<PAGE>

                                                            BLAKE DAWSON WALDRON
                                                                L A W Y E R S

                             MERGER IMPLEMENTATION
                                   AGREEMENT

                               LIHIR GOLD LIMITED

                                ARBN 069 803 998

                      LIHIR AUSTRALIAN HOLDINGS PTY LIMITED

                                 ACN 121 554 443

                            BALLARAT GOLDFIELDS N.L.

                                 ACN 006 245 441

                                                17 OCTOBER 2006

                                   Level 36
                            Grosvenor Place
                          225 George Street
                            Sydney NSW 2000
                Telephone: + 61 2 9258 6000
                      Fax; + 61 2 92586999      REF: PHM 02-1404-7936

                         (C) BLAKE DAWSON WALDRON 2006

<PAGE>

                                    CONTENTS

<TABLE>
<S>                                                              <C>
1.  AGREEMENT TO PROPOSE SCHEME                                   1
2.  CONDITIONS PRECEDENT                                          1
3.  SCHEME                                                        6
4.  OBLIGATIONS OF THE PARTIES                                    6
5.  RESTRICTION ON ACQUIRING SECURITIES                          12
6.  CO-ORDINATION AND TIMING                                     12
7.  CONDUCT OF BUSINESS                                          13
8.  COURT PROCEEDINGS                                            15
9.  REPRESENTATIONS AND WARRANTIES                               15
10. PUBLIC ANNOUNCEMENTS                                         20
11. TERMINATION                                                  20
12. EXCLUSIVITY                                                  22
13. BREAK FEE                                                    23
14. CONFIDENTIALITY                                              25
15. GENERAL                                                      27
16. INTERPRETATION                                               30
SCHEDULE

ANNEXURE

1   SCHEME
2   DEED POLL
3   TIMETABLE
4   JOINT ANNOUNCEMENT
</TABLE>

<PAGE>

                         MERGER IMPLEMENTATION AGREEMENT

DATE 17 OCTOBER 2006

PARTIES

      LIHIR GOLD LIMITED ARBN 069 803 998 of Level 7, Pacific Place, Cnr
      Champion Parade and Musgrave Street, Port Moresby, National Capital
      District, Papua New Guinea (LIHIR)

      LIHIR AUSTRALIAN HOLDINGS PTY LIMITED ACN 121 554 443 of Level 9, AAMI
      Building, 500 Queen Street, Brisbane Queensland 4000, Australia (LIHIR
      AUSTRALIA)

      BALLARAT GOLDFIELDS N.L. ACN 006 245 441 of 10 Woolshed Gully Drive, Mt
      Clear, Victoria 3350, Australia (BALLARAT GOLDFIELDS)

RECITALS

A.    Lihir and Lihir Australia have agreed with Ballarat Goldfields for Lihir
      Australia to acquire all the ordinary issued shares of Ballarat Goldfields
      by means of a scheme of arrangement.

B.    Ballarat Goldfields intends to propose a scheme of arrangement under Part
      5.1 of the Corporations Act 2001 (Cth) between Ballarat Goldfields and the
      Scheme Participants, and issue the Scheme Booklet.

C.    Lihir and Lihir Australia have agreed with Ballarat Goldfields in good
      faith to implement the Scheme upon the terms and conditions of this
      agreement.

OPERATIVE PROVISIONS

1.    AGREEMENT TO PROPOSE SCHEME

      (a)   Ballarat Goldfields agrees to propose the Scheme to its members upon
            and subject to the terms and conditions of this agreement.

      (b)   Lihir and Lihir Australia agree to comply with their respective
            obligations under the Scheme, and provide reasonable assistance to
            Ballarat Goldfields in proposing and implementing the Scheme, upon
            and subject to the terms and conditions of this agreement.

2.    CONDITIONS PRECEDENT

2.1   CONDITIONS PRECEDENT TO THE IMPLEMENTATION OF THE SCHEME

      The Scheme will not become Effective unless each of the following
      conditions precedent is satisfied or waived:

      (a)   FIRB APPROVAL: before 8.00am on the Second Court Hearing Date
            either:

            (i)   (FATA APPROVAL) the Treasurer of Australia gives an approval
                  to the acquisition by Lihir Australia of the Ballarat
                  Goldfields Shares under the

<PAGE>

                  Foreign Acquisitions and Takeovers Act 1975 (FATA) (that
                  approval to be subject to no conditions or only to those
                  conditions that Lihir Australia considers to be acceptable,
                  acting reasonably):

            (ii)  (EXPIRY OF NOTICE PERIOD) the expiry of the relevant period
                  following the giving of notice relating to the acquisition by
                  Lihir Australia of the Ballarat Goldfieids Shares under
                  section 26 of the FATA without any permanent order of
                  prohibition being made under the FATA; or

            (iii) (NO OBJECTION LETTER) the Treasurer indicating to Lihir
                  Australia that there is no objection in terms of the foreign
                  investment policy of the Federal Government to the acquisition
                  by Lihir Australia of the Ballarat Goldfields Shares (that
                  indication to be subject to no conditions or only to those
                  conditions that Lihir Australia considers to be acceptable,
                  acting reasonably).

      (b)   REGULATORY APPROVALS: before 8.00am on the Second Court Hearing Date
            Lihir and Lihir Australia (as appropriate) has obtained PNG Exchange
            Control Approval and ASIC, PNGSC, SEC, ASX, POMSoX, NASDAQ and AIM
            as appropriate, issue or provide such consents, waivers or approvals
            or do other acts which Ballarat Goldfields and Lihir Australia agree
            are necessary or reasonably desirable to implement the Scheme;

      (c)   RESTRAINTS: no temporary restraining order, preliminary or permanent
            injunction or other order issued by any Court or other material
            legal restraint or prohibition preventing the Scheme is in effect at
            8am on the Second Court Hearing Date;

      (d)   NO BALLARAT GOLDFIELDS MATERIAL ADVERSE CHANGE: no Ballarat
            Goldfields Material Adverse Change occurs or becomes apparent
            between the date of this agreement and 8.00am on the Second Court
            Hearing Date;

      (e)   NO LIHIR AUSTRALIA MATERIAL ADVERSE CHANGE: no Lihir Australia
            Material Adverse Change occurs or becomes apparent between the date
            of this agreement and 8.00am on the Second Court Hearing Date;

      (f)   NO BALLARAT GOLDFIELDS PRESCRIBED EVENT: no Ballarat Goldfields
            Prescribed Event occurs between the date of this agreement and
            8.00am on the Second Court Hearing Date;

      (g)   NO LIHIR PRESCRIBED EVENT: no Lihir Prescribed Event occurs between
            the date of this agreement and 8.00am on the Second Court Hearing
            Date;

      (h)   INDEPENDENT EXPERT REPORT: the Independent Expert issues its report
            which concludes that the Scheme is in the best interests of Scheme
            Participants before the date on which the Scheme Booklet is
            registered by ASIC under the Act;

      (i)   EXECUTION OF DOCUMENTS: between the date of this agreement and the
            date of despatch of the Scheme Booklet, Lihir executes the Lihir
            Australia Deed Poll pursuant to which Lihir covenants in favour of
            the Scheme Participants to perform its obligations under the Scheme;

                                                                               2
<PAGE>

      (j)   NO BREACH OR TERMINATION: no material breach of this agreement by
            either party has occurred (which has not been remedied to the
            satisfaction of the other party) and this agreement has not been
            terminated before 8.00am on the Second Court Hearing Date;

      (k)   BOARD RECOMMENDATION: the Ballarat Goldfields Board has unanimously
            recommended in the Scheme Booklet that Ballarat Goldfields
            Shareholders vote in favour of the Scheme in the absence of a
            Superior Proposal and the Ballarat Goldfields Board has not
            withdrawn, qualified or varied that recommendation before the date
            the Scheme is approved by the Scheme Participants;

      (1)   SCHEME PARTICIPANTS APPROVAL: the Scheme is approved by the
            requisite majorities of Scheme Participants in accordance with the
            Corporations Act;

      (m)   COURT APPROVAL: the Court approves the Scheme in accordance with
            section 411(4)(b) of the Corporations Act on the Second Court
            Hearing Date;

      (n)   OPTION HOLDERS: before 8.00am on the Second Court Hearing Date, all
            outstanding Options are either exercised by the relevant Option
            Holders in accordance with their terms of issue, cancelled by
            Ballarat Goldfields with the agreement of the relevant Option
            Holders or acquired by Lihir Australia;

      (o)   NO COMPETING TRANSACTION: as at 8.00am on the Second Court Hearing
            Date, Ballarat Goldfields has not entered into any agreement,
            arrangement or understanding with a Third Party in relation to a
            Competing Transaction;

      (p)   INTEREST IN BALLARAT GOLDFIELDS: between the date of this agreement
            and the Second Court Hearing Date, no person (other than any
            existing institutional or portfolio investor who is a Ballarat
            Goldfields Shareholder at the date of this agreement, Lihir or a
            subsidiary of Lihir) acquires an interest in securities so as to
            have a relevant interest in 10% or more of Ballarat Goldfields
            Shares;

      (q)   INDEX DECLINE: between the date of this agreement and the Second
            Court Hearing Date the S&P ASX 200 Index does not fall below 4,500
            on any trading day;

      (r)   GOLD PRICE: the Gold Price falls below USD 500 per ounce at any time
            between the date of this agreement and the Second Court Hearing
            Date; and

      (s)   SHARE SUBSCRIPTION: Ballarat Goldfields has duly issued and allotted
            the Placement Shares to Lihir Australia under clause 3.3 of the
            Share Subscription Agreement and Lihir Australia has paid in full
            the Subscription Price under clause 3.2 of the Share Subscription
            Agreement.

2.2   BEST ENDEAVOURS AND WAIVER OF CONDITIONS PRECEDENT

      Other than in respect of the conditions precedent in clause 2.1 (a), (1)
      and (m), which cannot be waived:

      (a)   The conditions precedent in clauses 2.1 (b), (c), (h) are for the
            benefit of each party and any breach or non-fulfilment of those
            conditions may only be waived with the written consent of each party
            and each of Ballarat Goldfields, Lihir and Lihir

                                                                               3
<PAGE>

            Australia must use its best endeavours to procure that each of those
            conditions and the conditions precedent in clause 2.1 (a) and (j)
            are satisfied.

      (b)   The conditions precedent in clause 2.1(e), (g), (i) and, to the
            extent of payment of the Subscription price, (s) are for the sole
            benefit of Ballarat Goldfields and any breach or non-fulfilment of
            those conditions may only be waived by Ballarat Goldfields giving
            its written consent and Lihir and Lihir Australia must use its best
            endeavours to procure that each of those conditions is satisfied.

      (c)   The conditions precedent in clauses 2.1(d), (f), (k), (n), (o), (p),
            (q),(r) and, to the extent of the allotment and issue of the
            Placement Shares, (s) are for the sole benefit of Lihir Australia
            and any breach or non-fulfilment of those conditions may only be
            waived by Lihir Australia giving its written consent and Ballarat
            Goldfields must use its best endeavours to procure that each of
            those conditions is satisfied.

      (d)   The condition in clause 2.1(j) is -

            (i)   in respect of a material breach by Ballarat Goldfields of this
                  agreement, for the sole benefit of Lihir Australia and any
                  breach or non-fulfilment of the condition in that respect may
                  only be relied on waived by Lihir Australia giving its written
                  consent;

            (ii)  in respect of a material breach by Lihir or Lihir Australia of
                  this agreement, for the sole benefit of Ballarat Goldfields
                  and any breach or non-fulfilment of the condition in that
                  respect may only be relied on or waived by Ballarat Goldfields
                  giving its written consent; and

            (iii) is otherwise for the benefit of each party and any breach or
                  non-fulfilment of that condition may only be waived with the
                  written consent of each party.

      (e)   Ballarat Goldfields, Lihir and Lihir Australia (as applicable) must
            cooperate, to the extent reasonably practicable, to assist one
            another with satisfying their obligations under this clause 2.2.

2.3   REGULATORY APPROVALS

      Without limiting the generality of clause 2.1(b):

      (a)   each party must promptly apply for all relevant Regulatory Approvals
            and take all steps it is responsible for as part of the approval
            process for the Scheme, including responding to requests for
            information at the earliest practicable time; and

      (b)   each party must use best endeavours to consult with the other in
            advance in relation to all material communications with any
            Governmental Agency relating to any Regulatory Approval.

2.4   STATUS OF CONDITIONS PRECEDENT

      (a)   Each party must promptly give the other notice of a failure to
            satisfy a condition precedent in clause 2.1 or of any event that
            will prevent a condition precedent in clause 2.1 being satisfied.

                                                                               4
<PAGE>

      (b)   Lihir Australia or Ballarat Goldfields (as the case may be) must
            give written notice to the other party as soon as reasonably
            practicable (and in any event before 5.00pm on the last Business Day
            before the Second Court Hearing Date) as to whether or not it waives
            the breach or non-fulfilment of any condition precedent of this
            agreement resulting from the occurrence of an event referred to in
            clause 2.4(a), specifying the condition precedent in question.

      (c)   Lihir Australia and Ballarat Goldfields must each provide the Court
            on the Second Court Hearing Date with a certificate that all the
            conditions precedent in clause 2.1 are satisfied or if not
            satisfied, are waived.

      (d)   The giving of a certificate by each of Lihir Australia and Ballarat
            Goldfields under clause 2.4(c) will in the absence of manifest
            error, be conclusive evidence of the satisfaction or waiver of the
            conditions precedent referred to in the certificate.

2.5   CONDITIONS PRECEDENT NOT MET

      (a)   If any conditions precedent contained in clause 2.1 is not satisfied
            or waived by the date specified in this agreement for its
            satisfaction or if the Scheme is not Effective by the End Date, then
            the parties will consult in good faith:

            (i)   with a view to determining whether the Scheme or a transaction
                  which results in a merger of Lihir Australia and Ballarat
                  Goldfields may proceed by way of an alternative approach and,
                  if so, to agree on the terms of such an alternative approach;
                  or

            (ii)  to agree to extend the date for satisfaction of the relevant
                  condition precedent or the End Date or to adjourn or change
                  the date of an application to the Court.

      (b)   If the parties are unable to reach agreement under clause 2.5(a) by
            5pm on the day before the Second Court Hearing Date, then unless
            that condition is waived in accordance with clause 2.2, a party
            entitled to the benefit of that condition may (subject to clause
            2.5(d)) terminate this agreement.

      (c)   A party will not be entitled to terminate this agreement pursuant to
            clause 2.5(b) if the relevant condition has not been satisfied as a
            result of;

            (i)   a breach of this agreement by that party; or

            (ii)  a deliberate act or omission of that party which either alone
                  or together with other circumstances prevents that condition
                  being satisfied.

      (d)   Termination of this agreement under clause 2.5(b) does not affect
            any accrued rights of either party arising from any breach of this
            agreement prior to termination.

                                                                               5
<PAGE>
3.    SCHEME

3.1   OUTLINE OF SCHEME

      Subject to clause 2.1, on the Implementation Date, all of the Scheme
      Shares will be transferred to Lihir Australia and the Scheme Participants
      will be entitled to receive the Consideration.

3.2   SCHEME CONSIDERATION

      (a)   Lihir must execute the Deed Poll prior to the despatch of the Scheme
            Booklet and, subject to clauses 3.2(c), Lihir must allot and issue
            to each Scheme Participant in accordance with the Scheme, five New
            Lihir Shares for every fifty-four Ballarat Goldfields Shares held by
            the Scheme Participant at the Record Date.

      (b)   Any fractional entitlement of a Scheme Participant to a part of a
            New Lihir Share will be rounded up or down to the nearest whole
            number of New Lihir Shares (and will be rounded up if the fractional
            entitlement is one half).

      (c)   Unless Lihir is satisfied that the laws of an Overseas Shareholder's
            country of residence (as shown in the Register) permit the issue of
            New Lihir Shares to the Overseas Shareholder either unconditionally
            or after compliance with terms which Lihir reasonably regards as
            acceptable and practical, Lihir has no obligation to allot or issue
            New Lihir Shares to any Foreign Shareholder and instead Lihir must
            allot and issue the New Lihir Shares to which an Overseas
            Shareholder would otherwise become entitled to a nominee appointed
            by Lihir on terms that the nominee must sell those New Lihir Shares
            at such time or times, in such manner and on such terms and
            condition as the nominee thinks fit in its absolute discretion and
            that the nominees must then pay to that Overseas Shareholder the
            proceeds received.

3.3   ALLOTMENT AND ISSUE OF NEW LIHIR SHARES

      Subject to the Scheme becoming Effective, Lihir must:

      (a)   allot and issue the New Lihir Shares on terms such that each New
            Lihir Share will rank equally in all respects with each existing
            Lihir Share;

      (b)   do everything reasonably necessary to ensure that the New Lihir
            Shares are approved for official quotation on ASX and POMSoX and
            that trading in the New Lihir Shares commences by the first Business
            Day after the Implementation Date; and

      (c)   ensure that on issue, each New Lihir Share will be fully paid and
            free from any mortgage, charge, lien, encumbrance or other security
            interest.

4.    OBLIGATIONS OF THE PARTIES

4.1   BALLARAT GOLDFIELDS'S OBLIGATIONS

      Ballarat Goldfields must take all necessary steps to implement the Scheme
      in accordance with the Timetable, including taking each of the following
      steps:

                                                                               6
<PAGE>

      (a)   SCHEME BOOKLET: prepare and send to Ballarat Goldfields Shareholders
            a Scheme Booklet which:

            (i)   complies with all applicable Australian laws, the Listing
                  Rules and applicable ASIC Policy Statements;

            (ii)  includes the Scheme, notices of meeting and proxy forms;

            (iii) unless the Independent Expert does not conclude that the
                  Scheme is in the best interests of Scheme Participants,
                  includes a statement that the directors of Ballarat Goldfields
                  unanimously recommend that all Scheme Participants vote in
                  favour of the Scheme in the absence of a Superior Proposal;
                  and

            (iv)  is updated by all such further or new information which may
                  arise after the Scheme Booklet has been despatched until the
                  date of the Scheme meeting which is necessary to ensure that
                  it is not misleading or deceptive in any material respect
                  (whether by omission or otherwise).

      (b)   INDEPENDENT EXPERT: after consulting with Lihir Australia, promptly
            appoint and brief the Independent Expert (and any other specialist
            expert required) and provide all assistance and information
            reasonably requested by the Independent Expert (and any such
            specialist expert) to enable the preparation of the necessary
            report(s) for the Scheme Booklet.

      (c)   APPROVAL OF SCHEME BOOKLET: as soon as practicable after the
            conclusion of the review by ASIC of the Regulator's Draft, procure
            that a meeting of the Ballarat Goldfields Board (or of a committee
            of the Ballarat Goldfields Board appointed for the purpose) is
            convened to consider and if thought fit, approve all of the contents
            of the Scheme Booklet as being in a form appropriate for despatch to
            the Ballarat Goldfields Shareholders, subject to approval of the
            Court.

      (d)   LIHIR AUSTRALIA INFORMATION: without limiting clause 6.1 include the
            Lihir Australia Information in the Scheme Booklet subject to such
            changes as are reasonably requested by Lihir Australia or otherwise
            agreed by the parties.

      (e)   APPLICATION FOR SECTION 411(17)(b) STATEMENT: apply to ASIC for the
            production of a statement pursuant to section 41l(17)(b) of the
            Corporations Act stating that ASIC has no objection to the Scheme.

      (f)   COURT DIRECTION: in accordance with the Timetable, apply to the
            Court for an order under section 411(1) of the Corporations Act
            directing Ballarat Goldfields to convene the Scheme Meeting.

      (g)   SCHEME MEETING: take all reasonable steps necessary to comply with
            the orders of the Court including, as required, despatching the
            Scheme Booklet to the Ballarat Goldfields Shareholders and convening
            the holding of the Scheme Meeting.

      (h)   REGISTRATION OF EXPLANATORY STATEMENT: request ASIC to register the
            explanatory statement included in the Scheme Booklet in relation to
            the Scheme in accordance with section 412(6) of the Corporations
            Act.

                                                                               7
<PAGE>

      (i)   APPROVAL AND IMPLEMENTATION OF SCHEME: if the resolution submitted
            to the Scheme Meeting in relation to the Scheme is passed by the
            necessary majorities, apply to the Court for orders approving the
            Scheme, and if that approval is obtained:

            (i)   promptly lodge with ASIC an office copy of the orders
                  approving the Scheme in accordance with section 411(10) of the
                  Corporations Act;

            (ii)  close the register of members of Ballarat Goldfields as at the
                  Record Date and determine entitlements to the Consideration in
                  accordance with the Scheme;

            (iii) execute proper instruments of transfer of, and effect and
                  register the transfer of, the Scheme Shares in accordance with
                  the Scheme; and

            (iv)  do all other things contemplated by or necessary to give
                  effect to the Scheme and the orders of the Court approving the
                  Scheme.

      (j)   PRESCRIBED EVENT: between the date of this agreement and immediately
            before the Implementation Date, use its best endeavours to ensure
            that a Ballarat Goldfields Prescribed Event does not occur other
            than in accordance with this agreement.

      (k)   INFORMATION: provide all necessary information about the Scheme
            Participants to Lihir which Lihir requires in order to facilitate
            the provision by Lihir of the Consideration.

      (1)   REGISTRATION: register all transfers of Ballarat Goldfields Shares
            held by Scheme Participants to Lihir Australia on the Implementation
            Date.

      (m)   CONSULT LIHIR AUSTRALIA:

            (i)   provide to Lihir Australia a draft of the Scheme Booklet for
                  the purpose of enabling Lihir Australia to review and comment
                  on that draft document;

            (ii)  take the comments made by Lihir Australia into account in good
                  faith when producing a revised draft of the Scheme Booklet and
                  before despatching the Scheme Booklet; and

            (iii) not submit the Regulator's Draft to ASIC unless Lihir
                  Australia has had at least 2 Business Days to review and
                  comment on the Regulator's Draft.

      (n)   REGULATORY REVIEW PERIOD: during the Regulatory Review Period, keep
            Lihir Australia at all times informed of any matters raised by ASIC
            in relation to the Scheme Booklet, and use all reasonable
            endeavours, in co-operation with Lihir Australia, to resolve any
            such matters.

      (o)   PUBLIC ANNOUNCEMENT: Ballarat Goldfields must state in the public
            announcement contemplated by clause 10 that the Ballarat Goldfields
            Board unanimously recommends to Ballarat Goldfields Shareholders
            that the Scheme be approved in the absence of a Superior Proposal,
            unless the Independent Expert opines that the Scheme is not in the
            best interest of Ballarat Goldfields Shareholders.

                                                                               8
<PAGE>

      (p)   PROVIDE A COPY OF THE REPORT: on receipt, provide Lihir Australia
            with a copy of any draft or final report received from the
            Independent Expert (or any other specialist expert).

      (q)   REGISTRY DETAILS: subject to the Scheme:

            (i)   provide all necessary information about the Scheme
                  Participants to Lihir which Lihir requires in order to assist
                  Lihir to identify the Scheme Participants and facilitate the
                  issue by Lihir of New Lihir Shares as consideration for the
                  Scheme; and

            (ii)  direct the Registry to promptly provide any information that
                  Lihir reasonably requests in relation to the Register
                  including any sub-register and, where requested by Lihir,
                  Ballarat Goldfields must procure such information to be
                  provided to Lihir in such electronic form as is reasonably
                  requested by Lihir.

      (r)   COURT ORDER: in accordance with the Timetable, apply to the court
            for an order approving the Scheme in accordance with sections 41l
            (4)(b) and 411(6) of the Corporations Act if approved by the
            requisite majorities of Scheme Participants.

      (s)   Listing: take all reasonable and appropriate steps to maintain
            Ballarat Goldfields' listing on ASX, notwithstanding any suspension
            of the quotation of Ballarat Goldfields Shares, up to and including
            the Implementation Date, including without limitation, making
            appropriate applications to ASX and ASIC.

4.2   LIHIR AND LIHIR AUSTRALIA'S OBLIGATIONS

      Each of Lihir and Lihir Australia must take all necessary steps within its
      power to implement the Scheme in accordance with the Timetable, including
      taking each of the following steps:

      (a)   LIHIR AUSTRALIA INFORMATION: promptly provide to Ballarat Goldfields
            all information regarding Lihir and Lihir Australia, and the New
            Lihir Shares required by all applicable Australian laws, the Listing
            Rules and ASIC Policy Statements for inclusion in the Scheme
            Booklet, which information must;

            (i)   contain all information necessary to ensure that the Scheme
                  Booklet complies with the requirements of section 411(3) of
                  the Corporations Act and ASIC Policy Statement 60 in respect
                  of that information;

            (ii)  contain all the information that would be required under
                  section 636(1)(g) of the Corporations Act if the Scheme
                  Booklet were a bidder's statement offering the New Lihir
                  Shares as consideration under a takeover bid, to the extent
                  reasonably applicable;

            (iii) not be misleading or deceptive in any material respect
                  (whether by omission or otherwise) including in the form and
                  context in which it appears in the Scheme Booklet, and to
                  which Lihir Australia has consented; and

            (iv)  be updated by all such further or new information which may
                  arise after the Scheme Booklet has been despatched until the
                  date of the Scheme Meeting

                                                                               9
<PAGE>

                  which is necessary to ensure that it is not misleading or
                  deceptive in any material respect (whether by omission or
                  otherwise).

      (b)   INDEPENDENT EXPERT: promptly provide all assistance and information
            reasonably requested by the Independent Expert (and any other
            specialist expert required) to enable the preparation of the
            necessary report(s) for the Scheme Booklet.

      (c)   REVIEW OF SCHEME BOOKLET: as soon as practicable after delivery,
            review the drafts of the Scheme Booklet prepared by Ballarat
            Goldfields and provide comments on those drafts in good faith.

      (d)   APPROVAL OF SCHEME BOOKLET: as soon as practicable after the
            conclusion of the review by ASIC of the Regulator's Draft, procure
            that meetings of the Lihir and Lihir Australia Boards (or of a
            committee of the Lihir and Lihir Australia Boards appointed for the
            purpose) are convened to consider and if thought fit, approve those
            sections of the Scheme Booklet that relate to Lihir and Lihir
            Australia as being in a form appropriate for despatch to the
            Ballarat Goldfields Shareholders, subject to approval of the Court.

      (e)   PRESCRIBED EVENT: between the date of this agreement and immediately
            before the Implementation Date, use its best endeavours to ensure
            that a Lihir Prescribed Event does not occur other than in
            accordance with this agreement.

      (f)   REPRESENTATION: if so requested by Ballarat Goldfields, procure that
            it is represented by counsel at the Court hearings convened for the
            purposes of section 411(1) and 41l(4)(b) of the Corporations Act in
            relation to the Scheme, at which, through its counsel, Lihir
            Australia will undertake (if requested by the Court) to do all such
            things and take all such steps within its power as may be necessary
            in order to ensure the fulfilment of its obligations under the
            Scheme, and, to the extent that leave of the Court is required for
            Lihir Australia to be represented at those Court hearings, apply for
            that leave. Nothing in this agreement is to be taken to give
            Ballarat Goldfields any right or power to make or give undertakings
            to the Court for or on behalf of Lihir Australia.

      (g)   SCHEME CONSIDERATION: if the Scheme becomes Effective, Lihir provide
            the Consideration in accordance with clause 3.2 on the
            Implementation Date.

      (h)   ASX QUOTATION: ensure that prior to the Second Court Hearing Date,
            application is made to ASX for the New Lihir Shares which are to be
            issued to Scheme Participants in accordance with the Scheme are to
            be approved for official quotation by the ASX on a deferred
            settlement basis as soon as practicable after the Effective Date and
            on a normal settlement basis no later than the first business day
            after the Implementation Date, which approval may be conditional on
            the issue of those shares and other conditions customarily imposed
            by the ASX including implementation of the Scheme.

4.3   DISPUTE AS TO CONTENT OF SCHEME BOOKLET

      If Lihir Australia and Ballarat Goldfields disagree on the form or content
      of the Scheme Booklet, they must consult in good faith to try to settle an
      agreed form of the Scheme Booklet. If complete agreement is not reached
      after reasonable consultation, then:

                                                                              10
<PAGE>

      (a)   if the disagreement relates to the form or content of the Lihir
            Australia Information contained in the Scheme Booklet, Ballarat
            Goldfields will, acting in good faith, make such amendments as Lihir
            Australia reasonably requires; and

      (b)   if the disagreement relates to the form or content of any other part
            of the Scheme Booklet, the Ballarat Goldfields Board will, acting in
            good faith, decide the final form or content of the disputed part of
            the Scheme Booklet.

4.4   OPTIONS

      (a)   Ballarat Goldfields must use its best endeavours to ensure that
            Vested Option Holders exercise all of their Options before 8.00am on
            the Second Court Hearing Date in accordance with the relevant Option
            Terms.

      (b)   Ballarat Goldfields must no later than 1 Business Day prior to the
            Record Date, issue to each Vested Option Holder who has exercised
            his Options the number of Ballarat Goldfields Shares to which that
            Vested Option Holder is entitled and must enter the name of the
            relevant Vested Option Holder in the register of members of Ballarat
            Goldfields at that time.

      (c)   Each Ballarat Goldfields Share issued under clause 4.4(b) will rank
            equally in all respects with all existing Ballarat Goldfields Shares
            and will form part of the Ballarat Goldfields Shares which are
            subject to the Scheme.

      (d)   With respect to Unvested Option Holders, Ballarat Goldfields must
            (at its option with the agreement of the Unvested Option Holders)
            before 8.00am on the Second Court Hearing Date either:

            (i)   Vary the Option Terms if necessary so that the Unvested Option
                  Holders can exercise all of their Options in accordance with
                  clause 4.4(a) as if they were vested Option Holders in which
                  case clause 4.4(b) and (c) will apply mutatis mutandis and
                  Ballarat Goldfields must first obtain any waiver which is
                  required under the Listing Rules to enable that variation to
                  be made;

            (ii)  (Subject always to the payment by the Unvested Option Holders
                  of any exercise or strike price that would have applied on
                  exercise of their Unvested Options) cancel all Options held by
                  the Unvested Option Holders on terms acceptable to Ballarat
                  Goldfields and the Unvested Option Holders but only at a price
                  or value per Option (whether in cash or, or, with the
                  agreement of Lihir (not to be unreasonably withheld or
                  delayed), New Lihir Shares) not exceeding the value of the
                  Scheme Consideration as at the date of this Agreement and
                  Ballarat Goldfields must deliver to Lihir Australia evidence
                  of the cancellation of all the Options held by the Unvested
                  Option Holders; or

            (iii) (Subject always to the payment by the Unvested Option Holders
                  of any exercise or strike price that would have applied on
                  exercise of their Unvested Options) Procure that the Unvested
                  Option Holders sell and transfer to Lihir Australia
                  unconditionally all the Options held by the Unvested Option
                  Holders but only at a price or value per Option (whether in
                  cash or , with the agreement of Lihir (not to be unreasonably
                  withheld or

                                                                              11
<PAGE>

                  delayed),New Lihir Shares) not exceeding the value of the
                  Scheme Consideration as at the date of this Agreement and
                  Ballarat Goldfields must deliver to Lihir Australia duly
                  executed instruments of transfer of all the Options held by
                  the Unvested Option Holders.

4.5   LIHIR BOARD CHANGES

      (a)   Following the Implementation Date up to a maximum of two
            non-executive Ballarat Goldfields directors will be appointed to the
            LihirBoard.

      (b)   BALLARAT GOLDFIELDS BOARD: Ballarat Goldfields will use its
            reasonable endeavours to:

            (i)   take all actions necessary to cause the appointment of that
                  number of nominees of Lihir Australia to the Ballarat
                  Goldfields Board which gives those nominees, acting together,
                  a majority of members of the Ballarat Goldfields Board; and

            (ii)  procure that such directors on the Ballarat Goldfields Board
                  as Lihir Australia may nominate must resign with effect from
                  the Effective Date and that each such director must provide
                  written notice to the effect that they have no claim
                  outstanding for loss of office, remuneration or otherwise
                  against Ballarat Goldfields.

4.6   ACCESS TO INFORMATION

      Prior to the Implementation Date, both Ballarat Goldfields and Lihir
      Australia must keep each other informed of all material developments
      relating to or affecting the Lihir Australia Group or Ballarat Goldfields
      Group (as applicable), its financial position and its prospects.

5.    RESTRICTION ON ACQUIRING SECURITIES

      Until the End Date, (other than as a result of the allotment and issue of
      shares by Ballarat Goldfields to Lihir Australia in accordance with the
      Share Subscription Agreement or under the Scheme) neither party may (and
      must ensure that their Related Parties do not) acquire or offer to
      acquire, any securities or property or any right or option to acquire any
      securities or property of the other party unless it has received the prior
      written consent of the other party.

6.    CO-ORDINATION AND TIMING

6.1   CONTENT OF SCHEME BOOKLET AND LIHIR AUSTRALIA INFORMATION

      (a)   Ballarat Goldfields must consult with Lihir Australia in accordance
            with clause 4.1 as to the content of the Scheme Booklet (other than
            the Lihir Australia Information) and give Lihir Australia and its
            representatives a reasonable opportunity to provide input about the
            Scheme Booklet's content and presentation.

      (b)   Lihir Australia must consult with Ballarat Goldfields as to the
            content of the Lihir Australia Information.

                                                                              12
<PAGE>

6.2   CO-OPERATION

      Ballarat Goldfields and Lihir Australia must each use all reasonable
      endeavours and utilise all necessary resources (including management,
      shareholder, marketing and corporate relations resources, as well as the
      resources of external advisers) to produce the Scheme Booklet and
      implement the Scheme in accordance with the Timetable. Ballarat Goldfields
      and Lihir Australia will for this purpose discuss the content of drafts of
      the Scheme Booklet and Ballarat Goldfields. Each party must procure that
      its officers and advisers work (including by attending meetings and by
      providing information) in good faith and in a timely and co-operative
      fashion with the other party to implement the Scheme in accordance with
      the Timetable and to prepare all documents required relating to the
      Scheme.

6.3   ACCESS BY LIHIR AND LIHIR AUSTRALIA TO PEOPLE AND BALLARAT GOLDFIELDS
      INFORMATION

      Between the date of this agreement and the earlier of 5:00pm on the
      Business Day before the Second Court Hearing Date and the date this
      agreement is terminated, Ballarat Goldfields will provide Lihir and Lihir
      Australia and its officers and advisers with reasonable access to Ballarat
      Goldfields' officers and advisers and documents, records, and other
      information (subject to any existing confidentiality obligations owed to
      third parties, or applicable privacy laws) which Lihir or Lihir Australia
      reasonably requires for the purposes of preparing for carrying on the
      business of Ballarat Goldfields following implementation of the Scheme.

7.    CONDUCT OF BUSINESS

7.1   CONDUCT OF BUSINESS

      From the date of this agreement up to and including the Implementation
      Date, each of Ballarat Goldfields and Lihir must conduct its business in
      the ordinary and normal course consistent with business plans and budgets
      made public or disclosed to the other party prior to the date of this
      agreement and in substantially the same manner as previously conducted.

7.2   SPECIFIC OBLIGATIONS

      Without limiting clause 7.1 and other than with the prior approval of
      Lihir (which approval must not be unreasonably withheld or delayed) or as
      required by this agreement Ballarat Goldfields must, from the date of this
      agreement up to and including the Implementation Date, use all reasonable
      endeavours to:

      (a)   BUSINESS AND ASSETS: maintain its business and assets and conduct
            its business in the ordinary and proper course;

      (b)   OFFICERS AND EMPLOYEES: keep available the services of its officers
            and employees;

      (c)   RELATIONSHIPS: preserve its relationships with customers, suppliers,
            licensors, licensees, joint venturers and others with whom it has
            business dealings; and

      (d)   CHANGE OF CONTROL PROVISIONS: identify any change of control or
            similar provisions in any significant contracts or any joint venture
            documentation and seek the consents of relevant persons who have
            rights in respect of those persons to the transactions contemplated
            by the Scheme.

                                                                              13
<PAGE>

7.3   BALLARAT GOLDFIELDS PROHIBITED ACTIONS

      Other than with the prior approval of Lihir (which approval must not be
      unreasonably withheld or delayed) or as required by this agreement
      Ballarat Goldfields must not from the date of this agreement up to and
      including the Implementation Date do any of the following (or agree to do
      so):

      (a)   ASSETS AND OPERATIONS: cease or suspend development of any of its
            operations;

      (b)   ACQUISITIONS AND DISPOSALS: acquire or dispose of any tenement or
            asset having a book value or for consideration of more than $500,000
            except as is in the ordinary and normal course consistent with
            business plans and budgets made public or disclosed to the other
            party prior to the date of this agreement;

      (c)   JOINT VENTURES: enter into any joint venture, partnership or similar
            arrangement;

      (d)   CAPITAL EXPENDITURE: incur any capital expenditure in respect of any
            item which exceeds $500,000 except as is in the ordinary and normal
            course consistent with business plans and budgets made public or
            disclosed to the other party prior to the date of this agreement;

      (e)   HEDGE CONTRACTS: enter into any hedge contract (or similar risk
            management arrangement) other than in accordance with policies which
            have been approved by the Ballarat Goldfields Board as at the date
            of this agreement;

      (f)   EMPLOYEES: terminate any Senior Employee, engage any new Senior
            Employee or increase the remuneration of any Senior Employee or
            issue any securities or options to any director or Senior Employee
            or otherwise vary any agreement with any of its directors or Senior
            Employees;

      (g)   TERMINATION PAYMENTS: pay a director or employee a termination
            payment, other than as provided for in an existing employment
            contract in place as at the date of this agreement a copy of which
            has previously been provided to Lihir;

      (h)   FINANCIAL ARRANGEMENTS: borrow any money, grant any security or
            encumbrance over any of the assets of Ballarat Goldfields or enter
            into any financing arrangements (including off-balance sheet
            arrangements) (and for clarification, this clause 7.3(h) does not
            prohibit Ballarat Goldfields from entering into financial
            accommodation which can only be drawn after the termination of this
            agreement and which can be cancelled by Ballarat Goldfields without
            penalty if the Scheme becomes Effective);

      (i)   DIVIDENDS: announce, declare or pay any dividend, bonus or other
            distribution of its shareholder profits or shareholder assets or
            returning or agreeing to reduce its capital or return any capital to
            its members;

      (j)   PRESCRIBED EVENT: take any action which would be reasonably expected
            to give rise to a Ballarat Goldfields Prescribed Event;

      (k)   INFORMATION TECHNOLOGY: take any action in respect of its
            information technology systems which would have a material impact on
            those systems; or

                                                                              14
<PAGE>


      (l)   LICENCES, PERMITS AND APPROVALS: dispose of, cancel, relinquish or
            amend any licence, permit or other approval necessary for the
            development and mining of its operations.

8.    COURT PROCEEDINGS

8.1   APPEAL PROCESS

      If the court refuses to make orders convening the Scheme Meeting or
      approving the Scheme, Lihir Australia and Ballarat Goldfields must consult
      with each other in good faith as to whether to appeal the court's decision
      and if Queen's Counsel or Senior Counsel representing Lihir Australia or
      Ballarat Goldfields in relation to the Scheme indicates that, in his or
      her opinion, an appeal would likely have less than a 50% prospect of
      success, either party may terminate this agreement in accordance with
      clause 11.

8.2   DEFENCE OF PROCEEDINGS

      Each of Lihir Australia and Ballarat Goldfields must vigorously defend, or
      must cause to be vigorously defended, any lawsuits or other legal
      proceeding brought against it (or any of its subsidiaries) challenging
      this agreement or the completion of the Scheme. Neither Lihir Australia
      nor Ballarat Goldfields may settle or compromise (or permit any of its
      subsidiaries to settle or compromise) any claim brought in connection with
      this agreement without the prior written consent of the other, such
      consent not to be unreasonably withheld.

8.3   COSTS

      Any costs incurred as a result of the operation of this clause 8 will be
      borne by the parties in equal shares.

9.    REPRESENTATIONS AND WARRANTIES

9.1   LIHIR REPRESENTATIONS

      Save as disclosed in writing by Lihir prior to execution of this
      agreement:

      (a)   Lihir represents and warrants to Ballarat Goldfields each of the
            matters set out in clause 9.1(b) as at the date of this agreement,
            the date of the Scheme Meeting, 8.00am on the Second Court Hearing
            Date, the Implementation Date and any other date to which a
            representation in clause 9.1(b) is expressed to be given.

      (b)   Lihir represents and warrants that:

            (i)   Each of Lihir and Lihir Australia is a validly existing
                  corporation registered under the laws of its place of
                  incorporation;

            (ii)  as at the date of this agreement Lihir's issued equity
                  securities comprise 1,284,224,710 ordinary shares there are no
                  preference shares nor any options of any class on issue, and
                  neither Lihir nor any of its Subsidiaries are under any
                  obligation to issue and have not granted any person the right
                  to call for the issue of any shares or other securities in
                  Lihir or any of its Subsidiaries other than pursuant to the
                  Lihir Australia Executive Share Plan;

                                                                              15
<PAGE>

            (iii) the execution and delivery of this agreement by Lihir and
                  Lihir Australia has been properly authorised by all necessary
                  corporate action and Lihir and Lihir Australia has full
                  corporate power and lawful authority to execute and deliver
                  this agreement and to perform or cause to be performed its
                  obligations under this agreement;

            (iv)  (subject to laws generally affecting creditors' rights and the
                  principles of equity) this agreement constitutes legal, valid
                  and binding obligations on it and execution and performance of
                  this agreement will not result in a breach of or default under
                  Lihir's or Lihir Australia's constitution or any agreement or
                  deed or any writ, order or injunction, rule or regulation to
                  which Lihir or any of its Subsidiaries is a party or to which
                  they are bound (except for such breaches or defaults as would
                  not have a material adverse effect on the consolidated
                  financial position of Lihir) or require any consent, approval,
                  authorisation or permit from any Government Agency, except for
                  the Regulatory Approvals;

            (v)   the New Lihir Shares to be issued in accordance with clause
                  3.2, will be duly authorised and validly issued, fully paid,
                  free of all security interests and third party rights and will
                  rank equally with all other Lihir Shares then on issue (other
                  than the B Class shares in the capital of Lihir);

            (vi)  the Lihir Australia Information provided to Ballarat
                  Goldfields for inclusion in the Scheme Booklet as at the date
                  it is despatched will comply with clause 4.2(a)(i); and is
                  complete, accurate and not misleading in all material respects
                  (including by omission);

            (vii) it will provide Ballarat Goldfields all such further or new
                  information of which it becomes aware that arises after the
                  Scheme Booklet has been despatched until the date of the
                  Scheme Meeting where that is necessary to ensure that the
                  Scheme Booklet continues to comply with the Corporations Act;

            (viii) it has complied with its continuous disclosure obligations
                  under the ASX Listing Rules and Corporations Act and its
                  accounts are prepared on a consistent basis with past
                  practices (except to the extent that adoption of AIFRS
                  requires a change to past practices) and in accordance with
                  all relevant accounting standards;

            (ix)  the Lihir Australia Information contained in the Scheme
                  Booklet will be included in good faith and on the
                  understanding that Ballarat Goldfields and its directors will
                  rely on that information for the purposes of considering and
                  approving the Scheme Booklet before it is despatched, and
                  implementing the Scheme;

            (x)   it and its subsidiaries have complied in all material respects
                  with all material Australian, Papua New Guinea and other
                  foreign laws and regulations applicable to them (other than as
                  part of its implementation of the control requirements of the
                  Sarbanes-Oxley Act (US), Lihir is currently identifying and
                  rectifying deficiencies in accordance with section 404
                  testing) and have

                                                                              16
<PAGE>

                  all material licenses, permits and franchises necessary for
                  them to conduct their respective businesses as presently being
                  conducted;

            (xi)  Lihir has provided to Ballarat Goldfields all information
                  actually known to it (having made reasonable enquiries) as at
                  the date of this agreement regarding matters affecting or
                  relating to it:

                  (A)   which is not already in the public domain; and

                  (B)   the disclosure of which might reasonably be expected to
                        have resulted in Ballarat Goldfields not entering into
                        this agreement at all or only entering into this
                        agreement on materially different terms;

            (xii) to the extent information provided to Ballarat Goldfields,
                  whether under due diligence or not, in connection with this
                  agreement, includes forward looking statements, those forward
                  looking statements are based on assumptions which Lihir
                  believes, as at the date the information was provided, and
                  continues to believe, to be reasonable; and

            (xiii) it and its subsidiaries have all material mining licences,
                  environmental approvals, planning permits, approved work plans
                  and other consents necessary for the development and mining of
                  its operations,

9.2   LIHIR'S INDEMNITIES

      Lihir agrees with Ballarat Goldfields to indemnify and keep indemnified
      Ballarat Goldfields from and against all claims, liabilities and loss
      which Ballarat Goldfields may suffer or incur by reason of any breach of
      any of the representations and warranties in clause 9.1(b).

9.3   BALLARAT GOLDFIELDS REPRESENTATIONS

      Save as disclosed in writing by Ballarat Goldfields prior to execution of
      this agreement:

      (a)   Ballarat Goldfields represents and warrants to Lihir each of the
            matters set out in clause 9.3(b) as at the date of this agreement,
            the date of the Scheme Meeting, 8.00am on the Second Court Hearing
            Date, the Implementation Date and any other date to which a
            representation in clause 9.3(b) is expressed to be given.

      (b)   Ballarat Goldfields represents and warrants to Lihir that:

            (i)   it is a validly existing corporation registered under the laws
                  of its place of incorporation;

            (ii)  as at the date of this agreement Ballarat Goldfields's issued
                  equity securities comprise 1,198,653,935 ordinary shares,
                  17,050,000 options over ordinary shares, there are no
                  preference shares of any class on issue, and neither Ballarat
                  Goldfields nor any of its Subsidiaries are under any
                  obligation to issue and have not granted any person the right
                  to call for the issue of any shares or other securities in
                  Ballarat Goldfields or any of its Subsidiaries other than
                  pursuant to the Ballarat Goldfields Share Plans;

                                                                              17
<PAGE>

            (iii) as at the date of this agreement, there are 11,750,000 Vested
                  Options and 5,300,000 Unvested Options and the details of the
                  Issued Options and Option Holders contained in the Schedule
                  are complete and accurate in all respects;

            (iv)  the execution and delivery of this agreement by Ballarat
                  Goldfields has been properly authorised by all necessary
                  corporate action and Ballarat Goldfields has full corporate
                  power and lawful authority to execute and deliver this
                  agreement and to perform or cause to be performed its
                  obligations under this agreement;

            (v)   (subject to laws generally affecting creditors' rights and the
                  principles of equity) this agreement constitutes legal, valid
                  and binding obligations on it and execution and performance of
                  this agreement will not result in a breach of or default under
                  Ballarat Goldfields's constitution or any agreement or deed or
                  any writ, order or injunction, rule or regulation to which
                  Ballarat Goldfields or any of its Subsidiaries is a party or
                  to which they are bound (except for such breaches or defaults
                  as would not have a material adverse effect on the
                  consolidated financial position of Ballarat Goldfields) or
                  require any consent, approval, authorisation or permit from
                  any Government Agency, except for the Regulatory Approvals;

            (vi)  so far as it is aware (after making reasonable enquiries), all
                  information provided by or on behalf of Ballarat Goldfields to
                  Lihir during the course of negotiations in relation to the
                  merger of the parties and the preparation of the Scheme
                  Booklet is complete, accurate and not misleading in all
                  material respects (including by omission);

            (vii) it has complied with its continuous disclosure obligations
                  under the Listing Rules and Corporations Act, and its accounts
                  are prepared on a consistent basis with past practices (except
                  to the extent that adoption of AIFRS requires a change to past
                  practices) and in accordance with all relevant accounting
                  standards;

            (viii)the Ballarat Goldfields Information contained in the Scheme
                  Booklet will be included in good faith and on the
                  understanding that Lihir and Lihir Australia and their
                  respective directors will rely on that information for the
                  purposes of considering and approving the Lihir Australia
                  Information in the Scheme Booklet before it is despatched,
                  approving the entry into the Deed Poll under clause 2.1(i) and
                  implementing the Scheme;

            (ix)  Ballarat Goldfields has provided to Lihir all information
                  actually known to it (having made reasonable enquiries) as at
                  the date of this agreement regarding matters affecting or
                  relating to it:

                  (A)   which is not already in the public domain; and

                  (B)   the disclosure of which might reasonably be expected to
                        have resulted in Lihir Australia not entering into this
                        agreement at all or only entering into this agreement on
                        materially different terms;

                                                                              18
<PAGE>

                  (x)   to the extent information provided to Lihir, whether
                        under due diligence or not, in connection with this
                        agreement, includes forward looking statements, those
                        forward looking statements are based on assumptions
                        which Ballarat Goldfields believes, as at the date the
                        information was provided, and continues to believe, to
                        be reasonable;

                  (xi)  it and its subsidiaries have complied in all material
                        respects with all material Australian and foreign laws
                        and regulations applicable to them and have all material
                        licenses, permits and franchises necessary for them to
                        conduct their respective businesses as presently being
                        conducted;

                  (xii) it and its subsidiaries have all material mining
                        licences, environmental approvals (including a properly
                        assessed and approved Environment Effects Statement),
                        planning permits, approved work plans and other consents
                        necessary for the development and mining of the Ballarat
                        Goldfields East Project; and

                  (xiii)no person has any right under any provision of any
                        agreement or other instrument to which Ballarat
                        Goldfields or any subsidiary of Ballarat Goldfields is a
                        party or is legally bound which arises or would arise as
                        a result of the acquisition of Ballarat Goldfields
                        Shares by Lihir Australia or the entry into or
                        performance of this Agreement and, if exercised by that
                        person, results, or could result in a Ballarat
                        Goldfields Material Adverse Change.

9.4   BALLARAT GOLDFIELDS'S INDEMNITY

      Ballarat Goldfields agrees with Lihir to indemnify and keep indemnified
      Lihir and Lihir Australia from and against all claims, liabilities and
      loss which Lihir or Lihir Australia may suffer or incur by reason of any
      breach of any of the representations and warranties in clause 9.3(b).

9.5   RELIANCE BY PARTIES

      Each party (the REPRESENTOR) acknowledges that:

      (a)   in entering into this agreement each other party has relied on the
            representations and warranties provided by the Representor under
            this clause 9. The representations and warranties provided by the
            Representor are not extinguished or affected by any investigation
            made by or on behalf of any other party into the affairs or business
            of the Representor or its Related Parties; and

      (b)   any breach of the representations and warranties provided by the
            Representor under this clause 9 after the Scheme becomes Effective
            may only give rise to a claim in damages and cannot result in a
            termination of this agreement.

9.6   SURVIVAL OF REPRESENTATIONS AND INDEMNITIES

      (a)   The representations, warranties provided by each party under this
            clause 9:

            (i)   are severable;

                                                                              19
<PAGE>

            (ii)  will survive the termination of this agreement; and

            (iii) are given with the intent that liability under them will not
                  be confined to breaches of them discovered prior to the date
                  of termination of this agreement.

      (b)   The indemnities provided by each party under this clause 9 will:

            (i)   be severable;

            (ii)  be a continuing obligation;

            (iii) constitute a separate and independent obligation of the party
                  giving the indemnity from any other obligations of such party
                  under this agreement; and

            (iv)  survive the termination of this agreement.

10.   PUBLIC ANNOUNCEMENTS

10.1  ANNOUNCEMENTS OF SCHEME

      Immediately after the execution of this agreement, the parties must make
      the Agreed Announcements.

10.2  PUBLIC ANNOUNCEMENT AND SUBMISSIONS

      Subject to clause 10.3, each party must consult with the other prior to
      making any other public announcements in connection with the Scheme.

10.3  REQUIRED DISCLOSURE

      Where a party is required by law, the Listing Rules or any other
      applicable stock exchange regulation to make any announcement or make any
      disclosure relating to matter the subject of the Scheme, it may do so only
      after it has given the other party as much notice as possible and has
      consulted with the other party as to the content of that announcement of
      disclosure.

10.4  MARKET AND ANALYST BRIEFINGS

      Each party must use its reasonable endeavours (subject to its disclosure
      obligations under the Listing Rules and Relevant Companies Legislation) to
      ensure that any briefing to analysts, the media or shareholders in
      relation to the Scheme or the subject matter of this agreement is a joint
      briefing.

11.   TERMINATION

11.1  TERMINATION FOR BREACH

      This agreement may be terminated at any time prior to 8.00am on the Second
      Court Hearing Date by a party if:

                                                                              20
<PAGE>


      (a)   the other party is in material breach of any clause of this
            agreement or there has been a material breach of a material
            representation or warranty given by that other party under clause
            9.1 or 9.3 (as applicable) before the Second Court Hearing Date;

      (b)   the non-defaulting party has given notice to the other party
            specifying the breach and stating an intention to terminate this
            agreement; and

      (c)   the breach has not been remedied within seven Business Days (or any
            shorter period ending at 5.00pm on the last Business Day before the
            Second Court Hearing Date) from the date a notice under clause 11.
            l(b) is given.

11.2  NO-FAULT TERMINATION

      This agreement may be terminated by either party, if the Scheme has not
      become Effective on or before the End Date and may also be terminated at
      any time prior to 8.00am on the Second Court Hearing Date:

      (a)   by either party, if the resolution submitted to the Scheme Meeting
            is not approved by the requisite majorities;

      (b)   by either party, if the Court or other Government Agency has issued
            an order, decree or ruling or taken other action which permanently
            restrains or prohibits the Scheme or the acquisition of the Ballarat
            Goldfields Shares and the parties fail to agree on conducting an
            appeal within 5 Business Days;

      (c)   in accordance with and pursuant to clause 2.5 or clause 8.1;

      (d)   by Lihir Australia if any of the events described in paragraphs (a),
            (b) or (c) of clause 13.1 occurs;

      (e)   by Lihir Australia, if a person (other than Lihir Australia or its
            Associates or any existing institutional or portfolio investor who
            is a Ballarat Goldfields Shareholder at the date of this agreement)
            has, together with its Associates, the power to exercise or control
            the exercise of, a right to vote attached to at least 10% of the
            Ballarat Goldfields Shares;

      (f)   by either party if the Independent Expert opines that the Scheme is
            not in the best interests of Ballarat Goldfields Shareholders; or

      (g)   by either party if an Insolvency Event has occurred in relation to
            Ballarat Goldfields or Lihir Australia or any of their related
            bodies corporate.

11.3  EFFECT OF TERMINATION

      (a)   Termination of this agreement under clause 11.1 or 11.2 (including
            under clause 2.5 or clause 8.1) does not affect any accrued rights
            arising from a breach of this agreement prior to termination.

      (b)   Clauses 9.6 and 15 survive termination of this agreement.

                                                                              21
<PAGE>
11.4  NOTIFICATION OF BREACH AND COMPLIANCE CERTIFICATE

      (a)   Ballarat Goldfields, Lihir and Lihir Australia will respectively
            promptly advise each other in writing of:

            (i)   a representation or warranty provided in this agreement by
                  either party becoming false; or

            (ii)  a breach of this agreement by it.

      (b)   By 5.00pm on the Business Day immediately before the Second Court
            Hearing Date, each of Lihir Australia and Ballarat Goldfields must
            execute and deliver to the other party a certificate signed by a
            director and made in accordance with a resolution of the relevant
            Board confirming that (except as previously disclosed in writing):

            (i)   it (and in the case of Lihir Australia, also including Lihir)
                  has complied in all material respects with its obligations
                  under this agreement; and

            (ii)  the representations and warranties given by it in clause 9
                  remain true and correct in all material respects.

12.   EXCLUSIVITY

12.1  TERMINATION OF EXISTING DISCUSSIONS

      Ballarat Goldfields represents and warrants that, other than the
      discussions in respect of the Scheme, it has terminated any other
      negotiations or discussions in respect of any Competing Transaction with
      any other person.

12.2  NO-SHOP RESTRICTION

      During the Non-Solicitation Period, Ballarat Goldfields must ensure that
      neither it nor any of its Related Parties directly or indirectly solicits,
      invites, facilitates, encourages or initiates any enquiries, negotiations
      or discussions, or communicates any intention to do any of these things,
      with a view to obtaining any expression of interest, offer or proposal
      from any other person in relation to a Competing Transaction.

12.3  NO-TALK RESTRICTION

      Subject to clause 12.6, during the Non-Solicitation Period, Ballarat
      Goldfields must ensure that neither it nor any of its Related Parties
      negotiates or enters into, participates in negotiations or discussions
      with any other person regarding a Competing Transaction or potential
      Competing Transaction or grants any other person any right or access to
      conduct due diligence investigations in respect of Ballarat Goldfields,
      even if:

      (a)   that other person's Competing Transaction was not directly or
            indirectly solicited or initiated by the party or any of its Related
            Parties; or

      (b)   that person has publicly announced their Competing Transaction.


                                                                              22
<PAGE>

12.4  NOTIFICATION

      During the Non-Solicitation Period, if Ballarat Goldfields is approached
      by any person to engage in any activity that would breach its obligations
      in clauses 12.2 or 12.3 (or would breach its obligations in clause 12.3 if
      it were not for clause 12.6) (PRESCRIBED ACTIVITY), Ballarat Goldfields
      must immediately inform Lihir Australia of the fact, the identity of that
      person, the key terms of any proposal made by that person and a copy of
      any such proposal (OTHER PROPOSAL).

12.5  LIHIR AUSTRALIA'S RIGHT TO MATCH OTHER PROPOSAL

      Ballarat Goldfields must not enter into any agreement, arrangement or
      understanding in relation to the Other Proposal unless Ballarat Goldfields
      has notified Lihir Australia in accordance with clause 12.4 and Lihir
      Australia has not, within 2 business days of that notification, submitted
      a written proposal (LIHIR AUSTRALIA'S PROPOSAL) to Ballarat Goldfields
      which is on terms no less favourable than the terms of the Other Proposal.
      If Lihir Australia's Proposal is on terms no less favourable than the
      Other Proposal, Ballarat Goldfields must, in the absence of a more
      favourable offer, proceed exclusively with Lihir Australia's Proposal,
      otherwise Ballarat Goldfields may proceed exclusively with the more
      favourable offer.

12.6  EXCEPTION TO NO-TALK

      Despite anything else in this agreement, the restrictions in clause 12.3
      do not apply to restrict Ballarat Goldfields taking any action with
      respect to a bona fide Competing Transaction in respect of all the
      Ballarat Goldfields Shares or substantially all of Ballarat Goldfields
      businesses (which was not solicited or initiated by Ballarat Goldfields in
      contravention of clause 12.2) where it is a Superior Proposal and would
      otherwise be prohibited by the terms of this clause.

13.   BREAK FEE

13.1  BALLARAT GOLDFIELDS BREAK FEE

      Subject to clause 13.2 and clause 13.3:

      (a)   if any director of Ballarat Goldfields;

            (i)   makes any public statement prior to the approval of the Scheme
                  by the Court under section 411(4)(b) to the effect that he or
                  she does not support (or no longer supports) the Scheme; or

            (ii)  (without limiting (i) above) fails to recommend the Scheme or,
                  having done so, any director of Ballarat Goldfields publicly
                  withdraws or varies his or her favourable recommendation of
                  the Scheme (or any part of it) prior to the approval of the
                  Scheme by the Court under section 411(4)(b);

            other than (in either such case):

                  (A)   in circumstances where Ballarat Goldfields is entitled
                        to terminate this agreement under clause 2.5(b); or

                                                                              23
<PAGE>

                  (B)   because the Independent Expert has concluded in the
                        Independent Expert's Report that the Scheme is not in
                        the best interests of Ballarat Goldfields Shareholders;

      (b)   if any director of Ballarat Goldfields publicly recommends,
            promotes or otherwise endorses a Competing Transaction in relation
            to Ballarat Goldfields; or

      (c)   if:

            (i)   before the Scheme becomes Effective a Competing Transaction in
                  relation to Ballarat Goldfields is announced or open for
                  acceptance;

            (ii)  the person proposing the Competing Transaction (either alone
                  or together with its Associates) acquires a Relevant Interest
                  in 20% or more in the voting shares of Ballarat Goldfields;
                  and

            (iii) that Competing Transaction is more favourable to Scheme
                  Participants than the Scheme, taking into account all terms
                  and conditions of the Competing Transaction,

      then Ballarat Goldfields must pay to Lihir Australia the Break Fee Amount
      in accordance with clause 13.5.

13.2  NO PAYMENT IF PRIOR TERMINATION OR SCHEME BECOMES EFFECTIVE

      The Break Fee Amount is not payable under clause 13.1 if:

      (a)   prior to an event referred to in that clause occurring, this
            agreement has already been validly terminated, or

      (b)   the Scheme becomes Effective notwithstanding the occurrence of any
            event under clause 13.1

13.3  COMPLIANCE WITH LAW

      If it is finally determined following the exhaustion of all reasonable
      avenues of appeal to the Takeovers Panel or a court that all or any part
      of a Break Fee Amount required to be paid under clause 13.1 (IMPUGNED
      AMOUNT) is:

      (a)   unlawful;

      (b)   involves a breach of directors' duties; or

      (c)   constitutes unacceptable circumstances,

      then:

      (d)   the requirement to pay the Break Fee Amount does not apply to the
            extent of the Impugned Amount; and

                                                                              24
<PAGE>

      (e)   if Ballarat Goldfields or Lihir Australia (as applicable) has
            received the Impugned Amount, it must refund it within 10 Business
            Days of the final determination being made.

13.4  ACKNOWLEDGMENTS

      (a)   Ballarat Goldfields acknowledges that:

            (i)   Lihir and Lihir Australia will incur significant costs,
                  expenses, outgoings and losses if the Scheme is not successful
                  and Lihir Australia does not acquire the Ballarat Goldfields
                  Shares, and that it is not possible to accurately ascertain
                  these costs, and

            (ii)  the Break Fee Amount represents a genuine and reasonable
                  pre-estimate of the internal, external advisory and financial
                  costs (and all associated out of pocket expenses) of Lihir and
                  Lihir Australia in relation to the proposed Scheme and the
                  acquisition of the Ballarat Goldfields Shares.

      (b)   Ballarat Goldfields confirms that:

            (i)   it has received legal advice on this agreement and the
                  operation of this clause; and

            (ii)  it considers this clause to be fair and reasonable and that it
                  is appropriate to agree to the terms in this clause in order
                  to secure the significant benefits to it (and its
                  shareholders) resulting from the Scheme.

13.5  PAYMENT

      Any payment of the Break Fee Amount required under this clause 13 must be
      made within 5 Business Days of receipt of a written demand from Lihir
      Australia. The demand may only be made after:

      (a)   the Scheme fails to become Effective by the End Date; or

      (b)   this agreement is terminated in accordance with its terms.

14.   CONFIDENTIALITY

14.1 BALLARAT GOLDFIELDS'S OBLIGATIONS

      Ballarat Goldfields acknowledges and agrees that:

      (a)   it will use the Lihir Australia Confidential Information exclusively
            for the purpose of due diligence and preparing the Scheme Booklet
            and for no other purpose (and, without limitation, will not make any
            use of the Lihir Australia Confidential Information or any part of
            it to the competitive disadvantage of Lihir Australia or any of its
            Related Parties);

      (b)   it will keep the Lihir Australia Confidential Information in
            confidence and will not disclose the Lihir Australia Confidential
            Information except:

                                                                              25
<PAGE>

            (i)   to such Representatives of Ballarat Goldfields as require the
                  Lihir Australia Confidential Information for the purpose of
                  preparing the Scheme Booklet, but only if any such person owes
                  a duty of confidentiality to Ballarat Goldfields and is aware
                  of the obligations of Ballarat Goldfields under this clause
                  14.1;

            (ii)  as required by law; or

            (iii) with the prior consent of Lihir Australia;

      (c)   it will immediately notify Lihir Australia of any suspected or
            actual unauthorised use, copying or disclosure of the Lihir
            Australia Confidential Information; and

      (d)   it will, upon request by Lihir Australia, return to Lihir Australia
            all Lihir Australia Confidential Information provided to Ballarat
            Goldfields and its Representatives, together with any notes, records
            or copies of the Lihir Australia Confidential Information generated
            by any such person.

14.2  LIHIR AUSTRALIA'S OBLIGATIONS

      Each of Lihir and Lihir Australia acknowledges and agrees that:

      (a)   it will not make any use of the Ballarat Goldfields Confidential
            Information or any part of it except in connection with the Scheme,
            a Competing Transaction in relation to Ballarat Goldfields or any
            other transaction contemplated by this agreement and will not make
            any use of the Ballarat Goldfields Confidential Information or any
            part of it to the competitive disadvantage of Ballarat Goldfields or
            any of its Related Parties;

      (b)   it will keep the Ballarat Goldfields Confidential Information in
            confidence and will not disclose the Ballarat Goldfields
            Confidential Information except:

            (i)   to such Representatives of Lihir or Lihir Australia as require
                  the Ballarat Goldfields Confidential Information in connection
                  with the Scheme, a Competing Transaction in relation to
                  Ballarat Goldfields or any other transaction contemplated by
                  this agreement, but only if any such person owes a duty of
                  confidentiality to Lihir and Lihir Australia and is aware of
                  the obligations under this clause 14.2;

            (ii)  as required by law; or

            (iii) with the prior consent of Ballarat Goldfields;

      (c)    it will immediately notify Ballarat Goldfields of any suspected or
             actual unauthorised use, copying or disclosure of the Ballarat
             Goldfields Confidential Information; and


      (d)    it will, upon request by Ballarat Goldfields, return to Ballarat
             Goldfields all Ballarat Goldfields Confidential Information
             provided to either Lihir or Lihir Australia and its
             Representatives, together with any notes, records or copies of the
             Ballarat Goldfields Confidential Information generated by any such
             person.


                                                                              26
<PAGE>

15.   GENERAL

15.1  FURTHER ACTS

      Each party will promptly do and perform all further acts and execute and
      deliver all further documents (in form and content reasonably satisfactory
      to that party) required by law or reasonably requested by any other part
      to give effect to this agreement.

15.2  NOTICES

      Any communication under or in connection with this agreement:

      (a)   must be in writing;

      (b)   must be addressed as shown below:

            LIHIR

            Address:               Level 7, Pacific Place
                                   Cnr Champion Parade and Musgrave Street
                                   Port Moresby, National Capital District,
                                   Papua New Guinea

            Fax No:                (+675)321 4705

            For the attention of:  the Investor Relations Manager

            BALLARAT GOLDFIELDS

            Address:               10 Woolshed Gully Drive
                                   Mt Clear, Victoria 3350, Australia

            Fax No:                03 5331 7927

            For the attention of:  the Managing Director

            LIHIR AUSTRALIA

            Address:               Level 9, AAMI Building
                                   500 Queen Street
                                   Brisbane, Queensland 4000, Australia

            Fax No:                07 3318 9203

            For the attention of:  Investor Relations Manager

            (or as otherwise notified by that party to the other party from time
             to time);

      (c)   must be signed by the party making the communication or by a person
            duly authorised by that party;

      (d)   must be delivered or posted by prepaid post to the address, or sent
            by fax to the number of the addressee, in accordance with clause
            15.2(b); and

                                                                              27
<PAGE>

      (e)   will be deemed to be received by the addressee:

            (i)   (in the case of prepaid post) on the third business day after
                  the date of posting;

            (ii)  (in the case of fax) at the local time (in the place of
                  receipt of that fax) which then equates to the time at which
                  that fax is sent as shown on the transmission report which is
                  produced by the machine from which that fax is sent and which
                  confirms transmission of that fax in its entirety, unless that
                  local time is not a Business Day, or is after 5.00pm on a
                  Business Day, when that communication will be deemed to be
                  received at 9.00am on the next Business Day; and

            (iii) (in the case of delivery by hand) on delivery at the address
                  of the addressee as provided in clause 15.2(b), unless that
                  delivery is not made on a Business Day, or after 5.00pm on a
                  Business Day, when that communication will be deemed to be
                  received at 9.00am on the next Business Day.

15.3  GST

      (a)   Unless expressly included, the consideration for any supply under or
            in connection with this agreement does not include GST.

      (b)   To the extent that any supply made by a party to another party
            (Recipient) under or in connection with this agreement is a taxable
            supply and a tax invoice has been provided to the Recipient, the
            Recipient must pay, in addition to the consideration to be provided
            under this agreement for that supply (unless it expressly includes
            GST) an amount equal to the amount of that consideration (or its GST
            exclusive market value) multiplied by the rate at which GST is
            imposed in respect of the supply.

      (c)   The amount of GST payable in accordance with this clause 15.3 will
            be paid at the same time and in the same manner as the consideration
            otherwise payable for the supply is provided.

15.4  STAMP DUTIES

      Lihir must pay all stamp duties (if any) and any fines and penalties with
      respect to stamp duty in respect of this agreement or the Scheme or the
      steps to be taken under this agreement or the Scheme.

15.5  EXPENSES

      Except as otherwise provided in this agreement, each party will pay its
      own costs and expenses in connection with the negotiation, preparation,
      execution, and performance of this agreement and the Scheme Booklet and
      the proposed, attempted or actual implementation of this agreement and the
      Scheme.

15.6  AMENDMENTS

      This agreement may only be varied by a document signed by or on behalf of
      each of the parties.

                                                                              28
<PAGE>

15.7  ASSIGNMENT

      A party cannot assign, novate or otherwise transfer any of its rights or
      obligations under this agreement without the prior written consent of the
      other party.

15.8  GOVERNING LAW

      (a)   This agreement is governed by and will be construed according to the
            laws of Victoria.

      (b)   Each party irrevocably submits to the non-exclusive jurisdiction of
            the courts of Victoria and of the courts competent to determine
            appeals from those courts.

15.9  BUSINESS DAY

      Except where otherwise expressly provided, where under this agreement the
      day on which any act, matter or thing is to be done is a day other than a
      Business Day, such act, matter or thing will be done on the next Business
      Day.

15.10 WAIVER

      (a)   Failure to exercise or enforce or a delay in exercising or enforcing
            or the partial exercise or enforcement of any right, power or remedy
            provided by law or under this agreement by any party will not in any
            way preclude, or operate as a waiver of, any exercise or
            enforcement, or further exercise or enforcement of that or any other
            right, power or remedy provided by law or under this agreement.

      (b)   Any waiver or consent given by any party under this agreement will
            only be effective and binding on that party if it is given or
            confirmed in writing by that party.

      (c)   No waiver of a breach of any term of this agreement will operate as
            a waiver of another breach of that term or of a breach of any other
            term of this agreement.

15.11 CONSENTS

      Any consent referred to in, or required under, this agreement from any
      party may not be unreasonably withheld, unless this agreement expressly
      provides for that consent to be given in that party's absolute discretion.

15.12 COUNTERPARTS

      This agreement may be executed in any number of counterparts and by the
      parties on separate counterparts. Each counterpart constitutes the
      agreement of each party who has executed and delivered that counterparty.

                                                                              29
<PAGE>

15.13 ENTIRE AGREEMENT

      To the extent permitted by law, in relation to the subject matter of this
      agreement, this agreement:

      (a)   embodies the entire understanding of the parties and constitutes the
            entire terms agreed upon between the parties; and

      (b)   supersedes any prior agreement (whether or not in writing) between
            the parties.

15.14 NO REPRESENTATION OR RELIANCE

      (a)   Each party acknowledges that no party (nor any person acting on its
            behalf) has made any representation or other inducement to it to
            enter into this agreement, except for representations or inducements
            expressly set out or acknowledged in this agreement.

      (b)   Each party acknowledges and confirms that it does not enter into
            this agreement in reliance on any representation or other inducement
            by or on behalf of any other party, except for any representation or
            inducement expressly set out or acknowledged in this agreement.

      (c)   Paragraphs (a) and (b) above do not prejudice any rights a party may
            have in relation to information which had been filed by the other
            party with ASIC or the ASX.

15.15 NO MERGER

      The rights and obligations of the parties will not merge on completion of
      any transaction under this agreement. They will survive the execution and
      delivery of any assignment or other document entered into for the purpose
      of implementing any transaction.

15.16 REMEDIES CUMULATIVE

      The rights and remedies provided in this agreement are in addition to
      other rights and remedies given by law independently of this agreement.

16    INTERPRETATION

16.1  DEFINITIONS

      In this agreement unless the context otherwise requires, the following
      words and expressions have meanings as follows:

      ADVISER means, in relation to an entity, its legal, financial and other
      expert advisers (not including the Independent Expert)

      AGREED ANNOUNCEMENTS means the announcements to ASX, POMSoX, NASDAQ and
      AIM by each of the parties in the form set out in Annexure 4 or such other
      form as the parties may agree.

      AIFRS means the International Financial Reporting Standards as adopted in
      Australia.

                                                                              30
<PAGE>

      ASIC means the Australian Securities and Investments Commission.

      ASSOCIATE has the meaning given to that term in the Corporations Act.

      ASX means Australian Stock Exchange Limited (ACN 008 624 691).

      BALLARAT GOLDFLEIDS BOARD means the board of directors of Ballarat
      Goldfields.

      BALLARAT GOIDFIELDS CONFIDENTIAL INFORMATION means any commercial,
      financial or technical information of Ballarat Goldfields or any Related
      Party of Ballarat Goldfields disclosed or supplied by or on behalf of any
      such entity to either Lihir or Lihir Australia or any of its
      Representatives, whether orally or visually or in documentary or
      electronic form and including the notes, records or copies made by either
      Lihir or Lihir Australia or any of its Representatives of such information
      but excluding information which is in the public domain (other than as a
      result of a breach of this agreement by Lihir or Lihir Australia) or
      otherwise previously known to Lihir or Lihir Australia.

      BALLARAT GOLDFIELDS EAST PROJECT means the current mine development as
      described in the announcement by Ballarat Goldfields to ASX on 7 September
      2006 entitled "Ballarat Goldfields East Revised Development Strategy".

      BALLARAT GOLDFIELDS SHARE PLANS means the Ballarat Goldfields Option Plan
      and the Ballarat Goldfields Employee Share Plan each announced to ASX on
      22 September 2006.

      BALLARAT GOLDFIELDS GROUP means Ballarat Goldfields and its Subsidiaries.

      BALLARAT GOLDFIELDS INFORMATION means information included in the Scheme
      Booklet, other than the Lihir Australia Information and any information
      derived from, or prepared in reliance on, the Lihir Australia Information.

      BALLARAT GOLDFIELDS MATERIAL ADVERSE CHANGE means an event which
      individually, or when aggregated with all such other events, is reasonably
      likely to have a material adverse effect on the business, financial
      position or prospects of Ballarat Goldfields and its subsidiaries
      including its mining operations and, in particular the Ballarat
      Goldfields East Project.

      BALLARAT GOLDFIELDS NOMINEES means the two non-executive directors of
      Ballarat Goldfields as notified to Lihir.

      BALLARAT GOLDFIELDS PRESCRIBED EVENT means the occurrence of any of the
      following:

      (a)   Ballarat Goldfields converting all or any of its shares into a
            larger or smaller number of shares;

      (b)   Ballarat Goldfields resolving to reduce its share capital in any
            way;

      (c)   Ballarat Goldfields:

            (i)   entering into a buy-back agreement; or

            (ii)  resolving to approve the terms of a buy-back agreement under
                  the Corporations Act;

                                                                              31
<PAGE>

      (d)   Ballarat Goldfields declaring, paying or distributing any dividend,
            bonus or other share of its shareholder profits or shareholder
            assets or returning or agreeing to return any capital to its
            members;

      e)    Ballarat Goldfields or any of its Subsidiaries issuing shares, or
            granting an option over its shares to a person outside the
            Ballarat Goldfields Group, or agreeing to make such an issue or
            grant such an option to a person outside the Ballarat Goldfields
            Group, other than as disclosed by Ballarat Goldfields to Lihir
            Australia prior to the date of this agreement or pursuant to the
            Ballarat Goldfields Share Plans;

      (f)   Ballarat Goldfields or any of its Subsidiaries issuing Ballarat
            Goldfields or agreeing to issue securities or other instruments
            convertible into shares or debt securities to a person outside the
            Ballarat Goldfields Group, other than as disclosed by Ballarat
            Goldfields to Lihir Australia prior to the date of this agreement;

      (g)   Ballarat Goldfields or any of its Subsidiaries disposing, or
            agreeing to dispose, of the whole, or a substantial part, of its
            business or property;

      (h)   Subject to clause 7.3(h), other than in the ordinary course of
            business and consistent with past practice, Ballarat Goldfields or
            any of its Subsidiaries creating, or agreeing to create, any
            mortgage, charge, lien or other encumbrance over the whole, or a
            substantial part, of its business or property;

      (i)   other than in the ordinary course of business and consistent with
            past practice, Ballarat Goldfields or any of its Subsidiaries:

            (i)   increasing the remuneration of, or otherwise varying, the
                  employment arrangements with any of its directors or
                  employees;

            (ii)  accelerating the rights of any of its directors or employees
                  to compensation or benefits of any kind (including under any
                  Ballarat Goldfields executive or employee share plans); or

            (iii) paying any of its directors or employees a termination or
                  retention payment (otherwise than in accordance with an
                  existing contract in place at the date of this Agreement);

      (j)   other than in the ordinary course of business and consistent with
            past practice, Ballarat Goldfields or any of its Subsidiaries:

            (i)   entering into any contract or commitment involving revenue or
                  expenditure of more than $500,000 over the term of the
                  contract or commitment; or

            (ii)  terminating or amending in a material manner any contract
                  material to the conduct of the Ballarat Goldfields Group's
                  business or which involves expenditure or revenue of more than
                  $500,000 over the term of the contract;

      (k)   Ballarat Goldfields or any of its operating Subsidiaries resolving
            that it be wound up;

                                                                              32
<PAGE>

      (l)   a liquidator, provisional liquidator or administrator of Ballarat
            Goldfields or any of its operating Subsidiaries being appointed;

      (m)   the making of an order by a court for the winding up of Ballarat
            Goldfields or any of its operating Subsidiaries;

      (n)   Ballarat Goldfields or any of its operating Subsidiaries executing a
            deed of company arrangement; or

      (o)   a receiver, or a receiver and manager, in relation to the whole, or
            a substantial part, of the property of Ballarat Goldfields or any of
            its operating Subsidiaries being appointed,

      provided that none of the above events in will constitute a Ballarat
      Goldfields Prescribed Event where Ballarat Goldfields has first consulted
      in detail with Lihir Australia in relation to the proposed event, and
      Lihir Australia has approved in its absolute discretion the proposed event
      within five Business Days of having been so consulted.

      BALLARAT GOLDFIELDS SHAREHOLDERS means each person who is registered in
      the register of members of Ballarat Goldfields as the holder of Ballarat
      Goldfields Shares.

      BALLARAT GOLDFIELDS SHARES means fully paid ordinary shares in Ballarat
      Goldfields.

      BREAK FEE AMOUNT means $3.5 million.

      BUSINESS DAY means a business day as defined in the Listing Rules.

      COMPANIES ACT means the Companies Act 1997 of Papua New Guinea.

      COMPETING TRANSACTION means:

      (a)   a transaction which, if completed, would mean a person would,
            directly or indirectly:

            (i)   acquire all or a substantial part of the assets or business of
                  the relevant company and/or its Related Bodies Corporate;

            (ii)  acquire a Relevant Interest in or become the holder of 10% or
                  more of the relevant company's share capital or of the share
                  capital of any of its Subsidiaries or enter into any cash
                  settled equity swap or other derivative contract arrangement
                  in respect of 10% or more of the relevant company's share
                  capital, (other than any existing institutional or portfolio
                  investor who is a Ballarat Goldfields Shareholder at the date
                  of this agreement); or

            (iii) acquire Control of the relevant company;

      (b)   a takeover bid, scheme of arrangement, amalgamation, merger, capital
            reconstruction, consolidation, purchase of main undertaking or other
            business combination involving the relevant company and/or its
            Related Bodies Corporate; or

                                                                              33
<PAGE>

      (c)   a transaction involving the formation of a dual listed company
            structure, stapled security structure or other form of synthetic
            merger having the same or substantially the same effect as a
            takeover bid for, or scheme of arrangement in respect of, the
            relevant company and/or its Related Bodies Corporate.

      CONSIDERATION means the New Lihir Shares to be issued to the Scheme
      Participants in accordance with clause 3.

      CONTROL has the meaning given to that term in the Corporations Act.

      COURT means a court of competent jurisdiction.

      CORPORATIONS ACT means the Corporations Act 2001 (Cth).

      EFFECTIVE means the coming into effect, pursuant to section 411(10) of the
      Corporations Act, of the order of the court made under section 411(4)(b)
      in relation to the Scheme, but in any event at no time before an office
      copy of the order of the court is lodged with ASIC.

      EFFECTIVE DATE means the date on which the Scheme becomes Effective.

      END DATE means 28 February 2007 or such other date as agreed in writing
      between Lihir Australia and Ballarat Goldfields.

      FIRST COURT HEARING DATE means the first day on which an application made
      to the Court, in accordance with clause 4.1(f), for orders under section
      411(1) of the Corporations Act convening the Scheme Meeting to consider
      the Scheme is heard.

      GOLD PRICE means on any day the London A.M Fix unless such a day is not a
      Business Day in which case the Gold Price will be the next London A.M Fix.

      GOVERNMENTAL AGENCY means any Australian or foreign government or
      governmental, semi-governmental, administrative, fiscal, regulatory or
      judicial body, department, commission, authority, tribunal agency or
      entity.

      IMPLEMENTATION DATE means the third Business Day (or earlier if agreed)
      following the Record Date.

      IMPUGNED AMOUNT has the meaning given to it in clause 13.3.

      INDEPENDENT EXPERT means the independent expert appointed by Ballarat
      Goldfields to prepare a report for the Scheme Booklet in accordance with
      clause 2.1(h), the Corporations Act and ASIC policy and practice.

      INSOLVENCY EVENT means in relation to a person:

      (a)   INSOLVENCY OFFICIAL: the appointment of a liquidator, provisional
            liquidator, administrator, receiver, receiver and manager or other
            insolvency official (whether under an Australian law or a foreign
            law) to the person or to the whole or a substantial part of the
            property or assets of the person;

      (b)   ARRANGEMENTS: the entry by the person into a compromise or
            arrangement with its creditors generally;

                                                                              34
<PAGE>

      (c)   WINDING UP: the calling of a meeting to consider a resolution to
            wind up the person (other than where the resolution is frivolous or
            cannot reasonably be considered to be likely to lead to the actual
            winding up of the person) or the making of an application or order
            for the winding up or dissolution of the person other than where the
            application or order (as the case may be) is set aside within 14
            days;

      (d)   SUSPENDS PAYMENT: the person suspends or threatens to suspend
            payment of its debts generally;

      (e)   CEASING BUSINESS: the person ceases or threatens to cease to carrye
            on business; or

      (f)   INSOLVENCY: the person is or becomes unable to pay its debts when
            they fall due within the meaning of the Corporations Act or is
            otherwise presumed to be insolvent under the Corporations Act.

      ISSUED OPTION means the Options issued by Ballarat Goldfields.

      LIHIR AUSTRALIA BOARD means the board of directors of Lihir Australia.

      LIHIR BOARD means the board of directors of Lihir.

      LIHIR AUSTRALIA CONFIDENTIAL INFORMATION means any commercial, financial
      or technical information of Lihir or any Related Party of Lihir disclosed
      or supplied by or on behalf of any such entity to Ballarat Goldfields or
      any of its Representatives, whether orally or visually or in documentary
      or electronic form and including the notes, records or copies made by
      Ballarat Goldfields or any of its Representatives of such information but
      excluding information which is in the public domain (other than as a
      result of a breach of this agreement by Ballarat Goldfields) or otherwise
      previously known to Ballarat Goldfields.

      LIHIR AUSTRALIA DEED POLL means a deed to be executed by Lihir
      substantially in the form of Annexure 2 (or in such other form agreed by
      the parties in writing) under which Lihir covenants in favour of the
      Scheme Participants to perform its obligations under the Scheme.

      LIHIR AUSTRALIA EXECUTIVE SHARE PLAN means the executive share plan
      established under the Rules adopted by the Board of Lihir through its
      Remuneration and Nomination Committee on 26 April 2006.

      LIHIR AUSTRALIA GROUP means Lihir and its Subsidiaries.

      LIHIR AUSTRALIA INFORMATION means all information provided by Lihir under
      clause 4.2(a).

      LIHIR AUSTRALIA MATERIAL ADVERSE CHANGE means an event which individually,
      or when aggregated with all such other events, is reasonably likely to
      have a material adverse effect on the business, financial position or
      prospects of Lihir and its subsidiaries including its mining operations.

                                                                              35
<PAGE>

      LIHIR PRESCRIBED EVENT means the occurrence of any of the following
      (excluding the borrowing of any money necessary for the subscription by
      Lihir Australia of shares in Ballarat Goldfields pursuant to the Share
      Subscription Agreement):

      (a)   Lihir converting all or any of its shares into a larger or smaller
            number of shares;

      (b)   Lihir resolving to reduce its share capital in any way;

      (c)   Lihir:

            (i)   entering into a buy-back agreement; or

            (ii)  resolving to approve the terms of a buy-back agreement under
                  the Companies Act;

      (d)   Lihir paying or distributing any dividend, bonus or other share of
            its shareholder profits or shareholder assets or returning or
            agreeing to return any capital to its members;

      (e)   Lihir or any of its Subsidiaries issuing shares, or granting an
            option over its shares to a person outside the Lihir Australia
            Group, or agreeing to make such an issue or grant such an option to
            a person outside the Lihir Australia Group, other than as disclosed
            in writing by Lihir to Ballarat Goldfields prior to the date of this
            agreement or pursuant to the Lihir Australia Executive Share Plan;


      (f)   Lihir or any of its Subsidiaries issuing or agreeing to issue
            securities or other instruments convertible into shares or debt
            securities to a person outside the Lihir Australia Group, other than
            as disclosed by Lihir to Ballarat Goldfields prior to the date of
            this agreement;

      (g)   Lihir or any of its Subsidiaries disposing or agreeing to dispose of
            the whole, or a substantial part, of its business or property;

      (h)   other than in the ordinary course of business and consistent with
            past practice, Lihir or any of its Subsidiaries creating or agreeing
            to create, any mortgage, charge, lien or other encumbrance over the
            whole, or a substantial part, of its business or property;

      (i)   other than in the ordinary course of business and consistent with
            past practice, Lihir or any of its Subsidiaries:

            (i)   increasing the remuneration of, or otherwise varying, the
                  employment arrangements with any of its directors or
                  employees;

            (ii)  accelerating the rights of any of its directors or employees
                  to compensation or benefits of any kind (including under any
                  Lihir executive or employee share plans); or

            (iii) paying any of its directors or employees a termination or
                  retention payment (otherwise than in accordance with an
                  existing contract in place at the date of this agreement);

                                                                              36
<PAGE>
      (j)   other than in the ordinary course of business and consistent with
            past practice. Lihir or any of its Subsidiaries:

            (i)   entering into any contract or commitment involving revenue or
                  expenditure of more than $5,000,000 over the term of the
                  contract or commitment; or

            (ii)  terminating or amending in a material manner any contract
                  material to the conduct of the Lihir Australia Group's
                  business or which involves expenditure or revenue of more than
                  $5,000,000 over the term of the contract;

      (k)   Lihir or any of its operating Subsidiaries resolving that it be
            wound up;

      (1)   a liquidator, provisional liquidator or administrator of Lihir or
            any of its operating Subsidiaries being appointed;

      (m)   the making of an order by a court for the liquidation of Lihir or
            any of its operating Subsidiaries;

      (n)   Lihir or any of its operating Subsidiaries executing a deed of
            company arrangement; or

      (o)   a receiver, or a receiver and manager, in relation to the whole, or
            a substantial part of the property of Lihir or any of its operating
            Subsidiaries being appointed,

      provided that none of the above events will constitute a Lihir Prescribed
      Event where Lihir has first consulted in detail, with Ballarat Goldfields
      in relation to the proposed event, and Ballarat Goldfields has approved in
      its absolute discretion the proposed event within five Business Days of
      having been so consulted.

      LIHIR AUSTRALIA'S PROPOSAL has the meaning given in clause 12.5.

      LIHIR SHARES means ordinary shares in Lihir.

      LISTING RULES means the official listing rules of ASX as from time to time
      amended or waived in their application to a party.

      LONDON A.M FIX means on any day, the price per ounce in US Dollars
      collectively fixed by the London bullion dealers in the morning (London
      time) on that day.

      NEW LIHIR SHARES means fully paid ordinary shares in the capital of Lihir
      to be issued under the Scheme.

      NON-SOLICITATION PERIOD means the period from the date of this agreement
      up to the earlier of the Second Court Hearing Date, the lawful termination
      of this agreement and the End Date.

      OFFICER means, in relation to an entity, its directors, officers, partners
      and employees.

      OPTION HOLDER means a person who is the holder of an Option.

      OPTION means an option to subscribe for shares in Ballarat Goldfields.

                                                                              37
<PAGE>

      OPTION TERMS means the terms and conditions of issue of an Option to an
      Option Holder.

      OTHER PROPOSAL has the meaning given in clause 12.4.

      OVERSEAS SHAREHOLDER means a Ballarat Goldfields Shareholder who is (or is
      acting on behalf of) a citizen or resident of a jurisdiction other than
      residents of Australia or New Zealand and their respective external
      territories, or whose address shown in the Register is a place outside
      Australia or New Zealand and their respective external territories or who
      is acting on behalf of such a person unless Lihir determines that:

      (a)   it is lawful and not unduly onerous and not unduly impracticable to
            issue that Ballarat Goldfields Shareholder with New Lihir Shares on
            implementation of the Scheme; and

      (b)   it is lawful for that Ballarat Goldfields Shareholder to participate
            in the Scheme by the law of the relevant place outside Australia or
            New Zealand and their respective external territories.

      POMSOX means the Port Moresby Stock Exchange Limited.

      PNG EXCHANGE CONTROL APPROVAL means approval by the Bank of Papua New
      Guinea, as the central bank, administering the foreign exchange
      regulations under the Central Banking Act 2000 (PNG).

      PNGSC means the Securities Commission of Papua New Guinea as defined in
      the Companies Act.

      PRESCRIBED ACTIVITY has the meaning given in clause 12.4.

      RECORD DATE means 5.00pm on the fifth Business Day following the Second
      Court Hearing date or such other date as Ballarat Goldfields and Lihir
      Australia agree.

      REGISTER means the share register of Ballarat Goldfields and REGISTRY has
      a corresponding meaning.

      REGULATOR'S DRAFT means the draft of the Scheme Booklet in a form
      acceptable to both parties which is provided to ASIC for approval pursuant
      to section 411(2) of the Corporations Act.

      REGULATORY APPROVALS means the approval referred to in clause 2.1(a), in
      the case of Lihir and Lihir Australia and the approvals referred to in
      clause 2.1(b) in the case of Lihir, Lihir Australia and Ballarat
      Goldfields.

      REGULATORY REVIEW PERIOD means the period from the date on which the
      Regulator's Draft is submitted to ASIC to the date on which ASIC provides
      a letter of intent under section 41l(17)(b) of the Corporations Act that
      it does not object to the Scheme.

      RELATED BODY CORPORATE has the meaning given to that term in the
      Corporations Act.

      RELATED PARTY means in relation to a party, its Related Bodies Corporate
      and each of the officers.

                                                                              38
<PAGE>

      RELEVANT COMPANIES LEGISLATION means the Corporations Act and the
      Companies Act as they apply to the parties.

      RELEVANT INTEREST has the same meaning as given by sections 608 and 609 of
      the Corporations Act.

      REPRESENTATIVE means, in relation to an entity:

      (a)   each of the entity's Related Parties; and

      (b)   each of the Officers and Advisers of the entity or of any of its
            Related Parties,

      SCHEME means the scheme of arrangement under Part 5.1 of the Corporations
      Act between Ballarat Goldfields and the Scheme Participants substantially
      in the form of Annexure 1, which if implemented will give effect to the
      merger between Lihir Australia and Ballarat Goldfields as described in
      clause 3.

      SCHEME BOOKLET means the explanatory statement with respect to the Scheme
      to be approved by the Court and despatched to Ballarat Goldfields
      Shareholders.

      SCHEME CONSIDERATION means the number of New Lihir Shares to be allotted
      and issued for each Ballarat Goldfields Share pursuant to the Scheme.

      SCHEME MEETING means the meeting to be convened by the Court in relation
      to the Scheme pursuant to section 411(1) of the Corporations Act.

      SCHEME PARTICIPANT means the holder of Ballarat Goldfields Shares as at
      the Record Date (other than Lihir Australia to the extent that it already
      holds Ballarat Goldfields Shares).

      SENIOR EMPLOYEE means the 2 Ballarat Goldfields executive directors as
      well as the 8 Ballarat Goldfields employees who received options under
      Ballarat Goldfields Option Plan announced to ASX on 22 September 2006.

      SHARE SUBSCRIPTION AGREEMENT means the Share Subscription Agreement
      between Lihir Australia and Ballarat Goldfields dated the same date as
      this agreement.

      SECOND COURT HEARING DATE means the first day on which an application made
      to the Court for an order pursuant to section 411(4)(b) of the
      Corporations Act approving the Scheme is heard.

      SUBSIDIARY has the meaning given to that term in the Corporations Act.

      SUPERIOR PROPOSAL means a publicly announced bona fide Competing
      Transaction in relation to Ballarat Goldfields which the Ballarat
      Goldfields Board, acting reasonably and in good faith and (unless Lihir
      Australia agrees otherwise) after receiving written advice from Queen's
      Counsel or Senior Counsel that failing to respond to such a bona fide
      Competing Transaction would be reasonably likely to constitute a breach of
      the Ballarat Goldfields Board's fiduciary or statutory obligations,
      unanimously determines, after obtaining advice from its financial
      advisers:

      (a)   is reasonably capable of being completed by the End Date taking into
            account all aspects of the Competing Transaction; and

                                                                              39
<PAGE>

      (b)   is preferable to the Scheme having regard to the best interests of
            Ballarat Goldfields as a whole and is more favourable from a
            financial viewpoint to Scheme Participants than the Scheme, taking
            into account all terms and conditions of the Competing Transaction

      TIMETABLE means the indicative timetable set out in ANNEXURE 3.

      UNVESTED OPTION HOLDER means an Option Holder who holds an Unvested
      Option.

      UNVESTED OPTION means an Issued Option that has not vested in accordance
      with the Option Terms and is not capable of being exercised by the Option
      Holder at the date of this agreement.

      VESTED OPTION HOLDER means an Option Holder who holds a Vested Option.

      VESTED OPTION means an Issued Option that has vested in accordance with
      the Option Terms and is capable of being exercised by the Option Holder no
      later than 8.00am on the Second Court Hearing Date

16.2  INTERPRETATION

      In this agreement, headings are for convenience only and do not affect the
      interpretation of this agreement, and unless the context otherwise
      requires:

      (a)   a word or expression to which a meaning is attributed in the
            Corporations Act will bear that meaning;

      (b)   words importing the singular include the plural and vice versa;

      (c)   words importing a gender include any gender;

      (d)   other parts of speech and grammatical forms of a word or phrase
            defined in this agreement have a corresponding meaning;

      (e)   an expression importing a natural person includes any company,
            partnership, joint venture, association, corporation or other body
            corporate and any Governmental Agency;

      (f)   a reference to a clause, party, annexure, exhibit or schedule is a
            reference to a clause of, and a party, annexure, exhibit and
            schedule to, this agreement and a reference to this agreement
            includes any annexure, exhibit and schedule;

      (g)   a reference to a statute, regulation, proclamation, ordinance or
            by-law includes all statues, regulations, proclamations, ordinances
            or by-laws amending, consolidating or replacing it, whether passed
            by the same or another Governmental Agency with legal power to do
            so, and a reference to a statute includes all regulations,
            proclamations, ordinances and by-laws issued under that statute;

      (h)   a reference to a document includes all amendments or supplements to,
            or replacements or novations of, that document;

                                                                              40
<PAGE>

      (i)   a reference to a party to a document includes that party's
            successors and permitted assigns;

      (j)   no provision of this agreement will be construed adversely to a
            party solely on the ground that the party was responsible for the
            preparation of this agreement or that provision;

      (k)   a reference to an agreement other than this agreement includes an
            undertaking, deed, agreement or legally enforceable arrangement or
            understanding whether or not in writing;

      (1)   the word "includes" in any form is not a word of limitation;

      (m)   a reference to "$" or "dollar" is to Australian currency; and

      (n)   a reference to any time is a reference to that time in Australian
            Eastern Summer Time.

                                                                              41
<PAGE>
EXECUTED as agreement.

EXECUTED for LIHIR GOLD LIMITED
ARBN 069 803 998 :                            /s/ Arthur Hood
                                              --------------------------------
                                              Signature of director/secretary

/s/ Ross Garnaut                              Arthur Hood
-------------------------------------         --------------------------------
Signature of director                         Name

Ross Garnaut
-------------------------------------
Name

EXECUTED for LIHIR AUSTRALIAN
HOLDINGS PTY LIMITED ACN 121 554 443:         /s/ Arthur Hood
                                              --------------------------------
                                              Signature of director/secretary

/s/ Graham Folland                            Arthur Hood
-------------------------------------         --------------------------------
Signature of director                         Name

Graham Folland
-------------------------------------
Name

EXECUTED for BALLARAT GOLDFIELDS N.L.
ACN 006 245 441;                              /s/ Richard Laufmann
                                              --------------------------------
                                              Signature of director/secretary

/s/ Alister Maitland                          Richard Laufmann
-------------------------------------         --------------------------------
Signature of director                         Name

Alister Maitland
-------------------------------------
Name

                                                                              42
<PAGE>
                                    SCHEDULE
                                    OPTIONS

<TABLE>
<CAPTION>
                                             NO. OF
                                            OPTIONS                         EXPIRY     VESTED        UNVESTED
     OPTIONS             OPTION HOLDER       HELD         EXERCISE PRICE     DATE      OPTIONS       OPTIONS
-----------------       ---------------    ----------     --------------   --------   ----------   --------------
<S>                     <C>                <C>            <C>              <C>        <C>          <C>
Directors Options       R Laufmann          7,000,000     1/3 @ 12 cents   30.09.07    7,000,000
                                                          1/3 @ 13 cents
                                                          1/3 @ 15 cents
                        M Etheridge         1,000,000     1/3 @ 12 cents   30.09.07    1,000,000
                                                          1/3 @ 13 cents
                                                          1/3 @ 15 cents

Employee Options        W Ozga              1,500,000           25 cents   30.09.08    1,000,000          500,000
                                                                                                   (vest 30.09.07)
                        C Finch               500,000        17.25 cents   30.09.07      500,000
                        J Forwood           1,000,000        17.25 cents   30.09.07    1,000,000

RFC & Numis             RFC and Numis       3,750,000           15 cents   02.12.07    1,250,000    1,250,000 RFC
Options                                                                                     (RFC)  (vest 02.12.06)
                                                                                                   1,250,00 Numis
                                                                                                   (vest 02.12.06)

September 2006          S Olsen               300,000         20.5 cents   30.09.11                       300,000
Option Plan             J Forwood             300,000         20.5 cents   30.09.11                       300,000
                        A Rivamonte           250,000         20.5 cents   30.09.11                       250,000
                        C Finch               150,000         20.5 cents   30.09.11                       150,000
                        D Livingstone         150,000         20.5 cents   30.09.11                       150,000
                        C Carnie              150,000         20.5 cents   30.09.11                       150,000
                        L Chibnall            500,000         20.5 cents   30.09.11                       500,000
                        M Davies              500,000         20.5 cents   30.09.11                       500,000

TOTAL                                      17,050,000                                 11,750,000        5,300,000
</TABLE>

                                                                              43
<PAGE>

                                   ANNEXURE 1

                                     SCHEME

                                                                              44
<PAGE>

                                                            BLAKE DAWSON WALDRON

                                                               L A W Y E R S

                             SCHEME OF ARRANGEMENT

                                     between

                    BALLARAT GOLDFIELDS N.L. ACN 006 245 441

                                       and

   THE HOLDERS OF FULLY PAID ORDINARY SHARES IN BALLARAT GOLDFIELDS AS AT THE
                                   RECORD DATE

                                   Level 36
                            Grosvenor Place
                          225 George Street
                            Sydney NSW 2000
                 Telephone:   +61 2 9258 6000
                         Fax: +61 2 9258 6999   REF: PHM 02-1404-7936

                         (C) Blake Dawson Waldron 2006
<PAGE>

                                    CONTENTS

<TABLE>
<S>                                                                   <C>
CONTENTS                                                               2

1.   PRELIMINARY                                                       3

2.   CONDITIONS                                                        4

3.   SCHEME                                                            5

4.   SCHEME CONSIDERATION                                              7

5.   DEALINGS IN BALLARAT GOLDFIELDS SHARES                            9

6.   QUOTATION OF SHARES                                              10

7.   GENERAL                                                          11

8.   DEFINITIONS AND INTERPRETATION                                   12
</TABLE>

<PAGE>

                              SCHEME OF ARRANGEMENT

                 pursuant to section 411 of the Corporations Act

                                     between

         BALLARAT GOLDFIELDS N.L. ACN 006 245 441 (BALLARAT GOLDFIELDS)

                                       and

   THE HOLDERS OF FULLY PAID ORDINARY SHARES IN BALLARAT GOLDFIELDS AS AT THE
                                  RECORD DATE

1.    PRELIMINARY

1.1   BALLARAT GOLDFIELDS

      Ballarat Goldfields is a public company incorporated in Australia and
      registered in Victoria, having its registered office at 10 Woolshed Gully
      Drive, Mount Clear, Victoria, 3350. Ballarat Goldfields is a no liability
      company under section 112(2) of the Corporations Act and Ballarat
      Goldfields Shares are quoted on the official list of ASX and AIM. As at
      the date of this Scheme, 1,198,653,935 Ballarat Goldfields Shares were on
      issue.

1.2   LIHIR AND LIHIR AUSTRALIA

      Lihir is a public company incorporated in Papua New Guinea and is a
      company limited by shares. Lihir Shares are quoted on ASX, NASDAQ and
      POMSOX. As at the date of this Scheme, 1,284,224,710 Lihir Shares were on
      issue. Lihir Australian Holdings Pty Limited ACN 121 554 443 (LIHIR
      AUSTRALIA) is a wholly owned subsidiary of Lihir and is incorporated in
      Australia and registered in Victoria having its registered office at Level
      9, AAMI Building, 500 Queen Street, Brisbane Queensland 4000, Australia,
      It is a proprietary company under section 112(1) of the Corporations Act.

1.3   EFFECT OF SCHEME

      If the Scheme becomes Effective, then:

      (a)   in consideration of the transfer of each Ballarat Goldfields Share
            to Lihir Australia, Lihir will provide, or procure the provision of,
            the Scheme Consideration to Scheme Participants in accordance with
            the terms of the Scheme; and

      (b)   Ballarat Goldfields will enter the name of Lihir Australia in the
            Register in respect of all of the Ballarat Goldfields Shares
            transferred to Lihir Australia in accordance with the terms of the
            Scheme; and

<PAGE>

      (c)   all of the Ballarat Goldfields Shares held by Scheme Participants
            will be transferred to Lihir Australia and Ballarat Goldfields will
            become a wholly-owned subsidiary of Lihir Australia with Lihir as
            the ultimate parent entity.

1.4   MERGER IMPLEMENTATION AGREEMENT

      Lihir, Lihir Australia and Ballarat Goldfields have agreed, by executing
      the Merger Implementation Agreement, to implement the terms of the Scheme
      and to perform their respective obligations under the Scheme.

1.5   DEED POLL

      Lihir has entered into the Deed Poll in favour of Scheme Participants
      pursuant to which it has covenanted to provide to each Scheme Participant
      the Scheme Consideration to which such Scheme Participant is entitled
      under the Scheme and to cany out its other obligations under the Scheme.

2.    CONDITIONS

2.1   CONDITIONS OF SCHEME

      The Scheme is conditional on all of the conditions precedent in clause 2.1
      of the Merger Implementation Agreement having been satisfied or waived in
      accordance with the terms of the Merger Implementation Agreement, which
      conditions precedent include the Court approving the Scheme in accordance
      with section 411(4)(b) of the Corporations Act, and any other conditions
      made or required by the Court under section 411(6) of the Corporations Act
      being satisfied..

2.2   EFFECT OF CONDITIONS

      The fulfilment of the conditions in clause 2.1 is a condition precedent to
      the operation of the provisions of clauses 3, 4 and 6.

2.3   CERTIFICATE

      Ballarat Goldfields and Lihir Australia will each provide to the Court at
      the Second Court Hearing a certificate confirming that all the conditions
      precedent in the Merger Implementation Agreement and the Scheme (other
      than in relation to the Scheme being approved by the Court pursuant to
      section 411(4)(b) of the Corporations Act) have been satisfied or waived.

2.4   CONCLUSIVE EVIDENCE

      The giving of a certificate by each of Lihir Australia and Ballarat
      Goldfields under clause 2.3 will, in the absence of manifest error, be
      conclusive evidence of the satisfaction or waiver of the conditions
      precedent referred to in the certificate.

2.5   END DATE

      The Scheme will lapse and be of no further force or effect if the
      Effective Date has not occurred on or before the End Date.

                                                                              4.
<PAGE>

3.    SCHEME

3.1   LODGEMENT OF COURT ORDER

      Following the approval of the Scheme by the Court in accordance with
      section 41l(4)(b) of the Corporations Act, Ballarat Goldfields will, as
      soon as possible, lodge with ASIC under section 411(10) of the
      Corporations Act an office copy of the Court order approving the Scheme.

3.2   TRANSFER OF BALLARAT GOLDFIELDS SHARES HELD BY SCHEME PARTICIPANTS

      On the Implementation Date:

      (a)   the Ballarat Goldfields Shares held by Scheme Participants, together
            with all rights and entitlements attaching to them as at that date,
            will be transferred to Lihir Australia without the need for any
            further acts by Scheme Participants;

      (b)   to transfer all of the Ballarat Goldfields Shares held by Scheme
            Participants to Lihir Australia, Ballarat Goldfields will either
            effect a valid transfer or transfers of the Ballarat Goldfields
            under section 1074D of the Corporations Act or deliver to Lihir
            Australia duly completed and executed share transfer forms (or a
            master transfer form) in accordance with section 107 1B of the
            Corporations Act and Lihir Australia will execute and deliver those
            share transfer form(s) to Ballarat Goldfields; and

      (c)   Ballarat Goldfields will enter the name of Lihir Australia in the
            Register in respect of all the Ballarat Goldfields Shares
            transferred to Lihir Australia in accordance with the terms of the
            Scheme.

3.3   AGREEMENT BY SCHEME PARTICIPANTS

      The Scheme Participants agree to the transfer of all of their Ballarat
      Goldfields Shares to Lihir Australia in accordance with the terms of the
      Scheme. The Scheme Participants will accept the New Lihir Shares issued by
      way of Scheme Consideration subject to the Lihir Constitution and agree to
      be bound by the Lihir Constitution.

3.4   WARRANTIES BY SCHEME PARTICIPANTS

      Each Scheme Participant is deemed to have warranted to Ballarat Goldfields
      and appointed and authorised Ballarat Goldfields as its attorney and agent
      to warrant to Lihir Australia, that all its Ballarat Goldfields Shares
      (including any rights attaching to those shares) which are transferred to
      Lihir Australia under the Scheme will, at the date of the transfer of the
      Ballarat Goldfields Shares to Lihir Australia, be fully paid and free from
      all mortgages, charges, liens, encumbrances and interests of third parties
      of any kind, whether legal or otherwise, and any restrictions on their
      transfer and that it has the full power and capacity to sell and transfer
      its Ballarat Goldfields Shares (including any rights and entitlements) to
      Lihir Australia under the Scheme.

3.5   BENEFICIAL ENTITLEMENT BY LIHIR AUSTRALIA

      From the Effective Date, Lihir Australia shall be beneficially entitled to
      the Ballarat Goldfields Shares transferred to it under the Scheme pending
      registration by Ballarat

                                                                              5.
<PAGE>

      Goldfields of Lihir Australia in the Register as the holder of those
      Ballarat Goldfields Shares.

3.6   APPOINTMENT OF LIHIR AUSTRALIA AS SOLE PROXY

      From the Effective Date until Ballarat Goldfields registers Lihir
      Australia as the holder of all the Ballarat Goldfields Shares in the
      Register, each Scheme Participant:

      (a)   is deemed to have appointed Ballarat Goldfields as attorney and
            agent (and directed Ballarat Goldfields in such capacity) to appoint
            the Chairman of Lihir Australia as its sole proxy and where
            applicable, corporate representative, to attend shareholders
            meetings, exercise the votes attaching to Ballarat Goldfields Shares
            registered in its name and sign any shareholders resolution, and no
            Scheme Participant may itself attend or vote at any of those
            meetings or sign any resolutions, whether in person, by proxy or by
            corporate representative (other than pursuant to this clause
            3.6(a)); and

      (b)   must take all other actions in the capacity of the registered holder
            of Ballarat Goldfields Shares as Lihir Australia directs.

      Ballarat Goldfields undertakes in favour of each Scheme Participant that
      it will appoint the Chairman of Lihir Australia as that Scheme
      Participant's proxy or, where applicable, corporate representative in
      accordance with clause 3.6(a).

3.7   APPOINTMENT OF BALLARAT GOLDFIELDS AS SOLE ATTORNEY AND AGENT

      Each Scheme Participant without the need for any further act, irrevocably
      appoints Ballarat Goldfields and each of the directors and officers of
      Ballarat Goldfields, jointly and severally, as the Scheme Participant's
      attorney and agent for the purpose of:

      (a)   in the case of Ballarat Goldfields Shares in a CHESS holding:

            (i)   causing a message to be transmitted to ASTC in accordance with
                  ASTC Settlement Rules so as to transfer the Ballarat
                  Goldfields Shares held by the Scheme Participant from the
                  CHESS subregister of Ballarat Goldfields to the issuer
                  sponsored subregister operated by Ballarat Goldfields
                  notwithstanding that, at the time of such transfer, Lihir has
                  not provided the Consideration which is due under this Scheme
                  to the Scheme Participants; and

            (ii)  completing and signing on behalf of Scheme Participants any
                  required form of transfer of Ballarat Goldfields Shares;

      (b)   in the case of Ballarat Goldfields Shares registered in the issuer
            sponsored subregister operated by the Ballarat Goldfields share
            registry, completing and signing on behalf of Scheme Participants
            any required form of transfer; and

      (c)   in all cases, executing any document (including any other instrument
            of transfer necessasy to give effect to the registration of Lihir
            Australia as the holder of all the Ballarat Goldfields Shares held
            by the Scheme Participants) or doing any other act

                                                                              6.
<PAGE>

            necessary or desirable to give full effect to the Scheme and the
            transactions contemplated by it.

4.    SCHEME CONSIDERATION

4.1   SCHEME CONSIDERATION

      On the Implementation Date and subject to clauses 4.3, 4.4 and 4.7, in
      consideration of the transfer of the Ballarat Goldfields Shares to Lihir
      Australia, Lihir must allot and issue to each Scheme Participant of five
      New Lihir Shares for every fifty-four Ballarat Goldfields Shares held by
      the Scheme Participant at the Record Date..

4.2   PROVISION OF NEW LIHIR SHARES AS SCHEME CONSIDERATION

      Subject to clauses 4.3, 4.4 and 4.7, the obligation of Lihir to procure
      the allotment and issue of the New Lihir Shares pursuant to clause 4.1
      will be satisfied by Lihir, on the Implementation Date:

      (a)   entering the name of each Scheme Participant in the Lihir share
            register in respect of the New Lihir Shares which that Scheme
            Participant is entitled to receive under the Scheme; and

      (b)   sending or procuring the despatch by pre-paid ordinary post (or, if
            the address of the Scheme Participant in the Register is outside
            Australia, by pre-paid airmail post) to each Scheme Participant to
            their address recorded in the Register at the Record Date, a holding
            statement for the New Lihir Shares issued to that Scheme Participant
            in accordance with the Scheme.

4.3   INELIGIBLE OVERSEAS SHAREHOLDERS

      Subject to clause 4.7, Lihir's obligations to provide New Lihir Shares to
      a Scheme Participant who is an Ineligible Overseas Shareholder will be
      satisfied by Lihir issuing the New Lihir Shares to which the Scheme
      Participant would have been entitled (were they not an Ineligible Overseas
      Shareholder) to a person agreed by Ballarat Goldfields and Lihir Australia
      (NOMINEE), and procuring that the Nominee:

      (a)   in the ordinary course of trading on ASX, sells for the benefit of
            the Ineligible Overseas Shareholder those New Lihir Shares issued to
            the Nominee under this clause 4.3; and

      (b)   as soon as reasonably practicable, accounts to the Ineligible
            Overseas Shareholder for the net proceeds of sale (on an averaged
            basis so that all Ineligible Overseas Shareholders receive the same
            price per New Lihir Share, subject to rounding down to the nearest
            whole cent) and any income referable to those New Lihir Shares,
            after deduction of any applicable brokerage, taxes and charges; and

      (c)   as soon as reasonably practicable, remits the net proceeds of the
            Ineligible Overseas Shareholder's entitlement under this clause 4.3
            in full satisfaction of the Ineligible Overseas Shareholder's rights
            to receive New Lihir Shares under clause 4.1. These proceeds are to
            be despatched in the form of a bank cheque drawn on an Australian
            bank in Australian currency.

                                                                              7.
<PAGE>

      The Nominee will be an authorised representative of a holder of an
      Australian financial services licence.

4.4   BREACH OF LAW

      Where issue of New Lihir Shares to which a Scheme Participant would
      otherwise be entitled would result in a breach of law, Lihir will, in full
      satisfaction of that Scheme Participant's rights to the New Lihir Shares
      under clause 4.1:

      (a)   procure the issue of the maximum possible number of New Lihir Shares
            to the Scheme Participant without giving rise to such breach; and

      (b)   subject to clause 4.7, procure the issue to the Nominee of the
            remaining New Lihir Shares to which the Scheme Participant would
            have been entitled (if the issue did not result in a breach of law
            or breach of a provision of the Lihir Constitution), and procure
            that the Nominee:

            (i)   in the ordinary course of trading on ASX, sells for the
                  benefit of that Scheme Participant those New Lihir Shares
                  issued to the Nominee under this clause 4.4(b); and

            (ii)  as soon as reasonably practicable, accounts to the Scheme
                  Participant for the net proceeds of sale and any income
                  referable to those New Lihir Shares, after deduction of any
                  applicable brokerage, taxes and charges; and

            (iii) as soon as reasonably practicable, remits the net proceeds of
                  sale and any income referable to those New Lihir Shares to
                  that Scheme Participant, after deduction of any applicable
                  brokerage, taxes and charges. These proceeds are to be
                  despatched in the form of a bank cheque drawn on an Australian
                  bank in Australian currency.

4.5   SENDING CHEQUES

      Despatch to a Scheme Participant of any bank cheque for net sale proceeds
      pursuant to clauses 4.3 or 4.4 must be by pre-paid ordinary post (or, if
      the address of the Scheme Participant in the Register is outside
      Australia, by pre-paid airmail post) in an envelope addressed to their
      address shown in the Register as at the Record Date.

4.6   JOINT HOLDERS

      In the case of Ballarat Goldfields Shares held in joint names:

      (a)   any bank cheque required to be paid to Scheme Participants by Lihir
            must be payable to the joint holders and be forwarded to the holder
            whose name appears first in the Register as at the Record Date; and

      (b)   holding statements for New Lihir Shares issued to Scheme
            Participants must be issued in the names of the joint holders and
            sent to the holder whose name appears first in the Register as at
            the Record Date.

                                                                              8.
<PAGE>

4.7   FRACTIONAL ENTITLEMENTS

      (a)   If the number of Ballarat Goldfields Shares held by a Scheme
            Participant is such that the aggregate entitlement of that Scheme
            Participant to New Lihir Shares is not a whole number, then the
            entitlement in each case must be rounded up or down to the nearest
            whole number, with fractions of 0.5 being rounded up.

      (b)   If Lihir and Ballarat Goldfields are of the opinion that several
            Scheme Participants, each of which holds a holding of Ballarat
            Goldfields Shares which results in a fractional entitlement to New
            Lihir Shares, have, before the Record Date, been party to a
            shareholding splitting or division in an attempt to obtain an
            advantage by reference to the rounding provided for in the
            calculation of each Scheme Participant's entitlement to the Scheme
            Consideration, Lihir and Ballarat Goldfields may give notice to
            those Scheme Participants:

            (i)   setting out the names and registered addresses of all of them;

            (ii)  stating that opinion; and

            (iii) attributing to one of them specifically identified in the
                  notice the Ballarat Goldfields Shares held by all of them,

            and, after the notice has been so given, the Scheme Participant
            specifically identified in the notice shall, for the purposes of the
            Scheme, be taken to hold all those Ballarat Goldfields Shares and
            each of the other Scheme Participants whose names are set out in the
            notice shall, for the purposes of the Scheme, be taken to hold no
            Ballarat Goldfields Shares.

4.8   NEW LIHIR SHARES TO RANK EQUALLY

      (a)   New Lihir Shares issued to Scheme Participants will be validly
            issued and will rank equally in all respects with all existing Lihir
            Shares.

      (b)   On issue, each New Lihir Share issued to Scheme Participants will be
            fully paid and free from any mortgage, charge, lien, encumbrance or
            other security interest.

5.    DEALINGS IN BALLARAT GOLDFIELDS SHARES

5.1   DETERMINATION OF SCHEME PARTICIPANTS

      For the purpose of establishing who are the Scheme Participants, dealings
      in Ballarat Goldfields Shares will only be recognised if:

      (a)   in the case of dealings of the type to be effected using CHESS, the
            transferee is registered in the Register as the holder of the
            relevant Ballarat Goldfields Shares at or before the Record Date;
            and

      (b)   in all other cases, registrable transmission applications or
            transfers in registrable form in respect of those dealings are
            received at or before the Record Date at the place where the
            Register is kept.

                                                                              9.
<PAGE>


5.2   REGISTER

      (a)   TRANSMISSION APPLICATIONS OR TRANSFERS RECEIVED AT OR BEFORE THE
            RECORD DATE: Ballarat Goldfields must register registrable
            transmission applications or transfers of the kind referred to in
            clause 5.1(b) by the Record Date.

      (b)   TRANSMISSION APPLICATIONS OR TRANSFERS RECEIVED AFTER THE RECORD
            DATE: Ballarat Goldfields will not accept for registration or
            recognise for any purpose any transmission applications or transfers
            in respect of Ballarat Goldfields Shares received after the Record
            Date, other than a transfer to Lihir Australia in accordance with
            the Scheme.

      (c)   MAINTAINING OF THE REGISTER: For the purpose of determining
            entitlements to participate in the Scheme, Ballarat Goldfields will,
            until the Scheme Consideration has been provided, maintain the
            Register in accordance with the provisions of this clause 5 and,
            subject to clause 4.7, the Register in this form will solely
            determine entitlements to the Scheme Consideration.

      (d)   SCHEME PARTICIPANT DETAILS: Ballarat Goldfields must procure that by
            9.00am on the Implementation Date, details of the names, registered
            addresses and holdings of Ballarat Goldfields Shares of every Scheme
            Participant as shown in the Register at the Record Date are
            available to Lihir in such form as Lihir may reasonably require.

      (e)   EFFECT OF THE RECORD DATE: All statements of holding for Ballarat
            Goldfields Shares (other than statements of holding in favour of
            Lihir Australia) will cease to have any effect from the Record Date
            as documents of title in respect of those Ballarat Goldfields
            Shares. As from the Record Date, each entry current at that date on
            the Register relating to Ballarat Goldfields Shares will cease to be
            of any effect other than as evidence of entitlement to the Scheme
            Consideration in respect of the Ballarat Goldfields Shares relating
            to that entry.

6.    QUOTATION OF SHARES

6.1   SUSPENSION OF TRADING IN BALLARAT GOLDFIELDS SHARES

      It is expected that suspension of trading on ASX in Ballarat Goldfields
      Shares will occur from the close of trading in marketable securities on
      ASX on the Effective Date.

6.2   TERMINATION FROM OFFICIAL QUOTATION OF BALLARAT GOLDFIELDS SHARES

      Ballarat Goldfields will apply for termination of the official quotation
      of Ballarat Goldfields Shares on ASX and the removal of Ballarat
      Goldfields from the official list of ASX with effect from the Business Day
      after the date on which all transfers of the Scheme Shares to Lihir
      Australia have been duly registered by Ballarat Goldfields in accordance
      with this Scheme.

6.3   Quotation of New Lihir Shares

      Lihir will apply for official quotation of the New Lihir Shares on ASX and
      POMSOX and will request that those shares be quoted on a deferred
      settlement basis as soon as

                                                                             10.
<PAGE>

      practicable after the Effective Date in accordance with ASX requirements
      and on a normal settlement basis as from the first Business Day after the
      Implementation Date.

7.    GENERAL

7.1   APPOINTMENT OF ATTORNEY

      Each Scheme Participant, without the need for any further act, irrevocably
      appoints Ballarat Goldfields and all of its directors and officers
      (jointly and severally) as its attorney and agent for the purpose of
      executing any document necessary to give effect to the Scheme including a
      proper instrument of transfer of Ballarat Goldfields Shares held by Scheme
      Participants for the purposes of section 1071B of the Corporations Act
      (which may be a master transfer of all the Ballarat Goldfields Shares held
      by Scheme Participants) and any instrument appointing Lihir Australia as
      sole proxy for or, where applicable, corporate representative of each
      Scheme Participant as contemplated by clause 3.6.

7.2   BALLARAT GOLDFIELDS AND SCHEME PARTICIPANTS BOUND

      The Scheme binds Ballarat Goldfields and all Scheme Participants and will,
      for all purposes, have effect notwithstanding any provision in the
      Constitution of Ballarat Goldfields.

7.3   FURTHER ASSURANCES

      Ballarat Goldfields will execute all documents and do all acts and things
      necessary or expedient for the implementation of, and performance of its
      obligations under, the Scheme.

7.4   AUTHORITY

      Each of the Scheme Participants consent to Ballarat Goldfields doing all
      things necessary or incidental to the implementation of the Scheme.

7.5   COMMUNICATIONS

      Where a notice, transfer, transmission application, direction or other
      communication referred to in the Scheme is sent by post to Ballarat
      Goldfields, it will not be deemed to have been received in the ordinary
      course of post or on a date other than the date (if any) on which it is
      actually received at Ballarat Goldfields' registered office or at the
      share registry of Ballarat Goldfields.

7.6   ALTERATIONS AND CONDITIONS

      Ballarat Goldfields may, with the consent of Lihir Australia (which
      consent will not be unreasonably withheld or delayed), by its counsel
      consent on behalf of all Scheme Participants to any modifications or
      conditions which the Court thinks fit to impose

7.7   STAMP DUTY

      Lihir will pay any stamp duty payable on the transfer by Scheme
      Participants of the Ballarat Goldfields Shares to Lihir Australia.

                                                                             11.
<PAGE>

7.8   GOVERNING LAW

      This Scheme is governed by the laws of Victoria. The parties submit to the
      non-exclusive jurisdiction of the courts in Victoria.

8.    DEFINITIONS AND INTERPRETATION

8.1   DEFINITIONS

      In this Scheme, except where the context otherwise requires:

      ASIC means the Australian Securities and Investments Commission.

      ASX means Australian Stock Exchange Limited (ACN 008 624 691).

      ASX LISTING RULES means the listing rules published by ASX.

      BALLARAT GOLDFIELDS SHAREHOLDERS means each person who is registered in
      the register of members of Ballarat Goldfields as the holder of Ballarat
      Goldfields Shares.

      BALLARAT GOLDFIELDS SHARES means the fully paid ordinary shares in
      Ballarat Goldfields.

      BUSINESS DAY means a business day as defined in the ASX Listing Rules.

      CHESS means the Clearing House Electronic Subregister System, which
      facilitates electronic security transfer in Australia.

      CORPORATIONS ACT means the Corporations Act 2001 (Cth).

      COURT means the Supreme Court of Victoria or Federal Court of Australia
      (as agreed by the parties).

      DEED POLL means the deed poll made by Lihir in favour of Scheme
      Participants, a copy of which is annexed to the Scheme Booklet.

      EFFECTIVE when used in relation to the Scheme, means the coming into
      effect, pursuant to section 411(10) of the Corporations Act, of the order
      of the Court made under sections 411(4)(b) and 411(6) of the Corporations
      Act in relation to the Scheme, but in any event at no time before an
      office copy of the order of the Court is lodged with ASIC.

      EFFECTIVE DATE means the date on which the Scheme becomes Effective.

      END DATE means 28 February 2007 or such other date as agreed in writing
      between Ballarat Goldfields and Lihir Australia.

      IMPLEMENTATION DATE means the fifth Business Day following the Record
      Date.

      INELIGIBLE OVERSEAS SHAREHOLDER means an Overseas Shareholder, unless
      Lihir determines that:

                                                                             12.
<PAGE>

      (a)   it is lawful and not unduly onerous and not unduly impracticable to
            issue that Overseas Shareholder with New Lihir Shares when the
            Scheme becomes Effective;

      (b)   it is lawful for that Overseas Shareholder to participate in the
            Scheme by the law of the relevant place outside Australia and New
            Zealand and their external territories; or

      (c)   it is confirmed to Lihir's satisfaction that the issue of New Lihir
            Shares to Ballarat Goldfields Shareholders resident in the United
            Kingdom is legally permitted under applicable United Kingdom law.

      LIHIR means Lihir Gold Limited ARBN 069 803 998.

      LIHIR AUSTRALIA means Lihir Australian Holdings Pty Limited ACN 121 554
      443.

      LIHIR CONSTITUTION means the Lihir Constitution as amended from time to
      time.

      LIHIR SHARES means ordinary shares in Lihir.

      MERGER IMPLEMENTATION AGREEMENT means the Merger Implementation Agreement
      between Lihir, Lihir Australia and Ballarat Goldfields dated 17 October
      2006, a copy of which is annexed to the Scheme Booklet.

      NEW LIHIR SHARES means fully paid ordinary shares in the capital of Lihir
      to be issued under the Scheme.

      NOMINEE has the meaning given to that term in clause 4.3.

      OVERSEAS SHAREHOLDER means any Ballarat Goldfields Shareholder who is (or
      is acting on behalf of) a citizen or resident of a jurisdiction other than
      residents of Australia or New Zealand and their respective external
      territories, or whose address shown in the Register is a place outside
      Australia or New Zealand and their respective external territories or who
      is acting on behalf of such a person.

      RECORD DATE means 5.00pm on the fifth Business Day following the Second
      Court Hearing date or such other date and time as Ballarat Goldfields and
      Lihir Australia agree.

      REGISTER means the register of Ballarat Goldfields Shareholders maintained
      in accordance with the Corporations Act and REGISTRY has a corresponding
      meaning.

      SCHEME means this scheme of arrangement subject to any modifications or
      conditions made or required by the Court pursuant to Section 411(6) of the
      Corporations Act and agreed or consented to by Ballarat Goldfields and
      Lihir Australia.

      SCHEME BOOKLET means the explanatory statement that is registered by ASIC
      under section 412(6) of the Corporations Act in relation to the Scheme.

      SCHEME CONSIDERATION means the New Lihir Shares to be issued by Lihirto
      each Scheme Participant in accordance with clause 4.1.

                                                                             13.
<PAGE>

      SCHEME PARTICIPANT means the holder of Ballarat Goldfields Shares as at
      the Record Date (other than Lihir Australia to the extent that it already
      holds Ballarat Goldfields Shares).

      SECOND COURT HEARING means the hearing of the application made to the
      Court for an order pursuant to sections 411(4)(b) and 411(6) of the
      Corporations Act approving the Scheme.

8.2   INTERPRETATION

      In this Scheme, unless the context otherwise requires:

      (a)   headings and bolding are for convenience and do not affect
            interpretation;

      (b)   the singular includes the plural and vice versa;

      (c)   the word "person" includes a body corporate, a partnership, a joint
            venture, an unincorporated body or association, or any government
            agency;

      (d)   a reference to a person includes a reference to the person's
            executors, administrators, successors, substitutes and assigns;

      (e)   words and phrases have the same meaning (if any) given to them in
            the Corporations Act;

      (f)   references to any legislation or regulations include any statutory
            modification of or substitution for such legislation or regulations;

      (g)   references to agreements or deeds are to agreements or deeds as
            amended from time to time;

      (h)   a reference to a clause, party, annexure, exhibit or schedule is a
            reference to a clause of, and a party, annexure, exhibit and
            schedule to, the Scheme and a reference to the Scheme includes any
            annexure, exhibit and schedule;

      (i)   the words "including", "for example" or "such as" when introducing
            an example, do not limit the meaning of the words to which the
            example relates to that example or examples of a similar kind;

      (j)   a reference to a holder includes a joint holder;

      (k)   references to a currency are to Australian currency; and

      (1)   a reference to time is a reference to Australian Eastern Summer
            Time.

                                                                             14.
<PAGE>

                                   ANNEXURE 2

                                   DEED POLL

                                                                              45
<PAGE>
                                                            BLAKE DAWSON WALDRON

                                                                 LAWYERS
--------------------------------------------------------------------------------

                                    DEED POLL

                               LIHIR GOLD LIMITED

                                ARBN 069 803 998

      THE HOLDERS OF FULLY PAID ORDINARY SHARES IN BALLARAT GOLDFIELDS N.L.
                                 ACN 006 245 441

                              Level 36
                       Grosvenor Place
                     225 George Street
                       Sydney NSW 2000
             Telephone: + 612 92586000
                   Fax: + 612 92586999      REF: PHM 02-1404-7936

                               (C) BLAKE DAWSON WALDRON 2006

<PAGE>

                                    DEED POLL
DATE:

PARTIES

      LIHIR GOLD LIMITED ARBN 069 803 998 of Level 7, Pacific Place, Cnr
      Champion Parade and Musgrave Street, port Moresby, National Capital
      District, Papua New Guinea (LIHIR)

      Each person registered as a holder of fully paid ordinary shares in
      BALLARAT GOLDFIELDS N.L. ACN 006 245 441 of 10 Woolshed Gully Drive, Mt
      Clear, Victoria 3350, Australia (BALLARAT GOLDFIELDS) as at the Record
      Date (SCHEME PARTICIPANTS)

OPERATIVE PROVISIONS

1.    INTERPRETATION

1.1   DEFINITIONS

      The following definitions apply in this document.

      SCHEME Means the scheme of arrangement under Part 5.1 of the Corporations
      Act between Ballarat Goldfields and the Scheme Participants which, if
      implemented, will give effect to the merger of Lihir Australia and
      Ballarat Goldfields.

      Other capitalised words and phrases have the same meaning as given to them
      in the Scheme.

1.2   INTERPRETATION

      In this deed poll, headings and bolding are for convenience only and do
      not affect its interpretation and, unless the context requires otherwise:

      (a)   words importing the singular include the plural and vice versa;

      (b)   a reference to any document (including the Scheme) is to that
            document as varied, novated, ratified or replaced;

      (c)   a reference to a clause, party, annexure or schedule is a reference
            to a clause of, and a party, annexure and schedule to, this deed
            poll and a reference to this deed poll includes any annexure and
            schedule;

      (d)   a reference to a party to a document includes that party's
            successors and permitted assigns;

      (e)   no provision of this agreement will be construed adversely to a
            party solely on the ground that the party was responsible for the
            preparation of this deed poll or that provision;

      (f)   a reference to an agreement other than this deed poll includes an
            undertaking, deed, agreement or legally enforceable arrangement or
            understanding whether or not in writing;

<PAGE>

      (g)   the word "includes" in any form is not a word of limitation;

      (h)   a reference to "$" or "dollar" is to Australian currency; and

      (i)   a reference to time is a reference to Australian Eastern Summer
            Time.

1.3   NATURE OF THIS DEED POLL

      Lihir acknowledges that this deed poll may be relied on and enforced by
      any Scheme Participant in accordance with its terms, even though the
      Scheme Participants are not party to it.

2.    CONDITIONS

2.1   CONDITIONS

      The obligations of Lihir under clause 3 are subject to the Scheme becoming
      Effective in accordance with section 411 of the Corporations Act.

2.2   TERMINATION

      If the Merger Implementation Agreement is terminated or the Scheme has not
      become Effective on or before the End Date, the obligations of Lihir under
      this deed poll will automatically terminate, unless Lihir otherwise
      agrees.

2.3   CONSEQUENCES OF TERMINATION

      If this deed poll is terminated under clause 2.2, in addition and without
      prejudice to any other rights, powers or remedies available to it:

      (a)   Lihir is released from its obligations to further perform this deed
            poll; and

      (b)   Scheme Participants retain the rights they have against Lihir in
            respect of any breach of this deed poll which occurs before it is
            terminated.

3.    CONSIDERATION

3.1   PERFORMANCE OF OBLIGATIONS GENERALLY

      Lihir will comply with its obligations under the Scheme and will do all
      things necessary or expedient on its part to implement the Scheme.

3.2   SCHEME CONSIDERATION

      Subject to clause 2, in consideration for the transfer to Lihir Australia
      of each Ballarat Goldfields Share held by a Scheme Participant under the
      terms of the Scheme, Lihir will, on the Implementation Date:

      (a)   provide or procure the provision of the Scheme Consideration to each
            Scheme Participant in accordance with the Scheme;

      (b)   enter the name of each Scheme Participant on the register of members
            of Lihir in respect of the aggregate number of New Lihir Shares to
            be provided to each

                                                                               2
<PAGE>

            Scheme Participant as consideration for all of his or her Ballarat
            Goldfields Shares in accordance with the Scheme;

      (c)   send or procure the despatch to each Scheme Participant by pre-paid
            post to his or her address recorded in the Register at the Record
            Date, a holding statement in the name of that Scheme Participant
            representing the total number of New Lihir Shares to be issued to
            that Scheme Participant in accordance with the Scheme.

4.    LIHIR WARRANTIES

      Lihir warrants that:

      (a)   it is validly existing corporation registered under the laws of its
            place of incorporation;

      (b)   it has the corporate power to enter into and perform its obligations
            under this deed poll and to carry out the transaction contemplated
            by this deed poll;

      (c)   it has taken all the necessary corporate action to authorise its
            entry into this deed poll and has taken or will take all necessary
            corporate action to authorise the performance of this deed poll and
            to carry out the transactions contemplated by this deed poll; and

      (d)   this deed poll is valid and binding on it.

5.    CONTINUING OBLIGATIONS

      This deed poll is irrevocable and subject to clause 2 in full force and
      effect until:

      (a)   Lihir has fully performed its obligations under this deed poll; or

      (b)   the earlier termination of this deed poll under clause 2.2.

6.    NOTICES

6.1   FORM

      Any communications in connection with this deed poll must be:

      (a)   in writing;

      (b)   addressed to Lihir at the address shown below and marked for the
            attention of the Investor Relations Manager:

            LIHIR

            Address:   Level 7, Pacific Place
                       Cnr Champion Parade and Musgrave Street
                       Port Moresby, National Capital District, Papua New Guinea

            Fax No:    (+675) 321 4705

                                                                               3
<PAGE>

      (c)   signed by the person making the communication or (on its behalf) by
            the solicitor for, or by any attorney, director, secretary, or
            authorised agent of, that person.

6.2   DELIVERY

      They  must be:

      (a)   left at the address set out for referred to in clause 6.1(b) of
            this deed poll;

      (b)   sent by prepaid ordinary post (airmail if appropriate) to the
            address set out or referred to in clause 6.1(b) of this deed poll;

      (c)   sent by fax to the fax number set out or referred to in clause
            6. l(b) of this deed poll; or

      (d)   given in any other way permitted by law.

      However, if the intended recipient has notified a changed postal address
      or changed fax number, then the communication must be to that address or
      number.

6.3   WHEN EFFECTIVE

      They take effect from the time they are received unless a later time is
      specified.

6.4   RECEIPT POSTAL

      If sent by post, they are taken to be received three days after posting
      (or seven days after posting if sent to or from a place outside
      Australia).

6.5   RECEIPT-FAX

      If sent by fax, they are taken to be received at the time shown in the
      transmission report as the time that the whole fax was sent.

6.6   RECEIPT-GENERAL

      Despite clauses 6.4 and 6.5, if they are received after 5.00 pm in the
      place of receipt or on a non-Business Day, they are to be taken to be
      received at 9.00 am on the next Business Day.

7.    STAMP DUTY

7.1   STAMP DUTY

      Lihir will:

      (a)   pay all stamp duties and any related fines and penalties in respect
            of this deed poll, the performance of this deed poll and each
            transaction effected by or made under this deed poll; and

      (b)   indemnify each Scheme Participant against any liability arising from
            failure to comply with paragraph (a).

                                                                               4

<PAGE>

8.    GENERAL

8.1   EXERCISE OF RIGHTS

      If a Scheme Participant does not exercise a right of remedy fully or at a
      given time, it may still exercise it later.

8.2   CUMULATIVE RIGHTS

      The rights, powers and remedies of Lihir and each Scheme Participant under
      this deed poll are cumulative and do not exclude any other rights, powers
      or remedies provided by law independently of this deed poll.

8.3   ASSIGNMENT

      The rights and obligations of Lihir and each Scheme Participant under this
      deed poll are personal and must not be assigned or otherwise dealt with at
      law or in equity.

8.4   VARIATION

      Lihir must not vary a provision of this deed poll, or right created under
      it.

8.5   WAIVER

      Failure to exercise or enforce or a delay in exercising or enforcing or
      the partial exercise or enforcement of any right, power or remedy provided
      by law or under this agreement by any party will not in any way preclude,
      or operate as a waiver of, any exercise or enforcement, or further
      exercise or enforcement of that or any other rights, power or remedy
      provided by law or under this agreement.

8.6   SEVERABILITY

      If the whole or any part of a provision of this deed poll is void,
      unenforceable or illegal in a jurisdiction it is severed for that
      jurisdiction. The remainder of this deed poll has full force and effect
      and the validity or enforceability of that provision in any other
      jurisdiction is not affected. This clause 8.6 has no effect if the
      severance alters the basic nature of this deed poll or is contrary to
      public policy.

8.7   FURTHER ACTION

      Lihir will promptly do all things and execute and deliver all further
      documents required by law or reasonably requested by any other party to
      give effect to this deed poll.

8.8   GOVERNING LAW AND JURISDICTION

      This deed poll is governed by the law in force in the State of Victoria.
      Lihir irrevocably and unconditionally submits to the non-exclusive
      jurisdiction of the courts of the State of Victoria and courts of appeal
      from them.

                                                                               5
<PAGE>

EXECUTED as a deed poll.

EXECUTED by LIHIR GOLD LIMITED
ARBN 069 803 998:

-----------------------------                    -------------------------------
Signature of director                            Signature of director/secretary

----------------------------                     -------------------------------
Name                                             Name

                                                                               6
<PAGE>

                                   ANNEXURE 3

                                   TIMETABLE

<TABLE>
<CAPTION>
EVENT                                                                    DATE
<S>                                                                      <C>
Finalise MIA and announce transaction                                    By 17 October 2006

Draft Scheme Booklet and IER                                             16 November 2006

Lodge Scheme Booklet with ASIC for review                                16 November to 30 November 2006

Application in respect of the court hearing to be held on the            20 November 2006
First Court Hearing Date, filed with the court, served on
ASIC and delivered to ASX

First Court Hearing Date                                                 5 December 2006

Printing and despatch of Scheme Booklet                                  5-11 December 2006

Scheme Meeting held                                                      11 January 2007

Second Court Hearing Date                                                16 January 2007

Lodge court order with ASIC (Effective Date)                             17 January 2007

Record Date                                                              24 January 2007

Implementation Date                                                      30 January 2007
</TABLE>

NOTE - THESE DATES ARE INDICATIVE ONLY AND ARE SUBJECT TO CHANGE

                                                                              46
<PAGE>

                                   ANNEXURE 4

                               JOINT ANNOUNCEMENT

                                                                              47
<PAGE>

(LIHIR LOGO)                                            (BALLARAT LOGO)

17 OCTOBER 2006

                             JOINT ASX ANNOUNCEMENT

                          LIHIR AND BALLARAT TO MERGE


Lihir Gold Ltd and Ballarat Goldfields NL have proposed a merger of the two
companies, creating a major Asia-Pacific pure gold producer.

The combined company will have two world class assets in Australia and Papua New
Guinea, a strong growth profile, reducing costs and significant exploration
opportunities.

The company is expected to achieve annual gold production of more than 900,000
ounces in 2008, around 1 million ounces in 2009, and well in excess of 1 million
ounces per annum thereafter.

Importantly, the transaction also will secure the future of the Ballarat
operation by providing the financial resources required to take the project to
full development.

THE MERGER PROPOSAL

The merger will be achieved through a scheme of arrangement (Scheme).

Under the Scheme, Ballarat shareholders will receive 5 Lihir shares for every 54
Ballarat shares held which equates to a value of 28.8 cents per Ballarat share
based on the closing price of Lihir's shares on the day prior to the
announcement of the transaction. This offer values Ballarat at $350 million,
based on its fully diluted share capital.

This offer price represents a 28% premium to the last traded price of Ballarat
prior to its trading halt on 13 October 2006.

Based on the last traded price of Lihir shares, at the completion of the Scheme,
the combined company will have a market capitalisation of more than A$4 billion,
with Ballarat shareholders holding approximately 8% of the combined group.

<PAGE>

It is proposed that the two Non-Executive Ballarat Directors, Alister Maitland
and Mike Etheridge, will join the Lihir Board of Directors, and Ballarat's
existing management will join the combined company's management team, under
Chief Executive Officer Arthur Hood.

Ballarat Chief Executive Richard Laufmann will be appointed as the merged
company's Executive General Manager Australian Operations and Business
Development, and will continue to be directly responsible for the Ballarat
operation.

The corporate head office of the combined entity will be in Brisbane and
operational headquarters of the Ballarat mine will remain in Ballarat.

The proposed acquisition is subject to the approval of Ballarat shareholders and
the Supreme Court of Victoria. Ballarat shareholders will be provided with a
Scheme Booklet outlining the proposal in greater detail which will include an
independent expert's report prepared by Grant Samuel & Associates Pty Ltd. This
is expected to be provided to Ballarat shareholders during December with the
meeting of Ballarat shareholders to approve the proposal to be held during
January 2007.

BALLARAT DIRECTORS' RECOMMENDATION

Ballarat's directors intend to unanimously recommend that shareholders vote in
favour of the scheme in the absence of a superior proposal and provided that
Grant Samuel determines that the proposal is in the best interests of
shareholders.

BALLARAT FUNDING

Lihir is committed to the development of the Ballarat East gold project in
accordance with Ballarat's development plans over the next 18 months which have
been previously announced to the market.

To cover interim funding requirements for the Ballarat East gold project
development during the period up to the Ballarat shareholders' meeting to
approve the Scheme, Lihir has agreed to provide Ballarat with A$41.7 million
through the unconditional subscription for 149 million Ballarat shares at 28
cents per share.


COMPELLING MERGER

Lihir Chairman, Dr Ross Garnaut, said that for both Lihir and Ballarat, the
merger was compelling.

"The deal creates genuine value for shareholders of the merged group, by
creating a Tier One Asia-Pacific gold producer with strongly growing
production," he said.

<PAGE>

"This merger will take Lihir into a new era in its development, building on the
great progress that has been achieved during the past few years, and consistent
with our goal of developing a diversified, profitable, pure gold producer," he
said.

Mr Hood said the merger established a combined entity with significant
exploration upside, expansion potential and long mine life.

"The combination of these two companies will create a major new force in the
gold sector and an attractive investment option for global funds looking for
pure gold exposure," he said.

"Furthermore, Ballarat's management brings to the team valuable complementary
underground mining skills that will advance our expansion strategy and provide
enhanced management capability."

Mr Laufmann said the merger represented a landmark in the development of the
Ballarat project.

"This merger secures the future of the Ballarat operation. It means that the
shareholders and employees can be confident in the long term future and
prosperity of this operation.

"As a cornerstone of a larger, multi-mine company, we will have the financial
resources required to ensure that this project is properly developed," he said.

CONDITIONS TO THE SCHEME

The principal conditions to the implementation of the Scheme are the approval of
Ballarat shareholders, the Supreme Court of Victoria, and applicable regulatory
bodies.

MERGER IMPLEMENTATION AGREEMENT (MIA)

Lihir and Ballarat have entered into the MIA under which they have agreed to
proceed with the merger by way of the Scheme. Implementation of the merger is
conditional on the satisfaction of a number of conditions precedent. The
conditions precedent and key terms of the MIA are summarised in Appendix A.

Following approval of the Scheme by Ballarat shareholders and the Court, all
shares in the company will be acquired by Lihir and Ballarat will be delisted.

Ballarat shareholders are not required to take any action at this stage in
relation to the scheme of arrangement.

<PAGE>

ADVISERS

Lihir is being advised by Caliburn Partnership and Blake Dawson Waldron.
Ballarat is being advised by RFC Corporate Finance Ltd and Baker & McKenzie.

Contact details
---------------

For further information, please contact:

Lihir Gold Ltd
Joe Dowling
Manager IR
0421 587 755

Josie Brophy
Communications Officer
0448 177 502

Ballarat Goldfields
Joel Forwood
Manager Corporate and Markets
(03) 5327 1111

<PAGE>

ABOUT LIHIR GOLD

Lihir Gold owns and operates one of the world's largest gold mines and
processing facilities on the island of Lihir, 900 kilometres north-east of Port
Moresby in New Ireland province of Papua New Guinea. The company is
headquartered in Brisbane, Australia.

Lihir Gold is publicly listed, with 1.28 billion shares on issue and a market
capitalisation of approximately US$3 billion. Lihir Gold's shares are traded on
the Australian, Port Moresby and Nasdaq stock exchanges.

The Lihir ore body is very large and rich by global standards. According to the
company's last resource and reserve statement, in February 2005, the estimated
resource is 422 million tonnes averaging 2.95 grams of gold per tonne for 40.0
million ounces of contained gold. It includes proved and probable reserves of
188 million tonnes, averaging 3.48 grams of gold per tonne for 21.0 million
ounces of contained gold. This estimate is based on a long-term price assumption
of US$380 per ounce.

The Lihir gold mine is an open pit mining operation consisting of three adjacent
pits. The pits supply high grade ore for direct processing and lower grade ore
for stockpiling for future processing. Nearly all of the ore is refractory
sulphide ore which must be oxidised before the gold can be recovered.

The mine has been in operation since 1997 and has produced more than 5 million
ounces of gold. Production for the year ended 31 December 2005 was 596,000
ounces, with substantially higher production for 2006. Production will increase
to more than 800,000 ounces in 2007, following the expansion of the process
plant through the construction of a 3Mt per annum flotation circuit. The company
is also currently evaluating a range of options designed to expand annual gold
production to in excess of 1 million ounces per annum after 2009.

Under the current mine plan open pit mining is scheduled to continue at Lihir
until at least 2021, during which period higher grade ore will be fed directly
into the processing plant and lower grade ore will be stockpiled. Processing of
lower grade stockpiles will continue until beyond 2040.

Lihir Gold has a large workforce comprising approximately 1,300 staff and 1,900
contractors. Over 36% of employees are Lihirian Nationals, with a further 54%
originating from other provinces in PNG.

The Lihir Project is located within a geothermally active area that produces a
natural abundance of geothermal steam. Since 2003 Lihir Gold has been harnessing
this underground steam reserve to generate electricity, replacing heavy fuel oil
powered electricity. The company is due to commission its third geothermal power
station by the end of 2006. The new 20 Megawatt (MW) plant will take Lihir
Gold's total geothermal capacity to 56MW and meet all of Lihir Gold's current
electrical power requirements.

<PAGE>

Geothermal power will save the company an estimated US$20 million per year,
compared to the cost of heavy fuel oil powered generation. The geothermal plant
is also formally certified as a facility that will lead to reductions in
greenhouse gas emissions, enabling the company to generate carbon credits and
sell them on global markets. This is expected to generate revenues in excess of
US$5 million per year.

For further information, please visit Lihir Gold's website at www.lihir.com.pg

ABOUT BALLARAT GOLDFIELDS NL

Ballarat Goldfields has exploration and mining tenements covering the historic
Ballarat East and Ballart West goldfields. Before its premature closure around
the time of the fist world war, the Ballarat region produced over 12 million
ounces of gold. Ballarat Goldfields is seeking to recover gold from the strata
beneath the old workings. The company is headquartered in Ballarat.

Ballarat Goldfields is publicly listed on the ASX in Australia and on AIM in the
United Kingdom and has approximately 1.2 billion shares on issue.


In 2004, for the first time following discovery in the 1850's, the leases over
the entire Ballarat field were consolidated under the sole ownership of Ballarat
Goldfields. This has resulted in Ballarat Goldfields constructing a
comprehensive geological model of the entire field, demonstrating what many had
suspected, that Ballarat had massive unexplored prospectivity. Following a
pre-feasibility study, based on Ballarat Goldfields' geological model,
underground development at Ballarat East recommenced in December 2004. In line
with this plan, drilling has continued to increase confidence in the geological
model.

Exploration activities by Ballarat Goldfields have defined an Inferred Resource
of 1.4 million ounces at Ballarat East and an additional exploration potential
of over 9 million ounces of gold within the company's Ballarat portfolio.

Ballarat Goldfields completed stage one of the processing plant in December 2005
only 6 months after work began. The plant design is unique and based around
Gekko Systems Ltd gravity technology. Final concentrate treatment will use an
inline leach reactor.

Mine development is continuing with over 5km of development complete to date.
The recent extended mine design will focus on the recently discovered high grade
mineralisation at depth. The extension of the mine will delay full gold
production until 2009 and will cost an estimated A$120m.

For further information, please visit Ballarat Goldfields' website at
www.ballarat-goldfields.com.au.

<PAGE>

APPENDIX A

SUMMARY OF KEY TERMS OF THE MERGER IMPLEMENTATION AGREEMENT

CONDITIONS PRECEDENT    The principal conditions precedent to the implementation
TO THE SCHEME           of the Scheme include:
                        -     approvals from applicable regulatory bodies such
                              as FIRB, ASIC and ASX;

                        -     unanimous approval of the Ballarat Goldfields
                              Board;

                        -     approval by the PNG Exchange Control;

                        -     Ballarat Goldfields shareholder approval of the
                              Scheme at the Scheme Meeting by the requisite
                              majorities under the Corporations Act;

                        -     Court approval of the Scheme in accordance with
                              s411 (4)(b) of the Corporations Act;

                        -     no Ballarat Goldfields or Lihir Material Adverse
                              Change occurs;

                        -     no Ballarat Goldfields or Lihir Prescribed Event
                              occurs;

                        -     the Independent Expert issues a report which
                              concludes that the Scheme is in the best interests
                              of Ballarat Goldfields shareholders;

                        -     the MIA has not been terminated;

                        -     no person (other than Lihir, a subsidiary of Lihir
                              or any institutional or portfolio investor in
                              Ballarat Goldfields at the date of the MIA)
                              acquires an interest in Ballarat Goldfields
                              securities so as to have a relevant interest in
                              10% or more of Ballarat Goldfields shares;

                        -     Ballarat Goldfields has not entered into a
                              Competing Transaction;

                        -     the Gold Price does not fall below USD 500 per
                              ounce;

                        -     the S&P ASX 200 Index does not fall below 4,500 on
                              any trading day; and

                        -     all Ballarat Goldfields options to subscribe for
                              shares having been exercised, cancelled or
                              transferred to Lihir,

NO TALK AND NO SHOP     Ballarat Goldfields must ensure that during the period
OBLIGATIONS             from the date of the MIA to the earlier of termination
                        of the MIA, the Second Court Date and 28 February 2007
                        ("Non-Solicitation Period") that:

                        -     (No Shop) Ballarat Goldfields nor any of its
                              related parties directly or indirectly solicits,
                              invites, facilitates, encourages or initiates any
                              enquiries, negotiations or discussions, or
                              communicates any intention to do any of these
                              things,

<PAGE>

                              with a view to obtaining any expression of
                              interest, offer or proposal from any other person
                              in relation to a Competing Transaction; and

                        -     (No Talk) Ballarat Goldfields nor any of its
                              related parties negotiates or enters into,
                              participates in negotiations or discussions with
                              any other person regarding a Competing Transaction
                              or potential Competing Transaction or grants any
                              other person any right or access to conduct due
                              diligence in respect of Ballarat Goldfields.

   LIMITATIONS TO NO    The no talk provisions summarised above do not apply if
   TALK OBLIGATION      BALLARAT Goldfields' Board of Directors has determined,
                        based on the written opinion of Queen's Counsel or
                        Senior Counsel, that failing to respond to a publicly
                        announced Competing Transaction would be reasonably
                        likely to be a breach of their fiduciary duties or
                        statutory obligations ("Fiduciary Carve-out").

   COMPETING            If Ballarat Goldfields is approached by another person
   TRANSACTIONS AND     during the Non-Solicitation Period with a Competing
   LIHIR'S RIGHT TO     Transaction to which the No Talk or No Shop provisions
   RESPOND              apply, Ballarat Goldfields must immediately notify Lihir
                        of the identity of that person and the key terms of
                        their Competing Transaction and a copy of the proposal.

                        Ballarat Goldfields must not enter into any agreement in
                        relation to that Competing Transaction unless, after
                        notifying Lihir, Lihir has not within 2 business days of
                        notification submitted a written proposal to Ballarat
                        Goldfields which is on terms no less favourable than the
                        Competing Transaction. If Lihir's proposal is on terms
                        no less favourable than the Competing Transaction, then
                        in the absence of a more favourable offer, Ballarat
                        Goldfields must proceed exclusively with Lihir's
                        proposal, otherwise Ballarat Goldfields may proceed
                        exclusively with the Competing Transaction.

BREAK FEE               A break fee of approximately $A3.5 million is payable by
                        Ballarat Goldfields to Lihir if:

                        -     any director of Ballarat Goldfields makes any
                              public statement prior to the approval of the
                              Scheme by the Court to the effect that he or she
                              does not support (or no longer supports) the
                              Scheme, other than because the Independent Expert
                              has concluded that the Scheme is not in the best
                              interests of Ballarat Goldfields shareholders;

                        -     any director of Ballarat Goldfields fails to
                              recommend the Scheme or, having done so, any
                              director of Ballarat

<PAGE>

                              Goldfields publicly withdraws or varies his or her
                              favourable recommendation of the Scheme (or any
                              part of it) prior to the approval of the Scheme by
                              the Court, other than because the Independent
                              Expert has concluded that the Scheme is not in the
                              best interests of Ballarat Goldfields
                              shareholders;

                        -     any director of Ballarat Goldfields publicly
                              recommends, promotes or otherwise endorses a
                              Competing Transaction; or

                        -     before the Scheme becomes effective, a Competing
                              Transaction more favourable to Scheme participants
                              in relation to Ballarat Goldfields is announced or
                              open for acceptance and a person under the
                              Competing Proposal acquires more than a 20%
                              interest in Ballarat Goldfields' issued shares,

                        provided that the break fee will not be payable by
                        Ballarat Goldfields if:

                        -     prior to any event referred to above occurring,
                              the MIA has already been validly terminated; or

                        -     the Scheme becomes Effective notwithstanding the
                              occurrence of any event referred to above.

There are various capitalised terms used in this Summary which are defined
in the MIA.