GRATIFII LIMITED — M&A Activity 2011

Jul 27, 2011

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28 July 2011

Waratah to Acquire Second Major Iron Ore Project in Emerging World Class Province

Highlights

• Waratah has secured the OKANABORA Exploration Licence in ROC Congo an area of 479km[2] this gives the Company an exploration area totalling 1415 km[2.]

• Historical Mapping has outlined 20km strike of ferruginous hematitic quartzite

• Recent Field Trip confirms mapping and returns results up to 60% Fe2O3

• Significantly increases the size of Waratahs Central African iron projects

The Board of Waratah Resources Limited ( Waratah ) ( ASX: WGO ) is pleased to announce that the company has signed a binding Share Sale Agreement to acquire Galina Iron Limited ( Galina ) ( Transaction ).

Galina owns an 80% legal and beneficial interest in Nyive Congo SA ( Nyive ), a company incorporated in the Republic of Congo ( ROC ). Nyive holds or is entitled to a 100% interest in the OKANABORA Permit de Recherché ( Project ) in the ROC. The Project is centred approximately 75 kms southwest of Waratah’s existing Youkou project.

The Project area is significantly under-explored but historical mapping of ferrouginous quartzites and recent field results returning results up to 60% Fe2O3 have highlighted the extreme prospectivity of the site for itabirite iron ore. Together with the proposed development of a number of relatively advanced projects in ROC and neighbouring Gabon, Okanabora is central within a province with great potential.

Waratah’s immediate goal is to define a JORC inferred resource by Q1 2012 at Youkou and Q2 2012 at Okanabora 2012.

The Transaction enables Waratah to increase its scale, and make another important step towards becoming a major iron ore producer utilising new infrastructure.

Waratah’s Chairman Peter Bennetto said: “Waratah now has two potentially World-class assets, Youkou and Okanabora in a major emerging iron ore province. We will shortly commence an exploration program at both locations that we hope will confirm a significant JORC compliant resource.”

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Geological Summary

Okanabora is located and forms part of an iron ore province in the Archaean Congo Craton that spans three countries: ROC, Gabon and Cameroon. The iron ore deposits of Belinga in Gabon, Mbalam in Cameroon and ROC and Avima in ROC are located nearby. Recent evaluation in ROC by Sundance Resources Ltd of Australia in the Mbalam Region, 150km north of Youkou, proved up a resource of 484 million tonnes of 61.1% Fe.

The deposits usually are typical supergene hematite enrichments of an Archaean banded iron formation protore which has been recrystallised to ferruginous quartzite or itabirite. They occur in similar geological settings to large iron ore occurrences identified in Liberia, neighbouring Gabon, and currently being evaluated in ROC. Due to similar regional geological characteristics to these settings we can deduce that the Okanabora occurrence would in all likelihood share similar type mineralization.

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Figure 1 - Location Diagram of Waratah's Youkou and Okanabora Project Areas

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The Republic of Congo

The Republic of Congo ( ROC ) is also sometimes referred to as Congo Brazzaville in order to distinguish it from its neighbour to the east, the Democratic Republic of Congo (DRC). The ROC is a unitary republic and the current government has been in power since 1997.

The ROC enjoys relative political and social stability and has a government which is supportive of mineral development and foreign investment. A number of Australian and other foreign mining and oil companies operate in the ROC.

Commercial Terms

• ( Conditions Precedent ): There are a number of conditions precedent to the Transaction. These include the satisfactory completion of financial and legal due diligence, Waratah obtaining all necessary shareholder and regulatory approvals and the Vendors providing written confirmation that all necessary approvals from the ROC have been obtained ( Conditions ). These are anticipated to be satisfied within the next 6 weeks.

• ( Consideration ): The total consideration payable by Waratah to acquire a 100% interest in Galina Iron Limited (and thereby an 80% interest in the Tenements) is:

  • $3,000,000 cash;

  • 14,000,000 fully paid ordinary shares in Waratah ( Shares ); and

  • deferred consideration of up to another 27,500,000 Shares, upon the achievement of certain performance milestones (outlined below).

• ( Refundable Initial Cash Payment ): Of the $3,000,000, $1,160,023.57 was paid as an initial cash payment, which is refundable if any of the Conditions are not satisfied for any reason on or before 30 September 2011 or if settlement under the Share Sale Agreement does not occur. The remainder of the consideration is payable either at settlement or as deferred consideration (which is described below).

• ( Deferred Consideration ): Waratah will issue up to a further 27,500,000 Shares in total pursuant to the below performance milestones in relation to the Projects:

  • Waratah shall issue a further 13,750,000 Shares upon the earlier to occur of either of the following to the reasonable satisfaction of Waratah and subject to satisfaction of the Conditions:

    • the delineation of greater than a 100,000,000 tonne iron ore JORC compliant resource, at greater than 30% Fe, on the Projects collectively (or any one of them); and

    • completion of an economically viable prefeasibility study in respect of the Projects collectively (or any one of them), and

Waratah shall issue a further 13,750,000 Shares upon the earlier to occur of either of the following to the reasonable satisfaction of Waratah and subject to satisfaction of the Conditions:

• the delineation of greater than a 200,000,000 tonne iron ore JORC compliant resource, at greater than 30% Fe, on the Projects collectively (or any one of them); and

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• completion of an economically viable definitive feasibility study in respect of the Projects collectively (or any one of them),

The Company notes that one of the vendors is William Witham, the Company’s Managing Director and confirms that all necessary shareholder approvals will be sought as a result of his involvement

ENDS

For further information contact

Peter Bennetto James Moses Chairman Mandate Corporate T (+61) 8 6365 4532 T (+61) 2 8012 7702 M (+61) 418 113 575 M (+61) 420 991 574 www.waratahresources.com.au E james@mandatecorporate.coma.au

Competent Person Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr WJA Witham B.Sc (Hons), MAIG an employee of Waratah Resources Limited. Mr Witham has sufficient experience that is 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. Mr Witham consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.