CAZALY RESOURCES LIMITED — Capital/Financing Update 2004

Nov 14, 2004

16^th November 2004 ASX Release

ACQUISITION OF 100% OF CUTTER'S RIDGE GOLD PROJECT

Cazaly Resources Limited (ASX Code: CAZ) announces that it has secured an option to acquire from Placer Dome Asia Pacific ("PDAP") their 49% interest in their Cutter's Ridge Gold Project, located approximately 20 kilometres north of Coolgardie in the Eastern Goldfields of Western Australia. This now gives Cazaly a 100% interest in this highly prospective area.

The acquisition contains the Cutter's Ridge resource of 1.3 Mt $@$ 1.8 g/t Au and further complements the regional holdings of Cazaly adjacent to the Company's Kunanalling Project. The Project covers an area of approximately 6 $km^2$ and is contiguous with Cazaly's current 716 km² tenement holding at Kunanalling and West Kalgoorlie. Global resources for the Kunanalling project now total; 5.74Mt @ 1.9 g/t Au (345,800oz. Au)

Significant drill results from the Cutters Ridge area include:

CRC061: 18m @ 3.73 g/t Au, including 8m @ 6.68 g/t Au CRC062; 22m @ 4.13 g/t Au, including 8m @ 8.54 g/t Au CRC106; 19m @ 2.62 g/t Au CRC110; 15m @ 3.38 g/t Au, including 22m @ 3.19 g/t Au CRD008; 29.6m @ 2.73 g/t Au CRD019; 14.85m @ 3.59 g/t Au

The geology of the area is dominated by the large differentiated gabbroic unit, the Powder Sill, which intrudes felsic sediments of the Spargoville formation. The Cutter's Ridge deposit is located in the upper part of the sill (granophyre unit) where NNE and East-West faults crosscut it. The Sill also hosts MRA's White Foil deposit (~1 M oz Au), located approximately 6 km further to the east. Similar structural controls are observed at White Foil where north to northeast trending faults crosscut the sill and appear to control the locus of mineralisation. The NNE structures are also significant in focusing gold mineralisation elsewhere in the region including the Kundana Camp $($ > 7M oz) which is located just 8.5 km to the east.

As consideration for the Project, Cazaly has agreed to pay Placer a nominal cash consideration. Placer retains:

• a once 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 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.
• $\mathbf{C}$ a 1% Net Smelter Royalty on all gold produced from the Project, except where a preexisting royalty exists.

This acquisition further complements the company's existing resource base and further expands the significant exploration potential of the Kunanalling project. There are significant economic and management advantages having the project consolidated under 100% ownership.

Furthermore, it enhances the opportunity for Cazaly to greatly expedite the development of any resource discoveries.

Yours sincerely

Nathan McMahon

Managing Director

Information in this report pertaining to mineral resources and exploration results was compiled by Mr. C.B Jones who is a Member of the Aus.I.M.M with not less than 5 years experience in the relevant fields, and who consents to the report appearing in the form and context in which it appears.