Proactiveinvestors Australia

1. SWEDEN - SVARTLIDEN

Background

The Svartliden Gold Mine is located 700km north of Stockholm and south west of the world class Skellefteå Mining District, in an area that is developing into a gold rich mineral province commonly referred to as the "Gold Line".

Svartliden ore is processed through a conventional comminution and leach (CIL) plant, with the design capacity of 300,000 tonnes per annum. It operates continuously throughout the year.

Svartliden has produced 243,436 ounces of gold in total as at 30 September 2010.

Operation

Svartliden was brought into production in March 2005 and was the first integrated mine and treatment plant to be developed under the new Swedish Environment and Mining Acts.

The following table represents the Svartliden statistics for the project to 30 Septemeber 2010.

* Year to date

Outlook

Production in 2010 is expected to be 40,000 ounces of gold and all ore will be sourced from the open pit.

The high grade nature of the Svartliden resource, its consistent geometry suggests that Svartliden will continue to maintain current production levels through a combination of pit expansions and underground development.

A feasibility study for the Svartliden underground mining operation has been completed and a decision to proceed is imminent, whilst studies evaluating the possibility at deepening the eastern portion of the open pit have commenced.

An application for a new operating licence including the future underground mining operation and more rational environmental limits has been submitted to the Environmental Court. There has been no response to date.

Development

Efforts continue to be directed towards defining the depth extensions of the Svartliden deposit, with view to proceeding to underground mining.

A further 35 diamond core drill holes and one re-entry diamond core hole were completed during 2009 for an advance of 7,840 metres. Numerous high grade intercepts including 5 metres @ 17.81 g/t gold, 5.00m @ 22.25 g/t gold, 6.00m @ 8.81 g/t gold, 11.00m @ 9.83 g/t gold, 5.00m @ 11.24 g/t gold, 8.00m @ 15.59 g/t gold, 5.00m @ 8.67 g/t gold and 5.00m @ 12.85 g/t gold were received.

An Indicated and Inferred Mineral Resource, reported above a 3 g/t gold cut-off grade, of 312,000 tonnes grading 7.1 g/t gold (71,400 ounces) for the western depth extensions was estimated by independent consultants Runge Limited, the result of a series of successful drilling campaigns undertaken since 2006. The underground resource is currently restricted by the limits of drilling, the deposit remains open to the east and down dip.

Svartliden Gold Mine - Planned and Proposed Developments

A preliminary underground mine design and internal study has been completed. The study confirms the potential to mine and process 320,000 tonnes at a head grade of 4.3 g/t resulting in 41,000 ounces of recovered gold.

Further detailed work is now being performed with the objective to commence the portal and ramp decline in the second half of 2010. This would allow for a seamless transition from open pit mining to underground mining during 2011. A permit for 1,000 metres of decline and 100,000 tonnes of test mining has already been obtained. Negotiations are being conducted with mining contractors, the contractors submitting bids in June. A decision to commence the underground development is expected in September.

Dragon Mining has now embarked on an aggressive drilling campaign with the aim to significantly increase the Svartliden Resource and Reserve inventory and extend the mine life. It is planned for 22,000 metres of drilling to be completed over 12 months from March 2010, targeting areas east and down dip of the existing resource.

Drilling has been completed on the East Zone Open Cut Extension area. This 32 hole, 4,524.6 metres campaign has returned a number of significant intercepts, including intercept highlights 10m @ 14.87 g/t gold, 2m @ 27.56 g/t gold, 14m @ 3.21 g/t gold, 8m @ 3.25 g/t gold, 10m @ 2.91 g/t gold, 6m @ 3.03 g/t gold and 6m @ 3.01 g/t gold.

Svartliden Resource Target Panels

With the arrival of a second diamond core drill rig at Svartliden, both rigs are now drilling on the 25 hole, 4,645 metre Western Zone Depth Extension 80-200 campaign to further examine the western portion of the deposit below and adjacent to the existing underground Indicated and Inferred Resource. The first results from this campaign are expected in August.

2. FINLAND - ORIVESI GOLD MINE

Sarvisuo Ore Lodes

Mining from the Sarvisuo ore loads commenced in April 2008 with ore being processed at the Vammala Production Centre 80km to the southwest.

Mining has been conducted from the 285m level to the 540m level with the decline being extended to 620m level. Since commencement 506,032 tonnes of ore have been mined and transported from Orivesi to Vammala.

Orivesi Gold Mine

Sarvisuo

Dragon Mining completed a total of 101 drill holes for an advance of 14,198.5 metres since the start of 2009 at Sarvisuo targeting extensions of this lode system between the 440m and 540m levels, the deeper depth extensions below the 540m level and new mineralisation to the north.

Drilling between the 440m and 540m levels returned a number of strong intercepts including 4.95m @ 17.95 g/t gold and 5.40m @ 5.70 g/t gold. As a result of the work completed during 2009, a decision to proceed with the development of the Sarvisuo decline between the 540m and 440m levels to access new Reserves was made. As at the end of June 2010, decline development was almost complete.

The evaluation of the extensions of the lode system below the 540m level commenced, with results from the 540m to 580m levels returning a number of encouraging intercepts including 7.30m @ 15.12 g/t gold, 3.05m @ 5.58 g/t gold and 4.60m @5.57 g/t gold. The results of a follow-up infill drilling in this area have highlighted the extension of the known pipes with intercepts of 7.15m @ 16.35 g/t gold, 4.30m @ 7.48 g/t gold, 4.00m @ 3.47 g/t gold and 3.55m @ 3.91 g/t gold whilst also identifying new deeper mineralised positions to the west of the Sarvisuo pipe cluster with an intercept of 4.65m @ 13.34 g/t gold.

Results for 16 of the 24 hole infill campaign have been received, assays for 6 holes remain pending whilst 2 holes are yet to be drilled.

Given the strength of these results, consideration is being given to extending the decline from the 540m level to the 620m level with a decision expected in late July.

Significant intercepts from recent Sarvisuo extension drill campaign (540-600m levels).

Sub-parallel drilling targeting deeper structures down to the 700m level has also been completed, returning intercepts such as 28.5m @ 6.03 g/t gold, 28.15m @ 6.81 g/t gold and 23.00m @ 12.32g/t gold from the existing Sarvisuo pipe cluster, whilst intercepts of 3.95m @ 4.61 g/t gold again highlight new deeper mineralisation positions west of the existing pipe cluster.

Holes designed to examine the potential for mineralisation to the north of the Sarvisuo lode system were completed from the 360m, 440m and 540m levels, returning a number of promising results including 4.20m @ 5.30 g/t gold. The results obtained indicate the possible existence of a new mineralised pipe or pipe cluster only 40 metres away from the existing mine development. An exploration drift has been completed into this area from the 420m level, from which a RC drilling campaign has been completed. Results are pending.

An update of the Sarvisuo Resource was completed by independent consultants Runge Limited incorporating all recent drilling, returning a total Mineral Resource of 292,000t @ 7.3 g/t gold (68,700 ounces) between the 130m and 600m levels at 3 g/t gold cut-off and inclusive of Reserves.

Kutema Deeps

An internal study is underway evaluating the potential development of the Kutema Deeps gold mineralisation down to the 1080m level. A staged development is being considered to initially deepen the mine to the 820m level, as a significant amount of drilling is still required to better define the extent of gold mineralisation below this level. A development decision is expected in late 2010.

The 150,000 ounce Resource (Indicated – 50,800 ounces; Inferred – 100,100 ounces) at Kutema Deeps represents a substantial, medium to high grade depth extension of the Kutema lode system which was previously mined to the 720m level.

3. FINALDN - JOKISVU GOLD MINE

The Jokisivu Gold Mine is located 40 kilometres south west of the Vammala Production Centre and hosts a Measured, Indicated and Inferred Resource totalling 356,300 ounces from two desposits 200 metres apart. The Kujankallio deposit has been shown by drilling to extend to at least 525 metres depth, though resource drilling currently extends only down to 440 metres, whilst the Arpola resource has only been drilled down to 200 metres. Both remain open at depth, partially along strike, an may converse.

Jokisivu became Dragon Mining’s third operating mine in 2009, with the commencement of mining from the Kujankallio open pit in September 2009. Since commencement, 103,445 tonnes of ore mined have been mined and transported from Jokisivu to Vammala.

Jokisivu Gold Mine

Development

Following the completion of an internal feasibility study, the decision was taken to commence the decline for the underground development of the Kujankallio deposit. Finnish mining contractor, SK-Kaivin OY, has been awarded the contract and development of the decline began in late September.

The decline is located at the eastern end of the Kujankallio open pit, which was completed in August.

Exploration and further internal studies are also underway to determine the viability of a development that would encompass the Arpola deposit, which is located 200 metres to the east.

4. FINLAND - VAMMALA

Vammala Production Centre

The Vammala Production Centre is located in the Sastamala region in southern Finland, 165 kilometres northwest of Helsinki. This region is well endowed with gold and nickel mineralization, the Production Centre within close proximity of the operating Orivesi and Jokisivu Gold Mines. The Vammala Plant is a 600,000 tonne per annum crushing, milling and flotation facility which was successfully recommissioned in June 2007. A gravity circuit was commissioned to treat ore from the Jokisivu Gold Mine in September 2009. Since recommissioning the plant has produced 94,984 ounces of gold in gravity gold and concerntrate.

The environmental permit for the Vammala Production Centre is valid until 2016.

The following table represents the Vammala Production Centre statistics as at 30 September 2010.

*6 months of production ** Year to date

Peter Cordin - Executive Chairman

Mr Cordin was appointed Managing Director on 20 March 2006. He is a civil engineer with 35 years experience in the evaluation and operation of resource projects within Australia and overseas.

He has direct experience in the construction and management of diamond and gold operations in Australia and Indonesia. Mr Cordin was Managing Director of Grant’s Patch Mining Limited (100,000 ounce gold per year production) and was Director – Operations of Forsayth NL, responsible for all group operations in Australia involving the annual production of 320,000 ounces of gold from five mines. He has more recently been involved in the development of resource projects in Kazakhstan and New Caledonia. Mr Cordin is a Non-Executive Director of Coal of Africa Limited and Vital Metals Limited.

Mr Cordin is a member of the Remuneration and Nomination Committee.

Michael Naylor - Finance Director

Mr Naylor has been CFO since May 2006 and was appointed Finance Director on 1 July 2008. He is a Chartered Accountant with 14 years of mining and resource related financial experience in Australia, Canada, Europe and Africa. He was previously responsible for the accounting and finance functions of an ASX listed company with gold operations in Australia and Africa and formerly held a senior management position with a major international accounting firm in Perth and Toronto.

Tapani Järvinen - Non-Executive Director

Mr Järvinen was appointed a Non-Executive Director on 22 December 2003. Until retirement on 31 December 2009, he was President and CEO of Outotec Oyj, a publicly listed company on the NASDAQ OMX Helsinki Oy. Mr Järvinen is also a Board member of Okmetic Oyj and Konecranes Plc, both publicly listed companies on the NASDAQ OMX Helsinki Oy. He is a Board member of Normet Oy, Outotec Oyj, Talvivaara Mining Company PLC and Chairman of the Finnish – Latin American Trade Association, Chairman of the Cleantech Finland Business Forum, Chairman of Laatukeskus Excellence Finland Oy and Chairman of the Industry Council of Technology Academy of Finland. He is also a Senior Advisor for VTT, Technical Research Centre of Finland.

Markku Mäkelä - Non-Executive Director

Professor Mäkelä was appointed a Non-Executive Director on 13 November 2008. He majored in geology and mineralogy at the University of Helsinki and holds over 38 years experience from a variety of scientific, operational and administrative activities in the economic geological and mining sector in Finland and abroad. Before joining he retired as a Director from the Geological Survey of Finland (GTK). Prior to joining GTK in 1994, he spent six years as a Technical Manager and Alternate Director of the UN Revolving Fund for Natural Resources and he remains a member of the UN Committee on Energy and Natural Resources for Development.  He is a board member of Kopylovskoye AB.

Christian Russenberger - Non-Executive Director

Mr. Russenberger is principal and director of 2004 founded CR Innovations AG, Baar Switzerland, which is specialised in strategic and financial consulting to private and public micro-cap companies. Prior to his current position Mr. Russenberger worked with Finter Bank in Zurich, Switzerland (1993-2004) as a relationship manager and analyst. Before joining Finter Bank, Mr. Russenberger worked in Zurich as an analyst with Anlage-und Kreditbank AKB (1991-1993) and Bank Leu AG (1990-1991). He also serves as a member of the board of directors of award winning Swiss car sharing company Mobility Cooperative.

Peter Gunzburg - Non-Executive Director

Mr Gunzburg was appointed a Non-Executive Director on 8 February 2010. Mr Gunzburg has over 20 years experience as a stockbroker. He has a Commerce Degree from the University of Western Australia and has previously been a director of Resolute Limited, the Australian Stock Exchange Limited, Eyres Reed Limited and CIBC World Markets Australia Limited.

Mr Gunzburg was appointed Executive Chairman of Eurogold Limited on September 2001. Mr Gunzburg was appointed Chairman of Fleetwood Corporation Limited on February 2002 however has now stepped down from that role and is a Non-Executive Director, appointed Chairman of PieNetworks Limited on April 2002 and appointed Non-Executive Director of AIM listed Brinkley Mining Plc on September 2009.

He was formerly a Non-Executive Director of AIM listed Matra Petroleum PLC (appointed July 2006 and resigned September 2009) and Non-Executive Director of Strike Oil Limited (appointed October 2006 and resigned 16 December 2008).

CLASS: Ordinary Fully paid

DATE:  31 DECEMBER 2010

Total Ordinary fully paid shares on issue: 73,778,508 (78.46%)