Esquel Gold Project

Brancote Holdings PLC
6 November 2001



Date:       6th November 2001


Contacts:   Richard Prickett, Chairman
            Bill Humphries, Managing Director
            Brancote Holdings PLC                 020 7493 1002

            David Bick
            Holborn Public Relations              020 7929 5599
            [e-mail]




                            BRANCOTE HOLDINGS PLC

                          Esquel Gold Project (74%)

                            Pre- Feasibility Study


In May 2001 Pincock Allen & Holt (PAH), Engineering Consultants from Denver
Colorado, were engaged by Brancote to prepare a Pre-feasibility study for the
Esquel Gold Project.

The completed study includes the construction of facilities, mining by open
pit methods and processing of precious metal ores at the nominal rate of 1.8
million tonnes per year, beginning in the year 2004.


Highlights from the study are:

*    A mine plan with a processing facility capable of producing 500,000
     ounces of gold per annum has been adopted with a 10 years mine life, 
     including 5/6 years of mineable reserves and 4/5 years of resource.

*    High proportion (88%) of the measured and indicated resource
     converted into mineable reserves of 10.4 million tonnes containing 
     2,818,000 ounces of gold at a grade of 8.5 gpt.

*    Good metallurgical recoveries of 89.5 percent for gold using
     standard whole ore Carbon in Leach (CIL) recovery methods.

*    Cash cost averages US$102 per ounce of gold plus US$9 per ounce for
     royalty and refining charges. The average cash cost per ounce of gold is 
     US$81 for the first two full years of production.

*    Estimated capital costs of up to US$131.5 million for the plant and
     infrastructure including indirect charges and contingencies of US$41 
     million.


Based on the information developed during the Pre-feasibility Study, PAH is of
the opinion that this is a positive project with the likelihood of increasing
resources and improving operating costs.


Mine Plan


In considering the parameters for the design of the mine and the processing
facilities, Brancote opted for a 10 year production/mine life with 5/6 years
of mineable reserves and 4/5 years of defined resource as the minimum
criteria.


At commencement of pre-feasibility, the defined resource already stood at 4.1
million ounces, including 3.3 million ounces of measured and indicated that
had a high probability of conversion into mineable reserves. In addition, the
high rate of discovery (70 ounces of gold per metre drilling) together with
the prospectivity of the central zone containing numerous un-drilled but
highly anomalous vein systems, led Brancote to believe that a resource of +5
million ounces of gold was likely to be achieved in the early years of mining.

Accordingly, a mine plan and processing facility capable of producing circa
500,000 ounces of gold per annum was adopted.



Mine Design and Resource Estimate


The Esquel Gold Project is an open-pit gold mining project that will utilise
excavators and trucks as the primary mining equipment. Production is scheduled
for 1.8 million tonnes of ore and an average 19.3 million tonnes of waste per
year over the 6.5 years of life of the project. These reserves will come from
three pits, which will encompass all of the Galadriel, Galadriel Sur, Julia
and Elena Norte systems.


At the end of the phase IV drilling programme in May 2001 the total resource
defined at the Esquel Project, at a cut-off grade of 1gpt, was:


 Resource              Resource             Contained                 Contained
 Category                Tonnes           Gold Ounces             Silver Ounces

Measured              7,756,000             1,910,500                 3,303,200
Indicated             7,010,600             1,420,200                 2,644,000
Inferred              4,695,700               492,700                 1,036,800
Total                19,462,300             3,823,400                 6,984,000



The Base Case for the Pre-feasibility Study was based on proven and probable
reserves derived from the measured and indicated resources only.

Neither the inferred resources have been included in the Mineable reserve, nor
have the resources from the satellite areas Elena Sur and Antonia, both
requiring additional drilling for better definition.


A 'Floating cone' analysis was used to design the ultimate pit as well as to
examine the project's sensitivity to gold price. At a gold price of $270 per
ounce and cut-off of 1.44 gpt, the resulting floating cone contained 10.8
million tonnes at a gold grade of 8.5 gpt and a silver grade of 14.5 gpt with
126.8 million tonnes of waste.


Reserves for the ultimate pit design are summarised in table 1-4



Table 1-4

Minera El Desquite
Esquel Gold Project
Reserve Estimate - Undiluted & Diluted at 11.5% & Zero Grade

  Category         Ore           Gold     Contained    Silver     Contained   
                   Tonnes        Grade    Au oz        Grade      Ag oz       
                                 g/t                   G/t                    
  Proven           6,009,000     8.91     1,721,000    15.23      2,942,000   
  Probable         4,348,000     7.85     1,097,000    13.65      1,908,000   
  Total            10,357,000    8.46     2,818,000    14.57      4,850,000   
  Undiluted                                                                   

  Proven           6,700,000     7.99     1,721,000    13.66      2,492,000   
  Probable         4,848,000     7.04     1,097,000    12.24      1,908,000   
  Total Diluted    11,458,000    7.59     2,818,999    13.06      4,850,000   
 
 

                                                                           
    Category           Gold        Silver      Waste          Strip Ratio  
                       Recovery    Recovery    Tonnes         Waste/ore    
                       %           %                                       
    Proven             89,67       73.00                                   
    Probable           89.53       73.00                                   
    Total Undiluted    89.62       73.00       115,953,000    11.2         

    Proven             89.67       73.00                                   
    Probable           89.53       73.00                                   
    Total Diluted      89.62       73.00       114,762,000    9.9          
 

Metallurgy


PAH reviewed metallurgical test-work performed during the past 2 years on
samples from the Galadriel, Galadriel Sur, Julia, Antonia, Elena Norte and
Elena Sur deposits.

Testing was performed by Hazen Research Inc. of Golden, Colorado on samples
taken from drill holes within the boundaries of the planned pits and
representative of ore types planned for mining. The testing has investigated
gravity concentration, whole ore cyanide leaching, whole ore carbon in leach,
flotation of concentrates followed by CIL leaching to recover gold from the
concentrates and flotation tailings, whole ore roasting followed by CIL
leaching and heap leaching of low grade wall rock materials.


PAH evaluated the test-work and then compared the metal recoveries, operating
costs and capital costs of several viable industrial process alternatives. The
Metal recoveries from the test work of the various ore types/deposits and the
metal recoveries that were applied to the mine model are presented in table
1-8 (Appendix 1).


PAH determined that the process that combines gravity concentration with whole
ore CIL leaching is currently the most desirable for this project. This
process yields high gold recoveries at lower capital and operating costs.

The average gold recovery over the life of the project is estimated to be
89.5% and silver recovery is estimated at 73%.



Ore Processing


The ore processing facility is designed to treat 1.83 million tonnes per year
of ore and will include equipment to perform coarse-crushing, SAG and
ball-mill grinding, gravity concentration, CIL leaching, carbon adsorption,
carbon stripping, electro-winning and smelting. The crusher will be located
near the open-pit mine. Ore will be crushed at a rate of about 5,000 tonnes
per day and conveyed to a large stockpile.

Crushed ore from the stockpile will be conveyed to the grinding circuit, which
consists of a SAG mill, one ball mill, hydro-cyclones and a pebble crusher.
The ore is ground to less than 80 percent passing 74 microns in the grinding
circuit to liberate the gold and silver from the waste material. Gravity
concentrates are collected from a slurry stream taken from the grinding
circuit utilising centrifugal and table concentrators.


Finely ground ore is leached with cyanide in a series of seven large mix tanks
to recover the gold and silver that was not collected in the gravity circuit.
The dissolved gold and silver is recovered from the leach solutions using
activated carbon (CIL process). The carbon absorbs the precious metals out of
the leach solutions. The carbon is then collected from the mix tanks, screened
and washed.

The precious metals are then stripped from the carbon using hot cyanide/
caustic solution under pressure in a strip vessel. The strip solution
containing the precious metals is then passed through electro-winning cells.
The metals are collected in the cells of stainless steel cathodes. The
precious metal sludge collecting on the cathodes is periodically washed from
the cathodes, filtered, dried and then smelted to produce dore, which is
shipped off-site to a refinery.


Tailings produced from ore processing will be detoxified using the INCO/SO2
air process, thickened to a paste consistency and mixed with cement prior to
disposal into a Tailings facility. This will result in a material with
significantly more beneficial properties than the slurried tailings typically
produced in similar operations.


Grinding and cyanide leaching, followed by carbon recovery is one of the most
common gold recovery circuits in the world.


Sustainable Development


The MED project would balance economic, environmental, social and community
issues through environmental sound design and construction methods, avoiding
waste and being sensitive to present and future community needs.


The duration of the base case project is a minimum of 10.5 years from start of
construction to closure. The needs of the present generation would be met by
this project through the creation of employment and the production of gold.


During the construction, production and closure phases of the project, there
would be environmental impacts. The Environmental Impact Study (EIS) report
conclusions are that, after the application of proposed mitigations, the
project:



*    Would not exceed the established regulatory limits;

*    Would be compatible with the environment in that the environment
     would quickly recover from the forecasted impacts once the activity has
     ceased;

*    Would provide socio-economic benefits to the community.

The project would employ approximately 340 people. Furthermore, there would be
additional indirect employment generated by goods and services required by the
project as well as support services for the workers and their families.

During production the Esquel Gold Project will produce about 30% of the gold
produced in Argentina.


Environment and Environmental Planning


The project will be developed under both Federal and Provincial regulatory
requirements of Argentina. Principal regulatory requirements are included in
the following:


*    Mining Code of Argentina as amended by Decree 456/97, which governs
     the rights, obligations and procedures for the purchase and operation of
     mines. Title 13, section 2 of the Mining Code addresses Environmental
     Protection of Mining Activities.

*    Law 24,585 'Supplemental Title of The Mining Code', which addresses
     environmental protection requirements for mining activities, including
     providing the scope and approach for the Environmental Impact Study that is
     required for permitting mining exploitation. This law provides certain
     responsibilities to the Province for the implementation of the Law.

*    Provincial Decree 4032, 'Environmental Impact Evaluation', which
     addresses the Chubut Province requirements for completion of environmental
     impact analysis for mining projects.


Central to these regulations will be the requirement to prepare a
comprehensive Environmental Impact Study (EIS) for the project. Requirements
for the study are presented in Exhibit 3 of Law 24,585-Supplemental Title of
the Mining Code.

An Environmental Management System will be developed for the project,
following the guiding principles of internationally recognised industrial
groups such as the International Council on Metals and the Environment (ICME).
The Management plan will address all aspects of environmental monitoring,
hazardous material handling, mine waste management, site health and safety,
spill prevention and response, dust control, surface water and erosion control
and project reclamation and closure.


Environmental staffing will consist of a senior level Environmental, Health
and Safety Manager reporting to the General Manager, three environmental
co-ordinators who are to be responsible for day to day direction of the
environmental issues, and eight environmental technicians.


Reclamations and closure planning for the operation will be focused on
returning the site to a forested and grazing land-use, similar to the existing
site conditions.



Capital Cost Estimate


PAH have provided a capital cost estimate for the process plant and ancillary
facilities.

The average accuracy of the capital estimate is +/- 25percent.


Plant and Infrastructure                        US$131,577,680


The estimate covers the total costs of the construction and installation of
the plant and infrastructure, including indirect charges and contingencies of
US$41,182,474.


The plant and infrastructure design allows for an enclosed conveyor from the
primary crusher to the plant, a distance of 2.5 Km and drop in elevation of
450 metres. An alternative would be to haul the ore by trucks with possible
savings of US$+10 million. However the conveyor will ultimately provide
substantial savings in mine costs and will be environmentally friendly



Mining Equipment.


PAH has also budgeted US$24,588,000 for an owner operated mining fleet instead
of contract mining, which will provide substantial savings in operating costs
over the life of the mine as well as provide greater employment opportunities
for the local community. Funds have been allocated for training of operators.



Operations Costs


The Base Case operations costs for the mine, process plant and ancillary
facilities, as well as general and administrative are shown in table 1-14.

The accuracy of the operating estimate is +/- 25percent.



Table 1-14
Minera El Desquite
Esquel Gold Project
Base Case Operating Cost Summary


Area*                   2004**  2005   2006   2007   2008   2009   2010  Total
Mining                  14.69  13.57  11.49  12.37   9.58   8.39   4.32  10.70
Process                 10.69  11.13  11.13  10.30  10.30  10.30  10.22  10.57
Reclamation              0.05   0.05   0.05   0.05   0.05   0.05   0.05   0.05
G&A                      3.51   2.57   2.44   2.31   2.31   2.31   2.31   2.44
Total US$ per tonne     28.94  27.32  25.11  25.02  22.23  21.05  16.90  23.75
Total US$ per ounce    170.00  83.00  79.00 113.00 113.00 137.00  90.00 102.00
Total US$ per ounce
with Royalty &         179.00  92.00  88.00 122.00 121.00 144.00  96.00 111.00
Refining

*All values per ore tonne

** Includes pre-production and Q 3 through Q4


These costs are well within the cost limits of other operations of similar
grades and stripping ratios internationally.



PAH Qualifications


The information requested by PAH and supplied by MED conforms to the level of
detail and stage of information PAH normally requires for a Pre-feasibility
Study.

The information includes a general engineering basis of the study, recognised
standards for the resource estimate, test and check values for the drill hole
assays, some preliminary geotechnical and metallurgical test-work, budget
quotes on major equipment and factors for construction, overheads, freight and
contingencies. The majority of the information required was provided by MED or
developed by PAH.



PAH Observations and Recommendations.



During the course of the study, PAH has recognised several areas that will
enhance the project economics if proven by drilling, actual practice or
further testwork. These items include:


*    Exploration drilling should be continued in order to move the
     inferred resource into the measured and indicated categories.

*    Undertake additional laboratory studies to increase recoveries from
     the vein and wall-rock materials.

*    Additional studies need to be undertaken to optimise pit slopes in     
     the mining plan if possible.


Managing Director Bill Humphries commenting on the study said:


'The results of the Pre-feasibility Study are very encouraging ensuring that
the Esquel Project will be advanced through full feasibility, project
financing, construction and then production. It also confirms the Esquel Gold
Project as one of the most viable up and coming gold projects in the world
today'.

Table 1-8
Minera El Desquite
Esquel Gold Project
Metallurgical Test Results - Recoveries by Deposit

                                 APPENDIX 'A'
                                                                   Deposit   
  Hazen Program       Number      Test Ore Type   Representing      As % of   
                      Of Tests    Or Deposit      Deposit Name      Total     
                                  Name                              Ore       
                                                                    Tonnes    

  Phase I - Year      9           Type A & B      Galadriel &       38        
  2000                            Veins           Galadriel Sur               
                                                  (North area of              
                                                  Mine)                       

  Phase II - Year     32          Galadriel Sur   Julia (North)     40        
  2001                            &               (Middle Area of             
                                  Football        Mine)                       
                                  Field                                       

  Phase II - Year     1           Julia           Julia (South)     19        
  2001                                            (South Area of              
                                                  Mine)                       

  Phase II - Year     1           Elena Norte     Elena Norte       3         
  2001                                            (South Area of              
                                                  Mine)                       

  Totals/weighted     43          All             All Deposit       100       
  Averages                        Ores/Veins      Area                        
 
                                                                              
                                          Test      Test      Applied   Applied 
                                         Au          Ag        Au        Ag     
  Hazen          Deposit Metallurgical Recovery  Recovery  Recovery  Recovery
  Program        As %    Test           By        By        By        By        
                 of      Procedure     Leaching  Leaching  Leaching  Leaching
                 Total                 
                 Oz of                                                        
                 Gold                   %         %         %         % 
      
  Phase I -      51      Whole-ore      92.7      72.7      92        73      
  Year 2000              CIL                                                  

  Phase II -     29      Whole-ore      86.4      76.9      86        73      
  Year 2001              CIL                                                  

  Phase II -     17      Whole-ore      89.8      71.4      90        73      
  Year 2001              CIL                                                  

  Phase II -     3       Whole-ore      79.6      55.0      80        73      
  Year 2001              CIL                                                  

Totals/weighted 100     Whole-ore       90.0      73.2      89.5      73.0    
  ed Averages            CIL                                                  

Note: Silver recoveries were applied to the mine model and project cash flow at 
a constant 73 percent