Drilling Report

Brancote Holdings PLC
11 January 2001




Date:          January 11th, 2001



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



                William Staple
                Benfield Advisory Limited                  020 7578  7070



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






                            BRANCOTE HOLDINGS PLC



                         Argentine 60% Joint venture
          Progress Report on the Phase III Exploration programme
                          And the Strategic Review Process



Phase III Drilling

The phase III exploration drilling program, completed in late December, has
confirmed expectations that the high grade Galadriel Sur vein system continues
southwards through the intervening hill, to connect with the Julia, Elena vein
systems 800 metres to the south.



This now suggests that the Galadriel, Galadriel Sur, Julia and Elena veins are
in fact one extensive epithermal system stretching over 2.2 Kilometres with
much of it totally preserved beneath the surface.



The drilling programme of 11650 metres comprised of 4011 metres of diamond
core and 7639 metres of reverse circulation drilling, was concentrated on
expanding the established resource Galadriel Sur down dip and south along
strike towards Julia.





Bill Humphries, Managing Director of Brancote Holdings PLC said:



'The success of the recent exploration programme has ensured a substantial
increase to the existing defined resource and has further enhanced the
prospectivity of this world-class gold occurrence in the Cordon de Esquel'.


The drilling programme was highly successful and achieved the following:



*        Close spaced drilling has extended the Galadriel Sur mineralisation a
further 250 metres southwards towards Julia, reducing the remaining gap
between those veins to approximately 550 metres.

Results indicate that the mineralisation is improving to the south. A
high-grade core 3 to 5 metres wide in excess of 20 g/t Au is present in many
of the intersections. The vein remains open to the south and down dip.



*        An east - west fence of 4 holes 50 metres apart, was completed on the
top of the hill (named the Football Field) approximately half way between the
southern most part of Galadriel Sur extended and the north end of Julia (a
distance of 550 metres). The three western holes intersected a wide, high
grade, vein system with textures similar to Galadriel Sur.

These results together with evidence from the previously completed geophysical
and soil geochemical surveys support the high probability that mineralisation
is continuous between Galadriel Sur and Julia.



*        Close spaced drilling has extended the southern 300 metres of the
original Galadriel Sur down dip by a further 50 metres. This now gives the
section an overall down dip of plus 200 metres.

In addition drilling has provided further evidence of parallel, mineralised
veins in both the hanging wall and footwall to the main vein.

Three holes, in the southern section of the original Galadriel Sur,
intersected a wide, high grade structure in the hanging wall over 120 metres
in length i.e. GD215 returned 10.1 metres at 10.4 g/t Gold.





Table 1

Summary of Significant Intersections

Galadriel Sur Diamond Core and Reverse Circulation Drilling


  Hole    Easting Northing  Depth    From         Intersection         Grade
Ndegrees    156     525    Metres   Metres            Metres           G/T Gold

Down Dip and Southern Extension

GR160      4820.9   2138.9  139.00     74.00               13.00           10.2
GR161      4783.8   2065.6  141.00     94.00               13.00           11.7
GR167      4752.3   2031.3  144.00     94.00                5.00           11.7
                                      109.00               20.00           14.2
GR169      4752.2   1991.2  150.00     72.00               18.00           10.4
GD215      4731.7   2853.8  257.50    156.14               10.10           10.4
GD218      4758.2   2068.4  167.00    112.23               12.00           10.6
GD220      4728.3   2036.6  189.50    128.00               20.60            7.2
GD224      4703.0   2040.2  196.40    131.56               14.10            8.1
                                      170.05                9.80            7.2
Section Between Southern Extension and Julia (Football Field)
GR173      4544.2   1665.5  150.00     99.00               11.00            7.7
GR174      4494.2   1673.6  150.00    132.00               18.00            7.2
GD222      4445.6   1680.5  191.00    125.30               15.10           10.0



Two smaller drilling programmes were completed on the Julia and Antonia vein
systems.



*        On Julia, 8 RC holes were drilled, for a total of 866 metres,
successfully extending the mineralisation down dip for in excess of 70 metres
in the northern sector. The results continue to show Julia to have a very wide
mineralised zone with constant high grade.



*        On the southern end of Antonia an exploration drilling programme of
19 holes, totalling 1466 metres, was carried out to determine the direction
and continuity of the various vein systems. Eight of the holes intersected a
wide mineralised zone containing veins with textures similar to the upper part
of Julia, high in the gold reporting zone.





Table 2

Summary of Significant Intersections


  Hole    Easting  Northing  Depth    From          Intersection         Grade
Ndegrees    156     525     Metres   Metres            Metres           G/T Gold

                      Julia Reverse Circulation Drilling
JR42       4335.1   1449.8   90.00     68.00               22.00           11.0
JR43       4339.9   1403.0  100.00     28.00               35.00            6.8
JR48       4282.7   1377.9  102.00     42.00               30.00            6.0

                     Antonia Reverse Circulation Drilling
AR4        4009.0   2013.3   93.00     54.00               22.00            6.3
AR16       3993.0   2040.0   59.00     36.00               16.00            7.2
AR18       4013.0   2016.0   84.00     37.00               25.00            5.8





Resource Upgrade

Pincock Allen & Holt of Denver, Colorado, are in the process of updating their
resource estimates in relation to the most recent phase of the drilling
programme and are scheduled to issue their findings before the end of January.



Strategic Review Process

Further to the announcement on November 8th 2000, Brancote confirms that three
interested parties have undertaken extensive technical due diligence,
inclusive of confirmation drilling, on site in Esquel during November and
December 2000.

Discussions are continuing with these three parties and the Board of Directors
expects to be able to make a further announcement within a month. It should be
emphasised however that an offer for Brancote remains one of a number of
options open to the Company.








Geological information in this report has been compiled by Brancote's Project
Manager, Marc 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 Australasian
Code for Reporting of Identified Mineral Resources and Ore Reserves;

*        is a Member of the Australasian Institute of Mining and Metallurgy
and has had more than five years' experience in the field of activity reported
herein;

*        has consented to the inclusion of this data.







Benfield Advisory Limited, which is regulated in the United Kingdom by the
Securities and Futures Authority Limited, is acting for Brancote in relation
to this announcement and for no-one else and will not be responsible to any
other person for providing protections afforded to customers of Benfield
Advisory Limited or for providing advice in relation to this announcement or
in relation to any transaction or arrangement referred to herein.