30 November 2006
Final Ellerston Gemstone Supply Agreement signed with CPH Limited

The Heads of Agreement with Consolidated Press Holdings Limited regarding supply by Cluff of coloured stone bearing concentrate to Ellerston Gems has been replaced with a Final Agreement.
This Final Agreement provides an ongoing basis for the operation of Cluff’s ruby and coloured gemstone mine, together with provision for increase in scale of operation should both parties agree, for further gemstone exploration with the approval of CPH, and for ensuring cost recovery by Cluff. The Agreement commenced on 1 October, 2006.

Under the Agreement, Cluff shall supply CPH with the final concentrate at the agreed delivery location, and CPH will reimburse Cluff 110% of the direct costs of supplying the relevant final concentrate. Cluff shall not supply any other person with concentrate originating from the subject land (ie. the Gummi River catchment).
50% of the large stones, (uncut coloured stones that are equal to or exceed four carats in size) are the property of Cluff, and 50% are the property of CPH; Cluff must permit CPH to deal with all large stones which are the property of Cluff.

CPH will establish and finance a gem business to arrange for the cutting and manufacturing of coloured stones and the marketing and selling of coloured stones and/or jewellery containing them. CPH will pay to Cluff 20% of the net proceeds of sale of the coloured stones excluding large stones, and 100% of the net proceeds of sale on 50% of the large stones. No royalty is payable on minerals privately owned by CPH.

CPH and Cluff may agree to significantly increase the production and supply of final concentrate, to undertake further exploration activities on the subject land, and to undertake a feasibility study in relation to either of these activities. Additional costs resulting from any activity agreed will be incorporated into the final concentrate costs, as agreed.

If the parties agree that Cluff should upgrade or replace its relevant plant and equipment, then if Cluff has not been able to obtain the necessary finance, then CPH must offer and Cluff must accept a loan facility of up to the full amount of the additional capital cost and working capital required. The loan facility must be made on commercial terms, provided that such facility shall be limited to security over the tenements, over any production from the tenements, and over any plant and equipment located on the tenements. Any monies then owing by Cluff to CPH may be deducted from any payment required to be made by CPH to Cluff.

The Agreement shall continue until either the parties determine that the coloured stones on the subject land have been exhausted, or CPH serves an anniversary notice within fourteen days of 1 July each year terminating the agreement, or it is terminated by either party by giving notice of a default. CPH may also terminate the agreement if it reasonably believes that Cluff has become insolvent, or has ceased producing or supplying the final concentrate, or the final concentrate cost makes the conduct of the gem business uncommercial, or CPH ceases to carry on its gem business under this agreement.

If this Agreement is terminated but CPH continues to conduct the gem business, then CPH must continue to make payments to Cluff on the same terms as set out in the Agreement.

Cluff will offer CPH the opportunity to cut, manufacture, market and sell coloured stones from any area outside the subject land but within the tenements, on the basis that Cluff and CPH shall each be entitled to share equally in the proceeds of sale of those coloured stones.

Peter Kennewell,
MANAGING DIRECTOR

10 November 2006
Exploration Model for Egerton Goldfield

Geological consultant to the Egerton Gold Project, Dr Julian Hollis, has developed a geological model explaining the origin and mode of occurrence of gold on the Company’s Egerton exploration tenements, and outlining similarities with the nearby Ballarat Goldfield, which has yielded 10.6 million ounces of gold in the past.

The Muckleford Fault, described below, appears to be comparable in nature to the Blue Whale Fault at Ballarat. This regional fracture underlies and appears to control gold mineralisation on the Ballarat Goldfield, and is considered by Ballarat Goldfields to be the path for gold bearing fluids. The gold, at both Egerton and Ballarat, appears to have been deposited in large, quartz filled fractures emanating from these regional scale fracture zones on which major rock movement has taken place.

Past gold production at Egerton and the neighbouring areas is shown below.

Dr Hollis comments that the goldfields form broadly arcuate zones arranged along a major fault zone (the Muckleford Fault). This zone extends from north-west of Castlemaine to a cut-off at the Bambra Fault, west of Geelong. The main goldfields north to south are Gordon, Mount Egerton, Mount Doran and Elaine. The Muckleford Fault, and similarly the associated gold mineralisation, is a major feature in Victorian geology.

Local geology is complicated by the Egerton Granite (G280), a Devonian-age pluton that has probably enhanced gold mineralisation by remobilisation near its margins. Parts of the zone of interest for exploration is concealed beneath Newer Volcanics. Basalt lava flows between Gordon and Mount Egerton cover significant potential zones for gold mineralisation that should be targets for exploration.

Heavy mineral distribution over the exploration licence areas include rare occurrences of distinctive mineral grains indicating the probable presence of fault wedges of Cambrian rocks at as yet unlocated points on the Muckleford Fault.

It is highly probable that most of the gold in the region has been hydrothermally transported and redeposited from source rocks of Cambrian age. These older rocks include serpentinites generated from gold-bearing island arc volcanics, known to occur several kilometres beneath the region.
Gold hosting regional rocks are turbidite sequences of tightly folded Ordovician rocks. The highest grades of mineralisation are structurally controlled and occur along quartz-mineralised shears, commonly involving dyke rocks and carbon-rich black slates.

There appear to have been at least 3 periods of hydrothermal solution activity, transporting gold.
Period 1: immediately pre-granite with siliceous, aqueous fluids removing gold from prograde metamorphosed serpentinite (siliceous serpentinite derived from island arc volcanics, particularly boninite). The largest quartz reefs appear to belong to this stage.
Period 2: epi to immediately post-granite redepositing gold, sometimes along secondary fractures in primary reefs, and
Period 3: during thermal activity associated with faulting and volcanism around 65 million years ago.

Dr. Julian Hollis is an independent consultant geologist with over thirty years experience in the field of minerals exploration. His geological qualifications comprise BSc(hons) and PhD from Kings College, University of London. He is a member of the Geological Society of Australia, the Royal Society of Victoria and an honorary Research Associate at the Melbourne Museum and the Australian Museum, Sydney. He has published extensively in the fields of mineralogy and petrology and has run University courses in geology.
It should also be noted that this report may contain forward looking statements or geological opinions that are speculative in nature and that remain unproven at this time.

Peter Kennewell,
MANAGING DIRECTOR

12 October 2006
Mundic Lode Exploration Target - Egerton Gold Project

The Mundic Lode Exploration Target on the Egerton Goldfield ranges from 90,000 ounces to 450,000 ounces of gold. This gold mineralised shoot is parallel to the Black Horse Lode but about 500 metres distant. It strikes to the north, dips steeply to the west, and is interpreted as plunging at a shallow angle to the north, manifesting at the surface as a number of old shafts and gold workings over a distance of over 500 metres. It is outlined in Figure 1. The potential quantity and grade of the target is conceptual in nature, there has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource

This Exploration Target has been intersected by six exploration holes drilled by Western Mining Company during the 1980s, and these indicate that it is from four to six metres in true width, extends vertically for 250 metres, and longitudinally for at least 350 metres, giving a range of tonnage from one million tonnes to 1.5 million tonnes. One drill hole entered an old mine within the Exploration Target, indicating that at least some parts of it were at economic grade in the past. The other drill intersections were at lower that currently economic grade, but the sampling and assay methods employed were not suitable to deal with the "nugget effect" endemic in the Victorian goldfields.

The Exploration Target grade may range from 2.7 grams/tonne, the average of the above intersections, to 10 grams/tonne, the likely cut off grade for commercial production in the early 1900s. Thus the Exploration Target ranges from 90,000 ounces to 450,000 ounces of gold.

The exploration target outlined is based on a review of previous mining and exploration data recently completed by the Company, which corrected locations of drill holes and mine shafts.

Previously Announced Exploration Targets
Exploration Targets totalling between 1.2 and 1.8 million tonnes of gold bearing quartz with grades between 6 and 12 grams/tonne have been outlined previously below old workings of the Black Horse and the Egerton Mines, the two largest (and interconnected) former mines on the Egerton Goldfield in Victoria.

These Exploration Targets are below 380 metres depth and may contain between 250,000 and 700,000 ounces of recoverable gold within the continuation to depth of two previously mined ore shoots. The potential quantity and grade of these targets is conceptual in nature, there has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource.

The information in this report that relates to exploration targets is based on information compiled by Peter John Kennewell, who is a corporate member of the Australasian Institute of Mining and Metallurgy included in a list promulgated by the ASX from time to time. Peter John Kennewell is a full time employee of Cluff Resources Pacific NL and 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, Identified Mineral Resources, and Ore Reserves”. Peter John Kennewell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Peter Kennewell,
MANAGING DIRECTOR

13th September 2006
Copeton Shaft Sampling Results

The samples taken from the tunnel extending from the Copeton Shaft have not yielded significant diamonds.

Two representative samples were taken from a rise at the end of the tunnel, and in total ten tonnes of sands and gravels were sampled, but yielded no diamonds. The representative samples are shown in bold type on Table 1 below. Additional non systematic samples, dominantly of granite collapsed from the roof with contamination from sands from unknown sources, were mucked out from the tunnel and processed, yielding one diamond weighing 0.35 carats.

It is obvious that hot springs sediments, the target of the sampling, are not present at the end of the tunnel, but have been removed at this point due to erosion by a river system. This river has transported barren sands from elsewhere in the district.

Further tunnelling has been terminated until a comprehensive review of the diamond project, incorporating the newly obtained data, is carried out. The proximity of the hot spring sediment targets must now be reconsidered. The sampling has made it obvious that waterworn gravels, in which the diamonds are reported as occurring (Pittman in "The Mineral Resources of NSW", 1901) are not a target.
The review of the project will also seek primary sources at Copeton similar to those identified at Staggy Creek in reconstituted granite, or reported at Oakey Creek in dolerite at Pike and O’Donnell’s Mine, and Ruby Hill. The potential location, scale and economics of such new targets will be assessed.

Cluff’s shaft and tunnel give previously unavailable access to a key area known to host high grade diamond deposits within the Copeton structure. We have a very experienced and hard working mining crew available, and now understand the costs and conditions of operating underground at Copeton. Once the review is complete, other parties will be invited to join Cluff in using this advantage to seek a local and non alluvial source for the Copeton diamonds.

Looking down the tunnel prior to Sampling

Single diamond recovered from Sample 5d

Peter Kennewell,
MANAGING DIRECTOR

12th September 2006
250,000 TO 700,000 OUNCE GOLD EXPLORATION TARGET - EGERTON GOLD PROJECT

Exploration Targets totalling between 1.2 and 1.8 million tonnes of gold bearing quartz with grades between 6 and 12 grams/tonne have been outlined below old workings of the Black Horse and the Egerton Mines, the two largest (and interconnected) former mines on the Egerton Goldfield in Victoria.

These Exploration Targets are below 380 metres depth and may contain between 250,000 and 700,000 ounces of recoverable gold within the continuation to depth of two previously mined ore shoots. The potential quantity and grade of the targets is conceptual in nature, there has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource.

The exploration targets outlined are based on a review of previous mining and exploration data recently completed, which corrected locations of drill holes and mine shafts. It used this data to upgrade a three dimensional mine model incorporating the mines of the Egerton Goldfield, and concluded that the modelled mined out areas closely corresponded with the recorded production of 1.063 million tonnes, based on an average mining width of 3.5 metres.

Black Horse Exploration Target

Written records for the Black Horse and Egerton Mines suggest that significant areas within and close to the existing level development were not mined as they were considered to be low grade at the time.

The targeted ore shoot was partly developed from 380 to 600 metres depth by the Black Horse Shaft and by many development tunnels, but reports indicate that it was not extracted before the mine closed in the 1900s. A 3.5 metre mining width for this target has been assumed, based on this being the apparent average mining width in the past. Assuming the target continues downward for 200 metres from this old development, it would contain one million tonnes, and if it continued for 400 metres downward, it would form a target of 1.5 million tonnes.

There exists the possibility that a significant target might be accessible from existing development. Grade is inferred to be between 6 grams/ton, the lowest grade reported recovered from the mine, and 12 grams/ton (less than the 16 grams/ton the highest grade reported recovered). Several areas were noted where mining exceeded 10 metres in width at grades in excess of 10 grams/ton.

A photograph taken within this exploration target in about 1903 shows a substantial reef. The caption describes the "Main Drive North on Lode, 1,760 ft level, Black Horse Shaft. Footwall Side of Lode Showing. Full width here exceeds 12 feet, and is good enough for bulk treatment" (Geological Survey of Victoria Bulletin No 10). Some parallel lodes were also noted and these were not mined in the past due to geotechnical considerations and are not included in the above target.

Egerton Mine Exploration Target

Egerton Large Stoping Block consists of upward and downward extensions to a large stoping area, where mining widths of up to 30 m were recorded. Should the mined block extend downward to the developed level beneath (50 meters), and upward for the same distance, it would form a target of between 250,000 and 350,000 tonnes at a grade inferred to be between 6 grams/ton, the lowest grade reported recovered from the mine, and 12 grams/ton (less than the 16 grams/ton the highest grade reported recovered).

Other Exploration Targets

Extensions of other ore shoots, and reefs parallel to those mined by the Black Horse, Egerton, Sister Rose and Rose Mines form additional and substantial exploration targets. They have not been included in this summary. A large drilling and evaluation program to test the exploration targets outlined above has been prepared and costed.

The information in this report that relates to exploration targets is based on information compiled by Peter John Kennewell, who is a corporate member of the Australasian Institute of Mining and Metallurgy included in a list promulgated by the ASX from time to time. Peter John Kennewell is a full time employee of Cluff Resources Pacific NL and 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, Identified Mineral Resources, and Ore Reserves". Peter John Kennewell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Peter Kennewell,
MANAGING DIRECTOR

5th September 2006
Copeton Shaft samples taken

Two samples of the diamond target zone have now been taken from the Copeton Diamond Shaft and Tunnel.

The tunnel has been extended to over twenty metres length, and a two metre diameter rise (a shaft dug vertically upward) has been put in to sample the overlying diamond target sediments. The sampled sediments were caved into the tunnel, and the timbers of the tunnel roof have now been replaced to maintain safe working conditions. Two samples have been taken.

The lower sample, of about five tonnes, contains one metre of partly consolidated sand with layers of gravels, mixed with half a metre of underlying decomposed granite forming the roof of the tunnel. The sand and gravels, at their base, contain fragments of white decomposed or altered granite.

The upper sample, also of about five tonnes, contains an unknown thickness of similar consolidated sand with layers of gravel, overlain by freely flowing sands.

The Copeton Tunnel (looking back towards the Shaft)

The samples will be processed at the Company’s smaller Copeton processing plant over the next few days.

Peter Kennewell,
MANAGING DIRECTOR

21st August 2006
Progress on Copeton Shaft and tunnel

The tunnel from the base of the Copeton Shaft has now been stabilised, with broken granite roof resulting from the last blast of the previous contract work now supported by very substantial timbers. Sediments are only about one metre above the tunnel at this point, and sands had been washed downward through cracks, allowing granite blocks to subside into the inwashed sands. Hand driving of timbers into this tunnel fill, the only method of safely progressing in this zone, has been very difficult.

These problems have now been overcome, and the tunnel has been driven past this difficult zone. All the inwashed sediment and broken granite has been mucked out, the last blasted face has been exposed, and the tunnel is progressing routinely in altered soft granite. Blasting is not necessary at present, and jack picking of the soft granite is being carried out.

Altered granite in the upper part of the tunnel face has changed in colour from green to red, suggesting weathering beneath the sediments above. It is expected that gravels which are potentially diamond bearing and likely to be present at the base of the sediments will be exposed and extracted within the next few days.

Peter Kennewell,
MANAGING DIRECTOR

4th August 2006
Copeton Shaft mining target zone

Excavation of the tunnel from the base of at the Copeton shaft recommenced this morning.

The potentially diamond bearing sediments in the target zone dipped more steeply than anticipated, and the roof of the tunnel broke into them several weeks ago, resulting in significant changes in mining conditions. These will greatly assist mining of the target horizon, with larger and more representative samples being extracted.

They have, however, necessitated termination of the tunnelling contract and design, planning and purchase of materials for an alternative style of mining using timber supports. This is due to poorly consolidated gravel in the tunnel roof, instead of hard granite. The pause has also allowed time for drainage of the small amounts of water present in the sediments, resulting in the tunnel now being dry.

The company has now employed its own underground crew of four men, led by an operator with four years experience working underground at Copeton, together with other deep lead mining experience. The crew is working under the supervision of our Operations Manager, Don Crowe, an experienced mining engineer. The headframe has been leased from the previous contractor.

Sand and gravel washed from the roof into the tunnel is now being mucked out, and installation of the first set of timber supports will commence this afternoon. A small, ten tonne per day, trommel and jig washing plant has been set up adjacent to the Company’s large plant at Copeton, to allow more careful processing of the gravels obtained from the tunnel during the next few weeks.

Peter Kennewell,
MANAGING DIRECTOR

25th July 2006
Ruby Mine recovers one of the largest Pink Sapphires ever found in Australia

The Company is pleased to report that a 19.37 carat pink sapphire has been recovered at the Ruby Mine. The gemstone measures approximately 17mm long, 15mm across and 9mm thick. It is a natural deep pink colour, displays exceptional clarity and appears to have very few internal flaws or inclusions.

The Company believes this is one of the largest gem quality pink sapphires ever found in Australia, and certainly the largest ever found in this particular region.

Photographed through a microscope showing gemstone lit from below (larger than actual size)

The gemstone has been consigned to the offices of Ellerston Gems in New York. World class gem cutters and appraisers will evaluate the most suitable cut to enhance its appearance and value. It is currently with the American Gemological Laboratory, where it is being examined with a refractometer/spectrometer and probe in order to create a distinctive ‘signature’ for future identification and reference.

Until the stone is faceted and the final weight known, it is very difficult to accurately assess its value. Under the agreement with CPH Limited, profits from the marketing of gemstones above 4 carats rough weight are shared 50/50. The Company is currently discussing with CPH Limited how to obtain the maximum possible value from the marketing of this unique natural gemstone, and looks forward to the possibility that there are more stones of this size and quality still to be found at the Ruby Mine.

Peter Kennewell,
MANAGING DIRECTOR

13th July 2006
Cluff exercises option to enter a Joint Venture agreement over the Egerton-Gordon goldfield, Victoria

The Company advises that it has exercised its option to enter a joint venture over the Egerton-Gordon Goldfield, 20 km east of Ballarat in Victoria. The Egerton Goldfield had produced 770,000 ozs of gold by 1903, with the larger mines closing around 1904.

The JV, with Tech-Sol Resources Pty Ltd, enables Cluff to earn a 51% interest in EL 4574, MIN 5421 and EL 4844. Included in the project is MIN 4422 in which Cluff will earn a right to the production. The cost of exercising the option has totalled $190,000, including option fee of $100,000, purchase of EL 4844 and a data package for $50,000, and agreed costs and technical studies during the option period totalling about $40,000.

The initial requirement of the joint venture is for Cluff to spend $350,000 within two years to earn a 51% interest in the project. Cluff may then proceed to acquire a further 24% of the tenements by expending an additional $1.65 million.Tech-Sol will be granted a 2.5% net smelter royalty from all gold production.

Initial investigations and planning for a drilling program is under way, with a three dimensional model of the formerly producing reef being investigated for drill targets, and field investigations of over twenty former shallow gold mines in progress. Several of these extended many hundreds of metres, and were reported by William Bradford of the Victorian Department of Mines in 1903 to be "gold bearing" over widths in excess of ten metres.

Peter Kennewell,
MANAGING DIRECTOR

14th June 2006
Copeton Diamond Shaft drive intersects target zone

The Copeton Diamond Shaft horizontal drive has reached a length of 22 metres from the shaft, where it has intersected the base of the overlying target basal sediments. Recent probe drilling indicated that this target horizon was dipping closer to the tunnel as it progressed, and this has now been confirmed.

This should facilitate easier sampling, and the extraction of a larger and therefore more representative sample of this material than previously anticipated. The sampling will also occur at a deeper point within these basal sediments. At present, the sediments are obscured by a layer of inwashed coarse sand, and this will be removed once excavation recommences.

The tunnel will continue to be extended to a length of 30 metres as planned. There was a small inflow of water encountered when the tunnel broke into the sediments (around 1 litre/second), and the immediate area will be allowed to drain over the next few days whilst roof supporting structures are fabricated and delivered to site.

Peter Kennewell,
MANAGING DIRECTOR

2nd June 2006
Copeton Shaft progress, 2 June 2006

Installation of rail within the Copeton tunnel has been completed, and a bogger (compressed air driven excavator) and skip (rail car) are now operative underground. A one tonne kibble (haulage bin) has been installed on rails within the shaft, and the shaft is now capable of hauling at a rate of several tens of thousand tonnes per year.

Driving recommenced this week, with one shot fired, extending the tunnel for about two metres. Four 7.5 centimetre probe holes have been drilled into the roof to determine the thickness and profile of granite above the shaft, and these showed that the basement contact has begun lowering steeply, and is now only about one metre above the tunnel at its current end.
Sediments in this overlying channel or depression are different in nature to the low diamond grade sediments penetrated by the shaft as, above the end of the tunnel, they contain gravels at their base. Edward Pittman, in the Mineral Resources of NSW, (1901), describes gravels similar to these as containing the diamonds mined at that time. A zone of altered granite underlies this depression.

As anticipated, the depression is saturated with water, and the probe holes are being used
to drain the overlying gravels, initially at ten litres per second, but with an already decreasing flow rate. Dewatering of this depression is expected to take at least several days. Driving of the tunnel to thirty metres length and putting rises (vertical shafts upwards) into the base of these gravels to test their diamond content will then be completed.

The Copeton tunnel	'Grizzly' over the rock chute
Bogger to transport rock from face	The shaft headframe

Peter Kennewell,
MANAGING DIRECTOR

29th May 2006
Gold reef defined at Egerton Goldfield

A near-surface gold bearing quartz reef has been mapped at Mount Egerton, with intersections by recent explorers including 3 metres at 26.1 grams/tonne.

The reef has been defined by the Company’s reinterpretation of reverse circulation drilling carried out in 1986 by WMC Resources Ltd, and in 1995 by St Barbara Mines Ltd. A three dimensional model incorporating all previous mining and drilling has been completed, and intersections previously considered to be individual gold shoots are now interpreted to be a coherent reef structure.

This Quarry Reef is located between the Egerton and Black Horse Reefs which were worked more than one hundred years ago. The Egerton Mine has been reported as having produced 590,000 tonnes of ore at a recovered grade of 12.6 grams per tonne, while production from the Black Horse Mine was reported as 303,000 tonnes of ore averaging 10.1 grams recovered per tonne for a total of 392,488 ounces of gold. The reef dips near vertically, is up to several metres in thickness, and is interpreted from the drilling to plunge at a shallow angle to the north.

There is also evidence that another line of reef occurs discontinuously between the Quarry Reef and the Black Horse Reef.

The Quarry Reef forms only one of several exploration targets being reviewed by the Company. The Egerton Goldfield, together with the adjoining Gordon Goldfield, was described in 1903 by William Bradford, (Bulletin of the Geological Survey of Victoria No.10), and has several types of exploration targets:

1. Down plunge extensions, below 380 metres depth, of the high grade ore shoots previously mined. Early photos and maps show these to be up to several metres in thickness. Maps produced near the time of mine closure show extensive shaft and tunnel development below 380 metres to about 600 metres depth, with little mining of the gold bearing shoots.
2. Remnant blocks containing hundreds of thousands of tonnes of lower grade gold bearing quartz left at shallow levels by the former miners.
3. Gold bearing quartz stockworks over ten metres wide and worked over hundreds of metres in length, some described by Bradford as containing gold in quantity sufficient for bulk treatment over its whole width.
4. Smaller near surface quartz reefs identified in the past as containing high grade gold, suitable for small scale mining but not yet developed.

When compilation of available data on all targets is complete, a work program will be decided.

All currently known intersections of the reef are shown in the accompanying figures and are tabulated below, listed from shallow to deeper intersections. Companies which undertook the programs were WMC Resources Ltd (WMC), St Barbara Mines Ltd (SBM) and Golden Hills Mining Ltd (GHM).

Cluff has signed a Heads of Agreement to enter a Joint Venture with Tech-Sol Resources Pty Ltd to explore and develop the Egerton Goldfield, located 20 km east of Ballarat, in Victoria.

TO VIEW THE COMPLETE RELEASE, INCLUDING CROSS SECTION TABLES AND RESULTS CLICK HERE (1.7 mb Adobe PDF file)

The sampling methodologies and sample assaying techniques are not comprehensively recorded.

It should be noted that these reefs are in close proximity to the township of Mount Egerton, and any further evaluation of the potential resources by exploration or underground development will require consultation with the Mount Egerton community, in accordance with the recently released report for the Victorian Minister for Energy, Industries and Resources on recommendations of an inquiry into limitations on mining near residences and community facilities under Section 45 of the Mineral Resources Development Act, 1990.

The information in this report that relates to exploration results and mineral resources is based on information compiled by Peter John Kennewell, who is a corporate member of the Australasian Institute of Mining and Metallurgy included in a list promulgated by the ASX from time to time. Peter John Kennewell is a full time employee of Cluff Resources Pacific NL, and 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, Identified Mineral Resources, and Ore Reserves". Peter John Kennewell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Peter Kennewell,
MANAGING DIRECTOR

5th May 2006
Copeton diamond shaft haulage facilities established

The Copeton diamond shaft has now reached its total depth of 61 metres, and the horizontal tunnel accessing sampling sites now extends 19 metres from the shaft. This will be extended to 30 metres, and diamond sampling rises will be established along the drive.

Shaft haulage and ladder work has now been installed, to allow for haulage of diamond bulk samples to the surface. The photo below shows Cluff’s contractor riding a kibble within the steel framework consisting of a ladderway, hoisting compartment and service (water, pump line, compressed air and electricity) support brackets.

Samples for processing through the Company’s plant to determine diamond grade will be shortly taken from five vertical tunnels (rises) extending upward for several metres from the horizontal tunnel into the overlying target sediments. A cross section illustrating these is shown below:

Peter Kennewell,
MANAGING DIRECTOR

21st April 2006
Copeton diamond shaft progress

The Copeton diamond shaft has been deepened to a depth of 57 metres, penetrating 1.2 metres of altered granite to 52 metres, with a sharp contact with hard, unaltered granite below. This granite has several horizontal and vertical fractures and several thin, discontinuous altered zones within it.

No water problems have been encountered, as the immediate surrounding area has now been drained.

A 2 metre wide by 2 metre high tunnel (plat) has been developed for 6 metres at 57 metres depth, and the main sampling tunnel, similarly 2 metres by 2 metres, has been commenced at right angles to this, and now extends a distance of 6 metres. Vertical tunnels (rises) will shortly be constructed upward for several metres into the overlying target sediments, and will extract samples for processing through the plant to determine diamond grade.

The shaft is now being deepened another four metres to 61 metres, to create a water sump to facilitate drainage and pumping. The shaft haulage and ladder work, which has been constructed and is on site, will be installed during the next week.

Peter Kennewell,
MANAGING DIRECTOR

22nd March 2006
Egerton Gold Joint Venture

The Company advises that it has signed a Heads of Agreement to enter a Joint Venture with Tech-Sol Resources Pty Ltd to explore and develop the Egerton Goldfield located 20 kilometres east of Ballarat, in Victoria. The JV includes the Exploration Licence 4574, over the Egerton Goldfield, together with a conditional sale and purchase agreement over EL 4844, held by Oroya Mining Limited. This EL covers the northerly extension of the mineralised zones and includes most of the Gordon Goldfield. Exploration may be assisted by two granted Mineral Leases (MIN 5421 and MIN 4422) over the most prospective gold areas, which entitle the JV to sink exploration shafts, subject to governmental approval. The tenements cover the Egerton, Black Horse and Sister Rose Mines, the largest producers on the Goldfield.

The Egerton Mine has been reported as having produced 590,000 tonnes of ore at an average recorded grade of 12.6 grams per tonne between 1861 and 1893, while production from the Black Horse Mine was reported as 303,000 tonnes of ore averaging 10.1 grams per tonne. These past production estimates are yet to be reviewed by the Company.

William Bradford in "The Egerton-Gordon Goldfield", (Bulletin of the Geological Survey of Victoria No 10), commented "In working out the richer parts of the Egerton deposit, hundreds of thousands of tonnes of ore have been left, which, even now, would probably keep hundreds of men employed if only a 100-head up-to-date mill were set going. The Main Drive North on Lode, 1760-ft level, Black Horse Shaft was described "Full width here exceeds 12 feet, and is good enough for bulk treatment".

The Egerton Goldfield had produced 770,000 ozs of gold by 1903, with the larger mines closing around 1904. The gold bearing quartz veins of the Ballarat Goldfield appear to have developed on the western side of a large granite mass, while the Egerton veins have formed in a similar position but on the eastern side.

Cluff has acquired a data base under the terms of the Joint Venture. This data base, of over 130 assayed reverse circulation drill holes to 150 metres depth, includes a number of encouraging intersections which will need interpretation of their geological context before their significance can be assessed.

The terms of the Joint Venture are:

Stage 1

• Cluff has paid $25,000 cash as an option fee, and may exercise within four months of the option by paying a further $75,000 in shares. It will also meet additional costs of the permits of approximately $20,000, and some bonds.
• Upon exercise of the option, Cluff may earn 51% of the project by spending $350,000 within two years on exploration, and giving notice to proceed to Stage 2.
• If Cluff withdraws from the project at this point, the tenements revert or remain with Tech-Sol.
• Cluff has an option to purchase, for $50,000, 50% of profits from a small dam leach operation on the tenements. Participation is subject to Cluff due diligence.
  

Stage 2

• Cluff then has a right to earn a 75% interest in the project by spending an additional $1,650,000 on exploration or development.
• By mutual consent, Cluff may sole risk up to an additional $1 million to take the project to conclusion. Tech-Sol will repay twice its share of this expenditure from any future profits.
• After completing Stage 1, Cluff has earned equity in the project.
• Tech-Sol retains a 2.5% net smelter royalty on gold production.
• No liabilities are assumed by Cluff for Tech-Sol’s present dam leach and former CIP operation.
  
  

The gold occurs in "wing makes", or quartz veins extending from vertical rock fractures (see Figure). Several such fractures have been mined or prospected for over a kilometre. Bradford (1903) compares the "wing makes" to the Scotchman’s lode formation at Stawell, and the Great Columbian and Welcome lode formations at Inglewood. Many are low grade, but exceptionally rich patches are present in places. He describes "a mass of stone associated with decomposed dyke material, on the eastern side of the ‘vertical’, a layer, or floor, of golden stone was found, having a length of about 60 feet, a width of 6 or 7 feet, and a thickness of about 2 feet, the whole of which, it is said, was hung together with gold".

He pointed out that "only one of a great system of ‘wing makes’ of quartz has received attention, returning remarkable richness from its outcrop to a depth of about 850 feet, below which point it has not been followed.

Tech-Sol Resources Pty Ltd is a private company which has produced over 6,000 ozs of gold from tailings on the Egerton Goldfield by dam leaching and CIP operations.

Peter Kennewell,
MANAGING DIRECTOR

21st February 2006
Underground development underway at Copeton

The Company has signed a contract for completion of the tunnel extending thirty metres from the base of the Copeton Shaft. The tunnelling contractor is now on site, and work on the project commenced this morning.
The tunnel is planned to extend thirty metres from the Company’s recently completed shaft, and to sample potentially diamond bearing rocks at the base of interpreted hot lake sediments.
The tunnel will be completed in several stages, outlined below:
1. Sinking of the shaft another nine metres in granite, to provide a sump for water drainage.
2. Cutting of a small chamber at a depth of 57 metres.
3. Installation of the ladder way and shaft haulage equipment.
4. Driving of a 2 metre by 2 metre tunnel for 30 metres in granite below the sediments.
5. Developing five vertical rises upward from the tunnel to the potentially diamond bearing sediments (see Figure). These will be completed and sampled consecutively, from the furthest point of the tunnel to the base of the shaft.
6. Sampling of these rocks by blasting them, and allowing them to fall to the tunnel floor. 60 tonne samples are planned from each vertical rise.
7. Bogging out and processing of the samples through the Company’s Copeton plant.

The work is expected to be completed in ten to twelve weeks.

Peter Kennewell,
MANAGING DIRECTOR

20th January 2006
Results of Extraordinary General Meeting

The Directors advise that the resolution to be voted upon and put to the Company's shareholders as per the Notice of Meeting and Explanatory Statement announced to the ASX on 19 December 2005 was approved at the Extraordinary General Meeting of the Company held yesterday.

The resolution to be voted on was as follows:
To approve the $750,000 placement of 53,571,428 fully paid ordinary shares at a price of 1.2 cents per share, and 53,571,428 unlisted 2 cent options expiring June 30, 2008 at a price of 0.2 cents per share, to Firebird Global Master Fund, Ltd.

The proxy votes exercisable on the resolution were as follows:

The resolution was passed on a unanimous show of hands.

Peter Kennewell,
MANAGING DIRECTOR

18th January 2006
Lower diamond target sampling, Bingara

The second sample processed from the lower target horizon at the Upper Four Mile pit, consisting of eight tonnes from the lower part of the hot spring lake (Sample UFM 6), contained no diamonds.

Sampling commenced yesterday, using a Calweld large diameter drill, of hot spring lake gravels which are not as decomposed as this sample, and which were penetrated by drill hole CR 74 during a recent drilling program. The hole is located fifty metres from old mine workings. Heavy mineral separation from the target zone of this drill hole has demonstrated the presence of 1mm topaz grains which were not present in UFM 5 and 6, together with a high concentration of fine spinel grains. This indicates preservation of a more diverse and concentrated heavy mineral suite which warrants testing for diamond.

Several holes will be drilled at the site and bulked together to produce a sample of about ten tonnes, large enough to effectively process through the plant.

Peter Kennewell,
MANAGING DIRECTOR

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