CAZALY RESOURCES LIMITED — Capital/Financing Update 2003

Dec 9, 2003

CAZALY RESOURCES LIMITED

10 December 2003 ASX Release

ACQUISITION OF PLACER DOME'S KUNANALLING GOLD PROJECT AND FORMATION OF STRATEGIC ALLIANCE

Cazaly Resources Limited (ASX Code: CAZ) announces that it has finalised a deal with Placer Dome Asia Pacific Ltd ("Placer") to acquire a 100% interest in Placer's Kunanalling Project, located 30 kilometres north of Coolgardie in Western Australia.

The acquisition of the project containing approximately 78,000 ounces in resources (Non-JORC compliant) further complements Cazaly's regional holdings. The resources acquired include:

Catherwood	484,000t @ 2.16 g/t gold
Premier	164,000t @ 1.99 g/t gold
Emu	260,000t @ 2.46 g/t gold
Blue Bell	118,000t @ 2.00 g/t gold

Significantly, these resources exist on granted mining leases, which will enable Cazaly to expedite any development opportunities.

Promising drill results on the Project requiring follow-up include 7m @ 142 g/t from 24m, 7m @ 12.4 a/t from 11m, and 14m @ 3.02 a/t from 24m at the Emu Prospect and 17m @ 2.22 a/t from 13m and 10m @ 5.85 g/t from 80m at the Catherwood Prospect.

The Project covers an area of approximately 40 km² and is contiguous to the west of Cazaly's current 90 km² tenement holding. The regionally significant and under-explored Kunanalling Shear transects the tenement holding and is the focus for most gold mineralisation. Cazaly now has access to more than 20 kilometres of this highly prospective Shear, which contains numerous old pits and workings.

Two phases of historical production have been recorded from the Project area with 88,000t @ 24.4 g/t for 69,000 oz produced pre-1954 and 210,000t @ 3.02 g/t for 20,400 oz between 1987- $1994$ ^T

As consideration for the Project, Cazaly has agreed to pay Placer \$57,000, with the first instalment of \$25,000 paid today and the balance payable within 90 days. Placer retains:

a one off right to clawback a 70% interest within 60 days of being notified of the a) establishment of a 500,000 ounce resource on the Project by paying Cazaly 2.5 times the expenditure (including acquisition costs) incurred with the resource discovery. The buy-back relates only to the resource area.

• b) the right to explore for conceptual targets within a declared area of the Project at Placer's expense. Any resource discovery of 500,000 ounces or more would be deemed to be owned 70% by Placer and 30% by Cazaly, and if less than 500,000 ounces to be owned 100% by Cazaly.
• c) the option to acquire or process any ore produced from the Project or from tenements owned or acquired by Cazaly within 100 kilometres of Placer's Paddington mill, at best commercial rates.
• d) a 2% Net Smelter Royalty on all gold produced from the Project, except where a preexisting royalty exists.

For a six month period. Placer has the exclusive right to negotiate joint ventures with Cazaly over Cazaly's existing tenements. Upon Cazaly acquiring any additional tenements, Placer has an exclusive right for one month to negotiate a joint venture over these tenements.

The strategic alliance with Placer provides Cazaly with the opportunity to greatly expedite the development of any resource discoveries. If Placer elects not to acquire or process ore through the Paddington mill, Cazaly's Kunanalling Project still has strong infrastructure advantages.

The enlarged Project area is located within trucking distance of three other mills, the closest of which is approximately 15 kilometres away at the +7 million ounce Kundana mining centre. The all weather road from Coolgardie to Ora Banda runs through the centre of the Project with mills located at either end.

This Agreement continues the corporate philosophy of focussing on gold assets with near term cash flow potential while consolidation of projects to a regional scale allows for maximum leverage to exploration success.

Yours sincerely

Nathan McMahon Managing Director