Beaconsfield Gold - Australia's Richest Gold Resource.

High Grade, Low Cost Gold Producer

March 2004 Quarterly Report

Report on Activities for the Quarter ended 31 March 2004

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HIGHLIGHTS BMJV gold production for the March 2004 quarter was 37,622 ounces (December 2003 quarter 40,104 ounces). 56,848 tonnes of ore (60,987 tonnes previous quarter) were milled at an average head grade of 21.7 g/t gold (22.0 g/t previous quarter) and an average gold recovery of 94.9% (93.0% previous quarter), excluding changes in gold in circuit. BMJV direct operating expenditure per ounce for the quarter was A$257 per ounce (A$231 previous quarter) versus gold revenue for Beaconsfield Gold of A$543 per ounce (A$539 per ounce previous quarter). New BMJV underground ore reserve drilling program underway with better intersections to date of the Tasmania Reef and its footwall splays including: Estimated Horizontal Thickness (metres) @ Grade (g/t gold) 3.9 @ 57.1 2.3 @ 86.5 3.3 @ 22.1 2.2 @ 23.4 1.8 @ 26.1 0.9 @ 50.0 BMJV ore reserves at 31 December 2003 of 352,000 ounces. Net increase in ore reserves over the six months from 30 June 2003, allowing for mining depletion, of approximately 66,708 ounces. Average gold per vertical metre for the Tasmania Reef now estimated to be around 1,500 ounces. Beaconsfield Gold profit for the 6 months ending 31 December 2003 (no tax payable) was $4.9 million after providing for depreciation and amortisation of $3.3 million and borrowing costs of $1.4 million. The Receiver and Manager for Beaconsfield Gold, who was appointed on 25 June 2001, retired on 12 March 2004 following the completion of fund raisings totalling $14.5 million and the restructuring of the debt facilities with BankWest. BankWest secured debt less cash (which peaked at around $35 million in October 2002) dramatically reduced to $4.4 million at 31 March 2004. Beaconsfield Gold shares recommenced trading on the ASX on 2 April 2004. Renounceable 1 for 7 Rights Issue at 30 cents per new share underway.

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

1.1 UNDERGROUND ORE RESERVE DRILLING OF THE TASMANIA REEF

Holes F1, F2, F4 and F5 were drilled from a cuddy located in the footwall of the Tasmania Reef. They all intersected the reef on the western side of the orebody and they all intersected footwall (FW) splay reef mineralisation in addition to intersecting the main reef. All of these intersections were above the base of the current ore reserves at 1050 mRL (997 metres below surface) but below the base of the ore reserve for the footwall splays at 1150 mRL (897 metres below surface). Holes F1 and F2 were designed to test the western limit of the reef.

Holes F3 and F6 through to F12 were drilled from two cuddies located in the hangingwall of the Tasmania Reef and intersected the orebody in western and central positions. The F8 intersection was above the base of the current ore reserves (997 metres depth). The balance of these intersections were all below the base of the current ore reserves.

Allstate, as Manager, will next calculate and report BMJV reserves and resources as at 30 June 2004.

1.2 ORE RESERVES / RESOURCES

1.2.1 As at 30 June 2003

The BMJV reserves and resources as at 30 June 2003 (as calculated and reported by Allstate as Manager of the BMJV) were:

1.2.2 As at 31 December 2003

The BMJV reserves and resources as at 31 December 2003 (as calculated and reported by Allstate as Manager of the BMJV) were:

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 26.4 g/t gold to the diluted reserve grade of 16.6 g/t gold (a reduction of 9.8 g/t or 37%).

1.2.3 Reconciliation between 30 June 2003 and 31 December 2003 Ore Reserves

Total gold milled by the BMJV in the six months to 31 December 2003 was estimated to be 83,708 ounces. Subtracting this total from the ore reserves at 30 June 2003 (369,000 ounces) gives 285,292 ounces.

As the ore reserves at 31 December 2003 were 352,000 ounces, there was a net increase in ore reserves over the six months, allowing for the mining depletion, of approximately 66,708 ounces. The majority of the increase is understood by Beaconsfield Gold to have come from reef splays in the footwall of the Tasmania Reef on the western side of the orebody. Holes F1, F2, F4 and F5 of the current drilling program (refer section 1.1) intersected these reef splays with the best result being in F4 (3.9 metres estimated horizontal thickness at 57.0 g/t gold).

1.3 ESTIMATE OF GOLD PER VERTICAL METRE

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

The Hart Shaft continued to perform well during the quarter with 53,588 tonnes of ore and 26,269 tonnes of waste (total material 79,857 tonnes) being hoisted. An additional 11,090 tonnes of waste rock were not hoisted, being utilised underground as stope backfill. A further 7,439 tonnes of "sand fill", a coarser fraction of the mill tailings, were also pumped underground and used as stope backfill.

The average March 2004 quarter head grade of 21.7 g/t gold was only 0.3 g/t gold less than the quarterly record in the December 2003 quarter of 22.0 g/t gold.

Ore treatment plant gold recovery for the March 2004 quarter, excluding changes in gold in circuit, was 94.9% (December 2003 quarter 93.0%).

Gold production for the March 2004 quarter was 37,622 ounces (150,901 ounces per year rate) compared with the quarterly record for the December 2003 quarter result of 40,104 ounces (159,108 ounces per year rate). The percentage of gold production recovered by gravity processes during the quarter was 54%.

1.5 BMJV EXPENDITURE PER OUNCE

Direct operating expenditure for the March 2004 quarter was $9.668 million (December 2003 quarter $9.276 million).

Capital expenditure for the March 2004 quarter was $2.849 million, significantly higher than the December 2003 quarter figure of $1.161 million). The main capital expenditure activities were the ore reserve diamond drilling program, improvements to the underground haul trucks, the final lift to the current (first) tailings dam and the site investigation drilling for the second tailings dam.

1.6 EXPLORATION JOINT VENTURE BETWEEN DDV AND THE BMJV

The exploration joint venture between Diamond Ventures NL (DDV) and the BMJV has been outlined in previous quarterly reports.

DDV recommenced exploration activities during the month of March, completing two RC holes at Hinds Hill on the Andersons Creek EL. No results are available. Diamond drilling will be undertaken at Moonlight, Little Wonder and Salisbury Hill as soon as a suitable rig becomes available.

1.7 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."

2. BEACONSFIELD GOLD CORPORATE

• Interest of 9.0% per annum, interest payable each six months in arrears until conversion or redemption;
• Notes secured by a second ranking charge (behind BankWest) over the fixed and floating assets of Beaconsfield Gold;
• Beaconsfield Gold must redeem the notes in full at 30 June 2006 unless the notes have been converted; and
• Notes can be converted at any time during their life.

The marked-to-market value of the hedge book at 31 March 2004, when the spot price of gold was A$553.84, was negative $1.1 million.

2.2.1 Gold Hedging as a Percentage of Ore Reserves

The BMJV ore reserves as at 31 December 2003 were 352,000 ounces so that Beaconsfield Gold's 48.49% direct interest was approximately 170,700 ounces. As a percentage of those ore reserves therefore, Beaconsfield Gold at 31 March 2004 was approximately 32% hedged.

2.2.2 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 approximated in the following table.

2.3 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. The approximate cash flow for the 12 months ending 31 March 2004 was $17.548 million.

2.4 RIGHTS ISSUE

On 31 March 2004, the Company announced a renounceable Rights Issue. Key dates for the Rights Issue are as follows*:

* These dates are indicative only and the Company reserves the right to amend any of these dates in accordance with the Prospectus. More information concerning the renounceable rights issue and the timetable for it is contained in the Prospectus.

The Rights Issue entitles securityholders to acquire, at a price of $0.30 per new share:

• 1 new fully paid ordinary share in Beaconsfield Gold for every 7 fully paid ordinary shares; and
• 1 new fully paid ordinary share in Beaconsfield Gold for every 7 convertible notes; and
• 1 new fully paid ordinary share in Beaconsfield Gold for every 245 partly paid shares,

The net amount raised by the Rights Issue, which is not underwritten, is intended to be used by Beaconsfield Gold as follows (more details are contained in the Prospectus):

• firstly for working capital generally;
• secondly for increasing exploration expenditure on Beaconsfield Gold's 100% owned exploration tenements; and
• thirdly for accelerating the reduction of the BankWest debt.

2.5 BOARD CHANGES

On 10 March 2004, Mr John Miedecke retired as a non-executive director of the Company after 11 years of service. He had been one of the founding directors of Beaconsfield Gold when it listed on the ASX in March 1993 and first became involved with the Beaconsfield Mine while working for Amax Exploration (Australia) as an environmental engineer in late 1979.

Following the retirement of John Miedecke, three additional non-executive directors were appointed to the Board, Mr Bede Noonan, Mr Bill Tsingos and Ms Elizabeth Parkin.

Mr Bede Noonan

Mr Noonan obtained a BA degree, majoring in Economics, from the University of Melbourne in 1989. After a period travelling and working overseas, he has worked for the last 12 years with Geotech Pty Ltd, one of Australia's leading civil engineering design and construction companies, specialising in ground works, tunnels, bridges and dams. Commencing with Geotech as the Company Accountant in 1992, he became General Manager in 1996 and Managing Director, his current position, in 2000. Mr Noonan is also a Director and Company Secretary of Coleman Rail Pty Ltd, an associated company that specialises in railway construction and maintenance. He is also responsible for the general business development of Coleman Rail, including reviewing overseas expansion projects.

Both the Geotech and Coleman Rail businesses involve Mr Noonan in the financial, legal and administrative management of diverse and complex projects, clients and contracts as well as managing over 150 employees and an extensive fleet of civil construction equipment. Total turnover for the two businesses has grown to around $40 million per year.

Mr William Tsingos

Mr Tsingos has for the past 26 years been running his own international trading business dealing in electrical and engineering products predominantly to government utilities and public companies involved in the mining, transport, heavy engineering and construction industries. He was previously appointed to the board of Beaconsfield Gold NL during the Company's period of receivership on 10 September 2001 and retired on 5 August 2002.

Ms Elizabeth Parkin

Ms Parkin holds a Bachelor of Business (Accounting) degree and is a member of the Institute of Chartered Accountants, the Securities Institute of Australia and the Australian Institute of Company Directors. She has over 20 years experience in a range of corporate finance, business analyst and business advisory roles. She has operated her own general business advisory company since 1997. Prior to its establishment, she was a director with KPMG Corporate Finance.

Ms Parkin is a director of Port of Melbourne Corporation and chair of its Audit and Risk Committee; a director of Yarra Valley Water and a member of its Audit and Risk Committee; a board member of North East Region Water Authority and chair of its Audit, Risk and Finance Committee; a director of First Samuel and a member of its Audit and Risk Committee; a director and treasurer of 3MBS, a volunteer-operated, not-for-profit broadcaster of classic music; and a trustee of the Northcote Trust, a philanthropic organization that helps young people further their education.

2.5.1 Remuneration

As part of their remuneration packages as directors, shareholders will be asked to approve at the next general meeting the issue of 400,000 partly paid shares to each of Mr Noonan, Mr Tsingos and Ms Parkin at a price of $0.35, payable as to $0.01 on allotment.

2.6 CURRENT BEACONSFIELD GOLD ISSUED SECURITIES

The issued securities for Beaconsfield Gold following the fund raisings are as follows:

Following the recent equity raising, the convertible notes issue and the conversion of some of those notes, the substantial shareholders for Beaconsfield Gold, based on notices received by the Company, are now as follows:

Graphs 1 and 2 show the Beaconsfield Gold share price and market capitalisation respectively 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. They also show the points at which trading in the shares on the ASX was suspended (8 June 2001) and subsequently was recommenced (2 April 2004). During the trading suspension, the market capitalisation graph was adjusted for the new share issues, based on the last sale price for the shares on the ASX in June 2001 of $0.23.

2.7 TENEMENTS

2.8 INTERNET

Shareholders who wish to receive Beaconsfield Gold ASX releases by e-mail are encouraged to contact the Company on:

Yours faithfully


Mike Trumbull
B.E. (Mining, First Class Honours), M.B.A., F.AusIMM
Managing Director