Drilling Report

Brancote Holdings PLC 19 June 2001 Date 19 June 2001 Contacts Richard Prickett, Chairman Bill Humphries, Managing Director Brancote Holdings PLC 020 7493 1002 David Bick Holborn Public Relations 020 7929 5599 david.bick@holbornpr.co.uk BRANCOTE HOLDINGS PLC Esquel Gold Project (60%) Progress Report on the Phase IV Exploration Programme and Pre-feasibility Study Phase IV Drilling The Phase IV drilling programme concluded on a high note with a diamond core hole drilled in the northern section of the Julia vein returning the largest gram-metre intersection to date on the entire vein system, exceeding even those of Galadriel Sur. Drill Hole ndegrees Intersection Gold Grade Silver Grade JD 51A 73 metres @ 15.2 g/t Au and 28.1 g/t Ag equivalent to 1.1 kilogram/metre gold and 2.0 kilogram/metre silver. (see attached schedule) In this latest campaign a total of 17,963 metres were drilled, including 9,175 metres of diamond drilling and 8,788 of reverse circulation, using three UDR 650 multipurpose drilling machines hired from and operated by Major Drilling of Canada. The programme was completed in just four months from the end of January to June 2. The Phase IV programme, concentrated on the large area of inferred mineralisation between the defined resources of Julia and Galadriel Sur, has identified several individual veins which have been drilled to a sufficient density to ensure that most of this resource will be placed in the measured and indicated categories. Bill Humphries, Managing Director of Brancote Holdings PLC said: 'With the completion of yet another successful drilling campaign we remain very encouraged by the quality and potential for growth of the Esquel Gold Project.' Table I Summary of Significant Intersections 'Football Field' and Julia Diamond Core and Reverse Circulation Drilling Hole Easting Northing Depth From Intersection Grade Ndegrees 156 525 metres metres metres g/t gold JD 51A 4379 1437 143.9 53.0 73.0 15.2 Including 63.5 35.2 25.1 GR 265 4401 1524 156.6 127.0 16.0 12.1 GR 266 4442 1516 132.0 105.0 8.0 13.6 GR 267 4467 1552 138.0 106.0 18.0 7.4 GD 290 4440 1598 185.8 141.8 25.9 14.9 Including 142.8 14.0 20.6 GD 300 4619 1891 235.6 194.4 16.9 12.6 Including 203.6 7.1 20.0 GD 303 4644 1887 192.2 155.0 15.9 7.9 The drilling of the 'Football Field' vein has been a major success showing this to conform to the morphology of a large and sheared sigmoid with symmetrical sub-vertical mineralisation developed on each flank, the principal one being that of Elena Norte, on the east of the sigmoid. This has allowed the northern continuation of Elena Norte to be inferred into the 'Football Field'. The drilling of Galadriel Sur Extended is incomplete, with the vein system remaining open both up-dip and at depth in several areas. Sufficient drilling has been completed to allow for the re-interpretation of the whole of the vein system and for its inclusion into the pre-feasibility study reserve estimates. Hanging wall structures are a common feature of both the 'Football Field' and the Galadriel Sur Extended veins. Grades can be significant (GD 299 21 metres @ 6.2 g/t Au) and their inclusion will make an important contribution to the resource. To date, in excess of 51,000 metres of drilling has been completed on the Esquel Gold Project. Sufficient drilling at adequate density has been completed to allow for mining design for pre-feasibility studies. Some infill and step-out drilling (estimated 10,000 metres) will be required, for full feasibility studies. Geological interpretation of the Phase IV drilling is currently being carried out at Esquel and when completed will be forwarded to Pincock Allen & Holt for inclusion into the new resource estimate, scheduled for completion in early August. The 2000 metres of exploration drilling, scheduled to be carried out on the external vein systems, Ungoliant, Antonia and La Joya del Sol, has been rescheduled for October. Pre-feasibility Studies The pre-feasibility studies being carried out by Mine Engineering Consultants Pincock Allen & Holt (PAH) have commenced and are scheduled for completion by late September 2001. Preliminary mine design has shown that all of the existing resources defined to date can be mined by open pit method. Metallurgical testing has been sub-contracted to Hazen Research of Golden, Colorado. Hazen has been involved with the Esquel Gold Project since early 2000, carrying out the initial testing of the Galadriel - Galadriel Sur resources Land Acquisition Leleque S.A., a fully owned subsidiary of Minera El Desquite, has acquired four new exploration 'cateos' in the Cholila region, some 30 kilometres north and west of the highly prospective Cordon Leleque. These 'cateos' totalling 40 square kilometres are in the main Cordillera and include several drainage systems showing strong anomalous geochemical trends of gold in pan concentrates (up to 6,000 ppb Au). Their names are: Rio Tigre Los Alerces Arroyo del Turco Epuyen Est. First pass exploration of these new areas has being scheduled to commence in October of this year. Argentine VAT Legislation and Tax Refund The Argentine Government has enacted an amendment to the Argentine Mining Law, (Official Bulletin June 1st 2001), enabling exploration companies to claim refunds of VAT expenditures (21%), retrospective from January 1st 2000. Minera El Desquite is eligible for a refund of US$ 1,030,000 over the next 12 months and will benefit on future exploration with an overall reduction of cost of approximately 12%. - ENDS - Geological information in this report has been compiled by Brancote's Project Manager, Marc J. Sale, who: - Is a consultant to Brancote Holdings plc; - Has relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined in the Australian Code for Reporting of Identified Mineral Resources and Ore Reserves; - Is a member of the Australian Institute of Mining and Metallurgy and has more than five years experience in this field of activity reported herein; - Has consented to the inclusion of this data. DRILL HOLE JD51A DRILL HOLE JD51A Sample From To Interval CODE Grade Grade Wt. Wt. No. Au Ag Ave.Au Ave.Ag 42650 53.00 54.00 1.00 Aas 2.98 3.5 2.98 3.5 ch bit py sw 42651 54.00 55.00 1.00 Aas 4.14 3.4 4.14 3.4 ch sm bit sw 42652 55.00 56.61 1.61 Aas 3.61 3.3 5.81 5.31 ch bit sw 42653 56.61 57.33 0.72 Vn ch 2.94 7.5 2.12 5.4 py bit 42654 57.33 58.28 0.95 Vn ch 1.70 9.1 1.62 8.65 bit qz 42655 58.28 59.30 1.02 Vn ch 9.78 10.5 9.98 10.71 bit qz 42656 59.30 60.50 1.20 Vn ch 23.90 46.0 28.68 55.2 bit qz 42657 60.50 61.54 1.04 Vn ch 22.70 38.0 23.61 39.52 qz 42658 61.54 62.80 1.26 Vn ch 6.16 7.7 7.76 9.7 qz 42659 62.80 63.80 1.00 Vn ch 4.41 15.7 4.41 15.7 qz bit 42661 63.80 64.76 0.96 Vn ch 10.50 17.6 10.08 16.9 qz amsil 42662 64.76 65.75 0.99 Vn ch 7.22 12.2 7.15 12.08 qz bit bx 42663 65.75 66.73 0.98 Vn ch 7.11 7.7 6.97 7.55 qz Aas bx 42664 66.73 67.72 0.99 Vn ch 0.57 1.8 0.56 1.78 qz 42665 67.72 68.77 1.05 Vn ch 10.40 15.3 10.92 16.07 qz bx 42666 68.77 69.81 1.04 Vn ch 63.50 113 66.04 117.52 42667 69.81 70.80 0.99 Vn ch 26.30 44.0 26.04 43.56 qz bit bx 42668 70.80 71.79 0.99 Vn ch 29.80 63.9 29.50 63.26 qz bit bx 42669 71.79 72.84 1.05 Vn ch 62.00 121 65.10 127.05 qz bit 42670 72.84 73.86 1.02 Vn ch 50.00 72.2 51.00 73.64 qz bit 42671 73.86 75.00 1.14 Vn ch 16.70 30.2 19.04 34.43 qz bx 42672 75.00 76.00 1.00 Vn ch 6.81 14.2 6.81 14.2 42673 76.00 77.00 1.00 Vn ch 20.20 41.6 20.20 41.6 amsil bx 42674 77.00 78.00 1.00 Vn ch 13.20 31.8 13.20 31.8 qz Aas bx 42675 78.00 79.00 1.00 Aaps 16.40 37.8 16.40 37.8 ch bx 42676 79.00 80.00 1.00 Vn ch 15.60 28.4 15.60 28.4 Aas bx 42677 80.00 81.00 1.00 Vn ch 12.50 31.0 12.50 31.0 qz ep bx 42678 81.00 82.00 1.00 Vn ch 7.34 22.2 7.34 22.2 ad py Aas 42679 82.00 83.05 1.05 Vn ch 2.28 10.4 2.39 10.92 cal Aas bx 42681 83.05 84.00 0.95 Vn ch 27.90 65.8 26.51 62.51 ad cal 42682 84.00 85.00 1.00 Vn ch 11.60 25.2 11.60 25.2 cal sm bx 42683 85.00 86.00 1.00 Vn ch 42.60 72.8 42.60 72.8 ad chl 42684 86.00 87.00 1.00 Vn ch 18.80 32.6 18.80 32.6 42685 87.00 88.00 1.00 Vn ch 50.50 61.0 50.50 61.0 ad qz 42686 88.00 89.00 1.00 Vn ch 45.10 89.6 45.10 89.6 ad 42687 89.00 90.00 1.00 Vn ch 23.50 61.8 23.50 61.8 ad bit 42688 90.00 91.00 1.00 Vn ch 24.40 59.6 24.40 59.6 ad bit 42689 91.00 92.00 1.00 Vn ch 32.00 48.0 32.00 48.0 qz 42690 92.00 93.00 1.00 Vn ch 18.60 31.8 18.60 31.8 qz bit 42691 93.00 94.00 1.00 Vn ch 30.10 38.4 30.10 38.4 qz ad bit Apa 42692 94.00 95.00 1.00 Vn ch 13.00 18.8 13.00 18.8 qz bit bx 42693 95.00 96.00 1.00 Vn ch 19.50 26.2 19.50 26.2 qz bit ad bx 42694 96.00 97.00 1.00 Vn ch 21.70 35.4 21.70 35.4 qz bit ad bx 42695 97.00 98.00 1.00 Vn ch 12.10 23.4 12.10 23.4 qz bit ad 42696 98.00 99.00 1.00 Vn ch 32.10 46.4 32.10 46.4 bit ad 42697 99.00 100.00 1.00 Vn ch 21.00 41.1 21.00 41.0 bit sm cal vt 42698 100.00 101.00 1.00 Vn ch 18.70 30.0 18.70 30.0 qz bit bx 42699 101.00 102.00 1.00 Vn ch 4.69 12.8 4.69 12.8 qz bit Aas py 42701 102.00 103.00 1.00 Vn ch 28.70 48.2 28.70 48.2 bit 42702 103.00 104.00 1.00 Vn ch 38.50 53.6 38.50 53.6 ad bit qz 42703 104.00 105.00 1.00 Vn ch 15.60 32.6 15.60 32.6 ad bit Aap 42704 105.00 106.00 1.00 Vn ch 6.02 13.8 6.02 13.8 am ad 42705 106.00 107.00 1.00 Vn ch 6.08 12.0 6.08 12.0 qz am Apa 42706 107.00 108.00 1.00 Vn ch 2.98 15.2 2.98 15.2 bit cal bx 42707 108.00 109.00 1.00 Vn ch 17.60 34.0 17.60 34.0 ad bx 42708 109.00 110.09 1.09 Vn ch 11.70 25.0 12.75 27.25 bit ad py bx 42709 110.09 111.16 1.07 Aaps 2.15 9.80 2.30 10.49 ch bit cal sw 42710 111.16 112.11 0.95 Aaps 0.81 5.60 0.77 5.32 ch cal sw 42711 112.11 113.13 1.02 Aaps 1.05 6.60 1.07 6.73 ch cal py sw 42712 113.13 114.13 1.00 Aaps 0.98 3.20 0.98 3.20 ch py sw 42713 114.13 115.22 1.09 Aas 0.78 2.00 0.85 2.18 ch py bit vt 42714 115.22 116.36 1.14 Vn ch 3.33 12.2 3.80 13.91 py bit cal 42715 116.36 117.57 1.21 Vn ch 7.91 13.4 9.57 16.21 bit ad Aas 42716 117.57 118.92 1.35 Apas 0.87 1.60 1.17 2.16 ch py vi 42717 118.92 120.00 1.08 Vn ch 0.80 1.80 0.86 1.94 am cal 42718 120.00 121.00 1.00 Vn ch 1.16 3.40 1.16 3.40 bit cal 42719 121.00 122.00 1.00 Vn ch 1.26 2.80 1.26 2.80 am bit cal 42721 122.00 123.00 1.00 Vn ch 2.39 6.00 2.39 6.00 bit cal 42722 123.00 124.00 1.00 Vn ch 1.71 7.00 1.71 7.00 bit 42723 124.00 125.00 1.00 Vn ch 5.23 17.2 5.23 17.2 bit 42724 125.00 125.95 0.95 Vn ch 3.73 5.60 3.54 5.32 cal py bx 72.95 1,109.3 2,046.66 Au INTERSECTION 73.0 m @ 15.2 g/t Au Ag INTERSECTION 73.0 m @ 28.1 g/t Ag INCLUDING 35.2 m @ 25.1 g/t Au

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