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September 2007 Quarterly Report

Report on Activities for the Quarter ended 30 September 2007

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HIGHLIGHTS FOR THE QUARTER OPERATIONAL - BEACONSFIELD GOLD MINE The Case for Safety for Western Ore Production was accepted by the Chief Inspector of Mines at the end of the quarter, enabling production to resume from the Western Zone of the mine. All Government notices restricting underground operations have now been lifted. Re-commissioning of underground operations is progressing towards full production with mining from all areas of the mine expected during the December quarter. Melick investigation completed. New longhole drill rig acquired to ensure accurate drilling for Western Zone remote mining. Ore treatment plant treated 28,975 tonnes from underground re-commissioning to produce 5,180 ounces of gold. New mineralised structure discovered 150 metres in footwall of Tasmania Reef. RC rig sourced to commence near-mine surface exploration program during the December quarter. Helicopter magnetic survey completed to advance regional exploration around the Beaconsfield Mine. CORPORATE Appeal lodged, subsequent to end of the quarter, against the ruling handed down in relation to proceedings commenced by Beaconsfield Gold Group companies in the Supreme Court of Victoria claiming indemnity of $45.5 million in respect of a business interruption insurance claim.

1. BEACONSFIELD GOLD MINE

1.1.1 Safety and Health

MRIFR (Medically Referred Injury Frequency Rate - number of injuries per million man hours)

There was one Lost Time Injury and five Medical Treatment Injuries in the September 2007 Quarter.
The Case for Safety in respect of Ore Production from the Western Zone was accepted by the Chief Inspector of Mines on 28 September 2007, and the final notice preventing mining was rescinded. There are now no regulatory restrictions preventing the recommencement of full mining activities in all areas of the mine.

1.1.2 Mining

Further progress was made with the re-commissioning of underground operations, although it took considerably longer than expected to complete the peer review and gain approval for the Western Zone Case for Safety. Production from the Western Zone is the key to returning to full production levels.

Sill driving continued and stoping was successfully recommenced in the Eastern Zone midway through the quarter after rehabilitation and enhancement of ground support in access drives. Dynamic cable bolts and resin bolts are being installed in conjunction with split-sets and mesh, in accordance with the appropriate Case for Safety.

Stoping in the Western Zone is based on a non-entry method of mining utilising footwall drives to provide drill and loader access whilst keeping all personnel remote from the orebody during stoping. The development of footwall drives commenced during September and is expected to provide access to drill and fire the first stoping panel in the second half of the December 2007 quarter. A new Simba M4C longhole drilling rig has been mobilised to site and will provide much improved drilling accuracy, critical to the new mining method. The rig is expected to be commissioned in early November.

Waste development continued throughout the quarter with 147 metres of capital development and 87 metres of operating level development completed.

During the quarter, 26,578 tonnes of ore were hoisted (18,455 tonnes previous quarter).

1.1.3 Ore Treatment Plant

The ore treatment plant operated throughout the quarter on a campaign basis, treating 28,975 tonnes of ore (14,843 tonnes previous quarter) to produce 5,180 ounces of gold. All areas of the plant performed well, including the bacterial leach circuit.


1.2 EXPENDITURE

Re-commissioning expenditure for the mine during the quarter totalled $10.7 million.
The Federal Government has assisted in the safe re-opening of the mine by providing a grant of $4.9 million through the Beaconsfield Community Fund, of which $4.5 million had been received by the end of September, including payments totalling $1.1 million during the quarter. The grant provides assistance with supernumerary payroll costs, development of the decline to access the F21 zone and diamond drilling for additional resources.


1.3 ORE RESERVES/RESOURCES

The previously reported Identified Mineral Resource for the Tasmania Reef at Beaconsfield, Tasmania as at 31 March 2006 was:

A Reserve Statement for the Tasmania Reef, including the conversion of additional F21 Zone and 840E resources, will be released as soon as possible now that all mining restrictions have been lifted. The Eastern and Western Cases for Safety both incorporate mining methods that are anticipated to result in little or no loss of reserves.

A drill program to test the depth extension of the Tasmania Reef will commence following the completion of the development of a hanging-wall drill drive on the 1090m level.


1.4 MELICK INVESTIGATION

Special investigator Greg Melick SC has finalised an independent investigation into the 25 April 2006 incident in the underground workings of the Beaconsfield Mine. The report was tabled by Mr Melick on 5 September 2007 at the re-opening of the Coronial Inquest.

Whilst the report was not made public, a summary of the findings and recommendations released publicly noted that recommendations made by consultants before the incident had been adopted and that there was no suggestion that the 925m level not be mined.

The recommendations of the report are also consistent with the measures accepted in the Case for Safety for the Western Zone.

2. EXPLORATION

At Pease Creek, previously reported exploration drilling during 1997/1998 gave a best result from 66.5m downhole of 10m at 5.3 g/t gold, including 1.5m at 21.1 g/t gold. The November drill program will aim to test the Pease Creek structure in the most prospective western Salisbury Hill Formation units that were not tested by the 1997/1998 drilling.

A helicopter, low-level, detailed aeromagnetic survey was successfully completed over the Beaconsfield area during September 2007. Data from the survey is currently being processed and it is expected that the results will assist in target definition for extensive regional surface drilling programs in 2007/2008 and 2008/2009.

3. CORPORATE

3.2 CASH POSITION

At 30 September 2007, Allstate had no cash. Funding for BMJV expenditure and corporate costs are currently being loaned to Allstate by Beaconsfield Gold.


3.3 CONSOLIDATION OF MINE OWNERSHIP

Day-to-day management of the Beaconsfield Mine was transferred to Beaconsfield Gold on 27 February 2007.

Beaconsfield Gold's takeover bid for Allstate Explorations NL closed on 12 July 2007 with Beaconsfield Gold holding 90.06% of Allstate. Under the terms of the bid a further 2.5 cents per fully paid share will be paid when the Allstate group achieves 30,000 ounces of attributable gold production from recommencement.


3.4 BUSINESS INTERRUPTION INSURANCE CLAIM

A number of Beaconsfield Gold group companies are pursuing a claim under their business interruption insurance policy following the 25 April 2006 incident and the temporary closure of the Beaconsfield Mine. The policy has a one month excess and is capped at $50 million.

To date, the insurer has refused to provide an indemnity in respect of loss resulting from the mine closure. As a result, on 14 May 2007, the Beaconsfield Gold group filed a claim in the Supreme Court of Victoria claiming damages of $45.5 million arising from the insurer's refusal to provide indemnity in breach of the terms of the policy. A preliminary trial to determine the true construction of a clause in the policy that is considered key to the claim was heard on 6 September 2007.

Following an adverse judgement, the group companies lodged an appeal with the Supreme Court of Victoria Court of Appeal on 24 October 2007.


3.7 CLAIM AGAINST ALLSTATE'S PREVIOUS LEGAL ADVISOR

A number of Beaconsfield Gold group companies are seeking damages for professional negligence arising from legal services provided to Allstate in relation to certain insurance and risk management issues associated with the contract for construction of the treatment plant at the Beaconsfield Mine in 1998/1999. No significant developments occurred in relation to the claim during the quarter.


For further information contact:
Bill Colvin - Chief Executive Officer

Allstate Explorations NL
t: 61-3-9909-7401