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Last Updated: 01/05/2012

2011 Annual Report

Annual Report for the period ending 30 June 2011

Highlights

Tasmania Mine Operations

• Ore tonnage production improved marginally to 297,845 tonnes (2010: 295,403 tonnes).

• Ore treated of 297,578 tonnes (2010: 297,229 tonnes) at an average head grade of 6.0 g/t gold (2010: 7.2 g/t) produced 46,460 ounces of gold (2010: 57,758 ounces).

• The mine treated a record 297,578 tonnes of ore during the year, however gold production was restricted due to the lower average head grade reflecting limited high grade areas available with relatively few discrete working areas. While the higher grade Western Zone was being developed, mining was restricted to generally lower grade areas of the ore body, predominantly in the eastern parts of the mine.

• Progress in developing the Western Zone was good and stoping production in this zone commenced in early September 2011.

• In December 2010 underground mining operations were re-structured and all mining and maintenance functions transferred to the incumbent mining contractor, Webb Mining Services. Annual savings of $3.5 to $5.0 million are expected.

• The ore treatment plant continues to demonstrate its ability to process in excess of 1,000 tonnes per day. Overall gold recovery of 81.5% (2010: 84.0%) was lower as a result of the reduced feed grade.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

With the commencement of mining from the higher grade Western Zone the Company will focus on returning the Tasmania Mine to profitability, with a strong emphasis on lower unit costs by production, productivity and operating cost improvements.

Exploration effort will concentrate on extending gold resources at the Tasmania Mine, exploring the Company’s other gold prospects in north-east Tasmania and western Victoria, drilling to expand the Company’s copper resources in western Victoria and progressing development studies for the copper resources.