Arboyne NL - Annual Report 1996

Chairman's Review

It is with pleasure that I present this review to shareholders, the first since my appointment as Chairman. The past year is notable for the following important achievements.

The disposal of the company's shareholding and option holding in Majestic Resources NL for a total consideration of $1,762,680 of which $1,052,034 represented profit before tax on the investment.

The restructuring of the Board of Directors in February 1996.

The continuation of feasibility work at the Woolgar Joint Venture.

Subsequent to the end of the financial year, the securing of an option over the Nonoc Nickel Mine, Smelter and Refinery Complex located on the island of Nonoc in Surigao del Norte, Philippines.

The future of the Company will now be determined by the progress made in developing the Nonoc Nickel Complex. The forthcoming year will be one of great challenge for the Company. If all goes to plan, Arboyne is well positioned to become a world class producer of nickel and cobalt. To this end, your Board will dedicate all its energy towards raising the necessary debt and equity needed to complete the refurbishment and improvements of the Nonoc Nickel Complex, with the objective of commencing the refurbishment programme in early 1997 leading to recommissioning of the plant in 1998.

In order to achieve this objective, the Company itself must undergo a process of change and enter into a number of major contracts to underpin the production of nickel and cobalt.

It must look to expanding the Board of Directors and building a first class technical and managerial team.

Finalisation of a bankable fixed price refurbishment contract is essential for securing a long term off-take contract for the nickel and cobalt product which will serve to underpin the required debt and equity financing.

Your Board is extremely confident that rapid progress will be made during the next year towards achieving our goals and intends to keep shareholders fully informed of the company's activities on a regular basis.

Finallv, I would like to express my appreciation to the current and past Directors of the Company and all those involved in the Company 5 operations during the past year for their dedicated commitment to achieving the Company's objectives.


Yours faithfully




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