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GBM Progress Report

Greater Bendigo Gold Mines Limited (GBM) updates the market on its gold production and outlook for the current quarter. In its just released April to June quarterly report GBM announced that it produced 6.7 kg in the quarter, mostly in June, demonstrating that its CIP leach and stripping circuit are performing in line with expectation. July production was affected by a number of mechanical issues, each of which was resolved but the combination of which affected output for the month. Notwithstanding these issues production for July was 4kg with a sales value of $190,800. As a result of the issues a comprehensive preventative maintenance and “on hand spare parts” regime has been implemented aimed at preventing significant downtime arising from such issues in future. For August and September gold output and sales value are expected to lift, potentially significantly, for the following reasons : • The “spare parts on hand” and preventative maintenance regime will limit downtime from mechanical issues. Increased uptime leads directly to higher output • The sampled head grade of tailings being reprocessed is expected to increase with a change of source occurring in August • With the new underground mining plan now implemented a steady volume of high grade Max shoot ore is expected for August and September – leading to a further enhancement of average ore grade and therefore further enhancing weekly gold production • The Mill has moved from an 8 hour day and is now operating on a 14 hour day split shift basis 5 days a week – leading to the optimal 14 hours of manned ore feed per day followed by a required 10 hours of automatically monitored leaching time, optimising daily manpower cost and plant utilisation • During September it is intended to secure further skilled personnel and move to 7 day production, further enhancing throughout and output “We expect to achieve output of in excess of 18Kg for the current quarter” said GBM General Manager Par Hallberg. “To ensure we achieve this a big part of my focus is to drive the Mill as the industrial processing unit it now is – which involves a relatively simple 3 step management formula of maintaining plant uptime through an active maintenance regime, increasing daily and weekly volume of ore throughput through use of split shift and moving to 7 day operation and actively working to enhance average grade of input ore by selecting higher grade tailings and ensuring high grade Max ore is blended in weekly. As a result this will substantially increase our weekly gold pours by end of this quarter”. With gold holding above A$42/g cashflow from gold sales for the July – September quarter is still expected to exceed $875,000 inclusive GST, which will be close to covering GBM operating, exploration and corporate costs for the Quarter. In addition recommissioning this quarter of the ball mill will allow regrind of the presently stored sand fraction, produced from processing of tailings and hard rock ore. Continuous reprocessing of the sand fraction will further enhance weekly gold production on an ongoing basis. In addition processing the currently stored 3,500 tonnes at approx 1.1g will produce within a few weeks a sum in excess of $120,000 from the stored sand, being more than the cost of recommissioning the Ball Mill. For further information, please contact: John Cahill Rod North Managing Director Managing Director Greater Bendigo Gold Mines Limited Bourse Communications Pty Ltd T: +3 5445 2300 T: +3 9510 8309 M: 0438074247 M: 0408 670 706 johncahill@gbgm.com.au rod@boursecommunications.com.au About Greater Bendigo Gold Mines Ltd ( GBM) Greater Bendigo Gold Mines Limited's primary focus is the building of a strong gold production base in central Victoria, Australia. GBM presently has three areas of focus, each in the Greater Bendigo Region, being Inglewood, Avoca and Bendigo. Within these areas of focus are a number of distinct tenements, projects and resource blocks. The various projects are at a mix of development stages, with some projects at production and others in later or earlier analysis, exploration or development phases. GBM has a highly experienced and focused Bendigo based management, finance and administration team with a growing on the ground operational team. For more information please visit the Company website: www.gbgm.com.au The information in this statement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by John Cahill, who is a Member the Australian Institute of Geoscientists. John Cahill is both Managing Director of Greater Bendigo Gold Mines Limited and a full time employee of Kralcopic Pty Ltd, the 100% owned operating company subsidiary of Greater Bendigo Gold Mines Limited. John Cahill has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. John Cahill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Greater Bendigo Gold Mines Limited Unit 2/ 8 Wood St, Bendigo, Vic 3550 T +3 5445 2300 F +3 5444 0036 E info@greaterbendigogold.com.au W www.gbgm.com.au.