GWR GROUP LIMITED — Capital/Financing Update 2011

Jan 13, 2011

==> picture [490 x 89] intentionally omitted <==

ASX/MEDIA ANNOUNCEMENT

14 January 2011

Share purchase plan offer

As announced to ASX on 23 December 2010, Golden West Resources Limited (“ GWR ” or “ the Company ”) is pleased to provide each shareholder with the opportunity to acquire additional shares up to the value of AUD$15,000 pursuant to a Share Purchase Plan (“ the Plan ”).

The shares are being offered (“ Offer ”) at a price of $0.80 per share, the same price offered to sophisticated investors who subscribed to the Company’s share placements in July and December 2010.

This price represents a discount to the market price prior to the announcement of the Offer and the date of the Offer.

The Plan is open for acceptance of applications until the Closing Date of 11[th] February 2011.

The Letter and Application form sent to shareholders setting out the terms and conditions of the Offer follows.

• ENDS -

Please direct enquiries to:

Golden West Resources

Richard Taylor Riley Mathewson Public Relations Tel: +61 (0)8 9381 2144 Mob: +61 (0)451 471 006

==> picture [492 x 37] intentionally omitted <==

==> picture [470 x 79] intentionally omitted <==

14 January 2011

Dear Shareholder

Share Purchase Plan

As announced to ASX on 23 December 2010, Golden West Resources Limited (“ GWR ” or “ the Company ”) is pleased to provide each shareholder with the opportunity to acquire additional shares up to the value of AUD$15,000 pursuant to a Share Purchase Plan (“ the Plan ”).

The shares are being offered (“ Offer ”) at a price of $0.80 per share, the same price offered to sophisticated investors who subscribed to the Company’s share placements in July and December 2010. This price represents a discount to the market price prior to the announcement of the Offer and the date of the Offer.This letter and the enclosed Application Form sets out the terms and conditions of the Offer. By accepting the Offer to purchase shares under the Plan, you will have agreed to be bound by these terms and conditions. The Plan is open acceptance of applications until the Closing Date of 11[th] February 2011.

The funds raised under the Plan, together with the placement proceeds, will be used for working capital purposes and expenditure in respect to the Company’s Wiluna West Iron Ore Project.

The Directors of the Company see the following advantages to shareholders in subscribing for shares under the Plan:

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 10] intentionally omitted <==

• small shareholders may top up their holdings;

• no brokerage or transaction costs are payable on shares subscribed for under the Plan;

• the price is at the same price as that subscribed for by sophisticated investors in recent placements; and

• there is no minimum shareholding requirement to qualify for participation in the Plan.

You are eligible to participate in the Plan if you were a registered holder of GWR shares as at the close of business on 22 December 2010 with a registered address in Australia, New Zealand, China, Malaysia, Hong Kong or Singapore. The Directors of the Company have determined that it is not practical for shareholders in other jurisdictions to participate in the Plan having regard to the number of shareholders with addresses outside these countries, the number and value of the shares they hold and the cost of complying with the legal regiments and the requirements of the regulatory authorities in each of the countries concerned.

This Plan is not intended to, constitute an offer of shares in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue the Plan. The distribution of this Plan in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Plan should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

==> picture [506 x 34] intentionally omitted <==

If you are eligible to purchase shares under the Plan, you may accept the Offer for one of the following options up to the amount of AUD$15,000:

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 11] intentionally omitted <==

==> picture [9 x 10] intentionally omitted <==

AUD$1,000

AUD$2,000 AUD$5,000 AUD$10,000 AUD$15,000

The maximum amount of shares will apply even if you receive more than one Offer from the Company (for example because you are a joint holder of shares or because you hold more than one shareholding under separate share accounts). The Company reserves the right to reject any application for shares where it believes this rule or any other term of the Plan has not been complied with or if the issue of those shares would contravene any law or the ASX Listing Rules.

If you hold GWR shares as a custodian (or sub-custodian) on behalf of more than one beneficiary, you are entitled to participate in the Plan separately on behalf of each beneficiary subject to completing and returning the custodian certificate accompanying the Application Form.

The Offer under the Plan is non-renounceable. This means that you cannot transfer your right to purchase shares under the Offer to anyone else.

The maximum amount of shares issued pursuant to the Plan will be capped at the maximum amount permissible under the ASX Listing Rules without requiring shareholder approval, which is approximately 56.9 million shares. If the Company receives subscriptions for this number of shares it intends to close the Plan at that time.

Participation in the Plan is entirely at your option. Shareholders should note that the shares offered under the Plan are speculative in nature.

There is a risk that the market price of GWR shares may fall between the date of the Offer and the date when the shares are issued under the Plan. This may result in the price of shares issued under the plan being higher than the market price of GWR shares at the time the shares are issued under the Plan.

All new shares issued under the Plan will rank equally with existing fully paid ordinary shares in the Company and will carry the same voting rights, dividend rights and other entitlements as at the allotment date.

The Plan will have a Closing Date of 11[th] February 2011. It is anticipated that the shares allotted to you under the Plan will be issued within 5 business days after the Closing Date of the Offer and quotation of those shares on ASX will be sought by the Company at the time of issue. To purchase shares under the Plan, please either:

• 1 Complete and sign the enclosed Share Application Form and return it to the Company’s share registry as described on the Application Form, together with your cheque payable to “ Golden West Resources Limited”; or

• 2 In accordance with the instructions on the Share Application Form apply for shares using the BPay payment method. If BPay is used there is no requirement to complete and return the enclosed Share Application Form .

2

Applications must be received by AWST 5.00pm on 11[th] February 2011. The Company, however, reserves the right to extend the closing date of the Plan if it believes it is desirable to do so. If the exact amount of money is not tendered with the Application Form, the Company reserves the right to disregard your application and not allot any shares to you, or alternatively issue that number of shares that corresponds with the payment tendered.

If you have any questions in respect of the Plan, please contact our Company Secretary, Mr Anthony Begovich on (08) 9201 9202 or by email at anthonyb@goldenwestresources.com. Yours sincerely

David Sanders Chairman

3

==> picture [37 x 37] intentionally omitted <==

SHARE PURCHASE PLAN APPLICATION FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

==> picture [37 x 37] intentionally omitted <==

GOLDEN WEST RESOURCES LIMITED

REGISTERED OFFICE:

SUITE 4 138 MAIN STREET OSBORNE PARK WA 6017 AUSTRALIA

ABN: 54 102 622 051

==> picture [261 x 76] intentionally omitted <==

SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

Code: GWR

Holder Number: Record Date: 22 DECEMBER 2010

NON-RENOUNCEABLE SHARE OFFER CLOSING AT 5.00PM WST ON 11 FEBRUARY 2011

(1) I/We, the above mentioned, wish to apply for the number of Fully Paid Ordinary Shares which will be issued in accordance with the Share Purchase Plan (SPP) and the Constitution of the Company as stated below: (please mark "X" to indicate one choice only)

		TOTAL SUBSCRIPTION AMOUNT	TOTAL SUBSCRIPTION AMOUNT	TOTAL SUBSCRIPTION AMOUNT	TOTAL SUBSCRIPTION AMOUNT	NUMBER OF SHARES
			@ $0.80 PER SHARE
OFFER A - maximum amount			$15,000.00			18,750
OFFER B			$10,000.00			12,500
OFFER C			$5,000.00			6,250
OFFER D			$2,000.00			2,500
OFFER E			$1,000.00			1,250

(2) I/We have enclosed/made payment for the amount shown above (following the payment instructions as detailed overleaf).

(3) I/We hereby authorise you to place my/our name(s) on the register of members in respect of the New Securities allotted to me/us.

(4) I/We agree to be bound by the Constitution of the Company and the terms of the SPP.

(5) I/We hereby agree to accept any lesser number of new Shares applied for.

(6) I/We hereby certify that the amount of Shares subscribed for by me/us pursuant to the SPP (being a maximum of $15,000 worth of Shares) does not exceed $15,000 taking into account the Shares the subject of this application and any other Shares applied for by me/us under the SPP or any other similar arrangement within the 12 months prior to this application including other beneficial interests. Limit on Participation and Custodian Certification- see overleaf for details.

(7) My/Our contact details in case of enquiries are:

NAME

TELEPHONE NUMBER ( )

EMAIL ADDRESS

@

BPAY PAYMENT OR THE RETURN OF THIS DOCUMENT WITH THE REQUIRED REMITTANCE WILL CONSTITUTE YOUR ACCEPTANCE OF THE OFFER.

REGISTRY DATE STAMP PAYMENT INFORMATION - Please also refer to payment instructions overleaf. CHEQUE/MONEY ORDER Biller Code: 159483 All cheques (expressed in Australian currency) are Ref: to be made payable to GOLDEN WEST RESOURCES LIMITED and crossed "Not BPAY® this payment via internet or phone banking. Negotiable". Your BPAY® reference number is unique to this offer and is not to be used for any other offer. E & O.E.

==> picture [37 x 37] intentionally omitted <==

==> picture [37 x 37] intentionally omitted <==

0114047704

5

0171047707

LODGEMENT INSTRUCTIONS

==> picture [37 x 37] intentionally omitted <==

==> picture [37 x 37] intentionally omitted <==

PAYMENT INSTRUCTIONS

CHEQUE/MONEY ORDER

Biller Code: 159483

BPAY® this payment via internet or phone banking. Your reference number is quoted on the front of this form.

Multiple acceptances must be paid separately.

Applicants should be aware of their financial institution's cut-off time (the time payment must be made to be processed overnight) and ensure payment is processed by their financial institution on or before the day prior to the closing date of the offer. BPAY applications will only be regarded as accepted if payment is received by the registry from your financial institution on or prior to the closing date. It is the Applicant's responsibility to ensure funds are submitted correctly by the closing date and time.

You do not need to return this form if you have made payment via BPAY.

Your BPAY reference number will process your payment to your entitlement electronically and you will be deemed to have applied for such Securities for which you have paid.

All cheques should be drawn on an Australian bank and expressed in Australian currency and crossed "Not Negotiable".

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured.

Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and the acceptance deemed to be invalid.

Do not forward cash as receipts will not be issued.

When completed, this form together with the appropriate payment should be forwarded to the share registry:

Security Transfer Registrars Pty Ltd PO Box 535, APPLECROSS WA 6953.

Applications must be received by Security Transfer Registrars Pty Ltd no later than 5.00pm WST on the closing date.

CERTIFICATION

By making payment for the application monies, I/we hereby:

1. Acknowledge that I/we have read and understood the Terms of the SPP;

LIMITATION ON PARTICIPATION

The maximum subscription limitation of $15,000 will apply even if an eligible Holder has received more than one form (whether in respect of a joint holding or because the eligible Holder has more than one holding under separate Security accounts).

1. Agree to be bound by the Terms of the Constitution of the Company and the SPP;

2. Agree to accept any lesser number of new Securities than the number of Securities applied for; and

3. (If not a Custodian as defined in ASIC Class Order 09/425) Certify that the amount of Securities subscribed for by me/us pursuant to the SPP does not exceed the maximum amount taking into account the Securities the subject of this application and any other Securities applied for by me/us under the SPP or any other similar arrangement within the 12 months prior to this application including joint and other beneficial interests.

CUSTODIAN CERTIFICATION

If you are a Custodian (as defined in ASIC Class Order 09/425), you must submit a custodian certificate to Golden West Resources Limited. If you did not receive a custodian certificate, contact Securiy Transfer Registrars Pty Limited. If you need further information to determine whether you are a Custodian, refer to the terms and conditions of the Plan which accompany this Share Purchase Plan Application Form or contact Security Transfer Registrars Pty Limited.

ENQUIRIES

All enquiries should be directed to the Company's share registry:

Security Transfer Registrars Pty Ltd

PO Box 535, Applecross WA 6953 AUSTRALIA

770 Canning Highway, Applecross WA 6153 AUSTRALIA

Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233

Email registrar@securitytransfer.com.au

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them at the address on this form.

==> picture [37 x 37] intentionally omitted <==

==> picture [37 x 37] intentionally omitted <==