Quarterly Report - for the period ended 31 March 2004

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Musgrave Block project - Independence Gold joint venture

Summary
Several heavy rainfall events in Western and Central Australia during February and March delayed planned exploration activities in both South Australia and the Northern Territory. Long term road closures in the Laverton area of Western Australia restricted Independence Group field crews from travelling by vehicle to the project areas from Western Australia. Field crews have since mobilised to the area and the planned programs commenced in early April. It is hoped the programs will be completed by the end of the June 2004 quarter.

Two high priority exploration licence applications ELs 5701 and 5703 in the Northern Territory were granted on the 17 Febuary2004. A preliminary reconnaissance geological visit to the newly granted areas was undertaken in late March. A number of key areas from a geological and logistical perspective were visited to assist with the planning of the forward work program. Three areas with reported silver and base metal anomalism (also low order gold) were located and rock chip samples were taken. Reasonably significant levels of base metal sulphides were observed in quartz veining in two of these areas. Assay results from the reconnaissance sampling are yet to be received.

Proposed exploration program
South Australia
A ground electro-magnetic (EM) survey is scheduled over the geochemical anomaly defined in the north-west of the De Rose Hill project (EL 2910) during April 2004. Ground checking of other geochemical and geophysical target areas will also be re-visited and additional ground electro-magnetic (EM) surveys may be completed. Drilling of electro-magnetic (EM) conductors is scheduled for May/June 2004.

Northern Territory
Follow-up soil sampling on a 200 metre by 200 metre spaced grid is planned for two target areas already defined on EL 9407 from the surface geochemistry completed to date. A major regional soil sampling program will be commencing over ELs 5701 and 5703 during June/July 2004.

Victoria - Sandy Creek - ELA 4812

On 10 March 2004 the Company made application for an exploration licence at Sandy Creek approximately 6 kilometres south of the township of Tallangatta in north-eastern Victoria. The application was made following a visit to the site by a Company director accompanied by a senior Victorian geologist who had researched the area over a number of years. Previous gold mining as late as the early 1990's had achieved encouraging results.

Gawler Craton - Hawks Nest project- South Australia

In January the Red Metal Limited/Phelps Dodge Australasia Inc. alliance, the Company's joint venture partner, reported assay results from their first two exploration diamond drill holes on the tenement. These results were not encouraging and only a highly metamorphosed banded iron formation was found. Additional information and other possible drill targets are being evaluated.

EXPLORATION ACTIVITIES

Musgrave Block project
South Australia

Geochemical sampling at DeRose Hill (EL 2910) had highlighted a new area for follow-up work based on elevated nickel, copper, cobalt +/- platinum group metals (PGMs) soil geochemistry. A ground electro-magnetic (EM) geophysical survey was delayed due to heavy rains and is now scheduled for these targets during April/May 2004. Ground checking of other geochemical target areas will be undertaken at the same time and additional ground electro-magnetic (EM) surveys may be completed. Drilling of at least one electro-magnetic (EM) conductor is scheduled for completion during the June quarter.

Northern Territory

Geochemical rock chip sampling was completed over a number of target areas on ELs 5701 and 5703 during the quarter. The aim of the rock chip sampling program is to confirm anomalous areas as defined by previous sampling that took place in the 1970's. Three areas with reported silver and base metal anomalism ( also low order gold ) were located and rock chip samples were taken. Assay results from these samples are yet to be received. Reasonably significant levels of base metal sulphides were observed in quartz veining in two of the areas. Geological reconnaissance work will be completed over ELs 5701 and 5703 during the June quarter. Follow-up soil sampling on a 200 metre by 200 metre spaced grid is planned for two target areas which have been defined on the adjacent EL 9407 from the surface geochemistry completed to date. A major regional soil sampling program will be commencing over ELs 5701 and 5703 during June/July 2004.

Gawler Craton - Hawks Nest project - South Australia

During the quarter drilling was completed at Hawks Nest (EL 2899) testing two significant geophysical targets by personnel from the Red Metal Limited/Phelps Dodge Australasia Inc alliance, the Company's joint venture partners. The first pre-collared diamond drill hole, testing a combined gravity/conductivity anomoly located within a fold closure, intersected dense rocks comprising banded hematite-magnetic gneiss typical of a highly metamorphosed banded iron formation. The hole was terminated at 361.1 metres. A second hole targeting a combined gravity/magnetic/conductivity anomoly intersected strongly conductive graphite and pyrrhotitebearing gneissic metasediments before passing into dense magnetic rocks comprising banded quartz-magnetic gneiss also typical of a highly metamorphosed banded iron formation. The hole was terminated at 486.4 metres. No significant mineralisation was encountered. Presently the results are being assessed and other possible drill targets are under review.

Windeyer project - New South Wales

This site has been downgraded and it is unlikely the Company will re-visit the site until later in the year. Other prospects appear to offer more prospectivity at this stage.

Moruya Project - New South Wales

This site was revisited during the quarter and negotiations are continuing with local groups.

Duck Creek project - Queensland

Due to the wet season no furthur work was completed on EPM 13336 during the quarter. As cultural clearances of individual prospect areas are required prior to detailed exploration, it is unlikely that exploration activities will proceed in the near future.

Joint venture opportunities

The Company has been actively evaluating joint venture opportunities on a number of prospective exploration targets. The most immediate being two new gold exploration areas, one in Victoria and one in Queensland, with known historical high grades. The Queensland area is already a mining lease and it is expected that following the signing of final documentation drill targets will be identified and drilled during the current quarter.

OTHER ACTIVITIES
Investments

Independence Group NL
The Company presently holds 200,000 ordinary fully paid shares and 500,000 options in Independence Group NL at a cost of $155,600. Interested shareholders may wish to visit the Independence Group web site at

Capix
Goldsearch retains a 14.8% minority interest in Melbourne based IT software company Capix. Sales have been intermittent but the company is experiencing an improved IT environment and is looking forward to an increase in sales and enquiry over the next quarter.

Information relating to Independence Group NL joint venture activities in this report was prepared by Mr Heath Hellewell, chief exploration geologist of Independence Group NL and acurately reflects the information compiled by him.

Information relating to the Red Metal/Phelps Dodge Autralasia Inc. alliance joint venture activities in this report was prepared by Mr Rob Rutherford Managing Director/Exploration Manager of Red Metal Limited and acurately reflects the information compiled by him.

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.

Consolidated statement of cash flows

Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities

Non-cash financing and investing activities

Financing facilities available
Add notes as necessary for an understanding of the position.

Estimated cash outflows for next quarter

Reconciliation of cash

Changes in interests in mining tenements

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Compliance statement

1. This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Law or other standards acceptable to ASX (see note 4).
2. This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 28 April 2004
(Company secretary)

Print name: P S HEWSON

Notes

1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
   
   
2. The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
   
   
3. Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .
   
   
4. The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
   
   
5. Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.