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    GOLDEN VALLEY MINES LIMITED 2002-09-19 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    MARKET UPDATE

    Further to the Company's announcement on 15 August 2002 with regard
    to the acquisition of a 35% equity interest in South African Mineral
    Resources Corporation Ltd (SAMROC), the directors are pleased to
    advise that the Company has made the first payment in settlement for
    this transaction. The Company's Chairman, Richard Linnell, and
    Executive Director, Simon Farrell, have been invited to join the
    SAMROC board.

    The acquisition of a strategic holding in SAMROC provides the Company
    with initial market entry into the substantial international
    industrial minerals market and, at the same time, provides
    flexibility through the Johannesburg Stock Exchange Listing of SAMROC
    to assist in financing further acquisitions.

    Over the last twelve months, the Company has been identifying and
    evaluating a number of potential acquisitions in the industrial
    minerals and alloys sector in southern Africa.

    The principal criteria used in the evaluation process have been:

    1. The business currently generates positive cash flows

    2. The business is well established and uses conventional technology

    3. Revenues are predominantly US$ based

    4. Management is sound

    5. Ongoing capital commitments are low

    6. The business has significant share of a concentrated market

    7. The acquisition price represents modest earnings multiples

    In addition to the SAMROC transaction, negotiations are currently
    underway regarding the potential acquisition of two further
    complementary businesses and when these are sufficiently advanced,
    the appropriate notices to the ASX will be made. It is hoped that
    these releases will be made before the end of October.

    Since completing the Company's investment in SAMROC, there have been a
    number of highly encouraging developments. Today SAMROC will be
    advising the Johannesburg Stock Exchange ("JSE") that Dow
    Agroscience's Mancozeb plant at Sasolburg (50kms south of
    Johannesburg) will be substantially increasing production commencing
    next month (Dow currently accounts for 47% of SAMROC's overall sales)
    and the South African Rand (ZAR) 2.76 million capital improvement and
    reconfiguration plan at SAMROC's Greenhills plant is substantially
    complete. The impact of these developments will be to double monthly
    sales from those of the first half of 2002.

    Preliminary discussions have been held with Dow regarding a proposal
    to supply Dow's worldwide requirements of manganese sulphate
    solution. This would involve a multiple increase in the existing
    supply arrangements. The initial response has been encouraging and
    SAMROC has commenced a prefeasibility investigation into the optimum
    manner for fulfilling such supply arrangements.

    The Company's strategy for acquiring cash generating businesses lies
    with your Board's desire to be able to pay dividends in the near to
    medium term. This focus has lead to a review of existing activities,
    in particular, its highly prospective Australian exploration assets
    and the short to mid-term capital requirements of the Group. As a
    result the following corporate initiatives are proposed:

    1. IMPLEMENTATION OF A SHARE PURCHASE PLAN (SPP)

    In accordance with the provisions of the Corporations Act 2001 (Cth),
    in particular, class order 00/194, the Company proposes to proceed
    with an offer to all shareholders registered at the record date to
    acquire further shares in the capital of the Company up to a maximum
    of $3,000 in value.

    The shares will be offered at an issue price of 3.5c per share and
    the offer to shareholders will provide for an acceptance by way of
    subscription of a minimum of $1,400 or a maximum of $2,800. The offer
    is to be partially underwritten to the extent of $1M by Montagu
    Stockbrokers Pty Ltd, a participating organisation of the Australian
    Stock Exchange Limited.

    The record date for determining entitlements to the share purchase
    plan will be 26 September.

    2. DISTRIBUTION IN SPECIE OF NAVIGATOR RESOURCES LIMITED SHAREHOLDING

    As the Company continues to direct its investment focus towards
    operating businesses, the Board has resolved to divest the Company of
    its interest in Navigator Resources Limited by way of a prorata offer
    of all shares held in the capital of Navigator Resources to
    shareholders. The prorata distribution will be effected by way of a
    proposed capital reduction and distribution in specie of the
    Company's shareholding in Navigator Resources.

    Navigator Resources will, at the same time, prepare a prospectus for
    a capital raising by way of Public Offer. Pursuant to that Offer
    existing, Golden Valley Mines Limited shareholders will be given a
    priority entitlement to round up their holdings in Navigator
    Resources Limited received by virtue of the prorata distribution.

    3. GENERAL MEETING

    Pursuant to ASX Listing Rule 7.1, a company is restricted in the
    number of securities it can offer during any twelve month period to a
    number not exceeding 15% of the issued capital at the commencement of
    the period. The offer pursuant to a Share Purchase Plan as outlined
    above is not an exception to Listing Rule 7.1.

    The distribution in specie will proceed subject to confirmation of a
    number of factors, including approval of shareholders at general
    meeting.

    Accordingly, the Company will proceed with the calling of an
    Extraordinary General Meeting of shareholders to approve:

    * The issue and allotment of shares pursuant to the SPP on the basis
    that acceptances to the minimum underwritten level of $1.0M will
    exceed the 15% threshold;

    * To ratify the placement made by the Company in February 2002 in
    conjunction with the offer of shares to Navigator Resources Limited
    shareholders, in order to fully restore the Company's capacity for
    further capital issues in accordance with Listing Rule 7.1(a); and

    * A capital reduction pursuant to the requirements of sections 256B
    and 256C of the Corporations Act 2001 (Cth) and distribution in
    specie of all of the Company's shareholding in Navigator Resources.

    Subject to compliance with various ASX and ASIC notice requirements,
    approval for these transactions may be sought at separate general
    meetings. Further information in relation to the timing and terms for
    this transaction will be advised in due course.


    S J Farrell
    EXECUTIVE DIRECTOR

 
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