GMA Resources Plc

Algeria is the second largest country in Africa (by area) with a population of 30 million. During 2000, Algeria embarked on a new series of reforms to open up the private sector and provide a supportive and transparent environment to encourage foreign investment. A new mining law was promulgated and a new privatisation act signified the intent of the Algerian government to attract foreign entrepreneurship into the domestic mining sector and exploit its potential. A key part of the new mining law was the rescinding of the 49 per cent. limit on the level of foreign participation when entering into a formal association with an Algerian state enterprise to exploit strategic deposits such as gold.GMA was incorporated in Australia on 17 May 2002 for the purpose of participating in a tendering process for the acquisition of a 52 per cent. interest in an Algerian based company, ENOR, the beneficiary of the Tirek-Amesmessa gold project in the Sahara of southern Algeria. Following an international tender launched by ENOR for the development and operation of the Tirek-Amesmessa permit (the "Tender"), GMA was chosen as the successful bidder.ENOR is a société par actions (limited company) incorporated under Algerian law. The major shareholders are the state owned oil company Sonatrach (34 per cent.), Banque d'Algérie (34 per cent.), Société Algérienne d'Assurance (18 per cent.) and Enterprise Nationale des Produits Non-Ferreux et Des Substances Utiles (10 per cent.).

ENOR currently holds an exploitation permit dated 21 October 1992 granted by the Algerian Ministry of Energy and Mines for a period of 20 years (from 10 February 1993) over an area of approximately 1400 km2 containing the Tirek gold mine, the Amesmessa gold deposit and various other prospects and mineralised occurrences within the property known as the ZITA or intermediate zone between Tirek and Amesmessa. The exploitation permit area is located approximately 400 km south west of the city of Tamanrasset in the Hoggar region of Southern Algeria. The Tirek-Amesmessa goldfield was discovered by the Algerian government agency ORGM in the 1970s. Following prospecting and sampling exploration programs in the permit area in the late 1980's and early 1990's by ORGM, ENOR was formed for the purpose of developing and bringing the Tirek and Amesmessa gold deposits into production. Following legislative reforms in Algeria, including the passing of the new mining law and privatisation act in 2001, GMA won the Tender and subsequently entered into the Subscription Agreement.