update on sepon

OXIANA RESOURCES NL 2003-02-13 ASX-SIGNAL-G

HOMEX - Melbourne

+++++++++++++++++++++++++
CORPORATEFILE.COM.AU

Oxiana Resources N L poured its first gold from the Sepon Gold
Project just over a month ago. How has the commissioning gone and
when do you expect to reach steady state production?

MANAGING DIRECTOR OWEN HEGARTY

Commissioning has gone well with the final performance trials
required for handover now near completion. We would expect to be at
steady state production before the end of February, which would be
slightly ahead of schedule.

CORPORATEFILE.COM.AU

How have production and shipments been during January compared with
forecasts?

MANAGING DIRECTOR OWEN HEGARTY

Our January forecasts were modest given it was scheduled as a
commissioning month but the plant has delivered throughput slightly
above those forecasts. The grade and recovery were better than
expected. This could be due to a better reconciliation from the
geological model, however we'll need several more months of
production to better determine how this may impact our forecasts.

CORPORATEFILE.COM.AU

The grade milled during commissioning is usually not representative
of longer term grades. What grades are currently going through the
mill and what are the implications for 2003 production?

MANAGING DIRECTOR OWEN HEGARTY

Early in commissioning we had been milling low grade ore. Lately, we
have milled material at about 4.5 grams per tonne (gpt) which is
slightly higher than forecast and above the reserve grade of 3.2 gpt.
Although the grades will vary during the rest of 2003, as we
establish the production pits, we expect the average for the year to
be near this higher level. As a result, we've increased our 2003
production forecast from 125,000 ounces to 140,000 ounces. We'll
refine our forecasts as we better understand the pit-to-mill grade
and tonnage reconciliations.

CORPORATEFILE.COM.AU

When might you have an idea of the operating costs you'll achieve
across the operation and how that will compare with feasibility
numbers?

MANAGING DIRECTOR OWEN HEGARTY

We would expect the second quarter to be the first full period with
representative unit operating costs. We're already getting sufficient
numbers which, after allowing for commissioning, suggest our
feasibility target of less than US$150 per ounce is being achieved.

CORPORATEFILE.COM.AU

Can you estimate the final capital costs for the Sepon Gold Project
and how that compares with feasibility?

MANAGING DIRECTOR OWEN HEGARTY

The feasibility capital estimate was US$45 million to construct and
commission the gold mine. This includes some working capital. The
actual numbers are still being finalised, however it looks as though
we will be on, or better, than budget.

CORPORATEFILE.COM.AU

Have any major operating issues become apparent during commissioning
on the mining or processing side? What risks remain with operating
the Sepon Gold Project?

MANAGING DIRECTOR OWEN HEGARTY

No major issues arose during the commissioning. We had to modify the
agitation parameters early on but other than the usual minor issues
associated with a new plant, the process has moved ahead very well.

We see few, if any, risks going forward. We have to maintain a focus
on training the Lao operators although our experience to date has
been excellent. The CIL process is simple, the grade from the various
pits is robust and the orebodies are very shallow. The next challenge
will be the wet season, however, we have a substantial ROM storage
capacity.

CORPORATEFILE.COM.AU

You've released some drilling results from the Vang Ngang prospect
around 1.5km south east of the gold plant. What impact might this new
prospect have on your mining schedule and are there other similar
targets in the vicinity of the plant?

MANAGING DIRECTOR OWEN HEGARTY

Vang Ngang is looking promising as an additional production source to
the 5 pits already planned. It's well located near the plant and is
on the side of a hill making haulage easier.

There are several other similar targets within relatively short
haulage distances from the gold plant. We've mentioned Luang to the
north of Discovery and Songkham to the immediate north of Nalou in
recent quarterlies. Both of these have good soil anomalies and some
earlier drilling with ore grade intersections. We still have
considerable drilling and interpretation to do before we re-estimate
the resource.

CORPORATEFILE.COM.AU

What do you hope to achieve from the gold exploration program in 2003
and what impact might that and a higher gold price have on
resources/reserves. When might you release an updated
resources/reserves statement?

MANAGING DIRECTOR OWEN HEGARTY

We're currently undertaking a 20,000 metre drilling program in the
mine area to define additional oxide reserves and resources. These
will come from the additional prospects mentioned above but also from
infill drilling between the currently defined pits and earlier,
nearby ore grade intersections, which have the potential to expand
the planned pits. Our target is to add at least 250,000 ounces in
mining reserve in 2003 alone. Although not an immediate focus, we do
have a considerable defined resource of sulphide gold below the
existing oxide reserves. This is still wide open in most directions
at each pit. We are now doing some metallurgical test work on
sulphide core.

As for a new reserve/resource statement, we hope to have sufficient
drilling finished, assayed and the geological models completed to
release a new statement mid year. The higher gold prices will clearly
help.

CORPORATEFILE.COM.AU

Given the promising geological prospectivity, are there any plans for
a gold plant expansion?

MANAGING DIRECTOR OWEN HEGARTY

Our site people are currently focussed on finalising commissioning
and establishing a steady state, low cost operating regime. Given
that, we're turning our thoughts to the possibilities thrown up by
the potential for a larger oxide reserve. The options are a
production increase and life extension, preferably both. We would
expect to have sufficient new geology for the mining engineers and
metallurgists to do some study work on options in the second half of
this year. The oxide plant does lend itself well to an expansion with
areas set aside for new tanks and a new mill if needed.

CORPORATEFILE.COM.AU

How is the Sepon Copper Project progressing?

MANAGING DIRECTOR OWEN HEGARTY

Since the Bankable Feasibility Study was completed last October,
we've commenced final engineering, including finalising the choice of
EPCM contractor. Improvements to the access road, Route 28A, are well
underway to allow for heavy transports during construction. We're
also well advanced on negotiations with several potential lenders as
part of the funding package for the US$167 million capital program.
Both this and the engineering are expected to be finalised by mid
year, well in time for the scheduled start of heavy construction in
October.

CORPORATEFILE.COM.AU

Does the attack last week on a local bus north of Vientiane have any
impact on Oxiana's operation or your views on security in Laos?

MANAGING DIRECTOR OWEN HEGARTY

The bus ambush occurred some 150 kilometres north of Vientiane in a
region known for disturbances in the past and some 600 kilometres
north of Sepon. In our view, the incident was isolated and represents
a localised issue.

We make the observation that Laos remains, in our view, a small,
peaceful, politically stable and secure location. It's very rare for
violence to take place in the country and when it does, as has
happened at Vang Vieng, the attention it receives can be magnified.

CORPORATEFILE.COM.AU

What's your view on the outlook for gold and copper?

MANAGING DIRECTOR OWEN HEGARTY

We're bullish on gold for the foreseeable future with all the
evidence suggesting that prices should be sustainable well into the
US$300s per ounce. As for copper, there are clear signs of the
beginnings of an upturn in demand, particularly in China and that the
recent several years of weak prices will be reversed over the next
few years. Khanong should be coming into production at an excellent
time if that scenario proves correct.

CORPORATEFILE.COM.AU

Thank you Owen