Matrix Metals | Copper Production and Exploration

The Company is pleased to announce the results from the scout-drilling that was the final phase of the December 2001 program. The scout program was designed to test structural and geological targets located significant distances along strike from the defined resource area. The drilling, to a maximum vertical depth of only 22metres, tested areas 650 metres to the west and 400 metres to the east of the resource area. This drilling has resulted in semi-continuous resource grade mineralisation now being identified over a total strike length of 2,300metres.

The results are highly encouraging with anomalous levels of copper mineralisation recorded in 36 of the 46 holes, with 6 holes reporting intersections of resource grade mineralisation. As has been the trend with the previous drilling results, copper grades are increasing with depth. Continuous widths of mineralisation of 70 metres and 60 metres respectively were defined at the eastern and western areas. These results complete the remaining 46 holes of the 82 hole programme drilled in late December 2001.

This drilling has defined new targets for future drilling and has also provided valuable geological information to assist with an interpretation of the overall Mt Watson prospect.

In addition to the deep Reverse Circulation drilling program under the resource area scheduled to commence in February 2002, a drilling program to further test these new areas of mineralisation to the east and west of the resource area is now being designed.

Mt Watson Prospect -Status Report

The following summary of the overall status of the Mt Watson Prospect is provided for information:

• The December 2001 drilling program has resulted in the resource being increased by 55% to 1.3 million tonne @ 1.3 % Copper.
• Maximum vertical depth of drilling to date is only 22m.
• The resource area, which now extends over a strike length of 1,100m, remains open to the east, west and most significantly at depth.
• The scout-drilling program to the east and west of the resource area has resulted in resource grade mineralisation now being identified over a semi-continuous total strike length of 2,300m (which includes the 1,100m resource area).
• 36 of the 46 holes comprising the scout-drilling program reported strong anomalous copper mineralisation. Resource grade mineralisation was reported in 6 holes with continuous width of mineralisation of up to 70m defined.
• The program of Reverse Circulation drilling scheduled to commence in early February will test the depth extensions under the resource area down to 100m, targeting further increases to the resource inventory.

Yours sincerely,

Andrew Chapman
Chief Executive Officer

The geological information in this report is based on information compiled by the Company's Senior project Geologist, Mr Phil Frank and the Company's Operations Manager, Mr Bob Dennis both of whom are employees of Matrix Metals Limited. Messrs Frank and Dennis each have a minimum of 5 years experience in estimation, assessment of, and evaluation of Mineral Resources and Ore Reserves, which are relevant to the style of mineralisation under consideration.