REVIEW OF OPERATIONS

Goldsearch-managed projects are currently focussing on the under-explored portions of well endowed mineral belts in the Woods Point region of Victoria and the Bergslagen district in Sweden

SUMMARY

Goldsearch is presently exploring for highgrade precious metals, base metals and uranium deposits in eastern Australia and Sweden and for nickel in central Australia through joint venture at its Musgrave Project. Goldsearch-managed projects are presently focussing on the under-explored portions of well endowed mineral belts in the Woods Point region of Victoria and the Bergslagen district in Sweden.

The previous year has resulted in significant changes in ownership at a number of the Company’s exploration projects. Goldsearch believes its sharpened focus for 2010, along with very positive changes in the structure of a number of key joint venture projects, will add value for shareholders.

Ongoing programs at the 100% owned Mount Wellington project have continued to provide encouragement and Goldsearch expects to drill a number of key targets in 2010. Goldsearch is confident of receiving further drilling subsidies from the Victorian State Government to assist with these programs.

Also, with a greater understanding of the gold mineralisation in Eastern Victoria, and following a strategic review of a number of projects in the Mount Wellington region, Goldsearch has made a significant equity investment in Morning Star Gold NL, which is currently re-developing the Morning Star Gold Mine near the town of Woods Point. Goldsearch’s other equity investments, including Independence Group, Rex Minerals and Queensland Mining Corporation, have performed particularly well in 2009.

Further geophysical survey work is scheduled to be completed in Sweden by the end of 2009, where Goldsearch is earning a 70% interest in three exploration permits which cover areas of previously recognised high-grade silver, lead and zinc mineralisation.

Goldsearch’s interest in the East Musgrave Joint Venture has climbed back to 49% following the withdrawal of BHP Billiton. Immediately following the withdrawal of BHP Billiton, Goldsearch and managing partner Independence Group approved budgets for detailed geophysics over the two highest priority anomalies identified by the previous BHP Billiton funded exploration programs. These programs will be completed by the end of 2009 and prospective drill targets are scheduled for drilling in the first half of 2010.

At the Mary Kathleen project in Queensland, Goldsearch’s project equity increased to 100% following the dilution and subsequent withdrawal of previous joint venture partner Central West Gold. Goldsearch was immediately able to attract a quality joint venture partner in China Yunnan Copper Australia, to invest in the project. China Yunnan Copper Australia is aggressively and successfully exploring a number of neighbouring tenements and Goldsearch is confident of a similar approach to the joint venture tenements. The arrangement with China Yunnan Copper Australia also resulted in Goldsearch acquiring a significant number of options over China Yunnan Copper Australia shares.