Progress Report

Brancote Holdings PLC
21 August 2001



Date:                   21st August 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 (60%)

                  Resource Statement - Progress Report



The Phase lV drilling, completed in June, was targeted at upgrading the
inferred resource on the 'Football Field' to measured and indicated categories
to allow for its inclusion into the Prefeasibility Study.



Pincock Allen and Holt, Brancote's mine engineering consultants, have produced
a revised resource estimate incorporating the Phase lV drilling.



 Highlights from the revised resource statement:



*         Most of the inferred resources in the 'Football Field' area have
          been converted to the measured and indicated categories.



*         Measured and indicated resources have been increased by 834,000
          ounces gold and 1,556,000 ounces silver, bringing the totals in these
          categories to 3,276,000 ounces gold and 5,866,000 ounces of silver,   
          equal to 87% of the total resource defined to date.



*         Three quarters of the total resource reported has a grade in excess
          of 10.5 g/t gold and 18.2 g/t silver



In late June Dr Richard H. Sillitoe, a world-renowned Consultant Geologist was
requested to revisit the Esquel gold project to review the results of the
Phase IV drilling programme.



Dr Sillitoe stated in his report:



'The Galadriel-Julia vein contains three discrete ore shoots, the Galadriel,
Galadriel Sur and Julia. The ore shoots are separated by only restricted
barren intervals, thereby resulting in a vein that is not only long, but also
extraordinarily continuously mineralised. Indeed, I am unaware of another
low-sulphidation epithermal vein characterised by in excess of 2 Km of
essentially continuous high-grade gold mineralisation.'


Resource Statement - On completion of the Phase IV drilling, Pincock Allen &
Holt (PAH) a leading mine engineering consulting company, based in Denver
Colorado, was requested to produce a revised resource estimate incorporating
all 4 drilling programmes completed to date.



The resource summary reported by PAH is:


                                                    
                            TABLE 1-1                
                            Brancote Holdings PLC    
                            Esquel Gold Project      
                            Resource Summary         
                            (As of August 18, 2001)  
 

                                                                              
  Resource   Cutoff      Resource     Gold   Silver    Contained   Contained  
              Grade                  Grade    Grade                           
  Category     Gold        Tonnes      gpt      gpt         Gold       Silver
                gpt                                       Ounces       ounces 
  Measured      1.0     7,675,000     7.60     13.2    1,874,600    3,251,600 
                2.0     6,773,000     8.40     14.4    1,829,700    3,133,500 
                3.0     5,707,000     9.50     16.0    1,743,700    2,939,500 
                4.0     4,789,000    10.66     17.7    1,641,100    2,726,300 
                5.0     4,098,000    11.70     19.3    1,541,600    2,542,500 
                                                                              
  Indicated     1.0     6,964,600     6.26     11.7    1,400,900    2,616,000 
                2.0     6,168,600     6.86     12.6    1,360,900    2,507,500 
                3.0     5,024,800     7.85     14.2    1,268,600    2,294,400 
                4.0     4,119,300     8.81     15.7    1,167,300    2,083,100 
                5.0     3,328,700     9.84     17.3    1,053,600    1,850,500 
                                                                              
  Measured      1.0    14,639,600     6.96     12.5    3,275,500    5,867,600 
  plus          2.0    12,941,600     7.67     13.6    3,190,600    5,641,000 
  Indicated     3.0    10,731,800     8.73     15.2    3,012,300    5,233,900 
                4.0     8,908,300     9.80     16.8    2,808,400    4,809,400 
                5.0     7,426,700    10.87     18.4    2,595,200    4,393,000 
                                                                              
  Inferred      1.0     4,702,700     3.27      6.9      494,200    1,039,200 
                2.0     2,651,700     4.69      9.1      399,700      775,800 
                3.0     1,511,500     6.36     12.0      309,300      583,800 
                4.0     1,085,800     7.51     13.9      262,000      483,500 
                5.0       774,700     8.74     16.3      217,900      405,100 
                                                                              
  Total         1.0    19,342,300     6.06     11.1    3,769,700    6,906,800 
  Resources     2.0    15,593,300     7.16     12.8    3,590,300    6,416,800 
                3.0    12,243,300     8.44     14.8    3,321,600    5,817,700 
                4.0     9,994,100     9.56     16.5    3,070,400    5,292,900 
                5.0     8,201,400    10.67     18.2    2,813,100    4,798,100 
 




The PAH resource statement will serve as an independent report prepared by a
Competent Person as defined by the Council of Mining and Metallurgical
institution in the UK. PAH has been responsible for the preparation of the
resource estimate contained on this announcement and has more than five years
experience in the estimation, assessment and evaluation of mineral resources
on ore reserves which is relevant to the style of mineralisation under
consideration.





Resource definition, as estimated by PAH is attached as an appendix to this
report.



MED total resources at Esquel now stand at:



                                       Ounces / Gold          Ounces / Silver

   Esquel Gold Project PAH                 3,769,700                6,906,800
   La Joya Del Sol                           209,000                1,413,000
   Huemules                                  114,300                        -
   Total Resources                         4,093,000                8,319,800
                        



Additional drilling will be required on the Galadriel-Julia vein for the full
feasibility study particularly in those areas highlighted in Dr Sillitoe's
report as being under-drilled, namely:



*         The southernmost extremity of the Julia ore-shoot where existing
          holes are too shallow to intersect the likely position of the high-   
          grade core zone.

*         The Julia ore-shoot between coordinates 1300 and 1400 where a 120
          metre gap has only minimal drill information (J51A drill hole is      
          located within this gap - 73 metres @ 15.2 gpt Au)

*         The northern and southern extremities of the Galadriel ore-shoot
          where drilling was not carried out due to the difficult terrain



Drilling of these areas together with the zones that remain open on the Julia
vein is expected to both increase the resource estimate and enhance the
overall grade.

This drilling is programmed to commence mid November as part of the full
feasibility.



Pre-feasibility Studies



The pre-feasibility studies being carried out by mine engineering consultants
Pincock Allen & Holt are on target for completion by mid October.

Metallurgical testing on core material from the Phase IV drilling is almost
complete and initial results are promising with recoveries in line with last
year's testing on the Galadriel-Galadriel Sur systems.



Exploration



Ongoing field exploration this past season has concentrated on the areas to
the north and south of Galadriel-Julia vein with highly encouraging results.

At Elena Centro, second pass exploration involving accurate mapping and
sampling has identified a close spaced swarm of narrow veins, from 0.3 to 1.9
metres wide, occupying a surface area of 90,000 m2, with good textures and
mineable grades of up to 40 gpt gold.

A fence line of reverse circulation drill holes will be completed across this
zone during the next exploration season (October to May)

There are now six highly prospective extensive vein systems in the 'mineable'
vicinity of the Galadriel-Julia vein, waiting development drilling.



La Joya del Sol                                  Galadriel Est-Ovest

Antonia                                          Beleriand - Galadriel North

Ungoliant                                        Elena Centro



La Joya and Antonia already have sizeable defined resources.

Having these vein systems, together with numerous less explored veins, bode
well for a long mine-life of the Esquel Gold Project.



The 2001/2 summer season exploration programme has been approved and includes:
7000 metres of R.C. drilling at Huemules and La Joya del Sol aimed at
increasing and upgrading the existing resources, together with four field
geological teams supported by consultants, to carry out first and second pass
exploration at Leleque, Huemules and Nahuel Pan.



Land



On July 24th, the final contract transferring the important mining lease
Galadriel and La Joya del Sol from the underlying owner Daniel Hughes to
Minera El Desquite was completed.

MED is now the legal owner of both the land and the mining rights of the
entire Esquel Gold Project.



                                   - ENDS -





                                   APPENDIX



Resource Definition



The following are definitions of terms relating to various categories of
resources used by PAH in this report.



Resource: A concentration of naturally occurring solid, liquid or gaseous
material in or on the Earth's crust in such form and amount that economic
extraction of a commodity from the concentration is currently or potentially
feasible. Location, grade, quality and quantity are known or estimated from
specific geological evidence.



To be classified as a resource, there must not only be some evidence that the
concentration of materials exists, but there must be sufficient information
available to estimate the quantity of material.



To reflect varying degrees of geological certainty, resources can be
subdivided into measured, indicated, and inferred.



Measured: Quantity is computed from dimensions revealed in outcrops, trenches,
workings, or drill holes; grade and/or quality are computed from the results
of detailed sampling. The sites for inspection, sampling and measurements are
spaced so closely and the geological character is so well defined that size,
shape, depth, and mineral content of the resource are well established.



Indicated: Quantity and grade and/or quality are computed from information
similar to that used for measured resources, but the sites for inspection,
sampling, and measurements are further apart or are otherwise less adequately
spaced. The degree of assurance, although lower than measured resources, is
high enough to assume geological continuity between points of observation.



Inferred: Estimates are based on geological evidence and assumed continuity in
which there is less confidence than for measured and/or indicated resources.
Inferred resources may or may not be supported by samples or measurements but
the inference must be supported by reasonable geo-scientific (geological,
geochemical, geophysical, or other) data.