EQ RESOURCES LIMITED — Capital/Financing Update 2007

Jun 21, 2007

22 June 2007

ASX Announcement

Icon Exploration Update & SPP/KUTh Priority Closure

Icon Resources' Board of Directors is pleased to provide shareholders with the following update on drilling in NSW and Tasmania.

Shareholders are also reminded that Icon Resources current Share Purchase Plan closes 5.00pm Wednesday $27^th$ June. This is also the time that Icon shares will be 'ex' the KUTh Energy priority offer. Icon Resources shareholders with 12,000 shares or more and holding these shares from the $27^th$ June through to the opening of the KUTh Energy IPO (expected late July/early August) will be offered a minimum of 12,000 KUTh Energy shares. In the case where Icon shareholders have more than 12,000 shares and want a higher allocation of KUTh shares, every effort will be made to give each qualifying Icon shareholder the number of shares applied for

Tara Tin, NSW (III: 100%)

The current aircore drilling program, totalling $\sim 1000$ m, has been completed and the first diamond drill hole, IDT001, is currently at 216m. Preliminary logging, assisted by Niton scans, has highlighted some encouraging polymetallic veining (Sn-Zn-Cu-W) throughout the cored interval, with the intensity of veining increasing with depth. Altered intersections of up to 1 metre in length with around 1% Sn (Niton assays) indicates the presence of a large mineralised system.

Professor Zinc. Tasmania (III:100%)

Drilling is progressing on the first of three new chargeability targets defined by the recent 3D-IP survey in the southern section of Icon's Professor Leases in western Tasmania. The hole is currently at 222m. Drilling has intersected pyrite sulphides which helps explains the anomaly. The core will be assayed for base metal mineralisation.

Managing Director Dr John Bishop commented that this initial drilling has upgraded the prospectivity of both projects. Tara is continuing to provide tantalizing tin grades and increasing alteration with depth supports the presence of a large system. Icon is contemplating a deep IP program to complement the existing drilling to better define areas of higher mineralisation. At Grieves, drilling of pyrite sulphides close to the surface is exciting and a strong indication for zinc mineralisation. Meanwhile, as Chairman of KUTh Energy, I want to ensure that all Icon shareholders understand the Kuth priority offer, particularly given the strong performance of the geothermal sector and the world focus on reducing carbon dioxide emissions.

KUTh Energy priority entitlement

KUTh Energy Ltd is a start up geothermal company with a close association to Icon Resources. KUTh holds a geothermal tenement covering a large part of Eastern Tasmania (Figure 1) and believes that the area is very prospective for geothermal resources with the presence of thermally anomalous granites buried at suitable depths beneath an insulating sedimentary cover. The area has excellent infrastructure with close access to the Tasmanian electricity grid as well as the mainland through the Bass Interconnect.

Kuth Energy is working towards listing on the ASX and Icon shareholders with at least 12,000 shares on $27^th$ June and holding these until KUTh's prospectus is open will be entitled to 12,000 KUTh shares. Every endeavour will be made to satisfy eligible Icon shareholders who own more than 12,000 Icon shares and want more than 12,000 KUTh shares. (Any KUTh shares applied for must be made through the application form which will be part of the KUTh prospectus.)

Figure 1. Tasmania has some of the highest heat flow measurements in the country and KUTh Energy's special licence SEL26/2005 covers areas where granites have been interpreted at depths suitable for the generation of electricity using enhanced geothermal power. KUTh is working towards listing on the ASX and is offering Icon shareholders a priority allocation (see text).

Tara Tin, Central NSW

During May an additional 24 line kms of detailed resistivity was completed across the immediate Tara prospect area to resolve the depth of surficial cover and features within the basement.

Processing of the data has recently been completed and confirms a relatively thin (20-30m) blanket of alluvial sands and clays overlying variably weathered basement with complex resistive response. The central magnetic anomaly which has been the focus of previous exploration at Tara appears to lie within a large $(\sim 1 \text{km} \times 2 \text{km})$ basin-like structure characterised by deeper weathering which may reflect extensive alteration associated with the mineralised vein system.

Localised more resistive features within the broadly defined 'basin' may reflect less-altered basement or zones of silicification. Drill-testing of several of these features is planned with shallow air-core drilling either at the completion of the current diamond drilling program or following a planned high-resolution ground magnetic survey which may successfully resolve potentially mineralised structures within the shallow basement.

The present campaign of reconnaissance aircore drilling has been completed, primarily testing shallow targets identified during Icon's initial ground resistivity survey. To date 18 holes (totalling approximately 1000m) have been drilled and sampled, with the majority of holes successfully penetrating the weathered basement. Niton scanning of the samples has indicated low-order multielement anomalism within the basement and highlighted intervals of elevated tin associated with visible cassiterite.

All sampling from this initial program have now been submitted for analysis and assays are awaited to confirm the geochemical anomalism indicted by the Niton analysis. Further sampling of the basement will be required to define the overall extent of anomalism across the entire prospect.

Diamond drilling of a series of basement targets previously identified by Icon has commenced with the first drillhole (ITD001) currently at a depth of 216m. This hole is targeting a discrete gravity feature on the southern flank of the main Tara magnetic anomaly and is traversing beneath a previous shallow hole (T3) which intersected elevated tin grades within weathered metasedimentary basement.

Preliminary geological logging assisted by Niton scans has highlighted some encouraging polymetallic (Sn-Zn-Cu-W) veining throughout the cored interval, with intensity of veining increasing with depth. From 180m an increasing abundance of fluorite in veins (associated with pyrite, cassiterite, sphalerite and minor chalcopyrite) and disseminations is evident.

This hole has confirmed mineralisation extending beyond the central magnetic anomaly and adds further to the developing model of a large concealed tin-mineralising system at Tara.

Line 3a

Figure 2. Resistivity cross-section showing the variable nature (weathering and topography) of the top of the basement at Tara. Aircore drilling has intersected tin within the weathered basement and the first diamond hole, planned for $\sim$ 250m, is near completion.

Professor Zinc. Western Tasmania

Drilling is progressing on the first of three new chargeability targets defined by the recent 3D-IP survey in the southern section of Icon's Professor project in western Tasmania. The rig siting has been based on the final data set received from the contractor (Figure 2) which differs in detail from the previously released preliminary data.

IPD005 has reached a depth of 222m and sulphides have been observed in the core. (It should be noted however that sphalerite is one of the few sulphides, if not the only one, which does not respond to IP. Thus the search for zinc using IP is one of association rather than direct response.)

The main mineralisation at nearby Grieves Siding is along the contact between the carbonates and the underlying Moina Sandstone and it is planned to drill IPD005 through to this contact.

Figure 2. Final plan of 3D-IP chargeability in the Grieves area, Professor Leases, western Tasmania. A winter drilling campaign is in progress to test the three areas indicated.

For further information, contact John Bishop, Managing Director 02 9279 1252 or 0418 373 429 Digital copies of this and other reports are available on our website www.iconresources.com.au. To receive email copies of future releases, subscribe by email to info@iconresources.com.au