TIVAN LIMITED — Capital/Financing Update 2003

Apr 3, 2003

HALLMARK SUPPORTS PROPOSED MENZIES DEED OF COMPANY ARRANGEMENT

4 April 2003

In 2002 a wholly owned subsidiary of Hallmark, South Murchison Mines Pty Ltd (SMM) (formerly known as Eaglemist Pty Ltd) advanced to King Solomon Mines Limited (KSM), a wholly owned subsidiary of Menzies Gold Limited (Menzies), the amount of \$871,000. The Loan was secured by a fixed and floating charge over the assets and undertakings of KSM. and a guarantee from Menzies which was also secured by a fixed and floating charge over the assets and undertakings of Menzies.

In January 2003, Administrators were appointed to both Menzies and KSM.

Subsequently Hallmark advised that they intended to work with the Administrator.

Hallmark now advises that it intends to support a proposed Deed of Company Arrangement (DOCA) for Menzies. The proposed DOCA was considered at a creditors committee meeting held on 31 March 2003 and will be further considered at a full meeting of creditors to be held on 11 April 2003. KSM will be placed into liquidation.

Should the creditors of Menzies approve the proposed DOCA and the creditors of KSM approve the release of Menzies it is then proposed to call a shareholder's meeting of Menzies to seek shareholder approval of the DOCA and a number of other matters.

Under the terms of the proposed DOCA the following will occur in respect to KSM;

• $\mathbf{1}$ KSM's plant & equipment, tenements and other assets will be transferred to Menzies in full and final satisfaction of Menzies secured and unsecured debts:
• $\overline{2}$ SMM will provide an absolute release of its claims against KSM:
• $\overline{3}$ KSM will be required to pay outstanding rates and royalties on the tenements to enable the tenements to be transferred to Menzies;
• $\overline{4}$ Menzies will replace the KSM performance bonds and inject \$39,000;
• KSM will release all its claims against Menzies in return for the above payment; 5
• 6 KSM will then be liquidated and a dividend paid to creditors.

In respect to Menzies:

• $\mathbf{1}$ Menzies will acquire the plant $\&$ equipment and other assets as stated above:
• $\overline{2}$ The debt owing to SMM which is guaranteed by Menzies will be assumed totally by Menzies:
• 3 Hallmark will facilitate an initial cash injection of \$120,000 and replace the KSM performance bonds (\$191,000). The cash injection will enable Menzies to complete the acquisition of assets from KSM, make a cash payment to KSM of \$39,000 and make a dividend payment to creditors in full and final satisfaction of amounts currently outstanding;
• The transfer of the fixed assets from KSM is in full and final satisfaction of $\overline{4}$ Menzies secured and unsecured claim against KSM:

$\overline{5}$ Menzies will then proceed to hold a shareholder's meeting which will consider the re-capitalisation of Menzies including a consolidation of share capital, a capital raising, a change of name, the appointment of directors, the re-structure of the debt owing to SMM the terms of which are still to be determined, the acquisition of the Deflector tenement and the Paynes Find tenements currently owned or optioned by Hallmark and various other matters

It is currently envisaged that shareholder's will be presented with all available information including an Independent Experts' report and full details of the proposed capital raising which will enable the re-listing of Menzies.

The DOCA for Menzies, the liquidation of KSM and the shareholder's meeting in Menzies will all be interdependent and the cash injection by Hallmark will not occur until creditors and shareholders have approved the various matters for their consideration.

Distribution to Hallmark Shareholders

The Board of Hallmark further advises that it is actively considering distributing the Menzies shares that it receives as a result of the creditors and shareholder's approval of the DOCA to its shareholders. The final decision in respect to this matter is dependent upon taxation advice and a further announcement will be made when the matter has been determined

For further information contact the Directors at Hallmark's offices on 9327 0900.

Yours faithfully HALLMARK CONSOLIDATED LIMITED

JOHN W BARR Chairman