CAZALY RESOURCES LIMITED — Capital/Financing Update 2004

Jul 7, 2004

8^th July 2004 ASX Release

DIVESTMENT OF EAST KALGOORLIE PROJECT

Cazaly Resources Limited (ASX Code: CAZ) has recently concluded an Option and Farm-Out Agreement with Planet Mining Limited ("Planet") relating to Cazaly's East Kalgoorlie Gold and Nickel Projects.

The terms of the Agreement include an Option Payment of \$30,000 (thirty thousand dollars) with Planet having the right to exercise the Option to acquire an 80% interest in the Project by:

• Payment of \$170,000 for the projects upon listing (\$100,000 for the nickel project $\bullet$ and \$70,000 for the gold project) on the ASX and the issue of shares in the purchaser having a value of \$200,000 (\$100,000 worth of shares for each project).
• Undertaking 5000 metres of reverse circulation and/or diamond drilling within 36 $\bullet$ months of listing on the nickel project and undertaking to complete 3000 metres of reverse circulation and/or diamond drilling within 36 months of listing on the gold project.

Cazaly may elect to contribute after Planet has completed the earn-in phase with standard industry dilution clauses applying or convert to a 1.5% Net Smelter Return.

The East Kalgoorlie project comprises of a large semi-contiguous tenement holding situated immediately to the east of Kalgoorlie in the Eastern Goldfields of Western Australia. The project covers more than 140 square kilometres and is strategically located just 15 kilometres to the east of Kalgoorlie (+60Moz Au) and around the +5Moz Kanowna Belle gold mine. The project is particularly prospective for gold and nickel and is located in a highly mineralised district.

Cazaly consider that Planet will aggressively advance the East Kalgoorlie project which will be one of their major focuses and subject to an intensive drilling program immediately upon listing.

Planet Mining plans to raise \$3 million via IPO and list on the ASX in August.

Cazaly remains well funded with strong equity in and joint ventures with Great Australian Resources Ltd, Scimitar Resources Ltd and potentially Planet Minerals Ltd whilst also having an existing joint venture with Straits Resources Ltd at Quartz Circle.

The divestment of East Kalgoorlie, coupled with the recent divestment of Mt. Carrington and other projects, allows Cazaly to continue consolidating and aggressively exploring its key Kunanalling project.

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.

East Kalgoorlie Project Geology & Resources