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Orchid Capital Ltd (ORC)

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Wednesday 31 August, 2005

Orchid Capital Ltd

Drilling Report

Orchid Capital Ltd
31 August 2005

                                                 Suite 3 Ground Floor
                                                   610 Murray Street
                                                  West Perth WA 6005
                                                  T: +61 8 9321 3664
                                                  F: +61 8 9322 6887
                                                [email protected]

31st August 2005

Australian Stock Exchange
Company Announcements Office

                             Orchid Capital Update

Qu Long Copper Project

Orchid Resources Limited (ORL) has consulted with various Government
authorities, including the China Tibet Institute of Geology Survey (CTIGS),
concerning the Qu Long and Jia Ma Copper Projects in Tibet as a result of the
new information received by the Company on 2nd August 2005 regarding a competing
bidder for the Qu Long Copper Project.

After due commercial consideration, ORL will no longer pursue the projects
covered by the Letter of Intent with the CTIGS as the Board has now formed the
view that it would be difficult for the Tibet Autonomous Region government to
deal with ORL in view of the local competitors, who, we believe, will be the
likely winners in such a bid.

ORL has instead initiated discussions on acquiring a minority stake in the Qu
Long Copper Project with a local company, Qinghai Geermu Zangge Potassium
Fertilizer Ltd (Zangge), but does not anticipate progress prior to November,
when they expect Tibet Government approval of their contract.  Zangge is a
diversified mining company which is part of a group of companies originally
involved in potassium mining, but which have since expanded into areas such as
methanol production, exploration and mining of copper, gold and other industrial

Nagarze Gold Project

ORL has now completed the 200 metre adit at the Nagarze gold prospect, together
with accompanying assays.  Much of the adit has anomalous gold values in the
range of 0.2 to 0.4 g/t Au.  Peak value was 2.06g/t in the adit, which compared
with peak surface values of 5.6 g/t Au.  The adit tested an area which was
indicated by using satellite ASTER (Advanced Space borne Thermal Emission
Reflection Radiometer) imagery.  After due commercial consideration, the Company
has decided that it will not proceed with test drilling of the prospect, and
accordingly, the Board has resolved to write-off the costs related to the
project in accordance with Australian Accounting Standards AASB6.

The Board has resolved to write-off a total of approximately A$3.3 million for
all the Tibetan projects.

ORL has also sought advice from its lawyers in the People's Republic of China
regarding the status of the Nagarze joint venture agreement with CTIGS, with a
view to terminating the joint venture agreement and winding up the joint venture
vehicle, Tibet Pioneer Mining Company Limited.

Upon termination of the joint venture agreement, ORL will be released from its
obligations under the joint venture agreement, including its obligations to fund
tenement exploration and feasibility studies.  This will free up the Company to
explore other investment opportunities.

Other Projects

Orchid Capital Limited (ORC) continues to examine other high growth
opportunities, in particular with a view to taking advantage of the strong
growth potential in China and the impact of such growth on various industries.

Orchid will keep shareholders informed of any further developments.

Information in this announcement that relates to mineral resources is based on
data compiled by Dr David Tyrwhitt PhD (Geology), BSc (Hons), FAusIMM, FSEG
(USA), CPGeo, who is a Fellow of The Australasian Institute of Mining and
Metallurgy and has over 40 years' experience in the mining and exploration
industry. Dr Tyrwhitt is employed by Orchid Resources Limited. Dr Tyrwhitt has
sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the '
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves'. Dr Tyrwhitt consents to the inclusion in the announcement of the
matters based on his information in the form and context in which it appears.

About Orchid Capital Limited

Orchid Capital is an Australian registered investment company listed on the
Australian and German Stock Exchanges and on AIM in London.

About Orchid Resources Limited

Orchid Resources Limited (ORL) is a wholly owned subsidiary of Orchid Capital.
ORL's focus is on the exploration and development of resource opportunities in
the People's Republic of China.

Media Enquiries:

Sarah Allchurch

Allchurch Communications

+61 8 9381 6625

 0412 346 412
Alvin Tan

Managing Director

Orchid Capital

+61 8 9321 3664

                      This information is provided by RNS
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