Quarterly Report for the period ended 30 September 2006

Prairie Downs: Zinc-Lead-Silver

The project hosts total mineral resources of one million tonnes at a grade of 8.3% zinc, 1.7% lead and 22g/t silver. Further details of the resources are provided in a release to ASX dated 10 July 2006.

The first gravity survey at Prairie Downs was completed during the quarter. The results have yet to be interpreted but the raw data show some interesting features. In particular, the Main Mineralised Horizon (Figure 1 below) is more closely defined. The results of this survey are expected to be an excellent aid to drill targeting and have already resulted in the discovery of additional prospects.

RC drilling commenced in October and is expected to continue through the March quarter. The drill program will test extensions to the three lodes that host the current resources, the Main, East and Gabbro Lodes. It will also target recently identified mineralisation at Zone Two.

Drilling commenced on the East Lode and will then move to the western extension of the Main Lode. Significant assay results will be released when available.

Diamond drilling is expected to commence early in 2007 and will target magnetic anomalies A and B, as shown in Figure 1, along with depth extensions to the Gabbro Lode and Zone Two.

Perenjori: Copper-Gold-Zinc-Lead-Silver

The Perenjori project covers a 2km long gossan anomalous in base metals and gold. An initial RC drill programme comprising 8 holes for 1,032 metres was completed during the quarter. Drilling targeted a 300 metre strike length of the gossan that is anomalous in copper. Results showed continuity of the mineralised structure but copper results were generally of low tenor.

Best results were: PJRC05, 33 to 36 metres, 3 metres at 0.7% copper and 18g/t silver and PJRC08, 33 to 37 metres, 4 metres at 0.7% copper and 22g/t silver. Further geological and geophysical work is planned prior to drilling in 2007.

Coppermine Bore: Copper-Gold-Uranium

This project is joint ventured with Western Uranium Limited, the first drill program is expected to commence in November.

Longreach Well: Zinc-Lead-Silver

No fieldwork was completed on this project during the quarter.

Corporate

In June the Company accepted a non-binding proposal that gave Sempra Metals & Concentrates Corp. ("Sempra") the exclusive right, until 30 September 2006, to negotiate the purchase and sale or marketing of concentrates from the Prairie Downs Zinc project. At that time Sempra also invested two million dollars in the Company by way of share placement at a price of $0.60 per share. The Company has agreed to extend the exclusivity period to enable further discussion, particularly with regard to project finance and corporate issues.

On behalf of directors and shareholders I would like to extend a warm welcome to Ms Emma Versteegh, who has joined us as Office Manager, Mr Mark Zucchi, who has joined us as Field Manager and Ms Christine Panetta, who has joined us as Assistant Company Secretary.

FIGURE 1. PRAIRIE DOWNS PROJECT - AIRBORNE MAGNETIC IMAGE

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Mr Mark Hansen, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hansen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hansen consents to the inclusion in this report of the statements based on his information in the form and context in which it appears.