Beaconsfield Gold - Australia's Richest Gold Resource.

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December 2003 Quarterly Report

Report on Activities for the Quarter ended 31 December 2003

BEACONSFIELD GOLD NL (RECEIVER AND MANAGER APPOINTED)
Report on Activities for the Quarter ended 31 December 2003

BEACONSFIELD MINE JOINT VENTURE (BMJV) (Beaconsfield Gold Direct Interest 48.49%)

HEAD GRADE

Production Summary

Graph 2 shows the trend for head grade to date in comparison to the reserve grade and the forecast head grade of the Allstate Administrators in March 2002. The December 2003 quarter head grade of 22.0 g/t gold was 23% greater than the current reserve grade of 17.9 g/t gold and 60% greater than the 5-year forecast head grade of the Allstate Administrators in March 2002 of 13.72 g/t gold. The reserve grade has not been increased over time as much as one would expect from a mathematical point of view, especially in the light of the increases in the resource grade at depth which were predicted from the feasibility study and subsequent ore reserve drilling programs.

GOLD PRODUCTION / RECOVERY

Ore treatment plant gold recovery for the December 2003 quarter, excluding changes in gold in circuit, was 93.0% (September 2003 quarter 95.1%).

Graph 3 shows gold recovery since production commenced in 1999 in comparison to the feasibility target (94%) and the forecast gold recovery of the Allstate Administrators in March 2002 (90.5%)..

Gold production for the December 2003 quarter was a quarterly record at 40,104 ounces (159,108 ounces per year rate) compared with the September 2003 quarter result of 38,578 ounces (153,054 ounces per year rate). The percentage of gold production recovered by gravity processes during the quarter improved further to 64%, well above the feasibility target of 42.6%.

Graph 4 shows actual quarterly BMJV gold production since start up and the percentage of gold production recovered by gravity processes since start up. The December 2003 quarter gold production rate of 159,108 ounces per year was 56% greater than the feasibility target annual gold production rate of 102,149 ounces and 106% greater than the 5-year forecast annual gold production rate of the Allstate Administrators in March 2002 of 77,158 ounces.

Graph 5 shows the 90-day rolling average for BMJV gold production since start up. For approximately three months, the 90-day rolling average was around the 160,000 ounces per year rate but, post December 2003, it has fallen to around the 140,000 ounces per year rate.

Gold Production

BMJV EXPENDITURE PER OUNCE

Total expenditure (operating plus capital) for the December 2003 quarter was $10.437 million (September 2003 quarter $10.634 million). Total expenditure per ounce of gold production was a record low at A$260 per ounce (September 2003 quarter A$276 per ounce).

The expenditure for the December 2003 quarter of A$260 per ounce is only around 46% of what it was when the Receiver and Manager was appointed (June 2001 quarter average of A$571 per ounce). It is also a record low 48% of the Beaconsfield Gold achieved gold price for the quarter (A$539 per ounce of production).

Graph 6 shows BMJV quarterly total expenditure (operating plus capital) per ounce since start up in comparison to the feasibility target figure of approximately A$300 per ounce.

Operating, Capital and Total Cash Expenditure

EXPLORATION JOINT VENTURE BETWEEN DDV AND THE BMJV

The exploration joint venture between Diamond Ventures NL (DDV) and the BMJV (represented by the Allstate Joint Administrators and the Receiver and Manager for Beaconsfield Gold) has been outlined in previous quarterly reports based on ASX releases by DDV.

On 11 November 2003, DDV announced the results for two RC holes drilled at the Salisbury prospect. Hole BFRC17 cut 0.8 g/t gold over 35 metres down-hole from 29 metres, including 5.3 g/t gold over 2 metres from 52 metres, in quartz-veined sandstones of the Eaglehawk Gully Formation, host of the Tasmania Reef at the Beaconsfield Mine. Vertical hole BFRC18 cut anomalous gold (including 0.18 g/t gold over 10 metres down-hole) within the Johnsons Creek fault, which is now recognised to be a vertical structure.

BEACONSFIELD GOLD CORPORATE

Average Received Price per Ounce

While the basic flat forward price is A$537 per ounce after arrangement costs and assumed 1.5% per annum gold leasing costs, Beaconsfield Gold has received higher prices on average as a result of generally favourable gold lease rates and selling spot when the spot price is favourable. In 1999 and 2000, when gold production was well below anticipated levels, Beaconsfield Gold also took advantage of low spot prices by purchasing gold at spot and delivering the purchased gold into the hedge book at a profit. Total net gold book proceeds and effective average received price per ounce of production are estimated in the preceding table.

Average Proceeds per Ounce of Production

BEACONSFIELD GOLD CASH FLOW FROM ITS 48.49% DIRECT INTEREST IN THE BMJV

Cash flow accruing to Beaconsfield Gold from its 48.49% direct interest in the BMJV, before BCD corporate and debt servicing costs, is approximated in the following table.

Beaconsfield Gold Cash Flow from its 48.49% Direct Interest in the BMJV

Beaconsfield Gold Net Secured Debt

Net secured debt equals the total due under the secured debt facilities with BankWest (debt plus accrued interest including penalty interest) less the cash held by the Receiver and Manager (R&M). Net secured debt at various points in time is shown in the following table. Net secured debt on 25 June 2001, when the Receiver and Manager was appointed, was approximately $32.8 million.

Beaconsfield Gold Net Secured Debt

BBR CLAIMS

In August 2000, Allstate (as Manager of the BMJV) lodged claims in respect of losses suffered by the BMJV participants associated with the design, procurement, construction and commissioning of the ore treatment plant at Beaconsfield by Bateman Brown & Root (BBR).

The final arbitration hearing was scheduled to commence on 12 May 2003. On 30 April 2003, the solicitors for BBR notified Allstate that QBE, the professional indemnity insurer, was considering withdrawing indemnity over the claims. Subsequently, the solicitors for BBR advised that neither QBE nor BBR were prepared to continue funding the defence of the arbitration. Furthermore, the solicitors advised that BBR no longer trades nor has any assets.

After a short delay, the arbitration commenced on 13 May 2003 and proceeded on 20 May 2003 on an ex parte basis. The BMJV participants tendered their final submission to the arbitrator.

On 27 January 2004, the ASX released the following announcement by Allstate Explorations NL (subject to deed of company arrangement):

"Interim Arbitration Award in Favour of the Beaconsfield Mine Joint Venturers

"Allstate Explorations NL (subject to deed of company arrangement) ("ALX"), as manager of the Beaconsfield Mine Joint Venture, today announces that an interim arbitration award was made in favour of the Beaconsfield Mine Joint Venturers (ALX, Beaconsfield Operations Pty Limited, Beaconsfield Tasmania Pty Limited, Beaconsfield Gold NL, Allstate Prospecting Pty Limited and ACN 070 164 653 Pty Limited) on 22 January 2004.

"As reported in ALX's financial report for the year ended 30 June 2003 (released to ASX on 22 October 2003), arbitration proceedings were brought by the Beaconsfield Mine Joint Venturers ("Claimants") in relation to a dispute with Batepro Australia Pty Limited and Brown & Root Engineering & Construction Pty Limited (now renamed A.C.N. 005 585 795 Pty Ltd) ("Respondents"). The dispute arose in connection with a contract between the Claimants and the Respondents under which the Respondents undertook to design, supply, construct and commission a gold treatment plant and backfill plant at the Beaconsfield Mine, Tasmania. The Claimants alleged amongst other things, delay, unsatisfactory design and construction, major defects and omissions in the works and failure to satisfy performance tests.

"The arbitrator, Mr J Tyrill, found that the Respondents are jointly and severally liable to the Claimants for $60,366,785 together with interest after 17 January 2004 at the rate of $29,292 per week. The Arbitrator also found that Respondents' cross claims against the Claimants fail. The Arbitrator reserved his award on the question of costs and has invited the parties' submissions on this.

"As reported in ALX's 2003 financial report, the Respondents have asserted that they have no funds to meet the cost of any award. The Respondents' professional indemnity insurer has withdrawn coverage with respect to the claim. The insurer has also indicated that, in any event, any claim would be capped at $20 million.

"It is currently unclear the extent to which the award will be able to be successfully enforced. ALX will seek legal advice on its position and will then determine the appropriate course of action in consultation with the other Beaconsfield Mine Joint Venturers."

ASIC INVESTIGATION OF ALLSTATE

Beaconsfield Gold is aware that numerous complaints have been made to the Australian Securities & Investments Commission (ASIC) regarding the administration of the Allstate group of companies. The majority of the complaints are understood to concern an Allstate creditors' meeting held on 19 March 2002. Beaconsfield Gold will monitor the results of the ASIC investigation for any impact on the company's investment in Allstate Explorations NL and the future operation of the BMJV.

ANNUAL GENERAL MEETING (AGM)

The first AGM for Beaconsfield Gold since November 2000 was held in the Beaconsfield Community Centre on Thursday 22 January. An explanatory letter by the new Chairman (Tony Greenwood), the Notice of Meeting, Proxy Form and Annual Reports for the 2001, 2002 and 2003 financial years had been mailed to shareholders ahead of the AGM. A record number of shareholders, estimated to total approximately 180, attended the meeting.

All nine resolutions put to the shareholders at the AGM, as follows, were approved or ratified by shareholders on a show of hands:

1. Re-election of Director - Antony Greenwood
2. Re-election of Director - John Miedecke
3. Ratification of Agreement to Issue Shares to Clients of Tolhurst Noall
4. Ratification of Agreement to Issue Convertible Notes to Gold Investors Pty Ltd
5. Issue of Options to Bank of Western Australia
6. Issue of Partly Paid Shares to Michael Trumbull
7. Issue of Partly Paid Shares to Antony Greenwood
8. Issue of Partly Paid Shares to Jeffrey Williams
9. Issue of Partly Paid Shares to John Miedecke

Graphs 8 and 9 show the BCD share price and market capitalisation since listing on the ASX in March 1993. Both graphs show the commencement of gold production in September 1999 which heralded the protracted commissioning problems in the ore treatment plant and, to a lesser extent, in the mine.

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