MMN macmin silver ltd

Fourth Quarter Activities Report

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    Fourth Quarter Activities Report

    MACMIN LIMITED 2002-07-26 ASX-SIGNAL-G

    HOMEX - Brisbane

    +++++++++++++++++++++++++
    1 SUMMARY & COMMENTS

    Macmin's corporate objective is to focus the company on silver mining
    and exploration. This objective was substantially progressed during
    the quarter with the commencement of Ore Reserve definition drilling
    at the Texas Silver Project; the sale, (subject to shareholder and
    regulatory approval), of Macmin's gold and gold/copper assets in
    Papua New Guinea (PNG), to TSX (Toronto venture exchange) listed
    company, New Guinea Gold Corporation (NGG); and the company will
    effectively sell down its interest in unlisted public company, TasEx
    Resources Ltd (TasEx) by the issuance of a prospectus in the near
    future.

    To further emphasise the focus on silver, Directors will seek
    shareholder approval, at a General Meeting to be held in early
    September, to change the company's name to Macmin Silver Ltd.

    Macmin, in the Board's opinion, is highly leveraged to future
    increases in the silver price. Shareholders should be aware that
    Macmin's share price is very sensitive to changes in the silver
    price. Increases in silver price not only increase the value of
    Macmin's silver reserves but would also increase the quantity of
    silver in reserves and resources by allowing lower mining cut off
    grades.

    1.1 TEXAS SILVER MINES PTY LTD

    As foreshadowed in the previous quarterly report, a major drilling
    program commenced at Twin Hills during the quarter to expand the
    reserve base around the periphery of the proposed Phase 1 open pit. A
    total of 94 holes were drilled to maximum depths of 60m for a total
    of 5173m of percussion drilling.

    This program is ongoing and is expected to continue throughout the
    remainder of 2002. A second rig (reverse circulation) recently
    commenced drilling at Twin Hills and a third, diamond core rig, is
    expected on site in September.

    Updated, Measured/Indicated Resource and Ore Reserve figures, will
    not be calculated until October 2002, to allow as much drill
    information as possible to be incorporated in the new figures.

    The program during the current quarter defined mineralisation within
    the previously announced Inferred Resource boundary, but also, as
    shown on the enclosed cross section, located a new zone of silver
    mineralisation adjacent to the eastern wall of the original proposed
    Phase 1 pit. Drill intercepts on section line 4175N include 6m @
    297g/t Ag and 34m a 121g/t Ag. This is an exciting new discovery
    which, in addition to increasing the in-pit Resource, should allow
    cost savings in mining, as it will permit a wider pit and reduce the
    stripping ratio. It may also allow the pit to be deepened, to access
    mineralisation not previously included in the Ore Reserves. During
    August and September, drill testing of other prospects outside the
    limits of the Twin Hills mining lease will commence (including
    diamond core drilling at Mt Gunyan).

    For further details refer to the colour copy or section 4175N at
    www.macmin.com.au and to Section 2.1 of this report.

    1.2 NEW GUINEA GOLD CORPORATION

    On 13th June 2002, Macmin announced that as part of its ongoing
    strategy to become a silver focused mining and exploration company,
    it had reached an agreement to sell its wholly owned subsidiary,
    Macmin (PNG) Limited, to Toronto Venture Exchange listed company, New
    Guinea Gold Corporation (NGG). NGG is currently owned 58% by Macmin
    Ltd, has approximately 20M shares on issue and is better positioned
    than Macmin, market wise, to raise finance for development and
    exploration of the Papua New Guinea projects.

    Macmin (PNG) Ltd holds title to seven exploration leases and one
    mining lease in Papua New Guinea.

    Consideration for the sale will consist of additional shares in NGG,
    plus royalty arrangements in respect of any future production from
    the Papua New Guinea properties. At the conclusion of the sale and
    before additional finance is raised, Macmin will own approximately
    66% of NGG.

    The sale is subject to due diligence, regulatory and shareholder
    approval, and is expected to be completed in early September. Further
    details are given in section 2.2 of this report.

    1.3 TASEX RESOURCES LTD

    Macmin's 45% owned subsidiary, TasEx Resources Ltd (TasEx), on 27th
    July 2002, closed the offer of securities contained in the Prospectus
    dated 14 September 2001 and Supplementary Prospectus dated 13th
    December 2001. TasEx intends to issue a new, updated prospectus in
    the near future, in line with its objective of achieving ASX listing
    during 2002.

    Macmin, as part of its ongoing strategy to become a silver focused
    mining and exploration company, has previously stated that it intends
    (subject to regulatory and commercial review) to distribute its
    10,000,000 shares in TasEx to Macmin shareholders by some form of in
    species distribution. The precise timing and manner of distribution
    is still subject to review.

    TasEx recently completed a small drilling program at its Lisle
    Project in NE Tasmania. At Potoroo, drilling defined an open ended
    structural zone containing high-grade gold in narrow quartz veins
    within a wider envelope of anomalous gold in granitic rocks. Grades
    such as 2m at 4g/t Au and 16g/t Ag were encountered (see also section
    2.3 of this report). The results are encouraging as chip samples from
    individual veins assayed up to 86.0g/t Au (the highest assay to date
    on the license) and it is speculated there may be stacked veins or
    wider high-grade occurrences within the structural zone.

    At Enterprise four of five holes were abandoned due to technical
    drill problems and the drill holes did not provide a test of the
    prospect.

    Further drilling at both prospects is planned for later in 2002.

    1.4 CORPORATE

    On July 4th 2002 Macmin made a placement into New Guinea Gold
    Corporation (NGG) of CAD$110,000. Macmin will be issued with 862,745
    units of NGG at CAD$0.1275/unit. Each unit will consist of one share
    and one warrant, the warrants being exercisable for a period of one
    year at a price of CAD$0.20. These funds will be used by NGG to
    proceed the acquisition of Macmin PNG Ltd by NGG, for initial
    exploration funding in PNG and for working capital.

    Macmin has retained Marcel R Ewald in Switzerland to provide investor
    relations and marketing advice to the company for Europe. Mr Ewald
    has arranged listings for Macmin on both the Berlin and Frankfurt
    Stock Exchanges, and for articles on Macmin to be published in German
    financial publications. These listings have been very successful with
    30 million shares being traded on those exchanges between April 2nd
    and June 28th 2002. An investor road show in Europe is planned for
    early October 2002.

 
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