Matrix Metals | Copper Production and Exploration

As previously advised, under the amended operating plan adopted in June 2001, copper production levels at the Mt Cuthbert Operation were anticipated to decline gradually in the latter part of the 2001 calendar year as the inventory of copper in the leach pads depletes.

This production decline commenced in late September 2001, but over the past 10 days a steeper than the foreshadowed decline in production has been recorded. The production rate now appears to have stabilised.

This decline in production when combined with the continued weakening of the copper price will have an effect on revenues from copper sales, placing further cash flow pressure on the Company.

The underwriter to the current Rights Issue, Resource Capital Fund II LP (RCF) has been informed of the situation and has subsequently confirmed ongoing funding support to the Company.

Negotiations are underway with the Company's major shareholder Summo Minerals Corporation, and their major shareholder RCF, in regard to the funding of the Company.

It is anticipated that the current Rights Issue will be restructured, with the new Issue to raise an increased amount of funds and to be fully underwritten by RCF and/or Summo.

Yours sincerely,

Andrew Chapman
Chief Executive Officer