It gives me great pleasure to report to shareholders that the Company not only had a successful year in 1995 but has built up a momentum which will see considerable growth and exciting developments in 1996.

The Company re-established itself as a gold producer in 1995 through the treatment of tailings from its Costerfield leases in Victoria. This is only the first step of a broader plan for the full development of the Company's resource base at Costerfield.

So far, a total resource of almost 670,000 tonnes containing over 87,000 ounces of gold and 13,600 tonnes of antimony has been identified at the Brunswick Reef Zone at Costerfield. There are many prospective areas which have yet to be explored or evaluated. These include strike and dip extensions of the Brunswick Reef, surface oxide and shallow sulphide prospects in the Costerfield-Bombay mine area and prospects for unworked repetitions of the known reef systems.

Initial exploration in the Bombay mine area has yielded early encouraging results and has provided indications of a series of stacked reefs. Exploration will continue this year at a pace similar to that of 1995.

Gold production started with the treatment plant commissioning in August, 1995. All the gold has been won so far from tailings generated by previous mining and treatment operations. Our own operation is expected to generate about 100,000 tonnes of tailings containing about 6,000 ounces of gold and 3,900 tonnes of antimony when tailings re-treatment is complete in May, 1996. By this time the Company expects to have obtained all necessary approvals to establish two open cut mines on shallow oxide ore of the Brunswick Reef. Open cut reserves are estimated at 40,000 tonnes grading 2.9 glt gold. Long term, efficient exploitation of the Costerfield resources depends partly on the development of an underground mine and a method of extracting both gold and antimony from the ore. In 1995, the Company participated with Diamin Resources NL in a research and development syndication to fund the development of a mine and production prototype treatment plant at Costerfield. The first drawdown of $1.17 million of the $2.67 million raised for the project - the Advanced Antimony Gold Extraction Technique (AAGET) has taken place.

Discussions are now being held with contractors for the development of the decline to provide underground access to the sulphide reserves of the Brunswick Reef, and for design of the prototype gold and antimony production plant. Present plans are to develop a mine capable of producing 60,000 tonnes of ore annually with scope to increase to 120,000 tonnes annually, depending upon future exploration results.

Two processes are under investigation for the treatment plant. The first involves leaching antimony from the ore in one or two stages, electrowinning antimony metal and conventional leaching of gold from the residues. The second involves a flotation plant to produce concentrates for subsequent leaching and electrowinning of antimony metal and conventional gold leaching of the residue. It is proposed that the production prototype plant will be commissioned late in 1996.

If the project is successful, the Company will be in a position to proceed to full scale mining and treatment operations early in 1997. It is envisaged that such an operation will produce about 10,420 ounces of gold and 2,620 tonnes of antimony annually for revenue of $16 million at current gold and antimony prices. While focusing its attention on exploration and development of Costerfield, the Company has continued to investigate other prospects to provide a long term future. In Victoria, the Company has applied for an exploration licence over 486 square kilometres of the Dundas Tablelands, north west of Hamilton. The target of this exploration is gold enriched laterites similar in style to laterite deposits in Western Australia, the best known of which is Boddington.

Our interests in Vietnam were maintained. Application has been made for an investment licence for development of the Hon Mo 0 gold deposit, while in the broader Phu Yen area, exploration was undertaken to assess the mineral potential of this extensively altered geological region. In Ha Giang Province, exploration was diverted from alluvial gold prospects to primary gold sources. A number of prospective targets have been identified.

In China, the Company continued to co-operate and discuss a joint venture involvement in a major molybdenum mining and treatment venture.

All three ventures have potential for the future but the immediate aim of the Company is to push ahead with development of Costerfield and the AAGET project, which will open up the possibility of the Company becoming involved in other known gold and antimony deposits in Australia and overseas.

The Company's goal is to achieve growth in shareholder value by establishing profitable gold and antimony production at Costerfield, by participating in the commercialisation of the AAGET process and maximising its use and by utilising the advantages it has in Vietnam and China. Directors believe that 1996 will be a decisive year in achieving this goal.

RICHARD C TOY

CHAIRMAN