NOTICE OF INITIATION OF NEGOTIATIONS WITH NATIVE TITLE PARTIES


SA MINING ACT 1971 S63M

TAKE NOTICE that Heathgate Resources Pty Ltd (ACN 011 018 232) of Level 9, 45 Grenfell Street, Adelaide SA 5000 proposes to undertake mining operations pursuant to Exploration Licences No's 2403, 2346 and 2385 on the following land (as manager under a joint venture agreement between Heathgate Resources Pty Ltd and Giralia Resources NL) and pursuant to Exploration Licence 2633 (as the licence holder)

EXPLORATION LICENCE NO 2403

WOOLTANA AREA - Approximately 120km east of Leigh Creek, bounded as follows: Commencing at a point being the intersection of latitude 30º1'S and longitude 139º26'E, thence east to longitude 139º27'E, north to latitude 30º17'S, east to longitude 139º28'E, north to latitude 30º15'S, east to longitude 140º01'E, south to the eastern boundary of Lake Frome Regional Reserve, thence generally northwesterly and southwesterly along the boundary of the said Regional Reserve to a northern boundary of Gammon Ranges National Park, thence generally northwesterly and northeasterly along the boundary of the said National Park to latitude 30º25'S, east to longitude 139º26'E, and north to the point of commencement.

AREA: approx. 1705 square kilometres.

EXPLORATION LICENCE NO 2346

LAKE COOTABARLOW AREA - Approximately 180km east of Leigh Creek, bounded as follows: Commencing at a point being the intersection of latitude 30º04'S and longitude 140º01'E, thence east to longitude 140º07'E, south to latitude 30º07'S, east to longitude 140º18'E, south to latitude 30º09'S, east to longitude 140º30'E, south to latitude 30º10'S, east to longitude 140º33'E, south to latitude 30º10'S, east to longitude 140º33'E, south to latitude 30º42'S, west to longitude 140º21'E, north to latitude 30º23'E, west to longitude 140º13'E, south to latitude 30º29'S, west to the eastern boundary of Lake Frome Regional Reserve, thence generally north westerly along the boundary of the said Regional Reserve to longitude 140º01'E and north to the point of commencement, but excluding the area bounded as follows:

Commencing at a point being the intersection of latitude 30º34'S and longitude 140º24'E, and north to the point of commencement.

AREA: approx. 2253 square kilometres.

EXPLORATION LICENCE NO 2385

NORTH MULGA AREA - Approximately 140km northeast of Leigh Creek, bounded as follows:

Commencing at a point being the intersection of latitude 30º00'S and longitude 139º42'E, thence east to longitude 139º52'E, south to latitude 30º01'S, east to longitude 140º01'E, south to latitude 30º15'S, west to longitude 139º39'E, north to latitude 30º05'S, west to longitude 139º38'E, north to latitude 30º03'S, east to longitude 139º40'E, north to latitude 30º02'S, east to longitude 139º41'E, north to latitude 30º01'E, east to longitude 139º42'E, and north to the point of commencement.

AREA: approx. 935 square kilometres.

EXPLORATION LICENCE NO 2633

PARLANA CREEK AREA - Approximately 110 km ENE of Leigh Creek, bounded as follows: Commencing at a point being the intersection of latitude 30º05'S and longitude 139º36'E, thence east to longitude 139º39'E, south to latitude 30º15'S, west to longitude 139º32'E, north to latitude 30º11'S, east to longitude 139º33'E, north to latitude 30º07'S, east to longitude139º34'E, north to latitude 30º06'S, east to longitude 139º36'E, and north to the point of commencement.

AREA: approx. 178 square kilometres

All the within latitudes and longitudes are geodetic and expressed in terms of the Australia Geodetic Datum as defined on p4984 of Commonwealth Gazzette number 84 dated October 6, 1966.

THE GENERAL NATURE OF THE PROPOSED MINING OPERATIONS THAT ARE TO BE CARRIED OUT ON THE LAND ARE AS FOLLOWS:

Exploration operations to determine the geological structure of the Land and presence of economic mineralisation, which may include: magnetic, gravity, electrical and seismic surveying, geochemical sampling, shallow trenching, auger, rotary, air blast, core, reverse circulation and diamond core drilling.

TAKE NOTICE that if two (2) months after notice is given to all who hold or may hold native title in the land, there are no native title parties in relations to the land to which this notice relates HEATHGATE RESOURCES PTY LTD may apply ex parte to the Environment Resources and Development Court for a summary determination pursuant to Section 63N of the Mining Act, 1971 authorising entry to the land for the purpose of carrying out mining operations on the land and the conduct of mining operations on the land.

Any person who holds or may hold native title in the land is invited to contact HEATHGATE RESOURCES PTY LTD through their legal advisers, McDonald & Co, Lawyers of 262-266 Pirie Street, Adelaide SA 5000.

TAKE NOTICE that if within four (4) months from the initiation of negotiations, HEATHGATE RESOURCES PTY LTD and any native title party/ies have not reached agreement, any party to the negotiations or the Minister may apply to the Environment Resources and Development Court pursuant to Section 63S of the Mining Act, 1971 for a determination in relation to the conduct of mining operations on the land.

Heathgate Resources Pty Ltd

c/- McDonald Steed Lawyers

262 Pirie Street, Adelaide SA 5000

Telephone: (08) 8223 5088

Facsimile: (08) 8223 5290

Contact Person: Michael McDonald