Beaconsfield Gold - Australia's Richest Gold Resource.

High Grade, Low Cost Gold Producer

June 2003 Quarterly Report

BEACONSFIELD GOLD NL (RECEIVER AND MANAGER APPOINTED)
Report on Activities for the Quarter ended 30 June 2003

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

The participants in the unincorporated BMJV, which operates the Beaconsfield Mine at Beaconsfield in north-east Tasmania, are Allstate with a 51.51% interest and Beaconsfield Gold with a 48.49% interest. Allstate, with the higher interest, is Manager of the BMJV and the BMJV Mine Manager and all the personnel reporting to him are employed by Allstate. Beaconsfield Gold in turn owns 30% of the fully paid shares in Allstate.
Joint Administrators (Michael Ryan and Tony Woodings of chartered accounting firm, Taylor Woodings, based in Perth, Western Australia) were appointed to Allstate on 8 June 2001 and a Receiver and Manager (Garry Trevor of Ferrier Hodgson, Perth office) was appointed to Beaconsfield Gold on 25 June 2001.

MINE PERFORMANCE

Graphs

Attached at the end of the written section of this quarterly report are graphs showing BMJV: mill throughput; head grade in comparison to ore resource and reserve grades; gold recovery; gold production; and cash operating costs per ounce of gold. These graphs are also available in colour on Beaconsfield Gold's web site: www.beaconsfieldgold.com.au

MINE DEVELOPMENT

Decline development during the 2002/2003 year totalled 865 metres (quarterly decline advances being progressively 230, 213, 216 and 206 metres). The decline face was 870 metres vertically below surface at 30 June 2003. Total waste development, including rising, for the year was 2,814 metres.

Ore production is now available from 12 levels throughout the mine, allowing increased flexibility in mine scheduling.

Adoption of an improved mining method during the year has contributed to the mine's improved performance. The modified Avoca stoping system utilises blind uphole stope drilling, in-stope ramping and Avoca stoping / backfilling. Waste development requirements have been reduced and unit costs have also decreased with this more productive mining method. Waste rock dilution is targeted for further reduction.

The Hart Shaft continued to perform well during the 2002/2003 year with 234,272 tonnes of ore and 101,962 tonnes of waste (total material 336,234 tonnes) being hoisted. An additional 80,156 tonnes of waste rock were not hoisted, being utilised underground as stope backfill. A further 42,714 tonnes of "sand fill", a coarser fraction of the mill tailings, were also pumped underground and used as stope backfill.

Mine Summary

Access: 5.2m x 2.6m rectangular Hart Shaft, 375m vertical depth, 700 kW single drum winder, cage over skip; 4.5m x 4.5m decline from 375m to 870m vertical depth.

Underground Work Roster: 10.5 hours/shift, 2 shifts/day, 3 panel mining crew; 12 hours/shift, 2 shifts/day, 4 panel mine maintenance crew.

Underground Mine Trucks: 3 x Atlas Copco Wagner MT436B.

Underground Loaders: 4 x Caterpillar R1300, 1 x Caterpillar R1600, 1 x Atlas Copco Wagner ST7.5, 1 x Atlas Copco ST3.5 services/charge-up unit.

Development Jumbo: 1 x Atlas Copco Rocket Boomer 322.

Production Jumbos: 2 x Atlas Copco H104.

Strata/Ground Control: DSI split set rock bolts, strand cable bolts, shotcrete (where required), mesh for all permanent excavations.

Explosives: Orica.

Remote Control Equipment for Loaders: 3 x Remote Control Technologies ControlMaster systems.

Underground Communications Systems: Minecom leaky feeder system, SCADA, telephones.

Mine Planning Software: Surpac, Ventsim, Excel, Mapinfo.

Dewatering

Waste development and ore stoping advances were unimpeded by water inflows during the year. An extensive coverhole diamond drilling program conducted on the 710 metre level failed to locate any significant watercourses, indicating that the mine is "drying up".

Mine water pumping rates are now down to 67 litres per second compared with 88 litres per second in June 2002 and rates well over 100 litres per second in earlier years.

ORE RESERVES / RESOURCES As at 30 June 2002

The BMJV reserves and resources as at 30 June 2002 (as calculated and reported by Allstate as Manager of the BMJV) were:

Ore Reserve

Identified Mineral Resource (including Ore Reserve)

The Proven and Probable Reserves were calculated from the Measured and Indicated Resources which totalled as follows:

That is, after allowances had been made for mine design parameters such as minimum mining width, dilution and cut-off grade (6 g/t gold) based on the mining experience gained over the previous four years of mining operations at Beaconsfield, the in-situ ore grade was reduced from 24.5 g/t gold to the diluted reserve grade of 16.7 g/t gold (a reduction of 7.8 g/t or 32%).

As at 30 June 2003

After allowing for subsequent face assay data and mining depletion during the 2002/2003 year, the BMJV reserves and resources were revised as at 30 June 2003 (as calculated and reported by Allstate as Manager of the BMJV) to:

Ore Reserve

Identified Mineral Resource (including Ore Reserve)

The Proven and Probable Reserves were calculated from the Measured and Indicated Resources.

After allowances had been made for mine design parameters and cut-off grade (6 g/t gold), the in-situ ore grade was reduced from 25.8 g/t gold to the diluted reserve grade of 17.9 g/t gold (a reduction of 7.9 g/t or 31%).

ESTIMATE OF GOLD PER VERTICAL METRE

The following table summarises the actual production figures for the Beaconsfield Mine up to 30 June 2003, the date as at which the current ore reserves were calculated by Allstate.

Total gold milled to 30 June 2003 is conservatively calculated at 357,780 ounces.

The current mining phase at Beaconsfield commenced under the deepest historical level at 455 metres depth. Assuming an average 5 metre pillar has been left below the 455 metre level, total gold mined to date in the current phase plus current gold ore reserves (a total of conservatively 726,780 ounces) fit in the interval 460 metres to 1,000 metres, that is a vertical depth of 540 metres.

1. Mill reconciled head grade.
2. Gold recovery excluding changes in gold in circuit.

The approximate gold per vertical metre is therefore conservatively 1,346 ounces. Each 100 metre vertical extension of the Tasmania Reef could therefore yield some 134,600 ounces.

MILL THROUGHPUT

Mill throughput for the June 2003 quarter was 56,304 tonnes (225,835 tpa rate). This was 2,479 tonnes less than the March 2003 quarterly record of 58,783 tonnes (238,398 tpa). Throughput for the 2002/2003 year was a record 227,908 tonnes, an improvement of 24,360 tonnes or 12% on the 2001/2002 figure of 203,548 tonnes.
Graph 1 shows the trend for mill throughput since start up.

Beaconsfield Gold now considers 240,000 tonnes per annum (tpa) to be the maintainable rate for the Beaconsfield Mine based on the currently available information. For a plant availability of greater than 95% for example, an annual rate of 240,000 tpa requires an average ball-milling rate of 29 tonnes per hour maximum, which has proven to be readily achievable provided the mine can supply the ore. The progressive improvements in the mine, incorporating the optimisation of waste development and the optimisation of the range of ore stoping methods employed, has shown that 240,000 tpa is achievable provided that mine planning and scheduling ensures the availability of sufficient live stopes.

HEAD GRADE

Head grade for the June 2003 quarter was a quarterly record 18.6 g/t gold. Average head grade for the 2002/2003 year was 16.0 g/t gold, an improvement of 1.6 g/t or 11% on the 2001/2002 figure of 14.4 g/t.

Graph 2 shows the trend for head grade to date in comparison to the reserve grade. While the trend for quarterly head grade is continuing upwards, head grade is only now exceeding the reserve grade, which has not been increased over time as much as one might expect from a mathematical point of view, and therefore future head grades may well continue to exceed the current reserve grade.

GOLD PRODUCTION / RECOVERY

Site management continued to focus on optimising elements in the processing circuit to both increase mill throughput and gold recovery and reduce operating costs during the 2002/2003 year. Successful circuit changes included the ongoing optimisation of the sulphide flotation In-Stream Analyser, the optimisation of the Cyanide Analyser, the installation of gravity-gold recovery Spirals in the leach circuit, the installation of a larger Regrind Mill ahead of the bacterial oxidation circuit, the installation of a larger Gravity Table in the goldroom, the installation of a larger 30 inch Knelson gravity-gold recovery unit and the relocation of the 12 inch and 20 inch Knelson units.

Ore treatment plant gold recovery for the 2002/2003 year was 90.3%. Gold recovery for the June 2003 quarter was 94.0%. Graph 3 shows gold recovery since production commenced in 1999.

Gold production for the June 2003 quarter was a quarterly record at 31,656 ounces (126,971 ounces per year rate). This was 5,074 ounces more than the March 2003 figure of 26,582 ounces (107,805 ounces per year rate). Gold production for the 2002/2003 year was a record 105,736 ounces, an improvement of 15,267 ounces or 17% on the 2001/2002 figure of 90,469 ounces.

Graph 4 shows actual quarterly gold production since start up compared with the feasibility target.

BMJV CASH OPERATING COSTS

For the 2002/2003 year, average cash operating cost for the BMJV was A$341 per ounce of gold production. By quarter for the year, BMJV cash operating costs were progressively A$465, A$336, A$280 (record low) and A$315 per ounce. Cash operating costs for the last three quarters of the year averaged A$311 per ounce.

Graph 5 shows BMJV quarterly cash operating cost per ounce since start up in comparison to the feasibility target figure of A$265 per ounce.

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.

In the DDV report for the June 2003 quarter, DDV's highlights for the Beaconsfield exploration were as follows:

• DDV completed the first six months of exploration activity on the tenements immediately surrounding the high grade Beaconsfield Mine.
  
  
• Diamond and percussion drilling commenced on the 12 composite anomalies selected from an extensive geochemical survey covering a nine kilometre length of the tenements.

BEACONSFIELD GOLD CORPORATE

GOLD HEDGING FOR BEACONSFIELD GOLD

The company initially sold forward 240,000 ounces of gold in October 1998 in a hedging arrangement with BankWest. At 30 June 2003, the hedge book was as follows.

Beaconsfield Gold Hedge Book at 30 June 2003

After allowing for favourable gold lease rates and the policy on spot gold sales, whereby advantage is taken whenever the spot price exceeds the hedged price, the hedge book should ensure an average received gold price going forward of at least A$550 per ounce.

The marked-to-market value of the hedge book at 30 June 2003 was negative $0.7 million.

Average Received Price per Ounce

While the 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 as described above. 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 following table.

Average Proceeds per Ounce of Production

BEACONSFIELD GOLD DEBT SERVICE

Based on the four six-monthly reports to ASIC by the Receiver and Manager, the previous table sets out the interest that accrued on the BankWest debt facilities to 25 June 2003. To 25 June 2003, the Receiver and Manager had made repayments to BankWest totalling $8 million.

Beaconsfield Gold Net Secured Debt

Net secured debt equals the total due under the secured debt facilities with BankWest (debt plus accrued interest) less the cash held by the Receiver and Manager. Net secured debt is shown in the following table based on the four six-monthly reports to ASIC by the Receiver and Manager to date. Net secured debt on 25 June 2001, when the Receiver and Manager was appointed, was approximately $32.8 million.

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 and are currently awaiting the award of the arbitrator.

The claims are in excess of $50 million. The professional indemnity insurance policy has a cap of $20 million. The strategy going forward is to await judgement against BBR and then to pursue QBE on a number of legal bases to pay the amount due under the award in accordance with its obligations under the insurance policy. It should be noted, however, that QBE currently denies that it has any liability under the policy.

ASIC INVESTIGATION OF ALLSTATE

Beaconsfield Gold are 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 complainants are understood to contend that serious breaches of the Corporations Law may have occurred in regards to an Allstate creditors' meeting held on 19 March 2002.

BEACONSFIELD GOLD BOARD

At a general meeting of shareholders held on 19 June 2003 in the Beaconsfield Community Centre, Mr Jeff Williams was elected to the board of Beaconsfield Gold.

Born in Broken Hill in New South Wales, Jeff Williams has 17 years' experience as a professional mining engineer in Australia and 7 years in the stockbroking industry. From 1972 to 1984, he held various positions with CRA Limited at Broken Hill. At the underground silver/lead/zinc mine, he gained his Mine Manager's Certificate and practical experience in mine planning and underground management. Following the completion of a Master of Business Administration (MBA) program in 1987, he played a major role as a Senior Project Engineer with North Limited. From 1989 to 1996, he worked in stockbroking, specialising in gold mining research, and rose to the position of Head of Resources Research at James Capel Australia. Jeff Williams then joined Mineral Deposits Limited, the mineral sands production company, and is still with that company as Managing Director. In this role, he successfully implemented measures to dramatically lower his company's cost of production.

EQUITY FUNDING AGREEMENT

On 15 July 2003, the company announced that Beaconsfield Gold and Tolhurst Noall Limited had signed a Subscription Agreement under which equity funding is to be provided to Beaconsfield Gold, subject to certain conditions.

The agreement allows for the subscription of $5.5 million in two tranches, the first tranche being $0.5 million and the second tranche being $5 million - the funds to be provided by clients of Tolhurst Noall who are sophisticated or institutional investors.

Beaconsfield Gold and Tolhurst Noall further agreed that an additional sum of up to $2.5 million may be subscribed as part of the second tranche (making a maximum subscription for both tranches of $8 million).

The first $0.5 million was placed in a Tolhurst Noall trust account and is being drawn down as required to pay for all the corporate costs necessarily incurred by the Beaconsfield Gold board until the Receiver and Manager retires. The total of the costs paid will be converted into Beaconsfield Gold fully-paid ordinary shares at $0.10 per share. This conversion price is considered reasonable in the circumstances, reflecting the considerable risk for the Tolhurst Noall clients ahead of the retirement of the Receiver and Manager.

The second tranche will be subscribed at $0.23 per Beaconsfield Gold fully-paid ordinary share to facilitate the necessary restructuring of the company's finances. This additional funding is subject to approval by shareholders at a general meeting and subject to the retirement of the Receiver and Manager. Any amount left unspent from the first $0.5 million in the trust account will also be converted into Beaconsfield Gold shares, upon the retirement of the Receiver and Manager, at $0.23 per share.

Beaconsfield Gold is currently progressing a timetable for the restructuring of the company's finances and the retirement of the Receiver and Manager.

SUSPENSION OF TRADING

Trading in the securities of the company remains suspended, in accordance with the listing rules.

BEACONSFIELD GOLD ISSUED SECURITIES

The issued securities for Beaconsfield Gold are as follows:

INTERNET

Shareholders are reminded that ASX releases (including all quarterly and annual reports), can be seen on the company's web site:

Shareholders who wish to receive Beaconsfield Gold ASX releases by e-mail are encouraged to contact the company on : beaconsfieldgold@bigpond.com


Yours faithfully
M W Trumbull
B.E. (Mining, First Class Honours), M.B.A., F.AusIMM Executive Director


This report has been prepared by M W Trumbull, the Executive Director of Beaconsfield Gold NL (Receiver and Manager Appointed). It is not a statement made by the Receiver and Manager of Beaconsfield Gold NL, who may hold different opinions on many of the issues reported on.