The 1995-96 year has been one of considerable success for Aquarius. It expanded its platinum holdings in the Bushveld region of South Africa and made good technical progress towards development of the assets.

In I 995 Aquarius announced that it had secured options over two UC-2 Platinum Group Metal ("PCM") projects ir the Bushveld Complex adjacent to the world renowned Rustenburg mine. In the current year the Company secured a further option over adjacent PGM projeds in the Bushveld Complex and Aquarius now is in a s~tuation where it has secured approximately 8 kilometres of UG-2 strike length. The platinum options expire n DecemDer I 996. The last option to be secured, the Pacific Platinum option requires approval of shareholders in accordance with t~e Notice of Meeting which has been issued.

Exploration activity on the ground metallurgical testwork completed in South Africa by Mintek and a scoping study completed by Dowding Reynard and Associates generated positive results. PCM recoveries tom the ore, capital and operating costs for a simple I Mtpa plant to produce a good qua~it>' sulphide concentrate, indicate the probability of the Company being in a position to commence production at an annual rate of I 50.000 ounces of PCM by mid I 998.

The Company's objectives are to develop sufficient confidence in the proJects to justify the exercise of the options and to put the projects into production as soon as possible thereafter

During the year the Company took the opportunity of disposing of its substantial shareholoing in Lone Star Exploration N.L. The proceeds together with existing cash resources has placed Aquarius in a strong financial position. Subject to the I 997 options being exercised and a suitable debt financing arrangement. the Company is well placed to fund the development of the Kroondal project at the proposed rate of throughput. Negotiations have commenced with bankers and brokers to secure the debt and equity fnancing requirements of the project.

During the last year the Company has made significant advancements towards its objective of becoming a platinum producer in South Africa and is now well placed to further pursue this objective during the foi~hcoming year

Finally. I take this opportunity of recording my appreciation for the hard work and dedicat~on shown by all staff and consultants to the Company during the year

Yours faithfully

K E JUDGE

Chairman

26 September 1996