CAZALY RESOURCES LIMITED — Capital/Financing Update 2009

Aug 3, 2009

MEDIA RELEASE

3 August 2009

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Sale of Mt Caudan Iron Ore Exploration Interests

Background

Gondwana Resources Limite d is pleased to announce that it has made a c onditional offer to Cazaly Iron Pty Ltd (a wholly- o wned subsidiary of Cazaly Resources Limited ASX:CAZ ) to sell all of Gondwana’s interests in the Mt Caudan Iron Ore project.

Under the Mt Caudan Farm I n Agreement ( Farm In ), which was first entered into in June 2007, Cazaly Iron is earning an 80% interest in the iron ore rights in a number of Gon d wana’s tenements at Mt Caudan, Parker Range, Western Australia. Under the terms of the Farm In, Gondwana’s remaining 20% interest is free-carried until the completion of a bankable feasibi l ity study.

In March 2008, Gondwana gr a nted to William Richmond ( Richmond ) a 5% ca r ried interest in iron ore rights in certain tenements covered by the Mt Caudan Farm In Ag r eement ( Principal Tenements ), with Gondwana retaining a 15% carried interest. Gondwana re t ains a 20% carried interest in iron ore rights in the remaining tenements ( Other Tenement Interests ).

Pursuant to three agreements entered into in 2002, 2003 and 2004, Kag a ra Nickel Pty Ltd ( Kagara ) retains nickel rights o ver certain Other Tenement Interests. Cazaly Resources Limited (A S X:CAZ) has recently published an Iron Ore Res o urce estimate and has made a series of ASX r e leases covering exploration results, ore resour c es and up-to-date progress on the Mt Caudan Iron Ore Project.

Sale Agreement

The principal terms of Gondw a na’s proposal are as follows:

• Two separate and conc u rrent offers have been made to Cazaly Iron, t h e first covering the Principal Tenements an d the second covering the Other Tenement Inter e sts ( Offers ).

• The offers are conditional on the consent of Richmond and Kagara in t h e form specified in their respective agreem e nts with Gondwana.

• The aggregate consideration payable by Cazaly Iron to Gondw a na in respect of Gondwana’s net intere s t is $207,500 in cash together with $655,000 i n shares in Cazaly Resources (or, failing t h at, cash) and Cazaly Iron will pay a proporti o nate consideration directly to Richmond in respect of his interest in the Principal Tenements.

• The Offers must be acc e pted no later than Wednesday 5 August 2009.

• Settlement will be 28 da y s after acceptance.

The Company is pleased with the proposed sale of Mt Caudan interests which, once completed, will allow the Company to con c entrate its iron ore ambitions on the Corunna D o wns Iron Prospect in the Pilbara, which is 100%-owned* and which Gondwana’s geologists con s ider has significant potential.

Contact

For further information phone G rant Donnes or Warren Beckwith on (08) 9388 9 961, email info@gondwanaresources.co m or visit the Company’s website at www.gondwa n aresources.com

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Warren Beckwith Director

• Adjacent exploration licence ap p lications are 90% owned.

P O Box 2000, Subiaco, Western Australia 6904 Registered Off i ce: 230 Rokeby Road, Subiaco, Western Australia 60 0 8 Telepho n e: +61 8 9388 9697 Facsimile: +61 8 9381 1705 Enquiries: info@go n dwanaresources.com Web: www.gondwanaresour c es.com