Alkane Resources — Capital/Financing Update 2007

Dec 23, 2007

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----- Start of picture text ----- R ESOURCES L TDABN 3 5 0 0 0 6 8 9 2 1 6----- End of picture text -----

24 December 2007

Manager Announcements Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street Sydney NSW 2000

Dear Sir,

ENTITLEMENT ISSUE – SUPPLEMENTARY PROSPECTUS

The Board of Alkane Resources Ltd wishes to advise that a supplementary prospectus dated 24 December 2007 has been lodged with Australian Securities and Investments Commission today. This is supplementary to the Prospectus dated 19 November 2007 in relation to non-renounceable rights issue to shareholders

The supplementary prospectus is attached.

Yours faithfully,

for ALKANE RESOURCES LTD

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D I Chalmers Managing Director

Registered Office: 129 Edward Street Perth WA 6000 Telephone: 61 8 9227 5677 Facsimile: 61 8 9227 8178 PO Box 8178 Perth Business Centre Western Australia 6849 www.alkane.com.au mail@alkane.com.au

Alkane Resources Ltd

ABN 35 000 689 216

SUPPLEMENTARY PROSPECTUS

This supplementary prospectus ( Supplementary Prospectus ) is supplementary to, and intended to be read in conjunction with, the prospectus issued by Alkane Resources Ltd ( Alkane or the Company ) dated 19 November 2007 in relation to a non-renounceable rights issue to raise up to $12,857,182 million less costs, by the issue of approximately 40,178,694 new fully paid ordinary shares at a price of $0.32 per share ( Prospectus ).

This Supplementary Prospectus is dated 24 December 2007. A copy of this Supplementary Prospectus was lodged with ASIC on 24 December 2007. No previous supplementary documents have been lodged with ASIC in relation to the Prospectus. Neither ASIC nor ASX takes any responsibility for the contents of this Supplementary Prospectus.

Words and expressions used in this Supplementary Prospectus have the same meaning as defined in the Prospectus unless otherwise indicated.

1. Change to underwriting arrangements

The Offer is underwritten by Gandel Metals Pty Ltd as trustee of the Gandel Metals Trust (the Underwriter ). Sections 4.10, 6.3 and 8.5 of the Prospectus state that, in circumstances where the interest of Mr Ian Gandel, Gandel Metals Pty Ltd or any of their related entities (together, the Gandel Group ) would in aggregate exceed 24.99% of the voting power in Alkane as a result of the Underwriter performing its obligations under the Underwriting Agreement, the Underwriter will procure that an unrelated, third party subunderwriter subscribe for the amount of Shares necessary to ensure that the interest of the Gandel Group does not exceed 24.99% of Alkane immediately following the issue of the New Shares.

At the request of the Underwriter, the Company and the Underwriter have now agreed to remove this 24.99% limit, with the effect that the Underwriter may itself fully subscribe for all New Shares not taken up by Eligible Shareholders.

The Company and the Underwriter have also agreed to vary the Underwriting Agreement with the effect that, to the extent that any Eligible Shareholders withdraw their application for New Shares (see section 3 below), the Underwriter will also subscribe for such number of Shares as is equivalent to the total number of New Shares that the Company is consequently required to cancel following such withdrawal.

The Underwriter has agreed to waive its rights to terminate the Underwriting Agreement as a result of the lodgement of the Supplementary Prospectus.

2. Effect on control

As at the Closing Date (21 December 2007), the Company had received acceptances for 14,495,258 New Shares.

The Underwriter proposes to subscribe for all of the New Shares that were not taken up by shareholders as at the Closing Date. This means that, following such subscription, entities related to Alkane Director Mr Ian Gandel will hold 70,406,245 Shares, which equates to approximately 29.15% of the issued Shares following completion of the Offer.

The Gandel Group's interest will increase further to the extent that any Eligible Shareholder exercises their withdrawal right (see section 3 below). If all Eligible

This is a Supplementary Prospectus to be read in conjunction with the original Prospectus dated 19 November 2007 issued by Alkane Resources Ltd and relating to an Offer of New Shares in Alkane Resources Ltd

Shareholders were to withdraw their acceptances and if the Underwriter subscribes for a number of Shares equal to all of the New Shares, entities related to Alkane Director Mr Ian Gandel will hold 77,464,368 Shares, which equate to approximately 32.07% of the issued Shares.

If entities related to Mr Gandel were to hold a total interest of more than 25%, Mr Gandel and these entities would have the ability to block special resolutions of Shareholders. A special resolution is a resolution of which notice is given in accordance with the Corporations Act and that has been passed by at least 75% of the votes cast by members entitled to vote on that resolution. Special resolutions are required to effect the following:

• change of company name or type;

• change of constitution;

• selective buy backs and capital reductions;

• financial assistance by a company for acquiring shares in the company or a holding company;

• variation of rights attaching to shares; and

• voluntary winding up or distribution of assets on a winding up.

3. Applications

All Valid Entitlement and Acceptance Forms received by the Company before the Closing Date (21 December 2007) were accepted by the Company, in accordance with the terms of the Prospectus. It is expected that the New Shares will be issued on 2 January 2008, with holding statements despatched on 2 January 2008.

As required by the Corporations Act, any Eligible Shareholder to whom New Shares were issued and who wishes to withdraw their application may do so within one month from the issue of the New Shares. Any shareholder who wishes to withdraw must ensure that written notice is received by the Company no later than 5.00pm (WDT) on Monday, 4 February 2008. A withdrawal request will be taken to constitute a return of the relevant securities by the applicant.

To withdraw an application, applicants should provide a written request to the Company's Share Registry as follows:

Alkane Resources Ltd

C/- Advanced Share Registry Services

110 Stirling Highway NEDLANDS WA 6009

Or

PO Box 1156

NEDLANDS WA 6909

The request must contain details for the refund cheque. The details for the refund cheque (including the address to which it should be sent) must correspond to the details contained in the Entitlement and Acceptance Form lodged by that applicant.

This is a Supplementary Prospectus to be read in conjunction with the original Prospectus dated 19 November 2007 issued by Alkane Resources Ltd and relating to an Offer of New Shares in Alkane Resources Ltd

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Consents

The Underwriter has consented to being named in this Supplementary Prospectus in the form and context in which it is named, and such consent has not been withdrawn.

Each Director of Alkane has consented to the lodgement of this Supplementary Prospectus with ASIC and has not withdrawn that consent.

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D I Chalmers

Managing Director

This is a Supplementary Prospectus to be read in conjunction with the original Prospectus dated 19 November 2007 issued by Alkane Resources Ltd and relating to an Offer of New Shares in Alkane Resources Ltd

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