VARISCAN MINES LIMITED — Management Reports 2003

Oct 12, 2003

Update October 2003

A high level of exploration activity has been sustained on PlatSearch's projects during 2003 adding value and prospectivity to many of its areas. Much of this work was preliminary geological, geophysical and geochemical surveys in preparation for planned deeper drilling. Substantial drilling is scheduled for the latter part of 2003 and early 2004 on the Mundi Mundi. Mulyungarie, Copper King, Stephens-Centennial and Ziggys projects, Also, PlatSearch is encouraged by the progress of joint venture discussions regarding several key areas including Callabonna, Quinyambie and Euriowie and anticipate that further drilling will take place on these areas during the next 12 months.

Four new joint venture agreements have been signed since December 2002 and currently seven of the Company's projects are funded by joint venturers.

Only drilling will result in an orebody discovery and it is anticipated that approximately 8,000 metres of drilling targeted on specific base metals and gold targets will be funded by joint venturers during the next 12 months. Expenditure on PlatSearch's areas for the 12 months to 30 June 2003 was \$1,650,000, of which \$1,450,000 was spent by joint venturers.

The Company's web site at www.platsearch.com.au contains full and up-to-date information on PlatSearch's activities, including quarterly reports and announcements.

PLATSEARCH EXPLORATION STRATEGY

PlatSearch's primary targets are large, world-class deposits, principally base metals (copper, lead, zinc and nickel) and precious metals (gold and silver). The Company has continued to build a strong tenement holding with potential for this type of deposit. Attention is focussed currently on the Cumamona Province (including the Broken Hill Block), the Gawler Craton and the Mt Isa Block.

Large mineral deposits commonly have signatures recognisable in regional geophysical data, specifically magnetic and gravity data. PlatSearch's selection of areas and prospects is often based on interpretation of the vast amount of geophysical and other exploration data increasingly available in Australia. Th≏ Company's in-house geophysical experience and computing expertise are a vital part of this process.

PlatSearch's activities are expertise intensive but relatively low cost. The higher cost activities, particularly drilling, are farmed-out to larger companies. By this means PlatSearch's share capital remains tight.

Following a discovery and successful development, PlatSearch would have a minority (10-30%) nonoperating interest or a royalty interest in a mining project.

Exploration for world-class deposits is a high-risk. but potentially high-reward high-cost verv endeavour. Mineral discoveries can only be made by drill testing quality targets. The more targets tested, the higher the probability of success. The next drillhole could be the discovery hole.

This strategy requires persistence and is critically dependent on ongoing funding by larger joint venture partners. PlatSearch continues to attract such support for exploration on its areas. This is a

reliable measure of the quality of our areas. The graph shows the level of joint venture funding which has averaged \$1.450,000 per annum on the Company's areas over the past seven vears, compared with the Company's own costs of \$200,000 per annum. Current joint venture partners are Inco (Mundi Mundi, Mulyungarie, Ziggys and Callabonna), Sipa (Stephens-Centennial and Copper King), Southern Cross (Mulyungarie) and Gravity Capital and BHP Billiton (Copper King and Lindsays Creek). From time to time joint venturers may withdraw from specific projects. However the high prospectivity of PlatSearch's areas determines that new partners are usually found. Areas that do not measure up or that do not ultimately attract further funding are relinguished.

PROJECTS (2004 TE

THE CURNAMONA PROVINCE. NSW AND SA

In the Broken Hill district a number of important developments have positive implications for PlatSearch's areas.

An airborne gravity survey using the Falcon™ system was completed over a substantial part of the Broken Hill Block by Gravity Capital Ltd (GCap) and funded by the state government. The Falcon™ system. PlatSearch holds two key tenements within the area surveyed.

developed by BHP Billiton, is regarded as a major technological advancement for exploration in the Broken Hill district and all parties are hopeful that it will lead to the identification of worthwhile drilling targets.

Interest in the exploration potential of the Broken Hill district, particularly for major copper-gold deposits, has been heightened. This interest has been spurred by the government-funded initiatives such as the Falcon™ survey and detailed government studies such as 'The Potential for Copper-Gold Deposits in the Broken Hill Block' and the entry of new, aggressive explorers and operators in the area such as Sipa and Perilya. PlatSearch's strong ground position in the area is benefiting from this interest.

Four new joint ventures have commenced on PlatSearch projects in the Broken Hill district. Sipa is farming into the Copper King and Stephens-Centennial tenements searching for copper-gold and silver-leadzinc deposits. Agreements signed with GCap give it (and BHP Billiton) rights to farm-in to specified parts of the Copper King tenement and all of the Lindsays Creek tenement.

At Copper King, Sipa has completed an ultra-detailed aeromagnetic survey and has commenced detailed geological mapping along with rock chip sampling and reconnaissance soil sampling. The tenement contains extensive gossan outcrops with anomalous copper (up to 7%), lead, zinc and gold. Of particular interest is a complex magnetic anomaly at the Copper King workings where numerous pits with copper oxides are closely associated with quartz-magnetite horizons. This anomaly has not been tested by drilling. There is scope for both shallow-seated, heap-leachable oxide copper as well as copper sulphide mineralisation at depth.

GCap has nominated two target areas in the Copper King tenement for ground follow-up of anomalies generated by the Falcon™ airborne gravity survey. One of these areas lies within the Native Dog Prospect, an area already identified by the PlatSearch/Sipa joint venture as having excellent potential for Broken Hill Style lead-zinc mineralisation. At Native Dog Prospect, heavily manganese stained and garnet banded rocks, silicification and strongly anomalous gossans and geochemistry extends over a strike length of at least four kilometres and a width of approximately 500 metres. These are the classic indications of Broken Hill Style mineralisation. GCap has also nominated one target area in the Lindsays Creek tenement.

Sipa has commenced a joint venture to farm-in to the Stephens-Centennial project. This tenement is located only 10 kilometres north-west of the Broken Hill line-of-lode and embraces a 30 kilometre strike length of highly prospective Broken Hill Group metasediments, with numerous occurrences of Broken Hill style stratiform leadzinc-silver mineralisation, where some of the best drill intersections in the Broken Hill Block, outside the main Broken Hill "Line of Lode", have been encountered. Most previous drilling is relatively shallow with anomalous intersections open at depth. Pending the granting of a new licence, Sipa has completed aerial photography and a compilation of previous work, including a digital database of historical drilling.

A substantial RAB (Rotary Air Blast) drilling programme has been completed at Ziggys project. This drilling further defined and extended a strong C-horizon geochemical anomaly discovered by previous explorer North Broken Hill Ltd. The anomalous geochemical results (up to 3,000ppm lead and 2,900ppm zinc) are coincident over a six kilometre strike length with a major aeromagnetic structural feature.

A substantial programme of ground geophysical work has been completed at the Polygonum prospect in the Mundi Mundi tenement at Broken Hill. The results of this work will provide quidance for further drilling to follow up zinc-rich massive sulphide intersections encountered by earlier drilling. Two previous drillholes DDIN3 and DDIN4, sited 500 metres apart, intersected highly sulphidic Bimba Formation, with a 3.8 metre interval grading 8.26% zinc and 0.95% lead in DDIN3 and a 5.8 metre interval grading 3.28% zinc, 0.73% lead and 17 g/t silver in DDIN4 (these results were reported in August 2002).

The mineralised Bimba Formation can be using magnetic, gravity mapped and sporadic drilling data over a strike length of at least 20 kilometres within PlatSearch tenements. Of particular interest is an eight kilometre interval where there is a marked change in strike from north-south to northwest and where detailed gravity data indicates a pronounced thickening of the prospective stratigraphy. This stratigraphy continues across the NSW/SA border into PlatSearch's Mulvungarie tenement where ground geophysical work has also been completed. Joint venturer Southern Cross Resources has rights to near surface sedimentary uranium in this tenement. An airborne electromagnetic survey completed by Southern Cross in 2002 shows clear evidence of palaeodrainage channels that could host sedimentary uranium.

programme $\alpha$ _f reconnaissance А investigation and rock-chip sampling of gossans and ironstones in the Euriowie tenement has shown widespread cold, silver and base metals anomalism in 183 samples with values up to 2.4 g/t gold, 650 g/t silver, 37.7% copper, 34% lead and 2.8% zinc. Results from rock-chip sampling in the area by the NSW Department of Mineral Resources also show very high values up to 39.8 g/t gold, 500 g/t silver and 31.6%

PlatSearch tenements in the Curnamona province

copper. Despite being located only 40 kilometres from the world's largest silver-lead-zinc deposit at Broken Hill, the Euriowie area is only lightly explored and contains excellent potential for ironstone associated copper-gold deposits and Broken Hill style silver-lead-zinc deposits. PlatSearch has defined 15 prospects within the Euriowie tenement where detailed exploration is planned. A new tenement (Para Bore) has been applied for to cover an adioining area where additional prospects have been defined.

Two inclined core holes (totalling 564 metres) were completed in the Yanco Glen tenement. Drillholes DDA8 and DDA9 targeted possible south and down-plunge extensions of complex fold structures in sulphide gossans mapped at surface around the historic Allendale Mine workings. Hole DDA8 intersected five separate mineralised blue quartz lodes of which the best interval was 4.4 metres averaging 5.45% zinc and 0.27% copper. The next best interval was 1.0 metre averaging 3.29% lead, 1.16% zinc, 0.26% copper and 66 g/t silver. Hole DDA9 also intersected blue quartz lodes with a best interval of 3.2 metres averaging 0.17% lead and 2.56% zinc.

A 270 hole RAB drilling programme was completed on the Hollis Tank tenement. Moderately anomalous geochemical analyses up to 700ppm zinc, 400ppm copper, 410ppm cobalt and 32ppb gold were recorded. Also further rock-chip sampling of gossan outcrops has encountered anomalous results up to 6.6% copper. 850ppb gold and 2,950ppm lead.

THE CURNAMONA PROVINCE - LOOKING FORWARD A programme of three core holes totalling 1.500 metres commenced in the Mundi Mundi/Mulvungarie project in late September 2003. Southern Cross will commence drilling to test for sedimentary uranium in the Mulyungarie tenement in late 2003. Percussion drilling will test geochemical anomalies defined by RAB drilling at Ziggys project in November 2003. Sipa will complete a 600 metre programme of RC/core drilling at Copper King project by December 2003. Sipa are committed to complete a 1,500 metre RC/core programme in the Stephens-Centennial project by May 2004. GCap must complete 1,000 metres of percussion/core drilling in the Lindsays Creek tenement by January 2004 or lose its rights to the nominated area. Recent drilling at Yanco Glen will be interpreted to determine other possible drilling targets. There is an encouraging level of interest in other PlatSearch areas in the Curnamona Province and discussions are in progress with potential joint venture partners regarding funding of further work on other areas including Euriowie, Thunderdome, Panama Hat, Redan, Callabonna and Quinyamble.

THE GAWLER CRATON, SA

PlatSearch has launched a major initiative to acquire ground prospective for sulphide nickel deposits. Two tenement applications Wynbring and Toolgerie cover approximately 3,000 square kilometres of the Fowler Domain located on the western flank of the Gawler Craton. The Fowler Domain is considered to be an analogue of the Thompson Nickel Belt in Canada, host to

many important sulphide nickel-copper deposits.

At the Coondambo project, PlatSearch completed a 504 metre percussion hole to test a large Olympic Dam "look-alike" gravity anomaly. The hole encountered an extremely high abundance of haematite between 349 and 402 metres, in Gawler Range Volcanics, together with enhanced levels of cerium and lanthanum (rare earths). This drilling result is the first effective test of basement lithologies within this tenement and the wider region and indicates to PlatSearch that the area is prospective for iron-oxide associated copper-gold deposits analogous to Prominent Hill and Olympic Dam.

The Mirikata tenement is located approximately 25 kilometres west of Minotaur's Prominent Hill discovery and covers a set of strong magnetic and gravity anomalies caused by large ironstone masses. Drilling to date has encountered unmineralised banded iron formation however several anomalies remain to be tested. Additional gravity surveys have been conducted by a potential joint venture partner.

THE GAWLER CRATON - LOOKING FORWARD PlatSearch intends to define other drilling targets for iron-oxide associated copper-gold systems in the Coondambo tenement and discussions are in progress with several potential joint venture partners to fund this work. Exploration concepts and targets are being developed for the Wynbring and Toolgerie areas and joint venture partnerships sought to fund exploration for sulphide nickel deposits. Discussions regarding a possible joint venture on the Mirikata tenement will be continued.

THE MT ISA BLOCK, QLD

A detailed review by PlatSearch of work conducted on the Horse Creek tenements by previous joint venturer BHP Billiton shows seven targets that require further work including drilling. A series of one-hole tests of magnetic and gravity anomalies by BHP Billiton, although not intersecting ore-grade mineralisation, disclosed lithologies prospective for copper-gold and

lead-zinc-silver deposits, with some minor mineralisation and alteration. In some cases BHP Billiton's drilling had missed the intended targets.

At Lilleyvale, the copper and gold bearing ironstone system intersected by drillhole LIL-01 in 2000 shows many of the characteristics of Cloncurry and Broken Hill Type (BHT) base metals and precious metals deposits. The considerable depth of cover (550-570 metres) is offset by the huge size of the system indicated by geophysical data, the existence of further good drilling targets and the potential for high-grade gold-copper and/or BHT style lead-zinc-silver.

THE MT ISA BLOCK - LOOKING FORWARD PlatSearch is confident of attracting joint venture parties to pursue further exploration of the Horse Creek and Lillevvale tenements. Despite its depth, the highly favourable result in the first hole and the size potential indicated at Lilleyvale ultimately should lead to further drilling.

PI ATSFARCH NL

Bob Richardson Managing Director

The information on mineralisation contained in this report accurately reflects information compiled by R L Richardson, BSc, BE (Hons), MAusIMM, MASEG, Managing Director of PlatSearch NL a Competent Person (as defined by the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves), who has relevant experience in relation to such mineralisation and has consented to the inclusion of such information in this report.