VARISCAN MINES LIMITED — AGM Information 2003

Nov 27, 2003

PLATSEARCH NL ACN 003 254 395

SET OUT BELOW IS THE CHAIRMAN'S ADDRESS TO BE DELIVERED TO SHAREHOLDERS AT THE ANNUAL GENERAL MEETING AT 4:30PM. 28 NOVEMBER 2003.

CHAIRMAN'S ADDRESS TO 2003 ANNUAL GENERAL MEETING

PlatSearch has stayed on track through 2002-2003 with another year of prospect development work and drilling on many prospects in the Curnamona Province, the Gawler Craton and the Mt Isa Block. Most of this work has enhanced the value of its areas and moved them that step closer to discovery. These advances have been achieved at low cost to PlatSearch.

For example over the two vears since July 2001 there has been 22,000 metres of drilling on 32 PlatSearch prospects funded by joint venturers. The total exploration expenditure by PlatSearch was only \$247,000.

Your company achieves such cost-effectiveness by sticking to its agenda:

• $\bullet$ Tight, low-cost management.
• Concentrate on ground acquisition and identification of drill targets,
• Farm out projects for high cost stages of exploration,
• Strong relationships with serious explorers.

Over the past seven years, joint venture funding from PlatSearch's partners has averaged \$1.45 million per annum compared with PlatSearch's own exploration expenditure which has averaged only \$200,000pa. This leverage is achieved by farming out the high risk, high cost drilling phase to other parties. Minotaur showed that if you are involved in a discovery, even a 19% interest results in a major share price appreciation.

However, when metal prices are in cyclical lows and exploration spending is down. there are problems with such a strategy. Perhaps the biggest issue faced by PlatSearch during the last few years is getting follow-up holes drilled. PlatSearch has obtained very encouraging results in many of its first hole tests such as confirmation of the right rocks, presence of haematitic breccias, metal anomalism, alteration etc. The first hole on a prospect is usually designed to answer the question "Are we in the right environment?" If the answer to that is positive, then follow up holes must be drilled. The likelihood of an ore-grade intercept in the first hole test of a typical base metal prospect is extremely low. This is particularly the case in deeply covered areas where drillhole targeting relies solely on geophysical data such as magnetic and gravity methods. For example, the drilling results at Minotaur's Mt Woods remind us that the relationships between magnetic and gravity anomalies and mineralisation can Further holes are necessary in order to identify vectors towards be subtle. mineralisation. It is a rare prospect that requires less than, say, five holes to

determine whether a "discovery" is indicated. Roxby Downs was "discovered" on the 10th drillhole.

In a flat market it has been difficult for PlatSearch to persuade partners to drill follow-up holes. However, the environment for exploration has improved and the outlook for 2004 is promising. The following is an extract from Metals Economics Group Press Release on 27 October. "Worldwide allocations for commercial nonferrous metals exploration are up by about 26% from 2002, representing the first increase in worldwide spending since 1997's exploration peak. Prior to this year's increase, substantial cutbacks by the majors, the negative effects of industry consolidation, and a loss of funding for a great number of junior companies contributed to five straight vears of declining exploration spending by the companies covered by our studies, from a high of \$4.09 billion in 1997 to a low of \$1.73 billion last year-an overall decline of almost 58%. This year's increase in worldwide exploration allocations is in large part due to the combination of increased spending by the majors as they recognize the dearth of new projects moving up the pipeline, the significant reduction in the negative effects of industry consolidation on exploration from the peak consolidation levels seen in 2001 and 2002, and two consecutive years of increased spending by junior companies on the back of increased gold prices and rising investor interest. If the gold price remains buoyant and demand for both copper and nickel remains strong, we expect that exploration budgets will continue to rise in 2004, aided by a sustained reduction in highlevel industry consolidation and increased junior spending."

As exploration spending picks up, it is well to realise that since 1997 the game has changed. Majors are becoming less involved directly in exploration and more dependent on juniors for "front end" exploration. Interest by the more entrepreneurial majors in spinning off listed, independently managed exploration companies, still tethered to the major via joint venture arrangements and an equity holding, is an encouraging sign. One such example is Red Metal Limited, a Phelps Dodge spin off, that listed on the ASX in October 2003 raising \$12 million to explore for iron-oxide related copper-gold deposits in Australia.

PlatSearch is poised to benefit from this upturn and change in tactics by the majors. We are well positioned with a large number of prospects where early work, including first hole drill tests in some cases, has indicated outstanding potential for major base and precious metals deposits.

The attached Summary of Exploration Highlights shows the key PlatSearch projects where we expect significant activity during 2004. Bob Richardson will take you through the detail of some of these projects in his address to follow.

In closing I would like to extend my thanks to the small but committed team at PlatSearch led by the Managing Director Bob Richardson, CFO Robert Waring and the rest of the team including Wendy Corbett, Robin Catalano, Nadia Waring, Wolf Leyh, David Edgecombe and the team of contractors that provide excellent service to us.

PlatSearch continues to come up with very interesting projects and has been able to get them drilled. We must be getting close to that "Elephant" we have all dreamed of for so long. I can tell you that the dream is still alive.

Ray Soper Chairman

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PLATSEARCH NL SUMMARY OF EXPLORATION HIGHLIGHTS

MUNDI MUNDI - MULYUNGARIE, NSW and SA

Three widely spaced holes totalling 1,639 metres were completed recently, funded by Inco (Australia) Resources Pty Ltd. All three holes intersected the Bimba Formation with low-grade zinc and lead mineralisation in massive sulphides. The results confirm the extensive strike length, thickness and unusually high metal content of this package and reinforce the prospectivity of this environment for the occurrence of large lead-zinc deposits. Final logging and analyses will be available in late December 2003.

MULYUNGARIE, SA

A large ironstone body at the K1 prospect has been re-evaluated by PlatSearch as a target for iron-oxide copper-gold style mineralisation. It is expected that this prospect will be drill tested in 2004. Southern Cross Resources has advised that it will drill test for shallow sedimentary uranium in early 2004.

TRUNDLE, NSW

The Trundle joint venture agreement gives PlatSearch exposure to a significant porphyry gold opportunity of the Northparkes/Cadia/Ridgeway type. A gravity survey will commence in mid December and the results used to identify further drilling targets.

LINDSAYS CREEK - YANCO GLEN, NSW

Joint venturer Gravity Capital Ltd is scheduled to drill test the Reservoir Anomaly in November-December 2003. The Reservoir Anomaly is a gravity anomaly identified by the airborne Falcon™ gravity survey completed in February 2003.

COPPER KING. NSW

Joint venturer Sipa has commenced a 600 metre RC percussion drilling programme to test the Mt Darling and Copper King prospects.

EURIOWIE, NSW

Extensive base and precious metals anomalous gossanous horizons have been defined. These gossans have never been drill tested. Several potential joint venturers are reviewing the data. It is anticipated that substantial RAB and percussion drilling will be completed during 2004.

WYNBRING - TOOLGERIE, SA

These large tenements are located on the western margin of the Gawler Craton and are regarded as a possible analoque of the Thompson nickel belt in Canada. A potential joint venturer (major company) is reviewing data on these areas.

CALLABONNA, SA

Negotiations regarding a joint venture are at an advanced stage. The incoming party would be required to fund a gravity survey and a drill test to Proterozoic basement.

QUINYAMBIE, SA

Negotiations regarding a joint venture are at an advanced stage. The incoming party would be required to fund a gravity survey and a drill test to Proterozoic basement.

COONDAMBO, SA

Negotiations regarding a joint venture are at an advanced stage. The incoming party would be required to fund a gravity survey and will have a six month option to commit to a drilling programme.

HORSE CREEK, QLD

One of PlatSearch's 100% owned tenements is adjacent to a key Red Metal Ltd prospect, Elizabeth Springs where a large magnetic anomaly is scheduled for drilling by Red Metal in early 2004. The magnetic anomaly extends into PlatSearch's tenement.