. However, the Company can only pay dividends out of the accumulated profits or current year profits. While not expected, if the investment portfolio were to drop significantly the directors would need to review the dividend policy.

A particular focus of the board for the year ended 30 June 2006 was to implement strategies aimed at reducing the share price discount to net tangible assets. One such strategy was to increase the capital and shareholder base of the company to increase ongoing demand for van Eyk Three Pillars shares. During the year the total capital raised was \$15.3M. Of this amount, \$3.9M was from the Share Purchase Plan and Dividend Reinvestment Plan and \$11.5M via a placement of shares to institutional and sophisticated investors. Of particular note, the placement led to the addition of over 300 shareholders, many of whom are expected to be ongoing buyers of van Eyk Three Pillars shares

Secondly, the stated intention of the board to pay 8 cents per share per annum announced in November 2005 was favourably received at the time of the announcement. The intention to increase this to 9 cents per share announced this week is expected to continue to strengthen demand for van Eyk shares. Seeking to reduce or eliminate the share price discount to NTA recognises the focus of the directors on ensuring that shareholder value is enhanced in both the short and long term.

The investment portfolio of van Eyk Three Pillars is managed by Three Pillars Portfolio Managers Pty Limited, formerly a division of van Eyk Research and now a separate entity. Corporate management is undertaken by VTP Management Pty Limited, renamed from White Funds Management Administration. The directors' responsibilities therefore do not include investment decisions, but rather ensuring that the managers operate in accordance with their mandates and in the best interest of the shareholders. The board also addresses issues of corporate governance, reviews corporate strategy and monitors the timeliness and accuracy of reporting to shareholders.

The investment mandate is a contrarian approach, seeking to buy stocks that represent good value which should therefore be re-rated. While the investment returns since inception are extremely strong in absolute terms, they are slightly below the index. In such a strong momentum market it has been a good performance to remain in touch with the index. When the market changes, we expect the contrarian approach to place us well

Of course no one can pick the timing of changes in the market. It is for this reason that listed investment companies, like most share investments, should be undertaken for the medium or long term.

Our valuation indicators show that Australian equities are around fair value as the earnings outlook has been supported by the recent round of corporate earnings reports. While mining earnings are extraordinarily high, with some scope for further growth, there is a mixed outlook for other sectors. There has been considerable caution in many recent company outlook statements which reflects moderating growth expectations and increasing inflationary pressures. With the current portfolio composition, the board consider the company well positioned to face the challenges of 2007.

I thank you for your support.

$D.J.$ lliffe Chairman