Comet Resources currently has cash reserves of $1.5m and 83,003,370 million shares on issue.

Comet continues to review new project opportunities, as well as evaluate its 100% owned projects. Comet is continually evaluating opportun ities to peg prospective ground.

GILMORE P ROJECT (EL8282)

During this quarter a field trip was conducted over the Gilmore Project. The Gilmore Project is a 75 block exploration licence located 80km west of Canberra in New South Wales . The project ‘ s geology and prosp ectiv ity fits Comet ‘ s exploration philosophy.

Meetings were held with land ow n ers to discuss land access and other associated issues. A re a access is good with some areas of steep relief . S elected sites were vis it ed to determine drill access . 17 rock chip samples were collected over prospective areas to help in prioritising target s and minerali s ation styles.

Table of Rock Chip Results

A ground heli magnetic survey was conducted over par t of the tenement area in 1996 by a previous explorer with line spacing of 100m and flight height of 60m. Raw data has been obtained and been reprocessed for help in interpretation and target definition.

The Project constitutes an attractive target for gold and base metal mineralisation due to the presence of Silurian acid volcanics located close to a major thrust fault (Gilmore Fault). The Gilmore Fault is a major regional thrust fault and controlling focus for major gold deposits including Sovereign Gold Ltd , Mount Adrah (located approximately 30kms away along the Gilmore Fault), Gidginbung, West Wyalong and Lake Cowal . Widespread gold and base metal responses within the project area from previous exploration also contribute the potential of th is project.