ATHENA RESOURCES LIMITED — Capital/Financing Update 2008

Feb 3, 2008

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63 Lindsay Street Perth WA 6000 p 61 8 9328 8277 f 61 8 9328 5188 e ahn@athenaresources.com.au www athenaresources.com.au ABN : 69 113 758 900

4 February 2008

Dear Shareholder

NOTICE TO SHAREHOLDERS – NON-RENOUNCEABLE RIGHTS ISSUE

On 1 February 2008 Athena Resources Limited announced a pro-rata Rights Issue to shareholders. The pro-rata is on the basis of one (1) share for every four (4) shares held at the Record Date at a price of 20 cents each. Every one (1) Share subscribed for will have one (1) free attaching Option, exercisable at 20 cents on or before 30 November 2009.

The Rights Issue is non-renounceable and is available to all Athena Resources Limited shareholders registered on the Record Date as detailed in the timetable below. Please note that shareholders at the Record Date that have an address registered outside of Australia or New Zealand may not be eligible to participate in the pro-rata offer.

The maximum number of shares which may be issued under the Rights Issue is 6,565,500 to raise approximately $1,313,100(based on the current capital structure of the Company). An offer letter containing your entitlement will be sent to you on the date referred to in the timetable below.

Please note that where the determination of an eligible shareholder results in a fraction of a share, such fraction shall be rounded down to the nearest whole share. Shares issued will rank equally with all Shares on issue. Shareholder approval is not required in relation to the Rights Issue. There will be no deferred settlement of the sale of shares offered under the pro-rata offer. Trading in the new shares will commence on the first business day following dispatch of the holding statements.

A notice under section 708AA (2) (f) of the Corporations Act (Notice) and an Offer Document will be lodged with the ASX on or about 13 February 2008 in respect of the Rights Issue and the Offer Document will be mailed to shareholders on 13 February 2008. However, the Offer Document will not constitute an offer in any place in which or to any person to whom it would be unlawful to make such an offer. Accordingly, it is the responsibility of non-resident applicants to obtain all necessary approvals for the allotment and issue to them of securities pursuant to the offer document.

The purpose of the Offer is to raise approximately $1,313,100 (before expenses of the Offer). The Company intends to apply the funds raised from the Rights Issue as follows;

• A. Progress on the Company’s Projects

• B. Meet the costs of the offer, and;

• C. General working Capital

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The total number and class of all securities quoted on ASX (including the maximum number of Shares to be issued in the Rights Issue on an undiluted basis – ie. assuming none of the Company’s options are exercised) is as follows;

	Quoted
	Number		Ordinary Shares		Options
	On Issue		21,637,000		25,485,000
	Rights Issued		6,565,500		6,565,500
	Total		28,202,500		32,050,500

The unquoted securities on issue in the Company following completion of the Entitlement Issue are as follows;

	Not Quoted
	Number		Ordinary Shares		Options
	On Issue		4,625,000		0
	Rights Issued		0		0
	Total		4,625,000		0

The timetable for the Rights Issue is as follows;

Event	Date
Announcement of Rights Issue and Appendix 3B	1 February 2008
Notice Sent to Security Holders	4 February 2008
Ex Date (date from which securities commence trading without the entitlement to participate in the Rights Issue)	6 February 2008
Record Date (date for determining entitlements of eligible shareholders to participate in the Rights Issue)	12 February 2008
First Cleansing Notice and Offer Document lodged with ASX	13 February 2008
Offer Document Dispatched to Shareholders (expected date of dispatch of offer document, entitlement and acceptance form)	13 February 2008
Rights Issue Opens	13 February 2008
Closing Date* 5pm (WDST)	17 March 2008
ASX Notified of Undersubscriptions	20 March 2008
Allotment Date**	26 March 2008
Second Cleansing Statement Lodged With ASX (under Section 708A (5)	26 March 2008
Dispatch Holding Statements**	26 March 2008

* Subject to the Listing Rules, the Directors reserve the right to extend the closing date for the offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the new shares

** Dates are indicative only.

E W Edwards EXECUTIVE CHAIRMAN