CORAZON MINING LIMITED — Capital/Financing Update 2005

Aug 16, 2005

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

Graynic Metals Limited

ABN

87 112 898 825

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{1}$ ⁺Class of ⁺securities issued or to be issued

Options to subscribe for Ordinary Fully Paid Shares at an exercise price of 20 cents on or before 31 October 2007.

• $\overline{2}$ Number of ⁺securities issued or to 12,250,002 be issued (if known) or maximum number which may be issued
• 3 Principal terms of the "securities (eg, if options, exercise price and expiry date; if partly paid *securities, the amount outstanding and due dates for payment; if securities. *convertible the conversion price and dates for conversion)

20 cent options exercisable on or before 31 October 2007

⁺ See chapter 19 for defined terms.

4	Do the "securities rank equally in all respects from the date of allotment with an existing "class of quoted *securities? If the additional securities do not rank equally, please state: the date from which they do which the extent to to they participate for the next dividend, of the case (in a trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment	No. paid shares, the allotted and issued shares will dividend or interest payment.	Upon exercise of the options into ordinary fully rank equally in all respects with an existing class of quoted securities. The option does not entitle the holder to participate in the next
5.	Issue price or consideration	\$0.01
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Funds raised from the issue will be applied to working capital and also to meet issue expenses of approximately \$10,000.
7	Dates of entering *securities into uncertificated holdings or despatch of certificates	On or about 23 September 2005
		Number	*Class
8	Number and class of - all securities quoted ASX. on (including the securities in clause 2 if applicable)	20,250,003	Fully Paid Ordinary Shares
		12,250,002	\$0.20 options exercisable on Οľ October before 31 2007

$\overline{\text{F}}$ See chapter 19 for defined terms.

		Number	+ Class
9	and "class" of Number -all	4,250,000	Paid Ordinary Fully
	"securities not quoted on ASX (including the securities in clause		Shares
	2 if applicable)	2,000,000	20 cent, 28 March 2007 Options
		2,000,000	30 cent 28 March 2008 Options
		2,000,000	30 cent 30 April 2008 Options

Dividend policy (in the case of a $\begin{bmatrix} \text{trust, distribution policy} \ \text{increased capital} \ \text{interests} \end{bmatrix}$ $10\,$

N/A

Part 2 - Bonus issue or pro rata issue

11	holder approval security Is. required?	No
12	Is the issue renounceable or non- renounceable?	Non-renounceable
13	Ratio in which the "securities will	One (1) Option for every two (2) ordinary
	be offered	fully paid Share held.
14	Class of securities to which the Ordinary Fully Paid Shares offer relates
15	determine *Record- date to	5.00pm WST 29 August 2005
	entitlements
16	Will holdings on different registers (or subregisters) be aggregated for	Yes
	calculating entitlements?
17	Policy for deciding entitlements in	Round up to nearest 1 option
	relation to fractions
18	Names of countries in which the	None
	entity has "security holders who
	will not be sent new issue documents
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	of Closing date for receipt	16 September 2005
	acceptances or renunciations

$\overline{\text{ }*$ See chapter 19 for defined terms.

20.	Names of any underwriters	Issue Not Underwritten. Shortfall to be placed at Directors discretion (not to Directors or Associates of Directors).
21	Amount of any underwriting fee or commission	N/A
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	any handling fee Amount of payable to brokers who lodge acceptances or renunciations on behalf of "security holders	N/A
25.	If the issue is contingent on "security holders" approval, the date of the meeting	N/A
26.	Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled	30 August 2005
27.	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	17 August 2005
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if N/A applicable)
30	How do "security holders sell their entitlements in full through - a broker?	N/A
31	How do "security holders sell part of their entitlements through a broker and accept for the balance?	N/A

$+$ See chapter 19 for defined terms.

• 32 How do "security holders dispose $N/A$ of their entitlements (except by sale through a broker)?
• 33 *Despatch date

On or about 23 September 2005

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities $(tick one)$
• $(a)$ Securities described in Part 1
• $(b)$

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35

37

If the ⁺securities are ⁺equity securities, the names of the 20 largest holders of the additional "securities, and the number and percentage of additional "securities held by those holders

36	If the "securities are "equity securities, a distribution schedule of the additional
	*securities setting out the number of holders in the categories
	$1 - 1,000$
	$1,001 - 5,000$
	$5,001 - 10,000$
	$10,001 - 100,000$
	$100.001$ and over

A copy of any trust deed for the additional "securities

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of securities for which *quotation is sought
• 39 Class of "securities for which quotation is sought
• Do the ⁺securities rank equally in all 40 respects from the date of allotment with an existing *class of quoted *securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend. (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that $\vert$ other security)

Number and "class of all "securities 42 quoted on ASX (including the securities in clause 38)

+ Class

⁺ See chapter 19 for defined terms.

Quotation agreement

• $\mathbf{I}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for an illegal purpose.
• There is no reason why those *securities should not be granted *quotation.
• An offer of the *securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any $\bullet$ applications received by us in relation to any "securities to be quoted and that no-one has any right to return any "securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the "securities be quoted.
• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the *securities to be quoted, it has been provided at the time that we request that the "securities be quoted.
• If we are a trust, we warrant that no person has the right to return the $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the "securities be quoted.
• $\overline{3}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{4}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before "quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:

Kent Hunter (Company secretary) Date: 17 August 2005