TESORO GOLD LTD — Fund Information / Factsheet 2005

Aug 21, 2005

van Eyk Three Pillars Monthly Comment - July 2005

Market Comments

The ASX 300 surged 2.6% for the month, continuing the incredible run for the Australian market. Resources and energy stocks performed particularly well as crude rose 7.2% over the month, closing at over US \$60/bbl, while renewed confidence in the 'China story', better than expected growth in the US and ongoing supply deficits saw many commodities maintain price strength and encourage investors towards the likelihood of a longer lived commodity cycle.

Australian economic data continued to paint a mixed picture. Positives included low inflation, very strong employment and consumer spending rebounding somewhat. However, ongoing softening of the residential property 'wealth effect' and surging petrol prices will serve to fighten the reins on the highly leveraged consumer.

Bond yields remain subdued, and liquidity remains high, providing further support to equity prices.

China took the first small steps toward a flexible exchange rate system, revaluing the Yuan slightly upwards against a basket of currencies, albeit being a very small move. This should prove to be a positive for commodities over time.

Performance

The portfolio performed strongly for the month as the major miners rallied on the back of continuing solidity in commodity and energy prices, while domestic cyclicals and consumer stocks regained a significant proportion of their steep and overdone falls through April and May. Stocks with expose to infrastructure and resource industry capital spending, such as Downer Edi and Leightons, also performed well.

Positive contributors to the portfolio:

0.54% BHP
---------------------

• Rio Tinto $0.46%$
• CSR 0.43%
• GUD Holdings 0.36% $\bullet$

Negative contributions:

Origin Energy	$-0.13%$

• ANZ Bank $-0.06%$
• $-0.06%$ Oceana Gold
• Westpac $-0.05%$

At month end cash levels were around 8%. With the put option strategy in place as portfolio insurance, the portfolio is protected from any significant falls through to September 2005.

	l1 Month			3 Month 12 Month Inception
NTP	$3.8\%$	7.7%	23.2%	33.8%
ASX 300	2.6%	11.0%	29.0%	40.5%

Outlook

While the stock market has had a superb run, resolution of the mixed economic signals and a raft of key issues will have a significant bearing on the direction of the Australian market for the rest of the financial year.

On the positive side we have:

• Continued low bond yields
• High levels of liquidity
• Resources and infrastructure spend
• Solid commodities outlook
• Improved international outlook

On the negative side we have:

• Consumers tightening belts
• Oil and energy price impact
• Materials and labour cost impact
• Company profit margin pressure
• Potential for ongoing profit warnings

In the short term, the current earnings season and accompanying outlook statements will set the tone. Performance of international markets will of course also have a major bearing. We retain a 'quality' bias in the portfolio, and in line with our investment philosophy and process, the key ratios and aggregate portfolio valuation indicate favourable positioning relative to market.

Portfolio Ratios

	ASX300	VTP
Price Earnings	19.3	17.9
Price to Book	2.6	2.6
Dividend Yield (%)	37	3.8
Price to Sales	20	15
Return on Equity (%)	17.6	19.3

Top Ten Holdings

Company	Weight
BHP Billiton	7.3%
Commonwealth Bank	5.3%
Rio Tinto	4.4%
National Australia Bank	4.3%
ANZ Bank	4.1%
Westpac	4.0%
Toll Holdings	3.7%
QBE Insurance	3.6%
Sims Group	3.5%
Woolworths	3.2%
	43.4%