EV RESOURCES LTD — Capital/Financing Update 2010

Nov 11, 2010

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12[th] November 2010

The Manager Company Announcements Office Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade PERTH WA 6000

Dear Shareholders

Victory West finalises the acquisition of the USSU Nickel Project

• Binding agreement signed to acquire rights to 70% interest in the USSU Nickel Project

• Legal and Technical Due Diligence confirms the Project to be in good standing and highly prospective

• Drilling contractor mobilized – 80 hole drilling program targeting maiden inferred JORC resource

• An aggressive work program and budget has been agreed to fund exploration, production permit approvals and pre-development works to be complete by February 2011

Key Project Highlights

• The Project is considered highly prospective with an initial exploration target of 35-45Mt at 1.2% to 1.6% Ni[1] (across both Limonite and Saprolite zones).

• Less than 40% of the concession has been explored providing significant further upside.

• Located close to a port site (~3km’s) and historical exploration work indicates potential low stripping ratio with well-developed mineralization at surface.

• Early commercialization through direct shipping ore (DSO) high grade saprolite nickel ore

• Favourable economics - potentially low cost and rapid ramp-up to commercial production and cash flow.

• · Feasibility and Environmental Studies in progress for Production and Operational IUP (Exploitation) concession application

• Robust market for Direct Shipping Ore (DSO) nickel ore and continued strong nickel demand from key Asian markets.

Transaction Summary

1 In accordance with Clause 18 of the JORC Code, it is important to note that no JORC Mineral Resources or Ore Reserves have been established on these concessions and any current assessment remains subject to ongoing exploration work and drilling and further exploration work may not result in the definition of a Mineral Resources or Ore Reserves.

Further to our announcement on 27 August 2010, Victory West Moly Limited (ASX: VWM FSE: R1E) (“VWM” or the “Company”) is pleased to announce that it has completed negotiations and commercial terms and conditions with Oceantide Investments Pty Ltd (“Oceantide”) and is proceeding with the acquisition of (subject to shareholder approval) of Oceantides rights to a 70% equity interest in the highly prospective USSU Nickel Project.

The USSU Nickel Project is a highly prospective exploration IUP concession (The “Concession” or the “Project”) covering approximately 1,608 hectares located in Malili East Luwu in South Sulawesi and located within a prolific nickel laterite province with several existing major operations nearby (including Rio Tinto’s 162Mt project and PT Inco’s Sorowako 161Mt project).

The Project is held by Indonesian entity PT. Primara Utama Lestari (“PT PUL”) and VWM has agreed to acquire Oceantides rights to acquire the 70% equity interest in PT PUL by;

• acquiring 100% of the issued share capital of Oceantide through the staged issue of 50 million fully paid ordinary shares (against agreed milestones as detailed on page 6); and

• assuming Oceantide’s financial obligations to the Project;

• Paying a staged consideration of US$3.75m (against agreed milestones as detailed on page 6) to the shareholders of PT PUL (“Indonesian Shareholders”);

• Sole funding 100% of exploration and development expenditure to commercial production (with full cost recovery from profits)

An initial US$2million budget has been agreed to fund exploration, permit approvals and predevelopment works until February 2011.

Subject to the timely receipts of required production and operational approvals and permits the project has the capacity to move into production by end Q2-2011.

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Due Diligence

The Company has undertaken significant legal due diligence and is finalising a staged technical due diligence process that will not only result in verifying the historical data and exploration target but also underpin a maiden inferred JORC resource for the Project.

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Legal Review

In summary, the legal due diligence undertaken on the nickel exploration concession held by PT PUL;

• PT PUL is the holder of Exploration IUP 2010 and is valid until 30 August 2014 and has been properly established as a limited liability company and with the necessary authority to hold an IUP and to carry on mining activities consistent with the USSU Nickel Project.

• The decree number, validity period, date of issuance and holder of the IUP, as stated in the Exploration IUP, are as recorded in the Luwu Timur Mining Office and has been issued in accordance with the prevailing procedures and requirements.

• The Exploration IUP area is not overlapping with other mining concessions.

• According to the Mining Area Map and the Forestry Area Map, a small and immaterial area within the concession overlaps a Forest Area (which is not expected to impinge the proposed production areas);

  • In addition, the Luwu Timur Forestry Office and BAPPEDA (Indonesian Regional Body for Planning and Development) have confirmed that the entire Exploration IUP area is situated within an area available for other purposes and may be used for mining purposes without the need for any forestry related licenses or permits.

  • Note: There are some minor discrepancies amongst (i) the Mining Area Map, as maintained by DGoMCG, (ii) the Forestry Area Map, as maintained by MoF, (iii) the Luwu Timur Forestry Office Explanation Letter and (iv) the verbal confirmation provided by BAPPEDA however this is not expected to impair the proposed activities.

  • According to verbal information provided by BAPPEDA, there is a possibility that the Exploration IUP 2009 area may overlap with land being used for private residences. However, this is not expected to impair the proposed activities.

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Technical Review

• Technical due diligence completed to date includes;

• complete software re-modeling and desktop analysis of the historic technical data

• local and regional geological assessment has confirmed the project as highly prospective.

• A drilling contractor has been mobilized to site to undertake a verification and infill-drilling program within the currently targeted initial production area.

• The contractor will be supervised and managed by PT GMT Indonesia (GMT)

• It is expected that the current drilling program will establish an inferred JORC resource.

• It is the Company’s intention to continue and expand the drilling program to increase both mineralisation tonnages and confidence levels of the deposit.

A more detailed and comprehensive technical update will be provided to the market immediately upon sign off by GMT (the Company’s Indonesian Geological and Technical Consultants) and competent person.

Shareholders Meeting

The Company is to seek approval from shareholders for the acquisition at a General Meeting of Shareholders (“General Meeting”) as soon as practically possible. It is intended that reports from the Company’s Indonesian lawyers (legal report) and Indonesian Geological Consultants (independent geological report) will be included with the Notice of Meeting (NOM).

Transaction Documents & PMA Company Conversion

The Parties are to execute a formal memorandum of agreement (“MOA”) as soon as practically possible, key transaction agreements (including conditional sale and purchase of shares agreement, new articles of associations and shareholders agreements) which are to be drafted by the Company’s nominated Indonesian law firm. The Parties agree to work expeditiously to facilitate the conversion of PT PUL into a PMA Company (foreign investor company).

Financing & Operations

• Funding to date: In addition to the funding and services that have previously been provided towards the development of the Project by Oceantide. VWM has advanced to Oceantide a total of US$777,780 (inclusive of the US$100,000 loan as announced on 27 August 2010). These funds have been on-lent to PT PUL and utilised for the benefit of the Project and are fully recoverable from the Project.

• Sole Funding: VWM is to assume Oceantide’s obligations to sole fund 100% of the Project’s expenditure to commercial production of DSO without contribution from the Indonesian Shareholders (the “Financing”). It is expected that commercial production can be achieved for approximately US$5-6m.

• Cost Recoverability: To the extent that VWM provides the Financing in the form of a loan to PT PUL, the Financing shall:

• attract interest at normal commercial rates;

• both interest and principal shall be repayable by PT PUL to VWM on a first priority basis and before any distributions to shareholders (other than the agreed pre-dividend distributions as defined below)

• Pre-existing liabilities: The Local Shareholders are to be exclusively responsible for and shall indemnify Oceantide and its affiliates against any and all commercial liabilities of PT PUL in existence at the date of Completion.

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• Operations & Management: The Parties are to work together to define a budget and timetable, operational management structure and the funding approval process (i.e. cash-calls and supporting documentation).

• Production Permits & Licenses: The Parties are to work together to finalise Feasibility, Environmental and AMDAL studies required for the conversion of the Concession to Production and Operational IUP as well as any permits required to undertake commercial production of the proposed Nickel DSO operations.

• Initial Budget: An initial US$2million budget is to fund exploration, permit approvals and predevelopment works until February 2011.

• Pre-Dividend Distribution: Upon commencement of sustainable production. The shareholders of PT PUL are to drawdown a monthly sum equivalent to US$3.00 per metric tonne of ore sold each month (the “Draw Down”).

• The Draw Down is to be distributed proportionately as to the equity interest of each shareholder (i.e. Local Shareholders = 30%, VWM Group = 70%),

• The Draw Down is dependent on sufficient cash availability and continued profitability of the Company.

• Survival: The rights and obligations, that each party are subject to, under the provisions of the binding agreement and any subsequent agreements (Transaction Documents) will survive in the event of divestment of interest by any party.

• Termination: In the event that the proposed Transaction does not proceed;

• At the election of Oceantide due to commercial reasons including failure of shareholder approval– a $5 per tonne priority royalty is to be paid to Oceantide until the total of the funds advanced plus interest calculated at 10% per annum have been repaid.

• Due to failure of final Technical Due Diligence (i.e. verification drilling program currently in progress is materially deficient of the stated historic exploration results), the total of the funds advanced at that date are to be considered at call and to be repaid in full.

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Transaction Consideration:

Equity Consideration

In consideration for acquiring 100% of the issued share capital of Oceantide and subject to shareholder approval the following equity consideration is to be paid against certain milestones;

Consideration	Milestone
20million fully paid shares	Upon shareholder Approval (Shareholders Meeting to be held as soon as practically possible)
10million Performance Shares	Convertible into ordinary fully paid shares upon confirmation of a JORC Inferred Resource of not less than 10million tonnes of Ni at a minimum grade of 1.5%
10million Performance Shares	Convertible into ordinary fully paid ordinary shares upon the conversion of PT PUL’s Exploration IUP into a Production and Operational IUP and granting of all production related permits.
10million Performance Shares	Convertible into ordinary fully paid ordinary shares upon commencement of commercial production, being defined to be deliveries of 3 shipments of at least 50,000 tonnes of nickel ore (per shipment).
Note: If an abovementioned milestone is not achieved within 48 months from the respective Performance Shares issue date, then that portion of performance shares will be automatically redeemed by the _Company for the sum of $0.00001 per Performance Share. _

Cash Consideration

In addition, VWM is to be assume Oceantide’s financial obligations to sole fund the project to DSO commercial production. A total cash consideration of US$3.75million is payable to the local Indonesian Shareholders the “Cash Consideration”);

Payment		Milestone
US$500,000		By the 17thNovember 2010
US$1,250,000		Upon VWM shareholder approval
US$750,000		upon receipt of ALL production, operational and access permits and licenses.
US$1,000,000		Upon first commercial shipment
US$250,000		Payable post-commercial production from profits after tax.

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$850,000 Convertible Loan

The company is also pleased to announce it has completed arrangements for the fundraising of $850,000 via a convertible loan. Under the terms of the offer, the convertible loan holders have the right to convert the loan into ordinary shares in VWM before 31 December 2010. The conversion price is $0.12 per share. The lenders will receive one free option for every one share converted. Each option has an exercise price of $0.20 cents and an expiry date of 24 February 2012. The loan carries a Coupon rate of 10% interest per annum. The additional funds will go towards the working capital of the Company.

Yours faithfully

LUKE MARTINO Company Secretary

About VWM

Victory West Moly Ltd is a metals focused resource exploration company listed on the Australian Securities Exchange (ASX code: VWM) and Frankfurt Stock Exchange (FSE code: R1E), with a vision to find, prove and extract value from world class metals projects in South East Asia. The Company currently has two key assets: a 27.5% free carried interest (to production) in the Malala Molybdenum Project and is in the process of finalising the acquisition of a 70% interest in the USSU Nickel Project in South Sulawesi.

For further information on VWM, please visit www.victorywestmoly.com.au

Competent Persons Statement

The data in this announcement that relates to Exploration Results, Resources and Reserves is based on information reviewed and evaluated by Mr Brett Gunter who is a member of The Australian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Gunter is a fulltime employee of GMT Indonesia and he consents to the result as they appear.

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