RETAIL STAR LIMITED ACN 098 238 585

NOTICE OF GENERAL MEETING

TIME: 11.00 cm (WST)

DATE: 6 August 2007

PLACE: Duxton Hotel Perth (Duxton Room 4) No. 1 St George's Terrace Perth WA 6000

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (61 8) 9367 8133.

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

A General Meeting of the Shareholders of Retail Star Limited (Company or Retail Star) will be held at 11.00am (WST) on Monday, 6 August 2007 at:

Duxton Hotel Perth (Duxton Room 4) No. 1 St George's Terrace Perth WA 6000

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed with this Notice of Meeting as soon as possible and either:

$\left( 0 \right)$ send the proxy form by facsimile to the Company on facsimile number (02) 9299 2239 (International +61 2 9299 2239); or
deliver the proxy form to the Company at Level 2, 350 Kent Street, Sydney, NSW; $(b)$ 2000 or
send the proxy form to the Company at PO Box Q191, QVB Post Shop, Sydney, $\left( c\right)$ NSW, 1230,

so that it is received not later than 11.00am (WST) on 4 August 2007. Proxy forms received later than this time will be invalid.

Your proxy form is enclosed after the Explanatory Statement

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Shareholders of Retail Star Limited will be held at 11.00am (WST) on 6 August 2007 at the Duxton Hotel Perth (Duxton Room 4), No. 1 St George's Terrace, Perth WA 6000.

The Explanatory Statement that accompanies and forms part of this Notice of Meeting describes in more detail the matters to be considered.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at close of business on 4 August 2007.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

$\mathbf{L}$ RESOLUTION 1 - AQUISITION OF ORION EXPLORATION PTY LTD AND URANIUM EXPLORATION ASSETS THROUGH AN ALLOTMENT AND ISSUE TO RED ROCK RESOURCES PLC

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1, for the purpose of Item 7 of Section 611 of the Corporations Act and for all other purposes, Shareholders approve and authorise:

$\langle \mathsf{a} \rangle$ the allotment and issue to Red Rock Resources Plc (Red Rock) of:
$\left( i\right)$ 80,000,000 Shares at an issue price of 1.5 cents each;
20,000,000 Options at an issue price of 1 cent each; and $(ii)$
$(iii)$ 20,000,000 Class "A" Performance Shares at an issue price of 0.5 cents each,

(together, the Subscription Securities);

$(b)$ the acquisition of the whole of the issued capital of Orion Exploration Pty Ltd (Orion) in consideration for a cash payment of \$1.5 million and the allotment and issue of 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares to Red Rock (the sole shareholder in Orion) (Acquisition); and
$\left( c\right)$ the acquisition by Red Rock (and its associates) of a relevant interest in the issued voting shares of the Company, giving them a voting power in excess of 20%, by virtue of the Shares issued under paragraph (a) above and the potential conversion of Options and Performance Shares issued under paragraphs (a) and (b) above,

on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this resolution by Red Rock, any other persons who will participate in the proposed issue and any other person who may obtain a benefit if the resolution is passed, except if the benefit is received solely in the capacity of a holder of ordinary securities, and any associates of those persons.

$2¹$ RESOLUTION 2 - ISSUE OF NEW CLASS OF SHARES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That, subject to the passing of Resolution 1, for the purposes of Section 246B of the Corporations Act, the Constitution of the Company and for all other purposes as contemplated by Resolutions 1 and 2, the Company be authorised to issue converting Performance Shares, the terms of which are set out in the Explanatory Statement accompanying this Notice."

$3.$ RESOLUTION 3 - ISSUE OF SHARES UNDER CAPITAL RAISING

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to allot and issue up to 37,500,000 fully paid ordinary shares in the capital of the Company at an issue price of 1.5 cents each to raise up to \$562,500 on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a security holder, if the Resolution is passed and any associates of those persons.

4. RESOLUTION 4 - ISSUE OF OPTIONS TO ADVISERS

To consider and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 7.1 of the ASX Listing Rules and for all other purposes, approval is given for the Company to allot and issue 10,000,000 Adviser Options to Carmichael Capital Markets Pty Limited (or its nominees) on the terms and conditions set out in the Explanatory Statement accompanying this Notice."

Voting Exclusion: The Company will disregard any votes cast on this resolution by a person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a security holder, if the resolution is passed, and any associate of those persons.

DATED: 28th June 2007

BY ORDER OF THE BOARD

SIMON HEADON COMPANY SECRETARY

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at a General Meeting.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

If you have any questions regarding the matters set out in this Explanatory Statement or the preceding Notice, please contact the Company, your stockbroker or other professional adviser.

GENERAL INFORMATION $\mathbf{L}$

$1.1$ Background

On 9 May 2007, the Company announced that it had reached agreement to acquire 100% of uranium exploration company Orion Exploration Pty Ltd (Orion) from Red Rock Resources Plc (a company incorporated in the United Kingdom and listed on AIM) (Red Rock), together with uranium exploration rights in E29/581 (Yilgarn District - Mt Alfred).

The consideration for the acquisition is \$1.5 million in cash. This cash consideration will be funded through Red Rock subscribing for 80 million Shares, 20 million Options and 20 million Class "A" Performance Shares for a total subscription sum of \$1.5 million. The 20 million Class "A" Performance Shares will convert into ordinary Shares on a one for one basis when ELA 24414 is granted to the Company.

A further 30 million Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares will also be issued to Red Rock in consideration of the Company being transferred certain exploration licenses located in Malawi, Southern Africa which have been applied for by Red Rock (Malawi Tenements).

Set out below is a summary of the current business of the Company, Orion and other relevant information for Shareholders to assess this proposed transaction.

$1.2$ Current Business

On-line Retail Business

The board of Retail Star intends to continue the retail business previously operated by G Retail focusing on internet shopping through an on-line portal. The opportunity is to utilize the look and feel of shopping in an actual retail store. Management has recognized that the internet offers substantial cost reductions associated with both retail display and transactional services. This will enable Retail Star to sell quality clothing in the sports and leisure markets at a price which attracts the middle income earners.

Retail Star is positioned to emulate the success of Australia's leading outdoor and activity-based retailers of semi-prestigious brand leisure and sportswear products. Sports and leisure clothing have more standardized sizes with less need for a precise fit than designer clothing, making them more suitable to on-line retailing.

The management of the Retail Star intends to develop an easy-to-use on-line portal that emulates the off-line shopping experience as much as possible. Customers are expected to be drawn to the Retail Star website by the user experience and the products on offer. With the increasing adoption of broadband Internet access, there is an opportunity to provide customers with a rich, interactive, on-line retail experience.

Development of the website and on-line portal is currently underway.

Path for Growth

Retail Star has an arrangement in which stock is currently being held in a warehouse in Alexandria, New South Wales. Further, Retail Star has access to a database of some 59,000 names, which it intends to utilize in developina its online portal.

Over the next 12-18 months, the Board has resolved to put in place strategic initiatives to enable Retail Star to realise growth. This includes

demographic analysis of our target market. Current focus is on low to middle class shoppers that are both price sensitive but aspire for quality branding and image. Management is initiating a market review and survey that identifies internet shopper and their behaviour/profile.
develop systems for product procurement and quality testing. Essential to the business is that we obtain quality product that has been tested to withstand ordinary wear and tear.
design and develop an on-line catalogue. Most important is attracting buyers to our on-line shopping experience. The development of glossy online and interactive catalogue that emphasis quality, image and price sensitivity is necessary to bring in internet shoppers.
build an on-line shopping portal that is capable of accepting most credit cards and Direct Debit facilities. There are a number of contractors and banks that offer this service. To start, we will review these available on-line billing services with special attention to customer identification, credit card authorization, goods tracking and final billing.
finally, management are reviewing procurement of goods, packaging of customer products and distribution/tracking for customer delivery and satisfaction

The proposed budget for the existing Retail Star's existing business and the ongoing administration of the Company for the next 12 months is as follows:

Action	Amount $(\$)$
Development of website and on-line portal	200,000
Administration expenses	270,000
Review and evaluation of new projects	200,000
Expenses of capital raising and new investment	80,000
TOTAL	750,000

Notes:

The above table is a statement of current intentions as of the date of this announcement. As with any budget, infervening events (including success or failure from business ventures) and new circumstances have the potential to affect the ultimate way funds will be applied. The Board reserves the right to alter the way funds are applied on this basis

New Opportunity

Notwithstanding this, the opportunity to invest in Orion allows the Company to commit a small amount of funding to an exploration program for a uranium entity. The Company has not made a decision to change the nature of its existing business and that decision will only be made if the Board considers this to be in the interests of all shareholders. In the event that the exploration program developed by Orion thereafter requires further expenditure, the Board will consider that expenditure at that time.

It may be that at this time the activities of the Company will be sufficient to change the nature and/or scale of its operations. ASX has advised it is likely to require full re-compliance with Chapters 1 and 2 of the ASX Listing Rules in the event the Company applies additional funding to the Orion project, acquires additional projects or raises additional funds in connection with the above.

Summary of Orion and its assets

Orion's assets consist of five granted exploration licences and one application for an exploration licence in the Northern Territory and an interest in a granted exploration licence in Western Australia. The details are as follows:

Prospect Name	Tenement	Grant/(Application Date)	Size	State
Celia	ELA 24414	(10/07/2004)	$13.05 \text{ km}^2$	NT
Marrakai	EL 24614	12/02/2005	20.9 km ²	NT
Edith River	EL 23568	17/02/2003	228.8 km ²	NT
Hayes Creek	EL 24432	02/12/2005	130.1 km ²	NT
Daly River Road	EL 24391	02/12/2005	$20.04 \text{ km}^2$	NT
Woolgni	EL 23569	17/06/2003	$360 \, km2$	NT
Yilgarn District - Mt Alfred	E 29/581	08/09/2006	$210.5$ km ²	WA

Celia Prospect - Northern Territory

$\triangleright$ Hosted within the highly favourable Rum Jungle Complex which has yielded over 70 mineral occurrences of a variety of commodities. Past mining has included uranium, base metals and gold.
$\triangleright$ Two extensive untested radiometric anomalies over airborne uranium channel lies south and north-west within the current tenure area.

Marrakai - Northern Territory

$\triangleright$ Untested radiometric anomalies are associated with the favourable lithologies and structures which have hosted uranium deposits in the Pine Creek region.
$\triangleright$ The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies.
$\triangleright$ Primary exploration focus has concentrated on iron ore and gold mineralisation.

Woolgni/Edith River Prospect - Northern Territory

Several uranium prospects were discovered in 1952 within the Lower Proterozoic Cullen Granite; the development of 9 vertical shafts with cross drive were completed with grades returning between $0.1\%$ U - $0.2\%$ U₃O₈.
$\triangleright$ The highly anomalous uranium grade is associated with shear/fault zones within the Cullen Granite.
$\triangleright$ Extensive radiometric anomalies remain untested throughout the area with little historical exploration work follow up.
Highly prospective for uranium mineralisation including unconformity, sandstone, quartz-pebble conglomerate, vein, and IOCGU deposit types.

Hayes Creek - Northern Territory

$\triangleright$ The tenement is located nearby uranium mined out deposits and uranium occurrences of Lady Josephine, Burrundie and Fleur de Lys.
The area highly prospective for unconformity-type uranium deposits, believed to be located at or near the contact between the Jindare Formation and the Stray Creek Sandstone. The tenement is hosted to one first/second order radiometric anomaly and five second order radiometric anomalies, which all remain untested.

Daly River Road - Northern Territory

$\triangleright$ Several first order and second order high priority radiometric anomalies are associated with sandstone units of the Pine Creek Area.
$\triangleright$ The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies.

Yilgarn/Mt Alfred Prospect - Western Australia

Tenement is compared to Lake Maitland and Yeelirrie type deposits.
Drainage systems around the region offer polymetallic possibilities.
$\triangleright$ Uranium anomalies identified by Uranerz in the mid 1970s.
$\ge$ Shallow auger drilling in 1977 by Uranerz returned results up to 150 ppm uranium (0.015%) from calcrete horizons.

Malawi Tenements

Red Rock has applied for the Machinga and Chintheche licenses in Malawi, Africa. These areas, amounting to 530 sq km in total, were highlighted as prospective for uranium mineralisation by Paterson, Grant and Watson in a study performed for the UNDP following a geophysical survey of the country conducted by Hunting Geophysics in 1986.

If these licences are granted, Red Rock has agreed to procure approval for the transfer of its rights and interest in them to Orion in exchange for the conversion of the Class "B" Performance Shares and the Class "C" Performance Shares (60 million in total) into ordinary Shares.

Exploration Budget

Orion has proposed an exploration budget for the various prospects referred to above.

It is intended that the exploration program will be subject to review and revision as information and experience on the project area is gathered. Accordingly, this budget is indicative only and subject to change.

The proposed budget is as follows:

ACTION	\$		\$	Ŝ	\$	\$
	Celia	Marrakai	Hayes Creek	Woolgni/E dith River	Daly River Road	Mt Alfred
	(Year 1)	(Year 1)	(Year 1)	(Year 1)	(Year 1)	(Year 1)
GIS Database	\$0.00	\$0.00	\$0.00	\$0.00	\$0.00	\$5,000
Establishment of Road Tracks	\$0.00	\$2,000	\$5,000	\$10,000	\$2,000	\$5,000
Surface Sampling Programs (Soll/Rock Chip)	\$4,000	\$4,000	\$4,000	\$10,000	\$4,000	\$15,000
Ground Magnetic/ Radiometrics Surveys	\$2,000	\$0.00	\$0.00	\$15,000	\$0.00	\$15,000
Geophysical Interpretation	\$1,000	\$1,000	\$1,000	\$6,000	\$1,000	\$5,000
RAB Drilling	\$0.00	\$0.00	\$0.00	\$50,000	\$0.00	\$40,000
Assays	\$1,000	\$1,000	\$1,000	\$9,000	\$1,000	\$5,000
TOTAL	\$8,000	\$8,000	\$11,000	\$100,000	\$8,000	\$90,000

As can be seen from the above, the proposed expenditure is not significant based on the Company's cash reserves of approximately \$2 million, however, it will allow the Company to evaluate whether to consider a change in the nature of its activities.

Board Changes and Professional Staff

On completion of the acquisition of Orion, the Company has agreed to invite Andrew Bell and Manoli Yannaghas to join its board of directors. In addition, the Orion technical team will include Helen Salmon.

The background and experience of each of these persons is set out below:

Andrew Bell, MA, LLB
Chairman, Regency Mines plc, Greatland Gold plc.
$\triangleright$ 30 years corporate finance experience in City of London and Hong Kong.
$\triangleright$ Former mining analyst.
$\triangleright$ Manoli Yannaghas
$\triangleright$ 6 years private equity experience structuring and raising funds for small, fast growing companies.
Financial Analyst in New York for banking consultancy business Greenwich Associates.
$\triangleright$ Director of Elstat Electronics Ltd; fast growing electronics Co.
$\blacktriangleright$ Helen Salmon
Graduated in Geology from the University of Hertfordshire 1999. BSc (Hons) 2:1. Worked on geological projects in British Guyana and Greenland.
Finishing PhD in Geology, University of London. Research area is in the Gardar alkaline province, Southern Greenland
Worked for London and Australian based exploration companies looking at Ta Uranium mineralization in Southern Greenland
$\triangleright$ Fellow of The Geological Society and member of the Mineralogical Society.

Placement and Capital Structure

As referred to above, Retail Star will place 37,500,000 Shares at 1.5 cents each to raise \$562,500, less the costs of issue. It is intended that part of these funds will be applied towards the budgeted expenditure on Retail Star's existing business and the exploration program referred to above.

The Company's cash position on completion of the placement will be approximately \$2 million.

Capital Structure on Completion of the Acquisition and Placement

	Shares	%
Existing	395,529,753	-77.1%
Placement	37,500,000	7.3%
Subscription by Red Rock	80,000,000*	15.6%
Total	513,029,753

* These shares are subject to voluntary restrictions for 12 months from the date of issue.

In addition to the above:

$(a)$ 20,000,000 Options with an exercise price of 2.5 cents each and an expiry date of 30 June 2008 will be issued to Red Rock; and
20,000,000 Class "A" Performance Shares, 30,000,000 Class "B" $(b)$ Performance Shares and 30,000,000 Class "C" Performance Shares will be issued to Red Rock; and
$\rm (c)$ 10,000,000 Options will be granted to certain advisers involved in the transaction. These Options will have an exercise price of 1.5 cents each and an expiry date of 30 June 2008.

Proforma Balance Sheet

Set out below is a balance sheet of the Company as at 31 January 2007, together with the proforma balance sheet on the basis of the assumptions set out below.

	31 January 2007 Ş	Proforma after capital raising and completion of investment
Assets (current)
Cash	1,696,775	2,259,275
Trade and other receivables	37,982	37,982
Inventories	53,173	53,173
Non Current Assets
Investment in Orion		1,500,000
Total Assets	1,787,930	3,850,430
Liabilities (current)
Trade and other payables	92,748	92,748
Net Assets	1,695,182	3,757,682
Equity
Contributed equity	25,522,645	27,285,145
Option reserve		200,000
Accumulated losses	(23,827,463)	(23,827,463)
Total Equity	1,695,182	3,757,682

Note 1. The movement of cash assets is reconciled as followed:

Cash Assets
Opening Balance	1,696,775
Placement of Shares	562,500
Closing Balance**	2,259,275

** As a result of expenditure incurred between 31 January 2007 and the anticipated date of completion of the investment, the Company's cash position will be approximately \$2 million.

Note 2. The movement in contributed equity is reconciled as follows:

Contributed Equity
Opening balance	25,522,645
Placement of 80,000,000 shares to acquire Orion (at
1.5 cents each)	1,200,000
Placement of 20,000,000 performance shares to
acquire Orion (at 0.5 cent each)	100,000
Placement of 37,500,000 shares (at 1.5 cents each)	562,500
Closing Balance	27,385,145

Note 3. The movement in the option reserve is reconciled as followed:

Option Reserve
Opening balance
Placement of 20,000,000 options to acquire Orion
(at 1 cent each)	200,000
Closing Balance	200,000

Note 4. The balance sheet covers Retail Star Limited as an individual entity.

$2₁$ RESOLUTION 1 - AQUISITION OF ORION EXPLORATION PTY LTD AND URANIUM EXPLORATION ASSETS THROUGH AN ALLOTMENT AND ISSUE TO RED ROCK

ASX Listing Rule 7.1 requires that a listed company obtain Shareholder approval prior to the issue of shares, or securities convertible into shares, representing more than 15% of the issued capital of that company in any 12 month period.

By approving this Resolution, the Company will also retain the capacity to issue securities in the future up to the 15% threshold without the requirement to obtain Shareholder approval.

$2.1$ Subscription by Red Rock

Resolution 1 seeks Shareholder approval for the allotment and issue to Red Rock of:

80,000,000 Shares at an issue price of 1.5 cents each; $(a)$
$(b)$ 20,000,000 Options at an issue price of 1 cent each; and
20,000,000 Class "A" Performance Shares at an issue price of 0.5 cents $\left( \circ \right)$ each.

The total funds raised from the issue will be \$1.5 million (which will be used to fund the acauisition of Orion).

Pursuant to, and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to Resolution 1:

$(a)$ the maximum number of Shares to be issued by the Company is 80,000,000 Shares:
the Shares will be issued at a price of 1.5 cents per Share; $(b)$
the maximum number of Options to be issued by the Company is $(c)$ 20,000,000 Options:
the Options will be issued at a price of 1 cent each; $(d)$
the Options shall be issued on the following terms and conditions: $(e)$
$(i)$ each Option entitles the holder, when exercised, to one (1) Share:
$(ii)$ the Options are exercisable at any time one or before 30 June 2008;
the exercise price of the Options is 2.5 cents each; $(iii)$
$(iv)$ subject to the Corporations Act, the Constitution and the ASX Listing Rules, the Options are fully transferable;
$(V)$ the options are exercisable by delivering to the registered office of the Company a notice in writing stating the intention of the option holder to exercise a specified number of Options, accompanied by an option certificate, if applicable, and a cheque made payable to the Company for the subscription monies due, subject to the funds being duly cleared funds. The exercise of only a portion of the Options held does not affect the holder's right to exercise the balance of any Options remaining:
$(V_i)$ all Shares issued upon exercise of the Options will rank part passu in all respects with the Company's then issued Shares;
$(vii)$ there are no participating rights or entitlements inherent in the new Options and the holder will not be entitled to participate in new issues of Options the Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be after at least 6 Business Days after the issue is announced. This will give Option holders the opportunity to exercise the Options prior to the date for determining entitlements to participate in any such issue;
$(viii)$ in the event of any reconstruction (including consolidation, subdivision, reduction or return of capital) of the issued capital of the Company prior to the expiry date of the Options, all rights of the Option holder will be varied n accordance wit the ASX Listing Rules; and
$(ix)$ in the event the Company makes a pro rata issue of securities, the exercise price of the Options will change in accordance with the formula set out in ASX Listing Rule 6.22.2;
$(f)$ the maximum number of Class "A" Performance Shares to be issued is 20,000,000. These Class "A" Performance Shares are to be issued on the terms set out in Item 1 of Schedule 1:
the Class "A" Performance Shares are to be issued at 0.5 cents each; $\left( 9\right)$
$(h)$ the Subscription Securities to be issued pursuant to Resolution 1 will be allotted and issued on one date anticipated to be on settlement of the acquisition of Orion and in any event not later than 3 months after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules). The Subscription Securities will not be issued to any related parties;
the Shares issued will rank equally with the existing Shares on issue; and $(1)$
the funds raised from the issue of the Subscription Securities pursuant to $(i)$ Resolution 1 (\$1.5 million in total) will be applied towards to the acquisition of Orion.

$2.2$ Acquisition of Orion

As noted above, the Company has agreed to acquire Orion in consideration for a cash payment of \$1.5 million and the issue of 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares to Red Rock.

Pursuant to, and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Acquisition:

$(a)$ the total number of securities to be allotted is 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares. These shares will be subject to a voluntary restriction of 12 months from the date of issue:
the Class "B" Performance Shares and Class "C" Performance Shares $(b)$ are to be issued for no cash consideration:
$\left( \circ \right)$ the terms of the Class "B" Performance Shares and the Class "C" Performance Shares are set out in Items 2 and 3 of the Schedule:
the Class "B" Performance Shares and the Class "C" Performance $(d)$ Shares shall be allotted and issued on one date anticipated to be immediately on settlement of the acquisition of Orion and in any event not later than 3 months after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules);
the name of the allottee of the Class "B" Performance Shares an Class $(\Theta)$ "C" Performance Shares is Red Rock (who is not a related party of the Company); and
no funds will be raised from the issue of the Class "B" Performance $(f)$ Shares or the Class "C" Performance Shares.

$2.3$ Advantages

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on Resolution 1:

$(a)$ the professional staff that will be appointed in conjunction with the transaction bring a new level of experience to the Company. The range of skills is diverse and the Directors are confident these new staff will assist in implementing the proposed exploration program on Orion's tenements:
Red Rock and parties related to the Red Rock have established $(b)$ relationships in capital, corporate and resources markets. As a result, the Company may have improved access to projects which will increase its ability to pursue growth opportunities; and
$\left( \circ \right)$ the uranium market in general is very strong at the moment with uranium spot prices at all time highs. If the proposed exploration program results result in a uranium resource being delineated, it is likely to have a positive effect on the Company's share price.

$2.4$ Disadvantages

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote on Resolution 1:

the proposal will result in the issue of securities to Red Rock which will $(a)$ heavily dilute the current holdings of Shareholders; and

$(b)$ there is no guarantee that the assets being acquired from Red Rock will generate a positive return for the Company and its Shareholders. As a general rule, mineral exploration is inherently risky and uncertain. If the initial round of exploration on Orion's tenements is unsuccessful, there may be an adverse affect on the Company's share price.

$2.5$ Acquisition of voting power in excess of 20%

Section 606 of the Act - the Statutory Prohibition

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person's or someone else's voting power in the company increases:

$(a)$ from 20% or below to more than 20%; or
$(b)$ from a starting point above 20% and below 90%.

Voting Power

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person's voting power in a company involves determining the voting shares in the company in which the person and the person's associates have a relevant interest.

A person (second person) will be an "associate" of the other person (first person) if:

$(a)$ the first person is a body corporate and the second person is:
$(i)$ a body corporate the fist person controls;
$(ii)$ a body corporate that controls the fist person; or
$(iii)$ a body corporate that is controlled by an entity that controls the person;
$(b)$ the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the Company's board or the conduct of the Company's affairs; and
$\left( \circ \right)$ the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the Company's affairs.

A person has a relevant interest in securities if they:

$(a)$ are the holder of the securities;
$(b)$ have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
$\left( \circ \right)$ have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

The effect of this section in relation to Resolution 1 is as follows:

$(a)$ Red Rock will initially acquire a relevant interest in all:
$(i)$ 80,000,000 Shares:
$(ii)$ 20,000,000 Options; and
20,000,000 Class "A" Performance Shares; $(iii)$
$(iv)$ 30,000,000 Class "B" Performance Shares; and
30,000,000 Class "C" Performance Shares; and $(V)$
when and if the Options, Class "A" Performance Shares, Class "B" $(b)$ Performance Shares and Class "C" Performance Shares are converted into ordinary Shares, Red Rock will acquire a relevant interest in up to an additional 100,000,000 ordinary Shares.

Shareholder approvals

Section 611 provides that certain acquisitions of relevant interests in a company's voting shares are exempt from the prohibition in section 606(1) including acquisitions approved previously by a resolution passed at a general meeting of the company in which the acquisition is made (item 7 of section 611).

However, for this exemption to apply, shareholders must be given all information known to the person proposing to make the acquisition or their associates, or known to the company that was material to the decision on how to vote on the resolution. In Policy Statement 74, the ASIC has indicated what additional information should be provided to shareholders in these circumstances.

For the purposes of the Corporations Act, and Policy Statement 74 the following information is disclosed:

$(a)$ the identity of each person proposing to make the acquisition of a relevant interest (in this section, an "Acquirer") and their associates (in this section, an "Associate") is:

Acquirer	Associates
Red Rock	None

$(b)$ the voting power that the relevant allottee's would have as a result of the acquisition, the maximum extent of the increase in the Acquirer's voting power in the Company that would result from the acquisition and the voting power that each of the allottee's associates would have as a result of the acquisition is:

Acquirer	lssue of Shares	Conversion of Options	Conversion of Class "A" Performance Shares	Conversion of Class "B" and "C" Performance Shares
Red Rock	15.59% \	18.76% 2	21.69%3	29.36%4

Notes:

$\mathbb{L}$ Based on total issued ordinary Shares, including as stipulated in this Resolution 1, being 513,029,753. i.e $395.529.753 + 37.500.000 +$ 80,000,000
$\overline{2}$ . Based on total issued ordinary Shares after the conversion of 20,000,000 Options being 533,029,753.
1. Based on total issued ordinary Shares after conversion of 20,000,000 Class "A" Performance Shares being 553,029,753.
1. Based on total issued ordinary Shares after conversion of 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares being 613,029,753.

Intentions of Red Rock in relation to Retail Star

Red Rock has informed Retail Star that, as at the date of this Explanatory Statement, on the basis of the facts and information available to it and other than as set out in this Explanatory Statement, if Shareholders approve Resolution 1 that it:

$(a)$ has no immediate intention of making any significant changes to the business of the Company such that it will continue materially in the same manner as at the date of this Explanatory Statement;
$(b)$ does not intend to redeploy any fixed assets of Retail Star;
does not have any present intention to inject further capital into Retail $(c)$ Star;
$(d)$ does not intend to transfer any property between Red Rock and Retail Star or any person associated with any of them other than as set out in this Notice:
has no current intention to change Retail Star's existing policies in $(\Theta)$ relation to financial matters or dividends:
has no current intentions regarding the future employment of the $(f)$ present employees of Retail Star; and
$(g)$ has no current intention to change the Board.

$3.$ RESOLUTION 2 - ISSUE OF NEW CLASS OF SHARES

The Constitution of the Company requires that the creation of a new class of share requires:

$(a)$ the written consent of the holders of three quarters of the issued shares of the affected class; or
$(b)$ a special resolution passed in a meeting of the holders of the issued shares of the affected class.

Pursuant to the Heads of Agreement, the Company proposes issuing:

$(a)$ 80,000,000 Shares:
$(b)$ 20,000,000 Options; and
20,000,000 Class "A" Performance Shares $\left( \circ \right)$

for subscription by Red Rock, and

$(d)$ 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares in part consideration for the acquisition of 100% of Orion.

The purpose of the issue of the 30,000,000 Class "B" Performance Shares and 30,000,000 Class "C" Performance Shares as part of the acquisition of Orion is to link part of the consideration to milestones in respect of the Malawi Tenements. If the milestones are not achieved within the prescribed timeframe, the Company will redeem the converting Performance Shares for nominal consideration.

A company with a single class of shares on issue which proposes to issue new shares not having the same rights as its existing shares, is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

The terms of the Performance Shares are not the same as the Shares. The terms of the Performance Shares have been approved by ASX.

Accordingly, the Company seeks approval from Shareholders for the issue of the Performance Shares on the terms set out in the Schedule of this Explanatory Statement.

$\boldsymbol{4}$ . RESOLUTION 4 - ISSUE OF SHARES UNDER CAPITAL RAISING

$4.1$ ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to certain exceptions, issue during any 12 month period any equity securities or other securities with rights of conversion to equity (such as an option) if the number of those securities exceeds 15% of the total ordinary securities on issue at the commencement of that 12 month period.

One circumstance where an issue is not taken into account in the calculation of this 15% threshold is where the issue has the prior approval of shareholders in a general meeting.

The Company is seeking approval under this Listing Rule for the proposed issue of fully paid ordinary shares in the capital of the Company to raise up to \$562,500 on the terms and conditions set out below (Capital Raising) to allow the number of securities issued not to be included in the calculation under ASX Listing Rule 7.1. This will enable the Company to have the flexibility to issue equity securities in the future up to the 15% threshold without the requirement to obtain Shareholder approval.

ASX Listing Rule 7.3 requires that the following information be provided to shareholders for the purposes of obtaining shareholder approval pursuant to ASX Listing Rule 7.1:

$(a)$ the Shares will be issued at an issue price of 1.5 cents each;

$(b)$ the Company will issue 37,500,000 fully paid ordinary Shares;
the allottees of the securities will be sophisticated and experienced $\left( \circ \right)$ investor clients/nominees of DJ Charmichael Pty Limited in accordance with section 708 of the Corporations Act;
$(d)$ the securities will be issued immediately after the date of this Meeting but in any event no later than 3 months after the date of this Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated that allotment will occur on one date:
$(\Theta)$ the Shares issued will rank equally with the existing Shares on issue; and
$(f)$ the funds raised by the issue of the Shares will be used for the purposes set out in Section 1 of this Explanatory Statement.

5. RESOLUTION 5 - ISSUE OF OPTIONS TO ADVISERS

$5.1$ Background

As part of their fee arrangements in relation to the Capital Raising stipulated in Resolution 4, the Company agreed to issue 10,000,000 Adviser Options to Carmichael Capital Markets Pty Limited (or its nominees) (together the Advisers) on the terms set out in Section 5.2 below.

The Company is seeking Shareholder approval for the proposed issue of 10,000,000 Adviser Options so that this number of securities is not included in the 15% calculation set out in Listing Rule 7.1.

$5.2$ Terms of Adviser Options

The material terms and conditions of the Adviser Options are as follows:

$(a)$ each Adviser Option entitles the holder to subscribe for one (1) Share;
$(b)$ the Adviser Options are exercisable at any time on or prior to 5.00pm (WST) on 30 June 2008 (Expiry Date) by completing an option exercise form and delivering it together with the payment for the number of Shares in respect of which the Adviser Options are exercised to the registered office of the Company on or before the Expiry Date;
$\left( \circ \right)$ the exercise price of each Adviser Option is 1.5 cents;
$(d)$ an Adviser Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Adviser Option can be exercised;
$(\Theta)$ the Adviser Options are freely transferable;
all Shares issued upon exercise of the Adviser Options will rank pari passu $(f)$ in all respects with the Company's then issued Shares;
the Company will apply for quotation of all Shares issued upon exercise $\left( q\right)$ of the Adviser Options on ASX. The Adviser Options will not be quoted on ASX:
$(h)$ there are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Adviser Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be after at least 6 Business Days after the issue is announced. This will give Adviser Option holders the opportunity to exercise their Adviser Options prior to the date for determining entitlements to participate in any such issue; and
if at any time the issued capital of the Company is reconstructed, all $(1)$ rights of a Adviser Option holder are to be changed in a manner consistent with the Corporations Act and the Listing Rules.

$5.3$ Listing Rule 7.3

Listing Rule 7.3 requires that the following information be provided to Shareholders:

the maximum number of securities to be issued is 10,000,000 Adviser $(a)$ Options;
the 10,000,000 Adviser Options will be issued for no cash consideration; $(b)$
the Adviser Options will be issued to the Advisers. The Advisers are not $\rm (c)$ related parties of the Company;
the Adviser Options will be issued immediately after the date of this $(d)$ Meeting but in any event no later than 3 months after the date of this Meeting (or later to the extent permitted by any ASX waiver of the Listing Rules) and it is anticipated that allotment will occur on one date;
$(e)$ the Adviser Options will be issued on the terms set out in paragraph 5.2 of this Explanatory Statement above; and
no funds will be raised from the issue of the 10,000,000 Adviser Options as $(f)$ they are being issued as part of their fee arrangements in relation to the Capital Raising and introducing Red Rock transaction to the Company.

$6.$ ENQUIRIES

If you have any queries, please contact the Simon Headon on (61 8) 9367 8133.

GLOSSARY

Advisor Option means the option tot be granted pursuant to Resolution 5 and having the terms and conditions set out in section 5.2 of the Explanatory Statement.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ABN 98 008 624 691).

ASX Listing Rule or Listing Rule means the Listing Rules of ASX.

Board means the board of directors of the Company.

Class "A" Performance Shares means those shared defined in Item 1 of the Schedule.

Class "B" Performance Shares means those shares defined in Item 2 of the Schedule.

Class "C" Performance Shares means those shares defined in Item 3 of the Schedule.

Company or Refail Star means Retail Star Limited (ACN 098 238 585).

Constitution means the constitution of the Company at the commencement of the General Meeting.

Corporations Act means the Corporations Act 2001 (Cth).

Directors mean the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting means the meeting convened by the Notice.

Heads of Agreement means the agreement executed by Retail Star, Orion and Red Rock on or about 9 May 2007.

Notice means the notice of meeting accompanying this Explanatory Statement.

Options means an option to acquire a Share.

Performance Shares means the Class "A" Performance Shares and the Class "B" Performance Shares.

Resolution means a resolution contained in the Notice.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

WST means Western Standard Time.

\$ means Australian Dollars.

SCHEDULE - PERFORMANCE SHARES

Item 1 - Class "A" Performance Shares

$\mathbf{L}$ RIGHTS ATTACHING TO CLASS "A" PERFORMANCE SHARES

$1.1$ (Class "A" Performance Shares) Each Class "A" Performance Share is a share in the capital of Retail Star Group Limited (Retail Star).
$1.2$ (General Meetings) The Class "A" Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Retail Star that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Retail Star.
$1.3$ (No Voting Rights) The Class "A" Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Retail Star.
$1.4$ (No Dividend Rights) The Class "A" Performance Shares do not entitle the Holder to any dividends.
(Rights on Winding Up) The Class "A" Performance Shares participate in $1.5$ the surplus profits or assets of Retail Star upon winding up of Retail Star only to the extent of \$0,000001 per Class "A" Performance Share.
(Not Transferable) The Class "A" Performance Shares are not $1.6$ transferable.
$1.7$ (Reorganisation of Capital) If at any time the issued capital of Retail Star is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
$1.8$ (Application to ASX) The Class "A" Performance Shares will not be quoted on ASX. However, upon conversion of the Class "A" Performance Shares into fully paid ordinary shares (Ordinary Shares) in accordance with condition 2, Retail Star must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on ASX.
1.9 (No Participation in Entitlements and Bonus Issues) Holders of Class "A" Performance Shares will not be entitled to participate in new issues of capital offered to holders of Ordinary Shares such as bonus issues and entitlement issues.
$1.10$ (No Other Rights) The Class "A" Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

$2.$ CONVERSION OF THE CLASS "A" PERFORMANCE SHARES

$2.1$ (Conversion on achievement of milestones) Each Class "A" Performance Share will convert into one (1) fully paid ordinary share in the capital of Retail Star (Ordinary Share) (i.e. a total of 20,000,000 Ordinary Shares) within 12 months from settlement of the Acquisition (Expiry Date) only upon ELA 24414 being granted (the Milestone).

$2.2$ (Redemption if Milestone not Achieved) If the Milestone is not achieved through no fault on the part of Retail Star or Orion by the Expiry Date, then all of the Class "A" Performance Shares held by a Holder relating to that Milestone will be automatically redeemed by Retail Star for the sum of \$0.000001 per Class "A" Performance Share within 10 Business Days of the date of the Expiry Date.
$2.3$ (Conversion Procedure) Retail Star will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class "A" Performance Shares into Ordinary Shares in accordance with condition 2.1.
$2.4$ (Ranking of Shares) The Ordinary Shares into which the Class "A" Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares and Retail Star will apply to have them listed on ASX.

Ifem 2 - Class "B" Performance Shares

$\mathbf{L}$ RIGHTS ATTACHING TO THE CLASS "B" PERFORMANCE SHARES

(Class "B" Performance Shares) Each Class "B" Performance Share is a $1.1$ share in the capital of Retail Star Group Limited (Retail Star).
(General Meetings) The Class "B" Performance Shares shall confer on $1.2$ the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Retail Star that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Retail Star.
$1.3$ (No Voting Rights) The Class "B" Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Retail Star.
$1.4$ (No Dividend Rights) The Class "B" Performance Shares do not entitle the Holder to any dividends.
$1.5$ (Rights on Winding Up) The Class "B" Performance Shares participate in the surplus profits or assets of Retail Star upon winding up of Retail Star only to the extent of \$0.000001 per Class "B" Performance Share.
(Not Transferable) The Class "B" Performance Shares are not $1.6$ transferable.
$1.7$ (Reorganisation of Capital) If at any time the issued capital of Retail Star is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
$1.8$ (Application to ASX) The Class "B" Performance Shares will not be However, upon conversion of the Class "B" quoted on ASX. Performance Shares into fully paid ordinary shares (Ordinary Shares) in accordance with condition 2, Retail Star must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on ASX.
1.9 (No Participation in Enfittements and Bonus Issues) Holders of Class "B" Performance Shares will not be entitled to participate in new issues of capital offered to holders of Ordinary Shares such as bonus issues and entitlement issues.
$1.10$ (No Other Rights) The Class "B" Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

$2¹$ CONVERSION OF THE CLASS "B" PERFORMANCE SHARES

$2.1$ (Conversion on achievement of milestones) Each Class "B" Performance Share will convert into one (1) fully paid ordinary share in the capital of Retail Star (Ordinary Share) (i.e. a total of 60,000,000 Ordinary Shares) within 12 months from settlement of the Acquisition (Expiry Date) only upon satisfaction of both of the following performance hurdles:
the successful grant of the Machinga tenement in Malawi, $(a)$ more specifically described as EPL0181/2005, in the name of Red Rock: and
$(b)$ the transfer from Red Rock of all of its legal and equity title in EPL0181/2005 to Orion (or its nominee) on an unencumbered basis.

(the Milestone).

$2.2$ (Redemption if Milestone not Achieved) if the Milestone is not achieved through no fault on the part of Retail Star or Red Rock by the Expiry Date, then all of the Class "B" Performance Shares held by a Holder relating to that Milestone will be automatically redeemed by Retail Star for the sum of \$0,000001 per Class "B" Performance Share within 10 Business Days of the date of the Expiry Date.
$2.3$ (Conversion Procedure) Retail Star will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class "B" Performance Shares into Ordinary Shares in accordance with condition 2.1.
$2.4$ (Ranking of Shares) The Ordinary Shares into which the Class "B" Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares and Retail Star will apply to have them listed on ASX.

Item 3 - Class "C" Performance Shares

$\mathbf{I}$ . RIGHTS ATTACHING TO THE CLASS "C" PERFORMANCE SHARES

$1.1$ (Class "C" Performance Shares) Each Class "C" Performance Share is a share in the capital of Retail Star Group Limited (Retail Star).
$1.2$ (General Meetings) The Class "C" Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Retail Star that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Retail Star.
$1.3$ (No Voting Rights) The Class "C" Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Retail Star.
(No Dividend Rights) The Class "C" Performance Shares do not entitle $1.4$ the Holder to any dividends.
$1.5$ (Rights on Winding Up) The Class "C" Performance Shares participate in the surplus profits or assets of Retail Star upon winding up of Retail Star only to the extent of \$0,000001 per Class "C" Performance Share.
$1.6$ (Not Transferable) The Class "C" Performance Shares are not transferable.
$1.7$ (Reorganisation of Capital) If at any time the issued capital of Retail Star is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
$1.8$ (Application to ASX) The Class "C" Performance Shares will not be However, upon conversion of the Class "C" quoted on ASX. Performance Shares into fully paid ordinary shares (Ordinary Shares) in accordance with condition 2, Retail Star must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on ASX.
$1.9$ (No Participation in Entitlements and Bonus Issues) Holders of Class "C" Performance Shares will not be entitled to participate in new issues of capital offered to holders of Ordinary Shares such as bonus issues and entitlement issues.
$1.10$ (No Other Rights) The Class "C" Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

CONVERSION OF THE CLASS "C" PERFORMANCE SHARES $2.$

$2.1$ (Conversion on achievement of milestones) Each Class $C'$ Performance Share will convert into one (1) fully paid ordinary share in the capital of Retail Star (Ordinary Share) (i.e. a total of 60,000,000 Ordinary Shares) within 12 months from settlement of the Acquisition (Expiry Date) only upon satisfaction of both of the following performance hurdles:
$\alpha$ the successful grant of the Chintheche tenement in Malawi, more specifically described as EPL0180/2005, in the name of Red Rock; and
$(b)$ the transfer from Red Rock of all of its legal and equity title in EPL0180/2005 to Orion (or its nominee) on an unencumbered basis,

(the Milestone).

$2.2₂$ (Redemption if Milestone not Achieved) If the Milestone is not achieved through no fault on the part of Retail Star or Red Rock by the Expiry Date, then all of the Class "C" Performance Shares held by a Holder relating to that Milestone will be automatically redeemed by Retail Star for the sum of \$0,000001 per Class "C" Performance Share within 10 Business Days of the date of the Expiry Date.
$2.3$ (Conversion Procedure) Retail Star will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class "C" Performance Shares into Ordinary Shares in accordance with condition 2.1.
$2.4$ (Ranking of Shares) The Ordinary Shares into which the Class "C" Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares and Retail Star will apply to have them listed on ASX.

APPOINTMENT OF PROXY RETAIL STAR LIMITED ACN 098 238 585

Voting on Business of the General Meeting

GENERAL MEETING

I/We
	being a member of Retail Star Limited entitled to attend and vote at the General Meeting, hereby
Appoint
	Name of proxy
	or failing the person so named or, if no person is named, the Chairman of the Meeting or the

Chairman's nominee, to vote in accordance with the following directions or, if no directions have been aiven, as the proxy sees fit at the General Meeting to be held at 11,00am (WST) on 6 August 2007 at Duxton Hotel Perth (Duxton Room 4), No. 1 St George's Terrace, Perth WA, 6000 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

		FOR	AGAINST	ABSTAIN
Resolution 1	Acquisition of Orion Exploration Pty Ltd and uranium Assets through an allotment and issue to Red Rock
Resolution 2	Issue of New Class of Shares
Resolution 3	Issue of Shares under Capital Raising
Resolution 4	Issue of Options to Advisers

OR

In relation to the Resolutions, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on these Resolutions, please place a mark in this box $\Box$

By marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the meeting will not cast your votes on Resolutions and your votes will not be counted in computing the required majority if a poll is called on these Resolutions. The Chairman intends to vote in favour of the Resolutions.

IF THE CHAIRMAN IS TO BE YOUR PROXY IN RELATION TO THE RESOLUTIONS YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY IN RELATION TO THE RESOLUTIONS WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

Signed this	day of	2007
By: Individuals and joint holders		Companies (affix common seal if appropriate)
Signature		Director
Signature		Director/Company Secretary
Signature		Sole Director and Sole Company Secretary

RETAIL STAR LIMITED ACN 098 238 585

Instructions for Completing 'Appointment of Proxy' Form

$\mathbb{L}$ A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member's voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.
$\overline{2}$ . A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sian.
1. Corporate shareholders should comply with the execution requirements set out on the proxy form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:
directors of the company;
a director and a company secretary of the company; or
for a proprietary company that has a sole director who is also the sole $\bullet$ company secretary - that director.

For the Company to rely on the assumptions set out in Sections 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

Completion of a proxy form will not prevent individual shareholders from 4. attending the meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the meeting in person, then the proxy's authority to speak and vote for that shareholder is suspended while the shareholder is present at the meeting
1. Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

Independent Expert's Report - 19 June 2007 Retail Star Limited

in relation to the acquisition of 100% of Orion Exploration Pty Ltd

İ,

Licensed Investment Adviser

FINANCIAL SERVICES GUIDE Dated 1 February 2005

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From time to time HLB Mann Judd Corporate or HLB Mann Judd (WA Partnership) may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

Complaints resolution

Internal complaints resolution process 9.1.

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. Complaints must be in writing, addressed to The Complaints Officer, HLB Mann Judd Corporate (WA) Pty Ltd, 2^nd Floor, 15 Rheola Street, West Perth WA 6005.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 7 days and investigate the issues raised. As soon as practical, and not more than one month after receiving the written complaint, we will advise the complainant in writing of the determination.

$9.2.$ Referral to external disputes resolution scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Industry Complaints Service Limited ("FICS"). FICS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FICS are available at the FICS website www.fics.asn.au or by contacting them directly via the details set out below.

Financial Industry Complaints Service Limited PO Box 579 Collins Street West Toll free: 1300 78 08 08 Melbourne VIC 8007 Facsimile: (03) 9621 2291

10. Contact details

You may contact us using the details at the foot of page 1 of this FSG.

0706 NGN011 REP NGN/CE

19 June 2007

The Directors Retail Star Limited Level 2, 350 Kent Street SYDNEY NSW 2000

Dear Sirs

INDEPENDENT EXPERT'S REPORT

1. INTRODUCTION

The directors of Retail Star Limited ("Retail Star" or the "Company") have engaged HLB Mann Judd Corporate (WA) Pty Ltd ("HLB") to prepare an Independent Expert's Report ("the Report") in relation to the acquisition of 100% of the issued capital of Orion Exploration Pty Ltd ("Orion") from Red Rock Resources Plc ("Red Rock") hereafter referred to as the Acquisition and to conclude as to whether the terms of the Acquisition are fair and reasonable to the non-associated shareholders of Retail Star.

The Acquisition is further described in Section 4 of this Report. Details of the Acquisition are also set out in the Explanatory Memorandum accompanying the Notice of Meeting of Retail Star dated on or about 19 June 2007.

We understand that the Acquisition is subject to shareholder approval and that this Report will accompany the Notice of Meeting and Explanatory Memorandum.

The report has been divided into the following sections:

1. Introduction
1. Purpose of the report
1. Summary of opinion
1. Acquisition
1. Implications of the Acquisition to Retail Star Limited
1. Corporate History and Nature of Business

16 Rheeta Street West Perth 6009, PO Box 263 West Ferth 6672 Western Australia, DX 238 Telephone +61 (88) 9481 0977, Fax +61 (89) 9481 3686. Email [email protected]. Wębsite: http//www.manajudd.com.au

it it lasse , and forpers (wall by its in a number of light "membres), a vock-wide regarbation of successing from end business advises.

1. Future Directions of Retail Star Limited
1. Basis of Valuation
1. Valuation of Retail Star
1. Premium for Control
1. Assessment as to Fairness
1. Reasonableness of the Acquisition
1. Conclusion
Appendices

$\mathcal{Z}$ PURPOSE OF THE REPORT

HLB has been engaged by the directors of the Company to prepare this Independent Expert's Report to accompany a Notice of General Meeting and Explanatory Memorandum to be sent to Shareholders in connection with the Acquisition.

Our report has been prepared solely for the purpose of assisting the non-associated shareholders of Retail Star in considering the Acquisition, details of which are included in the Explanatory Memorandum and summarised in Section 4 of this report.

Section 606 of the Corporations Act 2001 ("Act") prohibits the acquisition of an interest in a public company with more than 50 members if the transaction increases that person's interest from 20% or below to more than 20%. An exception to this general prohibition is set out in Section 611(7), whereby such an acquisition is allowed when approved by a majority of shareholders at a general meeting and where no votes are cast in respect of shares held by the acquirer or its associates.

Currently, Red Rock holds no shares in the issued capital of Retail Star. Should the Acquisition be approved, Red Rock will have the ability to hold up to approximately 29.36%.

ASIC Policy Statement 74 requires that shareholders voting on a Section 611(7) resolution must be provided with sufficient information to assess the merits of a proposal, including a report prepared by either the independent directors or an independent expert.

In the context of a Section 611(7) resolution, the independent expert should state whether a proposal is fair and reasonable to the non-associated shareholders and the opinion should be formed after considering all the circumstances of a proposal. The independent expert must compare the likely advantages and disadvantages for the non-associated shareholders if a proposal is agreed to, with the advantages and disadvantages to those shareholders if it is not.

This report has not been prepared to provide information to any parties considering the purchase or sale of Retail Star securities. Accordingly, we do not assume any responsibility or liability from the use of this report contrary to the provisions of this paragraph.

This report is to be included with the Notice of General Meeting and Explanatory Memorandum to assist the Company's non-associated shareholders in their consideration of the Acquisition.

З. SUMMARY OF OPINION

In our opinion the Acquisition is fair and reasonable to the non-associated shareholders.

4. ACQUISITION

4.1 Full details and conditions of the Acquisition are set out in the Notice of General Meeting and Explanatory Memorandum which accompanies this report. For the benefit of shareholders, we have summarised the key features of the Acquisition as follows.
4.2 The terms of the acquisition are as follows:

In consideration for the terms listed below, Red Rock is to receive a cash payment of A\$1.5 Million ("Consideration").

Retail Star agrees to acquire 100% of the shares held in Orion, held by the sole i) shareholder in Orion, Red Rock;
$ii)$ Retail Star agrees to acquire the uranium rights in E29/581 (Yilgarn District -Mt Alfred) beneficially owned by Red Rock but registered in the name of Baxter and Askins;
iii) subject to certain conditions, Retail Star agrees to acquire Red Rock's interest in certain yet to be granted tenements located in Malawi as described in clause 7 of the Heads of Agreement ("Malawi Tenements"); and
iv) Red Rock agrees to subscribe for various securities in the capital of Retail Star as described in section 4.3 below.
In undertaking the above agreement, Red Rock agrees to subscribe to and Retail Star 4.3 agrees to issue the following securities:
i) 80,000,000 fully paid ordinary shares in the capital of Retail Star at an issue price of 1.5 cents each;
ii) 20,000,000 options (with an exercise price of 2.5 cents each and an expiry date of 30 June 2008) at an issue price of 1 cent each;
iii) 20,000,000 "A" class converting performance shares (on the terms set out in the schedule to the Notice of Meeting) at an issue price of 0.5 cents each. These " $A$ " class converting performance shares will convert into ordinary shares on a one for one basis when ELA 24414 is granted to the Company

The total amount payable by Red Rock for the securities set out above is \$1.5 million and as a result the transaction is cash neutral to Retail Star.

An additional 30,000,000 "B" class and 30,000,000 "C" class converting performance shares (on the terms set out in the schedule to the Notice of Meeting) will also be issued to Red Rock in consideration of the Company being transferred certain exploration licenses located in Malawi, Southern Africa which have been applied for by Red Rock.

$4.4$ As both transactions will be put to shareholders in one resolution, the transactions are considered to be interdependent and have been dealt with as one transaction for the purposes of this report.

5. IMPLICATIONS OF THE ACQUISITION TO RETAIL STAR LIMITED

5.1 Immediately following the approval by shareholders and issue of all securities referred to in the Notice of Meeting, the following equity securities will be on issue:

	Shares
	Current Position	To be Issued under the notice of Meeting		Total
		Red Rock	Others
Ordinary Shares	395,529,753	80,000,000	37,500,000	513,029,753
"A" Class converting		20,000,000		20,000,000
"B" Class converting		30,000,000		30,000,000
"C" Class converting		30,000,000		30,000,000
	395,529,753	160,000,000	37,500,000	593,029,753

			Options
		Current Position		To be issued under the notice of meeting
			Red Rock	Others
Expiring	Exercisable
31 May 2008	\$0.80	65,000			65,000
31 May 2008	\$1.00	70,000			70,000
15 December 2009	\$0.261	1,333,334			1,333,334
15 December 2010	\$0.287	1,333,334			1,333,334
15 December 2011	\$0.314	1,333,332			1,333,332
15 December 2009	\$0.25	3,300,000			3,300,000
30 June 2008	\$0.025		20,000,000		20,000,000
30 June 2008	\$0.015			10,000,000	10,000,000
		7,435,000	20,000,000	10,000,000	37,435,000

5.2 As at 15 May 2007 the number of issued shares in Retail Star Limited totalled 395,529,753 and the top 20 shareholders were as follows:

	No of Ordinary	% of issued
	Shares	capital
ANZ Nominees Limited	28,639,166	7.24
Mr George Sim	14,900,000	3.77
Suburban Holdings Pty Ltd	14,000,000	3.54
Mr Joseph Charles Camuglia	13,650,000	3.45
Sinbad Pty Ltd	13,499,334	3.41
Armelek Pty Ltd	12,800,000	3.24
Canemoon Investments Pty Ltd	12,800,000	3.24
Mr Anthony Stephen Crimmins	12,500,000	3.16
Wolpert Management Pty Ltd	10,833,333	2.74
Strategic Value Pty Ltd	9,832,229	2.49
Marketech Pty Ltd	9,500,000	2.40
Mr Scott Ainsbury	9,375,000	2.37

Mr Gregory Glenn Worth	8,791,667	2.22
Farlaw No 11 Pty Ltd	7,500,000	1.90
Gowings Bros Ltd	7,350,001	1.86
Ms Maria Matthews	6,500,000	1.64
WA Haplin Investments Pty Ltd	6,250,000	1.58
Brantaz Pty Ltd	4,700,000	1.19
Mr David John Anderson	4,500,000	1.14
Flypane Pty Ltd	4,250,000	1.07

TOTAL	212,170,730	53.65

The top 20 shareholders therefore control 53.65% of the Company. If the Acquisition is approved, the effects on the percentage shareholdings of these shareholders would be as follows:

	Shares on issue	% held by existing top 20 shareholders	% held by Red Rock	$%$ held by other shareholders
Current position	395,529,753	53.65		46.35
Issue to Red Rock	80,000,000
Issue to Others	37,500,000
SUBTOTAL	513,029,753	41.36	15.59	43.05
Conversion of "A"
Class shares	20,000,000
SUB TOTAL	533,529,753	39.80	18.76	41.43
Conversion of "B"
Class shares	30,000,000
Conversion of " $c$ "
Class shares	30,000,000
SUB TOTAL	593,529,753	35.78	26.98	37.24

NOTE: Excludes any dilution impact of option issues. Maximum holding of Red Rock assuming it exercises all its options and no other options are exercised is 29.36%

6. CORPORATE HISTORY AND NATURE OF BUSINESS

6.1. RETAIL STAR LIMITED

Retail Star was incorporated as Gowings Retail Limited on 24 September 2001 and listed on the Australian Stock Exchange Limited ("ASX") on 18 December 2001. It was placed in Administration and changed its name to G Retail Ltd on 23 December 2004 before being released from Administration and changing its name to Retail Star Ltd on 15 August 2006.

As outlined in the 2007 half year report, the principal activity of the Company and its subsidiaries was the review of opportunities in the area of retail operations in recreational products and general merchandise. Following the termination of the Deed of Company Agreement that the Company had been operating under, the new board of directors of the Company continued the retail business that was operated by "G Retail" but under a new brand and primarily focusing on internet sales. In addition

the Board was to actively attempt to identify other acquisitions that will create Shareholder value.

The Company was reinstated to official quotation on the ASX on 30 January 2007. The current directors of the Company are Mr A S Crimmins, Mr R Kestel and Mr S Nicols.

7. FUTURE DIRECTIONS OF RETAIL STAR LIMITED

As outlined in the Notice of Meeting, the board of Retail Star intends to continue the retail business previously operated by G Retail focusing on internet shopping through an on-line portal. Notwithstanding this, the opportunity to invest in Orion allows the Company to commit an amount of funding to an exploration program for a uranium entity.

The Company has not made a decision to change the nature of its existing business and that decision will only be made if the Board considers this to be in the interests of all shareholders. In the event that the exploration program developed by Orion thereafter requires further expenditure, the Board will consider that expenditure at that time.

On completion of the acquisition of Orion, the Company has agreed to invite Andrew Bell and Manoli Yannaghas to join the board of directors.

8. BASIS OF VALUATION

In preparing this Report, HLB has had regard to the relevant ASIC practice notes and policy statements, in particular ASIC Policy Statement 75.

ASIC Policy Statement 75, states, inter alia:

an offer is considered "fair" if the value of the offer price or consideration is equal $\bullet$ to, or greater than, the value of the securities that are the subject of the offer.
an offer is considered "reasonable" if it is fair or, if the offer is "not fair", it may ø still be "reasonable" after considering other significant factors which justify the acceptance of the offer in the absence of a higher bid.

ASIC Policy Statement 75 requires the assessment of "fair" to be made assuming 100% ownership of the target company. In the assessment of "fair", the value of the securities under the offer cannot be reduced for factors that would normally be considered in the valuation of a minority interest such as a lack of control.

ASIC Policy Statement 75 also provides examples of factors that are relevant in an assessment of reasonableness.

An assessment of the fairness and reasonableness of Acquisition is set out in Sections 11 and 12 of this Report.

8.1 VALUATION OVERVIEW

The usual approach to the valuation of an asset is to seek to determine what a willing but not anxious buyer, acting at arm's length, with adequate information, would be prepared to pay and a willing, but not anxious seller would be prepared to accept in an open market.

In valuing Retail Star prior to consideration of the Acquisition, we have considered the following valuation approaches:

Market value approach;
Asset approach; ۰
Discounted cash flow ("DCF") approach; and
Capitalisation of future maintainable earnings (earnings based) approach. e.

8.2 VALUATION APPROACH

The traditional valuation method used to value companies such as Retail Star is the capitalisation of future maintainable earnings, with such earnings being estimated using historical results. However, in order to adopt such a basis of valuation, a business must have a track record of profitably. As Retail Star does not have a track record of profitability, we consider a valuation on this basis to be inappropriate.

HLB believes that the most appropriate method for valuing the issued shares in Retail Star is the asset based approach. The most common form of asset based approach is the Net Realisable Value method. The resultant net realisable value of the assets of the Company can then be expressed in terms of a value per share.

Details of our valuation are set out in Section 9.1 of this Report.

QUOTED MARKET PRICE BASIS 8.3

Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a "deep" market in that security.

As a crosscheck of the valuation on the basis as set out in Section 8.1 above, HLB has used the market based approach with reference to the market price of Retail Star Limited shares. This valuation crosscheck calculation is set out in Section 9.2 of this Report.

9. VALUATION OF RETAIL STAR LIMITED

9.1 VALUATION - NET ASSETS METHOD

We have assessed the value of Retail Star on the basis of the fair market value of the Company's underlying net assets on a going concern basis, market values for available for sale assets and book values of Retail Star's other net assets as at 31 January 2007 as determined from Retail Star's Reviewed accounts as at 31 January 2007. Retail Star's net assets are summarised below, together with our assessment of fair market values. Based on our assessment, no valuation adjustments are required other than to include the placement at 1.5 cents per share of 37,500,000 ordinary shares as outlined in the notice of meeting.

-7-

	Audited 31 July 2006	Unaudited 31 January 2007	Valuation
	\$'000	\$'000	\$7000
Current Assets
Cash assets	1,346	1,697	2,260
Receivables		38	38
Inventories	53	53	53
Total Current Assets	1,399	1,788	2,351
Total Non Current Assets
Total Assets	1,399	1,788	2,351
Current Liabilities
Payables	2,632	93	93
Interest-bearing liabilities	38
Total Current Liabilities	2,670	93	93.
Total Non Current Liabilities
Total Liabilities	2,670	93	93.
Net Assets/(Liabilities)	(1,271)	1,695	2,258
	Number 000's	Number 000's	Number 000's
Fully paid shares on issue	37,530	395,530	433,030
Fair market value per share (cents)	(3.39)	0.43	0.52

9.2 ANALYSIS OF RECENT TRADING

Set out below is an analysis of trading in Retail Star before and after the announcement on 9 May 2007 of the proposed acquisition of Orion:

	Low (\$)	High $\left( \$ \right)$	Last $(s)$	VWAP $\left( \$ \right)$	$%$ of Capital Traded
trading from 30 January 2007 to 9 May 2007	0.018	0.045	0.043	0.026	24.66%
trading from 9 May 2007to 8 June 2007	0.023	0.050	0.030	0.029	20.77%
VWAP = Volume Weighted Average Price Source: ASX

The share market can be expected to provide an objective assessment of the fair market value of a listed entity, where the market is well informed and liquid. Market prices incorporate the influence of all publicly known information relevant to the value of an entity's securities. We also note that the notice of meeting includes a placement of 37,500,000 shares at 1.5 cents, which is a condition precedent to the Acquisition.

Share prices from share market trading do not reflect the market value for control of a company as they are for portfolio holdings. Traditionally, the premiums required to obtain control of companies range between 15% and 25% of the portfolio holding values.

9.3 CONCLUSION ON THE FAIR MARKET VALUE OF A RETAIL STAR SHARE

We have considered the recent trading performance of Retail Star Limited's shares on the ASX, together with the underlying net asset value of the Company. We note that the Company has not generated any trading revenue from its retail business since its reinstatement to the ASX and therefore cannot be considered to be trading.

It is therefore considered appropriate to consider a range of values in determining a fair market value of a Retail Star share. We consider that the underlying net asset value as calculated in Section 9.1 represents the "low" value and the Volume Weighted Average Price as calculated in Section 9.2 represents the "high" value. The preferred value is the mid point of these two values or 1.71 cents.

This amount is not inconsistent with placement considered in the Notice of Meeting or the notional value of a share used in structuring the Acquisition, both of which are considered to be arms length transactions.

9.4 CONCLUSION ON THE FAIR MARKET VALUE OF A RETAIL STAR OPTION

As the Acquisition also involves the issue of Options, we consider it is appropriate to consider the value of those Options proposed to be issued. We have undertaken a valuation of the Options proposed to be issued by Retail Star using the Black-Scholes option pricing model and have assessed a value of 0.155 cents per option. The assumptions on which are calculations are based are set out in Appendix 4.

PREMIUM FOR CONTROL 10.

Premium for control for the purposes of this report, has been defined as the difference between the price per share which a buyer would be prepared to pay to obtain or improve a controlling interest in the Company and the price per share which the same person would be required to pay per share, which does not carry with it control or the ability to improve control of the Company.

Currently the Top 20 shareholders collectively control Retail Star. As a result of the acquisition, Red Rock will be in a position to control up to 29.36% of the voting power. Whilst a significant holding, Red Rock will not be in a position to control Retail Star without the support of other shareholders.

$-9-$

11. ASSESSMENT AS TO FAIRNESS

11.1 Based on the fair market values above, the consideration being given up by the Company is as follows:

	Value (Cents)	\$
Issue of 80,000,000 ordinary shares	1.71	1,368,000
Issue of 20,000,000 options exercisable at 2.5 cents	0.155	31,000
Issue of 20,000,000 Class "A" performance shares	1.71	342,000
Sub Total		\$1,741,000
Issue of 30,000,000 Class "B" performance shares	1.71	513,000
Issue of 30,000,000 Class "C" performance shares	1.71	513,000
Total		\$2,767,000

11.2 We have assessed the value of Orion on the basis of the fair market value of the Company's underlying net assets on a going concern basis, with reference to the independent valuations provided by Malcolm Castle (refer Appendix 5), market values for available for sale assets and book values of Orion's other net assets as at 31 December 2006 as determined from Orion's unaudited accounts as at 31 December 2006. Orion's net assets are summarised below, together with our assessment of fair market values.

	Unaudited 31		Valuation
	December 2006	Low	High	Preferred
	\$'000	\$'000	\$'000	\$'000
Current Assets
Cash assets	20	20	20	20
Other	7	7
Total Current Assets	27	27	27	27
Non Current Assets
Exploration ⁽¹⁾		1,220	3,450	2,210
Other	1	1	1
Total Non Current Assets	1	1,221	3,451	2,210
Total Assets	28	1,248	3,478	2,237

Current Liabilities
Payables	49	49	49	49
Total Current Liabilities	49	49	49	49
Non Current Liabilities
Payables ⁽²⁾	222
Total Non Current Liabilities	222
Total Liabilities	271	49	49	49
Net Assets/(Liabilities)	(243)	1,199	3,429	2,188

(1) Excludes the Malawi tenements.

$(2)$ Loan to be repaid prior to transaction. $-11-$

Additionally, the independent valuer has placed the following value on assets not yet held by Orion, but forming part of the transaction (Malawi Tenements):

----- -----------------	Low \$'000	High s ooo	Preferred \$'000
Machinga	520 .	.000	740
Chintheche	78ſ	-490	1,120

11.3 SUMMARY

	ORDINARY,	CLASS''B''	CLASS "C"	TOTAL
	OPTIONS	SHARES	SHARES
	AND "A"
	CLASS
Preferred value of Consideration	1,741,000	513,000	513,000	2,767,000
(Section 11.1)
Preferred value of Assets Acquired	2,188,000	740,000	1,120,000	4,048,000
(Section 11.2)

ASIC Policy Statement 75 defines an offer as being fair if the value of the offer price is equal to or greater than the value of the securities being the subject of the offer. The consideration offered by Retail Star under the terms of the Acquisition is below our assessment of the fair market value of the assets being acquired. Accordingly, it is our opinion that the Acquisition is fair.

12. REASONABLENESS OF THE ACQUISITION

13.1 In accordance with ASIC Policy Statement 75 an offer is reasonable if it is fair. An offer may be reasonable however, despite not being fair, if the advantages clearly outweigh the disadvantages.

The following factors, as outlined in the notice of meeting, have also be considered in assessing whether the Acquisition is reasonable.

13.1.1 Advantages of approving the Acquisition

Additional professional staff that will be appointed in conjunction with the transaction will bring different levels of experience and diverse skills to the Company;
The Acquisition will allow shareholders to access the uranium exploration market, which is experiencing significant growth. If the proposed exploration program results result in a uranium resource being delineated, it is likely to have a positive effect on the Company's share price.

13.1.2 Disadvantages of approving the Acquisition

the proposal will result in dilution of current shareholders interests in the Company; and

there is no guarantee that the assets being acquired from Red Rock will generate a $\blacksquare$ positive return for the Company and its Shareholders. As a general rule, mineral exploration is inherently risky and uncertain. If the exploration of Orion's tenements is unsuccessful, there may be an adverse affect on the Company's share price.

13. CONCLUSION

Based on the foregoing, we are of the opinion that the Acquisition is fair and reasonable.

Yours faithfully HLB MANN JUDD CORPORATE (WA) PTY LTD Licensed Investment Advisor (AFSL Licence number 250903)

://larragén/wka

N G NEILL Authorised Representative

APPENDIX1 SOURCES OF INFORMATION

In preparing this report we have had access to the following principal sources of information:

Retail Star's Half year financial report for the half year ended 31 January 2007; ¢
Heads of Agreement between Retail Star and Red Rock Resources plc (undated) ; ą.
Draft Notice of Meeting and Explanatory Memorandum which this Report will accompany.
Discussions with and information provided by the Directors and management of Retail $\pmb{\theta}$ Star;
Announcement to the ASX by Retail Star in relation to the Acquisition; $\pmb{\theta}$
Publicly available information; and $\bullet$
Independent Specialist Valuation Report by Malcolm Castle (refer Appendix 5). $\ddot{\Phi}$

APPENDIX 2 QUALIFICATIONS, DECLARATIONS AND CONSENTS

HLB, which is a wholly owned entity of HLB Mann Judd (WA Partnership), is a Licensed Investment Adviser and holder of an Australian Financial Services Licence under the Act and its authorised representative is qualified to provide this Report. The authorised representative of HLB responsible for this Report has not provided financial advice to Retail Star.

Prior to accepting this engagement, HLB considered its independence with respect to Retail Star to with reference to ASIC Practice Note 42. In HLB's opinion, it is independent of Retail Star and Red Rock.

This Report has been prepared specifically for the shareholders of Retail Star. It is not intended that this Report be used for any other purpose other than to accompany the Explanatory Memorandum to be sent to the Retail Star shareholders. In particular, it is not intended that this Report should be used for any purpose other than as an expression of the opinion as to whether or not the Acquisition is fair and reasonable to the shareholders of Retail Star. HLB disclaims any assumption of responsibility for any reliance on this Report to any person other than those for whom it was intended, or for any purpose other than that for which it was prepared.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. In the preparation of this Report, HLB has relied on and considered information believed, after due inquiry, to be reliable and accurate. HLB has no reason to believe that any information supplied to it was false or that any material information has been withheld.

HLB has evaluated the information provided to it by Retail Star and other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially misstated or would not provide a reasonable basis for this Report. HLB has not, nor does it imply that it has, audited or in any way verified any of the information provided to it.

In accordance with the Act, HLB provides the following information and disclosures:

HLB will be paid its usual professional fees (estimated to be in the range of \$10,000 -\$12,500) based on time involvement at normal professional rates, for the preparation of this Report.
Apart from the aforementioned fee, neither HLB, nor any of its associates will receive $\Phi$ any other benefits, either directly or indirectly, for or in connection with the preparation of this Report.
HLB, nor any of its directors or associates, have any interest in Retail Star or Red Rock.

Neither HLB nor HLB Mann Judd (WA Partnership) has had any relationship with Retail Star or any associate of Retail Star or Red Rock, other than HLB Mann Judd (NSW Partnership) has acted and continues to act as auditors of Retail Star. Both HLB Mann Judd (WA Partnership) and HLB Mann Judd (NSW Partnership) are members of the HLB Mann Judd National Association, an association of independent accounting firms.

APPENDIX 3 GLOSSARY OF TERMS

TERM	DEFINITION
Act	Corporations Act 2001
Acquisition	Transaction as outlined in Section 4
ASIC	Australian Securities and Investments Commission
ASX	Australian Stock Exchange Limited.
Consideration	A\$1.5 million
Directors	Directors of Retail Star
GST	Goods and Services Tax
Heads of Agreement	Heads of Agreement between Retail Star and Red Rock Resources plc (undated)
HLB	HLB Mann Judd Corporate (WA) Pty Ltd
Malawi tenements	Tenements in Malawi applied for by Red Rock
Red Rock	Red Rock Resources plc
Retail Star or the Company	Retail Star Limited
Reviewed accounts	Retail Star's half year report for the period ended 31 January 2007
Shares	Ordinary fully paid shares in the capital of the Company
Shareholders	Shareholders of Retail Star
Shareholders' Meeting	Ã Meeting convened to consider the Acquisition.
Shareholder Approval	Approval by the shareholders at the Shareholders Meeting
Orion	Orion Exploration Pty Ltd

APPENDIX 4 - BLACK SCHOLES ASSUMPTIONS AND CALCULATIONS

We have determined an indicative value for the options as outlined in Sections 4.3 and 9.4 using the Black and Scholes Option Pricing Model.

The model describes the value of an option as being a function of five variables:

Value of the underlying share; $\left( i\right)$
The risk free rate of return; $(ii)$
$(iii)$ The variance (or volatility) of the share price;
(iv) The exercise price of the option; and
The remaining time to maturity. $(v)$

OPTIONS А.
Exercise Price:	\$0.025
Expiry Date:	30 June 2008

The options are transferable, however no application will be made to the ASX for quotation of the options issued under the Acquisition.

В. VALUATION

Our calculation of the value of each option has been performed based on the following assumptions:

We have based the underlying value of each share in the Company on the fair market $(i)$ value per share of 1.71 cents as detailed in Section 9.3;
$(ii)$ Risk free rate of return - 6.25% (estimated, based on the 2 year bond indicator rate as at 31 May 2007);
$(iii)$ We have determined a volatility of the share price of 60%.

C. THEORETICAL VALUATION

Based on the above factors, the Black and Scholes Option Pricing Model attributes a theoretical value to each option of 0.222 cents.

D. INDICATIVE VALUATION

The Black and Scholes Option Pricing Model assumes that the options the subject of the valuation can be sold on a secondary market. As the options will not be listed on ASX, a discount for lack of marketability is required to determine an indicative fair value of the options.

For the purposes of arriving at an appropriate discount rate we have considered:

that discounts have traditionally been applied in the range of 10% to 30% to reflect the non-negotiability of unlisted equities; and
the fact that the options are unlisted.

On the basis of the above we have applied a discount factor of 30% to our theoretical valuation of the options. Our valuation of the options, based on their theoretical valuation, less a discount of 30% for lack of negotiability is as follows:

Theoretical Value per	Discount	Indicative value per Option
Option (cents)	$U_{\ell+1}$	(cents)
	30	በ 155

$\mathbb{Z}^{\times}$

$\frac{1}{2}$ .

APPENDIX 5 MALCOLM CASTLE - SPECIALIST VALUATION REPORT

Malcolm Castle Consulting Geologist P.O. Box 473, South Perth, WA 6951 Phone: 08 9368 4923 Fax: 08 9368 4932 Mobile: 04 1234 7511 Email: [email protected] ABN: 84 274 218 871

17 June 2007

The Directors Retail Star Limited Level 2, 350 Kent Street Sydney, NSW, 2000

Dear Sirs,

Re:

INDEPENDENT VALUATION OFURANIUM TENEMENTS IN AUSTRALIA AND MALAWI

I have been commissioned by Retail Star Limited ("Retail Star") to provide a Mineral Asset Valuation ("Report") of tenements in Australia and Malawi.

The Directors of Retail Star Limited has reached agreement to acquire 100% of the issued capital of Orion Exploration Pty Ltd ("Orion"). Orion is targeting uranium mineralisation at five projects in the Northern Territory, two of which are located in the Rum Jungle uranium field and one in Western Australia. The package of tenements may also include exploration licence applications in Malawi.

The present status of tenements listed in this report is based on information provided by Retail Star and Retail Star's independent consulting geologist and the Report has been prepared on the assumption that the tenements are lawfully accessible for evaluation.

DECLARATIONS

Relevant codes and guidelines

This Report has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports ("The Valmin Code") 2005, which is binding upon Members of the Australasian Institute of

Mining and Metallurgy (AusIMM), and the rules and guidelines issued by such bodies as ASIC and ASX Limited (ASX), which pertain to Independent Expert Reports. Where Mineral Resources have been referred to in this Report, the classifications are consistent with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA), effective December 2004.

Under the definition provided by the ASX and in the JORC Code, these properties are classified as 'exploration projects', which are inherently speculative in nature. The properties are considered to be sufficiently prospective, subject to varying degrees of risk, to warrant further exploration and development of their economic potential, consistent with the programs proposed by Retail Star.

Sources of Information

I have based this review on information provided by the title holders relating to exploration work on the properties, along with technical reports by independent consultants, previous tenement holders and other relevant published and unpublished data for the area. I have endeavoured, by making all reasonable enquiries, to confirm the authenticity and completeness of the technical data upon which this Report is based. Where and if appropriate, consent has been obtained to quote data and opinions expressed in unpublished reports prepared on the properties concerned by other professionals.

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the title holders, along with technical reports by consultants, previous tenement holders and other relevant published and unpublished data for the area. I have endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. A final draft of this report was provided to Retail Star, along with a written request to identify any material errors or omissions prior to lodgment.

The independent technical report has been compiled based on information available up to and including the date of this report. Consent has been given for the distribution of this report in the form and context in which it appears. I have no reason to doubt the authenticity or substance of the information provided.

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM, MSME

Malcolm Castle has over 40 years experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company 20 years ago and specialises in exploration management, technical audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical Audits in many countries.

Mr. Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Mr. Castle is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM), Member of the Society for Metallurgy and Mining Engineering (MSME) and has the appropriate relevant qualifications, experience, competence and independence to be considered as a "Qualified Person" as defined in the National Instrument 43-101, Canada as well as an "Expert" and "Competent Person" under the Australian Valmin and JORC Codes, respectively and under National Instrument 43-101 in Canada.

Independence

I am not, nor intend to be a director, officer or other direct employee of Retail Star and have no material interest in the Projects or Retail Star. The relationship with Retail Star is solely one of professional association between client and independent consultant. The review work and this report are prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Yours faithfully

Malcolm Castle

B.Sc.(Hons) MAusIMM, MSME GCertAppFin (Sec Inst)

SUMMARY OF VALUATION And Construction Construction

Based on an evaluation of the factors involved I estimate the value of the various components of the project area to be in the range AU\$2.52 million and AU\$5.94 million with a preferred value of AU\$4.07 million.

The components of the valuation are:

	Low Value	High Value	Preferred Value
Woolgni	\$0.49	\$1.69	\$1.00
Edith River	\$0.31	\$0.72	\$0.50
Celia	\$0.01	\$0.03	\$0.02
Marrakai	\$0.19	\$0.48	\$0.33
Hayes Creek	\$0.07	\$0.19	\$0.13
Daly River	\$0.01	\$0.03	\$0.02
Mt Alfred	\$0.12	\$0.31	\$0.21
Machinga	\$0.52	\$1.00	\$0.74
Chintheche	\$0.78	\$1.49	\$1.12
Total	\$2.52	\$5.94	\$4.07

All values are in million Australian Dollars

The projects have been valued on an individual basis and no account has been taken of synergy between deposits or management premiums for control. These factors could add considerably to the value of the portfolio.

URANIUM MARKETS

Production from world uranium mines now supplies only 55% of the requirements of power utilities.
Mine production is increasingly supplemented by ex-military material.
World mine production will need to expand significantly post 2005.

All mineral commodity markets tend to be cyclical. Prices rise and fall substantially over the years, but with these fluctuations superimposed on long-term decline in real prices. In the uranium market, very high prices in the late 1970s gave way to very low prices in the early 1990s, the spot prices being below the cost of production for most mines. In 1996 spot prices recovered to the point where most mines could produce profitably, though they then declined again and only recovered late in 2003.

"Spot prices" apply to marginal trading from day to day and in 2003 represented less than 12% of total sales. Most trade is 3-7 year term contracts with producers selling direct to utilities, but with the price often related to the spot price.

The reasons for fluctuation in mineral prices relate to demand, and perceptions of scarcity. The price cannot indefinitely stay below the cost of production, nor will it remain at very high levels for longer than it takes for new producers to enter the market.

Historical Uranium price variations 1969 to 2006

30 week moving average 1992 to 2006

3 year uranium price movement May 2005 to November 2006

RECENT DEVELOPMENTS IN THE URANIUM MARKET

With world uranium requirements exceeding global mine production since 1990, global inventories and secondary sources of uranium have been substantially reduced. While these secondary sources of uranium will remain available in the short term, over the longer term this finite supply will be reduced to strategic levels to ensure security of supply. As such, existing nuclear power plants will have to rely increasingly on uranium sourced from mine output.

These factors, as well as an improvement in the outlook for growth in nuclear reactor capacity, have led to a substantial increase in the global uranium price and fostered increases in global uranium exploration expenditure to expand existing mines and the development of new mines.

The price of US\$133.00/Ib was established at the end of May 2007. The following short list represents current uranium price predictions for $U_3O_8$ by analysts and management.

April 17, 2007 CIBC WORLD MARKETS \$140 in 2007, \$160 2008 April 11 BRENDAN KYNE, LEEWARD HEDGE FUNDS \$150-200 next two years Apr 10 NEAL FRONEMAN, CEO SXR URANIUM ONE \$150 end of 2007 Apr 10 LAURENCE ALEXANDER, JEFFREY & CO. \$115avg 2007 March 29 ABN AMRO, GLOBAL BANK \$140 2007-2010 March 29 JOHN WILSON, RESEARCH CAPITAL RESEARCH \$125 2007, \$140 late 2008 March 6 Australian Bureau of Agricultural and Resource Economics ABARE \$94.20avg 2007 \$103avg 2008 Feb 27 ABN AMRO, GLOBAL BANK \$95 2007 Feb 26 PATRICIA MOHR, SCOTIABANK at least \$90, appear headed to \$100 end 2007 Feb 12 PHILLIP SHIRVINGTON, CEO URASIA ENERGY > \$100 2007 Feb 12 NEAL FRONEMAN, CEO SXR URANIUM ONE > \$100 2007 Jan 31 YURIY NEDASHKOVSKY, UKRAINE DEPUTY ENERGY MINISTER \$122 end 2007 Jan 29 BRENDAN KYNE, LEEWARD HEDGE FUNDS \$100 in 2007, \$125 in 2008 Jan 8 RESOURCE CAPITAL RESEARCH \$90 mid 2007, \$115 late 2008 Jan 7 PATRICIA MOHR, SCOTIABANK \$90 by end 2007 Jan 7 ADAM SCHATZKER, RBC CAPITAL MARKETS \$100 in 2007 Jan 5 PETER GRANDICH, THE GRANDICH LETTER \$100 ?timeline Dec 21 BART JAWORSKI, RAYMOND JAMES \$90 in 2007 Dec 11 ANITA SONI, MERRILL LYNCH \$75 in 2007 Nov 7 LUKE BURGESS, GOLDWORLD.COM \$110 by 2010 Nov 6 JEAN-FRANCOIS TARDIF, SPROTT ASSET MANAGEMENT \$70 by January 2007 Nov 6 BOB MITCHELL, ADIT CAPITAL MANAGEMENT LP \$80-100 ?timeline Oct 18 DOUG CASEY, CASEY RESEARCH \$100-150 ?timeline http://uraniumstockinvesting.blogspot.com/2006/11/uranium-players-predicting-uranium.html

URANIUM DEMAND

Growth in nuclear power generating capacity is the fundamental driver of growth in uranium demand. As at August 2006, 442 nuclear reactors were operating globally, with a combined capacity of around 37,000 MWe (electricity generation capacity in megawatts). These reactors currently require approximately 79,000 tonnes of $U_3O_8$ a year. In 2005, the European Union accounted for the largest share of installed nuclear reactor capacity and uranium requirements

The majority of the world's operating reactors are light water reactors $-$ either pressurised water reactors or boiling water reactors. As at November 2006, a total of 360 of these reactors were operating globally.

As at August 2006, there were 27 nuclear reactors under construction worldwide with another 38 reactors planned. A range of countries including Japan, the Republic of Korea, the Russian Federation, China and India, have announced plans to increase nuclear power generating capacity over the period to 2030. In the case of China and India, strong economic growth and associated growth in electricity demand, as well as long term strategic approaches to planning future energy supply, have encouraged plans for substantial increases in nuclear generation capacity.

In comparison, there are currently limited plans for new reactors in the developed economies of Western Europe and North America. Over the previous two decades, relatively slow electricity demand growth and the large existing nuclear capacity in many of these countries has deterred the construction of new reactors. Increases in the prices of non-nuclear energy sources in 2006 (in particular the prices of oil and other fossil fuels) and in some cases environmental considerations regarding greenhouse gas emissions have renewed interest in the increased use of nuclear power in a number of developed countries. For example, the United States has recently announced changes to its energy policy, including plans to expand nuclear capacity in the medium term. In addition, the United Kingdom is assessing whether the construction of new nuclear plants should form part of its energy policy in the medium to long term, to help meet its greenhouse gas reduction targets.

URANIUM SUPPLY

In 2005, global uranium mine production was around 49 300 tonnes of $U_3O_8$ , substantially below annual reactor requirements. Canada, Australia, Niger, the Russian Federation, Kazakhstan, Namibia, Uzbekistan, the United States and South Africa accounted for 93 per cent of this total. Canada and Australia together accounted for the majority of global production, with around half of the total.

In 2005, the gap between global uranium mine production and annual reactor requirements was filled by secondary sources of uranium, including government inventories of uranium supplied under the US-Russian HEU purchase agreement, re-enriched uranium tails and reprocessing.

While the availability of some of these secondary sources of uranium is expected to continue, or even increase in some instances during the short term, on the whole secondary sources are expected to decline over the longer term. Accordingly, with nuclear power generating capacity expected to grow, primary mine production of uranium will need to increase over the medium to longer term to meet demand.

The period of low uranium prices over the 1980s and 1990s discouraged expenditure on exploration for uranium and the development of new uranium mines. However, recent substantial increases in global uranium prices have led to an increase in global exploration for uranium and the development of a number of new mines. Kazakhstan, for example, has announced plans to increase uranium mine output to around 17,700 tonnes of $U_3O_8$ by 2010. Production in Canada is also expected to increase over the medium term as the Cigar Lake mine commences production (as at November 2006, technical difficulties with this mine have further delayed its startup) and a number of other mines are expanded. The Russian Federation has also announced plans to substantially increase exploration for uranium with the intention of increasing uranium production six fold by 2020.

In summary, the improving outlook for the construction of nuclear power plants, particularly in India, China and the Russian Federation, and concerns over the future supply of uranium from secondary sources have led to a substantial increase in the global uranium price. The rise in the uranium price and an improved outlook for growth in demand for uranium has resulted in a substantial increase in global uranium exploration expenditure. Reflecting this, plans to increase uranium mine production substantially are in place in Canada, Kazakhstan and the Russian Federation.

MINERAL ASSETS VALUATION METHODOLOG

FAIR MARKET VALUE OF MINERAL ASSETS

Mineral assets include, but are not limited to, mining and exploration tenements held or acquired in connection with the exploration, the development of, and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

	Mineral assets classification
Exploration areas	Mineralisation may or may not have been identified, but where a mineral resource has not been defined.
Advanced exploration areas	Mineral resources have been identified and their extent estimated (possibly incompletely). This includes properties at the early stage of assessment.
Pre- development projects	A positive development decision has not been made. This includes properties where a development decision has been negative, properties on care and maintenance and properties held on retention titles.
Development projects	Committed to production, but which, are not yet commissioned or not initially operating at design levels.
Operating Mines	Mineral properties, particularly mines and processing plants, which have been fully commissioned and are in production.

The fair market value, of a mineral asset is the estimated amount of money or the cash equivalent or some other consideration for which the mineral asset should change hands between a willing buyer and a willing seller in an arm's length transaction. Each party is assumed to have acted knowledgeably, prudently and without compulsion.

The value of a mineral asset usually consists of two components,

The underlying or Technical Value which is an assessment of a mineral asset's future net economic benefit under a set of appropriate assumptions, excluding any premium or discount for market, strategic or other considerations.
The Market Component, which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or zero.

When the technical and market components of value are combined the resulting value is referred to as the market value. A consideration of country risk should also be taken into account.

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change.

REGULATORY AUTHORITIES

Mineral asset valuations are governed by the VALMIN code and ASIC Practice Note 43 in Australia and by the CIMVAL code, NI43-101 and TSXV Appendix 3G in Canada

THE VALMIN CODE

The four main requirements of the VALMIN Code are

Transparency The report needs to explain how the valuation was done and the assumptions used in calculating the value. The objective is to provide sufficient information that other people can come up with the same answer.

Materiality This means the valuer has to ensure that all important data that could have a significant impact on the valuation is included in the report.

Competence The valuer must be competent at doing valuations. The person needs to be an expert in the particular exploration target being evaluated. Typically the person needs at least 5 years experience in that commodity.

Independence. The valuer must act in a professional manner and not favour the buyer or the seller. In other words the price must be set at a "fair market value". To achieve independence, the valuer must not receive any special benefit from doing the study.

The decisions as to the valuation methodology or methodologies to be used and the content of the Report are solely the responsibility of the Expert or Specialist whose decisions must not be influenced by the Commissioning Entity. The Expert or Specialist must state the reasons for selecting each methodology used in the Report. Methods chosen must be rational and logical and be based upon reasonable grounds.

The Expert or Specialist should make use of valuation methods suitable to the Mineral or Petroleum Assets or Mineral or Petroleum Securities under consideration. Selection of the appropriate valuation method will depend on, inter alia:

(a) the purpose of the Valuation;
(b) the development status of the Mineral or Petroleum Assets;
(c) the amount and reliability of relevant information;
(d) the risks involved in the venture; and
(e) the relevant market conditions for commodities and/or shares.

The Expert or Specialist should choose, discuss and disclose the selected valuation method(s) appropriate to the Mineral or Petroleum Assets or Mineral or Petroleum Securities under consideration, stating the reasons why the particular valuation method(s) have been selected in relation to those factors set out in Paragraph 39 and to the adequacy of available data. It may also be desirable to discuss why a particular valuation method has not been used. The disclosure should give a sufficient account of the valuation method(s) used so that another Expert could understand the procedure used and assess the Valuation. Should more than one valuation method be used and different valuations result, the Expert or Specialist should comment on the reason(s) for selecting the Value adopted.

Australian Securities and Investment Commission - Practice Note 43

It is not the ASIC's role or intention to fimit the expert's exercise of skill and judgment in selecting the most appropriate method or methods of valuation. However, it is appropriate for the expert to consider:

(a) the discounted cash flow method;
(b) the amount which an alternative acquirer might be willing to offer if all the securities in the target company were available for purchase;

The ASIC does not suggest that this list is exhaustive or that the expert should use all of the methods of valuation listed above. The expert should justify the choices of valuation method and give a sufficient account of the method used to enable another expert to replicate the procedure and assess the valuation. It may be appropriate for the expert to compare the figures derived by more than one method and to comment on any differences.

The complex valuations in an expert's report necessarily contain significant uncertainties. Because of this an expert who gives a single point value will usually be implying spurious accuracy to his or her valuation. An expert should, however, give as narrow a range of values as possible. An expert report becomes meaningless if the range of values is too wide. An expert should indicate the most probable point within the range of values if it is feasible to do so.

The expert should carry out sufficient enquiries or examinations to establish reasonable grounds for believing that any profit forecasts, cash flow forecasts and unaudited profit figures that are used in the expert's report, and have been prepared on a reasonable basis. If there are material variations in method or presentation the expert should adjust for or comment on them in the report.

The expert should discuss the implications to his or her valuation if:

(a) the current market value of the subject of the report is likely to change because of market volatility (for example, boom or depression); or
(b) the current market value differs materially from that derived by the chosen method.

METHODS OF VALUING EXPLORATION TENEMENTS

When valuing an exploration tenement the estimate is attempting to arrive at a value that reflects:

The potential of the tenement to yield newly discovered zones of mineralisation.
The potential of the tenement at the valuation date to yield a mineable ore reserve
In line with what the tenement will be judged to be worth when assessed by the market.

The Fair Market Value of Exploration Properties and Advanced Exploration Properties can be determined by several general approaches: Geoscience Factor; Cost; Market; or Income. For properties without mineral reserves, the income (DCF) approach is not appropriate and the following approaches are used by the geologist to establish value for exploration and advanced exploration areas:

Ranked and weighted geological aspects, including proximity to mines, deposits and $\bullet$ the significance of the camp and the commodity sought. (Geoscience Factor Method). The method focuses on the potential of the property to yield newly discovered zones of mineralisation leading to a mineable ore reserve. This method is commonly used in Australia but is not acceptable to the TSX Venture Exchange.

Results and costs of historic exploration and the program and cost of future exploration, if warranted (Appraised Value Method). The method focuses on historical exploration costs and the potential to build on past results to enhance existing mineralisation and to yield a mineable ore reserve. Enhancement factors are commonly used in Australia but are not acceptable to the TSX Venture Exchange that requires a modified version of the method.
Prior transactions for the property and recent arm's-length transactions for comparable properties, (Comparable Transaction). The method seeks to compare prices paid in recent sales of mineral assets, often on a dollar per ounce basis, and is based on a database of published information. It is acceptable in Australia and to the TSX Venture Exchange.

There is a large element of subjectivity involved in arriving at a value of a tenement no matter which method is selected. It is obvious that the geologist must be aware of all valuation methods and actual transactions taking place in the industry in general to ensure that value estimates are realistic.

In the preparation of a tenement valuation, a geologist must give consideration to a range of technical issues as well as make a judgment about the "market". Key technical issues that need to be taken into account include:

Geological setting of the property and style of mineralisation. $\bullet$
Results of exploration activities on the tenement usually data from soil mapping, trenching, mapping and drilling.
Interpretation of geophysical data and remotely sensed information.
Evidence of mineralisation on adjacent properties.
Proximity to existing infrastructure and production facilities to the property.

In addition to these technical issues the geologist has to take particular note of the market's demand for the type of property being valued. An adjustment of the technical value of a mineral tenement should only be made if the technical and market values are obviously out of phase with each other.

A. GEOSCIENCE FACTOR METHOD

The Geoscience Factor Method determines a base dollar value per unit area (Base Acquisition Cost $-$ BAC), which is dependent on the tenement type, to arrive at an overall property value which is upgraded by various elements of perceived prospectivity. The method is based on four main characteristics of mineral properties: location; inclusion of valuable mineralization; inclusion of geophysical and/or geochemical targets; and inclusion of favourable geological lithologies and structures.

The subcategories are prioritized and assigned relative value factors. Factors are generally expressed as a range of values to reflect the uncertainties in estimation. The four factors are multiplied together to provide the Technical Factor.

The Base acquisition cost represents the minimum reasonable exploration budget a tenement holder would be prepared to commit for a new tenement and should be determined on a case by case basis. This will include costs of researching and applying for the tenement and government charges and exploration commitments over the first year of tenure. Experience in Australia and overseas and a review of the requirements set out in regulations and legislature suggests that the following ranges are appropriate.

Tenement Type	Expenditure per square kilometre (BAC)
Exploration License and equivalents	\$300to \$350
Prospecting License and equivalents	\$4,000 to \$4,500
Mining Lease and equivalents	\$10,000 to \$12,500

The technical value of each mineral tenement is determined by applying the appropriate technical Factor to the BAC. Property value is calculated by totaling the values of the tenements in the project area. The value of a property is ultimately influenced by additional, subjective factors to arrive at a fair market value; the expertise of geologists and engineers, commodity markets, financial markets, stock markets, mineral property markets, metal prices and political and economic conditions which vary with time.

	Geoscientific Rating Criteria - simplified
Rating	Off Property Factor	On Property Factor	Anomaly Factor	Geological Factor
0.1				Unfavourable lithology
0.5			Extensive previous exploration with poor results - no encouragement	Generally favourable lithologies on 25% of the lease area
0.9			Extensive previous exploration with encouraging results - regional targets	Generally favourable lithology on 50% of the lease area
$\mathbf{1}$	No known Mineralization in District	No known Mineralization	No targets outlined	Generally favourable lithology on 70% of the lease area
2	Several old workings in District	Several old workings on leases	Several well defined surface targets	Generally favourable lithology with structures throughout the lease area
3.5	Historical production >200,000 oz	Historical production >100,000 oz
5	Historical production >1 million oz	Historical Production >500,000 oz	Several ore grade Drill intersections

A major disadvantage of the method is that the degree of dependence of the property value on the assumed basic value of each tenement. Large properties would tend to have very high values and very small properties would tend to have very low values, which may not reflect the real exploration potential. This is allowed for to some extent by the Geological Factor.

The preferred method of accounting for prospectivity is to subdivide tenements into blocks based on geological signatures and value each separately. This assists in accounting for large tracts of land with little or no potential surrounding prospective areas.

B. APPRAISED VALUE METHOD (MULTIPLE OF EXPLORATION EXPENDITURE)

The method is a cost approach to valuation and a basic tenet is that an exploration property is worth 'meaningful past exploration expenditures plus warranted future costs'. The latter represent a reasonable budget to advance the property to the next decision stage as determined by a prudent and responsible explorationist, i.e. a seasoned exploration geologist. The appraised value may have to be adjusted to market value if the local market for properties is elevated or depressed.

In this method a property is deemed to be worth what has been spent on it, with a premium if results are positive, or a discount if results are poor. Sometimes costs are adjusted for inflation, although, if applied indiscriminately to old costs, this can result in an overly large value bonus for inflation. Replacement costs to carry out the relevant work may be more appropriate in some cases.

The method is based upon the cost of conducting exploration on a current standard contract basis, which accounts for the effects of inflation. The purpose is to provide a standard basis for valuing historical work on large property positions where there is a wide range in historic costs for similar work completed. Costs, particularly for diamond drilling, are then factored for significance. Some allowance may also be made for drilling which provides useful geological data aiding target selection.

In Australia, a premium or discount may be allocated to the relevant and effective Expenditure Base (represented by the past and future expenditure) through the use of the Prospectivity Enhancement Multiplier (PEM), a factor directly related to the success (or failure) of the exploration completed to date and to an assessment of the future prospects of the tenement(s). The multiples generally range from 0.5 to 3.0 with zero representing a complete write-off and values greater than 1 applying where exploration had successfully upgraded the property.

Typical Adjustment Factors
	The Prospectivity Enhancement Multipliers (P.E.M.) can range from 0.5 to 5 but is
	usually in the range 0.5 to 3.0. The average is ~1.8.
$\times 0.5$	Previous exploration indicates that the area has limited
	potential for a major discovery.
$\times 1.0$	Existing data is sufficient to warrant further exploration.
	Further work is expected to define interesting targets.
$\times 1.5$	Have direct evidence of an interesting target. Further work is
	warranted to evaluate the target.
x2.0	The tenements contain a defined drill target with significant
	geochemical intersections.
x 2.5	Exploration is well advanced and limited infill drilling is likely
	to define a resource.
$\times 3.0$	Have already found a substantial resource (that is likely to
	lead to a mine). Further exploration is likely to lead to an
	increase in the size and quality of the resource.

The principal shortcomings of this method are that there is no constant base from which to commence the valuation, as there is with the base cost used in the Geoscience Rating Method, and, secondly, there is no systematic approach taken in arriving at the exploration multiplier. A judgment is required, therefore, at both the start and end of the valuation. An estimate of unit costs for various stages of exploration (eg. acquisition, office studies, regional mapping and geochemistry, geophysics, trenching, RAB and drilling) could be used as an estimate, as a check on actual, stated expenditure.

In other words, what current budget would be required to accomplish the encouraging results presently available? This conceptual budget should be upgraded by the success of the exploration by the use of prospectivity multipliers. A pre-determined scale of unit rates and multipliers could be established as a guide as in the following example. These rates will, of course, vary from time to time and from place to place.

C. MARKET APPROACH METHOD (COMPARABLE TRANSACTION)

If a property in the recent past was the subject of an arms-length transaction, for either cash or shares (i.e. from a company whose principal asset was the mineral property) then this forms the most realistic starting point, provided that the deal is still relevant in today's market. Complicating matters is the knowledge that properties rarely change hands for cash, except for liquidation purposes, estate sales, or as raw exploration property when sold by an individual prospector, or entrepreneur.

Any underlying royalty or net profits interests or rights held by the original vendor of the claims should be deducted from the resultant property value before determination of the company's interest. Also, reductions in value should be made where environmental, legal or political sensitivities could seriously retard the development of exploration properties.

It should be noted again that exploration is cyclical, and in periods of low metal prices there is often no market, or a market at very low prices, for ordinary exploration acreage (inventory property) unless it is combined with a significant mineral deposit, or with other incentives.

Truly Comparable Transactions are rare for early stage properties without defined drill targets. This is natural in a recession, as companies focus on brownfields exploration. Inflated prices paid for property in fashionable areas should not be discounted because they reflect the true market value of a property at the transaction date. If however, the market sentiment is not so buoyant then adjustments must be made.

VALUATION OF RESOURCES BY COMPARABLE TRANSACTIONS

When only a resource has been outlined and its economic viability has still to be established (i.e. there is no ore reserve) then a Comparable Transactions approach is usually applied, often stated as a percent of metal value.

With gold projects the method requires allocating a dollar value to resource ounces of gold in the ground. The dollar value must take into account a number of aspects of the resources including:

The confidence in the resource estimation (the JORC Category).
The quality of the resource (grade and recovery characteristics)
Possible extensions of the resource in adjacent areas
Exploration potential for other mineralisation within the tenements
Presence and condition of a treatment plant within the project
Proximity of toll treatment facilities, infrastructure, development and capital $\bullet$ expenditure aspects

A similar approach can be taken with other metals including uranium $(U_3O_8)$ sold on the spot market and benchmarks are similar to gold properties. Value is estimated as a percentage of contained value once appropriate discounts for uncertainty relating to resource categorisation are taken into account.

APPLICATIONS OF DISCOUNTED CASH FLOW ANALYSIS CONDITIONS CONTINUES.

Discounted cash flow analysis is a forward-looking methodology which requires that forecasts be made with respect to technical and economic conditions which will prevail in the future. All predictions of the future are inherently uncertain, but the level of uncertainty will be materially reduced if adequate data are available from which to project future rates of production and future costs. The more comprehensive the available data, the more reliable will be the discounted cash flow valuation.

These observations suggest that the most definitive application of discounted cash flow analysis will be in the valuation of an existing mining operation with a well-defined mineable reserve, no potential for additional discoveries, and an established history of consistent production rates and cash costs, sufficient to permit the confident projection of future operating conditions.

One step removed from this is the property for which a favourable bankable feasibility study has been prepared. Almost invariably, such a feasibility study will use discounted cash flow techniques to assess the economic viability of the proposed development, based on the current reserve estimate, comprehensive engineering studies, detailed estimates of capital expenditure and operating cost, and rational projections of product revenues. In this instance, however, the resultant net present value at any selected discount rate may not, by itself, provide an accurate measure of the value of the property.

It is not uncommon for a mining company to commission a bankable feasibility study and commit to production from a new property as soon as a sufficient tonnage and grade of mineralization has been identified to warrant development, but before the entire property has been fully explored. In such cases, the feasibility study will typically make provision, within the original design, for the possible future expansion of the productive facilities to accommodate the definition of additional mineable reserves. Under these circumstances, the net present value derived in the feasibility study will represent a base, demonstrated value for the property, but it is clear that some additional value must be attributed to any inferred resources and unexplored geological potential.

Since discounted cash flow analysis is fully capable of assessing the profitability of various levels of expansion, or increases in operating life, associated with various levels of additional ore discovery, it remains the preferred method for valuing properties which are at the stage of a bankable feasibility study. The value derived, however, will not be as definitive as that for a producing mine, and will be heavily influenced by informed geological judgment as to the most likely level of future discovery.

At a lower level of definition come those properties which have been subjected to preliminary or conceptual feasibility studies, on the basis of a resource which has been identified to a greater or lesser degree of assurance. In these cases, the economic viability of the property will typically be assessed by discounted cash flow analysis, based on preliminary estimates of production, revenue and cost. Despite the preliminary nature of the underlying estimates, it is still generally accepted that discounted cash flow analysis is the best method of valuing mineral properties at this stage of development.

Ultimately, as long as a resource has been identified, it is possible to make a reasoned estimation of production rates, revenues and costs. Discounted cash flow analysis, therefore, can be validly applied to the valuation of any property with an identified resource. In the absence of an identified resource, however, there simply are no data to support the application of discounted cash flow analysis, and such properties must be valued using other methodologies.

CONCLUSIONS¹²

Valuation reports must be prepared by a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and who is therefore obligated to prepare tenement valuations in accordance with the Australian reporting requirements as set out in the VALMIN Code and Guidelines for assessment and valuation of mineral assets and mineral securities for independent expert reports (AusIMM, 1995). This code is binding upon members of the AusIMM, who are "competent persons", when preparing public reports concerning the valuation of mineral assets.

Mineral Property can be categorised into five groups and methods will vary depending on the data available.

Valuation Methods
Exploration areas	> Geoscience Factor Method which rates the perceived prospectivity of mineral tenements (Australia), > Appraised Value Method which considers past expenditures and applies a multiplier depending on the results obtained (Australia). > Modified Appraised Value Method which considers past expenditures (Canada)
Advanced exploration areas with defined resources	> Comparable Transactions method which considers sales of similar deposits to select an appropriate dollar per ounce rate, and > Conceptual Discounted Cash Flow method which is based on an estimate of future earnings.
Pre-development projects	> Discounted Cash Flow method which is based on a preliminary feasibility study
Development projects	> Discounted Cash Flow method which is based on a full feasibility study
Operating Mines	> Discounted Cash Flow method which is based on an operating records and experience.

DESCRIPTIONS OF THE PROPERTIES INCLUDED IN THE VALUATION The CONSTITUTION

The Alligator Rivers uranium field is in the Pine Creek Inlier about 220 km east of Darwin (NT). It contains the major uranium deposits at Ranger 1, Koongarra, Jabiluka and Nabarlek. Koongarra, Ranger 1 and Jabiluka are enclosed by the Kakadu National Park, although the immediate areas around each of these deposits were excluded from the park when it was proclaimed. Nabarlek is in the Arnhem Land Aboriginal Reserve.

The mineral potential of the area was recognised in 1967, when BMR published a revised 1:500 000 geological map of the Darwin - Katherine region which showed probable Archaean basement in the Alligator Rivers area. The Archaean rocks were shown to be unconformably overlain by deformed and metamorphosed Palaeoproterozoic strata which were in turn overlain by Mesoproterozoic sandstones of the McArthur Basin. This map highlighted similarities to the uranium deposits in the Archaean.

Recent investigations have indicated that the cover sandstones in the Alligator Rivers area are of late Palaeoproterozoic rather than Mesoproterozoic age.

The Ranger 1 deposits were detected as a very strong anomaly in an airborne radiometric survey in 1969. Koongarra was represented as a more subtle anomaly in the same survey and was discovered in the course of a ground follow-up in 1970. Nabarlek was detected as an intense anomaly in an airborne radiometric survey in 1970. The Jabiluka 1 deposit was discovered in 1971 during the investigation of a very weak ground surface radiometric anomaly, and Jabiluka 2 was found in 1973 by drilling along strike from Jabiluka 1.

The proposed development of the Ranger 1 deposits became the subject of an Environmental Inquiry conducted by the Fox Commission under the Environmental Protection (Impact of Proposals) Act 1974. The Fox Commission issued its first report in October 1976 and a second report in May 1977.

The mineral assets consist of five granted exploration licences and one application for an exploration licence in the Northern Territory within the Alligator Rivers uranium field and an interest in an exploration licence in Western Australia. The package may also include exploration licence applications in Malawi, South East Africa.

WOOLGNI/EDITH RIVER PROJECT

Several uranium prospects were discovered in 1952 within the Lower Proterozoic Cullen Granite; the development of 9 vertical shafts with cross drive were completed with grades returning between 0.1 % U - 0.2% $U_3O_8$
The highly anomalous uranium grade is associated with shear/fault zones within the Cullen Granite,
Extensive radiometric anomalies remain untested throughout the area with little historical exploration work follow up

• Highly prospective for uranium mineralisation including unconformity, sandstone, quartz-pebble conglomerate, vein, and IOCGU deposit types.

LOCATION AND ACCESS:

The Woolgni/Edith River project is located approximately 220km south of Darwin. Two exploration licences cover the project, due to expire in 2009. They are EL 23568 (Edith River) covering 228.8 $km^2$ and EL 23569 (Woolgni) covering 360 km². A Mining Lease Application (24342) is included within EL 23569. The ELs are adjoining and are well situated with respect to the Stuart Highway and the main railway line as well as the main power line. Access to much of the ELs appear reasonable, particularly in the dry season.

GEOLOGICAL SETTING:

The Edith River/Woolgni prospect is located within the Pine Creek geosyncline, the most significant gold province in the Northern Territory. Significant production occurred from the field since the late 1800s. More recently, companies such as Dominion Mining, WMC and Acacia Resources were extracting up to 400,000 ounces a year from the field in the 1980s and 1990s. Uranium mineralisation is known to occur in the area hosted by the Cullen Granite.

Woolgni Project Area

The gold workings at Woolgni are hosted and surrounded by the Lower Proterozoic Burrell Creek formation, consisting of folded greywackes, siltstones, minor conglomerate and rare tuffs. More locally, the Burrell Creek Formation forms a 60km2 inlier surrounded by the Mid-Proterozoic Cullen Batholiths. In the southern portions of the tenements the Edith River volcanics have pierced the Cullen Granite and Burrell Creek formation and in places extrusive volcanic now form a shallow cap over the older units. Historically exploited mineralisation at Woolgni, has been associated with two trends termed the East and West workings. Gold mineralisation in both areas is often associated with quartz veins, stockworks or disseminations in the host rock. There appears to be no direct relationship between gold grade quartz, quartz veining and/or sulphide content. The sulphide assemblages consist of pyrite, pyrrhotite and arsenopyrite varying from trace amounts up to 25%. Weathering and oxidation is intense to about 20m and locally to 40m. In the areas of economic importance shearing, jointing and quartz veining are more intense.

The Western system has been extensively mined to shallow depths along 400m of strike. Trenching failed to provide economic assay data due to old workings. Two of the four sections drilled penetrated stopes at the north end where high grade material was historically mined to depths in excess of 30m. Deeper holes in this area yielded disappointing results and the scope for additional ore appears limited to small tonnages. The stopes and veining appear to be conformable to steep west-southwest dipping sediments.

The Eastern system has been mined to shallow depths over a strike length of approximately 450m. The most extensive old workings occur at the "E2" group of workings in the mid portion of the east system, where east and north trending quartz veins are unconformable to bedding. Most of the best trenching and drilling results were obtained from the "E2" workings where several parallel to sub-parallel one are interpreted.

Edith River

The Edith River project area is dominated by the southern portion of the Cullen Granite batholith. The granite is intrusive into metamorphosed shale, siltstone, and greywacke of the Burrell Creek Formation, pendents of which crop out in the north, centre-east, and southeast of the tenement area. The granite and the metasediments are overlain by an outlier of acid volcanics of the MesoProterozoic Edith River Group in the centre-east and by the MesoProterozoic sandstones and dolomites of the Tolmer Group in the northwest. Younger sediments occupy the southwest portion of the area. From younger to older (top to bottom) they are:

Quaternary alluvium
Cainozoic sand
Lateritised Cretaceous mudstone and shale
Ordovician and Cambrian to Ordovician sandstone, shale, and dolostone
Cambrian limestone and shale

At Edith River, several uranium prospects were discovered in 1952 in an intrusion of Lower Proterozoic granite (the Cullen granite). The surface grade was estimated at the time from 0.1% to 0.2% $U_3O_8$ , apparently from underground sampling where a series of shafts and cross cuts were developed.

Disseminated uranium mineralisation associated with hematite and apatites was identified at three locations on shear zones at the YMCA prospects, 1.6 to 4.8 kilometres south east of the Edith River siding; the Tennysons prospects, 3.2 kilometres west south west of the Edith River siding; and the Hore and O'Connor's prospect, 8 kilometres west north west of the Edith River siding.

The uranium mineralization did not provide easy drilling targets. A later exploration strategy in 1971 defined four areas of intersecting shear zones and low-level airborne radiometric surveys with ground follow-up was implemented. However the strategy was never implemented.

The uranium occurrences include several radioactive occurrences are known in the southern part of the Cullen Granite, near the abandoned Edith River railway siding. Secondary uranium minerals occur in small quartz veins.

PREVIOUS EXPLORATION/MINING:

Alluvial gold mining began at Woolgni in the late nineteenth century when Chinese miners first extracted alluvial gold. Recorded production was 3840 ounces up to 1905. More recent trenching by Hilltop Enterprises in 1990 revealed grades of $0.21g/t$ to $31.1g/t$ Au. They included intercepts of 5.18g/t over 4.3 metres and 4.44g/t over 10.7 metres. A small non-JORC inferred resource of 150,000 tonnes at 2.7g/t gold was estimated.

EL 23569 also hosts the Copperfield South prospect. Anomalous gold values up to 7.7 $g/t$ were obtained by rock chip sampling in 1984. Copper mineralization was also identified with grades of up to 12.4% obtained from old waste dumps. The Copperfield South prospect has potential to host a large low grade gold deposit. Excellent exploration potential exists along the northern trend of the Woollybutt anticline. Significant gold mineralisation concealed beneath shallow eluvial/colluvial cover remains untested. The 'Paperbark anticline' remains completely untested and represents a high order structural target for further exploration.

Prior work concluded that the project area was highly prospective for uranium mineralisation, including unconformity, sandstone; quartz-pebble conglomerate, vein, and IOCGU deposit types. It also suggested that interpretation of aeromagnetic data could reveal structures and shears that may host gold/base metal mineralisation within the Cullen Batholith. The following areas were identified within the project area as being of specific interest for uranium exploration:

Volcanics of the Edith River Group crop out in the central east of EL 23569. These are interpreted to unconformably overlay the Cullen Granite. This represents a suitable environment for precipitation of uraniferous minerals in the basal sequence which includes conglomerate and shale.
Sediments of the Mesoproterozoic Tolmer Group crop out in the north-west corner of EL 23569. At the base of this group is the Depot Creek Sandstone, a pebbly quartz sandstone that unconformably overlies the Cullen Granite. This presents a suitable environment for uranium precipitation. A number of elevated U/Th ratio values occur near the margins of the Depot Creek Sandstone and indicate a high priority exploration target.
In the extreme north of EL 23568 a high uranium channel value is located near the edge of the outcrop of Cullen Granite.

CELIA PROJECT:

Hosted within the highly favourable Rum Jungle Complex which has yielded over 70 mineral occurrences of a variety of commodities. Past mining has included uranium base metals and gold.
Two extensive untested radiometric anomalies over airborne uranium channel lies south and north-west within the current tenure area.

LOCATION AND ACCESS:

The Celia project is covered by ELA 24414 and is located approximately 95 km south of Darwin in the vicinity of the Rum Jungle uranium province. It lies 4km east of the town of Batchelor and is near the Compass Resources Brown's polymetallic project. It comprises 5 graticular blocks located on Aboriginal Freehold Land. Aboriginal Freehold Land is advantageous regarding ability to quickly gain access for drilling and other exploration methods. It is within 10 km of the Stuart Highway.

GEOLOGICAL SETTING:

The Celia project hosts the Celia dolostone, Beestons Formation and Crator Formation sequences. The coarse sandstones and conglomerates of the Beestons Formation uncomformably overlie the basement granitic complexes and are restricted to the eastern and south-eastern markings of the Rum Jungle Dome. The Celia dolostone is comformable with this unit and is composed of stromalitic dolostone and magnesite interbedded with minor components of calcareous metapelite and para-amphibolite. Outcrops are poorly exposed but previous drilling indicates thicknesses of around 600 metres. The Crator formation extends around the margins of both basement complexes and rests unconformably on the basement rocks where the older units have been eroded away.

PREVIOUS EXPLORATION/MINING:

Previous exploration associated with this prospect involved the search for magnesite. An indicated resource of 10 million tonnes of 45% magnesite was identified. This confirms the presence of carbonaceous rocks and proximity to the redox boundary, considered necessary for uranium deposition. A number of uranium anomalies were identified in the 1960s without follow-up work. Two of these are believed to be related to potentially uraniumbearing palaeo-channels.

MARRAKAL PROJECT:

Untested radiometric anomalies are associated with the favourable lithologies and structures which have hosted uranium deposits in the Pine Creek region.
The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies.
Primary exploration focus has concentrated on iron ore and gold mineralisation.

LOCATION AND ACCESS:

The Marrakai project is covered by EL 24614, granted in February 2005 for 6 years. It has potential for uranium, iron ore and precious metals. The EL covers an area of 20.9km2. It is located 75 km south east of Darwin on the eastern margins of the Rum Jungle mineral field. Access is obtained from the Stuart Highway thence the gravel road to Heathers Lagoon, the Marrakai Crossing of the Adelaide River and the nearby crossing of the Margaret River, thence a track leading west from the Marrakai Track. This track essentially skirts the hills to the east of the Adelaide River and hence the western margin of the licence area. Access is considered difficult, particularly during the wet season.

GEOLOGICAL SETTING:

The Marrakai prospect is located within the Pine Creek geosyncline. The main features of the geology of the licence area are:

The oldest rocks occur in the central part of the licence area where metapelites of the Wildman Siltstone of Mount Partridge Group.
The central portion of the licence area is occupied by remnants of strike ridges of Koolpin Formation and Mount Formation (comprising the South Alligator Group)
The Koolpin Formation includes a very distinctive ferruginous unit, the Ella Creek Member, in the core of the faulted, domal structure in the central part of the licence area; this member, which consists in the main of distinctive, siliceous and goethitic breccias and is up to 10 metres thick, appears to represent an ancient erosion surface.
An extension to the southeast of the large Noonamah Fault appears to lie within the northern part of the licence area and may be part of an extremely large, regional structure of which the Pine Creek Shear Zone also is a highly significant component;
The domal structure in the central part of the licence area is dissected by a cross fault which trends ENE-WSW to NE-SW; A north-south and several NW-SE to NNW-SSE faults affect the units.
Colluvial soil cover derived from the siliceous ridges is extensive and laterite may be present in topographic lows.

PREVIOUS EXPLORATION/MINING:

Several limonitic ironstone replacement deposits were discovered in 1963. The deposits were identified along the limbs and crest of a large NE trending anticline, typical of the Pine Creek geosyncline. Highest grades were around 31%Fe. No iron ore exploration has taken place since that time however exploration by Kennecott Exploration and others for gold, base metals and uranium took place in the 1980s and 1990s. It was considered that most potential for gold was blind mineralization within the Koolpin Formation, the host for much of the gold in the area.

Orion Exploration through its consultant carried out a review of open files over the area and reviewed geophysical data from the NT geological survey database. A number of anomalies were identified for follow up.

HAYES CREEK

The tenement is located nearby uranium mined out deposits and uranium occurrences of Lady Josephine, Burrundle and Fleur de Lys.
The area highly prospective for unconformity-type uranium deposits, believed to be located at or near the contact between the Jindare Formation and the Stray Creek Sandstone. The tenement is hosted to one first/second order radiometric.

LOCATION AND ACCESS

The Hayes Creek South Fe-Mn Project consists of one granted Exploration Licence (EL24432) covering 130.1 square kilometres approximately 160 kilometres south of Darwin. The tenement area is situated approximately 8 kilometres east of the Douglas Homestead and is accessed via the Stuart Highway to the north with the western portion through graded road tracks. Much of the area is potentially accessible to vehicles however some parts are too rugged. The topography can be divided between black soil plains, dominated by flat swampy landscapes and tablelands, consisting of uneven and rocky open forest.

GEOLOGICAL SETTING

In common with the other NT prospects, the Hayes Creek project is located within the Pine Creek geosyncline. The north eastern half of the Exploration Licence consists of the Upper Proterozoic, shallow water sequence of Tolmer Group sediments, which represent the basal units of the Daly Basin. The oldest unit, the Buldiva Sandstone, which unconformably overlies the Cullen Granite, can be subdivided into two members:

a) Depot Creek Sandstone (for which this is the type area), a ripple marked, pink and white massive, quartz sandstone and the overlying,

b) Stray Creek Sandstone, a sequence of interbedded quartz sandstone, chloritic siltstones and shale.

Overlying the Buldiva Sandstone to the southwest is the Waterbag Creek Formation, a redbrown ferruginous sandstone with occasional outcrops of dolomite and marble. This formation forms the final slope down to the alluvial plains of the Daly Basin. The sediments of the Tolmer Group generally dip gently to the south and south-west towards the centre of the Daly Basin, except where faulting and folding has reoriented the beds (such as along the Hayes Creek Fault).

The area west of the fault scarp consists predominantly of flat plains or low hills which have been cleared for grazing. The Fenton Granite, which underlies this plain, outcrops north of the Douglas landing ground and is situated north-east of EL24432 as large rounded tors of coarse grained, pink-grey granite or adamellite with large phenocrysts of orthoclase and microcline. It is the coarse grained nature and abundance of feldspars which has resulted in the weathering of the granite to its present state. The Fenton Granite is believed to be associated with the Cullen Granite Complex which intruded the Lower Proterozoic sediments in the main trough zone of the Pine Creek Geosyncline around 1700 Ma.

The major structural influences on the area are two faults trending north to northeast (eg Hayes Creek Fault) and northwest to north-northwest. These faults have, in many places, influenced the course of streams and shed tin and accessory minerals form locally remobilized concentrations along fault zones.

DALY RIVER

Several first order and second order high priority radiometric anomalies are associated with sandstone units of the Pine Creek Area.
The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies.

LOCATION AND ACCESS

The Daly River Road Project consists of one granted Exploration Licence (EL24391) covering 20.04 square kilometres approximately 200 km south of Darwin. The tenement area is situated approximately 55 km north-northwest of the township of Katherine and lies immediately west of the Stuart Highway. It is situated some 25 kilometers south of Adelaide River Township. Access can be gained from the old Stuart Highway (Dorat Road) and from the Daly River Road. The northeastern part of the area is rugged hill country accessible only on foot. The remainder consists of relatively low undulating hills and escarpments, with includes drainages, and is potentially accessible to 4WD vehicles. The entire area is occupied by monsoonal savannah woodlands.

GEOLOGICAL SETTING

The ironstone lenses are near the base of a highly lateritised sequence of Cretaceous claystone porcellanite, siltstone and sandstone that is capped by remnants of nodular laterite. The iron ore occurs on the surface as dark red boulders of varying size and outcrops. Hematite is major iron mineral with some quantities of goethite. The portion of the mesa south of the Daly River Road has fairly continuous thin cap of clayey laterite and laterised sandstone. At this mesa, patches of low grade ironstone occur only on the northern edge. A few small areas of detrital laterite, including ironstone and boulders of Buldiva Sandstone, occur along the western margin of the mesa.

EXPLORATION HISTORY

Iron ore was first discovered in the area in the 1960s and a resource of over 100 million tonnes delineated. Further work in 1970 resulted in assays of 28 to 55% Fe. Orion conducted limited rock chip sampling as well as open file review and a field reconnaissance. A review of geophysical data was also conducted.

MT ALFRED PROSPECT WEEN

Tenement is compared to Lake Maitland and Yeelirrie type deposits.
Drainage systems around the region offer polymetallic possibilities.
Uranium anomalies identified by Uranerz in the mid 1970s.

• Shallow auger drilling in 1977 by Uranerz returned results up to 150 ppm uranium from calcrete horizons.

LOCATION AND ACCESS

The Mt Alfred property is located 260 km north of Southern Cross in the Yilgarn district of Western Australia. Access from Kalgoorlie is via a sealed and gravel roads and station tracks within the project area.

GEOLOGY AND MINERALISATION

The Yilgarn district is one of the richest mineral provinces in Australia with world class deposits of both precious and base metals. It consists of the Archaean greenstone belt. In Western Australia, uranium is likely to occur in the valley-fill sediments along Tertiary drainage channels and in playa-lake sediments.

PREVIOUS EXPLORATION

The target for previous exploration was a surficial deposit that has accumulated around drainage channels and basin environments. During 1977, Uranerz conducted grab sampling and shallow auger drilling from beneath a large salt lake in the area. Anomalous results of up to 150 ppm (0.015%) $U_3O_8$ from calcrete horizons were returned. No further uranium exploration has taken place since that time.

MALAWIAN PROJECTS

Red Rock Resources Plc has applied for two exploration licences in Malawi, southern Africa. The licence areas (if granted), will amount to 530 sq km, and have been highlighted by an independent party as being prospective for uranium mineralisation. The tenements include two main target areas at Chintheche and Machinga. The three areas have been explored by aerial radiometric surveys and several areas have been identified with strong radioactive responses.

CHINTHECHE

The North south trending Chintheche radiometric anomalous zone is underlain by interpreted quartzites, quartz schists and amphibolites north of Chintheche and hornblende-biotite gneiss to the south. Regional mapping identified a series of faults underlying recent clays and gravels. These structures appear to be parallel with the anomalous zone.

Possible economic concentrations of uranium minerals (pyrochlore, monazite and uranium minerals) have been targeted for further ground follow up. Fuel and industrial mineral targets have also been targeted for ground follow up (including uranium).

MACHINGA

Highly anomalous zones were reported to be associated with pegmatites, granitic dykes and veins intruding the Zomba-Chaona-Malosa syenite complex and surrounding basement gneisses (Paterson et al). Previous work detected sub-economic grades of niobium and thorium and lesser grades of uranium. Again follow up work in the form of ground spectrometer surveys was recommended.

URANIUM MINING IN MALAWI

Paladin Resources has been granted a mining licence for its Kayelekera uranium project in northern Malawi by the country's Minister of Energy, Mines and Natural Resources. Having already received environmental approval, the project is set to move into the mine construction stage.

The mining licence covers an area of 55.5 square kilometres and has been granted for a term of 15 years, renewable for further ten year periods.

The Kayelekera conventional open pit mine is scheduled to be commissioned in September 2008 and to reach full production by mid-2009. Paladin plans to spend \$185 million to develop the mine. Annual production will be 1500 tonnes $U_3O_8$ (1270 tU). The project has total inferred resources of 9.4 million tonnes of ore at 0.12% $U_3O_8$ containing 11,850 tonnes $U_3O_8$ (at 300 ppm cut-off). The Bankable Feasibility Study (BFS) defined a project life of 11 years with a mine life of seven years. However, Paladin believes it can extend project life materially beyond the 11 years.

The Paladin Mining operation is about 200 kilometres north of the Nkhata Bay area and is considered to be on the same geological trend parallel to the Lake Nyasa - Lake Rukwa zone.

VALUATION OPINION

There are no defined resources estimated in accordance with the JORC code in the tenements. Having considered the various methods used in the valuation of exploration tenements, the most appropriate approach to the technical valuation is the Geoscientific Rating method. This has been applied to the tenement areas to arrive at a range of values and a preferred valuation for the project area. The method reflects the current state of knowledge of the prospectivity. The Geoscientific rating method focuses on the exploration potential and the opportunity to make new discoveries.

In arriving at a technical value for a particular exploration tenement, I have taken into consideration the company's equity in the tenement and have only considered the net area of a tenement where it does not overlap with any pre-existing titles.

VALUATION OF THE EXPLORATION POTENTIAL - GEOSCIENTIFIC RATING METHOD

This valuation is based on an assessment of the exploration potential of the project. No resources have been delineated at the project at this stage and no financial studies are possible to assess the impact of the net profits interest and royalty at this stage. Elements of the valuation are as follows.

TENURE

with the commenced profite and co- Prospect Name 医骨骨骨的法的法法的法法的法	かいりょうしょうしょうか Tenement No.	Date granted/ (application date)	Size (km2)	State/country
Woolgni	EL 23569	17/6/03	360.00	NT
Edith River	EL 23568	17/2/03	228.80	NT
Celia	ELA 24414	(10/7/04)	13.05	NT
Marrakai	EL 24614	12/2/05	228.80	NT
Hayes Creek	EL 24432	2/12/05	130.10	NT
Daly River	EL 24391	2/12/05	20.04	NT
Mt Alfred	E 29/581	8/9/06	210.50	WA
Machinga	EPL0180/2005		212.00	Malawi
Chintheche	EPL0181/2005		318.00	Malawi

Tenement Details (Retail Star 2007)

BAC - BASE ACQUISITION COST

This represents the exploration cost for the current period of the tenements. It is estimated at \$300 to \$350 which is used for the Exploration Licences in Australia and a similar amount was used for the tenements in Malawi.

PROSPECTIVE AREA

An estimate has been made of the percentage of the tenement area that may be prospective for uranium. The tenement areas are large and the exploration focus will be throughout the major host rock types.

GRANT FACTOR

Where a tenement is not yet granted a discount factor is applied to reflect the uncertainty of continuing with the application or the certainty of eventual grant by the Government of Malawi.

Prospect Name	State	Tenement		Size (km2)		Base Cost		Prospective	Grant
					Low	High	Low	High
Woolgni	ΝT	EL 23569	100%	360.00	300	350	20%	30%	1
Edith River	ΝT	EL 23568	100%	228.80	300	350	20%	30%	1
Celia	ΝT	ELA 24414	100%	13.05	300	350	20%	30%	0.75
Marrakai	ΝT	EL 24614	100%	228.80	300	350	20%	30%	1
Hayes	ΝT	EL 24432	100%	130.10
Creek					300	350	20%	30%	1
Daly River	ΝT	EL 24391	100%	20.04	300	350	20%	30%	1
Mt Alfred	WA	E 29/581	100%	210.50	300	350	20%	30%	1
Machinga	Malawi	EPL0180/2005	100%	212.00	300	350	20%	30%	0.25
Chintheche	Malawi	EPL0181/2005	100%	318.00	300	350	20%	30%	0.25

REGIONAL SETTING - METAL ENDOWMENT (OFF PROPERTY)

Woolgni/Edith River

The most significant mining operation in the area is the Mt Todd (more recently known as Yimuyn Manjer) gold mine, situated approximately 10km from the eastern boundary of EL23568, near Edith River falls. This operation evolved over a number of years from a relatively small heap leach operation to a large scale, 9 million tpa mine using CIP/CIL and flotation to recover mainly gold. The mine had a planned life of around 15 years at a throughput of around 9 million tonnes of ore treated per annum and a head grade of around 1.1g/t. However the mine experienced considerable operating difficulties and never achieved the grades. At current grades, the revenue from the mine would be around \$270 million p.a., however costs would also be high due to extremely hard ore, metallurgical difficulties and associated environmental problems.

Celia tenement

The Celia prospect is favourably located with respect to both the former Rum Jungle uranium mine and the Brown's project, operated by Compass Resources. The NT Department of Primary Industries, Fisheries and Mines reports on its website that the oxide component of the Browns project contains 2.64 Mt of oxide ore at 1.02%Cu, 0.12% Co & 0.10% Ni. The project is being developed at present with construction proceeding at a reported capital expenditure of \$70 million.

Marrakai

Hayes Creek, Daly River, Mt Alfred

No significant mining operations exist in the immediate area.

Malawi

Paladin Resources operates the high grade Kayelekera sandstone uranium deposit in Malawi. With environmental approval already received, and a mining licence granted in April 2007, this now clears the way for the US\$ 185 million construction to commence. First production is expected late in 2008, ramping up to full capacity of 1500 t $U_3O_8/\gamma r$ in mid 2009 (UIC 2007).

The Bankable Feasibility Study (BFS) defined ore reserves, generated from the Measured and Indicated Resources, occur within a single open pit. Using the ore reserve base of 10.46Mt at an average grade of 0.11% $U_3O_8$ the BFS shows a scheduled mine life of 7 years and a process plant life of 11 years (including treatment of marginal material). Based on the mill throughput design of 1.5Mtpa of ore and a 90% recovery the BFS shows an average 1,493tpa (3.3Mlb) $U_3O_8$ will be produced for the first 7 years from a head feed grade of 0.109% $U_3O_8$ and 530tpa (1.17Mlb) $U_3O_8$ over the last 4 years, using the accumulated marginal material stockpile grading 0.039% $U_3O_8$ .

LOCAL SETTING - METAL ENDOWMENT (ON PROPERTY)

The local Setting of the project areas in described earlier in the report.

ANOMALY FACTOR - KNOWN TARGETS ON THE PROJECTS

Woolgni/Edith River

Retail-Star Limited - Independent Valuation 17 June 2007

Orion exploration secured the Exploration Licences from Tennant Creek Gold (NT) Pty Ltd in 2003. It proposed the following program for the Woolgni tenements. Photo geological study should be made, to locate where intersecting shears are evident; such areas should then be examined with detail ground radiometric surveys. Conduct a low level airborne radiometric/magnetic survey to mapped deep seated structures such as fault/shear zones, and follow this with a ground examination of anomalous areas. Detailed rock chip sampling along shear/faulted systems to test uranium/gold/copper mineralisation is associated with regional structures. Follow up detailed rock chip sampling and soil sampling around the historic uranium shafts and surrounding areas. If any geophysical or geochemical uranium anomalies are delineated by the survey, a small RAB drilling program should be implemented to test the bedrock. Deeper drilling would be required to follow up positive results from the rock chip sampling and reconnaissance drilling.

The Woolgni/Edith River project is prospective for a range of commodities including gold, copper and uranium. There are granted ELs over the prospects, and good infrastructure with proximity to major roads, railway and power.

Celia

The Celia prospect is relatively close to the former Rum Jungle uranium mines and the Compass Resources' polymetallic mine. The presence of significant magnesite mineralization indicates the proximity of the site to the redox boundary. Two untested radiometric anomalies of significant dimension have been identified within the prospect boundaries (see report by Salmon). It is therefore apparent that the Celia prospect is considered highly prospective for uranium.

Hayes Creek

The Hayes Creek EL is situated within the Pine Creek geosyncline and therefore is in an area with potential for economic polymetallic resources. Clearly, the original exploration focus was on iron ore and manganese, however there is also potential for uranium and gold. The fact that nothing significant has been discovered over the area despite over 100 years of mining and exploration in the Pine Creek geosyncline would indicate that a cautionary approach be adopted.

Daly River

The Daly River road project is well situated with respect to both former and potential gold mining operations. The Spring Hill project is listed as a Potential Mining Development. It has a resource of approximately 300,000 tonnes at 2.3g/t gold. The deposit is only small and "is only viable if ore is trucked to the Union Reefs mill and toll treated.

However it is clear that potential for further delineation of iron ore resources exist, although doubts about tonnage and quality (including phosphorus content) have been expressed. The potential for uranium mineralization is more problematic.

Mt Alfred

The tenement is that the geology may be conducive for calcrete-type uranium resource; it is a granted EL; and granted ELs for uranium are in demand by junior explorers. Furthermore, uranium has not been the major focus of exploration in this district previously.

GEOLOGY FACTOR

The tenements lies on highly prospective lithologies with major structural features thought to be conduits for mineralising fluids. All the projects lie on prospective rock types as described in Regional and Local geology sections.

Prospect		Off Site		On Site		Anomaiv		Geology
Name
	Low	High	Low	High	Low	High	Low	High
Woolgni	2.00	2.25	1.50	1.75	1.00	1.25	1.25	1.50
Edith River	2.00	2.25	1.50	1.75	1.00	1.25	1.25	1.50
Celia	2.50	2.75	1.25	1.50	1.00	1.25	1.25	1.50
Marrakai	1.50	1.75	1.25	1.50	1.00	1.25	1.25	1.50
Hayes Creek	1.00		1.25
		1.25		1.50	1.00	1.25	1.25	1.50
Daly River	1.00	1.25	1.25	1.50	1.00	1.25	1.25	1.50
Mt Alfred	1.00	1.25	1.25	1.50	1.00	1.25	1.25	1.50
Machinga
	2.25	2.50	1.50	1.75	2.00	2.25	2.00	2.25
Chintheche
	2.25	2.50	1.50	1.75	2.00	2.25	2.00	2.25

Prospectivity Assessment Factors:

MARKET VALUE

In arriving at a fair market value for a particular exploration tenement, I have considered the current market for exploration properties in Australia and overseas. It is considered appropriate to apply a market premium to the technical value of the exploration potential of its tenements and the low perceived country risk associated with investments in USA and Australia.

The announcement on Wednesday, March 7, by Energy Resources of Australia (ERA) of problems at their Ranger site, due to heavy rainfall from Cyclone George, has led to uncertainty of production schedules for Ranger, in addition to that of the Cigar Lake operation in Canada. Although it is too early to make any definitive statements about the situation at Ranger, the invoking of the force majeure clause by ERA in its sales contracts is not a sign of optimism on ERA's part. Neither is the statement in ERA's press release that "First quarter production is estimated to be between 20 and 30 per cent lower than in the corresponding period last year. The impact of the water level in the operating pit is still being assessed; however production will be impacted in the second half of 2007."

Independent assessments of Ranger's situation point to a long and expensive process to bring Ranger back up to full strength. Assuming ERA can bring the mill back into operation on a reasonable schedule and at reasonable costs, the design of Ranger's operation has provided a certain level of buffer, by virtue of a large ore stockpile-much of it from previous mining of the Ranger I pit. During normal times, this lower-grade ore $(0.11\% U_3 O_8)$ representing about 60 million pounds of $U_3O_8$ , according to ERA's annual reserve assessment for 2006) is blended with higher-grades from ongoing or recently stockpiled ore from the mining of the Ranger III pit.

This situation has led to an increase in spot market predictions and, for the purpose of this valuation, to a stronger market outlook for new entrants to the market. A comparison of spot price ranges for the 2002 to 2004 period (US\$9.70 to US\$20.50 per pound) to current prices over the last six months (US\$64.00 to US\$113.00 per pound suggests a Market Factor of $6.$

VALUATION WALLER

Projec	Low High		Preferred
Woolgni	0.49	1.69	1
Edith River	0.31	0.72	0.50
Celia	0.01	0.03	0.02
Marrakai	0.19	0.48	0.33
Hayes Creek	0.07	0.19	0.13
Daly River	0.01	0.03	0.02
Mt Alfred	0.12	0.31	0.21
Machinga	0.52	1.00	0.74
Chintheche	0.78	1.49	1.12
	2.52	5.94	4.07

The valuation of the exploration potential has been arrived at from a consideration of the existence of surrounding mines and resources available within the project area. In this report, I have systematically established the value of the mineral assets as at 6 June 2007.

Based on an assessment of the factors involved I estimate the value of the various components of the project area to be in the range AU\$2.52 million and AU\$5.94 million with a preferred value of AU\$4.07 million.

BEALTHY

Valuation References

AusIMM, (2004), "Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA), effective December 2004.

AusIMM. (2005), "Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code)" 2005 Edition

AusIMM, (1998), "Valmin 94 - Mineral Valuation Methodologies"

CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM, (2000), "CIM Standards on Mineral Resources and Reserves-Definitions and Guidelines". Prepared by the CIM Standing Committee On Reserve Definitions. Adopted by CIM Council August 20, 2000.

CIM, (April 2001), "CIM Special Committee on Valuation of Mineral Properties (CIMVAL)" Discussion paper

CIM, (2003) - "Standards and Guidelines for Valuation of Mineral Properties. Final Version, February 2003" Special Committee of the Canadian Institute of Mining, Metallurgy and Petroleum on Valuation of Mineral Properties (CIMVAL)

KILBURN, LC, 1990, "Valuation of Mineral Properties which do not contain Exploitable Reserves" CIM Bulletin, August 1990.

RUDENNO, (1998), "The Mining Valuation Handbook"

Uranium References

Mollard, W.S., Rumley, C., Penney, K. and Curtotti, R. 2006, "Uranium, Global Market Developments and Prospects for Australian Exports", ABARE Research Report 06.21

Prepared for the Australian Government Department of Industry, Tourism and Resources and the Australian Government Department of Prime Minister and Cabinet, Canberra, November 2006

The Ux Consulting Company, LLC (UxC) 1401 Macy Drive Roswell, Georgia 30076, http://www.uxc.com/index.aspx

OECD NEA/IAEA, Uranium Resources Production & Demand, 1974-02, Company information, Geoscience Aust.

OECD-NEA & IAEA, 1998-2002, Uranium Resources, Production and Demand.

OECD NEA & IAEA, "Uranium 2003: Resources, Production and Demand, updated 2005" by Geoscience Aust.

Uranium Information Centre web site www.uic.com.au

Project References

Retail Star Ltd, 2007, ASX Release, 9 May 2007.

Laurence, D, 2007 "Exploration Tenements in the Northern Territory, Western Australia and Africa For Retail Star Limited", May 2007

Paladin Reasources Limited, 2007, "Kayelekera Uranium Project, Malawi, Southern Africa"

AI assistant

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Celia Prospect - Northern Territory

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Yilgarn/Mt Alfred Prospect - Western Australia

Malawi Tenements

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