Tembang Project

Tembang is an abandoned mine with a recent exploration history dating back to the 1980s. The Company hold various rights to an area of about 800 km2 over and around the old mine-site, and these are host to known partially-explored epithermal gold-silver and copper-gold porphyry systems and reflect extensions of the historically important goldfields of Bengkulu.

Tembang is a large low-sulphidation epithermal deposit comprising gold-silver bearing quartz sulphide veins hosted by Tertiary volcanics. Two vein styles are present a relatively wide and continuous vein set surrounded by irregular narrower veins that occur in both the footwall and hanging-wall providing a "halo" of mineralisation peripheral to the main veins.

The historic mine commenced production under a previous operator in late 1997 and ceased production in March 2000 due to a declining gold price. The prior operator mined only the main veins and discarded the lower grade halo mineralisation.

The January 2009 Mineral Resource estimate to JORC reporting standards by Snowden Mining Industry Consultants is summarised below:

Note: Rounding errors may occur. The cut-off grade for Tembang Gold Project is 0.5g/t Au for the vein mineralisation and 0.35g/t Au for the Halo mineralisation

Tembang is the most advanced of the Company's Projects with Snowden Mining Industry Consultants completing a Pre-Feasibility Study (PFS) in early 2009.

The PFS revealed that simple beneficiation of the halo mineralisation, representing approximately half the Tembang, is conceptually feasible and offers economies of scale from larger processing rates. Throughputs of up to 2.5 Mtpa were considered which forecast an average 120,000 ounces of gold would be produced annually for approximately eight years.