PHILIPPINES

PANAON ISLAND GOLD PROJECT - Goldsearch earning 50%
(gold)

Significant progress has been made at the Pinut-an deposit rehabilitating the existing underground development. The 1.5 metre level has been rehabilitated and tracks laid for the entire (258 metre) length of the adit. All of the ore drives and stopes which extend from this level have also been cleared of debris, as has a raise up to the 32 metre level and a portion of the development on this level. The Vein C ore drives, which extend both to the east and west off the main adit, have been completely rehabilitated with track laid so that all of the proposed phase one underground drill positions are now accessible for the drill rig.

An underground drill has been moved into position and the first underground drill hole has commenced. A second diamond rig was in position drilling surface holes and, at the end of the March quarter, had commenced drilling a target in the tunnel 5 and 6 area from an existing road access.

Two additional geologists have joined the team on site at Panaon to assist with the drilling programs and on-going program of surface and underground mapping.

To date, all the rehabilitated mine areas have been geologically mapped and the general understanding of the deposit has improved. Similarly, surface mapping outside of the mine area has also been on-going with a number of additional areas of quartz veining and artisanal mining being located, particularly to the south towards Caingin Point.

As previously announced, the rehabilitation work to date had exposed a number of pre-existing stopes where small-scale miners have extracted significant amounts of material above the 1.5 metre level. The shape and orientation of the stopes suggest the epithermal veins, whilst continuous, may include a number of pods where the veins swell; these pods are considered to have good potential for bonanza gold grades. Unconfirmed sampling in the mine by previous explorers returned grades up to 950 g/t gold with 2000 g/t silver from the 32 metre level in the Vein C area, and up to 230 g/t gold with 189 g/t silver also in Vein C drilling beneath areas previously mined. As the geological knowledge of the deposit improves, these pods should become easier to target.

Numerous small veins have been recognised in the adit as it has been cleaned out. The veins in the north are shallow dipping, with the veins exhibiting an increasingly steeper dip to the south suggesting the classic “tree-like” epithermal vein structure similar to that seen at the Co-O and Dalwalwal mines in the Surigao region of Mindanao, where Medusa Mining Limited has its plant and mining operation. The potential for a thicker, high-grade ore zone where these veins coalesce at depth is possible.

The project, which is a 50/50 joint venture with the Medusa Mining/ Philsaga consortium, is targeting a small high-grade gold mine capable of producing between 100 to 200 tonnes per day of high-grade ore. Medusa/Philsaga are operators on behalf of the joint venture.

NORTHERN TERRITORY

BLOODS RANGE (EL 5701) – Goldsearch earning 70%
(gold, copper)

A program of auger drilled geochemistry is scheduled to further evaluate previously identified mineralisation which returned rock chips up to 30 g/t gold.

NEW SOUTH WALES

WINDEYER (EL 6094) - 50% joint venture with Central West Gold NL

The Windeyer project is situated some 28 kilometres south of Mudgee and is a 50% joint venture between Central West Gold NL and Goldsearch with Central West Gold NL as the operator.

During the quarter a limited reverse circulation percussion drilling program of four holes was drilled for a total of 262 metres. The program was directed to test for extensions of the ore-bearing horizons previously exploited in the old workings. Three holes encountered some problems with excess water flows which were experienced in previous drilling, but all reached the target zones successfully. The other hole was terminated early, as it passed into an unmapped section of old workings. Drill cuttings have been submitted for assay and results are pending.

QUEENSLAND

YORKEYS PROJECT (MLs 50098, 50153 and 3759) – 100% Goldsearch
(gold, silver)

No work was carried out on these tenements during the quarter.

MARY KATHLEEN PROJECT (EPMs 14019 and 14022) – Goldsearch earning 75%
(uranium, copper, gold)

Goldsearch is conducting uranium exploration over the Mary Kathleen tenements EPM 14019 (154 square kilometres) and EPM 14022 (151 square kilometres) in the Mt Isa mineral province. The province hosts several uranium deposits including the former Mary Kathleen Uranium Mine and the Valhalla and Westmoreland deposits. The recent rise in the uranium spot price to about US$40 per pound has resulted in renewed interest in the commodity and a resurgence in exploration.

Goldsearch’s tenements in the prospective Mary Kathleen district contain target co-incident radiometric and geochemical anomalies which merit further exploration. Initial work by Goldsearch has focussed on the area six kilometres to the south of the former Mary Kathleen Mine and a 1.6 kilometre long radiometric uranium anomaly 17 kilometres to the south-west. Initial reconnaissance soil sampling totalling 138 samples has reported values to 31 ppm uranium in soils and 68 rock chip samples returned a maximum of 490 ppm uranium

CLONCURRY PROJECT - Duck Creek (EPM 13336) – 95% Goldsearch
(gold, copper)

Drilling is expected to commence during this quarter on the Chinaman prospect where high grade copper production has previously been established.

VICTORIA

SANDY CREEK PROJECT (EL 4812) – 100% Goldsearch
(gold)

No work took place during the quarter but a field visit is scheduled to select possible drill sites.

SOUTH AUSTRALIA

MUSGRAVE BLOCK – 100% Goldsearch with Independence Group NL earning 51%)
(nickel, copper, gold)

The joint venture has been invited to a meeting with traditional owners and the executive board of the Anangu Pitjantjatjara Yankunytjatjara in May in order to present proposed exploration techniques and outline proposed work programs. This is a key development in the progress of the applications in South Australia for granting.

STATEMENT

Technical information contained in this report was prepared by Mr Greg Duncan and Mr Heath Hellewell, Consulting Geologists, who are Members of the Australasian Institute of Mining and Metallurgy and/or Geological Society of Australia, and accurately reflects the information compiled by them. Mr Duncan has in excess of 20 years relevant experience in mineral exploration and mine development, Mr Hellewell has 15 years of relevant experience, and they qualify as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

Mr Duncan and Mr Hellewell consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.