DREADNOUGHT RESOURCES LTD — Capital/Financing Update 2011

Feb 27, 2011

==> picture [96 x 68] intentionally omitted <==

ASX Announcement

28 FEBRUARY 2011

==> picture [74 x 10] intentionally omitted <==

----- Start of picture text ----- M I N I N G----- End of picture text -----

The Manager Companies Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

A$2.97 million share purchase plan to fund 2011 SA-NT lithium-uraniumgold campaign by ERO

Highlights

• Share Purchase Plan priced at A$0.03

• 1-for-4 Bonus Option Issue

ERO Mining Limited ACN 119 031 864 62 Beulah Road Norwood South Australia 5067

PO Box 3126 Norwood South Australia 5067 Phone 61 8 8132 7970 Fax 61 8 8132 7999 Email info@eromining.com web www.eromining.com

Introduction

ERO Mining Limited (ASX: “ERO” or “the Company”) is pleased to today announce a A$2.97 million Share Purchase Plan (“SPP”) to principally fund new exploration campaigns on lithium, uranium and gold targets in South Australia (SA) and the Northern Territory (NT).

Proceeds will also be applied to general working capital purposes.

The lithium and uranium push in SA will focus on two areas:

• the Wertaloona Project northeast of Port Augusta, named due to drilling activities focussed on the Wertaloona Station lowland, and

• the Padthaway Ridge in the State’s South East.

The NT uranium and gold drive is targeting work on the Company’s Suplejack and Talbot North gold prospects at the Company’s Tanami project in the Tanami Desert, northwest of Alice Springs.

The campaigns are the first to be mounted by ERO Mining since the Company’s successful transition late last year from a more diversified explorer to one primarily intent on lithium and uranium.

The SPP is scheduled to open on 7 March 2011 and close on 25 March 2011.

SPP terms

Under the SPP announced today, ERO is offering a maximum of 99,000,177 ordinary shares at 3 cents each to raise up to A$2.97 million.

The non-renounceable SPP offer represents a 13% discount to the average closing market price for ERO traded on the ASX over the five business days on which the stock traded prior to today’s announcement.

Under the SPP terms, shareholders can acquire up to $15,000 each in new ordinary ERO shares.

ERO Directors reserve the right to close the SPP early. Applications will be accepted and allocated at the discretion of the Directors. Participation in the SPP is optional.

The Directors of ERO intend to subscribe for shares under the SPP in respect of their own shareholdings.

Shareholders with an address on the Company’s register in Australia or New Zealand at the close of business on 25 February 2011 (“Eligible Shareholders”) can purchase SPP shares without incurring brokerage costs.

ERO Mining Limited 1

Bonus option

Simultaneous with the announcement of the SPP, the Company has announced that it will undertake a bonus issue of options to shareholders on the basis of one (1) free option for every four (4) shares held (“Bonus Issue”).

Eligible shareholders who subscribe for additional shares under the SPP will be entitled to increase the number of free options issued to them under the Bonus Issue as the SPP shares will be allotted prior to the record date of the Bonus Issue.

The options, to be listed on the ASX, will be exercisable at 6 cents on or before 28 September 2012.

If the SPP is fully subscribed, the Bonus Issue will result in 107,250,192 options being issued to shareholders of ERO who remain on the register at the Bonus Issue Record Date.

Further details regarding the Bonus Issue will be provided in due course.

SPP – indicative timetable

SPP Record Date	25 February 2011
SPP announced	28 February 2011
SPP Opening Date	7 March 2011
SPP Closing Date	25 March 2011
Allotment Date	29 March 2011
Quotation Date	31 March 2011
Bonus Issue Record Date	1 April 2011

These dates are subject to change and are indicative only.

==> picture [139 x 57] intentionally omitted <==

Shane Gale Chief Executive Officer

28 February 2011

Media and investor relations contacts:

Shane Gale ERO Mining: t (08) 8132 7911, m 0459 128 252

Duncan Gordon

Adelaide Equity: t (08) 8232 8800, m 0404 006 444

Kevin Skinner

Field Public Relations: t (08) 8234 9555, m 0414 822 631

Further information relating to ERO Mining Limited and its various exploration projects can be found on its website: www.eromining.com

2 ERO Mining Limited