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ALARA RESOURCES LIMITED Capital/Financing Update 2011

Jan 23, 2011

64461_rns_2011-01-23_5aace0ad-037c-49e2-856c-96fbbab755e2.pdf

Capital/Financing Update

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Alara Resources Limited A.B.N. 27 122 892 719 Level 14, The Forrest Centre 221 St Georges Terrace Perth Western Australia 6000

Telephone | +61 8 9214 9787 Facsimile | +61 8 9322 1515 Web | www.alararesources.com.au Email | [email protected]

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Monday, 24 January 2011

MARKET ANNOUNCEMENT

Conditions Precedent now met in Saudi Arabia for advancing Khnaiguiyah Zinc-Copper Mining Project

Alara Resources Limited is pleased to announce that the Khnaiguiyah Zinc-Copper Project joint venture company has been formed in Saudi Arabia – “Khnaiguiyah for Mining Company” ( KMC ).

Alara has also received an Industrial Foreign Investment Licence from the Saudi Arabian General Investment Authority ( SAGIA ) as a preliminary step to the formation of KMC.

KMC has also received signed documents to facilitate the transfer of the Project licences from Alara’s joint venture partner “United Arabian Mining Company” ( Manajem ) to KMC.

This completes the conditions precedent under the Shareholders’ Agreement between Alara and Manajem and accordingly, Alara has effected payment of US$1.25 million to Manajem due under Payment Milestone/Tranche 2 of the Shareholders’ Agreement.

FURTHER INFORMATION:

Shanker Madan Managing Director T | (08) 9214 9787 E | [email protected]

Victor Ho Company Secretary T | (08) 9214 9787 E | [email protected]

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ASX Code | AUQ