FOCUS MINERALS LTD — Capital/Financing Update 2009

Feb 23, 2009

24 February 2009

Dear Shareholder,

CAPITAL RAISING TO COMPLETE 2ND STAGE OF GROWTH STRATEGY AND CAPITALISE ON STRONG DEMAND FOR GOLD

As announced today, 24 February 2009, I am pleased to confirm that Focus Minerals Ltd ( Focus or Company ) has now embarked upon the final stage of the two-stage strategy first outlined to you approximately two years ago, when we moved to consolidate ownership of our then 50%-owned gold tenements by purchasing Committee Bay Resources’ 50% stake in the Coolgardie Gold Project.

At the time, we indicated that we would subsequently raise further funds for the refurbishment and modernisation of the Company’s fully permitted 1.2Mt per annum Three Mile Hill Treatment Plant ( Plant Refurbishment ), once the Company was confident that it had sufficient identified ore feed for a consistent 5 to 10 years of production and processing.

Recent announcements outlining significant increases in the Company’s gold resources – together with encouraging results from other work progressing elsewhere within the Company’s land holdings, combined with the continuing strong gold price – has led the Board to make the decision to move now in order to have the Plant Refurbishment completed in a timely fashion.

Once completed, the Plant Refurbishment will enable Focus to rapidly expand gold output at Coolgardie, eliminating the production bottleneck imposed currently by the capacity constraints at our toll milling facility. In addition, it will result in significant ongoing operating cost reductions.

The Plant Refurbishment and, more importantly, modernisation of the plant will cost approximately A$18 million. In addition, the Company is seeking your approval to raise additional funds which will be used to increase the amount available to spend immediately on the Company’s land assets ( Capital Raising ). This is the only change to the Company’s previously announced strategy; importantly, it will enable the Company to accelerate its exploration strategy and add more quickly to its Bankable reserves of gold at a particularly favourable time for gold companies.

The Board is mindful of the dilutionary effect this raising may have.

On balance, the Board believes that the effect of this will be minimised in the short term and removed in the medium term, once the full benefits of the Company’s strategies are realised and the market values Focus accordingly.

The Board’s view is that its share price will improve once the Company is a long-term producer and processor of gold and fully in control of its own destiny – which will be the ultimate outcome of the growth strategy outlined above.

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Although it was always the intention to raise funds to refurbish and modernise the Three Mile Hill plant, the Company could have waited for organic cash flow growth to embark upon further investment in proving up gold resources. However, this would have delayed the strategy by at least 12 to 14 months as the majority of the Company’s cash flow is currently directed appropriately to paying off debt as quickly as gold output permits (including the Convertible Notes to the Company’s major shareholder).

On balance, the Board considers that the current circumstances and environment, together with the positives it believes will flow from implementing this strategy, fully justify the decision to move now rather than potentially await the vagaries which the future might hold.

The Board has also been mindful of the importance of maintaining a credible and logical development strategy and achieving the milestones and targets adopted by the Company..

The Company’s first stage 50% buyout and subsequent maiden gold production, achieved in April 2008, were the initial foundation blocks upon which to build its growth strategy.

The Company must now ensure that the Plant Refurbishment is completed on time and within budget. To achieve this, Peter Williams will relinquish the role of Managing Director and concentrate on managing the Three Mile Hill Project, as well as ensuring that priority open pit resources are brought into production as rapidly as possible. These are skills which Peter has demonstrated in previous roles and which he possesses in abundance.

Campbell Baird will be appointed to the role of Chief Executive Officer, overseeing all aspects of the current and future strategy of the Company.

Effectively, these two gentlemen have swapped roles in order to ensure that your Company has skill-sets matched to the areas of greatest need to ensure our future success.

The Board has been grateful to both of them, particularly Peter for his recent leadership of the Company, and currently Campbell, for his impact in providing additional focus and strategic leadership around the important issues.

The Directors believe these changes will deliver the outcome sought by the Board and that the market will embrace the Company’s success and value it accordingly.

For further details of the Capital Raising, Shareholders should refer to the announcement released today and are encouraged to visit the Company’s website at www.focusminerals.com.au to view the presentation and the details it contains to further their appreciation of the effects and direction of the raising.

Existing Shareholders will have the opportunity to participate in the Capital Raising by acquiring up to A$5,000 in shares at an issue price of $0.02 each via the Company’s Share Purchase Plan (SPP) to raise up to approximately A$3 million. It is proposed that these shares will be issued following completion of the initial share placement using the Company’s capacity under Listing Rule 7.1.

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Under ASX Listing Rules, the Company was required to utilise its 15% share issue capacity to ensure that all shareholders could participate at the price being offered under the capital raising. Directors and officers of the Company wish to also participate in the SPP and will further seek your approval at the General Meeting being convened to approve the share issues.

Some shareholders have asked us to look at a reconstruction of the capital given the number of shares on issue, which will clearly increase following completion of the Capital Raising. The Board is conscious that consolidations can have the effect of lowering a company’s share price and lead to further frustration on the part of shareholders. The Board reviewed a number of previous capital reconstructions and determined that those that stuck the most, were associated with major acquisitions and corporate restructures. The Board feels that, on balance, the best approach for the Company and its shareholders is to leave the capital base as is, until all elements of the Company’s two stage strategy are up and running. The Board will continue to monitor this decision and make a call on circumstances at the time.

The Board believes there are exciting times ahead for the Company and, for those shareholders who believe timing is an important investment outlook, the Board believes it is well placed to embark upon the completion stage of the Company’s earlier strategy.

A Notice of Meeting to seek the necessary shareholder approval is currently being prepared and will include an explanatory memorandum. These materials will be distributed to shareholders as soon as practically possible.

Many of you are no doubt watching the gold price and the AUD/USD exchange rate with great interest. Shareholders should also note that once the price of nickel returns to sustainable levels the Company will also consider proceeding with the mining of this resource.

With all of these opportunities for upside not very far into the future, the Board believes the time is right to get behind Focus and enjoy the success that patience brings.

Thank you for your continued support of the Company and its people.

Yours sincerely,

D.J Taig Chairman

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