GWR GROUP LIMITED — Capital/Financing Update 2007

Dec 10, 2007

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11 December 2007

ASX ANNOUNCEMENT

Corporate Summary	Corporate Summary
ASX Code:	GWR
Issued Capital:	77.5 Mil
Issued Options:	37.6 Mil
Market Cap fully diluted
Dec 07	$A247.6 Mil
Contact Details
6/136 Main Street
OSBORNE PARK
Western Australia	6017

NON-RENOUNCEABLE RIGHTS ISSUE

==================================

Golden West Resources Limited (ASX: GWR) is pleased to announce a non renounceable pro-rata rights issue to eligible shareholders of approximately 6,291,200 ordinary fully paid shares on the basis of one new ordinary fully paid share (“ Share ”) for every 15 Shares held at an issue price of $1.85 per Share to raise approximately $11,638,720 (“ Rights Issue ”).

The offer will be available to all registered shareholders who hold Shares on 20 December 2007 (“ Record Date ”). The Rights Issue will be conducted under section 708AA of the Corporations Act, which allows the offer to be made without the issue of a prospectus.

Tel: +61 8 92019202 Fax: +61 8 92019203 admin@goldenwestresources.com www.goldenwestresources.com

Enquiries:

Gary Hutchinson

Managing Director

Mick Wilson

Exploration Manager / Director Peter Thompson Director General Manager, Operations

The Company will dispatch a Rights Issue Offer Document, setting out the terms of the Rights Issue and enclosing a personalised Entitlement and Acceptance Form, to eligible shareholders on 28 December 2007.

Basic Terms of the Rights Issue

Record Date:	20 December 2007
Entitlement:	1 new Share for every 15 Shares held
	as at the Record Date
Subscription Price:	$1.85 per Share
Number of new Shares
to be issued:	Approximately 6,291,200
Funds raised as a
consequence of the
Rights Issue
(assuming full take up):	Approximately $11,638,720
Lead Manager to
the Issue:	Capital Investment Partners

Further Information

Capital Investment Partners will act as lead manager in relation to the Rights Issue and will place any shortfall under the Rights Issue to professional investors.

Optionholders will be notified on 11 December 2007 of the Rights Issue and the need to exercise their options if they wish to participate in the Rights Issue.

As stated above, approximately 6,291,200 Shares (subject to rounding) will be issued (this number may be increased to 8,643,778 Shares if all existing optionholders exercise their options prior to the Record Date). On this basis, a maximum dilution of approximately 9% will result. The Shares will be issued for $1.85 each.

Upon completion of the Rights Issue, and assuming existing optionholders do not exercise their options, the issued capital of the Company will comprise approximately 100,659,202 Shares and the following options:

• 14,263,879 unlisted options exercisable at $2.00 each on or before 31 December 2010;

• 8,500,000 unlisted options exercisable at $3.00 each on or before 31 December 2011;

• 800,000 unlisted options exercisable at $0.25 each on or before 30 June 2008;

• 800,000 unlisted options exercisable at $0.30 each on or before 30 June 2008; and

• 1,050,000 unlisted options exercisable at $0.40 on or before 30 June 2008.

Fractional entitlements will be rounded up and Shares issued pursuant to the Rights Issue will rank equally with all Shares on issue.

In accordance with the Listing Rules of the Australian Securities Exchange, the Company has considered the number of shareholders with registered addresses outside of Australia and New Zealand (“ NonResident Shareholders ”) and the size of the shareholdings held by those shareholders. Taking this into consideration as well as the costs of complying with the legal requirements and the requirements of the regulatory authorities relating to shareholders with registered addresses outside of Australia and New Zealand, the Company has formed the view that it is unreasonable to extend the Rights Issue to those shareholders.

A proposed timetable for the Rights Issue is set out below in more detail:

	RightsIssue announcement,Appendix3B	11 December 2007
	Letterto optionholders detailing theRightsIssue	11 December 2007
	Notice to shareholders of RightsIssue terms	13December 2007
	“Ex”date	14 December 2007
	Record date	20 December 2007
	Dispatch of Rights Issue Offer Document and personalised Entitlement and	28 December 2007
	AcceptanceForms
	Acceptances close at 5.00pm(Perthtime) (closing date)	21January2008
	Allotment of Shares, dispatch of holdings statement and lodge section 708A	30 January 2008
	cleansingnotice
This timetable is indicative only and may be subject to change, subject to the ASX Listing Rules.

Notice Under Section 708AA of the Corporations Act 2001 (Cth)

The Company confirms the Rights Issue is being made without a disclosure document, pursuant to the exemption granted in section 708AA of the Corporations Act 2001 (Cth (“ Act ”).

Pursuant to section 708AA(7) of the Act, the Company provides the following information:

• (a) the Company will offer the Shares for issue without disclosure to investors under Part 6D.2 of the Act;

• (b) the Company is providing this notice under paragraph (2)(f) of section 708AA of the Act;

• (c) as at the date of this notice, the Company has complied with:

  • (i) the provisions of Chapter 2M of the Act as they apply to the Company; and (ii) section 674 of the Act; and

• (d) as at the date of this notice, there is no information:

  • (i) that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

  • (ii) that investors and their professional investors would reasonably require for the purpose of making an informed assessment of:

    • (A) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

    • (B) the rights and liabilities attaching to the Shares; and

• (e) if all shareholders take up their entitlement under the Rights Issue, the Rights Issue will have no effect on the control of the Company. Given that the offer is being made at an issue price per Share of $1.85, a discount to the current Share price, it is reasonable to assume that all shareholders will take up their entitlements. However, the proportional shareholdings of NonResident Shareholders may be diluted as those shareholders are not entitled to participate in the Rights Issue.

An Appendix 3B applying for quotation of the abovementioned Shares follows.

Yours sincerely John Palermo Company Secretary

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