Feasability Study Commences

DIO announced this morning the commencement of it's Frogs Leg feasability study, with open pit mining to commence at the end of 2002.

..........and the share price has fallen 1c so far....!

Company Announcement


Frog`s Leg Feasibility Study Commences

DIORO EXPLORATION NL 2002-06-05 ASX-SIGNAL-G

HOMEX - Perth

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The board of Dioro Exploration NL ("Dioro") wishes to advise that the
Mungari East Joint Venture has commenced a Feasibility Study into
open pit gold mining at Frog's Leg.

This study comprises a comprehensive drilling program to 'sterilise'
the proposed waste-dump site, geotechnical and hydrogeological
evaluations, metallurgical test work (assuming off-site ore
processing), an update of the resource model with recoverable
resources, final optimisation and pit design, and the completion of a
'Notice of Intent'.

The study has a substantial drilling component, with 11,000 metres of
reverse circulation and aircore drilling allocated to the testing
(sterilisation) of the proposed waste-dump site in a previously
unexplored area west of the proposed Frog's Leg open pits, 1,000
metres of diamond drilling in 8 holes to provide geotechnical
information to aid in pit design, plus a number of exploratory water
bores.

The Feasibility Study is scheduled to be completed by late September
2002 at an estimated cost of $1 million (Dioro's share $490,000).
Subject to completion of the Feasibility Study and process plant
selection, open pit mining activities at Frog's Leg are still
scheduled to commence by the end of calendar 2002.

The pre-feasibility report indicated that, subject to the off-site
process plant selected, total pre-open pit mining capital costs at
Frog's Leg are estimated to be less than $2 million. Dioro's share of
capital costs of $2 million would be $980,000.

Based on the planned work program Dioro expects to fund its share of
estimated Feasibility Study and pre-mining capital costs from its
existing cash resources.

At a gold price of A$550 per ounce (current price A$575) and
estimated operating and capital costs of A$270 per ounce, the
pre-feasibility study estimated that the Frog's Leg open pit mining
project should return net cash flows of approximately A$18 million
(before tax) over an 18-month period. The underground scoping study
indicated that the project would then continue as an underground
mining operation for around 8 years based on current resources.

The exploration program for the second half of calendar 2002 is
currently being finalised and details will be made available shortly.


D McArthur
DIRECTOR