96 Parry Street PERTH WA 6000 PO Box 8178 PERTH BUSINESS CENTRE WA 6849 Ph: (08) 9328 9292 Fax: (08) 9227 6011 Email: [email protected], Web: www.nsrltd.com

Quarterly Report for the period ended 31 December 2005 HIGHLIGHTS ‰

Outstanding high grade gold and silver values returned from the two follow-up diamond drill holes at the Range Prospect. • Significant results include: WRD002 - 6.15m @ 10.48g/t Au, 45.03g/t Ag from 21.5m and WRD001 – 3.65m @ 2.45g/t Au, 1.23g/t Ag from 6.35m

‰

High grade gold and silver results from systematic rock chip sampling of six of the zones of quartz veining at the Hunter Prospect. • Significant results include: 50.65g/t Au (10.4g/t Ag), 13.85g/t Au (20.3 g/t Ag), 4.88g/t Au (3.7g/t Ag).

‰

Significant platinum mineralisation confirmed from follow up drilling at Red Billabong Project (Bond Prospect). RC hole RBC 007 returned: 9m @ 0.3g/t Pt, 0.4g/t Pd, and 0.06g/t Au (0.78g/t PGE+Au) from 26m, including 1m @ 1.08g/t Pt, 1.30g/t Pd, 0.11g/t Au (2.49g/t PGE+Au) from 27m.

‰

A strong electromagnetic (EM) conductor identified at the Springvale Project. The strike limited nature of the electromagnetic anomaly, the associated geochemistry, and ultramafic lithologies indicate a high probability that the conductor is sourced by sulphides.

‰

Significant base metal results achieved from reconnaissance aircore drilling 1.5km along strike from the Emull zinc deposit (Red Billabong Project), including RBA313 15m @ 0.28% Zn, 0.25% Cu and 0.33% Pb from surface.

1

OVERVIEW

Northern Star Resources (ASX Code: NST) has three project groups centred on Halls Creek in the largely under-explored East Kimberley region of Western Australia (Figure 1). The project groups cover an area of approximately 4,200 km2 and are highly prospective for nickel-copper-cobalt and platinum group elements (PGE) mineralisation, gold, diamonds and base metals. The December 2005 quarter completed a highly successful exploration field season for the Company with highlights including confirmation of the epithermal gold potential of its East Kimberley projects with the discovery of high-grade gold-silver mineralisation at the Range and Hunter Prospects. The Company also enjoyed success with its nickel-PGE exploration programs at the Red Billabong and Springvale Projects in the Halls Creek region of the East Kimberley. The 2005 field season has generated several priority follow-up drilling targets for the Company and laid the foundations for a very active 2006 field season which will include follow-up drilling of the high-grade gold mineralisation intersected at the Range Prospect, initial drill testing of the Hunter Prospect, planned drilling of a strong EM conductor identified at the Springvale Project and accelerated field exploration and drilling activities at several other nickel-PGE and base metal targets.

Wilson River Project Group (100% NST) The Wilson River Project Group, situated about 150 km north of Halls Creek and centred 50 km west of the Argyle diamond mine, comprises seven exploration licences (ELs) and five exploration licence applications (ELAs) covering approximately 2,280 km2. Together with the present ground holdings at the Wilson River, Dunham and new Tunganary projects (covering some 900 km2 of potential host rocks) the Company is a major landholder in the East Kimberley district and is strategically well placed to take advantage of the emerging epithermal style of gold mineralisation in the region. The silicified quartz veins at the Range and Hunter prospects are remarkably similar to those from mineralised epithermal quartz vein systems in Queensland’s Drummond Basin. Examples of low sulphidation epithermal gold mineralisation in Australia are the multi-million ounce PajingoVera-Nancy and Cracow deposits in Queensland, although these are of a younger age. Range Prospect, Wilson River Project - Gold The Range Gold Prospect is located about 130 km north of Halls Creek. During 2004 and early 2005, NST reported rock chip samples from the Range prospect that returned encouraging high grade gold in quartz veins, which exhibit low sulphidation epithermal textures. The results, including 40.84g/t Au (10.5g/t Ag), are from zones of quartz veining that are generally 3m to 5m wide but can be up to 15m in width. The mineralised veins identified to date are contained within a north-northeast trending corridor that is over 2 km long and 1 km wide. The first phase of drilling was completed in August 2005 (20 shallow RC percussion holes for a total of 1,214 metres) and reported to the ASX on 28 September 2005, with a number of highgrade gold intersections confirming the potential for epithermal-style gold mineralisation

2

identified by Northern Star in the Kimberley region. Significant results from this drilling included an outstanding high-grade intersection of 5m @ 15.08g/t Au and 34.94g/t Ag from 23m. Two follow-up diamond drill holes, for a total of 48.24m, were completed late last year to twin the significantly mineralised RC holes announced previously (Figure 2). WRD-001 twinned WRC021 (5m @ 15.08g/t Au and 34.94g/t Ag from 23m) and WRD-002 twinned WRC018 (8m @ 1.42g/t Au and 0.81g/t Ag from 6m including 1m @ 5.53g/t and 2.5g/t Ag from 9m). The diamond drill holes were designed to confirm the nature, grade and orientations of the quartz veining, as well as providing samples to determine the conditions at the time of gold deposition. Preliminary assay results from the diamond drilling have confirmed the potential for the prospect area and the region in general to host low sulphidation style epithermal style deposits. • Significant results include: WRD002 – 6.15m @ 10.48g/t Au, 45.03g/t Ag from 21.5m and WRD001 – 3.65m @ 2.45 g/t Au, 1.23g/t Ag from 6.35m The results from the RC and diamond drilling are considered very significant for reconnaissance exploration and a follow-up drilling program is currently being planned. Studies of the nature and distribution of the gold mineralisation and quartz veining in the drill core will be used to target drilling planned for the 2006 field season. Hunter Prospect, Dunham Project - Gold Recent exploration has generated a series of highly encouraging results from rock chip sampling at the Hunter prospect (Dunham Project) located some 200 km north northeast of Halls Creek. The Hunter prospect occurs some 80 km to the northeast of Northern Star’s Range prospect, where shallow RC and diamond drilling by the Company has returned high grade gold and silver results as outlined above. The exploration program, which included systematic rock chip sampling of six of the zones of quartz veining at the Hunter Prospect, has returned high grade gold and silver results. •

Significant results include: 50.65g/t Au (10.4g/t Ag), 13.85g/t Au (20.3g/t Ag), 4.88g/t Au (3.7g/t Ag), 1.30g/t Au (23.9g/t Ag), 0.54g/t Au (27.0g/t Ag)

These results add further weight to Northern Star’s confidence in the potential of the emerging epithermal style mineralisation in the East Kimberley district and are in line with the early rock chip results that were returned from the Range prospect. Earlier geological investigations have demonstrated epithermal style quartz veining over a one square kilometre area at the Hunter prospect. Zones of quartz veining are generally 1m to 3m in width and up to 400m in length (Figure 3). The latest work comprised sampling a number of the veins, nominally on 10m spacing. Further work is required to complete the systematic sampling of all the veins.

3

Exploratory work to define the extent of the gold bearing quartz veining at the Hunter Prospect will be ongoing with drilling planned for the 2006 field season. Tunganary Project Following the successful confirmation of the potential for the East Kimberley region in general to host low sulphidation style epithermal style deposits, the Company has applied for additional ground in the Tunganary area. This new project, which will form part of the Wilson River Project Group, is located some 80 km north-northwest of Halls Creek, and comprises five ELAs over an area of approximately 1,045 km2.

East Kimberley Nickel Project Group (100% NST) The East Kimberley Nickel Project Group comprises six tenement holdings; Springvale, Toby, Foal Creek, Red Billabong, Castlereagh and McGowan, over an approximate 1,575 km2 area. This commanding land holding covers known and inferred mafic/ultramafic intrusive rocks, which are considered prospective for nickel-copper-platinum and base metal mineralisation. Red Billabong Project The Red Billabong Project, located between 30 to 70 km west and southwest of Halls Creek, comprises five ELs covering approximately 710 km2. Northern Star’s drilling at the Red Billabong project commenced in late June 2005 to test a number of targets within the project, including EM and aeromagnetic anomalies as possible responses to nickel sulphide and PGE mineralisation. The initial drilling within the southern Red Billabong project area (Emull area) confirmed three areas of interest that are anomalous in either platinum group elements (PGEs), gold and/or base metals. The results from the initial drilling were reported to the ASX on 31 August 2005 and 04 October 2005. A follow-up drill program was completed during the December quarter. It was designed to determine the source of mineralisation in the Emull area, particularly the PGE mineralisation at the Bond prospect. The program comprised 74 aircore holes for a total of 1,313m and a single RC percussion hole (RBC 007, for 48m) (Figure 4). Preliminary assay results from the follow-up drilling have confirmed the potential for platinum mineralisation at the Bond prospect within the Emull area. The single RC percussion hole tested the zone beneath the best of the previously intersected PGE mineralisation (RBA-211 6m @ 0.20g/t Platinum (Pt), 0.25g/t Palladium (Pd), including 1m @ 0.46g/t Pt, 0.25g/t Pd from 16m and 1m @ 0.49g/t Pt, 0.71g/t Pd from 20m to EOH). RC hole RBC 007 returned 9m @ 0.3g/t Pt, 0.4g/t Pd, and 0.06g/t Au (0.78g/t PGE+Au) from 26m, including 1m @ 1.08g/t Pt, 1.30g/t Pd, 0.11g/t Au (2.49g/t PGE+Au) from 27m.

4

As part of the follow-up, a program of 43 aircore holes was designed to test the broader area around the RC hole (drill lines nominally 200m apart and hole spacing of approximately 80m, totalling 854m). This returned anomalous PGE values from a number holes including: RBA-296 20m @ 20.6ppb Pt, 22.7ppb Pd, 64ppb Au from 2m and RBA-273 11m @ 36.0ppb Pt, 74.9ppb Pd, 16.4ppb Au from 2m, confirming the trend of the PGE mineralisation. The drilling at the Bond prospect has confirmed the presence of mafic host rocks associated with a weak north-east trending magnetic anomaly some 1.5 km in strike length. In addition, the drilling has shown that the depth of younger cover is generally less than 5m with hole depths averaging less than 20m. The Company believes that these PGE results represent an exciting new exploration opportunity given that limited drilling intersected anomalous PGE’s in a number of widely-spaced holes in an area with no record of PGE mineralisation or previous drilling. Given the broad spaced nature of the reconnaissance drilling conducted to date, further drilling is being planned to continue to define the extent and character of the PGE mineralisation at the Bond prospect. The initial drilling within the southern Red Billabong project area (Emull area) had also returned significant base metal intercepts 1.5 km west of the Emull deposit, including RBG-10 (EOH 15m) 13m @ 0.1% Cu and 0.06% Zn from 2m including 8m @ 0.12% Cu and 0.08% Zn from 5m and RBG-11 (EOH 10m) 9m @ 0.03% Cu and 0.11% Zn from 1m. As part of the follow up drilling completed this quarter a 12 hole infill aircore drill program (totalling 204m) confirmed and upgraded the initial anomalous base metal values. Significant assay results included: RBA313 – 15m @ 0.28% Zn, 0.25% Cu and 0.33% Pb from surface and RBA312 – 3m @ 0.14% Zn, 0.04% Cu and 0.01% Pb from 14m to EOH and RBA314 – 4m @ 0.17% Zn, 0.05% Cu and 0.01% Pb from 2m Further exploration in the Emull area will integrate the recently completed geophysical programmes (IP) to locate the source of the anomalous results highlighted by the recent aircore drilling, as well as higher grade zinc shoots within the existing low grade deposit. Springvale Project Springvale, located between 30 to 60 km north of Halls Creek, comprises two ELs and an ELA covering an area of approximately 372 km2. Previous explorers reported two zones of ultramafic/mafic intrusions in the West Robin Soak area, hosting nickel–copper gossans, chromite bands, and ferruginous rocks. Past rock chip sampling of these intrusions within NST’s ground contain up to 1.23% Ni and 0.19% Cu. Soil sampling on nominally 400m spaced traverses was completed covering the northern and western portions of the ultramafic units. The grid covers an area approximately 5.5 km by 1.25 km, and elevated platinum and palladium values, peaking at 80ppb and 66ppb respectively, were returned over four intervals up to 160m wide and strike length of 800m. 5

A moving loop ground EM survey (16 line kilometres over 15 lines) covered the two zones of ultramafic/mafic intrusions in the West Robin Soak area (Figure 5). A strong conductor has been identified on line 1600mE (Figure 6) and weaker conductor on line 800mE. Both conductors are associated with elevated base metal and PGE values in the soils and are 200m to 300m in length. The limited strike length of the electromagnetic anomalies, the associated geochemistry and ultramafic lithologies indicates a high probability that the conductors are sourced by sulphides. Field activities will be concentrated on drill testing of the conductors at the earliest opportunity.

Halls Creek Project Group (100% NST) The project group is located east and south of Halls Creek covering an area of approximately 570 km2. It includes the Golden Crown, Bailey Range, Balara and Cummins Range projects. Golden Crown Project Golden Crown, located 20 km east of Halls Creek and approximately 4 km northeast of the 70,000 oz Palm Springs gold mine, comprises two ELs covering an approximate 40 km2 area. Drilling conducted during 2004 confirmed that numerous quartz veins with high grade gold occur over a 250m length at the Faugh-a-Ballagh prospect and 130m length at the Golden Crown prospect. An assessment of the resource potential at the Golden Crown and Faugh-a-Ballagh prospects is in progress. This assessment relies heavily on previous explorers’ drilling for which there is no downhole survey data. Several critical drill hole intercepts, including 5m @ 23.0g/t Au from 81m (Golden Crown) and 7m @ 11.4g/t Au from 123m (Faugh-a-Ballagh) need to be surveyed before an assessment of the resource potential can be finalised. These critical holes have been located and surveying was attempted with the available rig during November. Unfortunately the rig proved not to be suitable and the survey work was not successful. An interim assessment of the resource potential with the available data will be conducted however correct downhole survey data will be required before a definitive statement can be released. Whilst the company intends to complete the current phase of analysis of the Golden Crown prospect, it sees the Wilson River, Red Billabong and Springvale projects as its immediate priorities and efforts will be focussed on these areas in the 2006 field season. CORPORATE The Company had $2.1 million cash at the end of the quarter. Charles Wilkinson Managing Director Information in this report is based on information compiled by Mr C S Wilkinson, MAusIMM, Managing Director of the Company, who is a competent person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Wilkinson has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity, which is being undertaking and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

6

Table 1

Significant Drill Intercepts –Range Prospect

Hole

EOH (m)

Easting AGD66

Northing AGD66

WRD-001 Including

18.90

358690

WRD-002 Including

29.34

358825

Azm (Mag)

Dip

From (m)

To (m)

Interval (m)

Au g/t

Ag g/t

8108250 280

-70

6.35 9.35

10.00 10.00

3.65 0.65

2.54 6.38

1.23 2.00

8108510 002

-70

21.5 21.5

27.65 22.05

6.15

10.48

45.03

0.55

33.65

45.00

Samples analysed using 50g lead collection fire assay and analysed by flame Atomic Absorption Spectrometry and 25 gram Aqua-Regia digest and finished with Enhanced Inductively Coupled Plasma Optical (Atomic) Emission.

Table 2

Significant Drill Intercepts –Emull Drilling

Hole

EOH Easting (m) AGD66 Base Metal Aircore Holes

Northing AGD66

From (m)

To (m)

Interval (m)

RBA-312

17

319648

7962104

14

17

RBA-313

17

319650

7962124

0

RBA-314

17

319650

7962144

322014

Pt ppb

Pd ppb

Au ppb

Zn %

Cu %

Pb %

3

0.14

0.04

0.01

15

15

0.28

0.25

0.33

2

6

4

0.17

0.05

0.01

7962470

26 27

35 28

9 1

297 1,077

419 1,300

60 110

PGE RC Hole RBC-007 including

48

PGE Aircore Holes RBA-273

17

322042

7962481

2

13

11

36

75

16

RBA-296

22

322163

796564

2

22

20

21

23

64

All holes drilled vertically except RC hole (-60 degrees to 140 degrees magnetic). 1 metre sample analysed using mixed acid digest and ICP-AES or MS finish. Au, Pt, Pd determined by lead collection fire assay by firing a 40g (approx) sample with ICP MS finish. NB: 1,000ppb is equivalent to 1g/t

7

Emull Follow-up Drilling Hole

EOH (m)

Easting AGD66

Northing AGD66

From To Interv. (m) (m) (m)

Base Metal Aircore Holes RBA-312 17 m

319648

7962104

14

17

3

Zn % 0.14

RBA-313 17 m

319650

7962124

0

15

15

0.28

0.25

0.33

RBA-314 17 m

319650

7962144

2

6

4

0.17

0.05

0.01

Pt g/t

Pd g/t

Au g/t

9 1

0.3 1.08

0.4 1.30

0.06 0.11

Pd ppb 75

Au ppb 16

23

64

PGE Drill Holes

RBC-007 including

48 m

322014

7962470

26 27

35 28

PGE Aircore Holes RBA-273 17 m

322042

7962481

2

13

11

Pt ppb 36

RBA-296 22 m

322163

796564

2

22

20

21

Cu % 0.04

Pb % 0.01

Northern Star Resources Ltd KIMBERLEY REGION WESTERN AUSTRALIA

Springvale Project We s t R o b i n S o a k

0

500 metres

EM Line 1600mE 1D Smooth - Model Inversion Moving - In - Loop TEM dE/dt Data Plan No. : NSR SPV 1DG-005

Figure No. : 6