GWR GROUP LIMITED — M&A Activity 2007

Nov 26, 2007

REJECT

the Offer from Fairstar Resources Limited

Your Independent Directors unanimously recommend that you REJECT the Offer from Fairstar Resources Limited to acquire all of your shares in Golden West Resources Limited.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL OR OTHER PROFESSIONAL ADVISER IMMEDIATELY.

Financial Advisor L egal Advisor

IMPORTANT INFORMATION

Target's Statement

This statement is made in response to the replacement bidder's statement dated 26 October 2007 and supplementary bidder's statement dated 13 November 2007 received by Golden West Resources Limited ABN 54 102 622 051 ("Golden West") from Fairstar Resources Limited ABN 38 115 157 689 ("Fairstar") (the "Bidder's Statement") and relates to the Offer made by Fairstar constituting a takeover bid (the "Offer") for the acquisition of all the issued shares in Golden West (including all shares issued as a result of the exercise of Golden West Options) referred to in the Bidder's Statement.

A copy of this Target's Statement was lodged with ASIC on 27 November 2007 and provided to ASX on 27 November 2007. None of ASIC, ASX or any of their officers takes any responsibility for the contents of this Target's Statement.

Defined Terms

A number of defined terms are used in this Target's Statement. These terms have capitalised first letters and are set out in Section 10. Section 10 also sets out some rules of interpretation which apply in this Target's Statement.

Investment Decisions

This document does not take into account the investment objectives, financial situation or particular needs of any person. Beforemaking any investment decisions on the basis of this Target's Statement you should consider whether that decision is appropriate in light of those factors and seek independent financial and taxation advice if necessary.

Disclaimer regarding forward looking statements

This Target's Statement contains statements in the nature of forward-looking statements. All statements other than statements of historical fact are forward-looking statements. Shareholders should note that forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which could cause actual values, results or events to be materially different to those expressed or implied in those forward-looking statements. These risks, uncertainties and assumptions include matters specific to the industries in which Golden West operates as well as economic and financial market conditions; legislative, fiscal or regulatory developments; the price performance of Golden West Shares, including the risk of possible price decline in the absence of the Offer or other takeover or merger speculation; and risks associated with the business and operations of Golden West. None of Golden West, any of its officers or any person named in this Target's Statement with their consent or any person involved in the preparation of this Target's Statement makes any representation or warranty (either express or implied) or gives any assurance that the implied values or anticipated results or events expressed or implied in forward-looking statements contained in this Target's Statement will be achieved, and you are cautioned not to place undue reliance on these statements. Any forward-looking statement in this Target's Statement is qualified by this cautionary statement.

Information line and website

If you have any queries in relation to the Offer or this Target's Statement, please contact the Golden West Shareholder Information Line on 1800 118 938 (toll free within Australia) between 9.00am and 5.00pm (Perth time). International callers or Australian callers on mobile phones please call +61 8 9386 2651.

Further information in relation to Golden West and the Offer can be obtained from Golden West's website at www.goldenwestresources.com.

CORPORATE DIRECTORY

Board of Directors

John Daniels (Chairman) Gary Hutchinson (Managing Director) Michael Wilson Peter Thompson Alan Rudd Constantino Markopoulos

Company Secretary

John Palermo

Principal Place of Business

Suite 6 136 Main Street OSBORNE PARK WA 6017 PO Box 260 Osborne Park WA 6917 Telephone +61 8 9201 9202 Facsimile +61 8 9201 9203

Website

www.goldenwestresources.com

Corporate Adviser

Azure Capital Pty Ltd Level 33, Exchange Plaza 2 The Esplanade Perth WA 6000

Independent Expert

PricewaterhouseCoopers Securities Ltd 250 St Georges Tce Perth WA 6000

Solicitors

Pullinger Readhead Lucas Level 2, 50 Kings Park Road West Perth WA 6005

Auditor

Stantons International Level 1, 1 Havelock Street West Perth WA 6005

Share Registry

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Telephone +61 8 9389 8033 Facsimile +61 8 9389 7871

Contents

	CORPORATE DIRECTORY	1
Chairman	's Letter	2
Reasons	for Independent Directors ' Recommendation	4
Target	's Statement	8
1.	Introduction	8
2.	Relevant Considerations for Golden West Shareholders	8
3.	Profile of Golden West	11
4.	Golden West Directors and their Recommendations	22
5.	Opinion of Independent Expert	23
6.	Your Choices	24
7.	Important Information About the Fairstar Offer	25
8.	Directors' Interests	33
9.	Additional Information	35
10.	Interpretation	39
11.	Approval	41
Appendix	A: ASX Announcements	42
Appendix	B: Independent Expert 's Report	44

Chairman's Letter

27 November 2007

Dear Shareholder

Fairstar Resources Limited ("Fairstar") has made an offer for all of your shares in Golden West Resources Limited ("Golden West" or the "Company") which is described in the Bidder's Statement prepared by Fairstar. This takeover bid was first announced to the Australian Securities Exchange ("ASX") on 4 September 2007. A replacement bidder's statement was lodged by Fairstar with the Australian Securities and Investments Commission ("ASIC") on 26 October 2007, with a further supplementary bidder's statement being lodged on 13 November 2007.

This Target's Statement is Golden West's formal response to the Bidder's Statement.

Your Independent Directors unanimously recommend that you REJECT the Offer from Fairstar.

In the opinion of your Independent Directors, the Fairstar Offer:

• • undervalues your Company;
• • will significantly dilute shareholders' interests in the Wiluna West Iron Ore Project;
• • does not offer access to any other substantial assets or increased capability within the combined entity;
• • does not bring any meaningful cost synergies; and
• • will incur substantial costs that will deplete financial resources that could otherwise be applied to the development of your Project.

As there is no cash consideration included in the Offer, the value shareholders will receive for their Golden West Shares is uncertain and will depend on the future market performance of Fairstar Shares. There is no guarantee that individual Golden West Shareholders will be able to realise the implied value of the Offer through selling Fairstar Shares acquired through this Offer on the market as the shares are not heavily traded.

The Board of Golden West has received significant support from its shareholders in rejecting this Offer. Irrevocable notices undertaking to reject the Offer have been received from Shareholders representing 27.85% of the issued shares of Golden West, including two of the Company's major shareholders, Falak Holding LLC and the Francke group of shareholders.

As greater than 20% of Shareholders have indicated that they will not accept the Offer, it is likely that Fairstar will not achieve an 80% interest in Golden West, and hence any Shareholders who accept this Offer will not qualify for scrip for scrip capital gains tax relief. Shareholders who accept the Offer may therefore face significant tax consequences which they will have to meet personally, without receiving any cash proceeds under the Offer to assist in meeting this cost.

The Board of Golden West is committed to the rapid development of the Company's 100% owned Wiluna West Project in a manner that creates maximum value for Golden West Shareholders.

The announcement of Mr Geoff Wedlock as the new Chairman of Golden West marks a significant milestone for the Company. Mr Wedlock brings more than 35 years experience in minerals exploration and project development, including senior executive roles with BHP Billiton, Portman Mining and Grange Resources. The appointment of Mr Wedlock as Chairman, effective from 30 November 2007, will undoubtedly assist Golden West with its development ambitions.

Concurrently, the Company announced the appointment of Capital Investment Partners as lead manager to undertake a share placement to institutional and sophisticated professional shareholders. The introduction of such investors onto the register of Golden West will enhance liquidity and provide support for future capital raising requirements necessary to continue the development of the Project.

Together these two developments provide an outstanding platform for the Company from which it can drive development of the Wiluna West Project to the benefit of all Shareholders.

The reasons for the Independent Directors' recommendation are described in more detail in the section headed "Reasons for Independent Directors' Recommendation" on page 4 of this Target's Statement.

Golden West has appointed PricewaterhouseCoopers Securities Ltd ("PricewaterhouseCoopers") as the independent expert to review the terms of the Offer.

PricewaterhouseCoopers have concluded that the terms of the Offer are neither FAIR nor REASONABLE.

In reaching their conclusion that the Offer is NOT FAIR PricewaterhouseCoopers established a mid-point fair valuation for Golden West of \$2.92 per Golden West Share and concluded that the consideration offered by Fairstar does not include a full control premium for the acquisition of the shares in Golden West.

In reaching the conclusion that the Offer is NOT REASONABLE PricewaterhouseCoopers raised concerns with the tax consequences for individual Shareholders, the level of transaction costs and the dilution impact they will have on the interest of Golden West Shareholders in the Wiluna West Project. PricewaterhouseCoopers conclude that there are only limited prospects for a market re-rating of shareholders' interests as a consequence of the Offer but potential adverse implications of remaining a minority shareholder in Golden West if Fairstar acquires more than 50.1% of Golden West.

A copy of the Independent Expert's Report is annexed to this Target's Statement as Appendix B and your Directors urge you to consider this report carefully as you read this Target's Statement.

In considering the Fairstar Offer, you may choose one of the following three courses of action with respect to your Golden West Shares:

• 1. reject the Offer and retain your Golden West Shares;
• 1. sell some or all of your Golden West Shares to another person; or
• 1. accept Fairstar's Offer in full.

Shareholders should not take any action until they have considered the Bidder's Statement and this Target's Statement, including the Independent Expert's Report, in their entirety.

Shareholders should seek professional financial advice if they are in any way concerned about whether acceptance of the Offer is in their own best interests, taking into account their own individual circumstances.

The Directors will provide you with further information if there are any material developments relating to the Offer. In the meantime, I urge you to read this Target's Statement carefully.

Should you have any enquiries in relation to the Offer, please refer to Section 7 of this Target's Statement or telephone 1800 118 938 (toll free within Australia) or +61 8 9386 2651 for international callers or Australian callers on mobile phones, between 9.00am and 5.00pm (Perth time).

Yours sincerely

Dr John Daniels Chairman

Reasons for Independent Directors' Recommendation

The Fairstar Offer is highly opportunistic and does not recognise the true value of Golden West's Wiluna West Project.

Golden West's 100% owned Wiluna West Project contains a potentially large, high grade hematite iron ore deposit. Since the Fairstar Offer was announced, Golden West has significantly increased the JORC compliant Inferred Mineral Resource at Wiluna West by 36.1Mt to 86.3Mt at 60.1% Fe.

1

2

Because the Fairstar Offer was announced prior to this 72% resource upgrade, it fails to recognise and appropriately compensate Golden West Shareholders for the value associated with the increase. Golden West Shareholders who accept the Offer will transfer a share of this value uplift and potential market re-rating of the Company associated with it to Fairstar's shareholders without appropriate compensation.

PricewaterhouseCoopers, the Independent Expert commissioned to form an opinion on the Offer has concluded that the Offer is neither fair nor reasonable to Golden West Shareholders. In its report PricewaterhouseCoopers has concluded that a fair mid point valuation for Golden West Shares is \$2.92 per share, with a range of \$2.50 to \$3.35. This valuation considers the potential future earnings from the Wiluna West Project via discounted cash flow modelling, the trading value of comparable prospective and emerging listed iron ore producers and the analysis of the recent trading in Golden West Shares. PricewaterhouseCoopers concluded that the consideration offered is not sufficient and does not include a full control premium for the acquisition of the shares in Golden West by Fairstar.

The Offer is extremely dilutive to Golden West Shareholders and will reduce the proportion of the Wiluna West Project owned by current Golden West Shareholders from 100% to approximately 70% if the takeover is successful.

Fairstar's projects are all early stage exploration projects with significant risk and unproven potential. On the other hand, Golden West owns the more advanced Wiluna West Project, which has a JORC compliant Inferred Mineral Resource of 86.3Mt at 60.1% Fe and is moving towards the early stages of development.

By accepting the Offer Golden West Shareholders are diluting their exposure to Golden West's assets including the Wiluna West Project in exchange for a share of Fairstar's less advanced and riskier assets. If the Offer is successful, and following the issue of Fairstar Shares to pay for transaction costs, Golden West Shareholders will control approximately 70% of the combined entity.

In effect Golden West Shareholders will have sold an approximately 30% share in their assets for a 70% share in Fairstar assets. It is not in the interests of Golden West Shareholders to give up such a substantial percentage of the Wiluna West Project for a share in less advanced and riskier assets.

There are likely to be significant Capital Gains Tax ("CGT") consequences for Shareholders who accept the Offer as 3 they will not qualify for scrip for scrip CGT rollover relief.

Scrip for scrip CGT rollover relief will only be available to Golden West Shareholders if Fairstar acquires at least 80% of Golden West. Golden West has received irrevocable undertakings from its Shareholders representing 27.85% of the Company's issued shares to reject the Fairstar Offer. In this circumstance it is highly likely that Golden West Shareholders who accept this Offer will not qualify for scrip for scrip CGT relief, and hence may be required to pay CGT.

If a CGT liability becomes payable, individual Shareholders will be required to settle the liability with a cash payment.

As the consideration offered for your Golden West Shares comprises Fairstar Shares only and does not include any cash component, accepting Golden West Shareholders will have to find the funding required to pay this tax liability from their own resources and will not be able to rely on any funds received in consideration of their Golden West Shares.

If a substantial number of shareholders seek to sell Fairstar Shares in order to meet such tax liabilities, the price of Fairstar Shares is likely to be depressed further.

The value Golden West Shareholders will 4 receive under the Offer is uncertain.

There is no cash component to the Fairstar Offer and Golden West Shareholders who accept the Offer will only receive Fairstar Shares in exchange for their Golden West Shares. Therefore, the value of the consideration received depends solely on the future trading price of Fairstar.

Fairstar has low liquidity and there is no guarantee that the value indicated by Fairstar will be achievable to Golden West Shareholders who accept the Offer and wish to liquidate their holdings to realise cash. Given the low liquidity of Fairstar stock, shareholders who wish to sell their Fairstar Shares to receive cash may either face a substantial discount on the price of those shares or have to wait a significant time to sell their shares at their desired price.

The risk of the Fairstar Share price becoming depressed due to selling pressures from previous Golden West Shareholders is likely to increase if a significant number of shareholders are forced to sell Fairstar Shares to meet capital gains tax charges triggered by their acceptance of the Fairstar Offer.

REASONS FOR INDEPENDENT DIRECTORS' RECOMMENDATION

5

The acquisition of Golden West may trigger \$43.55 million in transaction costs that could otherwise be used to develop the Wiluna West Project.

If it is successful in achieving 100% ownership of Golden West, Fairstar identifies \$43.55 million of transaction costs associated with this Offer including \$9.11 million to professional advisors, \$13 million in Western Australian government stamp duty and \$21.44 million to compulsorily acquire outstanding Golden West Options. In the situation where Fairstar is successful in achieving a 50.1% interest in Golden West, transaction costs of \$5.24 million will be incurred.

Fairstar has indicated that it will issue additional Fairstar Shares to meet these costs.

This will further dilute accepting Shareholders' ownership of the Wiluna West Project without providing any funds that can be used to advance the development of the Project.

The Independent Directors consider it fundamentally against the best interests of shareholders for a small company with limited capital raising ability to incur the significant costs described above, funding an acquisition that brings no enhanced prospects of successful development or increased capital raising capabilities.

6

The combination of Fairstar with Golden West will not bring any synergies or cost savings and does not enhance the prospect of successful development of the Wiluna West Project.

The Golden West team has successfully advanced the Wiluna West Project from an early stage exploration project to the point where early stage development activities have commenced on a potentially large iron ore deposit and a JORC compliant Inferred Mineral Resource has been defined.

Merging Golden West with Fairstar does not enhance the prospect of successful development of the Wiluna West Project.

Fairstar does not bring any increased management capability with noteworthy project development or marketing experience, nor does Fairstar bring an increased funding capability, both of which would be required to "allow Golden West shareholders to realise the benefits from their company's exploration assets earlier", as suggested by Fairstar in its Bidder's Statement.

The recent appointment of Mr Geoff Wedlock as Chairman of Golden West brings substantial experience and capability in iron ore to the Board that is not currently contained within Fairstar. The Board of Golden West is committed to continue rapidly advancing the Wiluna West Project in a manner that maximises value for its Shareholders.

In its Bidder's Statement, Fairstar claims "significant" potential savings through elimination of duplication, streamlining of functions and reducing overheads.

While there may be some minor cost synergies associated with merging the two companies, the Independent Directors strongly believe they will be immaterial, especially as Fairstar has stated in its Bidder's Statement that it will continue the employment of Golden West's present employees, maintain the current business activities of Golden West and invite the existing Directors of Golden West to join the combined board (with the exception of Dr John Daniels who has announced his retirement). Given these stated intentions there is no basis for the belief that there will be significant cost savings through the merger of the two companies and given the disparate nature of the minerals in the combined entity's portfolio there is potential for duplication of technical resources due to their specialised nature.

Combining Golden West and Fairstar does not result in an increase in scale or diversification that is material 7 enough to warrant any market re-rating.

If the Fairstar Offer is successful, the combination of a company with a market capitalisation of \$52 million (Fairstar) with a company with a market capitalisation of \$173 million (Golden West) will not result in an increase in scale or diversification that is material enough to warrant any market re-rating.

In addition, the combined entity will hold interests in an iron ore deposit, gold deposits, uranium targets and a highly speculative oil exploration project. This can only be described as minimal diversification considering Golden West has interests in iron ore, gold and uranium.

The Fairstar assets are all risky early stage exploration projects. By contrast Golden West has delineated the significant iron ore Mineral Resource described earlier and gold Mineral Resources totalling 107,430 ounces of contained gold at its Wiluna West and Dohertys projects. Combining the Fairstar assets with Golden West's assets will not make the portfolio materially stronger and may be negatively viewed by investors as they dilute the quality of the asset base.

In the opinion of the Independent Directors, this modest increase in size and minimal diversification will not warrant the follow-on benefits described by Fairstar in its Bidder's Statement and will not make the merged entity more attractive to international and institutional investors.

The funding for the Offer is highly conditional and may leave the merged company in financial distress 8 or forced to raise substantial additional equity.

In its Bidder's Statement, Fairstar describes a highly conditional underwriting arrangement to secure up to \$25 million of funding to partly fund the transaction costs that would be incurred if Fairstar were successful in achieving 100% ownership of Golden West, or \$10 million if Fairstar is successful in acquiring a 50.1% interest. Under this arrangement Fairstar Shares will be issued at the LOWER of \$0.50 or 80% of the price of Fairstar Shares at the time of the issue. This funding arrangement is not certain and it is not known how many new Fairstar Shares will be issued to meet transaction costs.

In its Bidder's Statement, Fairstar shows the combined entity as having a cash balance of only \$2.578 million even after raising \$25 million in new equity. Yet the combined entity would still need to fund an additional \$9.466 million in outstanding transaction costs before raising any new working capital for exploration activities to progress the Wiluna West Project.

Issuing such a large amount of equity may depress the Fairstar Share price in the short term and any further equity issued to provide working capital to progress the Company's projects may be done at a substantial discount to prevailing market prices, causing further dilution for existing shareholders.

Except under limited circumstances provided for in the Corporations Act, Golden West Shareholders who accept the Offer are unable to withdraw their acceptance or accept a higher offer, should one emerge. Inability to accept a higher offer, should one emerge. 9

As at the date of this Target's Statement, the Board of Golden West is not aware of any proposal to make an alternative offer.

Target's Statement

1. Introduction

This Target's Statement has been prepared by Golden West. Details of the Offer are included in the Bidder's Statement.

The Independent Directors unanimously recommend that you REJECT the Offer.

The reasons for the Independent Directors' recommendation are described in the section headed "Reasons for Independent Directors' Recommendation" on page 4 of this Target's Statement.

An independent expert's report prepared by PricewaterhouseCoopers is annexed to this Target's Statement as Appendix B. The report contains the Independent Expert's opinion that the terms of the Offer are neither fair nor Reasonable.

It is the intention of Dr John Daniels and Mr Gary Hutchinson, being those Independent Directors who hold a relevant interest in Golden West Shares, to REJECT the Offer in respect of all of their Golden West Shares.

2. Relevant Considerations for Golden West Shareholders

In making a decision whether to accept or reject the Offer, Golden West Shareholders should carefully consider the matters outlined below, including both the advantages and disadvantages of the Offer, which are outlined in the Independent Expert's Report.

2.1 Offer Price, Share Price and Liquidity

The Offer presented by Fairstar in its Bidder's Statement provides for Golden West Shareholders to receive 5 Fairstar Shares for every 1 Golden West Share held. This notionally values each Golden West Share at approximately \$2.475, based on the ASX closing price of \$0.495 for Fairstar Shares on 26 November 2007, being the last trading day before the date of this Target's Statement. This represents a premium of 7.6% over the ASX closing price of Golden West Shares of \$2.30 on the same date.

Golden West Shareholders should note that the value implied by the Offer is conditional on the trading price of Fairstar Shares and this may change dramatically in the future. The table below shows the implied Offer value under different prices for Fairstar Shares. Since Fairstar first announced its intention to make the Offer on 4 September 2007, Fairstar Shares have traded between \$0.40 and \$0.645, implying an Offer value of between \$2.00 and \$3.225.

Fairstar Share Price (\$)	Implied Offer Value (\$)
0.40	2.00
0.45	2.25
0.50	2.50
0.55	2.75
0.60	3.00
0.65	3.25
0.70	3.50

Figure 2.1.1: Implied Value of Fairstar Offer

During the 12 months prior to the date of this Target's Statement, Fairstar Shares traded between \$0.40 and \$1.97, with a volume-weighted average price of \$0.94. During the same period, Golden West Shares traded between \$1.50 and \$3.35, with a volume-weighted average price of \$2.27. The figure below examines the comparative share price performance during the past 12 months between Golden West Shares and Fairstar Shares, rebased to 100 at the beginning of this period. As can be seen, the performance of Golden West Shares has been steady, outperforming Fairstar Shares over the 12 month period. As a matter of fact, Fairstar Shares performed poorly following strong share price appreciation during late 2006 and early 2007, trending down to current levels.

Figure 2.1.2: Relative Historical Share Price Performance of Golden West and Fairstar

Note: Prices for Golden West and Fairstar are volume-weighted average prices that have been rebased to 100 as at 27 November 2006 to demonstrate relative historical performance.

The figure below examines the liquidity of Golden West and Fairstar, as measured by average daily value traded during the 12 months prior to the date of this Target's Statement. As can be seen, \$311,295 of Golden West Shares were traded on average each day, compared to \$232,801 for Fairstar Shares. Although on average a slightly higher value of Golden West Shares change hands each day, neither company can be considered highly liquid.

Figure 2.1.3: Average Daily Value Traded of Golden West and Fairstar

Further information on Fairstar and the activities it conducts can be found in section 1 of the Bidder's Statement or www.fairstarresources.com.

2.2 Other Offers for the Company or the Assets

As at the date of this Target's Statement, the Board of Golden West is not aware of any proposal or any intention to make a proposal by anyone to acquire Golden West or the Company's assets.

2.3 Overseas Shareholders

If you are a Foreign Shareholder there may be additional considerations for you in accepting the Offer. Refer to Section 6.4 of the Bidder's Statement and Section 7.13(b) of this Target's Statement.

2.4 Tax Considerations

Section 7.13(c) of this Target's Statement contains details on tax considerations relating to the Offer. The Directors recommend all Shareholders read the section carefully and seek independent advice that takes into account their specific circumstances.

The key tax considerations identified with regards to the Fairstar Offer are Capital Gains Tax ("CGT") for the individual Shareholders and Western Australian State Government stamp duty payable by the merged entity.

2.4.1 Capital Gains Tax

The Australian income tax consequences for Golden West Shareholders who accept the Offer will be dependent upon a number of factors including:

• • whether the Golden West Shareholder holds their Golden West Shares on capital or revenue account or as trading stock;
• • the tax residency of the Golden West Shareholder (i.e. whether Australian resident or not); and
• • whether the scrip for scrip rollover relief will be available to the Shareholder.

As indicated in the section headed "Reasons for Independent Directors' Recommendation" on page 4 of this Target's Statement, Shareholders who accept the Fairstar Offer are unlikely to qualify for scrip for scrip CGT rollover relief as it is unlikely that Fairstar will become the owner of at least 80% of Golden West. This may result in the Shareholder facing a substantial tax liability. The nature, if any, of the tax liability will vary according to the circumstances of each Shareholder, however the impact may be substantial. We have provided below two examples by way of illustration of the potential tax liability to Shareholders.

This example considers a Shareholder that is an individual Australian resident, paying the top marginal tax rate of 46.5% and holding the Golden West Shares on capital account (with no offsetting capital losses available) and having acquired those Golden West Shares as part of the original float of Golden West in 2004 (for \$0.20 per share). On the basis that the market value of the Fairstar Shares received by the Golden West Shareholder at the date of accepting the Offer is \$2.50 per Golden West Share (based upon a Fairstar Share price of \$0.50 per share), the disposal of the Golden West Shares will result in the Shareholder facing a tax liability of approximately \$0.53 per share. By way of illustration, a Shareholder in the above situation with 100,000 Golden West Shares will make a capital gain of \$115,000 which results in a tax liability of approximately \$53,000. The above capital gain has been calculated on the basis that the Shareholder will be eligible for the 50% discount concession on disposal as the Golden West Shares have been held for greater than 12 months.

This example considers a Shareholder that is an individual Australian resident, paying the top marginal tax rate of 46.5% and holding the Golden West Shares on a capital account (with no offsetting capital losses available) and having acquired those Golden West Shares in March 2007 for \$2.20 per share. On the basis that the market value of the Fairstar Shares received by the Golden West Shareholder at the date of accepting the Offer is \$2.50 per Golden West Share (based upon a Fairstar share price of \$0.50 per share), the disposal of the Golden West Shares will result in the Shareholder facing a tax liability of approximately \$0.14 per share. By way of illustration, a Shareholder in the above situation with 100,000 Golden West Shares will make a capital gain of \$30,000 which results in a tax liability of approximately \$14,000. The above capital gain has been calculated on the basis that the Shareholder will not be eligible for the 50% discount concession on disposal as the Golden West Shares have been held for less than 12 months.

2.4.2 Stamp Duty

In Western Australia, State Government stamp duty is payable on the acquisition of a controlling interest (broadly, at least a 90% ownership interest) in a listed company considered to be "land rich". Golden West has received advice that stamp duty would almost certainly be payable should Fairstar achieve a 90% ownership interest in Golden West Shares.

The stamp duty impost will be levied at 5.4% of the value of the land assets and chattels (plant) held by Golden West, with the value of the dutiable assets being determined as the market value of those assets at the time the controlling interest is acquired. Basing the market value on the market capitalisation of Golden West prior to takeover speculation in September this year indicates that stamp duty in the order of \$13 million would be payable should Fairstar achieve a 90% ownership interest in Golden West on completion of the Offer.

3. Profile of Golden West

3.1 Overview of Golden West

Golden West listed on the ASX in late December 2004, under the code GWR. Its flagship Wiluna West Project contains significant iron ore and gold resources and is prospective for calcrete hosted uranium.

The Company's focus is on exploring for and developing the high grade iron ore situated within these tenements. Exploration to date has identified a number of iron ore deposits and gives confidence that the Project contains a substantial iron ore resource with the ability to sustain profitable production.

Golden West is a well managed company, with Directors and senior management that have extensive experience and expertise in exploration, project development and corporate and financial management.

3.2 Overview of Golden West's Projects

Wiluna West Project

Overview

The Wiluna West Project is located approximately 40 kilometres west of the township of Wiluna in the north-eastern Goldfields of Western Australia. The Project occupies an area of 440 square kilometres over a strike length of 45 kilometres covering almost the entire Joyners Find Greenstone Belt (see figure below). The Wiluna region is well known for large deposits of nickel, gold, lead, uranium and now iron ore.

The Wiluna West Project hosts significant gold and iron deposits and is prospective for calcrete hosted uranium.

The Company's primary focus is on iron ore exploration and development. An aggressive exploration program is continuing with the immediate goal of delineating sufficient resources and reserves to develop a 10 million tonne per annum direct shipping iron ore project. To date the Company has outlined at the Wiluna West Project an Inferred Mineral Resource of 86.3 million tonnes at 60.1% Fe, prepared in accordance with the JORC Code.

Gold exploration has identified a combined Measured and Indicated Mineral Resource estimate of 788,000 tonnes at 3.5 g/t for a contained 87,000 ounces of gold, with considerable potential for additional discoveries.

The southern area of the Wiluna West Project is highly prospective for calcrete hosted uranium deposits located along strike from the Hinkler Well uranium deposit for which ASX listed company, U3O8 Limited, has recently announced an Inferred Mineral Resource of 10 million pounds of uranium.

Golden West is currently earning a 60% interest in tenement E53/1089 through a farm in agreement with Jindalee Resources Limited. All Mineral Resources identified to date making up the Wiluna West Project lie outside this tenements in the Company's 100% owned tenements.

Iron Ore (Direct Shipping Hematite)

The Wiluna West Project contains a number of potentially mineralised units, named Units A, B, C, D and E. The Company's activities conducted so far indicate the Wiluna West Project has the potential to host a large, high grade iron ore deposit.

Golden West has initiated an aggressive exploration program, with exploration to date concentrating on the northern, more exposed sections of two units, namely "B" and "C".

In April 2007, the Company announced its initial Inferred Mineral Resource of 50.1 million tonnes at 61% Fe, encompassing the C3 and C4 deposits on C Ridge and Bowerbird, Bowerbird North, Joyners Find and Joyners North on B Ridge.

In October 2007, Golden West announced an interim resource upgrade following further exploration on C Ridge, at deposits C1, C2, C5 and CR. The interim Inferred Mineral Resource calculation of 86.3 million tonnes at 60.1% Fe was prepared in accordance with the JORC Code. The estimate, which is summarised below, represents a tonnage increase of 72% over the maiden estimate announced in April 2007. In addition, the adjacent figure illustrates the deposits incorporated into the estimate (excluding CR).

Deposit	Unit	Type	Tonnes (Mt)	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	LOI (%)
Bowerbird	B	Block	9.5	59.8	7.7	3.5	0.06	2.7
Bowerbird North	B	Sectional	2.0	61.5	5.3	3.2	0.04	2.1
Joyners Find	B	Block	7.8	64.6	3.1	1.9	0.02	2.0
Joyners North	B	Sectional	3.6	63.1	4.8	2.5	0.03	2.1
C1	C	Block	4.2	58.5	7.2	3.3	0.09	5.2
C2	C	Block	3.4	60.1	6.0	2.1	0.03	6.0
C3	C	Block	23.3	59.1	8.6	2.1	0.07	4.4
C4	C	Block	24.1	59.6	9.2	2.5	0.03	2.7
C5	C	Block	4.4	59.1	8.9	2.1	0.12	3.8
CR	C	Block	4.0	60.6	9.3	1.4	0.03	1.7
Total			86.3	60.1	7.8	2.4	0.05	3.3

Figure 3.2.2: Wiluna West Project Inferred Mineral Resource

Note: All resources reported using a 50% Fe cut-off Block model resource estimated by Snowden Sectional resources estimated by Golden West

Figure 3.2.3: Wiluna West Project Identified Deposits

The deposits consist of direct shipping hematite and contain low levels of phosphorous, alumina and silica. No other significant deleterious contaminants have been identified. All deposits remain open at depth and in some cases, open along strike.

There remains considerable potential for the discovery of new soil covered deposits in this region and work undertaken has already identified a number of additional areas on C Ridge that have the potential to significantly boost resources.

Golden West has commenced exploration in the less explored southern area of the Project. The Company recently completed a mapping and rock chip sampling program which identified high grade hematite over a 1.1 kilometre strike length in an area approximately 10 kilometres south of C1. Samples were taken from lines 100 to 200 metres apart and all returned values in excess of 50% Fe and up to 63% Fe. The sampling also returned intercepts of up to 40 metres in width, which are expected to represent true widths as the mineralisation is steeply dipping.

Mapping has also highlighted further targets which will be subject to rock chip sampling in the near future. These targets are likely to significantly add to the known iron resources within the Wiluna West Project.

Iron Ore Project Development

Golden West is moving rapidly towards early stage development activities at its Wiluna West Project. A high level project timeline is being developed to define the tasks and resources necessary to achieve a 10 million tonne per annum production project by mid 2011. A draft submission for mining approval (NOI) for Bowerbird has been completed and is under review and application to convert exploration licences to mining leases in the north of the project area has commenced. A conceptual plan for the proposed mining operations has been developed setting out an overall strategy to develop the Project and identifying potential mining areas and infrastructure locations. A scoping study to define the economic parameters of a future feasibility study and a programme to expand the environmental studies to encompass the north area of the Project are currently being undertaken.

Golden West has commenced examining the infrastructure and transport options available to it. Two possible routes are being considered and are illustrated in Figure 3.2.4 on the following page. The Oakajee route, which involves linking the Project to the proposed Midwest regional rail system to the proposed Oakajee Port is presently the preferred option for Golden West. The Esperance route links the Project to the existing railway infrastructure between Leonora and the Esperance Port.

An infrastructure planning report for the Esperance route has been completed with cost estimates. The report is being revised and updated as project details are refined. An initial estimated cost of \$25 per tonne for cartage from the Wiluna West Project to Esperance gives the Company confidence to pursue studies of the Esperance route as a viable alternative to the proposed Oakajee Port. Costs of transport for the Oakajee route are expected to be significantly less than for the Esperance route.

A study has been commenced to evaluate the alternative infrastructure options and costs for the Oakajee route. The Wiluna West Project is 700 kilometres from the proposed Oakajee Port (25 kilometres north of Geraldton). The plans will initially involve transporting at least 10 million tonnes of iron ore per annum through the Oakajee Port. Plans include construction of approximately 250 kilometres of railway infrastructure from the Wiluna West Project to Weld Range, joining the proposed Midwest regional rail infrastructure.

The Oakajee Port planning has been less detailed and is dependant on Government approvals and on port and rail infrastructure being constructed by third parties. The Company is in discussion with the proponents in the Midwest Region for the proposed rail and port facilities to Oakajee.

Geraldton Iron Ore Alliance ("GIOA")

Golden West is one of seven members comprising the GIOA. The GIOA was formed in December 2005 by a group of companies with iron ore deposits in the Geraldton/Midwest area of Western Australia. The primary objective of the alliance is to promote the development of a successful iron ore industry in the Midwest region of Western Australia. The GIOA is assisting members in all key areas of the industry's development, with particular focus on infrastructure (including expansion of the existing Geraldton port and timely development of the Oakajee Port and associated rail and other infrastructure), statutory and environmental approvals and Government/community relations.

Gold

The Joyners Find and Brilliant Shear Zones exhibit a major structural control on the known gold mineralisation within the Wiluna Project area. Mineralisation is most intense where shearing is adjacent to Banded Iron Formations producing both quartz reef and quartz stockwork style mineralisation.

No exploration has been carried out on the gold targets since Golden West began focussing on iron ore. The gold resources will remain an asset of the Company and will be considered for development in due course, possibly in conjunction with iron ore mining.

Nine gold deposits have been identified for a combined Measured and Indicated Mineral Resource of 788,000 tonnes at 3.5 g/t gold for 87,000 ounces of contained gold. The resource estimate is summarised below:

Prospect	Resource Type	Tonnage (t)	Grade (g/t)	Contained Gold (oz)
Iron Monarch	Indicated	140,000	3.0	13,500
Eagle East	Indicated	102,000	3.7	12,000
Hawk	Indicated	42,000	2.5	3,400
Iron King	Indicated	163,000	3.3	17,300
Iron Duke	Indicated	143,000	2.6	12,000
Goldfinch	Indicated	72,000	3.0	6,900
Bronzewing	Indicated	30,000	5.5	5,300
	Measured	21,000	7.6	5,100
Bottom Camp	Indicated	16,000	5.5	2,800
Brilliant North	Indicated	59,000	4.6	8,700
Total		788,000	3.5	87,000

Figure 3.2.5: Wiluna West Project Gold Resource

Uranium

The most southern Wiluna West tenement, exploration licence 53/1159, is located upstream from the Dawson Well, Hinkler Well, Centipede and Lake Way uranium deposits. These deposits, like the Yeleerie deposit (50,000 tonnes of contained U308), which is located 16 kilometres south of the tenement, are calcrete hosted style deposits.

A single stratigraphic traverse of RC holes (26 holes for 1,238 metres) was completed to test a possible palaeochannel target within the Abercromby Creek system immediately upstream from the Dawson-Hinkler Well Prospects. Four metre composite samples returned anomalous values of up to 74 ppm uranium.

ASX listed company U308 Limited has announced additional significant uranium mineralisation from drilling at its Dawson-West Prospect, downstream and contiguous with the eastern boundary of E53/1159. It has been noted that the westernmost traverse, through the Dawson Well zone, intersected a substantial zone of uranium mineralisation one kilometre wide and up to 5 metres thick, 300 – 700 metres from the Company's eastern tenement boundary.

Dohertys Project

The Dohertys Project is located in the Barrambie greenstone belt, 65 kilometres north of the township of Sandstone in the Murchison region of Western Australia. The Project consists of a single granted prospecting licence, P57/972, covering an area of 175 hectares. The Barrambie region has a history of high-grade gold production. Records show that 27,308 ounces of gold were produced from 34,101 tonnes of ore from four mining centres.

The Dohertys Project contains three groups of historical mine workings; Dohertys, Old Camp and South Shear. The Dohertys mine is the largest, having produced 2,292 tonnes at a grade of 25.4 g/t gold between 1955 and 1985.

Previous exploration within the project area concentrated on the Dohertys mine and culminated with shaft sinking and underground development where high grade gold mineralisation was defined on the eighth level (100 metre depth) averaging 43.1 g/t gold over a distance of 51 metres.

Golden West has compiled and re-assessed the previous exploration data, leading to a much clearer understanding of the high-grade mineralisation present and culminating in a complete reappraisal of the deposit, which now contains an Indicated Mineral Resource of 25,700 tonnes @ 23.8 g/t Au for a contained 20,430 ounces.

The Dohertys Project contains a high-grade gold resource and Golden West intends to seek a joint venture partner to develop the deposit.

Bullabulling Project

Golden West recently surrendered the Bullabulling Project.

3.3 Key Risks

Your Independent Directors have recommended that you reject the Fairstar Offer. If you do not accept the Fairstar Offer and the Fairstar Offer is unsuccessful, you will continue to hold Golden West Shares and remain a Golden West Shareholder.

If you accept the Fairstar Offer and it becomes unconditional, you will become a holder of Fairstar Shares in which case your investment will be subject to the risks associated with holding Fairstar Shares as set out in Part E of the Bidder's Statement and the risks associated with being a holder of Golden West Shares as set out below as Fairstar will become the holder of your Golden West Shares.

You should be aware of the following key risks that may affect the performance of Golden West and the value of Golden West Shares. These risks include general risks associated with any form of business or specific risks associated with Golden West's business and its involvement in the exploration and mining industry.

General and Industry Risks

A. Economic Conditions

Adverse changes in economic conditions such as interest rates, exchange rates, inflation, government policy, international economic conditions, and employment rates amongst others are outside of Golden West's control and have the potential to have an adverse impact on Golden West and its operations.

B. Stock Market Fluctuations

Investors should be aware that there are risks associated with any investment in a company listed on ASX. The value of Golden West Shares may rise above or fall below the current share price depending on the financial and operating performance of Golden West and external factors over which the Company and the Directors have no control. These external factors include:

• • economic conditions in Australia and overseas which may have a negative impact on equity capital markets;
• • changing investor sentiment in the local and international stock markets specifically relating to the mining sector or iron ore sector stocks;
• • changes in domestic or international fiscal, monetary, regulatory and other government policies; and
• • developments and general conditionsin the iron ore marketsin which Golden West proposesto operate and which may impact on the future value and pricing of shares in iron ore companies.

C. Commodity Price Movements

Iron ore prices have varied significantly over recent years and are currently at, or near, historical highs. This is, to a large extent, attributed to strong demand from countries such as China, Japan, India and South Korea. Competitor behaviour or the behaviour of new entrants attracted by current price increases may also influence iron ore price negotiation outcomes. Accordingly, it is difficult to predict accurately future price movements and such movements may have a positive or negative impact on Golden West's future development and planned future production.

D. Regulatory Risks

Mining and construction operations in Australia are subject to a variety of general and industry specific regulations concerning the environment, the health and safety of employees, land access, infrastructure creation and access, royalties, taxation, accounting policies and other matters. Compliance with such laws may cause delays or require capital outlays in excess of those anticipated, causing an adverse impact on the Wiluna West Project.

While Golden West's exploration and general business activities are highly regulated, it is possible that new specific laws will be introduced in Australia and/or overseas which may have a material adverse effect on Golden West's current and future business. For example, laws may be established to address concerns relating to the use of iron ore, the production of carbon dioxide or the remediation of mines.

E. Mining and Exploration Risks

The business of mining exploration, mineral development and production is subject to risk by its nature. The success of the business depends on successful exploration and/or acquisition of reserves, successful development in accordance with forecasts and successful management of the operations.

Exploration and mining are speculative undertakings which may be hampered by force majeure circumstances, land claims and unforeseen mining problems.

F. Insurance Risks

Although insurance is proposed to be maintained for the development, construction and operation of any project within ranges of coverage consistent with industry practice, no assurance can be given that such insurance will be available in the future on commercially reasonable terms or that any cover will be adequate and available to cover any or all claims. If Golden West incurs uninsured losses or liabilities, its assets, profits and prospects may be adversely affected.

G. Environmental Risks

Iron ore exploration and production can be environmentally sensitive and can give rise to substantial costs for environmental rehabilitation, damage control and losses. Further, there are a number of environmental conditions that may be attached to Golden West's mining tenements. Failure to meet such conditions could lead to forfeiture of these tenements. Future legislative and regulatory changes may be introduced. Such changes could have an adverse impact on Golden West's operations and potential profitability.

H. Tenement Title Risks

All of the tenements for which Golden West is the registered holder will be subject to application for renewal by the tenement holder from time to time. The renewal of the term of each tenement is subject to applicable legislation. The Directors are not aware of any reason why renewal of the term of any tenement should not be granted.

Golden West's Specific Risks

I. Operational Risks

Golden West could be adversely affected by disruptions to exploration, mine development or proposed future operations caused by adverse climatic, geological, geotechnical, seismic and mining conditions, infrastructure construction and operation breakdown of equipment, industrial accidents, labour disputes and port delays. The Company will seek to minimise the potential damage flowing from the occurrence of some of these risks by obtaining suitable indemnities from suppliers and contractors in the event that equipment or services do not provide the performance that was expected.

The occurrence of operating risks can result in increased production costs for Golden West if it commences operations and may materially impact on the Company's competitive position or ability to derive profits. In particular, mining costs may be materially impacted by adverse mining and geological conditions. Iron ore processing costs and yields may be negatively impacted by unforeseen deterioration in the quality or quantity of iron ore mined and any unbudgeted increase in operating costs.

J. Loss of Key Personnel

Golden West may also face risks from the loss of key personnel from time to time, as it may be difficult to secure replacement personnel with appropriate experience and expertise, particularly in the current Western Australian market which is highly competitive.

K. Resource Estimations

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates, which were valid when made, may change significantly when new information becomes available. In addition, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Should the Company encounter mineralisation or formations different from those predicted by past sampling and drilling, resource estimates may have to be adjusted and mining plans may have to be altered in a way which could have either a positive or negative effect on the Company's operations.

Completion of updated resource estimates at Wiluna West has outlined an interim Inferred Mineral Resource (as defined in the JORC Code) of 86.3 million tonnes at 60.1% Fe. The actual volumes, grades and recoveries of the iron ore may be more or less than this estimate. The estimates for Wiluna West are only estimates based on the judgment, experience and technical data available to Golden West.

L. Mine Development, Construction and Commissioning

The development of the Wiluna West Project will require substantial capital expenditure, experienced personnel and regulatory approvals. Golden West will be subject to all the risks inherent in the establishment of a new mining and infrastructure project.

There is no guarantee that the resources and approvals required for development of the Wiluna West Project in a timely fashion will be readily available.

The Company is yet to conduct a feasibility study, which provides the basis for project planning, cash flow analysis and proposed financing. Raising finance for the establishment of a commercial mining operation at Wiluna West depends on the outcome of the feasibility study. Additional work is therefore required before any decision can be made to further develop the Project.

M. Infrastructure Development

The Company is currently assessing the infrastructure requirements associated with the Wiluna West Project including the export of the iron ore from either the Port of Esperance or from a proposed new port at Oakajee. Delays in selecting an appropriate infrastructure provider, funding and construction of suitable rail and port infrastructure may affect the economic value of the Wiluna West Project.

The development of suitable infrastructure is an integral part of the successful development of the Wiluna West Project. An inability to secure or delay in securing or a delay in construction or implementation of suitable infrastructure may impact on the future viability of the Project.

As at the date of this Target's Statement, no decision has been made by the Western Australian State Government with respect to the Oakajee route as to the provider or providers of the infrastructure, its route and location or the proposed construction timetable.

Further, the construction of the necessary port and rail infrastructure associated with the Oakajee port assumes that the miners in the mid-west region will have a bankable project to justify such development. There is a risk that the miners in the region are unable to delineate sufficient reserves to bank the development of the infrastructure.

The Company will rely on third parties to undertake construction of appropriate infrastructure, equipment supply, installation and commissioning and there is a risk that these third parties will not perform their obligations promptly, properly or at all. In addition, there may be significant delays or expenses associated with construction of or access to transport and associated infrastructure.

N. Native Title and Aboriginal Heritage Risk

The grant of a mining tenement in Western Australia is generally a "Future Act" under the Native Title Act 1993 ("NTA") and the grant of a tenement is subject to the right to negotiate procedures under the NTA. These procedures give registered native title claimants rights to negotiate with tenement applicants prior to the grant of the tenement.

There may also be registered or unregistered Aboriginal heritage sites on land covered by the Company's tenements and the Company must comply with the provisions of the Aboriginal Heritage Act 1972 and the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (the "Heritage Acts"). The presence of sites of indigenous heritage significance may limit or preclude mining or construction activity and delays and expenses may be incurred in obtaining clearance and approvals.

All of the Company's tenements, excluding L53/147, are live tenements and we presume the right to negotiate procedures of the NTA have been complied prior to their grant.

The majority of the tenements in Wiluna West and Dohertys Projects are covered by the Sir Samuel Number 2 Native Title Claims (NNTT WC95/82 & WC95/58) ("SS Claims"). The SS Claims are not registered as at the date of this Target's Statement and as a result the claimants do not have the right to negotiate under the NTA. Mining lease 57/619 is affected by one of the SS Claims (WC95/82) and the Koara native title claim (WC95/001), which is also not registered as at the date of this Target's Statement. The claims may become registered at some time in the future. If this occurs and the Company wishes to apply for further tenements in the area then the Company may be required to negotiate with the claimants pursuant to the NTA.

Miscellaneous licence application 53/147 is affected by Sir Samuel Claim (WC95/82) and the Wiluna native title claim (WC99/24). The Wiluna claim is registered and the claimants have the right to negotiate in relation to its grant. Pursuant to the right to negotiate procedures the Wiluna claimants have lodged an objection to the grant of the tenement being included in "expedited procedure" under the NTA. The objection is not an objection to the tenement being granted, but to the application being fast-tracked. The parties are now required to negotiate in relation to the grant of the tenement or apply to the NNTT for a determination. The grant of tenements by agreement usually follows the entry into an agreement between the applicant for the tenement and the claimant or objectors, which relates to the protection of both Aboriginal heritage and Aboriginal sites during exploration.

Pursuant to a Deed of Agreement with a number of the Sir Samuel Claimants the Company conducted heritage surveys over the area of a number of the tenements (M53/1016, M53/1017, M53/1018, E53/1089, E53/1114, E53/1116, E53/1159, E53/1173, E53/1177, L53/115, L53/156). The survey identified an area within the tenements as a site and the Company will not conduct any mining activity on that area without complying with the provisions of the Heritage Acts. In addition, the Company agreed to conduct further negotiations with the claimants should they proceed to productive mining in the area.

O. Specific Environmental and Regulatory Risk

Golden West will need to receive various environmental approvals before it can develop the Wiluna West Project. There is risk that these approvals may be delayed or not granted or that additional environmental conditions will be required.

P. Future Capital Needs and Additional Funding

The ultimate development of the Wiluna West Project will involve a substantial investment of capital that will require funding. Golden West is confident that the Wiluna West Project will attract funding support from other industry participants; however, there can be no guarantee of this. Further, there can be no assurance that the Company will be able to obtain additional capital resources on terms acceptable to the Company.

Any additional equity financing may be dilutive to existing Shareholders and any debt financing if available may involve restrictive covenants, which limit the Company's operations and business strategy.

The Company's failure to raise capital if and when needed could delay or suspend the Company's business strategy and could have a material adverse effect on the Company's activities.

4. Golden West Directors and their Recommendations

4.1 Directors

Dr John Leonard Daniels (Non-Executive Chairman)

Dr Daniels is an experienced geologist and Company Director. Dr Daniels has produced extensive publications on petrology, mineralogy, photogeology, remote sensing, regional geology, economic geology, gossans and gemstones. He has undertaken extensive regional mapping and photogeological studies in Australia, North America, Somalia, Brazil, Iran and Saudi Arabia and visited and studied mineral deposits in Brazil, Venezuela, Canada and the USA.

As announced to ASX on 1 November 2007, Dr Daniels will retire as a Director at the conclusion of the Company's upcoming Annual General Meeting scheduled to be held on 29 November 2007.

Gary Wayne Hutchinson (Managing Director)

Mr Hutchinson has had considerable experience in the administration of several listed mining companies and has had over 20 years in the finance and banking industry as the principal of a finance broking business and branch manager of a major finance house.

Michael Reginald Wilson (Executive Director)

Mr Wilson is an exploration geologist with more than 20 years experience within Australia and South East Asia. He was actively involved in the discovery of the Bullabulling gold deposits in Western Australia and the development of the Longos gold deposit in the Philippines.

Peter Wayne Thompson (Executive Director)

Mr Thompson's 30 years experience in the mining industry in Australia, the UK and South America includes senior corporate, project commercialisation and operational management roles with Mount Edon Gold Mines, MIM Holdings and Xstrata plc. Mr Thompson is director of GBM Resources Ltd and non-executive director of Queensland based mining and civil contractor JJ McDonald & Sons Group.

Alan Paul Rudd (Non-Executive Director)

Mr Rudd has been involved in mineral exploration for 16 years since graduating from Curtin University in 1990. He has successfully explored for a wide range of commodities, including gold and base metals, predominantly in the Eastern Goldfields of Western Australia. Mr Rudd resides in Kalgoorlie and brings a wealth of experience in all facets of geology including tenement project acquisition, grass roots exploration and project development. Mr Rudd is also a non-executive director of Fairstar Resources Limited.

Constantino Markopoulos, MAICD (Non-Executive Director)

Mr Markopoulos' professional career has spanned over 30 years with significant involvement in strategic procurement and project management solutions within the resources, engineering, petro-chemicals, automotive, insurance and retail sectors, with a focus on operational efficiency, cost reductions, consolidation and continuous improvement. His senior management positions have included appointments with Beach Petroleum, Delhi Santos, Shell, ICI/Orica, Pasminco, RACV, Autojap and Coles Myer as well as the provision of strategic planning consultancy services to the private sector. Mr Markopoulos is also the managing director of Classic Minerals Limited.

4.2 Directors' Recommendations and Intentions

Following the announcement of the Fairstar Offer on 4 September 2007, the Board of Golden West established an independent sub-committee to respond to the Offer. The sub-committee comprised Mr Hutchinson, Mr Thompson and Mr Markopoulos.

The Independent Directors comprise Dr Daniels, Mr Hutchinson, Mr Thompson and Mr Markopoulos.

4.2.1 Recommendations and Intentions of Independent Directors

It is the recommendation of the Independent Directors that Shareholders REJECT the Offer from Fairstar.

The reasons for that recommendation are fully detailed under the section headed "Reasons for Independent Directors' Recommendation" on page 4 of this Target's Statement.

It is the intention of Dr Daniels and Mr Hutchinson, being those Independent Directors who hold a relevant interest in Golden West Shares, to reject the Offer in respect of all of their Golden West Shares.

In addition, each of Dr Daniels and Mr Hutchinson has executed an irrevocable undertaking to reject the Offer for all their Golden West Shares. The undertaking remains in full force and effect until the Offer is withdrawn, the Directors recommend that Shareholders accept the Offer or the consideration under the Offer is varied.

As part of the due diligence process, Mr Markopoulos has formally sought both clarification and independent legal advice regarding his position on the boards of both Golden West and Classic Minerals Limited. The advice received clarifies that there are no conflicts of interest or issues regarding his independence.

4.2.2 Recommendations and Intentions of Alan Rudd and Michael Wilson

Each of Mr Rudd and Mr Wilson decline to make a recommendation to Golden West Shareholders in relation to the Fairstar Offer.

Mr Rudd may not be considered an independent Director with respect to the Fairstar Offer. Due to his position as a nonexecutive director of Fairstar and as a holder of securities of Fairstar, Mr Rudd has a material personal interest in the outcome of the Fairstar Offer and a conflict of interest with respect to the Fairstar Offer. For these reasons, Mr Rudd considers himself unable to make an impartial recommendation to Golden West Shareholders in relation to the Offer.

Mr Wilson may not be considered an independent Director with respect to the Fairstar Offer. Due to his holding of securities of Fairstar, Mr Wilson has or may be perceived as having a material personal interest in the outcome of the Fairstar Offer and therefore he has a conflict of interest with respect to the Fairstar Offer. For these reasons, Mr Wilson considers himself unable to make an impartial recommendation to Golden West Shareholders in relation to the Offer.

Mr Wilson intends to reject the Offer with respect to his Golden West Shares.

5. Opinion of Independent Expert

5.1 Independent Expert's Report

Golden West has appointed PricewaterhouseCoopers as an independent expert to provide an opinion on whether the Offer is fair and reasonable in accordance with section 640 of the Corporations Act. The report is required because Mr Alan Rudd, a director of Golden West, is also a director of Fairstar.

The Report is annexed to this Target's Statement as Appendix B.

5.2 Conclusions of Independent Expert

PricewaterhouseCoopers concluded that the terms of the Offer are neither fair nor reasonable.

Golden West Shareholders should read the Independent Expert's Report in full to understand the reasons for the Independent Expert's opinion.

6. Your Choices

You have three choices as a Golden West Shareholder in responding to the Fairstar Offer:

• 1. reject the Offer and retain your Golden West Shares;
• 1. sell some or all of your Golden West Shares to another person; or
• 1. accept Fairstar's Offer in full.

Your Independent Directors unanimously recommend that you REJECT the Fairstar Offer.

To REJECT the Fairstar Offer, simply ignore all documents sent to you by Fairstar.

6.1 Reject the Offer

If you do not wish to accept the Fairstar Offer, simply ignore any documents sent to you by Fairstar.

You should be aware that:

• • if you choose not to accept the Fairstar Offer and Fairstar acquires at least 90% of Golden West Shares, Fairstar may become entitled to compulsorily acquire the balance of the Golden West Shares, and it has said that it intends to exercise those rights (see Section 7.12 of this Target's Statement for further details);
• • if Fairstar acquires more than 50% but less than 90% of Golden West Shares and all other Defeating Conditions of its Offer are either satisfied or waived and you continue to hold Golden West Shares, you will be exposed to the risks associated with being a minority shareholder in Golden West (see Section 7.13 of this Target's Statement for further details); and
• • as a holder of Golden West Shares you will continue as before to be subject to the normal exploration risks set out in Section 3.3 of this Target's Statement.

6.2 Sell Your Golden West Shares on Market

During the Offer Period, you may sell your Golden West Shares on market through ASX for cash, provided you have not already accepted the Fairstar Offer for those Golden West Shares (or, if you have accepted the Fairstar Offer, provided you have validly withdrawn that acceptance for those shares under the limited withdrawal rights).

If you sell your Golden West Shares on market, you will receive the consideration for that sale of your Shares sooner than if you accept the Fairstar Offer whilst it is subject to Defeating Conditions. If you sell your Golden West Shares on market, you:

• • will lose the ability to accept the Fairstar Offer and receive the Offer (and any possible increase in the Offer Price) in relation to those Golden West Shares;
• • will lose the ability to accept any higher offer for Golden West Shares which may or may not eventuate;
• • will lose the opportunity to receive future returns from Golden West;
• • may be liable for capital gains tax on the sale; and
• • may incur a brokerage charge.

6.3 Accept the Fairstar Offer

The Independent Directors unanimously recommend that you REJECT the Fairstar Offer.

However, you may choose to accept the Fairstar Offer with respect to all of your Golden West Shares. Fairstar has stated that its Offer remains open until 7.00pm (Perth Time) on 13 December 2007. It is possible that Fairstar will choose to extend the Offer Period in accordance with the Corporations Act (see Section 7.5 of this Target's Statement). Details of the consideration that you will receive if you accept the Fairstar Offer is set out in the Bidder's Statement.

If you accept the Fairstar Offer and it becomes unconditional you will become a holder of Fairstar Shares in which case your investment will be subject to the risks associated with holding Fairstar Shares as set out in Part E of the Bidder's Statement and the risks associated with being a holder of Golden West Shares as set out in Section 3.3 of this Target's Statement as Fairstar will become the holder of your Golden West Shares.

7. Important Information About the Fairstar Offer

7.1 Consideration

The consideration offered by Fairstar is 5 Fairstar Shares for every 1 Golden West Share held by you.

7.2 Offer for all of your Golden West Shares

The Offer may only be accepted for all of your Golden West Shares. There is no right to partially accept the Offer.

7.3 Offer for Golden West Options

The Offer does not include an offer for the Golden West Options.

However, the Offer extends to all Golden West Shares that are issued during the period from the Register Date to the end of the Offer Period due to the exercise of Golden West Options.

7.4 Offer Period

The Fairstar Offer, unless withdrawn or extended, will remain open for acceptance during the period commencing on 13 November 2007 and ending at 7.00pm (Perth time) on 13 December 2007 ("Offer Period").

If you choose to accept the Offer, your acceptance must be received before the end of the Offer Period.

7.5 Extension of the Offer Period

While the Fairstar Offer is subject to a Defeating Condition, Fairstar may extend the Offer Period at any time before giving the Notice of Status of Conditions.

However, if the Fairstar Offer is or becomes not subject to a Defeating Condition (that is, it is free of all Defeating Conditions), Fairstar may extend the Offer Period at any time before the end of the Offer Period.

To extend the Offer Period, Fairstar must lodge a notice of variation with ASIC and give a notice to Golden West and to each Golden West Shareholder to whom an offer was made under the Fairstar Offer.

In addition, there will be an automatic extension of the Offer Period if, within the last 7 days of the Offer Period:

• (a) Fairstar improves the consideration under the Fairstar Offer; or
• (b) Fairstar's voting power in Golden West increases to more than 50%.

If either of these events occurs, the Offer Period is automatically extended so that it ends 14 days after the relevant event occurs.

7.6 Withdrawal of the Fairstar Offer

Fairstar may not withdraw the Fairstar Offer if you have already accepted it. Before you accept the Fairstar Offer, the Fairstar Offer may only be withdrawn by Fairstar with the written consent of ASIC and subject to the conditions (if any) specified in the consent.

However, if the conditions of the Fairstar Offer are not satisfied or waived by the end of the Offer Period, the Fairstar Offer will lapse. This means that even if you have accepted the Fairstar Offer, the Offer will not proceed and you will continue to hold your Golden West Shares. Details of the conditions of the Fairstar Offer are set out in Section 7.10 of this Target's Statement.

7.7 Limited rights to withdraw your acceptance

You have only limited rights to withdraw your acceptance of the Fairstar Offer. Specifically, you may withdraw your acceptance of the Fairstar Offer if:

• (a) it is still subject to a Defeating Condition; and
• (b) the Fairstar Offer is varied in a way that postpones, for more than 1 month, the time by which Fairstar must satisfy its obligations under the Fairstar Offer. This may occur if Fairstar extends the Offer Period by more than 1 month and the Fairstar Offer is still subject to a Defeating Condition.

7.8 Effect of accepting the Fairstar Offer

If you accept the Fairstar Offer, subject to any withdrawal rights set out in Section 7.7 of this Target's Statement:

• (a) you will be unable to accept any higher takeover bid that may be made by a third party or any alternative transaction that may be recommended by the Board;
• (b) you will relinquish control of your Golden West Shares to Fairstar but will have no guarantee of payment until the Fairstar Offer becomes unconditional; and
• (c) you will be unable to sell your Golden West Shares on ASX.

The effect of acceptance is set out in detail in section 9 of the Bidder's Statement. That section of the Bidder's Statement describes the representations and warranties that you will be making and the irrevocable authorities and appointments that you will be giving if you accept the Fairstar Offer.

7.9 Timing of payment

If you accept the Fairstar Offer in accordance with the instructions contained in the Bidder's Statement, Fairstar will provide the consideration for your Golden West Shares to you by the earlier of:

• (a) the day 1 month after you accept the Fairstar Offer or, if the Fairstar Offer is subject to a Defeating Condition when accepted, 1 month after the contract resulting from your acceptance becomes unconditional; and
• (b) the day 21 days after the end of the Offer Period, assuming the Fairstar Offer becomes unconditional.

7.10 Conditions of Fairstar Offer

Golden West Shareholders should note that the Fairstar Offer (and each contract resulting from acceptances of the Fairstar Offer) is subject to a number of conditions, and that the Offer will lapse unless the conditions are either satisfied or waived by Fairstar prior to the end of the Offer Period. These conditions are set out in full in Section 10.1 of the Bidder's Statement.

Some of these conditions (the "Defeating Conditions") are broadly summarised below:

• • Fairstar having a relevant interest in more than 50% (by number) of Golden West Shares on issue at the end of the Offer Period;
• • Fairstar receiving all regulatory consents and approvals required in relation to its Offer before the end of the Offer Period;
• • during the Condition Period, no regulatory action adversely affecting the Offer being issued, commenced or threatened in connection with the Offer (other than an application to, or decision of, ASIC or the Takeovers Panel);
• • during the Condition Period, every person who has a right under a Material Agreement (being an arrangement or agreement the termination of which is likely to adversely affect Golden West or impair the Company's assets or cause a liability to become due) as a result of Fairstar acquiring Golden West Shares to acquire or require the disposal of any material asset of Golden West, or terminate or vary any material arrangement or agreement with Golden West, provides in writing a waiver or release of that right to Golden West, and Golden West provides that waiver to Fairstar;
• • during the Condition Period, Golden West does not acquire, dispose or offer to acquire or offer to dispose of an interest in one or more companies or assets for an amount in aggregate greater than \$1 million, or enter into a joint venture or partnership involving a commitment of the same amount, or commit to any capital expenditure or liability in respect of one or more related items of the same value;
• • during the Condition Period, no occurrence or matter arising that could reasonably be expected to have a materially adverse effect on the assets, liabilities, financial or trading position, profitability, production or prospects of Golden West;
• • no prescribed occurrences (as listed in section 652C of the Corporations Act) during the Condition Period;
• • during the Condition Period, no declaration or distribution of any dividends occurs;

• • during the Condition Period, Golden West does not amongst other things borrow any money, release any obligation, or conduct its business otherwise than in the ordinary course;

• • during the Condition Period, the S&P/ASX 200 Index not closing below 5,900 for 3 or more consecutive trading days;

• • during the Condition Period, the Gold Price Index not falling below 4,750; and
• • during the Condition Period, Fairstar does not become aware that any document filed by Golden West with ASX or ASIC contains a statement which is incorrect or misleading in any material particular or from which there is a material omission.

The share placement announced by the Company, if completed, will result in a Defeating Condition being triggered. Golden West is unaware of whether Fairstar will waive this Defeating Condition if the placement is completed by the Company.

Golden West Shareholders should be aware that even if the Defeating Conditions are not satisfied they may be waived by Fairstar. Furthermore, if a Defeating Condition is not satisfied and has not been waived, then Fairstar may allow the Offer to lapse and you will continue to hold your Golden West Shares.

7.11 Notice of status of conditions

The Bidder's Statement states that Fairstar will give its Notice of Status of Conditions to ASX and Golden West on 5 December 2007. If the Offer Period is extended by a period before the time by which the Notice of Status of Conditions is to be given, the date for giving the Notice of Status of Conditions will be taken to be postponed for the same period. If there is such an extension, Fairstar is required, as soon as possible after the extension, to give notice to ASX and Golden West that states the new date for the giving of the Notice of Status of Conditions.

Fairstar is required to set out in its Notice of Status of Conditions:

• (a) whether the Fairstar Offer is free of any or all conditions;
• (b) whether, so far as Fairstar knows, any of the conditions have been fulfilled; and
• (c) Fairstar's voting power in Golden West.

If a condition is fulfilled (so that the Fairstar Offer becomes free of the condition) before the date on which the Notice of Status of Conditions is required to be given, Fairstar must, as soon as possible, give ASX and Golden West a notice that states that the particular condition has been fulfilled.

7.12 Compulsory Acquisition

Fairstar has stated in Section 5.2 of the Bidder's Statement that if it becomes entitled to proceed to compulsory acquisition of Golden West Shares in accordance with the Corporations Act and the other conditions of the Offer are satisfied, then Fairstar intends to do so.

The two types of compulsory acquisition permissible under Chapter 6A of the Corporations Act are discussed below.

(a) Follow-on compulsory acquisition

Under Part 6A.1 of the Corporations Act, Fairstar will be entitled to compulsorily acquire any Golden West Shares on the same terms as the Offer if, during or at the end of the Offer Period, Fairstar (together with its associates):

• (i) has a relevant interest in at least 90% (by number) of all the Golden West Shares; and
• (ii) has acquired at least 75% (by number) of all the Golden West Shares that Fairstar offered to acquire under the Offer (whether the acquisitions happened under the Offer or otherwise).

If these thresholds are met, Fairstar will have up to 1 month after the end of the Offer Period within which to give compulsory acquisition notices to Golden West Shareholders who have not accepted the Offer. Golden West Shareholders have statutory rights to challenge the compulsory acquisition, but a successful challenge will require the relevant Golden West Shareholder to establish to the satisfaction of a court that the terms of the Offer do not represent a "fair value" for the Golden West Shares.

Golden West Shareholders should be aware that if they do not accept the Offer and their Golden West Shares are compulsorily acquired, those Golden West Shareholders will face a delay in receiving the consideration for their Golden West Shares compared with Golden West Shareholders who have accepted the Offer.

(b) General compulsory acquisition

Under Part 6A.2 of the Corporations Act, Fairstar will be entitled to compulsorily acquire any Golden West Shares if Fairstar holds full beneficial interests in at least 90% (by number) – i.e. if Fairstar becomes a 90% holder of Golden West Shares.

If this threshold is met, Fairstar will have 6 months after it becomes a 90% holder within which to give compulsory acquisition notices to Golden West Shareholders. The compulsory acquisition notices sent to Golden West Shareholders must be accompanied by an independent expert's report and an objection form.

The independent expert's report must set out whether the terms of the compulsory acquisition give a "fair value" for the Golden West Shares and the independent expert's reasons for forming that opinion.

If Golden West Shareholders with at least 10% of the Golden West Shares covered by the compulsory acquisition notice object to the acquisition before the end of the objection period (which must be at least 1 month), Fairstar may apply to the court for approval of the acquisition of the Golden West Shares covered by the notice.

Golden West Shareholders should be aware that if they do not accept the Offer and their Golden West Shares are compulsorily acquired, those Golden West Shareholders will face a delay in receiving the consideration for their Golden West Shares compared with Golden West Shareholders who have accepted the Offer.

7.13 Issues arising from the Fairstar Offer

• (a) The value of the Offer is not fixed
• • The market value of Fairstar Shares will change over time. The implied value of the Offer will fluctuate with movements in the market value of Fairstar Shares. Golden West Shareholders are urged to obtain updated quotes on the price of Fairstar Shares. Such quotes can be obtained online at www.asx.com.au.
• • Over time, the Fairstar Share price may fluctuate for a variety of reasons, including movements in iron ore and gold prices and other commodities; exchange rate movements or other factors which impact the operating or financial performance of Fairstar.
• (b) Risk in relation to the Offer
• • It is possible that if the Fairstar Offer lapses, there may be a reduction in the market price for Golden West Shares.
• • If Fairstaracquiresmore than50%butlessthan90%ofGoldenWest Shares,thoseGoldenWest Shareholders who do not accept the Fairstar Offer may become minority Golden West Shareholders. In such a situation, Golden West's stock market liquidity is likely to be reduced and Fairstar would have the ability to control the composition of the Golden West Board and Golden West's strategic direction.
• • Fairstar has indicated that Foreign Shareholders will not receive Fairstar Shares if the Offer is successful, but will instead receive the proceeds from the sale of the Golden West Shares they would otherwise be entitled to. If the Offer is successful, the Fairstar Share price may face the risk of price weakness due to any overhang caused by the sale of the Fairstar Shares.
• (c) Taxation considerations
• (i) Introduction

The Australian income tax consequences for Golden West Shareholders who accept the Offer will be dependent upon a number of factors, including:

• • whether the Golden West Shareholder holdstheir Golden West Shares on capital or revenue account or as trading stock;
• • the tax residency of the Golden West Shareholder (i.e. whether Australian resident or not); and
• • whether the scrip for scrip rollover relief will be available to the Shareholder.

This section of the Target's Statement provides a general summary of the Australian income tax considerations of accepting the Offer for holders of Golden West Shares who are Australian residents for income tax purposes.

The following discussion is based upon the Australian law and administrative practice in effect at the date of this Target's Statement, but is general in nature and is not intended to be an authoritative or complete statement of the laws applicable to the particular circumstances of every Golden West Shareholder.

This Section does not constitute taxation advice and Golden West Shareholders should seek independent taxation advice in relation to their own particular circumstances.

Special additional rules may apply to particular Golden West Shareholders, such as insurance companies, superannuation funds and financial institutions. Also, special rules may apply to Golden West Shareholders who originally acquired their Golden West Shares as part of an employee share acquisition scheme. These Shareholders should seek independent tax advice as the information set out below may not be applicable to their particular circumstances.

Golden West Shareholders who are not resident in Australia for tax purposes should seek their own independent taxation advice prior to accepting the Offer as they may be subject to tax in Australia or in their country of residence on the disposal of their Golden West Shares in certain circumstances.

(ii) Income Tax Considerations

The Australian income tax consequences associated with accepting the Offer will depend upon whether the Golden West Shareholders hold their Golden West Shares as:

• • assets held on capital account;
• • assets held on revenue account; or
• • trading stock.

Each Golden West Shareholder will need to determine which category they fall into. The Australian income tax consequences of accepting the Offer for each Golden West Shareholder will differ depending on which category of ownership applies to them.

(A) Shares Held on Capital Account

Golden West Shareholders who hold their Golden West Shares as passive investments with the intention of generating dividend income and long term capital growth are likely to be considered to hold their securities on capital account for tax purposes and accordingly subject to the Australian Capital Gains Tax ('CGT') rules.

CGT – General Principles

Golden West Shareholders may be subject to the Australian CGT rules on the disposal of their Golden West Shares under the Offer.

To the extent that the value of the consideration received by a Golden West Shareholder under the Offer is greater than the tax cost base of the Golden West Shares, a capital gain will result. For CGT purposes, the cost base of the Golden West Shares would generally include the amount paid to acquire those shares plus any non-deductible interest costs and incidental acquisition costs (i.e. brokerage fees, stamp duty). Under the Offer, the consideration provided to a Golden West Shareholder is solely Fairstar Shares. Therefore for CGT purposes the consideration under the Offer will be the market value of the Fairstar Shares determined as follows:

• • for Golden West Shareholders who accept the Offer, the market value of Fairstar Shares at the date of acceptance of the Offer; or
• • for Golden West Shareholders who have their Golden West Shares compulsorily acquired by Fairstar, the market value of the Fairstar Shares at the date of the compulsory acquisition.

A Golden West Shareholder will make a capital loss on disposal if the consideration received under the Offer for their Golden West Shares is less than the reduced cost base of the Golden West Shares held. A taxpayer may use a capital loss to offset other capital gains derived in the same or subsequent years of income, however, a capital loss cannot be offset against ordinary income.

CGT – Discount Capital Gain

For a Golden West Shareholder that is either an individual, trust or complying superannuation fund that has held their Golden West Shares for at least 12 months, any capital gain may be treated as a Discount Capital Gain.

A Discount Capital Gain is a capital gain derived by an individual, trust or complying superannuation fund, from the disposal of an asset that has been held for at least 12 months. For the discount to apply, the capital gain must be worked out without the cost base being indexed.

For individuals and trusts, the amount of the discount capital gain which may be included in assessable income is 50% of the net capital gain after applying current and prior year capital losses. Trustees should seek specific advice regarding the tax consequences of distributions attributable to discounted capital gains.

For superannuation funds, only two thirds of the discount capital gain may need to be included in assessable income after applying current and prior year capital losses.

Companies (other than a life insurance company) are not eligible to discount capital gains in any circumstance.

CGT – Scrip for Scrip Rollover Relief

If a capital gain accrues to a Golden West Shareholder as a result of accepting the Offer and the conditions of scrip for scrip rollover are satisfied, the Golden West Shareholder may be eligible for tax relief upon the disposal of their Golden West Shares under the scrip for scrip rollover provisions which would enable a shareholder to disregard a capital gain they make from the disposal of Golden West Shares.

The scrip for scrip rollover provisions would not apply where a Golden West Shareholder realises a capital loss on acceptance of the Offer.

In order for a Golden West Shareholder to be eligible for scrip for scrip rollover relief, the Shareholder must receive shares of Fairstar as consideration for their Golden West Shares and it is a requirement that there be sufficient acceptance of the Offer by Golden West Shareholders such that Fairstar becomes the owner of at least 80% of the voting shares in Golden West. Given that there is a minimum acceptance condition of only 50% attached to the Offer, this requirement may not be satisfied and scrip for scrip rollover relief may not be available to Golden West Shareholders who accept the terms of the Offer. Fairstar will need to advise Shareholders whether the ownership threshold of at least 80% of Golden West Shares is reached by Fairstar.

It should be noted that other pre-conditions are also required to be satisfied before rollover relief will be available. In respect of Australian resident Shareholders who accept the terms of the Offer, each Shareholder should seek his or her own independent advice regarding whether the pre-conditions for rollover can be satisfied.

Rollover Relief does not apply or is not elected in relation to the disposal of Golden West Shares

Where the scrip for scrip rollover relief does not apply or an election is not made for it to apply to the disposal of Golden West Shares, the Golden West Shareholder will make either a capital gain or capital loss equal to the difference between the market value of the Fairstar Shares issued under the Offer (generally being the market value of the Fairstar Shares at the time of accepting the Offer or the time of compulsory acquisition) and the cost base of the Golden West Shares.

(B) Shares Held on Revenue Account

Golden West Shareholders who acquired their Golden West Shares with the dominant purpose of reselling them at a profit (but not in a share trading business) may be considered to hold their Golden West Shares on revenue account for tax purposes. Where this is the case, any gain or loss realised on disposal of the Golden West Shares (determined based on the market value of the Fairstar Shares received) will be assessed as ordinary income or claimed as a revenue deduction.

The scrip for scrip rollover relief provisions for Golden West Shares will have no application. The rules relating to discount capital gains will also not be applicable in this situation.

(C) Shares Held as Trading Stock

Golden West Shareholders, who are engaged in the business of share trading, whereby they regularly acquire shares and hold them with a view to making short-term profits through sale or exchange in the ordinary course of carrying on a business, would hold the Golden West Shares as trading stock.

Where this is the case, scrip for scrip rollover relief will not be available on acceptance of the Offer. Any proceeds received from the sale arising from the Offer (being the market value of the Fairstar Shares received) will be included in assessable income in these circumstances. Furthermore, a deduction will be available representing the cost of the Golden West Shares disposed of in the Offer. The discount capital gain will also not be available.

(iii) Tax Implications of Ownership and Disposal of Fairstar Shares

As a consequence of accepting the Offer, Shareholders will cease to be shareholders of Golden West and will become shareholders of Fairstar.

(A) Subsequent Disposal of Fairstar Shares held on Capital Account

The subsequent disposal of Fairstar Shares by Australian resident shareholders will generally result in Australian CGT implications where the Fairstar Shares are held on capital account.

These will differ depending upon whether or not scrip for scrip rollover relief was elected (where available) in relation to the disposal of Golden West Shares pursuant to the Offer.

Where scrip for scrip rollover relief is elected in relation to the disposal of Golden West Shares

Where scrip for scrip rollover is elected (where available) in relation to the disposal of Golden West Shares, the CGT cost base or reduced cost base of each Fairstar Share is determined on the basis of a reasonable apportionment of the cost base or reduced cost base of the Golden West Shares disposed of under the Offer.

A shareholder will be taken to have acquired the Fairstar Shares at the time the Golden West Shares were acquired for CGT purposes. Consequently, shareholders will be entitled to add together the ownership periods for both the Golden West and Fairstar Shares to determine whether the twelve month ownership requirements are satisfied for the discount capital gain rules.

Where scrip for scrip is not elected to apply or is not available in relation to the disposal of Golden West Shares

Where scrip for scrip rollover relief is not elected to apply or is not available in relation to the disposal of the Golden West Shares, the cost base or reduced cost base of each Fairstar Share received under the Offer would be equal to one fifth of the market value of each Golden West Share disposed of at the time of the exchange, plus any incidental acquisition costs (ie brokerage fees, stamp duty).

If an individual, trust, complying superannuation entity or life insurance company has held Fairstar Shares for twelve months or longer at the time of disposal, the capital gain derived may be eligible for a discount such that only half of the capital gain for an individual or trust, or two-thirds of the capital gain for a complying superannuation entity or life insurance company, is treated as assessable income (after applying any available capital losses).

If the Fairstar Shares are held for less than twelve months at the time of disposal then the Fairstar Shareholders will not be eligible to apply the discount method. Companies (other than life insurance companies) are not eligible to discount capital gains in any circumstance.

(B) Subsequent Disposal of Fairstar Shares held on Revenue Account

A shareholder holding their Fairstar Shares on revenue account will be required to treat any gain or loss arising on a subsequent disposal of their Fairstar Shares as assessable or deductible respectively.

(C) Subsequent Disposal of Fairstar Shares held as Trading Stock

A shareholder holding their Fairstar Shares as trading stock will be required to treat the proceeds received on a subsequent disposal of their Fairstar Shares as assessable. Furthermore, a deduction will be available representing the cost of the Fairstar Shares disposed.

Where a Shareholder has any questions about the financial or taxation aspects of holding or selling Fairstar Shares, they should seek their own independent advice from a professional adviser before making a decision whether or not to accept the Offer.

8. Directors' Interests

8.1 Golden West Directors' interests in securities of Golden West

As at the date of this Target's Statement, the relevant interests of Golden West Directors in securities of Golden West are as follows:

Director	Shares	Options
John Daniels	500,000	2,250,000
Gary Hutchinson*	2,062,500	4,631,250
Michael Wilson	1,667,537	3,817,356
Peter Thompson	–	1,000,000
Alan Rudd*	–	2,600,000
Constantino Markopoulos	–	1,000,000

*Gary Hutchinson has exercised 825,000 Golden West Options and Alan Rudd has exercised 600,000 Golden West Options. As at the date of this Target's Statement, these Golden West Shares have not been issued.

The above Golden West Options held by the Directors are not subject to any vesting or other conditions which are affected by the Fairstar Offer.

8.2 Golden West Directors' dealing in securities of Golden West

No Golden West Director has acquired or disposed of any securities of Golden West in the period of 4 months ending on the date immediately before the date of this Target's Statement, except that:

• • Peter Thompson was issued with the following Golden West Options on 2 October 2007 pursuant to a resolution of Golden West Shareholders on 21 September 2007:
• 1,000,000 Golden West Options, each exercisable at \$2.00 on or before 31 December 2010, of which 500,000 of those Golden West Options were gifted to Mr Thompson's family members; and
• 1,000,000 Golden West Options, each exercisable at \$3.00 on or before 31 December 2011, of which 500,000 of those Golden West Options were gifted to Mr Thompson's family members;
• • Constantino Markopoulos was issued with the following Golden West Options on 2 October 2007 pursuant to a resolution of Golden West Shareholders on 21 September 2007:
• 500,000 Golden West Options, each exercisable at \$2.00 on or before 31 December 2010; and
• 500,000 Golden West Options, each exercisable at \$3.00 on or before 31 December 2011;
• • John Daniels was issued with 500,000 Golden West Shares on 14 November 2007 upon exercise of 250,000 Golden West Options, exercisable at \$0.25 and 250,000 Golden West Options, exercisable at \$0.30; and
• • Gary Hutchinson has exercised 825,000 Golden West Options and Alan Rudd has exercised 600,000 Golden West Options. As at the date of this Target's Statement, these Golden West Shares have not been issued.

8.3 Golden West Directors' interests in securities of Fairstar

As at the date of this Target's Statement, none of the Golden West Directors hold a relevant interest in securities of Fairstar, except as follows:

Director	Shares	Options
Michael Wilson	2,625,000	1,186,922
Alan Rudd	3,125,000	2,162,500

8.4 Benefits and agreements or arrangements with Golden West Directors

No Golden West Director has entered into any agreement or arrangement in connection with or conditional on the outcome of the Offer and no Golden West Director has agreed to receive, or is entitled to receive, any benefit from Fairstar in connection with or conditional on the Offer (other than in his capacity as a Golden West Shareholder, a security holder in Fairstar or as otherwise disclosed in this section).

As at the date of this Target's Statement, no Golden West Director has an interest in the outcome of the Offer (other than an interest in his capacity as a Golden West Shareholder or a security holder in Fairstar, or as otherwise disclosed in this section).

As a result of the Offer, no benefit (other than a benefit which can be given without member approval under the Corporations Act) has, or will be given to any person in connection with the retirement of a person from a board or managerial office in Golden West, or a related body corporate of Golden West, or who holds, or has held a board or managerial office in Golden West or a related body corporate, or a spouse, relative or associate of such a person, in connection with the transfer of the whole or any part of the undertaking or property of Golden West.

Alan Rudd has an interest in the outcome of the Offer in his capacity as a non-executive director of Fairstar. He has not been involved in the deliberations of Golden West regarding the Offer except to the extent required by law.

8.5 Golden West Directors' interests in any contract entered into by Fairstar

As at the date of this Target's Statement, no Golden West Director holds any interest in any contract entered into by Fairstar (other than an interest in his capacity as a Golden West Shareholder, a security holder in Fairstar or as otherwise disclosed in this section).

Alan Rudd has an interest in contracts entered into by Fairstar in his capacity as a non-executive director of Fairstar.

9. Additional Information

9.1 Golden West's issued securities

Based on the Company's latest Appendix 3B available as at the date of this Target's Statement (announced on 26 November 2007), the issued securities of Golden West consists of:

• • 75,100,331 Golden West Shares; and
• • 40,078,657 Golden West Options, with the following exercise prices and expiry dates:

NO. of Golden West Options	Exercise Price (\$)	Expiry Date
14,053,667	0.20	31 December 2007
1,000,000	0.25	30 June 2008
1,000,000	0.30	30 June 2008
1,250,000	0.40	30 June 2008
14,274,990	2.00	31 December 2010
8,500,000	3.00	31 December 2011

Golden West Shares and those Golden West Options with an exercise price of \$0.20 and expiry date of 31 December 2007 are listed on ASX.

9.2 Dealings in Golden West Shares

The collective information that Golden West has as to the number of Golden West Shares that have been traded in the 12 month period from 27 November 2006 to 26 November 2007, and the aggregate price at which they were traded is set out in this clause:

Period of Sales	Total no . of Shares Traded	Total Consideration	Average Price Paid
12 months	34,609,709	\$78,446,272	\$2.27

9.3 Issue of Golden West Shares

The cumulative details of working capital raised and the subsequent new shares issued by Golden West in the 12 month period from 27 November 2006 to 26 November 2007 are:

Period of Issues	Total no . of Shares Issued	Total Consideration	Average Issue Price
12 months	4,669,990	\$8,405,982	\$1.80

9.4 Golden West Options

The Offer does not include an offer for the Golden West Options. However, any Golden West Shares issued from the Register Date to the end of the Offer Period upon exercise of the Golden West Options will become subject to the Fairstar Offer.

9.5 Dealings in Fairstar Shares

There have been no acquisitions and disposals of Fairstar Shares by Golden West, Directors or associates of Golden West in the period of 4 months ending on the date immediately before the date of this Target's Statement, except that Michael Wilson disposed of a total of 125,578 listed options in Fairstar over the period 29 October 2007 to 20 November 2007 for an average price of \$0.287 per option.

9.6 Arrangements or agreements between Fairstar and Golden West

As at the date of this Target's Statement, there are no arrangements or agreements entered into between Golden West (or any of its associates) and Fairstar (or any of its associates).

9.7 Written commitments from Golden West Shareholders to reject Fairstar Offer

As detailed in its announcement to ASX on 21 November 2007, the Company has received written commitments form Shareholders representing a total of 27.85% of Golden West Shares that they do not intend to accept the current Fairstar Offer. These Shareholders include two of Golden West's major investors: Dubai-based Falak Holding LLC (10.26%) and the Francke group (9.32%).

Golden West managing director Gary Hutchinson (2.48%), retiring Chairman Dr John Daniels (0.68%) and company secretary John Palermo (0.85%) have also provided written commitments indicating they intend to reject the Fairstar Offer.

Messrs Hutchinson, Daniels and Palermo elected to reject the Fairstar Offer independently of the action taken by the other Shareholders who have rejected the Offer.

Under the terms of the rejection agreements, each of the rejecting Shareholders has undertaken not to accept the Offer by Fairstar.

The undertaking is irrevocable and remains in full force and effect until:

• • the Offer is withdrawn;
• • the Directors recommend that Shareholders accept the Offer; and
• • the consideration under the Offer is varied.

As at the date of this Target's Statement, none of these conditions have been satisfied and accordingly, the undertakings remain irrevocable.

9.8 Changes in Golden West's financial position

So far as is known to the Directors of Golden West, there have been no material changes to Golden West's financial position since the date of the last balance sheet sent to Golden West Shareholders (being the balance sheet as at 30 June 2007) which have not been announced to ASX.

9.9 Continuous disclosure

Golden West is a disclosing entity under the Corporations Act and subject to regular reporting and disclosure obligations under the Corporations Act and the listing rules of ASX. These obligations require Golden West to notify the ASX of information about specified matters and events as they occur for the purpose of making that information available to the market. In particular, Golden West has an obligation (subject to limited exceptions) to notify the ASX immediately on becoming aware of nay information which a reasonable person would expect to have a material effect on the price or value of Golden West Shares.

A list of ASX announcements made in relation to Golden West between 30 June 2007 and the date immediately before the date of this Target's Statement is set out in Appendix A to this Target's Statement.

During the Offer Period, you may obtain a copy free of charge of the announcements made by Golden West to ASX between the dates referred to above by calling the Golden West Shareholder Information Line between 9.00 am and 5.00 pm (Perth Time) on 1800 118 938 (toll free within Australia) or +61 8 9386 2651 (for international callers and some Australian mobile phone users).

Copies of announcements by Golden West may also be obtained from Golden West's website at www.goldenwestresources.com.

9.10 Professional Services

Approximately \$650,000 (plus GST) of fees for professional services and other transaction costs are expected to be incurred by Golden West in relation to the Fairstar Offer.

9.11 Effect of the Fairstar Offer on Golden West's Employee Options

Golden West has not issued any Golden West Options under its employee share option plan approved by Golden West Shareholders on 29 November 2006.

9.12 Material Litigation

As at the date of this Target's Statement, Golden West is not aware of any current or proposed litigation or dispute that is material in the context of Golden West taken as a whole. Golden West notes the Takeovers Panel proceedings referred to in Section 9.13 of this Target's Statement.

9.13 Takeovers Panel Proceedings

On 30 October 2007, and revised on 19 November 2007, Golden West made an application to the Takeovers Panel in relation to the Fairstar Offer and the disclosures contained in the Bidder's Statement. On 16 November 2007, Fairstar made an application to the Takeovers Panel seeking a declaration of unacceptable circumstances in relation to the affairs of Golden West.

As at the date of this Target's Statement, there are no current proceedings or outstanding orders with respect to the Takeovers Panel.

9.14 ASIC modifications

As permitted by ASIC Class Order 01/1543, this Target's Statement contains statement which are made, or based on statements made, in documents lodged with the ASIC or on the company announcements platform of ASX. Under the terms of ASIC Class Order 01/1543, the persons who made those statements are not required to consent to, and have not consented to, those statements being included or referred to in this Target's Statement.

If you would like to receive a copy of any of the documents (or parts of the documents) that contain these statements, please contact the Golden West Shareholder Information Line between 9.00am and 5.00pm (Perth time) on 1800 118 938 (toll free within Australia) or +61 8 9386 2651 (for international callers and some Australian mobile phone users) and you will be sent copies free of charge.

Copies of announcements made by Golden West may also be obtained from its website at www.goldenwestresources.com.

In addition, as permitted by ASIC Class Order 03/635, this Target's Statement may include or be accompanied by certain statements:

• • fairly representing a statement by an official person; or
• • from a public official document or a published book, journal or comparable publication.

9.15 Other Material Information

Except for the information contained in this Target's Statement and in the Bidder's Statement, there is no other information that Golden West Shareholders and their professional advisers would reasonably require to make an informed assessment whether or not to accept the Offer, and would reasonably expect to find in this Target's Statement, that is known to any of the Directors and has not previously been disclosed to Golden West Shareholders or disclosed to the ASIC under the regular reporting and disclosure obligations to which Golden West is subject as a disclosing entity for Corporations Act purposes.

In deciding what information should be included in this Target's Statement, the Directors have had regard to:

• (a) the nature of Golden West Shares;
• (b) the matters that Golden West Shareholders may be expected to know;
• (c) the fact that certain matters may reasonably be expected to be known to their professional advisers; and
• (d) the time available to prepare this Target's Statement.

The Directors have assumed, for the purposes of preparing this Target's Statement, that the information in the Bidder's Statement is accurate. However, the Directors do not take any responsibility for the contents of the Bidder's Statement and are not to be taken as endorsing, in any way, any or all statements contained in it.

9.16 Consents

PricewaterhouseCoopers Securities Ltd has acted as independent expert in relation to the Offer and has given its consent to:

• • being named in this Target's Statement in the form and context in which it is named;
• • the inclusion of references to the Independent Expert's Report in this Target's Statement in the form and in the context in which they are included;
• • the inclusion of statements in this Target's Statement which are based on statements by PricewaterhouseCoopers Securities Ltd in the form and in the context in which they are included; and
• • the inclusion of the Independent Expert's Report as Appendix B of this Target's Statement in the form and context in which it is included.

This consent has not been withdrawn prior to the lodging of this Target's Statement with ASIC.

Azure Capital Pty Ltd has given its consent to being named in this Target's Statement as corporate adviser to Golden West in the form and context in which it is named. This consent has not been withdrawn prior to the lodging of this Target's Statement with ASIC.

Pullinger Readhead Lucas has given its consent to being named in this Target's Statement as solicitors to Golden West in the form and context in which it is named. This consent has not been withdrawn prior to the lodging of this Target's Statement with ASIC.

Stantons International has given its consent to being named in this Target's Statement as auditor of Golden West in the form and context in which it is named. This consent has not been withdrawn prior to the lodging of this Target's Statement with ASIC.

Coffey Mining has given its consent to the inclusion of the Independent Technical Report as Appendix H of the Independent Experts' Report, which is incoporated as Appendix B of this Target's Statement, in the form and context in which it is included. This consent has not been withdrawn prior to the lodging of this Target's Statement with ASIC.

Each person named in this section as having given their consent to the inclusion of a statement or being named in this Target's Statement:

• • does not make, or purport to make, any statement in this Target's Statement or any statement which a statement in this Target's Statement is based on other than, in the case of a person referred to above as having given their consent to the inclusion of a statement included in this Target's Statement with the consent of that person; or
• • to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Target's Statement, other than a reference to its name, and in the case of a person referred to above as having given their consent to the inclusion of a statement, any statement which has been included in this Target's Statement with the consent of that party.

9.17 JORC Code reporting of Golden West's Mineral Resources

All references to Golden West's mineral resources have been reported in accordance with the requirements of the JORC Code.

The information contained in this Target's Statement that relates to iron Mineral Resources is based on, and accurately reflects, the information compiled by Ms Marlene Kelly, a consultant to the Company, and Mr Paul Blackney of Snowden Mining Industry Consultants. Ms Kelly and Mr Blackney are members of the Australian Institute of Geoscientists and Australasian Institute of Mining and Metallurgy, respectively. Ms Kelly and Mr Blackney have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activities which they are undertaking to qualify as Competent Persons as defined in the JORC Code.

Information in this Target's Statement relating to gold Mineral Resources conforms with the reporting requirements of the JORC Code and is based on and accurately reflects information compiled by John D Wyatt of Geological Investigations Pty Ltd who is a Competent Person as defined by the JORC Code and is a fellow of the Australasian Institute of Mining and Metallurgy.

10. Interpretation

10.1 Definitions

In this Target's Statement except where the context otherwise requires:

"ASIC" means the Australian Securities and Investments Commission.

"ASX" means ASX Limited.

"Bid" means the takeover bid for the acquisition of Golden West Shares referred to in the Bidder's Statement.

"Bidder's Statement" means the replacement bidder's statement of Fairstar dated 26 October 2007 received by Golden West on 26 October 2007, as supplemented by the supplementary bidder's statement of Fairstar dated 13 November 2007 received by Golden West on 13 November 2007 and both of which were sent to Golden West Shareholders on or about 13 November 2007, relating to an offer for Golden West Shares.

"Board" means the board of directors of Golden West Resources Limited

"Condition Period" means the period beginning on 4 September 2007, being the date on which Fairstar announced the Offer to ASX, and ending at the end of the Offer Period.

"Corporations Act" means the Corporations Act 2001 (Cth).

"Defeating Condition" means a defeating condition of the Fairstar Offer as set out in Section 10 of the Bidder's Statement and summarised in Section 7.10 in this Target's Statement.

"Directors" or "Golden West Directors" means directors of Golden West.

"Fairstar" means Fairstar Resources Limited ABN 38 115 157 689.

"Fairstar Offer" or "Offer" means the offers dated 13 November 2007 constituting a takeover bid for the acquisition of Golden West Shares referred to in the Bidder's Statement.

"Fairstar Shares" means fully paid ordinary shares in Fairstar.

"Foreign Shareholders" means Shareholders whose address in the register of members is not in Australia or New Zealand.

"Gold Price Index" means the London PM Fix gold price (expressed in US dollar terms and converted into Australian dollars with reference to the AUD/USD representative exchange rate as published in the Australian Financial Review on the relevant date).

"Golden West" or "Company" means Golden West Resources Limited ABN 54 102 622 051.

"Golden West Options" means options granted by Golden West to subscribe for Golden West Shares.

"Golden West Shares" means fully paid ordinary shares in Golden West

"Golden West Shareholders" or "Shareholders" means holders of Golden West Shares.

"Independent Directors" means all of the Directors other than Alan Paul Rudd and Michael Reginald Wilson.

"Independent Expert" or "PricewaterhouseCoopers" means PricewaterhouseCoopers Securities Ltd.

"Independent Expert's Report" means the report of PricewaterhouseCoopers which is included as Appendix B of this Target's Statement.

"JORC" or "JORC Code" means the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".

"NNTT" means the National Native Title Tribunal.

"Notice of Status of Conditions" Fairstar's notice disclosing the status of the Defeating Conditions of the Offer which must be given in accordance with section 630(3) of the Corporations Act.

"Offer Period" means the period within which the Offer will remain open for acceptance, commencing on 13 November 2007 and ending at 7.00pm (Perth time) on the later of 13 December 2007 or any date to which the Offer Period is extended.

"Offer Price" means the offer of 5 Fairstar Shares for every 1 Golden West Share under the Fairstar Offer.

"Register Date" means 26 October 2007, being the date set by Fairstar under section 633(2) of the Corporations Act.

"S&P/ASX 200 Index" means the index of that name published by Standard & Poor's (or any successor of or replacement for that index).

"Target's Statement" means this target's statement, including Appendices A, B and C.

"Wiluna West", "Wiluna West Project", "Wiluna West Iron Ore Project" or "Project" means the Company's iron ore project located in the Wiluna West region of Western Australia.

10.2 Interpretation

In this Target's Statement except where the context otherwise requires:

• (a) a reference to any legislation or legislative provision includes any statutory modification or re-enactment of, or legislative provision substituted for, and any statutory instrument issued under, that legislation or legislative provision;
• (b) a word denoting the singular number includes the plural number and vice versa;
• (c) a word denoting an individual or person includes a corporation, firm, authority, government or governmental authority and vice versa;
• (d) a word denoting a gender includes all genders;
• (e) a reference to a paragraph is to a paragraph of this Target's Statement; a reference to an Appendix is to an appendix to this Target's Statement; and appendices to this Target's Statement form part of this Target's Statement;
• (f) a reference to any agreement or document is to that agreement or document (and, where applicable, any of its provisions) as amended, novated, supplemented or replaced from time to time;
• (g) a reference to any party includes that party's executors, administrators, substitutes, successors and permitted assigns;
• (h) a reference to a "subsidiary" of a body corporate is to a body corporate which is a subsidiary of the first-mentioned body corporate under section 46 of the Corporations Act;
• (i) a reference to "dollars" or "\$" or "cents" or "¢" is to an amount in Australian currency;
• (j) a reference to the "holder" of a Golden West Share at a particular time includes a reference to a person who, as a result of a dealing received by Golden West or its share registry on or before that time, is entitled to be entered in the share register as the holder of that Golden West Share;
• (k) a reference to the "transfer" of a share or option includes a reference to the conferring of a relevant interest in that share or option;
• (l) words and phrases defined elsewhere in this document shall have the meaning there ascribed to them;
• (m) words and phrases defined in the Corporations Act shall have the meaning there ascribed to them;
• (n) headings are for convenience of reference only and do not affect interpretation; and
• (o) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning.

11. Approval

This Target's Statement is dated 27 November 2007, which is the date on which it was lodged with ASIC.

This Target's Statement has been approved by a resolution passed by Directors at a meeting of the Board held on 26 November 2007. Alan Rudd and Michael Wilson did not participate in this meeting due to their respective conflicts of interest as detailed in Section 4.2 of this Target's Statement.

SIGNED for and on behalf of Golden West Resources Limited by Dr John Daniels and Gary Hutchinson, being 2 directors of Golden West Resources Limited who are authorised to so sign pursuant to a resolution passed at a meeting of the directors of Golden West Resources Limited.

Dr John Daniels Gary Hutchinson Non-Executive Chairman Managing Director

Appendix A: ASX Announcements

APPENDIX A: List of ASX Announcements in Relation to Golden West since 30 June 2007

Date	Announcement
26/11/2007	Appendix 3B – Option Conversion
26/11/2007	FAS: Acceptances Continue for Off Market Bid of GWR
26/11/2007	Change in Substantial Holding from FAS
23/11/2007	Option Expiry Notice
23/11/2007	Change in Substantial Holding from FAS
23/11/2007	Appointment of Chairman
23/11/2007	Change in Substantial Holding from FAS
23/11/2007	FAS: Takeovers Panel Rebuts Golden West Application
23/11/2007	FAS: Fairstar Increases Acceptance in GWR
22/11/2007	Response to Letter Received by Shareholders
22/11/2007	Takeovers Panel – Golden West Resources Limited
21/11/2007	Appendix 3Y
21/11/2007	More GWR Shareholders Reject Fairstar Offer
21/11/2007	Appendix 3Y
20/11/2007	Reject Fairstar Offer
16/11/2007	FAS: Fairstar Voting Intentions at Golden West AGM
16/11/2007	Golden West Resources Ltd – Panel Receives Further Application
15/11/2007	GWR Reiterates Shareholders Reject FAS Offer
15/11/2007	FAS: Fairstar Reaffirms Takeover Bid
14/11/2007	FDY: FAS Takeover Bid for GWR
13/11/2007	FAS: Supplementary Bidder's Statement
13/11/2007	Program of Works Infringement
13/11/2007	Appendix 3B
13/11/2007	GWR Recommends Shareholders Reject Fairstar Offer
01/11/2007	Retirement of Dr John Daniels
01/11/2007	Notice of Change of Interests of Substantial Holder
01/11/2007	Becoming a Substantial Holder
31/10/2007	Quarterly Report for the Period Ended 30 September 2007
31/10/2007	Notice of Annual General Meeting and 2007 Annual Report
31/10/2007	Major Resource Upgrade for Wiluna West Iron Ore Project
31/10/2007	Trading Halt Request
31/10/2007 31/10/2007	Trading Halt FAS: Fairstar responds to GWR announcement
31/10/2007	FAS: Media Release from Takeovers Panel
30/10/2007	TOV: Golden West Resources Limited – Panel Receives Application
29/10/2007	Appendix 3B – Conversion of Options
29/10/2007	Significant Drill Intercepts at Wiluna West Iron Project
29/10/2007	GWR to Refer Fairstar's Bidder's Statement to Takeovers Panel
26/10/2007	FAS Supplementary Bidder's Statement
25/10/2007	FAS: Supplementary Bidder's Statement

Date	Announcement
25/10/2007	FAS Bid for GWR Deficient – Shareholders To Take No Action
18/10/2007	FAS: Correction of Phone Numbers
18/10/2007	FAS: Correction of Phone Numbers
18/10/2007	Company Response to FAS Bidder's Statement
17/10/2007	Becoming a Substantial Holder from FAS
15/10/2007	Bidder's Statement – Off-market Bid
15/10/2007	FAS: Announcement to FAS and GWR Shareholders
10/10/2007	Appendix 3B – Conversion of Options
05/10/2007	Ceasing to be a Substantial Holder
02/10/2007	Change of Directors' Interest Notices
02/10/2007	Appendix 3B – Pursuant tot Resolution of Members
28/09/2007	2007 Annual Report
28/09/2007	Amended Letter to Shareholders – Update
28/09/2007	Letter to Shareholders - Update
25/09/2007	Final Director's Interest Notice
25/09/2007	Retirement of Director
24/09/2007	Outcome of Shareholders' Meeting
21/09/2007	Appointment of Advisors
18/09/2007	General Meeting of Members – Deferment and Change of Venue
13/09/2007	Appendix 3B – Conversion of Options
07/09/2007	FAS: Clarification of Public Authority
06/09/2007	Letter to Shareholders – Fairstar Resources Limited Bid
04/09/2007	Response to Takeover Offer – Fairstar Resources Limited
04/09/2007	FAS: Intention to Make Takeover Bid
03/09//2007	Appendix 3B – Conversion of Options
31/08//2007	Letter to Shareholders
29/08/2007	GWR Company Presentation – Audio Stream
27/08/2007	Presentation
24/08/2007	GWR Launches New Website
21/08/2007	GWR Welcomes A\$750M Commitment to Iron Ore Needs of Mid West
13/08/2007	Esperance Iron Ore Export Option Extended
09/08/2007	Notice of General Meeting of Members, EM and Proxy Form
02/08/2007 31/07/2007	Appendix 3B – Conversion of Options Quarterly Report for the Period Ended 30 June 2007
23/07/2007	Corporate Brochure
11/07/2007	Notice of Change of Interests of Substantial Holder
06/07/2007	Appendix 3B

Appendix B: Independent Expert's Report

The Directors Golden West Resources Limited Suite 6, 136 Main Street OSBORNE PARK WA 6017

PricewaterhouseCoopers Securities Ltd ACN 003 311 617 ABN 54 003 311 617 Holder of Australian Financial Services Licence No 244572

QV1 250 St Georges Terrace PERTH WA 6000 GPO Box D198 PERTH WA 6840 DX 77 Perth Australia www.pwc.com/au Telephone +61 8 9238 3000 Facsimile +61 8 9238 3999

26 November 2007

Dear Sirs

Subject: Independent Expert's Report in relation to Offer by Fairstar Resources Limited

Introduction

• 1. On 4 September 2007, Fairstar Resources Limited ("Fairstar") announced its intention to make an off market takeover bid (the "Offer") for all of the ordinary shares in Golden West Resources Limited ("GWR"). The Offer of five fully paid ordinary shares in Fairstar for each share held in GWR was despatched to GWR shareholders on 13 November 2007.
• 1. The Offer is dependent on a number of conditions including Fairstar gaining a relevant interest in more than 50% of the GWR shares on issue at the completion of the Offer Period. The Offer may only be accepted in respect of all of the GWR shares held by a shareholder. Fairstar will apply for the new Fairstar shares issued to GWR shareholders who accept the Offer to be listed on the Australian Securities Exchange ("ASX").
• 1. The Offer does not extend to GWR's share options. GWR option holders who wish to participate in the Offer will need to exercise their options and then accept the Offer for the GWR shares issued.
• 1. Under Section 640(1) of the Corporations Act, a target's statement given in response to a Takeover Offer must include an independent expert's report if either the bidder's voting power in the target is 30% or more, or the bidder and target have one or more common directors. The independent expert's report is required to provide shareholders of the target company with an objective view as to whether the Offer is fair and reasonable and to provide them with sufficient information to make an informed decision as to whether or not to accept the Offer. As a common director exists between Fairstar and GWR, it is a requirement of Section 640 that an independent expert's report is provided in response to the Takeover Offer. The Directors of GWR not associated with Fairstar have requested PricewaterhouseCoopers Securities Ltd ("PwCS") to prepare this report for the purposes of Section 640.

Description of the Offer

• 1. Details of the Offer are contained in the Fairstar replacement Bidder's Statement dated 26 October 2007 and the supplementary Bidder's Statement dated 13 November 2007 (collectively "the Bidder's Statement"). The Offer is subject to a number of conditions up to the end of the Offer Period including:
• x Fairstar gaining a relevant interest in more than 50% of the GWR shares on issue at the completion of the Offer Period;
• x GWR and any of its subsidiaries not entering into any material transactions;
• x no material adverse change in relation to GWR;
• x the S&P/ASX 200 Index not closing below 5,900 for three or more consecutive trading days; and
• x the Gold Price Index not falling below 4,750.
• 1. The Bidder's Statement and the Target's Statement contain considerable information in respect of the Offer. We recommend that shareholders read these documents in full.
• 1. At the date of the Bidder's Statement, Fairstar held 364,506 GWR shares and had entered into pre-bid acceptances for 14,048,850 GWR shares. Since this time Fairstar has obtained pre-bid acceptance for a further 5,652,258 GWR shares, to take the total pre-bid acceptances of the Offer to 19,701,108. These entitlements represent 27.8% of the GWR issued shares at the date of this report. The pre-bid acceptances are subject to Fairstar securing an interest of more than 50% in GWR at the end of the Offer Period.
• 1. Our assessment of the Offer considers the position of GWR shareholders under two scenarios; firstly if Fairstar were to gain 50.1% of GWR shares and secondly, if Fairstar were to gain a 100% equity interest in GWR. It has been assumed in these scenarios that holders of GWR options which are "in the money" will not exercise their options in the event of Fairstar gaining a 50.1% interest in GWR shares, whereas we have assumed that all holders of GWR options which are deep "in the money" will exercise their options should Fairstar gain a 100% equity interest in GWR. GWR share options with an exercise price of \$2.00 or above are assumed not to be exercised in the event of Fairstar gaining full control of GWR; rather, these options are assumed to be subject to the compulsory acquisition process as outlined in the Bidder's Statement released by Fairstar¹ .

¹ Under the Corporations Act 2001, the compulsory acquisition process for the convertible securities not subject to the Offer effectively requires a cash consideration to be paid for the class of security at no less than the fair value (on a controlling interest basis) of that class of convertible security. We consider that the fair value of options with an exercise price of \$2.00 or above is significantly higher than the consideration which would be payable upon exercise of the share option and participation in the Offer and would require no cash outlay by the holders of these securities for exercise of the options.

• 1. The equity base of Fairstar following the Proposal and the assessment of the consideration to be received by GWR shareholders under the Offer using these scenarios should be regarded as illustrative as the number of Fairstar issued shares and the interest in GWR acquired may vary significantly depending upon the actions of option holders and the level of acceptance of the Offer.
• 1. Certain existing overseas shareholders will not be able to receive Fairstar shares as part of the offer consideration. If the Fairstar bid is successful, such shareholders will be remitted cash from the sale on the ASX of their notional Fairstar scrip entitlement as soon as reasonably practicable after the close of the Offer Period.

Summary of Opinion

1. We consider that the Fairstar Offer is neither fair nor reasonable. The reasons for our opinion are summarised below.

Fairness of the Offer

Value of GWR shares (refer section IV)

• 1. It is difficult to value GWR shares on a controlling interest basis with a high degree of precision. GWR's principal asset is an early stage iron ore exploration project which requires extensive drilling and future analysis of drilling results to ascertain the amount of economically recoverable resources. Further, the transport infrastructure necessary for commercial exploitation of the project has not yet been developed and there are a wide range of market views as to future iron ore prices. The market is currently placing high values on the prospect of future identification of resources within such projects. There are no directly comparable assets which can be used as a reliable benchmark for the market value of GWR's principal asset. Accordingly, our assessment of the market value of GWR has involved a high degree of professional judgement.
• 1. We have assessed the likely range of value of GWR's underlying assets by using a number of valuation approaches including:
• x discounted cash flow modelling using a probabilistic approach to key project parameters;
• x comparison with the implied market capitalisation of a number of listed prospective and emerging iron ore producers in Australia;
• x commissioning a technical review and assessment of GWR's exploration assets; and
• x analysis of recent trading in GWR shares.
• 1. These valuation bases provide a broad range of indicators for the value of GWR shares on a controlling interest basis as set out below. After taking into account these indicators, we

consider the current value of GWR shares is in the range of \$2.50 to \$3.35 per share with a midpoint value of \$2.92. This valuation includes a premium for control and reflects the value of GWR's exploration interests as well as its existing cash reserves. This valuation also incorporates the potential dilutive impact of existing share options.

1 – adjusted for control premium

2 – adjusted for relative attributes of respective projects and inclusive of control premium

• 1. We consider that a purchaser of a controlling interest in GWR would use DCF based modelling as a primary valuation approach. Accordingly, in assessing a likely range of values for GWR shares we have given most weighting to the probabilistic DCF modelling over the other indicators shown above.
• 1. Our assessed values of GWR's Wiluna West Iron Ore Project using probabilistic DCF modelling have been based on static cash flow models developed by GWR in conjunction with their mining consultants. These models reflect a range of market views for key assumptions such as commodity prices and exchange rates as well as a range of project specific assumptions including the potential for resource identification, the proportion of lump product, project development timing and varying transport options.
• 1. Our valuation of GWR shares reflects a broad range of values due to the underlying sensitivity to the resource base, commodity prices and foreign exchange rates. Potential purchasers of GWR may hold different views of the prospects of the underlying assets which may be more or less favourable than we have adopted. Our assessment of fair market value on a controlling interest basis also assumes that the owner of the assets has access to capital and other resources necessary to fully exploit the assets acquired.
• 1. The valuation range we have adopted is supported by indicative control premia applied to GWR share share prices prior to the announcement of the Offer as adjusted for the recent resource upgrade.
• 1. Coffey Mining Pty Ltd ("Coffey Mining") has been engaged to undertake a technical review and valuation assessment of GWR's mineral assets including the Wiluna West Iron Ore Project ("Wiluna West"). Coffey Mining has complied with the requirements of the Valmin

Code in its assessment of Wiluna West. Wiluna West comprises several extended areas of iron ore mineralisation along five adjacent ridges. GWR is undertaking an extensive drilling campaign to increase its resource base. GWR has recently increased its inferred iron ore resources (cut off grade of 50% Fe) from 50.1 million tonnes to 86.3 million tonnes upon analysis of early drill results. There is a further backlog of assay work from recent drilling which is not included in the resource base. GWR has a target of increasing the Wiluna West resource base to over 100 million tonnes (with cut off grade 50% Fe) by drilling work to be undertaken prior to the end of 2007 and to increase indicated resources to at least 50 million tonnes through infill drilling. The GWR drilling program has concentrated on higher priority targets within the mineralisation present. GWR's overall resource target for Wiluna West is 200 to 250 million tonnes.

• 1. Coffey Mining has assessed GWR's JORC1 compliant resources and exploration potential separately in its technical assessment and valuation. Coffey Mining has mainly applied benchmarks from a limited number of transactions for iron ore projects to assess the value of the JORC compliant resources. The value of iron ore projects is heavily influenced by ore body characteristics and transportation costs. There are no directly comparable recent transactions for early stage hematite iron ore projects in similar locations to Wiluna West which has limited the assessment made. The exploration potential has been assessed only by reference to a multiple of expenditure incurred.
• 1. Having regard to the limitations of a technical assessment of Wiluna West (due in part to the limited level of JORC compliant resources because of its early stage of evaluation) and the current strong interest in iron ore exploration projects, we consider that the market value of this project is considerably higher than the technical assessment undertaken by Coffey Mining. As evidenced by market prices of iron ore exploration companies, the market is currently placing considerable value on the potential for further resource identification. In our view, a potential purchaser of this project would make a similar allowance for additional resources (using a probability basis) and would also factor into its evaluation some optimisation of transport alternatives. Coffey Mining concurs with this view and has confirmed that its assessment has primarily been based on currently identified resources. Accordingly, we have adopted a market valuation range for GWR which mostly lies above the technical assessment undertaken.
• 1. Our analysis of other listed iron ore explorers at a similar phase of exploration or with comparable target sized direct shipping ore² projects has been limited by the lack of directly comparable projects. Many of the potential comparable companies have significantly more favourable locational factors (through their relative proximity to port or rail infrastructure) which are likely to result in significantly lower unit transport costs than for Wiluna West. Others have less advanced projects than GWR. Accordingly, we consider that the value of these companies (on a value per tonne of target resource) should be regarded as providing an indicative range for the value of GWR at its current stage of evaluation.

¹ Joint Ore Reserves Committee (JORC) Code for Reporting of Mineral Resources and Ore Reserves ² Hematite iron ore requiring no beneficiation, refer to appendices E and F.

Value of consideration offered (refer Section V)

• 1. Under the Offer, GWR shareholders will receive five Fairstar shares for each GWR share held. Based on the share prices prior to the announcement of the Offer, it appears that Fairstar is offering a premium for GWR shares (as the price of five Fairstar shares exceeded the GWR share price). However, the value of the consideration offered hinges on the Fairstar share price following conclusion of the Offer. Because of the overwhelming significance of GWR's assets to the enlarged Fairstar group, the value of the shares being offered in the enlarged Fairstar group will be materially influenced by the minority interest values of assets of the enlarged Fairstar group (including the impact of shares issued to meet potential costs associated with the Offer).
• 1. It is not possible to predict with confidence the prices at which shares in the enlarged Fairstar group will trade if the Offer is successful. The principal asset of Fairstar will be its interest in GWR. We do not consider that there is any compelling reason why the market value of Wiluna West will be more favourably rated within the enlarged Fairstar group than within GWR as a stand alone company. We have assessed the value of the enlarged Fairstar group shares being offered by reference to the combined market capitalisations of Fairstar and its relevant interest in GWR using weighted average share prices of each company.
• 1. A summary of this analysis for the mid point of our adopted traded range for Fairstar and GWR shares in the event of Fairstar acquiring 50.1% of GWR's shares is set out below. Full details of our analysis, both in the event of Fairstar acquiring 50.1% of GWR's shares and obtaining full control of GWR, is detailed in section IV of our report.

	Fairstar	Acquisition of 50.1% of GWR	Equity raised to meet cash outflows of the Offer1	Fairstar value (excl. costs and synergies)	Net transaction costs and synergy benefits	Enlarged Fairstar
Value (\$m)	57.1	84.6	15.0	156.7	(2.2)	154.5
No. Fairstar shares	103.78	183.95	31.07	318.80	-	318.80
Minority interest value per share (cents)	55.0	46.0	48.3	49.2	(0.7)	48.5

¹ Equity raising as per the Bidder's Statement net of expenses of the issue.

Market Capitalisation of Fairstar (50.1% of GWR acquired)

• 1. The apparent premium being offered by Fairstar will be significantly diluted due to the significant number of new Fairstar shares to be issued to GWR shareholders and for the proposed capital raising to meet costs associated with the Offer. The value of the Offer consideration does not vary materially if Fairstar acquires 50.1% of GWR shares or 100% of GWR. The value of the consideration does decrease with levels of acceptance above 50.1% until Fairstar reaches a position where full ownership can be obtained and potential synergy and taxation benefits realised. For example, the value of the implied consideration may be diluted to by up to 2 cents per share in the enlarged Fairstar group in the event that Fairstar acquires 89.9% of GWR shares¹ .
• 1. We have adopted a value of shares in the enlarged Fairstar group of 45 cents to 52 cents with a preferred value of 48.5 cents. This represents an assumed 50.1% acceptance by GWR shareholders. Using these values, our assessed value of the consideration offered falls in the range of \$2.25 to \$2.60 per GWR share with a mid point value of \$2.43. We consider that this valuation range is appropriate for the purposes of our fairness assessment irrespective of whether Fairstar were to acquire 50.1% or 100% of GWR.

¹ Assumes conversion of all GWR options excluding those with an exercise price of \$2.00 or above.

Comparison of value of GWR shares and consideration offered

28. Our assessed values for GWR shares and the consideration offered are summarised below.

	Low	Mid	High
Assessed value per GWR share (controlling interest basis)	\$2.50	\$2.92	\$3.35
Assessed value per enlarged Fairstar group share (minority interest basis)	\$0.45	\$0.485	\$0.52
Offer consideration (five shares in the enlarged Fairstar group on a minority interest basis)	\$2.25	\$2.43	\$2.60
Discount to controlling interest value	10%	16%	22%

1. If the Offer is successful and depending on the level of acceptance, the investment by Fairstar in GWR will comprise between 55% and 70% of the assets of the enlarged Fairstar group by market capitalisation. As such, the key factors which influence our range of values for GWR shares also impact in a similar manner the range of values for shares in the enlarged Fairstar group which comprise the consideration. Each point within our range of values for GWR shares on a controlling interest basis lies above the equivalent value of the consideration to be received by GWR shareholders. Accordingly, we do not consider the Offer to be fair.

Control premium

1. Our assessment of the fairness of the Offer under ASIC Regulatory Guides has required a comparison of the value of the consideration offered under the Offer with the value of all of the GWR shares being acquired by Fairstar on a controlling interest basis. We have concluded that the consideration offered does not exceed the value of GWR shares on a controlling interest basis. Accordingly, we believe that the consideration offered does not include a full control premium for the acquisition of the shares in GWR by Fairstar.

Reasonableness of the Offer

• 1. In assessing the reasonableness of the Offer, we have considered whether there are grounds for shareholders to accept the Offer despite our opinion that the Offer is not fair.
• 1. In making this assessment, we have compared the likely position of GWR shareholders in the event that the Offer was accepted with their position if the Offer was not accepted. The key factors which have influenced our opinion are set out below:
• x the offer consideration, if analysed as a merger, broadly equates to the price of GWR shares but potentially gives rise to a taxation liability for GWR shareholders who accept the Offer;
• x Fairstar does not have any producing assets to bring enhanced cash flow to GWR in the near term;
• x GWR shareholders who accept the Offer will dilute their interest in Wiluna West by between 30% and 42% (through their holding in the enlarged Fairstar group)
• x transaction costs will erode cash and lead to further dilution of equity interests in the underlying mineral assets;
• x the transaction potentially increases the influence of a shareholding group over Fairstar and Wiluna West which is not paying any premium for GWR shares;
• x we consider there are limited prospects of a market re-rating of GWR shareholders' interests as a consequence of accepting the Offer; and
• x there are potential adverse implications of remaining a minority shareholder in GWR if Fairstar acquires more than 50.1% of GWR.

The offer consideration, if analysed as a merger, broadly equates to the price of GWR shares but potentially gives rise to a taxation liability for GWR shareholders who accept the Offer

1. Our analysis suggests that, in the absence of changed economic or company specific factors, shares in the enlarged Fairstar group may trade at a slight discount to the volume weighted average prices of Fairstar shares at the date of this report due to the dilutive impact of the Offer on the enlarged Fairstar group.

2. 1. Our assessment of the consideration offered falls in the range of \$2.25 to \$2.60 (adopting a value for shares in the enlarged Fairstar group of 45 cents to 52 cents per share). This is based on an assumed purchase by Fairstar of a 50.1% interest in GWR shares and is marginally (5% to 6%) above the range of \$2.15 to \$2.45 at which GWR shares have recently traded. We note that the value of the consideration will dilute further if more than 50.1% of GWR shares are acquired up to the point where Fairstar is able to and effects compulsory acquisition of a 100% interest in GWR. As such, we consider that GWR shareholders are being offered little more than the current share prices for each share held.
3. 1. No single shareholder will hold greater than 50% of Fairstar as a consequence of the Offer and if the Offer is successful, GWR shareholders will collectively hold most of Fairstar's shares. If the transaction were to be regarded as a merger, it is appropriate that the consideration offered represents an equal sharing of the benefits that such a merger may bring. However, the benefits of the proposal are largely mitigated by transaction costs of the Offer. Further, there will be tax consequences for GWR shareholders from the Offer which will vary between individual shareholders and will also be influenced by the aggregate level of acceptance by GWR shareholders. If rollover relief is not available to shareholders with taxable gains arising from the Offer, then acceptance of the Offer is likely to result in a taxation liability for GWR shareholders.

Fairstar does not have any producing assets to bring enhanced cash flow to GWR in the near term

1. Neither GWR nor Fairstar have projects which are yet in production and both are subject to financial constraints which limit their ability to develop the enlarged group's asset base without significant potential for dilution of the interests of existing shareholders. Fairstar is a junior mineral exploration company with a number of early phase exploration projects. The value of Fairstar is dependent upon successful future resource identification and development of one or more of its mineral interests. The potential capital costs of Fairstar's projects are likely to be significantly lower than for GWR's principal asset, however none of Fairstar's projects are as advanced as Wiluna West and all will require further expenditure to advance the projects.

GWR shareholders who accept the Offer will dilute their interest in Wiluna West by between 27% and 42% (through their holding in the enlarged Fairstar group)

1. Wiluna West is a significant exploration project which is progressing to feasibility analysis. Wiluna West is a much more significant and advanced project than the projects held by Fairstar. If the Offer is accepted for 50.1% of GWR shares, the shareholders who accept the Offer will collectively give up an effective interest of 21% (25% fully diluted for Fairstar options) in GWR's underlying assets (principally Wiluna West) in exchange for an interest in Fairstar's underlying assets (principally early stage exploration projects) of 58%. If the Offer is accepted for all GWR shares, those shareholders who accept the Offer will collectively

give up an effective interest of 27% in GWR's underlying assets in exchange for an interest of 73% in Fairstar's underlying assets.

• 1. Fairstar has 49.7 million options on issue. The exercise of these options will further dilute the interests of accepting GWR shareholders in the enlarged Fairstar group.
• 1. There is currently extensive interest in prospective iron ore projects from overseas steel producers, commodity trading organisations and other investors. This interest arises from a supply / demand imbalance for iron ore. GWR has had preliminary approaches from a number of offshore steel producers and also from other iron ore companies with tenement holdings in the Mid West region of Western Australia expressing potential interest in future commercial arrangements. The GWR Board has considered a more optimal shareholder outcome will eventuate by progressing towards GWR's resource targets prior to advancing these discussions beyond a preliminary stage. Further, the non-iron ore interests of an enlarged Fairstar group may reduce the attractiveness of Fairstar to a potential third party compared with GWR.
• 1. There are rationalisation proposals currently under consideration for iron ore holdings within the Mid West region as companies holding key iron ore deposits attempt to optimise development timeframes for ore deposits within the region and resolve transport and shipping infrastructure development requirements.

Transaction costs will erode cash and lead to further dilution of equity interests in the underlying mineral assets

• 1. Fairstar estimates that transaction costs of \$5.2 million will be incurred if the Offer is accepted for 50.1% of GWR shares and up to \$22.1 million if a 100% interest is obtained. The upper estimate includes an allowance for \$13.0 million of potential stamp duty arising from the transaction. Whilst Fairstar has stated that it has received legal advice indicating that payment of this duty is not inevitable if full control is obtained, we believe that stamp duty in the order of this magnitude will be payable if Fairstar acquires 90% or more of GWR, as GWR's principal assets comprise direct interests in mining and exploration leases which are dutiable under the relevant Western Australian legislation. Accordingly, we have included an allowance for stamp duty costs in our assessment of transaction costs associated with full control of GWR. Fairstar has indicated that it intends to satisfy a significant portion of these costs through the issue of further shares.
• 1. Fairstar intends to compulsorily acquire GWR shares and options (or enter into alternative arrangements for the acquisition of remaining options) in the event of obtaining more than a 90% interest in GWR. Under the Corporations Act, the consideration for compulsory acquisition of securities must be in the form of cash. Fairstar has estimated that the fair value of options which have exercise prices of \$2.00 and \$3.00 per share is \$21.5 million. We consider that the fair value of these options on a controlling interest basis under a compulsory acquisition is more likely to be over \$40 million.
• 1. Transaction costs outlined above will involve a significant cash outlay by Fairstar in the event of obtaining full control of GWR. The level of costs is considerably above the cash on hand in the combined entity. In the event that 50.1% of GWR shares are acquired, Fairstar intends to issue 31.1 million shares to satisfy transaction costs and raise cash of \$9.8 million net of expenses. In the event of a 100% acquisition, Fairstar intends to issue 70.8 million shares to raise \$33.9 million to partly meet the cash outlay required. Fairstar has entered into an underwriting agreement for the cash component of this proposed equity issue at an issue price of the lower of 50 cents and 80% of the share price at issue. An underwriting fee of 6% will apply to the placement. It is likely that this raising will be dilutive to shareholders in the enlarged Fairstar group.
• 1. Conversely, Fairstar will benefit to the extent that the tax cost base of the underlying assets of GWR is able to be uplifted in the event of a full acquisition of GWR. These benefits will only be realised progressively in the event of commercial development of the underlying assets, however we consider that the value of the benefits arising from the tax uplift will largely offset, and may exceed, the transaction costs which are included in the above estimate.
• 1. Similarly, whilst the potential for operational synergies is relatively limited in the event of Fairstar only obtaining control of 50.1% of GWR and such benefits may only be progressively realised, the value of these benefits will partially offset the transaction costs incurred in obtaining a 50.1% interest in GWR.

The transaction potentially increases the influence of a shareholding group over Fairstar and Wiluna West

• 1. If the Offer is successful, Fairstar will obtain control of GWR including control over operating decisions for Wiluna West. We do not consider that an appropriate control premium is being paid. Whilst GWR shareholders in aggregate will hold between 58% and 73% of the enlarged Fairstar group, we note that Mr John Doutch and related parties of Mr John Doutch hold significant interests in both Fairstar and GWR. There is some uncertainty over the exact number of shares and options in Fairstar and GWR which Mr John Doutch and related parties hold due to the lack of recent substantial shareholder notices for these holdings and clarification as to which parties holding shares in both Fairstar and GWR are deemed to be related to him.
• 1. We note that Mr John Doutch and some associates of Mr John Doutch are party to pre-bid acceptances in relation to the Offer. In the event that Fairstar was to acquire only 50.1% of GWR, it is likely that Mr John Doutch and related parties will increase their relative shareholding interests in Fairstar. Whilst it is unlikely that any individual shareholder will hold more than 50% of the enlarged Fairstar group immediately following the transaction, we consider that Mr John Doutch will be in an increased position to influence Fairstar and its controlling interest over GWR relative to his current holding in GWR.

There are limited prospects of a market re-rating of GWR shareholders' interests as a consequence of accepting the Offer

• 1. If the Offer is successful, the shareholders of GWR will dilute their effective interests in the assets of GWR and receive an equity interest in Fairstar and its more diverse asset base. Fairstar has interests in exploration projects for several commodities including gold, uranium and oil which are at a less advanced stage of development than Wiluna West.
• 1. We do not consider that Fairstar has greater financial capacity than GWR or significantly enhanced depth in its management structure. Whilst the expanded Fairstar group may have a greater market capitalisation than GWR if Fairstar obtains around 60% or more of GWR, the increase in market capitalisation is not significant in relation to the potential impact arising from key advancements in GWR's Wiluna West project.
• 1. There is no assurance that the Offer will provide significantly greater trading depth and liquidity to GWR shareholders through their shareholdings in the enlarged Fairstar group relative to GWR's shares. Further, if Fairstar acquires more than 50% of GWR shares, but not full ownership of GWR, there is some prospect that the market may regard the interest in Wiluna West held by Fairstar through its shareholding in GWR less favourably than the interest in Wiluna West held by GWR.

There are potential adverse implications of remaining a minority interest shareholder in GWR if Fairstar acquires more than 50.1%

• 1. Fairstar has obtained conditional acceptances for 26.8% of the issued share capital of GWR. GWR has also advised that it has received confirmation from shareholders which in aggregate hold 27.8% of GWR's issued shares that they do not intend to accept the Offer in its current form.
• 1. If Fairstar is successful in obtaining an interest of greater than 50% but less than 90% of GWR shares, shareholders who do not accept the Offer will remain as minority shareholders in GWR. The reduced free float of GWR shares has the potential to reduce the liquidity of GWR shares.
• 1. The Fairstar Bidder's Statement indicates that Fairstar will consider delisting GWR shares in the event that the spread of GWR shareholders holding less than marketable shares falls below ASX guidelines. If this were to occur, the marketability of shares in GWR would be significantly reduced.

Other Factors

• 1. If the Offer is not accepted by more than 50% of GWR shareholders:
• x GWR shareholders will retain their GWR shares and will not receive five shares in Fairstar for each GWR share held;
• x the principal activity of GWR will remain that of iron ore exploration and development of the Wiluna West Iron Ore Project; and
• x GWR shareholders will continue to have full exposure to the risks and rewards of an equity interest in GWR and its underlying assets.
• 1. There remain significant exploration and development risks associated with Wiluna West. However, this project is significantly more advanced than the early stage exploration projects held by Fairstar and the prospects remain favourable for strong market interest in potentially viable iron ore projects. We do not consider that the prices at which GWR shares have traded since announcement of the Offer have been significantly influenced by the Offer. Whilst we are unable to predict with certainty how GWR shares may trade in the absence of the Offer, we see no reason why they should not continue to trade in the range that they have over the past three months as adjusted for the upgraded resource at Wiluna West.
• 1. The Directors of GWR have advised us that they have received no alternative takeover offers for GWR and are not aware of any potential alternative takeover offer. However, the Directors of GWR have received a number of preliminary approaches from third parties in relation to development opportunities for Wiluna West. Whilst the Directors of GWR have considered the approaches which have been made, they believe that a more favourable outcome for GWR shareholders is likely through GWR continuing to expand its resource base to a level where it can be demonstrated that larger mining operations can be sustained prior to advancing negotiations with a potential project partner or alternative arrangement.
• 1. In summary, we consider that the Offer consideration broadly equates to the traded price of GWR shares. The principal asset of the enlarged Fairstar group will be its investment in GWR and the success or otherwise of the enlarged Fairstar group will be linked to Wiluna West. There are risks associated with a single project and commodity focus on iron ore. However, we consider that the exposure of GWR shareholders to this risk is offset by the higher direct interest held by GWR in this project particularly given the current market interest in iron ore projects. The remaining projects of both Fairstar and GWR are early stage exploration projects which are dependent upon successful future exploration activities.

• We do not consider that the prospects for GWR shareholders as minority shareholders in an enlarged Fairstar group are likely to be significantly enhanced relative to their existing interests in GWR and exposure to Wiluna West. There is no compelling evidence to suggest that the enlarged Fairstar group will provide GWR shareholders with greater liquidity and depth of share trading, a more favourable market rating, or an enhanced capacity to raise capital or better manage the GWR assets. Accordingly, we do not consider the Offer to be reasonable.

Summary

1. For the reasons set out above, in our opinion, the Offer is neither fair nor reasonable to the shareholders of GWR. In the event that significantly greater than 50% (but less than 90%) of GWR shareholders accept the Offer, those shareholders which have not then accepted the Offer should consider the potentially adverse consequences of remaining a minority interest shareholder in GWR and consider accepting the Offer notwithstanding our views.

Other Considerations

• 1. If GWR shareholders accept the Offer and dispose of their GWR shares, depending on their circumstances they may incur a capital gains tax liability. This will depend on the tax treatment of the individual shareholder's securities as investment or trading, the tax cost base of the GWR shares held and whether capital gains tax rollover relief is available. Australian tax legislation provides for rollover relief where the bidder successfully acquires 80% or more of the target company such that no capital gains tax will be payable on any capital gain. Shareholders should consult their tax advisers in relation to their personal circumstances.
• 1. An individual shareholder's decision in relation to the Offer may be influenced by his or her particular circumstances. We have considered the Offer from the perspective of GWR shareholders as a whole. We have not considered the effect of the Offer on individual shareholders nor have we considered their individual objectives, financial situation or needs. Due to their particular circumstances, individual shareholders may place different emphasis on various aspects of the Offer from the views expressed in this report. Accordingly, individuals may reach different conclusions as to whether the Offer is fair and reasonable.
• 1. The full analysis and reasoning for our opinion is set out in the attached report. The mineral exploration assets of GWR have been subject to technical review and assessment by Coffey Mining and its report is attached as Appendix H.

Structure of Report

• 1. The balance of this report is set out in the following sections.
• I Basis of Evaluation
• II Analysis of GWR
• III Analysis of Fairstar
• IV Value of GWR Shares
• V Value of Consideration Offered
• VI Premium for Control

Appendices

• A Declarations and Disclosures
• B Sources of Information
• C Financial Services Guide
• D Determination of Discount Rates
• E Iron Ore Overview
• F Discounted Cash Flow Base Case Scenario
• G Comparable Companies
• H Coffey Mining Technical Expert's Report

Yours faithfully

Roger Port Authorised Representative

I BASIS OF EVALUATION

Purpose of our Report

• 1. Fairstar is making an off market takeover bid for all of the ordinary shares in GWR. The Offer was despatched to GWR shareholders on 13 November 2007.
• 1. As Mr Alan Rudd is a Director of both Fairstar and GWR, pursuant to Section 640 of the Corporations Act, an independent expert's report is required to be included in the Target Statement given in response to the Takeover Offer. The Directors of GWR not associated with Fairstar have requested PwCS to prepare this report for the purposes of Section 640. This report sets out whether in our opinion the Fairstar takeover offer is fair and reasonable.
• 1. This report is to be included in the Target's Statement to be sent to shareholders and has been prepared for the exclusive purpose of assisting the GWR shareholders and the Directors in their consideration of the Takeover Offer. This report cannot and should not be relied upon for any other purpose.

Overview of the Principles Adopted for the Evaluation

• 1. In our assessment of whether the Offer is fair and reasonable, we have considered the Regulatory Guides issued by the Australian Securities and Investments Commission, in particular, Regulatory Guide 111 "Content of expert reports" and Regulatory Guide 112 "Independence of experts".
• 1. Under Regulatory Guide 111, an offer is "fair" if the value of the Offer is equal to or greater than the value of the securities which are the subject of the Offer. This comparison must be made assuming 100% ownership and therefore control of the target company.
• 1. Under Regulatory Guide 111, an offer is "reasonable" if it is fair. It may also be reasonable if, despite not being fair but after considering other significant factors, shareholders should accept the Offer in the absence of any higher takeover offer or alternative proposal before the close of the Offer.
• 1. In undertaking our assessment, we have considered the likely impact of the Offer on GWR shareholders as a whole. We have not considered how the Offer may affect individual shareholders. Individual shareholders have different financial and tax circumstances and it is not practicable or possible to consider the implications of the Offer on individuals as their respective financial circumstances are not known to us. This report therefore contains only general financial product advice and shareholders may wish to obtain personal financial product advice in considering the Offer. We note that specific rules apply to shareholders who do not have registered addresses in Australia which may limit the ability of those shareholders to retain the Fairstar shares offered. Individual shareholders should ensure

that they are familiar with the provisions of the Offer set out in the Bidder's Statement and seek their own professional advice.

Basis of Evaluation of GWR

• 1. We have valued GWR shares on the basis of the fair market value of GWR as a whole, being the price which an independent party would be likely to be prepared to pay to acquire all of the company's issued ordinary shares. Fair market value is defined as the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arms length within a reasonable time frame.
• 1. In forming our opinion as to whether the Offer is fair and reasonable, we have had regard to:
• x discounted cash flow modelling using a probabilistic approach to key project parameters;
• x comparison with the implied market capitalisation of a number of listed prospective and emerging iron ore producers in Australia;
• x commissioning a technical review and assessment of GWR's exploration assets; and
• x analysis of recent trading in GWR shares.
• 1. The valuation bases were used to form a view as to the amount which an alternative acquirer might be willing to offer if all the issued shares of GWR were available for purchase or alternatively the amount that would be distributed to GWR shareholders on an orderly realisation of assets.
• 1. We have also considered the prices at which GWR shares have been trading on the ASX. In considering these prices, we have considered the liquidity of the shares and whether the share price is an appropriate reflection of underlying share values.
• 1. In assessing whether the Offer is fair, we have compared the value of the Fairstar shares being offered as consideration with our assessed value of the GWR shares (including a control premium). If the value of the consideration is equal to or greater than the value of GWR shares, the transaction will be fair.
• 1. In assessing reasonableness of the Offer, we have considered a number of factors including:
• x the terms of the Offer;
• x whether GWR's shareholders are likely to be better off after the transaction;
• x whether the Offer is the best alternative available, including the likelihood of an alternative bid or proposal; and
• x other potential implications for shareholders of rejecting the Fairstar Offer.

Reliance on Technical Expert

• 1. Coffey Mining has been engaged to provide a Technical Expert's Report for use and reliance by us in the preparation of our independent expert's report. The Coffey Mining report has been prepared to the standards of contemporary Australian independent expert valuation reports, and specifically to the standards required under the Valmin Code.
• 1. We are satisfied that:
• x Coffey Mining has appropriate qualifications, industry experience and competence to conduct its assessments;
• x Coffey Mining is independent of GWR and Fairstar;
• x the methodologies used in its valuations are consistent with generally accepted industry practice; and
• x the Coffey Mining report contains sufficient information to support the conclusions drawn.
• 1. The Coffey Mining report is attached at Appendix H to our report and should be read in conjunction with our report.

Basis of Evaluation of Consideration Offered by Fairstar

• 1. It has been necessary for us to assess the value of Fairstar shares in order to compare the value of the consideration under the Offer with the valuation of GWR shares. The aggregate consideration offered by Fairstar for all of the shares in GWR (which Fairstar does not already own), assuming exercise of all deep in the money options for GWR shares exceeds four times the current issued share capital of Fairstar. Because of the overwhelming significance of the GWR assets to the value of the Fairstar shares to be received as consideration, we have based our evaluation on an assessment of the likely value of shares in the enlarged Fairstar group.
• 1. GWR shareholders who accept the Fairstar offer will become minority holders in Fairstar. Accordingly, our valuation of Fairstar shares is on a minority interest basis. This compares with the valuation of GWR on a controlling interest basis as described above to reflect that Fairstar is seeking to obtain control of GWR.
• 1. In addition, it should be noted that whilst our assessment of GWR shares was made with access to GWR management and data, our assessment of Fairstar shares was carried out using publicly available information only.

Sources of Information

• 1. In preparing this report, we have relied upon the information on GWR and Fairstar set out in Appendix B and representations made by GWR's management. Financial information set out in this report for the years ended 30 June 2006 and 2007 is based on the audited financial statements of GWR and Fairstar. We have conducted checks, enquiries and analyses of the information provided to us by GWR which we regard as appropriate for the purposes of this report. Based on these procedures, we believe that the GWR information used as the basis for forming the opinions in this report is accurate, complete and not misleading and we have no reason to believe that material information relevant to our report has been withheld by GWR. We have relied upon publicly available information only in relation to Fairstar.
• 1. The information provided to us includes GWR's operating budget for the year ending 30 June 2008 and other strategic cash flow models prepared by management. GWR's key projects and identified resources have not yet progressed to a detailed mine planning stage. Accordingly, the cash flow models and forward looking information are conceptual in nature. The strategic model for Wiluna West has had extensive input from GWR's mining consultants and transport infrastructure consultants and reflects indicative project cash flows under a range of project scenarios. We have revewied these cash flow models and forward looking information to understand the range of potential outcomes for GWR's principal asset.
• 1. The achievement of the prospective financial information prepared by management or the cash flow projections and assumptions that we have adopted for the purposes of this assessment is not warranted or guaranteed by us. This information is based on an assessed range of possible future events and circumstances, many of which are outside the control of management, and is therefore inherently uncertain. Actual results and outcomes may differ materially from forward looking information.
• 1. Our assessment has been made at the date of our report. Economic conditions, market factors and performance changes may result in the report becoming outdated. We reserve the right to review our assessments and, if we consider it necessary, to issue an addendum to our report, in the light of any relevant material information which subsequently becomes known to us prior to the close of the Offer Period.

Limitation of Scope

1. Whilst our engagement has involved an analysis of financial information and accounting records, it does not constitute an audit in accordance with Australian Auditing Standards of GWR, Fairstar or of any data compiled by GWR and accordingly, no such assurance is provided in this report.

II ANALYSIS OF GWR

Profile of GWR

• 1. GWR was incorporated in 2002 and its shares were listed on the ASX in 2004. The Company was listed as a gold and iron ore exploration company with three main projects located in the Eastern Goldfields of Western Australia but with a primary focus on gold exploration. Whilst GWR still holds these early stage gold interests, its primary focus is on development of high grade hematite iron ore mineralisation co-located with one of these gold projects at Wiluna West in the Mid West region of Western Australia. GWR had a market capitalisation of approximately \$214.7 million¹ at 23 November 2007.
• 1. The principal focus of GWR since 2005 has been to progress the Wiluna West project towards commercial development of iron ore mineralisation. The first phase of drilling of iron ore targets was undertaken by GWR in June 2005. Since then the company has commenced quantifying the extent of mineralisation, undertaking test work on the ore quality and evaluating transport options for the project.
• 1. GWR has identified five mineralised ridges which are prospective for iron ore with a combined strike length of 125 kilometres. Significant drilling programs have been underway since 2006 to further define the extent of mineralisation on high priority targets within these ridges. An initial inferred mineral resource of 50.1 million tonnes of direct shipping grade hematite ore within four deposits grading an average of 61% Fe was announced in April 2007. This was upgraded to an interim mineral resource estimate of 86.3 million tonnes at 60.1% Fe on 31 October 2007. The ore characteristics reflect a low phosphorous content which increases the attractiveness of the ore for blending purposes² . GWR has a 100% interest in most of the project area which includes all of the priority targets. GWR is earning a 60% joint venture interest from Jindalee Resources Limited in a small part of the project area covering the southern extension of one of the mineralisation units.
• 1. Wiluna West is characterised by deep plunging sheared ore bodies along each of the ridges. This will limit the amount of mineralisation which may be able to be economically recovered as a consequence of the increased volumes of waste removal for deeper ore. Exploration work has mostly concentrated on areas within two of the ridges. Mineralisation is in narrow widths in the areas of ridge B which have been subject to exploratory drilling which may lead to grade dilution impacts in the event of mining, but are notably wider in the target areas on ridge C where most work is currently focussed.

L:\Advisory\Restricted\Transaction Services\Due Diligence\Golden West Resources\Report\GWR IER DRAFT REPORT - 26 Nov 07.doc

¹ Based upon the weighted average share price over the previous 30 days and inclusive of the intrinsic value of listed and unlisted share options. ² Many Australian iron ore deposits are characterised by a phosphorous content above the optimal ore

specifications of most producers. Blending low phosphorous content ore with higher phosphorous content ore allows producers of high phosphate ore to bring the average product specification within an acceptable range without a selling price penalty.

• 1. GWR is proceeding with its exploration program on the priority deposits with the near term goal of defining a resource of 100 to 150 million tonnes. Only 30% of the northern (exposed outcropping) sections of two of the five ridges have been explored in detail to date. There is potential for a further uplift in the iron ore resource base from areas away from the initial high priority deposits identified for an initial mining feasibility study.
• 1. GWR has commenced a scoping study for the production and sale of iron ore from Wiluna West. GWR has commissioned infrastructure consultants to study and evaluate the options available to GWR for transport of ore to the proposed port of Oakajee north of Geraldton (a distance of 645 kilometres by linking 235 kilometres of rail to the planned railway infrastructure from Weld Range to Oakajee) and to the Port of Esperance (a distance of 932 kilometres through 259 kilometres of railway construction to Meekathara or Leonora and transport along existing railway infrastructure to Esperance).
• 1. Over the next six months GWR plans to commence a bulk sampling mining program aimed at demonstrating the quality of the Company's deposits and providing an increased understanding of attributes of the resource. The following key project targets have been set by GWR management in relation to Wiluna West:
• x June 2008 definition of an iron ore reserve of 100 million tonnes through a diamond drilling program and associated scoping studies
• x December 2008 completion of a feasibility study on the project
• x December 2008 finalisation of the transport infrastructure decision between the Oakajee and Esperance alternatives
• x January 2009 design of site infrastructure
• x March 2009 environmental approval

Financial Performance

1. GWR does not have any mining assets in production and is focussed on the development of Wiluna West. We have set out below a summary of the financial performance of GWR for the two years ended 30 June 2007.

	Audited FY06 \$million	Audited FY07 \$million
Total revenue	0.1	0.2
General overheads and administration costs	(0.8)	(2.1)
Exploration expenditure written off	(1.5)	(0.1)
EBITDA	(2.2)	(2.0)
Depreciation and amortisation	(0.1)	(0.2)
EBIT	(2.3)	(2.2)
Share based payments	-	(18.6)
Operating loss before income tax	(2.3)	(20.8)
Income tax	-	-
Operating loss after income tax	(2.3)	(20.8)

Source: GWR Company Reports

• 1. Exploration and evaluation expenditure is capitalised unless it is not expected to be recouped through successful development or sale of the relevant area of interest or where exploration activities in an area of interest are not continuing. Accordingly, GWR's financial performance is predominantly influenced by general overheads and administration costs not associated with exploration and by the write off of exploration expenditure.
• 1. At a general meeting of shareholders held on 15 March 2007 the shareholders of GWR resolved to approve the issue of 7.0 million \$2.00 options and 7.0 million \$3.00 options to various directors, employees, consultants and associated parties of GWR. The significant operating loss of GWR during FY07 was primarily attributable to a value of \$18.6 million being placed on the options issued.
• 1. The increase in GWR's overheads and administration costs during 2007 is mostly attributable to additional employees and reflects an accelerated exploration program on the Wiluna West project. Employee and contractor numbers have increased from approximately 12 to 30 people over the past year.

Cash Flows

1. GWR's cash flows for the two years ended 30 June 2007 and the quarter ended 30 September 2007 are summarised below.

	Audited	Audited	Unaudited
	FY06	FY07	1Q08
	\$million	\$million	\$million
Net cash outflows from operating activities
Payments to suppliers and employees	(1.0)	(1.7)	(0.8)
Sundry other	-	-	0.3
	(1.0)	(1.7)	(0.5)
Cash flows from investing activities
Payments for exploration expenditure	(1.3)	(8.0)	(3.3)
Net payment for plant and equipment	(0.3)	(0.8)	(0.1)
	(1.6)	(8.8)	(3.4)
Cash flows provided by financing activities
Net proceeds from issue of shares and options	3.0	16.4	0.4
Net increase/(decrease) in cash	0.4	5.9	(3.5)
Cash at beginning of financial period	1.0	1.4	7.3
Cash at end of financial period	1.4	7.3	3.8

Source: GWR Company Reports, Appendix 5B for quarter ended 30 September 2007

• 1. GWR raised \$16.4 million from the issue of shares and options during FY07 to fund exploration and evaluation programs on the Wiluna West project. Significant drilling programs and evaluation activity have continued since 30 June 2007. At 30 September 2007 GWR has expended a further \$4.1 million on exploration and administrative costs and its cash balance had reduced to \$3.8 million.
• 1. There are 15.2 million GWR options exercisable at 20 cents which expire in December 2007. The exercise of these options will raise approximately \$3.04 million. GWR is increasing activity to develop Wiluna West and estimates that costs in the order of \$50 million will be incurred up to December 2008 in completing a feasibility study on Wiluna West. GWR has sought shareholder approval for the issue of up to 14.48 million shares at an issue price at least 80% of the five day average market price of GWR shares (to raise approximately \$25 million). GWR has proposed that the shares be issued within three months of obtaining shareholder approval.

Financial Position

1. We have set out below the financial position of GWR at 30 June 2006 and 2007.

	Audited	Audited
	June 2006	June 2007
	\$ million	\$ million
Current Assets
Cash and cash equivalents	1.5	7.3
Trade and other current assets	0.1	0.5
	1.6	7.8
Non Current Assets
Plant and equipment	0.3	0.9
Mineral exploration and evaluation expenditure	3.3	11.3
	3.6	12.2
Total Assets	5.2	20.0
Liabilities
Trade and other payables	0.1	0.7
Current and non-current provisions	0.1	0.3
	0.2	1.0
Net Assets	5.0	19.0
Equity
Contributed equity	7.9	24.1
Reserves	0.1	18.8
Accumulated losses	(3.0)	(23.9)
Total Equity	5.0	19.0

Source: GWR Company Reports

1. Mineral exploration and evaluation expenditures have increased since 30 June 2006 due to the active drilling and evaluation campaign undertaken on Wiluna West.

Capital Structure

• 1. GWR had 73.44 million ordinary shares and 41.74 million options on issue at the date of this report. GWR also has an obligation to issue a further 5.0 million shares in the event that it delineates an indicated resource of 10 million tonnes of iron ore at Wiluna West as deferred consideration for the acquisition of mineral interests including Wiluna West. The 20 largest shareholders hold approximately 33.7 million shares, or 46.1% of the issued ordinary shares of GWR.
• 1. The unlisted options are held by GWR directors, consultants and related parties. The expiry dates and exercise prices of each series of options on issue are detailed in the table below.

Expiry Date	Exercise Price	Number of Options	Type of Option
31/12/2007	\$0.20	15,214,802	Listed
30/06/2008	0.25	1,250,000	Unlisted
30/06/2008	0.30	1,250,000	Unlisted
30/06/2008	0.40	1,250,000	Unlisted
31/12/2010	2.00	14,274,990	Unlisted
31/12/2011	3.00	8,500,000	Unlisted
		41,739,792

Source: GWR Appendix 3B

• 1. A company associated with Mr John Doutch and other parties (Lingchip Pty Ltd) vended tenements (including Wiluna West) to GWR in exchange for GWR shares prior to listing on the ASX. Lingchip holds 14.1 million GWR shares as trustee on behalf of 29 parties. Whilst ownership of the shareholdings remained with the beneficiaries, up until 14 September 2007 Lingchip had exercised the voting rights attached to the shares as a single voting block. Since then, Lingchip has advised that each of the beneficiaries instructs Lingchip how to exercise their voting entitlement. As such Lingchip has advised that it no longer has the principal relevant interest in these shares.
• 1. William Francke, Dominic Casella and Phillip Francke (beneficiaries of GWR shares held by Lingchip) have since jointly lodged a substantial shareholder notice in September 2007 indicating that they together hold 6.85 million ordinary shares, a 9.4% interest in GWR. These shareholders have irrevocably rejected the Offer.
• 1. Mr John Doutch and a number of other beneficiaries of shares held by Lingchip have entered into pre-bid acceptances with Fairstar for their GWR shares. We understand that these interests comprise the majority of the 19.1% of GWR shares subject to pre-bid acceptances. No substantial shareholder notice has been lodged by Mr John Doutch subsequent to 14 September 2007.
• 1. Falak Holding LLC advised that in July 2007 it became a substantial shareholder in GWR, controlling 7.5 million ordinary shares (10.48% of GWR's issued shares). GWR has advised that this company is associated with an independent investor from Dubai. This shareholder has irrevocably rejected the Offer.

Observed Trading in GWR's Shares

1. GWR's daily share prices and trading volumes since January 2005 are presented below.

1. The GWR share price has been relatively volatile over the period from May 2006. We have summarised below the key events which coincided with key movements in GWR's share price.

Ref	Period		Brief description of event affecting share price
1	November 2005 to May 2006	¾	GWR shares remained within the range of 50 cents to \$1.00 between November 2005 and the announcement in April 2006 of an inferred iron ore resource of approximately 50Mt at Wiluna West.
2	May 2006 to November 2006	¾	Progressive announcements of favourable drill results and an exploration target for resource identification at Wiluna West of between 160Mt and 220Mt.
		¾	Share trades also reflected favourable announcements regarding prospective development of rail infrastructure in the Mid West region.
3	January 2007	¾	The high point of GWR's share price (\$3.20) came in December 2007 at the time of positive drill results and project announcements regarding Wiluna West. There were also takeover rumours during this period which identified Fairstar as a possible suitor for GWR. Representatives from Chinese steel mills were also being briefed as to company developments during this period.
4	February 2007 to August 2007	¾	The GWR share price has traded in the range of \$1.75 to \$2.50 pending the results of GWR's drilling program and increased definition around the potential scale of Wiluna West.
5	August 2007	¾	GWR shares fell to \$1.50 on 17 August 2007 as the S&P200 fell to its lowest price since March 2007 due to concerns over the potential impact of US credit issues. In line with the market the GWR share price recovered in subsequent days.
6	September 2007	¾	Announcement of the Fairstar Offer occurred on 4 September 2007 resulting in an increased level of trading.
7	October 2007	¾	Announcement of a 72% increase to GWR's Interim Inferred Mineral Resource, from 50.1Mt to 86.3Mt at an average grade of 61% Fe.

1. The GWR volume weighted average share price ("VWAP") prior to and following the announcement of the Offer on 4 September 2007 is set out below. GWR's share price as at 23 November 2007 was \$2.25.

Period	High	Low	VWAP	Cumulative volume traded	% of issued capital4
	\$	\$	\$
1 month prior to 4 September 2007	2.12	1.70	1.89	1,378,401	2.0%
3 months prior to 4 September 2007	2.55	1.70	2.17	7,937,754	11.8%
6 months prior to 4 September 2007	2.56	1.55	2.12	15,882,577	23.6%
Between announcement the Offer on 4 September 2007 and 26 October 2007	2.60	2.03	2.23	5,247,881	7.3%
Since 29 October 2007 announcement of resource upgrade at Wiluna West to 23 November 2007	2.74	2.11	2.39	3,290,192	4.5%

Source: Bloomberg

1. Apart from the resource upgrade at Wiluna West, we note that expectations for future iron ore prices have increased in recent months and the offer by Murchison Metals for Midwest Corporation should also be regarded as positive for GWR.

¹ Shares on issue have been calculated as an average number of shares on issue for the period.

III ANALYSIS OF FAIRSTAR

Profile of Fairstar

• 1. Fairstar was incorporated in August 2005 and its shares were listed on the ASX in October 2006. Fairstar is an exploration company with a market capitalisation of approximately \$69.8 million¹ at 23 November 2007. Its main exploration projects are summarised below.
• x Mount Padbury Uranium Project Fairstar pegged tenements prospective for uranium in the North Eastern Murchison Goldfields region of Western Australia during 2005 and 2006. Rock chip sampling undertaken by Fairstar has confirmed uranium mineralisation on these tenements. Fairstar is in the process of undertaking geological assessment work including sampling and ground survey programs to improve the geological understanding of the tenements prior to establishing a targeted exploration drilling program.
• x Kurnalpi Gold Project Fairstar has an option to acquire 90% of this gold exploration project in the Eastern Goldfields region of Western Australia. Fairstar has undertaken exploration drilling on several prospect areas within the Kurnalpi Gold Project over the past year. The drill results together with previous exploration data are being analysed by Fairstar. Fairstar has announced that it is planning an additional drilling program on two of the prospects. The Kurnalpi Gold Project has an inferred resource of 421,000 tonnes at 3.1 g/t gold. There has been no upgrade to the resource base by Fairstar.
• x Petroleum Exploration Permit 165 In July 2007, Fairstar entered into an agreement with Knight Industries, a private oil and gas exploration company, to farm into an oil exploration permit within the Murray Basin, northern Victoria. Under the agreement, Fairstar will spend up to \$2.6 million depending upon drill results to earn a 60% interest in the permit. Knight Industries were granted the exploration permit in October 2002.
• 1. Fairstar also has options to earn interests in various tenements in Western Australia with prospects for gold (Cue General, Cue Mindoolah, both located in the Mid West region of Western Australia, at Spinifex Well, North of Leonora and those tenements included in the Randalls Group of Prospects located east of Kalgoorlie). Fairstar has also applied for a number of tenements which it considers to be prospective for uranium at Killara.

L:\Advisory\Restricted\Transaction Services\Due Diligence\Golden West Resources\Report\GWR IER DRAFT REPORT - 26 Nov 07.doc

¹ Based upon the weighted average share price over the previous 30 days and inclusive of securities subject to escrow and the intrinsic value of listed and unlisted share options

Financial Performance

1. We have set out below a summary of the financial performance of Fairstar for the two years ended 30 June 2007.

	Audited FY06* \$million	Audited FY07 \$million
Total revenue	-	0.2
General overheads and administration costs	(0.4)	(2.1)
Exploration expenditure incurred	(0.2)	(1.1)
EBITDA	(0.6)	(3.0)
Depreciation and amortisation	-	(0.1)
EBIT	(0.6)	(3.1)
Share based payments	(0.2)	(0.9)
Operating loss before income tax	(0.8)	(4.0)
Income tax	-	-
Operating loss after income tax	(0.8)	(4.0)

Source: Fairstar Company Reports

* FY06 covers the period from 31 August 2005 to 30 June 2006.

• 1. In contrast to GWR, Fairstar expenses exploration and evaluation costs as incurred, however acquisition costs relating to tenements are capitalised and carried forward. To the extent that previously capitalised acquisition expenditure is determined to not be recoverable in the future, profits and net assets are reduced in the period in which the determination is made to write off exploration expenditure.
• 1. Prior to its ASX listing in October 2006, minimal activities were undertaken. Exploration expenditure of \$1.1 million was incurred in FY07 and a further \$0.7 million was spent on tenement acquisition. Activities carried out during FY07 included review of historical data, geological reconnaissance, a limited exploration drilling program on the Kurnalpi Gold Project, grab sampling for uranium at the Mount Padbury Uranium Project, and geophysical data acquisition and processing at Mount Padbury and Spinifex Well.

Cash Flows

1. Fairstar's cash flows for the two years ended 30 June 2007 and the quarter ended 30 September 2007 are summarised below.

	Audited FY06*	Audited FY07	Unaudited 1Q08
	\$million	\$million	\$million
Cash flows from operating activities
Payments to suppliers and employees	(0.3)	(3.2)	(1.2)
Interest received	-	0.2	0.1
Net cash used in operating activities	(0.3)	(3.0)	(1.1)
Cash flows from investing activities
Payments for acquisition of exploration interests	-	(0.2)	-
Payment for plant and equipment	(0.1)	(0.6)	-
Purchase of equity investments	-	-	(0.5)
	(0.1)	(0.8)	(0.5)
Cash flows provided by financing activities
Net proceeds from issue of shares and options	1.2	7.7	0.4
Net increase / (decrease) in cash	0.8	3.9	(1.2)
Cash at beginning of financial period	-	0.8	4.7
Cash at end of financial period	0.8	4.7	3.5

Source: Fairstar Company Reports

* FY06 covers the period from 31 August 2005 to 30 June 2006.

• 1. Fairstar raised \$7.4 million in October 2006 upon listing on the ASX. Operating cash outflows reflect the corporate costs and level of exploration and evaluation activity undertaken by Fairstar in each period. There are no operating cash inflows other than interest received.
• 1. In the quarter ended 30 September 2007, Fairstar issued 4.0 million shares as non cash consideration for consulting fees of \$2.9 million related to the farm in agreement with Knight Industries.

Financial Position

1. We have set out below the financial position of Fairstar at 30 June 2006 and 2007.

	Audited June 2006 \$million	Audited June 2007 \$million
Current Assets
Cash and cash equivalents	0.8	4.7
Trade and other receivables	0.1	0.2
	0.9	4.9
Non Current Assets
Plant and equipment	0.1	0.7
Exploration expenditure	-	0.7
	0.1	1.4
Total Assets	1.0	6.3

	Audited	Audited
	June 2006	June 2007
	\$million	\$million
Liabilities
Trade and other payables	0.2	0.2
Interest bearing liabilities	0.1	0.1
	0.3	0.3
Net Assets	0.7	6.0
Equity
Issued capital	1.4	10.5
Reserves	0.1	0.3
Accumulated losses	(0.8)	(4.8)
Total Equity	0.7	6.0

Source: Fairstar Company Reports

1. In FY07 Fairstar recognised \$0.7 million in relation to the acquisition of mining tenements and exploration expenditures. The carry forward of these capitalised expenses are dependent on the successful development and commercial exploration or sale of the respective mining areas.

Capital Structure

• 1. Fairstar had 103.78 million ordinary shares and 49.68 million options on issue at the date of this report. The 20 largest shareholders hold approximately 46.2 million shares, or 44.7% of the total issued ordinary capital of Fairstar. The substantial shareholder of Fairstar is Catchment Holdings which holds 14.0 million shares (13.5% of Fairstar's issued shares) as trustee on behalf of 6 parties, including Mr John Doutch (4.0 million shares). Catchment advised on 6 November 2007 that it does not have a beneficial interest in the shares it holds. The next largest shareholder holds 2.4% of Fairstar and is associated with Mr William Francke.
• 1. The unlisted options are held by Fairstar directors and related parties. The expiry dates and exercise prices of each series of options on issue are detailed in the table below.

Expiry Date	Exercise Price	Number of Options	Type of Option
30/08/2009	0.25	45,479,457	Listed
30/08/2009	0.25	4,200,000	Unlisted
		49,679,457

Source: FAS Appendix 3B, FAS 30 June 2007 Annual Report

Observed Trading in Fairstar's Shares

1. Fairstar's daily share prices and trading volumes since its ASX listing in October 2006 are presented below.

1. The Fairstar share price has been relatively volatile over this period. We have summarised below the key events which coincided with significant movements in Fairstar's share price.

Ref	Period	Brief description of event affecting share price
1	October 2006	¾ Fairstar undertook an initial public offering with its 25 cents shares listing on the ASX at 57 cents.
2	December 2006	¾ Fairstar announced positive results from initial rock chip sampling at the Mount Padbury Uranium Project.
3	February 2007	¾ Fairstar announced a rights issue of 48.4 million options at an issue price of 0.5 cents each, with an exercise price of 25 cents expiring on 30 August 2009. The resultant fall in the share price reflects the impact of the potential dilution of these securities.
4	March 2007 to October 2007	¾ The Fairstar share price in this period is broadly consistent with movement in the average uranium spot price over this period.
5	September 2007	¾ Fairstar announced its intention to make a takeover offer for GWR on 4 September 2007. The share price of Fairstar has firmed since this date.
6	October 2007	¾ The share price of Fairstar increased in the period from 19 October 2007 to 24 October 2007. On 19 October 2007 Fairstar disclosed the corporate mandate with Findlay Securities to the market. The Fairstar share price has since fallen.

1. The Fairstar VWAP prior to and following the announcement of the Offer on 4 September 2007 is set out below. Fairstar's share price as at 23 November 2007 was \$0.50.

Period	High \$	Low \$	VWAP \$	Cumulative volume traded	% of issued capital1
1 month prior to 4 September 2007	0.74	0.45	0.53	2,471,474	4.0%
3 months prior to 4 September 2007	0.89	0.45	0.71	12,946,710	25.8%
6 months prior to 4 September 2007	1.15	0.45	0.77	23,610,139	47.3%
Since announcement of the Offer on 4 September 2007	0.65	0.40	0.53	10,686,564	16.8%

Source: Bloomberg

¹ Shares on issue have been calculated as an average number of shares on issue for the period.

IV VALUE OF GWR SHARES

Valuation Methodology

• 1. The value of GWR has been assessed on the basis of fair market value as described in Section II of our report. Due to the inherent uncertainties associated with the early stage of development and the lack of a directly comparable asset to use as a valuation benchmark for GWR, we have selected a number of valuation approaches to assess the value of GWR on a controlling interest basis. Our valuation assessment has been based on the following approaches:
• x DCF modeling using a probabilistic approach the DCF methodology has a strong theoretical basis and is commonly used to value mining companies and projects at an advanced stage of evaluation. The methodology is also applied to assess the likely valuation range of projects at an early phase of development. This methodology involves projecting cash flows over a future period (usually corresponding to the life of mine for short or medium term projects), estimating a continuing value at the end of the period (where applicable) and selection of an appropriate discount rate which reflects the risks inherent in the estimated cash flows.

The practical difficulty with this approach, particularly for early stage projects, is the capability to reliably estimate future cash flows. Drilling programs at Wiluna West have not yet advanced to a stage where GWR believes the full resource has been identified or defined to a level where full life of mine plans can be prepared. Further, the development of rail and port infrastructure is critical to the development of Wiluna West. Wiluna West is located approximately 650 kilometres inland from the proposed port of Oakajee and approximately 900 kilometres north of the port of Esperance. Both of these transport options are being evaluated by GWR. GWR and its mining consultants have prepared preliminary high level cash flows for Wiluna West under a range of scenarios to assist with the evaluation of project development options. We have used these conceptual cash flow models to understand the range of possible outcomes for Wiluna West. We have adopted a range of key operational parameters on a probabilistic basis and other general economic parameters in order to assess the most likely range of values for the project.

We have applied the orderly realisation of assets basis for GWR's cash and other assets.

x Comparison to market capitalisation of other iron ore projects – there are no readily available market benchmarks of directly comparable projects to Wiluna West. Whilst there are a number of listed Australian companies holding early stage iron ore projects, the value of each of these is heavily influenced by project specific factors including the nature and location of the mineralisation, the potential scale of mining operations and the stage of project advancement. Nevertheless, we have sought to

broadly compare the project values implied from prices of a number of Australian listed companies holding early stage iron ore exploration projects to provide a general indication as to market value.

Our valuation is of GWR as a whole and is therefore inclusive of a control premium. In making these comparisons we have adjusted the market capitalisation of these companies to incorporate a control premium.

• x Analysis of GWR share trades we have reviewed the GWR share prices traded on the ASX when considering the reasonableness of our valuation assessment of GWR.
• x Technical valuation of GWR's mineral assets Coffey Mining has undertaken a technical valuation of Wiluna West and GWR's other less advanced exploration projects. As previously indicated, Coffey Mining's assessments have been undertaken in accordance with the AusIMM Code and Guidelines for the Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports. The lack of recent transaction or other market value indicators for readily comparable iron ore exploration projects has limited the ability of Coffey Mining to provide an assessment of the current fair market value for Wiluna West. Further, the market is increasingly placing value on the potential resources of iron ore projects. Coffey Mining has limited its assessment to JORC compliant resources with minimal value placed on exploration potential. Accordingly, the technical assessment is not considered to reflect the full market value of the mineral assets, but provides a base value for our evaluation.

Summary of Valuation

• 1. We have assessed the value of GWR's ordinary shares on a controlling interest basis to be in the range of \$2.50 to \$3.35. This valuation includes a premium for control and incorporates the potential dilutive impact of existing share options. Our range of fair values for GWR shares excludes any special value which a particular purchaser might attribute to GWR shares. Our assessment is based on an aggregate value of GWR (before dilution) in the range of approximately \$260 million to \$360 million.
• 1. It is difficult to value GWR shares on a controlling interest basis with a high degree of confidence. Our assessment has involved a high degree of professional judgment based on a range of indicative valuation measures. The measures of value from each of the approaches we have used are set out below.

1 – adjusted for control premium

2 – adjusted for relative attributes of respective projects and inclusive of control premium

1. We consider that a purchaser of a controlling interest in GWR would use DCF based modelling as a primary valuation approach. Accordingly, in assessing a likely range of values for GWR shares, we have given most weighting to the probabilistic DCF modelling over the other indicators shown above. The value of GWR is highly dependent upon assumptions concerning the identification of further resources and conversion of these into mineable reserves, future iron ore prices and the exchange rates and other key operating parameters including transport logistics. We consider that our valuation assessment reflects an appropriate range and risk profile for these parameters which would reasonably be applied by a prospective purchaser in assessing a market value for GWR's underlying assets at the date of our report. However, we recognise that individual investors or prospective purchasers may have differing views in relation to these assumptions which may lead to GWR shares being priced above or below our assessed valuation range.

Probabilistic DCF Modelling

• 1. Using this approach we have valued GWR by aggregating the estimated value of Wiluna West based on probabilistic DCF modelling and the value of other assets less liabilities. In our assessment, we have included a reduction in value for corporate overhead costs which are not absorbed into the evaluation of Wiluna West.
• 1. We have analysed Wiluna West under a range of sensitivities undertaken on static cash flow models developed by GWR in conjunction with its mining consultants. These models use comparative capital and mining cost estimates and transport infrastructure and operating costs advised by GWR's transport infrastructure consultants. We have adopted a range of potential resource scenarios and transport options for the project. We have also reflected a range of market views for key assumptions such as future iron ore prices and exchange rates.

• A summary of the probabilistic based valuation assessment is set out below.

	Valuation
	Low	Mean	High
	\$million	\$million	\$million
Wiluna West	160.0	297.0	443.0
Other mineral rights	2.0	2.7	4.8
Cash and other sundry assets and liabilities	3.7	3.7	3.7
Less: allowance for corporate overheads	(15.0)	(20.0)	(25.0)
GWR equity value (non-diluted)	150.7	283.4	426.5
Potential proceeds from unlisted options exercised	32.8	58.3	58.3
GWR equity value (diluted)	183.5	341.7	484.8
Number of ordinary shares on issue (million)	73.4	73.4	73.4
Potential issue of shares to Lingchip1	5.0	5.0	5.0
Potential shares from unlisted options exercised	33.2	41.7	41.7
Diluted number of shares on issue (million)	111.6	120.1	120.1
Value per share (diluted)	\$1.64	\$2.85	\$4.04

DCF assessment of Wiluna West

• 1. Our assessed value of Wiluna West on a probabilistic DCF basis is in the range of \$160 million to \$443 million with a preferred mean value of \$297 million. This range reflects the narrowing of a broader range of possible values to reflect that some commercial judgement would be applied by a prospective purchaser of the Project. The broad range of values reflects the high level of sensitivity to changes in the resource base, the proportion of lump product, iron ore prices, exchange rates and transport options (and in particular the cost of rail transport which represents the largest capital and operating cost component of the project).
• 1. The underlying cash flow models developed by GWR were on an un-geared pre-tax basis. We have adjusted these to reflect our assessed range of commodity price and foreign exchange rate parameters together with risk weighted resource base and transport infrastructure scenarios. The cash flow models were then adjusted to a post tax basis and discounted at a post tax discount rate developed by us to derive a range of present values.

L:\Advisory\Restricted\Transaction Services\Due Diligence\Golden West Resources\Report\GWR IER DRAFT REPORT - 26 Nov 07.doc

¹ Under the terms of the acquisition agreement as amended, Lingchip is to be granted 5.0 million shares when GWR delineates an indicated resource of ten million tonnes of iron ore within Wiluna West.

1. The key assumptions adopted in valuing Wiluna West included:

x a mineable resource base of between 85 million tonnes and 350 million tonnes at 60% Fe grade with a probability weighting as set out below. This broadly reflects mineable resources equivalent to the existing inferred resource base at the low extreme, a most likely mineable resource base of 175 million tonnes with a 10% prospect of the mineable resource base exceeding 250 million tonnes up to an effective limit of 350 million tonnes. The mean mineable resource base under this weighting is 187 million tonnes.

• x scenarios relating to the split of lump and fines product. Our valuation range reflects an equal likelihood of the proportion of lump product being between 40% and 60%.
• x use of an average realised free on board iron ore price for lump and fines based on the following general price profile relative to the ex Dampier Hamersley US dollar iron ore prices per dry metric tonne unit. The profile has been based upon a range of publicly available broker and analyst views of future iron ore prices. We have used prices within this range based on a probability distribution.

Source: Minerals Monitor, AME Mineral Economics, various broker forecasts

x an exchange rate of the Australian dollar to the US dollar as follows:

	2008	2009	2010	2011	2012	2013	2014	Long term
A\$:US\$	0.85	0.83	0.78	0.77	0.76	0.75	0.74	0.73

Source: Minerals Monitor, AME Mineral Economics, various broker forecasts, Bloomberg

The exchange rate we have adopted has been subject to a similar probability profile as the iron ore prices within a range of +/-0.05 basis points.

• x pre-production and feasibility study costs as advised by GWR and GWR's mining consultants.
• x mining capital and operating costs based on indicative comparable costs provided by GWR's mining consultants.
• x transport capital and operating costs based on indicative costs provided by GWR's transport logistic consultants (inclusive of a 30% capital cost contingency allowance) with an 90% prospect of utilisation of the proposed port of Oakajee and a 10% prospect of utilisation of the port of Esperance.
• x commencement of product sales in July 2011.
• x production and sales are assumed to occur at the rate of 10 million tonnes per annum.
• x an indicative waste to ore ratio of 2.5 to 1.
• x allowance has been made for an annual rehabilitation charge rather than an end of mine outflow.
• x a corporate tax rate of 30%.
• x a real ungeared post tax discount rate of 11% per annum (having regard to the risks reflected within the probabilistic cash flow assessments). Our assessment of the post tax discount rates applied in the valuations is set out at Appendix D. The discount rate applied is applicable to mining operations of the scale envisaged together with an allowance for construction risks. The discount rate does not reflect project financing risk in determining fair market value as the assumed purchaser is taken to have the financial capacity for project development.
• 1. We have made appropriate enquiries into the basis of the cost estimates and other operating parameters applied by GWR and their mining and transport logistic consultants. We are satisfied that appropriate processes have been adopted in the compilation of these estimates having regard to the stage of advancement of Wiluna West and the purposes of our assessment.
• 1. Based on the results of the modelling undertaken, we have assumed that production would not proceed after feasibility stage in the event that the Oakajee rail and port option was not available and where mineable tonnage was less than 150 million tonnes. Further details of the operational parameters and assumptions are set out at Appendix F.
• 1. We have considered the sensitivity of our DCF assessment to various changes in the key assumptions including the size of the mineable resource base, the proportion of lump ore product, iron ore prices, exchange rates and rail operating costs. The sensitivity has been undertaken on the DCF value derived using the scenario of the most likely individual probability based assumptions (which gives rise to a DCF value of \$350 million – refer Appendix F). This single scenario DCF output against which the sensitivity has been undertaken differs from the mean of the probability weighted set of DCF outcomes. For example, the most likely DCF scenario includes transport of ore to Oakajee, whereas the probabilistic DCF analysis also ascribes some weighting to the less likely (and more economically adverse) Esperance transport option, The results of the sensitivities are set out below.

Other Assets and Liabilities

1. We have reviewed GWR's assets and liabilities and have set out below the assets and liabilities of GWR which have not been reflected in the underlying mining asset assessments. Given the immaterial nature of these balances, book value has been adopted as reflective of the fair value of these assets and liabilities.

Other Assets and Liabilities
		Value
	Note	\$million
Cash and other assets/liabilities
Cash	(1)	3.8
Receivables	(2)	0.5
Property, plant and equipment	(3)	0.4
Trade and other payables	(2)	(0.7)
Other liabilities	(2)	(0.3)
		3.7

(1) Based on cash balance at 30 September 2007.

(2) Book value at 30 June 2007 has been taken as representative of market value.

(3) 50% of the property plant and equipment is assumed to be not directly associated with the exploration/project activities. Book value has been adopted as representative of market value for these assets.

Other Mineral Rights

1. The value of GWR's interests (other than the Wiluna West Iron Ore Project) mainly relates to the gold project area at Wiluna West. A summary of Coffey Mining's valuation assessment for these interests is set out below.

	Low \$million	Base \$million	High \$million
Gold projects	2.0	2.6	4.7
Uranium project	-	0.1	0.1
Total	2.0	2.7	4.8

Taxation

1. At 30 June 2007, GWR had tax losses of \$15.7 million available to offset against future taxable income. These losses have been incorporated into our DCF assessment of Wiluna West. The taxation base of other assets is not material to our assessment.

Corporate Overheads

• 1. The cash flows used to value the underlying assets of GWR do not include corporate costs of the GWR group. Accordingly, we have made separate allowance for these costs as a deduction from the aggregate value of GWR's operations.
• 1. We have assessed the allowance to be made for GWR's corporate overheads to be in the range of \$15 million to \$25 million using a DCF approach. The key assumptions we have adopted in this assessment included:
• x an average annual level of corporate administration costs in the range of \$2 million to \$3 million;

• x an effective period of between 10 and 20 years representing the range of effective mine lives applied for Wiluna West in the project assessment analysis;
• x a corporate tax rate of 30%; and
• x a real ungeared post tax discount rate of 11% representing the rate applied in our assessment of Wiluna West.

Dilutive Impact of Options

• 1. The GWR share options are potentially dilutive to the existing GWR shareholders' interests. Consistent with the assessment of GWR shares on a controlling interest basis, we have considered the potentially dilutive impact of the options using the implied GWR share value on a controlling interest basis.
• 1. Where the undiluted GWR value per share exceeds the option exercise price, we have assumed that the exercise of options occurs in order to determine a diluted value per share on a controlling interest basis.

Comparison of Market Capitalisations of other Emerging Iron Ore Companies

• 1. We have considered the implied value of a number of direct shipping iron ore exploration projects derived from the market capitalisation of other listed Australian companies and used these to assist in determining an indicative valuation range for GWR. In undertaking this assessment we have:
• x identified a number of Australian listed companies with emerging iron ore exploration projects of small scale – we have excluded companies where the anticipated scale of production is greater than 15 million tonnes per annum as well as overseas iron ore projects and companies where the principal project is a not of direct shipping quality
• x assessed the market capitalisation using the past 30 day VWAP and the intrinsic value of options on issue
• x applied a control premium of 30% to the market capitalisation of the benchmark companies
• x determined the controlling interest value of the identified companies on a dollar per tonne of resource basis – as the market is increasingly placing value on resource potential, we have undertaken this analysis on both the stated current resources and management's indicated resource target to the extent such information is publicly disclosed

• x compared key attributes of the various projects to Wiluna West to form a view on the comparability of the underlying project with Wiluna West.

• The implied controlling interest values expressed on both a dollar per tonne of JORC compliant resource and indicated resource target basis (to the extent such information is publicly available) are set out below.

Source: Bloomberg, Capital IQ and company websites

• 1. A brief overview of the key projects held by these companies is set out at Appendix G. We note that Global Iron and BC Iron both have a market capitalisation in excess of \$100 million but do not have any disclosed JORC compliant resources. Global Iron has no publicly stated exploration target and is therefore unable to be included in the above analysis, however BC Iron has announced an exploration target for its key projects and has been included.
• 1. We have excluded Murchison Metals and Midwest Corporation from the above analysis. Murchison Metals holds the Jack Hills Project, a proposed direct shipping operation with target production at 25 million tonnes per annum. The current resource of direct shipping ore is 50.5 million tonnes at 60.7% Fe, but with only 20% of the mineralisation area having been drilled there is significant resource exploration potential. There is further potential for beneficiation of lower grade mineralisation. Midwest Corporation's principal project is Weld Range which has an identified deposit of 114.4 million tonnes at 55.7% Fe but potential to expand to 400 million tonnes to 500 million tonnes due to major high grade outcrops. The target annual production is 15 to 20 million tonnes.
• 1. The anticipated scale of mining operations of these two companies is higher than GWR and both will benefit from lower transportation costs through being located closer to the proposed port of Oakajee. Midwest Corporation also holds interests in other iron ore projects. Both companies also have major international partners for development of their key projects. Both of these companies have a level of market capitalisation per tonne of target resource higher than the range reflected above.
• 1. We have also excluded Gindalbie Metals from our analysis. Although it has a proposed direct shipping iron ore project in the Mid West region, Gindalbie is giving priority to its Karara magnetite project. Whilst Atlas Iron also has a substantial secondary magnetite project which distorts analysis of market capitalisation by reference to direct shipping ore alone, we have chosen to keep this company in the sample as the direct shipping operations form most of the company's current value.
• 1. Our analysis discloses that the market is currently placing considerable value on targeted resource potential and has regard to the location and implied geology of the deposit. The cost of transporting ore from mine to port represents a significant cost to iron ore projects and in our opinion forms a key factor in the market pricing of the actual and potential projects. Proximity and access to existing rail infrastructure not only provides an opportunity to accelerate project development, but the rail access prices are the sharing of infrastructure costs between users.
• 1. GWR will need to develop significant rail infrastructure predominantly dedicated to its Wiluna West operations for which there will be limited opportunity to share capital costs. This will be the case irrespective of whether ore is transported to Oakajee or Esperance, however the latter option provides more limited options for infrastructure cost sharing. Due to the significance of these costs relative to those of the emerging selected Pilbara operations, the implied market capitalisation reflected by the Pilbara projects should reflect an upper range for our comparison to GWR.
• 1. We regard FerrAus as providing closer comparability with Wiluna West's circumstances than the other selected Pilbara based projects. This company has a similar sized exploration target to GWR and is relatively distant from port facilities. FerrAus has proximity to the rail head of BHP Billiton's Jimblebar iron ore operations but contains a lower grade direct shipping grade ore than Wiluna West. We consider that the dollar per tonne of target resource implied from FerrAus share trades is an indicative upper range for an implied market value of Wiluna West. Most of the remaining emerging projects identified in the Pilbara region, whilst generally having lower iron content than Wiluna West, are more favourably located to existing or soon to be commissioned high throughput rail and/or port infrastructure.
• 1. We have also considered the suitability of using two companies with emerging iron ore projects in South Australia for benchmarking purposes. We do not consider Western Plains as being representative for comparison to GWR due to the advanced nature of its key project and proximity to the existing Adelaide to Darwin rail infrastructure. Similarly, Centrex has significant freight advantages due to the proximity of its key direct shipping ore projects to port infrastructure.
• 1. Both Royal and Polaris Metals have operations in either the Mid West or Yilgarn regions of Western Australia. Royal's principal project, although located in the Mid West region, is significantly closer to port infrastructure than GWR and does not have a publicly stated exploration target. Polaris Metals' principal project, the Yilgarn iron ore project lies

approximately 80 kilometres north of the Portman Mining iron ore mining activities at Koolyanobbing. Polaris intends to extend rail facilities 60 kilometres from the East West (Perth – Sydney) railway and then transport the ore approximately 450 kilometres to Perth for export through the port of Kwinana. The Yilgarn iron ore project has a target resource size which is not dissimilar to that of GWR, but is of lower grade ore and at an earlier stage of resource definition and project feasibility. Whilst Polaris also has a prospective resource of 10-15 million tonnes direct ship iron ore located near to Port Hedland in the Pilbara and has secured support from a major investor, we regard Polaris as providing an indicative lower valuation range for Wiluna West.

1. Having regard to these factors, we consider that the \$1.37 per tonne of target resource (implied by trading in FerrAus) forms an indicative upper range and 73 cents per tonne of target resource (implied by trading in Polaris) forms an indicative lower range for our estimated value of Wiluna West. GWR has a stated target resource of 250 million tonnes. Accordingly, we consider that the comparable company analysis suggests a valuation of GWR on a controlling interest basis of \$146 million to \$343 million. This equates to approximately \$1.60 to \$3.34 per GWR share on a fully diluted controlling interest basis using the same principles previously adopted under the probability based DCF assessment.

Recent GWR Share Price

• 1. The closing price of GWR shares on 23 November 2007 was \$2.25 and VWAP of GWR shares over the one month and three months prior to the announcement of the Offer were \$1.89 and \$2.17 respectively1 . We also note that the VWAP of GWR shares has risen by \$0.20 to \$0.25 following announcement of upgraded resources at Wiluna West.
• 1. We consider that the GWR share price has not demonstrated any significant speculative component associated with the Offer. This would suggest that the market price reflects the underlying investment fundamentals of GWR on a stand alone basis. Apart from the resource upgrade at Wiluna West, market expectations for future iron ore prices have been more favourable in recent months and Murchison Metals has launched a takeover bid for Midwest Corporation. These factors should be regarded positively by investors in GWR.
• 1. We have considered a number of transactions involving the acquisition of controlling interests in mining companies where public information is available. Control premiums paid depend on the specific circumstances of each transaction and have occurred both above and below the range of 15% to 30% typically observed in the market. We have applied a control premium of between 25% and 35% in our assessment of a controlling interest value for GWR shares implied from recent share prices.
• 1. We have chosen an indicative range of \$2.15 to \$2.45 for GWR shares on a minority interest basis, reflecting the VWAP prior to announcement of the Offer adjusted upwards to

¹ Excluding trading between 14 August 2007 and 21 August 2007 during a period of global stock market volatility

reflect the market uplift on announcement of recent drilling results and the upgrade to resources. Application of the above control premia to the general market traded range for GWR shares of \$2.15 to \$2.45 suggests a controlling interest value for GWR shares in the range of \$2.69 to \$3.31 as set out below.

	Low	High
Market traded price	\$2.15	\$2.45
Control premium Controlling interest value	25% \$2.69	35% \$3.31

V VALUE OF CONSIDERATION OFFERED

Basis of Evaluation of Fairstar Share Price

• 1. The Offer consideration comprises five Fairstar shares for each GWR share. If the Offer is successful, the profile of the enlarged Fairstar group will differ from that of Fairstar currently. Our assessment of the estimated value of shares in the enlarged Fairstar group has been made by reference to the current trading prices of Fairstar shares together with the likely impact on the price of Fairstar shares resulting from acceptance of the Offer.
• 1. In undertaking this analysis, we have adopted the following approach:
• x considered the Fairstar share prices to gauge the market perception of its underlying assets;
• x assessed the likely GWR share prices in the absence of the Offer to gauge the market perception of its underlying assets;
• x reviewed transaction related factors which would impact the financial position of the enlarged Fairstar group in the event of both 50.1% and 100% acceptance of the Offer; and
• x considered factors which may lead to any reassessment of an investment in the enlarged Fairstar group relative to both existing Fairstar and GWR share trading.

Fairstar Share Prices

• 1. Our analysis of Fairstar has been limited to publicly available information including share trading data. Fairstar shares have traded in relatively high volumes both prior to and subsequent to announcement of the Offer. We have no reason to believe that the share price of Fairstar does not provide a reasonable basis for our assessment of the value of a minority interest in Fairstar.
• 1. The VWAP of Fairstar shares since announcement of the Offer has not changed significantly from one month prior to announcement of the Offer for GWR. Whilst the share price range has fallen slightly since announcement of the Offer and the market price has shown some volatility over this period, we consider the VWAP over the month prior to announcement of the Offer is most likely to reflect the market perception of Fairstar and its underlying assets in the absence of the Offer. Based on share prices over this period, we consider Fairstar shares would be likely to trade in the range of 50 cents and 60 cents per share in the absence of the Offer.

Likely GWR Share Price in the absence of the Offer

• 1. We have selected a range of \$2.15 to \$2.45 as being representative of the trading range of GWR shares on a minority interest basis in the absence of the Offer. This assessment was based on the general VWAP trading range of GWR prior to announcement of the Offer adjusted upwards by \$0.20 to \$0.25 to reflect the market uplift upon announcement of recent drilling results and the upgrade to resources.
• 1. We have assessed the value of a GWR share on a controlling interest basis to be in the range of \$2.50 to \$3.35 with a mid point value of \$2.92 per share. This is a wider range than has been exhibited by share trading in GWR and reflects the subjectivity associated with our assessment. It is normal for minority interests in listed companies to trade at a discount to the underlying value of its net assets on a controlling interest basis. Such a discount commonly falls in the range of 20% to 30%. Our range of values for GWR shares in the absence of the Offer reflects a discount of between 14% and 27% to our preferred value of GWR on a controlling interest basis. We regard this level of discount as being consistent with minority interest discounts typically associated with shares in Australian listed companies.

Adjustment for the Fairstar Offer

• 1. We have considered the potential impact on Fairstar's share price in the event that Fairstar acquires both 50.1% and 100% of GWR's shares as well as the impact of shares issued due to the exercise of GWR share options which are in the money and to meet cash outflows associated with the Offer.
• 1. Based on our analysis set out below, we consider that the minority interest value of shares in the enlarged Fairstar group is likely to fall in the range of 45 cents to 52 cents per share if Fairstar gains a 50.1% interest in GWR (and in the absence of other marketability related adjustments). This range of values is largely unchanged if Fairstar gains full control of GWR. We have also considered how this value may change in the event that Fairstar acquires more than 50.1% of GWR but less than the number of shares required to allow compulsory acquisition of any remaining securities. If Fairstar acquires more than 50.1% of GWR, the implied value of shares in the enlarged Fairstar group will be further diluted. The extent of this value dilution may be as high as 2 cents per Fairstar share in the event that Fairstar were to acquire 89.9% of GWR.

Implied Market Capitalisation of enlarged Fairstar group		Assuming 50.1% acceptance of Offer	Assuming 100% acceptance of Offer including exercise of deep in the money share options
Current market capitalisation of Fairstar 1	\$ million	51.9 – 62.3	51.9 – 62.3
Implied additional market capitalisation of enlarged Fairstar group attributable to investment in GWR 2	\$ million	79.1 – 90.1	198.7 – 226.4
Transaction costs 3	\$ million	(5.2)	(22.1)
Potential management and operational synergies 4	\$ million	3.0	20.0
Implied market capitalisation of enlarged Fairstar group prior to capital raising 5	\$ million	128.8 – 150.2	248.5 – 286.6
Proposed Fairstar capital raising 5	\$ million	15.0	33.9
Implied market capitalisation of enlarged Fairstar post the Offer 6	\$ million	143.8 -165.2	282.4 – 320.5
Number of Fairstar ordinary shares on issue	million	103.78	103.78
Number of Fairstar ordinary shares issued to GWR shareholders	million	183.95	462.00
Number new Fairstar ordinary shares issued under capital raising and to meet costs of the Offer	million	31.07	70.82
Number of ordinary shares on issue in enlarged Fairstar group	million	318.80	636.60
Implied minority interest value per share of enlarged Fairstar group6	cents	45 – 52	44 – 50

1 the market capitalisation of Fairstar is based on 103.78 million ordinary shares (inclusive of shares subject to escrow) at a price range of 50 to 60 cents.

2 the implied additional market capitalisation of enlarged Fairstar group attributable to its prospective investment in GWR is based on the acquisition of 36.79 million GWR shares (50.1% of GWR's 73.44 million issued shares) using a GWR share price of \$2.15 to \$2.45 in the event of gaining 50.1% ownership. If full ownership is obtained, it is assumed that 18.96 million deep in the money options will be exercised to add to the existing 73.44 million shares on issue.

• 3 payment to corporate advisors and stamp duty at the land rich rate on 100% acquisition of GWR where applicable
• 4 includes elimination of assumed administrative duplication and tax benefits (where full ownership is achieved)
• 5 proposed Fairstar capital raising to meet the Offer costs and cash outflows as detailed in the Bidder's Statement
• 6 before consideration of potential re-rating factors
• 1. We have considered the impact of transaction costs and the potential benefit arising from the increase in the taxation base of depreciable assets which will arise from entry of GWR to the Fairstar tax consolidated group.
• 1. Our assessment of the transaction costs includes amounts disclosed by Fairstar in the Bidder's Statement and as advised by GWR. We have also made allowance for stamp duty which would be likely to become payable in the event that the Offer was fully accepted.
• 1. Our assessment of cost savings recognises some elimination of administrative functions and overheads under 50% ownership and increased cost savings arising from full control of GWR. In the event that Fairstar were to gain full ownership of GWR, significant taxation benefits may eventuate from Fairstar's ability to uplift the tax base of GWR's mineral assets upon entry to the Fairstar tax consolidated group and the associated tax deductions which would arise assuming development of Wiluna West.
• 1. As the operational savings and tax benefits are not material to the above analysis, we have not undertaken a detailed analysis of the cost savings and potential tax benefits available in the event of full ownership being obtained. Our assessment of the value of these benefits has been based on high level discounted cash flow analysis. These benefits largely mitigate the impact of the transaction costs, even though the transaction costs need to be funded in the short term and the cost savings and taxation benefits will be generated over an extended timeframe and have some risk of realisation.
• 1. We have also considered the impact on our analysis of the 49.7 million Fairstar options on issue which are exercisable at 25 cents. These have the potential to increase the implied minority interest value per share in the enlarged Fairstar group by between 0.6 cents and 0.8 cents at the mid point of our assessed range. Conversely, the terms of the Fairstar equity raising have the potential to be issued at a price lower than 50 cents. As such we have made no adjustment to our assessed range of values.

Adjustment for Market Factors Specific to the Shares in the Enlarged Fairstar Group

• 1. We have considered whether a re-rating of shares in the enlarged Fairstar group is likely to occur following the Offer. We have specifically considered whether:
• x the combined mix of the assets of the enlarged Fairstar group will be more favourably regarded by the market;
• x the management of the assets under Fairstar control will be more favourably regarded by the market;
• x the likely market capitalisation of the enlarged Fairstar group will result in a re-rating of securities; and
• x the number of securities on issue and spread of shareholders will result in increased liquidity of securities.
• 1. The principal asset of Fairstar either with 50.1% or 100% control of GWR or 100% will be Wiluna West. Fairstar does not have advanced stage or near production projects and whilst its exploration interests include oil, uranium and gold projects, all of these projects are reliant upon future exploration success. GWR is exclusively focussed on development

of its iron ore project and whilst further drilling to upgrade the resource and development of transport infrastructure is required, there is currently considerable interest in prospective iron ore projects from international steel mills and major commodity traders. A number of other entities with early stage iron ore projects have disposed of or demerged their exploration interests in other commodities to present investment opportunities to investors which are exclusively focussed on iron ore¹ .

• 1. Murchison Metals' Jack Hills Project and Midwest Corporation's Weld Range Project are located within 250 kilometres of Wiluna West. Both of these companies are currently competing (together with their respective Japanese and Chinese partners) for the right to establish multi user rail and port infrastructure for the commercial development of these projects. Murchison has recently made a takeover offer for Midwest with the objective of optimising development of these projects and the associated transport infrastructure. We regard this development as positive for Wiluna West in that if successful, the prospects of accelerated development of rail infrastructure from these projects to the proposed Oakajee port will be enhanced and there may be an increased opportunity for further rationalisation of iron ore projects within the region.
• 1. We consider that there are limited project synergies arising from combining the assets of Fairstar and GWR. We do not consider that the GWR assets will be more favourably viewed by investors merely because they are in combination with those of Fairstar. Similarly, we do not consider that Fairstar's assets will be more favourably regarded by the market in combination with GWR. Further, there is a prospect that the converse may be true for investors seeking a pure iron ore exploration focus.
• 1. Fairstar has indicated that it will continue to accelerate the development of Wiluna West if the Offer is successful. GWR is systematically proceeding with its objective of increasing the resource base at Wiluna West through a continuing and active drilling and analysis program. The Company is also exploring transport options to allow commercial exploitation of the resource. GWR has held preliminary conceptual project investment discussions with representatives of a number of overseas steel companies and with other Australian listed prospective iron ore producers over the past 18 months. GWR has maintained its strategy to optimise shareholder returns by increasing its resource base prior to actively seeking and formalising joint venture or investment arrangements with third parties for development of Wiluna West. We have seen no basis to suggest that the prospects for development of the Wiluna West Project will be significantly enhanced under Fairstar management.
• 1. GWR will require an estimated \$50 million to advance development of Wiluna West to a pre-feasibility stage. These funds will be required irrespective of whether the project is operated under the control of GWR or Fairstar. Neither GWR nor Fairstar have such funds and further share issues will be required by either Fairstar or GWR. GWR is seeking shareholder approval to the issue of a further 47 million shares to raise capital to fund the

¹ Examples include Gindalbie Metals, Sphere Investments, Atlas Iron, Polaris Metals and Australasian Resources

first phase of this work. We do not consider that the potential change in market capitalisation of the enlarged Fairstar group under either 50.1% or 100% control of GWR would represent such a change to the market capitalisation of GWR to give rise to a significant re-rating of shares in the enlarged Fairstar group relative to GWR.

Conclusion

1. We do not consider that the Offer will give rise to a significant re-rating of shares in the enlarged Fairstar group relative to GWR shares. The transaction does not provide access to significant complementary projects or alternative investment opportunities and does not provide greater access to funding. We have therefore assessed the indicative price at which minority interests in Fairstar shares may trade following the Offer to be in the range of 45 cents to 52 cents per share. We stress that it is not possible to predict with certainty the prices at which shares in the enlarged Fairstar group are likely to trade following completion of the Offer.

Value of Offer Consideration

1. In summary, we consider that the value of the consideration offered under the Offer is in the range of \$2.25 to \$2.60 per GWR share.

Assessed Consideration
	Low	High
Implied value of share in enlarged Fairstar group	\$0.45	\$0.52
Implied value of five enlarged Fairstar group shares offered per GWR share	\$2.25	\$2.60

VI PREMIUM FOR CONTROL

• 1. We are required by Regulatory Guide 111 to assess whether a premium for control is being paid by Fairstar under the Offer.
• 1. The premium for control reflects the value a controlling shareholder might be able to extract from being able to control the strategic direction and the operational, funding and dividend policies of GWR. This represents the benefits of access to GWR's cash flow as well as benefits able to be derived from extracting cost efficiencies, operating leverage and project development advantages. These latter benefits will differ depending on the identity of the purchaser. It is uncertain what direct advantages may arise to Fairstar once control is obtained above those from being able to control strategic, dividend and financial policies. It is possible that Fairstar will be able to extract some limited cost efficiencies however we consider these are unlikely to be significant relative to the transaction costs incurred. Whilst greater benefits (including taxation benefits) may be secured if a 100% interest is obtained, these will be eroded by the stamp duty likely to arise as a consequence of the acquisition.
• 1. A number of acquisitions of Australian mining companies over recent years have taken place at significant premia to the share prices immediately prior to the offer. These premia, in part, reflect a sharing of some of the special value of the target company to specific acquirers above the conventional level of control premia paid. Empirical studies suggest that takeover premia more generally fall in the range of 25% to 40%.
• 1. Our assessment of the fairness of the Share Scheme has required a comparison of the value of the consideration offered under the Share Scheme with the value of all of the GWR shares being acquired by Fairstar on a controlling interest basis. We concluded that the overall consideration offered is unlikely to exceed the value of GWR shares on a controlling interest basis. Accordingly, we believe that the consideration offered does not include a full control premium for the acquisition of 100% of the shares in GWR by Fairstar.

DECLARATIONS AND DISCLOSURES

Qualifications

PwCS is beneficially owned by the partners of PricewaterhouseCoopers ("PwC"), a large international firm of chartered accountants and business advisors. PwCS is a licensed securities dealer under the Act and, as such, is licensed to provide advice on securities related matters.

Roger Port, the person responsible for the preparation of this Report, is a partner in PwC and an authorised representative of PwCS with extensive experience in the preparation of corporate valuations, independent expert's reports and the provision of corporate financial advisory services to corporations involved in takeovers, capital raisings and mergers and acquisitions.

Independence

We have considered our independence from GWR, Fairstar and related parties, having regard to ASIC Regulatory Guide 112, and we do not consider that there are any circumstances which conflict with our independence from GWR or hinder our ability to provide objective independent advice.

Neither PwCS, PwC nor the authors of this report have, at the date of this Report, or have had within the previous two years, any shareholding in or other relationship with either GWR or related parties (other than the provision of professional services for time based fees) that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Offer.

Neither PwCS, PwC nor the authors of this report have any interest in the outcome of the proposed transactions. PwCS is entitled to receive a fee from GWR based on normal professional hourly rates for the time taken in the preparation of this report. The estimated fee is \$100,000 and will be paid regardless of the outcome of the Offer.

A draft of this report was provided to GWR for a review of factual accuracy on 22 November 2007. No changes to our opinion arose as a result of this review.

Indemnity

The terms of appointment include a provision that GWR will indemnify PwCS, PwC, its employees, officers and agents against any claim, liability, loss or expense, cost or damage and liabilities arising out of reliance on any information or documentation provided by GWR which is false or misleading or incomplete.

APPENDIX A (cont)

Consent

PwCS has consented in writing to this report in the form and context in which it appears being included in the Target Statement be issued by the directors of GWR and which will be distributed to GWR shareholders.

Neither PwCS nor PwC has authorised or caused the issue of all or any part of the Target Statement other than this report. Neither the whole nor any part of this report nor any reference to it may be included in or with or attached to any other document, circular, resolution, letter or statement without the prior consent of PwCS to the form in which it appears.

APPENDIX B

SOURCES OF INFORMATION

The principal sources of information used in the preparation of this report are as follows:

• 1. Target Statement to be provided to shareholders in relation to the Offer.
• 1. The Fairstar Bidder's Statements.
• 1. Financial statements and half yearly reports for GWR for the years ended 30 June 2006 and 30 June 2007 and for the six months ended 31 December 2006 together with supporting analysis schedules.
• 1. Financial statements and half yearly reports for Fairstar for the year ended 30 June 2007 and for the six months ended 31 December 2006.
• 1. Quarterly cash flow and activity statements for the two years and three months ended 30 September 2007 for GWR and Fairstar.
• 1. Wiluna West Project strategic cash flow model for the period to assumed end of mine life.
• 1. Broker's research reports on mining industry participants.
• 1. Publicly available information about GWR and Fairstar and other mining industry participants available from:
• (a) Connect 4 company announcements;
• (b) Capital IQ comparable company financial analysis;
• (c) Bloomberg LP comparable company financial analysis; and
• (d) Individual company and industry body websites and publications.
• 1. Discussions with the management, directors and geological consultants of GWR.

APPENDIX C

FINANCIAL SERVICES GUIDE This Financial Services Guide is dated 7 June 2007

1. About us

PricewaterhouseCoopers Securities Ltd (ABN 54 003 311 617, Australian Financial Services Licence no 244572) ("PwC Securities") has been engaged by Golden West Resources Limited to provide a report in the form of an Independent Expert's Report in relation to the Offer (the "Report") for inclusion in the Target Statement to be issued to Golden West Resources Limited.

You have not engaged us directly but have been provided with a copy of the Report as a retail client because of your connection to the matters set out in the Report.

2. This Financial Services Guide

This Financial Services Guide ("FSG") is designed to assist retail clients in their use of any general financial product advice contained in the Report. This FSG contains information about PwC Securities generally, the financial services we are licensed to provide, the remuneration we may receive in connection with the preparation of the Report and how complaints against us will be dealt with.

3. Financial services we are licensed to provide

Our Australian Financial Services Licence allows us to provide a broad range of services, including providing financial product advice in relation to various financial products such as securities, interests in managed investment schemes, derivatives, superannuation products, foreign exchange contracts, insurance products, life products, managed investment schemes, government debentures, stocks or bonds and deposit products.

4. General financial product advice

The Report contains only general financial product advice. It was prepared without taking into account your personal objectives, financial situation or needs.

You should consider your own objectives, financial situation and needs when assessing the suitability of the Report to your situation. You may wish to obtain personal financial product advice from the holder of an Australian Financial Services Licence to assist you in this assessment.

5. Fees, commissions and other benefits we may receive

PwC Securities charges fees to produce reports, including this Report. These fees are negotiated and agreed with the entity who engages us to provide a report. Fees are charged on an hourly basis or as a fixed amount depending on the terms of the agreement with the person who engages us. In the preparation of this Report, our fees are as disclosed in Appendix A of this Report.

Directors or employees of PwC Securities, PricewaterhouseCoopers, or other associated entities, may receive partnership distributions, salary or wages from PricewaterhouseCoopers.

APPENDIX C (cont)

6. Associations with issuers of financial products

PwC Securities and its authorised representatives, employees and associates may from time to time have relationships with the issuers of financial products. For example, PricewaterhouseCoopers may be the auditor of, or provide financial services to, the issuer of a financial product and PwC Securities may provide financial services to the issuer of a financial product in the ordinary course of its business.

7. Complaints

If you have a complaint, please raise it with us first, using the contact details listed below. We will endeavour to satisfactorily resolve your complaint in a timely manner. In addition, a copy of our internal complaints handling procedure is available upon request.

If we are not able to resolve your complaint to your satisfaction within 45 days of your written notification, you are entitled to have your matter referred to the Financial Industry Complaints Service ("FICS"), an external complaints resolution service. You will not be charged for using the FICS service.

Contact Details

PwC Securities can be contacted by sending a letter to the following address:

Mr Roger Port PricewaterhouseCoopers Securities Ltd QV1 Building 250 St Georges Terrace PERTH WA 6000

DETERMINATION OF DISCOUNT RATES

The discount rate applicable for fair market valuation purposes should represent the required market rate of return for capital invested in the individual projects being valued. The expected rate of return for invested capital is conventionally derived using the weighted average cost of capital ("WACC") approach using market evidence appropriate to the business being examined. Whilst there is a body of theory that provides a framework for the determination of such a discount rate, it is important to note that there is a level of subjectivity involved in selecting the various inputs to the theoretical framework.

The formulation of WACC using modern finance theory and commonly accepted practice is derived in the first instance on a post-tax, nominal basis as the parameters comprising WACC are observable in the market place on this basis.

Inflation, defined as changes in the purchasing power of money, is implicitly built into the observable inputs of the WACC. A consistent treatment is therefore required for the forecast cash flows to which the WACC is applied. The cash flows adopted for the purposes of our assessment are in real (uninflated) dollars.

For the purposes of this report, we have assessed appropriate post-tax real discount rates to be approximately 9% for open cut type mining operations and approximately 12% for exploration companies with advanced projects. The probabilistic valuation methodology adopted for Wiluna West has factored in a certain level of risk associated with key parameters due to the scenario simulation undertaken. As such, we consider that the appropriate discount rate for our probabilistic DCF analysis is lower than that implied by the sample of exploration companies considered, but above that associated with established mining operations. We have chosen to adopt a real post tax discount rate of 11% for the purposes of our assessment. This rate represents a premium of 2% above that of mining operations to reflect the development risk, but 1% lower than that of the sample of exploration companies with advanced stage projects.

We consider that these discount rates reasonably reflect the discount rates that purchasers would use in the current market in assessing the individual operations of GWR and are reflective of the operational and technical risks of Wiluna West.

WACC

The WACC of an entity is the expected cost of the various classes of its capital (both equity and debt), weighted by the proportion of each class of capital to the total capital of the entity.

The general formula for calculating WACC is:

WACC = Kd(1-t) x (D/D+E) + Ke x (E/D+E)

where the key inputs are defined as follows:

• Ke the after-tax cost of equity, which is the rate of return required by the providers of equity capital
• Kd the pre-tax cost of debt, which is the expected long-term future borrowing cost of the relevant project and/or business. The conventional practice for estimating Kd is to estimate an appropriate premium over the benchmark lending rate.
• t the applicable corporate tax rate
• D the market value of debt
• E the market value of equity

Each of the components of the WACC formula is discussed further below.

Cost of Equity (Ke)

One of the most subjective areas in applying WACC is the estimation of the required return on equity. A widely accepted method for estimating the cost of equity is the capital asset pricing model ("CAPM").

Under CAPM, the expected return on equity is measured as the return on risk free investments plus a premium for the non-diversifiable risk associated with the relevant asset or project.

The CAPM rate of return on equity capital is calculated using the formula:

$$
K_{e} = R_{f} + [\beta_{E} \times (R_{m} - R_{f})]
$$

Where:

• Ke rate of return on equity capital
• Rf risk-free rate of return
• ȕ^E beta for this type of equity investment
• Rm Rf market risk premium which is the expected return on a broad portfolio of stocks in the market (Rm) less the risk free rate (Rf)

Risk-free Rate (Rf)

The relevant risk-free rate of return is the return on a risk-free security, typically for a period that reflects the longevity of its associated cash flows. In practice, Government bonds are an acceptable benchmark for the risk-free security. The yield to maturity of Government bonds at the valuation date is generally accepted as a proxy for the risk-free rate.

Having regard to the projected mine lives and estimations of further resource conversion, we have used the current yield to maturity of the 10-year Australian Commonwealth Government bond, as a proxy for the risk free rate, which is currently 6.0%.

Market Risk Premium (Rm - Rf)

The market risk premium is the premium above the risk free rate that investors can expect to earn on a diversified portfolio of equity investments. It is generally measured as the difference between actual historical returns on a market share portfolio (or proxy such as the ASX index) and long term Government bonds.

In Australia, Professor Robert Officer has conducted research which indicates that the long term average market premium using data over the period form 1882 to 1987 has been close to 6% (using a geometric average). Further, Professor Martin Lally has reviewed the appropriateness of using 6% as an estimation of market risk premium and concluded it to be reasonable. However, we note that some recent academic studies suggest that market risk premia may be trending downwards due, in part, to the impact of dividend imputation and therefore the use of 6% may currently be considered a relatively full estimation of market risk premium.

We have adopted a market risk premium of 6% for the purposes of the cost of equity calculation.

Beta (ȕE)

Beta is a risk measure that reflects the sensitivity of a company's share price to the movements of the stock market as a whole. Beta measures the systematic risk of a company's investments which cannot be diversified away, measured relative to the market portfolio.

The historical beta for equity securities can be measured statistically by regressing the return on an equity market index against the share price returns of the relevant stock over a suitably long period of time. The measurement of beta is not an exact science as estimation errors may result from oneoff events occurring during the measurement period and a company's beta may vary over time.

A beta factor of one implies that the risk of the particular asset or investment is the same as the risk profile of the market average as a whole. A beta above one indicates greater risk than the average, while a beta of below indicates less risk than the average risk of the market as a whole.

The beta of a stock can be presented as either an adjusted beta or as an historical beta. The historical beta is obtained from the linear regression of a stock's historical data, whereas the adjusted beta is an estimate of a security's future beta. It is initially derived from the historical beta, but modified by the assumption that a security's true beta will move towards the market average of one, over time. In practice an adjusted beta is often used.

Observed betas in the market place are equity betas and are affected by the gearing of the entity. In applying CAPM, adjustments are generally made to the observed equity betas in the market place to allow for the different capital structures and levels of gearing in the companies examined. This process involves "de-gearing" the beta to arrive at the asset beta (that is, the beta applicable to the risk profile of the assets or business operations).

There are a number of formulae advanced for the "de-gearing" and "regearing" of beta. The most commonly applied formula is the Harris and Pringle formula as follows:

$$
\beta_E = \beta_A \left( 1 + \frac{D}{E} \right)
$$

where:

• E ^E company's equity beta
• E ^A company's ungeared (asset) beta
• D market value of the company's debt
• E market value of the company's equity

The following table sets out current financial gearing levels, adjusted equity betas and the adjusted ungeared (asset) beta estimates for a selection of mining entities listed on the ASX with comparable attributes. The beta factors have been calculated relative to the ASX All Ordinaries (Accumulation) Index.

Exploration companies with advanced projects

			Observed
Company	Market Capitalisation A\$million	Net Debt / Equity %	Adjusted Equity Beta	Adjusted Ungeared Beta
Mount Gibson Iron Ltd. (ASX:MGX)	2,101.9	5%	2.58	2.45
Midwest Corp. Ltd. (ASX:MIS)	987.7	0%	1.93	1.93
Gindalbie Metals Ltd. (ASX:GBG)	818.6	0%	2.02	2.02
Jabiru Metals Ltd. (ASX:JML)	605.4	0%	2.00	2.00
FerrAus Ltd. (ASX:FRS)	135.3	0%	1.80	1.80
Breakaway Resources Ltd.
(ASX:BRW)	83.8	0%	2.20	2.20
Yilgarn Mining Ltd. (ASX:YML)	81.3	0%	1.82	1.82
Argonaut Resources NL (ASX:ARE)	78.3	0%	1.43	1.43
Goldstream Mining NL (ASX:GDM)	75.7	0%	1.15	1.15
Legend Mining Ltd. (ASX:LEG)	70.6	0%	1.36	1.36
Helix Resources Ltd. (ASX:HLX)	52.8	0%	1.37	1.37
Average			1.79	1.78

Source: Bloomberg, latest available financial statements of relevant companies

Note 1: Market capitalisation as at 1 November 2007.

Note 2: Net debt is interest-bearing debt less cash. Net debt based on interest bearing debt as disclosed in latest available financial reports as at 30 June 2007. Where a company does not have any interest bearing debt or the resultant net debt figure is negative i.e. where cash exceeds interest-bearing debt, the ratio of net debt to equity has been recorded as 0% for the purposes of our assessment.

Note 3: We have used adjusted equity betas based on observed weekly data over a five year period as reported on Bloomberg.

Mining companies

			Observed
Company	Market Capitalisation	Net Debt / Equity	Adjusted Equity	Adjusted Ungeared
	A\$million	%	Beta	Beta
Jubilee Mines NL (ASX:JBM)	2,809.4	0%	1.44	1.44
Portman Ltd. (ASX:PMM)	2,175.9	0%	1.47	1.47
Consolidated Minerals Ltd. (ASX:CSM)	1034	11%	1.58	1.42
Sally Malay Mining Ltd. (ASX:SMY)	1,032.3	0%	2.13	2.13
Iluka Resources Ltd. (ASX:ILU)	955.6	64%	1.23	0.75
CopperCo Ltd. (ASX:CUO)	446.7	8%	0.98	0.91
CBH Resources Ltd. (ASX:CBH)	428	0%	1.89	1.89
Bemax Resources Limited (ASX:BMX)	211.8	43%	1.67	1.17
Consolidated Rutile Ltd. (ASX:CRT)	178.2	4%	1.13	1.09
Fox Resources Ltd. (ASX:FXR)	123.1	0%	1.10	1.10
Australian Zircon NL (ASX:AZC)	73.9	35%	1.21	0.89
Average			1.44	1.30

Source: Bloomberg, latest available financial statements of relevant companies

Note 1: Market capitalisation as at 1 November 2007.

• Note 2: Net debt is interest-bearing debt less cash. Net debt based on interest bearing debt as disclosed in latest available financial reports as at 30 June 2007. Where a company does not have any interest bearing debt or the resultant net debt figure is negative i.e. where cash exceeds interest-bearing debt, the ratio of net debt to equity has been recorded as 0% for the purposes of our assessment.
• Note 3: We have used adjusted equity betas based on observed weekly data over a five year period as reported on Bloomberg.

The above analysis indicates that the ungeared beta for advance stage exploration companies falls in the range from 1.15 to 2.45 with an average ungeared beta of 1.78. We have adopted a range of 1.65 to 1.85 as being representative of an advanced stage exploration company beta for the purposes of our analysis. The ungeared beta for a single commodity focus mining company falls in the range from 0.75 to 2.10 with an average ungeared beta of 1.30. We have adopted a range of 1.20 to 1.40 as being representative of a single commodity focus mining company beta for the purposes of our analysis.

Having assessed an appropriate asset (or ungeared) beta, it is then necessary to derive the equivalent equity beta by "re-gearing" the beta according to the optimal capital structure for the asset being examined.

Debt to Equity Mix

In estimating the WACC, the debt to equity assumption should reflect the optimal or target capital structure for the asset being valued.

Optimal (as opposed to actual) capital structures are not readily observed. Accordingly, any estimate of optimal capital structure is necessarily subjective. In practice, the existing capital structures of comparable companies are used as a guide to estimate the likely optimal capital structure for an entity, taking into consideration the specific financial circumstances of that entity. In drawing any conclusions from the comparable company information, it is important to note that the observed gearing levels usually represent current or historical gearing levels, which may or may not be representative of optimal, long term gearing levels.

We have reviewed the capital structure of comparable exploration and mining companies whose securities are listed on the ASX. We have also considered the specific financial circumstances pertaining to GWR's individual operations. Based on this assessment, we consider appropriate long term gearing levels to be in the order of 0% debt and 100% equity for exploration companies and 13% debt and 87% equity for mining companies, based on the average debt to equity ratio's from the sample of companies used in our analysis.

On this basis, we have assessed the regeared beta of GWR to be in the range between 1.65 and 1.85 for exploration companies and between 1.3 and 1.5 for mining companies.

Cost of Debt (Kd)

The cost of debt is the rate a prudent debt investor would require on interest-bearing debt after considering the appropriate capital structure and the nature and risks pertaining specifically to the entity's operations.

Since the interest on debt is deductible for income tax purposes, the WACC incorporates the aftertax interest rate in the calculation. For the purposes of assessing WACC, the existing effective Australian corporate tax rate of 30% is generally applied.

We have applied a cost of debt of 8.0%, which we believe is an appropriate cost of debt after considering the capital structure and the nature of GWR's projects. This corresponds to a post tax cost of debt of 5.6% per annum.

Dividend Imputation

Since July 1987, Australia has had a dividend imputation tax system in place, which aims to remove the double taxation effect of dividends paid to investors. There has been considerable debate in relation to the extent to which dividend imputation should be taken into consideration in determining a company's value. Whilst no consensus view has been reached, we note that it is current market practice for dividend imputation to be excluded from valuations of mining assets.

Calculation of WACC

The following table summarises the nominal post-tax WACC for application in the assessment of GWR's operations based on the assumptions and inputs discussed above.

Input	Definition	Value Adopted
Kd	Cost of debt (pre-tax)	8.0%
Ke	Cost of equity (post-tax)	15.9% to 17.1%
t	Corporate tax rate	30.0%
D/D+E	Proportion of debt in capital mix	0%
E/D+E	Proportion of equity in the capital mix	100%
WACC	Weighted average cost of capital (nominal post-tax)	15.9% to 17.1%

Exploration companies

Mining companies

Input	Definition	Value Adopted
Kd	Cost of debt (pre-tax)	8.0%
Ke	Cost of equity (post-tax)	13.8% to 15.0%
t	Corporate tax rate	30.0%
D/D+E	Proportion of debt in capital mix	13%
E/D+E	Proportion of equity in the capital mix	87%
WACC	Weighted average cost of capital (nominal post-tax)	12.7% to 13.8%

Adjustment for Inflation

The cash flows for GWR's operations have been derived on a post tax real basis. The WACC set out above is on a nominal basis as it includes an allowance for inflation. The inflation rate implicit in long term bonds over the duration of the cash flows modelled approximates 3.2% per annum.

The WACC on a real post tax basis inferred from the table above and an inflation rate of 3.2% is 12.2% to 13.4% per annum for exploration companies and 9.2% to 10.2% per annum for mining companies.

Discount Rates

We consider that an appropriate discount rate to be adopted for our probabilistic DCF analysis is lower than that implied by the sample of exploration companies considered, but above that associated with established mining operations. We have chosen to adopt a real post tax discount rate of 11% for the purposes of our assessment. This rate represents a premium of 1% to 2% above that of mining operations to reflect the development risk, but 1% to 2% lower than that of the sample of exploration companies with advanced stage projects.

IRON ORE OVERVIEW

Almost all iron ore production is used in steelmaking. Iron rich ores are common throughout the world, but commercially exploitable deposits are limited. Commercially exploitable iron ore deposits are usually in the form of iron oxides:

• x hematite Fe2O3 (direct shipping grade generally above 55% Fe content) or
• x magnetite ore Fe3O4 (lower iron content genetrally above 25% Fe content ore capable of beneficiation).

Hematite ore is less common than magnetite deposits but is more sought after due to the suitability of this ore for use in steel making with minimal beneficiation. Direct shipping hematite ore product is classified into either lump or fines based on the screened size of the ore produced. Lump ore commands a price premium as it can be input directly to the blast furnace steel making process whereas fines are not suitable for this and require an agglomeration process (sintering) into pellets before use. The economic viability of hematite deposits is mainly influenced by the physical location and scale of the deposit (which affect the mining and transport costs) and the level of nondesirable elements (which impact the steel making process and resultant price penalty associated with the ore). Whilst lower grade hematite ore can be beneficiated (mostly by crushing and subsequent density separation), this is generally less cost effective than beneficiation options for lower graded magnetite ores.

The iron content of magnetite ores is too low for direct input into the steel making process. As such, this ore type requires extensive beneficiation. This is undertaken using the magnetic properties of this ore type. Ore is crushed and subject to grinding to allow iron rich ore to be separated through a magnetic process. The process also allows the resultant concentrate to reduce levels of non-desirable minerals. The concentrate is generally subject to a pelletisation process before use in the steel making process. The crushing and grinding process is energy intensive and adds significant operating costs to the production of saleable product. Magnetite deposits have varying degrees of suitability for economic processing depending in part on how the ore crushes and separates. However, the resultant product commands a price premium due to its high iron content and reduced level of non-desirable elements.

Raw iron itself is not as strong and hard as needed for construction so it is generally alloyed with a variety of elements in the steel making process, such as tungsten, manganese, nickel, vanadium and chromium. There is no substitute for iron in steel production, however scrap steel has a high level of recycling to add to iron ore as feedstock for the steel making process.

World Resources of Iron Ore and Mine Production

It is estimated that worldwide iron ore reserves are approximately 800 billion tonnes, containing over 230 billion tonnes of iron¹ . The reserves are distributed over a number of countries. Whilst iron is an abundant element, iron ore production is concentrated with four countries accounting for 76% of current annual iron ore production.

The largest iron ore producing nations are China, Brazil, Australia and India. With the exception of China, the majority of iron ore produced in these countries is not consumed in the country of origin. Brazil, Australia and to a lesser extent India are the principal exporters into the global seaborne iron ore market with each of these countries having significant deposits of high iron content (>60%Fe) ore. These three countries account for 85% of the current global seaborne iron ore market. The increase in demand for seaborne iron ore imports (driven by growth of the Chinese market) has largely been met by rapid expansion of supply from Brazil and Australia, which together maintain dominance of supply to this market and have the largest global reserves of high iron content ores. Over 90% of Australian iron ore production and over 80% of Brazilian iron ore production is exported through seaborne trade. India's production is now increasingly being used for domestic supply with just over 50% exported.

Production is largely dominated by three companies: CVRD (Brazil), Rio Tinto (Australia) and BHP Billiton (Australia) which together will account for an estimated 32% of the total expected world iron ore production in 2007. Importantly, these companies control over 70% of the global seaborne

¹ Source US Geological Society.

traded iron ore production. The increase in global demand has also led to expansion of iron ore production in other countries and the emergence of a number of new prospective producers. However, the relatively small scale of these operations compared to the significant expansion that the three major producers have undertaken and the reserves that they control will maintain the dominance of the major producers over supply to the global seaborne market for the foreseeable future.

Iron ore production is largely a mechanical process which relies on economies of scale and operational efficiency to reduce mining, materials handling and transportation costs on a per tonne basis. Sea freight also comprises a significant component of the landed cost of iron ore to steel producers supplied by seaborne trade.

World Demand and Historical Prices

Demand for iron ore is driven by steelmaking. Iron ore consumption is concentrated in a few countries with the top five regions/countries accounting for approximately 80% of world demand for iron ore. Whilst steel production in many of these areas has experienced relatively low growth over recent years, China has experienced double digit growth in its crude steel production. As a consequence, China has accounted for most of the growth in world steel production over the past ten years and now represents over a third of the world's crude steel production.

The rapid growth in steel production in China has not been met by a corresponding increase in domestic Chinese iron ore production. Chinese iron ore deposits, although substantial, are of a much lower grade (approximately half of the equivalent iron content per tonne) than the current iron ore produced by Brazil and Australia. China has moved from a position where demand was largely satisfied by domestic supply in the early 1990's to being a net importer of an estimated 380 million tonnes of iron ore in 2007. This is despite an increase in domestic production during this period. Chinese net imports of iron ore are forecast to exceed 500 million tonnes in 2009.

The Australian Iron Ore Industry

Australia has extensive deposits of high grade iron ore and with little domestic demand exports almost all of its production into the seaborne iron ore market. Australia (together with Brazil) has undergone significant expansion of its iron ore production capacity to meet the demand growth from China. Australian iron ore production is dominated by Rio Tinto and BHP Billiton. However, the rapid increase in demand and lead time to increase production has led to a lag in supply. Whilst the major participants are continuing to expand production capacity, there remains a shortfall in supply. This has allowed emerging producers an opportunity to align themselves with steel mills anxious to gain security over the long term supply of iron ore.

Whilst a limited spot market exists for iron ore, most production is sold under long term contract with annual benchmark prices driven from negotiations between the major suppliers and the Chinese and Japanese steel mills. The performance of Australia's iron ore producers is largely dependent on the worldwide demand and supply balance which influences the annual negotiated benchmark contract price and volume of sales. The contract price is set in US dollars and as such the financial performance of Australian iron ore producers is influenced by the strength of the Australian dollar relative to the US dollar.

The conditions for the Australian iron ore industry have been very buoyant in recent years with high iron ore prices due to worldwide supply falling short of global demand. Further price increases are expected in FY08 although these are anticipated to be offset slightly by the increased strength of the Australian dollar against the US dollar. The rapid growth in production which has occurred over recent years has also caused labour and other constraints, which in turn has led to significant capital and operational cost increases.

Source: IBIS World

Significantly increased demand from Chinese steel mills for imported iron ore has led to significantly higher iron ore prices and production volumes since FY2004. Prior to this, prices were relatively flat with more balanced supply and demand and moderate overall growth.

Price increases of 19% were secured by Australian producers in their negotiations with Japanese steel mills for the 2004/5 contract year as demand from Chinese steel mills triggered increased competition for iron ore output. The price negotiations between major Australian iron ore producers and Japanese steel mills for the 2005/06 contract year yielded substantial price rises of 71.5%, reflecting their desire to secure iron ore supply in light of surging demand from a rapidly growing Chinese steel production market, and booming demand for steel.

Chinese steel mills led annual contract price negotiations in 2006/7 as their net iron ore imports had grown above that of Japan. Negotiations between Australian producers and Chinese steel mills broke down, as the Chinese steel mills refused to accept further price increases. However, Australian producers secured price increases of approximately 19% with customers in Japan, Germany and Korea. Chinese customers eventually accepted an equivalent price increase in June 2006, which was backdated to the commencement of the contract year. A 9.5% price increase for both fines ore and lump ore was secured for the 2007/8 contract year as growth in demand continued to outstrip supply and capital costs for expansion projects escalated.

Australian iron ore exports are expected to rise to 298 million tonnes for the 2007/8 year with BHP Billiton and Rio Tinto bringing expansion projects on stream. Fortescue Metals Group's Chichester Range project is also expected to come on line in 2008 to become Australia's third largest iron ore producer ahead of Cleveland Cliffs.

Outlook

The trend of global demand for iron ore is expected to follow closely that of steel production and in particular growth in Chinese steel production driven by Chinese urbanisation, industrialisation and associated infrastructure projects. The output of Australia's iron ore producers is expected to grow significantly with IBIS World projecting total production to increase from approximately 345 million tonnes in 2008/9 to approximately 440 million tonnes in 2012/13, an increase of approximately 27.5%. Whilst this growth includes the commissioning of a number of projects held by emerging junior producers, most of the growth is anticipated from major expansion programs being undertaken by BHP Billiton, Rio Tinto and Fortescue Metals.

In addition to the expansion projects and new mines currently under construction in Australia, the price increases have led to planned and actual capacity growth in other parts of the world. Subject to expectations on future demand growth, these projects are anticipated to bring the market more into balance with effect from 2009.

There is a common view among economic forecasters that the current high prices observed in recent years will reduce as additional production comes on stream. A range of current price expectations for the future US dollar benchmark contract price of Australian lump iron ore relative to the 2007/8 contract year price is set out below.

Source: Minerals Monitor, AME Mineral Economics, various broker forecasts

The short term outlook is for further increases in iron ore prices. However, there are a range of views as to when supply will become more aligned with demand to moderate the long term price for iron ore. As such, there is considerable uncertainty over the medium and longer term iron ore price outlook. The significant capital invested in recent growth projects and higher operating cost structures associated with some of the additional production necessary to meet demand is generally viewed as likely to give rise to a longer term iron ore price which is higher than historical levels but significantly below prices experienced over recent years. There may also be longer term benefits to Australian producers through normalisation over time of the landed price of iron ore in the Asian markets.

APPENDIX F

DISCOUNTED CASH FLOWS – Base case scenario analysis

Wiluna West - Base Case scenario analysis
Year				2008	2009	2010	2011	2012	2013	2014	2015	2017 2016	2018	2019	2020	2021	2022	2023	2024	2025	2027 2026	2028	2029	2030
Waste mined Ore mined	Mtpa Mtpa	mean	187.2	0.0 0.0	0.0 0.0	0.0 0.0	5.0 12.5	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0 10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0	10.0 25.0 10.0 25.0	10.0 25.0	10.0 25.0	2.2 5.5
Iron content of ore	%			60%	60%	60%	60%	60%	60%	60%	60%	60%	60% 60%	60%	60%	60%	60%	60%	60%	60%	60% 60%	60%	60%	60%
Lump Fines	Mtpa Mtpa	50% 50%		0.00 0.00	0.00 0.00	0.00 0.00	2.50 2.50	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00 5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00	5.00 5.00 5.00 5.00	5.00 5.00	5.00 5.00	1.10 1.10
Lump price Fines price	USD/dmtu USD/dmtu	mean mean		139.36 109.88	139.36 109.88	114.40 90.20	95.68 75.44	84.24 66.42	76.96 60.68	72.80 57.40	55.76 70.72	70.72 55.76 70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76 70.72 55.76	70.72 55.76	70.72 55.76	70.72 55.76
Exchange rate	USD/A\$	mean		0.85	0.83	0.78	0.77	0.76	0.75	0.74	0.73	0.73	0.73 0.73	0.73	0.73	0.73	0.73	0.73	0.73	0.73	0.73 0.73	0.73	0.73	0.73
				\$M	\$M	\$M	\$M	\$M	\$M	\$M \$M	\$M	\$M	\$M	\$M	\$M	\$M	\$M	\$M	\$M	\$M \$M	\$M	\$M	\$M	\$M
Gross sales revenue State royalties			\$9,917.6 \$662.1	0.0 0.0	0.0 0.0	0.0 0.0	333.4 22.3	594.7 39.7	550.5 36.8	527.8 35.2	34.7 519.8	519.8 519.8 34.7	34.7 519.8 34.7	519.8 34.7	519.8 34.7	519.8 34.7	519.8 34.7	34.7 519.8	519.8 34.7	519.8 34.7	519.8 34.7 519.8 34.7	519.8 34.7	519.8 34.7	7.6 114.2
Net revenue				0.0	0.0	0.0	311.1	555.0	513.7	492.6	485.1	485.1 485.1	485.1	485.1	485.1	485.1	485.1	485.1	485.1	485.1	485.1 485.1	485.1	485.1	106.6
Rail and port capital (non-shared) Pre-production capital costs Sustaining capital		Oakajee option	\$188.3 \$84.3 \$773.5	0.0 193.4 47.1	0.0 193.4 47.1	386.7 0.0 94.1	0.0 2.3 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0 0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0	0.0 4.5 0.0 0.0 4.5 0.0	0.0 4.5 0.0	0.0 1.0 0.0
				240.5	240.5	480.8	2.3	4.5	4.5	4.5	4.5	4.5	4.5 4.5	4.5	4.5	4.5	4.5	4.5	4.5	4.5	4.5	4.5 4.5	4.5	1.0
Rail and port charges Mine site costs		Oakajee option Oakajee option	\$2,077.9 \$2,188.2	0.0 0.0	0.0 0.0	0.0 0.0	55.5 65.9	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8 111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8	111.0 115.8 111.0 115.8	111.0 115.8	111.0 115.8	24.4 37.9
				0.0	0.0	0.0	121.4	226.8	226.8	226.8	226.8	226.8 226.8	226.8	226.8	226.8	226.8	226.8	226.8	226.8	226.8	226.8 226.8	226.8	226.8	62.3
Net cash flows before taxation and finance			\$3,943.3	-240.5	-240.5	-480.8	187.4	323.7	282.4	261.3	253.8	253.8 253.8	253.8	253.8	253.8	253.8	253.8	253.8	253.8	253.8	253.8 253.8	253.8	253.8	43.3
Taxation			\$1,246.5	0	0	0	49.4	83.8	71.7	65.7	63.8	64.1	64.6 64.4	64.9	65.1	65.3	65.5	65.6	65.8	65.8	65.8 65.9	65.5	64.7	10.3
Net cash flow post taxation (excluding finance)			\$2,696.8	-\$240.5	-\$240.5	-\$480.8	\$138.0	\$239.9	\$210.7	\$195.6	\$190.0	\$189.4 \$189.7	\$189.2	\$188.9	\$188.7	\$188.5	\$188.3	\$188.2	\$188.0	\$188.0	\$188.0 \$187.9	\$188.3	\$189.1	\$33.0
Discount factor	11%
Net present value				\$350.3

COMPARABLE COMPANIES

Detailed below are summaries of each of the companies utilised as comparable companies for the purposes of our analysis.

• x BC Iron is an iron ore exploration company with its principal operations in the Pilbara region. The company does not have any stated JORC compliant resources, but has set an exploration target of achieving an inferred resource of between 45 million tonnes and 75 million tonnes by March 2008 with expected grades of between 56% and 58% Fe. The project mineralisation occurs as outcrops or near surface channel iron deposit up to 35 metres thick. The project is located approximately 275 kilometers from Port Hedland and is in close proximity to the Fortescue Metals Group Cloud Break project. BC Iron has entered into a memorandum of understanding with Fortescue Metals Group for future options of transport services. Whilst BC Iron will have relatively easy access to the multi access rail and port infrastructure being developed by Fortescue Metals Group the iron grade is towards the lower end of direct ship ore.
• x Iron Ore Holdings is an iron exploration company with principal operations in the Pilbara region, approximately 300 kilometers from Port Hedland and in close proximity to Fortescue Metals Group's multi access rail and port infrastructure. The company has indicated resources of 8.3 million tonnes at 58.1% Fe and 46.8 million tonnes at 50% Fe. Only the higher grade resources are currently suitable for direct shipping.
• x Royal Resources' main project is the Plateau Iron Stone project in the Mid West region of Western Australia, approximately 300 kilometers from Oakajee. The company has an inferred resource of 16.5 million tonnes at 60% Fe. The mineralisation occurs in narrow widths. The project is dependent on the development of rail and port infrastructure within the Mid West region.
• x Western Plains Resources has two key direct shipping iron ore deposits located in South Australia (Peculiar Knob and the nearby Buzzard deposit) with a combined resource of 28.1 million tonnes iron ore at a grade of 61.9% Fe. The key deposit at Peculia Knob is within 90 kilometers trucking distance to the Wirrida siding of the Central Australian rail line some 585 kilometers from the port of Whyalla. Western Plains have completed a bankable feasibility study (BFS) which has concluded that the project is technically and economically feasible. Production at 2.7 million tonnes per annum is anticipated by the 4th quarter of 2008. Western Plains have also disclosed that their nearby Hawks Nest project contains over 500 million tonnes of magnetite ore at 35% Fe, however we consider limited value is associated to the Hawks Nest project. With the initial pit design complete, the project has less resource upside than earlier stage exploration projects.
• x The principal asset of FerrAus is the Robertson Range project located in the Pilbara region of Western Australia, approximately 550 kilometers from Port Hedland and 50 kilometers from the rail head at BHP Billiton's Jimblebar iron ore mining operations. The current resource

APPENDIX G

indicated for the project is 30.6 million tonnes at 58.7% Fe content. FerrAus is advanced in mine planning and engineering studies with a mining proposal targeted for submission to Government in late 2007. FerrAus is targeting exploration potential of more than 200 million tonnes of resource within its tenement areas over five to seven separate deposits. FerrAus also has projects prospective for nickel and manganese.

• x Atlas Iron's principal asset is the Pardoo project 75 kilometers east of Port Hedland. Atlas Iron has a resource of 23 million tonnes of direct shipping ore at 57.3% Fe (14.3 million tonnes at Pardoo) and has advanced to a definitive feasibility study for direct shipping operations at 3 million tonnes per annum trucking ore to Port Hedland. Exploration activity is continuing to expand the resource base of direct shipping ore. Atlas also has a magnetite resource at Pardoo of over 850 million tonnes at 37.2% and has completed a scoping study for magnetite operations. Atlas has an exploration target of 20 million tonnes direct shipping ore at its Abydos project 100 kilometers south of Port Hedland and an exploration target of 30 to 40 million tonnes from tenements in the Mid West region near Jack Hills and Million tonnes Weld.
• x Polaris Metals has two principal iron ore projects. Poodano is a small (1.25 to 2.5 million tonnes per annum) prospective iron ore operation some 30 kilometers from Port Hedland. The project has a resource target 10-15 million tonnes grading around 55-58% Fe "Robe River" type iron ore. Polaris also has iron ore tenements in the Yilgarn region which Polaris indicates has a resource target of 150 to 200 million tonnes. This project has a non JORC compliant resource of 59 million tonnes at 57.9%Fe. Polaris is developing a pre feasibility study for a 5-10 million tonnes per annum mining operation on this project. The pre feasibility involves trucking ore up to 40 kilometers to a central rail load out facility, development of a new 60 kilometers spur line from the Perth Sydney rail line and railing the ore approximately 450 kilometers to Perth for export through the Port of Kwinana.
• x Centrex Metals holds iron ore exploration tenements near Whyalla in South Australia which contain a number or areas of mineralisation of direct shipping grade iron ore. The direct shipping grade deposits are relatively small and the immediate targets are high in phosphorous (>0.1%) content. Centrex has a resource of 9.1 million tonnes at its Wilgerup project and has indicated further resource potential from a number of buried targets. It is targeting a 2 million tonnes per annum mining and exporting operation. There is also potential for direct shipping grade product through gravity separation of lower grade hematite clay material.

APPENDIX H

COFFEY MINING TECHNICAL EXPERT'S REPORT

Independent Technical Report

Golden West Resources Limited

PriceWaterhouse Coopers

Coffey Mining Pty Ltd ABN 52 065 481 209 1162 Hay Street, West Perth WA 6005 Australia

DOCUMENT INFORMATION

Author(s):	Alex Virisheff Mal Kneeshaw John Hearne	Manager Mining Perth	Principal Consultant - Resources Associate Consultant - Resources	(MAusIMM) (FAusIMM) (MAusIMM)
Date:	Monday 26 November 2007
Project Number:	PPIR01
Version / Status:	v.10 / Final
Path & File Name:	P:\MINE\Projects\Pricewaterhouse Coopers\PPRI01_IGR\Report\pr_PPIR01_GWR_ITR_071126.doc
Print Date:	Monday 26 November 2007
Copies:	PriceWaterhouse Coopers		(2)
	Coffey Mining – Perth		(1)

Document Review and Sign Off

Primary Author Alex Virisheff

Supervising Principal John Hearne

This document has been prepared for the exclusive use of PriceWaterhouse Coopers ("Client") on the basis of instructions, information and data supplied by them. No warranty or guarantee, whether express or implied, is made by Coffey Mining with respect to the completeness or accuracy of any aspect of this document and no party, other than the Client, is authorised to or should place any reliance whatsoever on the whole or any part or parts of the document. Coffey Mining does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever.

1			Introduction 1
	1.1		Terms of Reference1
	1.2		Qualifications, Experience and Independence1
	1.3		Principal Sources of Information 2
	1.4		Projects Reviewed2
2			Wiluna West Project4
	2.1		Introduction4
	2.2		Tenement Status and Permitting5
	2.3		Geology and Mineralisation5
		2.3.1	Gold 7
		2.3.2	Iron 7
		2.3.3	Uranium 11
	2.4		Exploration History 11
		2.4.1	Geophysics 12
		2.4.2	Geological Mapping 13
		2.4.3	Drilling 14
		2.4.4	Environmental Issues 14
	2.5		Mineral Resources – Iron Ore 15
		2.5.1	Summary 15
		2.5.2	Bowerbird Deposit 17
		2.5.3	Bowerbird North Deposit 19
		2.5.4	Joyners Find Deposit 20
		2.5.5	Joyners North Deposit 22
		2.5.6	C1 Deposit 23
		2.5.7	C2 Deposit 26
		2.5.8	C3 Deposit 27
		2.5.9	C4 Deposit 29
		2.5.10	C5 Deposit 32
	2.6	2.5.11	C Regional 33 Mineral Resources - Gold36
		2.6.1	Summary 36
		2.6.2	Iron Monarch Deposit 36
		2.6.3	Eagle East Deposit 38
	2.7		Uranium 39
	2.8		Proposed Mining Operations39
	2.9		Metallurgy and Processing 39
		2.9.1	Gold 39
		2.9.2	Uranium 39
		2.9.3	Iron 39
	2.10		Infrastructure 40

9			References 74
8			Glossary of Technical Terms 70
	7.7		Valuation Summary 69
	7.6		Material Agreements 68
	7.5		Bullabulling South Projects67
	7.4		Doherty's Project 67
	7.3		Wiluna West Uranium Projects67
	7.2		Wiluna West Gold Projects66
	7.1		Introduction66
7			Other Assets 66
	6.7		Wiluna West Iron Ore Valuation60
		6.6.2	Resource Projects 58
		6.6.1	Exploration Projects 56
	6.6		Comparable Transactions 56
	6.5		Native Title56
	6.4		Environment 56
	6.3		Iron Ore Pricing 55
	6.2		Valuation Method55
	6.1		Resources 55
6			Iron Ore Assets55
	5.3		Valuation Methods52
	5.2		Fair Market Value of Mineral Assets 52
	5.1		Introduction52
5			Technical Valuation Background 52
	4.5		Mineral Resources51
	4.4		Exploration History 50
	4.3		Geology and Mineralisation49
	4.2		Tenement Status and Permitting48
	4.1		Introduction48
4			Bullabulling South Project 48
	3.5		Mineral Resources46
	3.4		Exploration History 46
	3.3		Geology and Mineralisation43
	3.2		Tenement Status and Permitting43
	3.1		Introduction42
3			Doherty's Project42
		2.10.3	Esperance Option 41
		2.10.2	Oakajee Option 40
		2.10.1	Current Infrastructure 40

List of Tables

Table 1 – Wiluna West Iron Ore Mineral Resources	ii
Table 2 – Wiluna West Gold Mineral Resources	v
Table 3 – Doherty's Project Gold Mineral Resource	vi
Table 4 – Valuation Summary	viii
Table 2.2_1 – Tenement Schedule –Wiluna West Project	5
Table 2.3.2_1 – Wiluna West Iron Deposit Extents	9
Table 2.4.3_1 – Drilling Summary – Iron Ore –Wiluna West Project	14
Table 2.5.1_1 – Wiluna West Iron Ore Mineral Resources	15
Table 2.5.2_1 – Bowerbird Deposit Drilling Summary	17
Table 2.5.2_2 – Bowerbird Mineral Resource	18
Table 2.5.3_1 – Bowerbird North Sectional Mineral Resource	19
Table 2.5.4_1 – Joyners Find Resources	21
Table 2.5.5_1 – Joyners Find North Sectional Mineral Resource	22
Table 2.5.6_1 – C1 Mineral Resource	25
Table 2.5.7_1 – C2 Mineral Resource	27
Table 2.5.8_1 – C3 Mineral Resource	29
Table 2.5.9_1 – C4 Deposit High Grade Cuts	30
Table 2.5.9_2 – C4 Mineral Resource	31
Table 2.5.10_1 – C5 Mineral Resource	33
Table 2.5.11_1 – C Regional Mineral Resource	35
Table 2.6.1_1 – Wiluna West Gold Mineral Resources	36
Table 2.6.2_1 – Iron Monarch Mineral Resource Comparison	37
Table 3.2_1 – Tenement Schedule – Doherty's Project	43
Table 3.5_1 – Doherty's Project Indicated Mineral Resource	47
Table 3.5_2 – Doherty's Project Gold Mineral Resource - Discrepancies	47
Table 4.2_1 – Tenement Schedule – Bullabulling South Project	49
Table 6.1.3_1 – Iron Ore Price Calculations	55
Table 6.1.4_1 – Recent Iron Exploration Project Transactions	58
Table 6.6.2_1 – Recent Iron Resource Project Transactions	59
Table 6.7_1 – Wiluna West Iron Ore Inferred Resources	60
Table 6.7_2 – Wiluna West Iron Ore	64
Table 7.7_1 – Golden West Resources Assets - Valuation Summary	69

List of Figures

Figure 1.4_1 – GWR Project Location Plan	3
Figure 2.1_1 – Wiluna West Project Regional Geology and Location Plan	4
Figure 2.3_1 – Wiluna West Simplified Geology	6
Figure 3.1_1 – Doherty's Project Regional Geology and Location Plan	42
Figure 3.3_1 – Doherty's Project Regional Geology	45
Figure 4.1_1 – Bullabulling South Project Regional Geology and Location Plan	48
Figure 4.3_1 – Bullabulling South Project – Local Geology	50

EXECUTIVE SUMMARY

Coffey Mining Pty Ltd (Coffey Mining) has been commissioned by PriceWaterhouse Coopers (PwC) to provide an Independent Technical Valuation of the Golden West Resources Limited (GWR) assets located in Western Australia.

Coffey Mining has not been requested to provide comment on the fairness or reasonableness of any vendor or promoter consideration in relation to the GWR assets, and has therefore not offered any opinion on these matters.

The conclusions expressed in this Independent Technical Valuation are appropriate as at the Valuation Date (25 November 2007).

Project Summary

GWR has three projects areas, Wiluna West, Doherty's and Bullabulling South. Within all projects areas, there is a history of previous gold mining but only at Wiluna West is there potential for iron mineralisation.

There are reported Mineral Resources for the Wiluna West iron and gold and Doherty's gold Project areas and there is potential for further resources to be defined.

Current exploration is primarily focused on the delineation of iron mineralisation at the Wiluna West Project. The potential of calcrete-hosted uranium is also being evaluated at this Project.

West Wiluna Project

Project Location

The Wiluna West Project is located approximately 40km southwest of the township of Wiluna and about 450km north-northwest of Kalgoorlie in the East Murchison Mineral Field of Western Australia. GWR hold access to a 45km long series of tenements varying to about 10km in width.

Project Background

These tenements cover the majority of the Joyners Find Greenstone Belt within which iron ore and gold prospects have been identified. It is believed that there is potential to enhance and extend these resources. Anomalous uranium values have also been recognised and a program is proposed to evaluate its potential.

Iron Ore

Geology

The Greenstone Belt contains a sequence of steeply westward dipping mafic, ultramafic and sediment lithologies, and in particular banded iron-formation (BIF) horizons which host some identified iron mineralisation. Three horizons (termed Units A, B and C) are recognised from surface geological mapping, and a further two (Units D and E) possibly exist (interpreted from aeromagnetic survey). Unit A is thin and has not yet been examined in detail; Units D and E are interpreted to occur in the west beneath younger cover, but have not been evaluated. The potential of Units A, D and E for iron mineralisation is unknown.

In limited areas of the northern 25km long section of the tenements, Units B and C have to date been demonstrated to host iron ore deposits (particularly Deposits C3 and C4) and these Units have been the main target for GWR exploration over the last two years. There is currently no detailed understanding of the Unit C BIFs' stratigraphy / structure which would assist in developing better orebody models and possibly aid the search for further mineralisation. It is suggested that attention could be directed towards these areas via activities such as re-appraisal of existing stratigraphic-structural and aeromagnetic data, collection of some down hole geophysical data and possibly additional gravity work.

In the southern 20km section of the tenements, much of the bedrock is under Tertiary sand cover, and based on the aeromagnetics and limited outcrop data, the Unit B and C horizons are interpreted to continue under the cover. Exploration drilling has only recently commenced in this area.

Resources

GWR have made good progress in establishing Mineral Resources in bedrock deposits in the Unit B and particularly the Unit C. The work programmes generally meet industry standards, with the notable exception of lack of down-hole surveys and in situ bulk dry density determinations. Adequate QA/QC procedures are in place but the results have not been evaluated.

Presently, a total Inferred Mineral Resources of 86Mt at 60.2% Fe has been identified (Table 1) with nearly 55% (47Mt) of the overall resource occurring in two deposits, C3 and C4. Resource estimates have been compiled using industry standard practice of Ordinary Kriging (Snowden) and lower quality sectional area methods (GWR). In classifying the resource estimates, the JORC Code guidelines (2004) have been referenced.

				Table 1
				Golden West Resources Limited
				Wiluna West Project
				Iron Ore Inferred Mineral Resources
	Estimate	Compiled	Lower	Tonnes	Fe	Si02	Al2O3	P	LOI
Deposit	Method	By	Cut Off	(Mt)	(%)	(%)	(%)	(%)	(%)
Unit B
Bowerbird	Block	Snowden	50%Fe	9.47	59.8	7.7	3.5	0.06	2.7
Bowerbird North	Sectional	GWR	§50% Fe	1.95	61.5	5.3	3.2	0.04	2.1
Joyners Find†	Block Snowden §50% Fe 7.75 64.6 3.1 1.9 0.02 2
Joyners Find North	Sectional	GWR	§50% Fe	3.57	63.1	4.8	2.5	0.03	2.1
Unit C
C1	Block	Snowden	50% Fe	4.20	58.5	7.2	3.3	0.09	5.2
C2	Block	Snowden	50%Fe	3.40	60.1	6	2.1	0.03	6
C3	Block	Snowden	50% Fe	23.30	59.1	8.6	2.1	0.07	4.4
C4	Block	Snowden	50%Fe	24.10	59.6	9.2	2.5	0.03	2.7
C5	Block	Snowden	50% Fe	4.40	60.6	8.9	2.1	0.12	3.8
C Regional	Block	Snowden	50%Fe	4.00	60.6	9.3	1.4	0.03	1.7
TOTAL				86.14	60.2	7.8	2.4	0.05	3.3

Coffey Mining considers that the section based estimates used for Bowerbird North, Joyners Find and Joyners North are of low quality and recommend that they be revisited using industry standard block modelling techniques.

Coffey Mining considers that there is insufficient data to demonstrate geological and grade continuity to support the Inferred Mineral Resource estimates for the C1, C5 and C Regional deposits. Further drilling is required to confirm these estimates.

Coffey Mining considers Snowden's Inferred Mineral Resource estimates for Bowerbird, C2, C3 and C4 as acceptable. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

Mining

The four deposits within Unit B (Bowerbird, Bowerbird North, Joyners Find and Joyners Find North, comprising 23Mt or 26% of the mineral resource tonnage, occur along a total strike length of some 4.8km and are hosted within a series of very thin BIF horizons.

A relatively high strip ratio is likely with selective mining techniques anticipated to be required to achieve maximum grade / tonnage recovery from the thin, multi-seam environment. The economic viability of some very thin and / or deeper iron mineralisation of these deposits may be questionable under some scenarios.

In contrast, the Unit C deposits delineated to date (C1 to C5 inclusive and C Regional) contain 63Mt or 74% of the entire area's mineral resource tonnage. The C3 and C4 deposits are by far the largest, together making up 55% (47Mt) of the area's total resource and 75% of the total Unit C tonnage. The various C deposits occur along a total mineralised strike length of some 7.9km and are hosted within a thick (>500m) BIF sequence and could be mined under a comparatively lower strip ratio environment.

Metallurgy

The iron ore types are variously magnetite-hematite (Unit B) or mainly hematite (Unit C), which possibly reflect different genesis.

The current GWR expectation of an overall project 60:40 lump to fine ratio is considered to be optimistic and an overall ratio of 40:60 lump to fine ratio is more probable. Based on the examination of RC drill samples, lump to fine ratios of the observed iron ore types will locally probably vary from a 20% lump content for dust like material, through 40% for biscuit to +60% for massive non-porous material types.

No metallurgical, density or mineralogical characterisation of the various iron ore types has yet been completed. Usual industry practice is to collect such data early, although it is understood that such work is proposed as an integral part of a forthcoming diamond drill program.

Prospectivity

The potential of the entire 25km section of the Unit C northern area has now been examined... The C3 and C4 deposits appear to host the only significant enrichment to date, and have been delineated by 40m by 40m drilling in parts of C4, with C3 having a more variable and, wider drill grid.

The C1, C2, C5 and C Regional deposits at present appear to comprise more limited enrichment. Much of the drilling in the latter areas comprises wide grid spacings (200m / 400m) and tonnage envelopes have often been extrapolated from single hole intersections. Considerable further drilling is required across these areas to properly understand the mineralisation extent both along strike and down dip.

To date, Unit C has been irregularly tested by drill holes along some 18.5km of the northern section's 25km strike length. Within that tested area, the enrichment extent totals approximately 7.9km of strike. Several areas have no drill holes where only BIF is seen in outcrop. It is noted that some 40% of the C1, C2 and C3 deposits, totalling approximately 4.5km of the enriched strike length, consists of hydrated, near surface mineralisation, rather than deeper and higher grade low silica enrichment

It is not possible to make a comment on the prospectivity of the Units A, D and E in the northern area at this time given the very limited geological knowledge. For similar reasons, the potential of the Unit B and C horizons in the southern area is difficult to comment on, although the potential for additional discoveries in this area is perhaps brighter, particularly for the thicker Unit C given the occurrence of significant enrichment in the northern area.

However GWR should not lose sight of the possibility that locating further large (C3 or C4 size) deposits in the tenements could be poor, and the future may possibly result in an aggregate of a series of additional smaller, C1, C2, C5 and C Regional sized deposits scattered along the main Unit C range and/or under cover to attain GWR's target tonnage for the area of 100Mt.

Gold

Geology

Within the region, the Joyners Find Shear Zone (JSZ) and the Brilliant Shear Zone (BSZ) host most of the known gold mineralisation. The JSZ strikes roughly north-south through the centre of the greenstone belt and is coincident with the lithological strike. The BSZ is located on the eastern edge of the belt and oriented north-northwest (50 to the lithological strike). Gold mineralisation is extremely fine-grained occurring within the steeply dipping units and as shear hosted quartz veins. The gold is associated with pyrite and arsenopyrite. Faulting disrupts the continuity of the mineralisation.

Localised gold mineralisation occurs elsewhere in the BIFs, mafics and ultramafics associated with smaller shears.

Resources

A total gold Measured and Indicated Mineral Resource of 788,000t @3.5g/t Au has been reported by GWR from nine contributing deposits (Table 2). These resources have been estimated by using a sectional end area approach. Coffey Mining considers the section based estimates are of lower quality and recommends that they be revisited using industry standard block modelling techniques.

The Iron Monarch and Eagle East deposits have estimated by GWR with the remaining resources are as reported by Sipa Resources Limited. The available GWR documentation provides no details on the assessment of data quality, historical data validation, insitu dry bulk density determination and criteria used in assigning the resource category.

Coffey Mining has not reviewed the detail of the historic resources and cannot comment on the veracity of the calculations or assigned classification.

			Table 2 Golden West Resources Limited Wiluna West Project Gold Mineral Resources – April 2005 As Compiled by GWR
	Geology		Resource	Tonnes	Gold Grade	Gold Metal	Company /
Deposit	Shear	Style	Category	(t)	(g/t)	(oz)	Date
Iron Monarch		BIF	Indicated	140,000	3.0	13,500
Eagle East		BIF	Indicated	102,000	3.7	12,000	GWR 2005
Hawk	Joyners	BIF	Indicated	42,000	2.5	3,400
Iron King	Shear Zone	BIF	Indicated	163,000	3.3	17,300
Iron Duke	(JSZ)	BIF	Indicated	143,000	2.6	12,000
Goldfinch		BIF	Indicated	72,000	3.0	6,900
Bronzewing		Qtz	Indicated	30,000	5.5	5,300	Sipa 1990
Bottom Camp			Measured	21,000	7.6	5,100
	Brilliant Shear Zone	Qtz	Indicated	16,000	5.5	2,800
Brilliant/ Brilliant North	(BSZ)	Qtz	Indicated	59,000	4.6	8,700
TOTAL			Rounded	788,000	3.5	87,000

Prospectivity

Further investigations will focus on extending existing resources and testing areas similarly featured untested regions.

Doherty Project

Project Location

The Doherty's project is a single tenement located 65km north of Sandstone and 600km northeast of Perth within the East Murchison Mineral Field, Western Australia and the historic Barrambie mining centre.

Within the tenement, gold resources have been identified and there is potential to enhance and extend these resources.

Geology

The project is located at the southern end of Barrambie Greenstone Belt. Within the area, the recognised lithologies include quart-chlorite schists, felsic volcanoclastics, metasediments, banded ironformations (BIFs) and dolerites. These the rocks are tightly folded and disrupted by faults, cross faults and shears. Several phases of granite have also intruded the sequence. The BIF horizons containing grey chert, magnetite and some pyrite form prominent northwest-southeast trending ridges.

Gold has been mined historically from north-south trending quartz vein-filled shears in altered albite porphyry. The mineralised shoots are narrow, plunge at 30° to north-northwest and contain sulphides predominantly pyrite, scheelite, chlorite and silica. Two shoots, A and B are known at Doherty.

Resources

A modified sectional end area approach was used in estimating the Mineral Resources for the project. Level face samples obtained from the underground workings were used in conjunction with diamond drill holes samples in outlining mineralisation and grade estimation. RC drilling completed by GWR were not used. A 1g/t Au lower cut-off grade together with minimum 1m width was used to outline gold mineralisation at 20mRL intervals over a distance of 100m. A high grade cut (top cut) of 100 g/t Au was applied. Tonnage calculations used an in situ dry bulk density of 2.6t/m³ .

GWR have cited an Indicated Mineral Resource of 26,700t at 23.8g/t Au. A discrepancy of 1,000t and more than 700ozs are noted between the reported figures and the resource documentation (Table 3). The source of the errors is likely to be typographical in origin.

The available GWR documentation provides no details on the assessment of data quality, historical data validation and criteria used in assigning the resource category. Coffey Mining considers the section based estimates are of lower quality and recommends that they be revisited using industry standard block modelling techniques.

		Table 3 Golden West Resources
		Doherty's Project Indicated Mineral Resource – April 2005 Gold
	Tonnes	Au Grade	Gold Metal
	(t)	(g/t)	(oz)
Resource Report†	25,693	23.8	19,660
Technical Report† Text	26,700	23.8
Technical Report† Table	25,693	23.8	19,660
Annual Reports‡	25,700	23.8	20,430

† Table 1: Report on Doherty's Resource Estimate – April 2005 – Report Doherty's Resource _April 2005_.pdf and in Table 2: Doherty's Annual Technical Report on P57/972 January 2006 - DOH_A_2006.pdf

‡ From Annual Report 2005, 2006, 2007

Prospectivity

There is potential for further mineralisation to be found both at depth and within the western limb.

Bullabulling South Project

Project Location

The Bullabulling South Project is a single tenement located 35km southwest of Coolgardie and 80km southwest of Kalgoorlie in the Coolgardie Mineral Field, Western Australia.

Project Background

The project is located at the southern end of the highly mineralised Coolgardie-Bullabulling Greenstone Belt which has produced more than 3 million ounces of gold. Gold operations are located along two major geological structures, the Bullabulling and Reptile Shears that traverse the tenement.

A number of companies have conducted exploration in the area targeting the two shear horizons. Investigations have included geological reconnaissance, geophysical and geochemical surveys and drilling in evaluating the area. Aeromagnetic surveys and drilling has firstly discovered that the greenstone belt extends further south and identified several major structures that of exploration interest. Triton's geochemical survey identified two areas of particular interest, the Canyon and Triton Anomalies.

Geology

The area is located on the western side of the Norseman-Wiluna Greenstone Belt, where the Coolgardie Domain of the Kalgoorlie Terrane changes from a south-westerly trend to a north-westerly orientation. The rock sequence includes basalts, gabbros, dolerites, felsic volcanics and sediments that have undergone amphibolite grade metamorphism and now are largely obscured by soil cover. This sequence is intruded by pegmatite. Structurally, thrusting, folding and faulting are recognised. The main structural features are the Bullabulling and Reptile Shears. The effects of weathering are known to extend to more than 40m. From drilling anomalous gold intercepts were found to be coincident with the saprolite saprock interface below transported overburden.

Resources

GWR have compiled all the exploration results and maps from the available WAMEX Open File Reports. To date, no Mineral Resource has been reported.

Prospectivity

Further exploration is aimed at testing greenstone-granite contacts identified from the analysis of existing data. These areas are characterised by magnetic highs and are associated with geochemical anomalies and the shear zones.

Valuation

A summary of the adjusted valuations for the various Projects is provided in the Table below.

	Table 4 Golden West Resources Valuation Summary (25 November 2007)
			Valuation (to three significant figures)
Project		Low (\$M)	High (\$M)	Preferred (\$M)
Wiluna West Iron Ore Projects	Resources	26.82	241.35	86.72
	Exploration	2.75	8.25	5.00
Wiluna West Gold Projects	Resources	1.58	3.55	1.81
	Exploration	0.02	0.06	0.05
Wiluna West Uranium Projects	Exploration	0.00	0.10	0.10
Doherty's Project	Resources	0.36	0.80	0.53
	Exploration	0.02	0.06	0.05
Bullabulling South Project	Exploration	0.08	0.25	0.15
Total		31.62	254.42	94.41

The value of Golden West Resources Limited's 100% equity interest in the Projects is considered to lie in a range from \$31.62 Million to \$254.42 Million, within which range Coffey Mining has selected a preferred technical value of \$94.41 Million.

This valuation represents a technical value, which excludes the application of corporate issues, taxation and gearing. In all other respects the valuation has been prepared in a manner consistent with the Valmin Code.

The market capitalisation of a number of listed iron ore exploration companies is currently placing a significant value on prospective future iron ore resource potential above that associated with any JORC compliant resources. There are only a limited number of transactions over the past two years involving iron ore exploration assets. Some of these may or may not reflect the current market sentiment associated with iron ore projects, which is in part driven by improved expectations for future iron ore prices.

The value of individual deposits is heavily influenced by factors including the iron ore grade, physical location, proximity to infrastructure and prospectivity of the deposit. Our assessment has by necessity been based on the assessment of actual drill results, geological analysis and the interpretation undertaken. Whilst we have considered the prospectivity of the tenements, this has been based upon the interpretation of existing data rather than assumptions over continuance of mineralisation and grade where there is limited evidence to provide confidence of this.

1 INTRODUCTION

1.1 Terms of Reference

Coffey Mining Pty Ltd (Coffey Mining) has been commissioned by PriceWaterhouse Coopers (PwC) to provide an Independent Technical Valuation of the Golden West Resources Limited (GWR) assets, located in the West Australia.

The objective of this work is to provide a Valmin compliant valuation and technical assessment of the GWR assets. The work has been commissioned by PwC with the full support of GWR. PwC will rely upon and use the report to separately form an opinion about the value of GWR in relation to a takeover offer from Fairstar Resources Ltd. This Report is to comply with the technical information required under various Australian securities laws and may be included in the GWR Target Statement to be prepared in connection with the offer. This report does not provide a valuation of GWR as a whole, nor does it make any comment on the fairness and reasonableness of any aspect of the offer.

The conclusions expressed in this Independent Technical Valuation are appropriate as at the Valuation Date (25 November 2007). The valuation is therefore only valid for this date and may change with time in response to variations in economic, market, legal or political factors, in addition to ongoing exploration results. Furthermore, Coffey Mining has not reviewed any information relating to corporate, taxation and gearing matters, nor is it qualified to do so and, as such, these have not been considered in this technical valuation.

All monetary values included in this report are expressed in Australian dollars (A\$) unless otherwise stated.

This valuation represents a technical valuation which, with the exception of the application of corporate, taxation and gearing issues, has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (The Valmin Code) as adopted by the Australasian Institute of Mining and Metallurgy (AusIMM) in April 2005.

1.2 Qualifications, Experience and Independence

The primary author, Mr Alex Virisheff, is a professional geologist with over 30 years international experience in the mining industry. Mr Virisheff is a Principal Consultant – Resources with Coffey Mining and a Member of the AusIMM, appropriately qualified to act as a "Competent Person" as defined in the JORC Code and has the appropriate qualifications, experience and independence to satisfy the requirements as an "Expert" as defined under the Valmin Code.

In addition, Mr John Hearne and Mr Mal Kneeshaw were retained by the primary author as "Specialists" to respectively advise and report on geology and mining associated with the GWR assets. All contributing authors are appropriately qualified and experienced to act as "Specialists" as defined in the Valmin Code.

1.3 Principal Sources of Information

The principal sources of information used to compile this report comprise resource estimates, transport studies, along with technical reports and data variously compiled by GWR and its consultants, and discussions with GWR corporate management. A listing of the principal sources of information is included in Section 9 of this report.

In addition, a site visit was undertaken to the West Wiluna Project by Mr Mal Kneeshaw between 8 October 2007 and 10 October 2007. He was accompanied by Mr Mick Wilson, Exploration Manager and an Executive Director of GWR.

All reasonable enquiries have been made to confirm the authenticity and completeness of the technical data upon which this report is based. A final draft of this report was also provided to GWR, along with a request to identify any material errors or omissions prior to final submission.

1.4 Projects Reviewed

GWR has three projects areas, Wiluna West, Doherty's and Bullabulling South (Figure 1.4_1). Within all projects areas, there is a history of previous gold mining but only at Wiluna West is there potential for iron mineralisation. There are reported Mineral Resources for the Wiluna West iron and gold and Doherty's gold Project areas and there is potential for further resources to be defined. Current exploration is primarily focused on the delineation of iron mineralisation at the Wiluna West Project. The potential of calcrete-hosted uranium is also being evaluated at the Wiluna West Project.

2 WILUNA WEST PROJECT

2.1 Introduction

The Wiluna West Project is located approximately 40km southwest of the township of Wiluna and about 450km north-northwest of Kalgoorlie in the East Murchison Mineral Field of Western Australia. The tenement area of some 440 square kilometres almost covers the entire Joyners Find Greenstone Belt. The tenements are contiguous over a length of 45km north-south and vary to about 10km in width.

Within the tenements, gold and iron resources have been identified and there is potential to enhance and extend these resources. Also, anomalous uranium values have been recognised and a program is scheduled to evaluate this potential.

Source: Golden West Resources

2.2 Tenement Status and Permitting

GWR tenements consist of 13 granted Exploration and Mining Licences and one pending application for an Exploration Licence in an area 40km southwest of Wiluna in Western Australia (Table 2.2_1). These tenements comprise an area of approximately 440km² . For the Jindalee Resources Limited owned tenements, E53/1089-I and M53/1078-I, there is a joint venture agreement through which GWR must spend \$400,000 on exploration within four years commencing 1st April 2004 to earn a 60% interest. Jindalee Resources can then decide on whether to contribute or may revert to a 20% free carried interest.

		Table 2.2_1 Golden West Resources Wiluna West Project Tenement Schedule
Tenement	Registered Holder	Proportion Held	Date Granted	Expires	Area1
2
E53/1089-I	Jindalee Resources Limited	100%	04/03/2004	3/03/2009	6 blocks
E53/1114-I	Golden West Resources Ltd	100%	24/09/2004	23/09/2009	21 blocks
E53/1116-I	Golden West Resources Ltd	100%	26/07/2005	25/07/2010	33 blocks
E53/1159-I Golden West Resources Ltd 100% 28/10/2005 27/10/2010 23 blocks
E53/1173-I	Golden West Resources Ltd	100%	06/04/2006	05/04/2011	17 blocks
E53/1177-I	Golden West Resources Ltd	100%	06/04/2006	05/04/2011	38 blocks
L53/115	Golden West Resources Ltd	100%	11/07/2002	10/07/2023	32.5 ha
L53/146	Golden West Resources Ltd	100%	10/08/2006	9/08/2027	51.8 ha
L53/147	Golden West Resources Ltd	100%	Application
L53/148	Golden West Resources Ltd	100%	10/08/2006	9/08/2027	147.0 ha
M53/1016-I	Golden West Resources Ltd	100/100	30/01/2006	29/01/2027	600.0 ha
M53/1017-I	Golden West Resources Ltd	100/100	30/01/2006	29/01/2027	798.0 ha
M53/1018-I	Golden West Resources Ltd	100/100	30/01/2006	29/01/2027	597.0 ha
M53/1078-I	Jindalee Resources Limited2	100/100	1/02/2007	31/01/2028	750.0 ha

¹ A graticular block is an area described by 5 minute latitude by 5 minute longitude increments on 1:1,000,000 plans of Western Australia

² GWR are earning 60% ownership through exploration expenditure

³ L23.11.05. Area 286 ha. Objection by Wiluna people lodged 15.11.2006.

2.3 Geology and Mineralisation

The Joyners Find Greenstone Belt is adjacent to the highly productive Norseman-Wiluna Greenstone Belt. This sequence of mafics, ultramafics and sediments is located near the northern margins of the Archaean Yilgarn Craton. Granites and dolerites also occur in the region. Outcropping banded iron-formation (BIF) units form low to prominent ridges. The stratigraphy trends north to south and is convergent to the south. Proterozoic age rocks of the Yerrida sub-basin occur as cover in the north of the belt within the tenement areas.

The greenstone belt contains two regional shear zones known as the Joyners Find and the Brilliant Shear Zones. The Joyners Find Shear is the most significant being at least 47km long and up to 1.5km wide.

Source: Golden West Resources

2.3.1 Gold

The Joyners Find Shear Zone (JSZ) and the Brilliant Shear Zone (BSZ) are the two major structural features recognized. The sense of movement along the shears is not known. The JSZ strikes roughly north-south through the centre of the greenstone belt and is coincident with the lithological strike. The BSZ is located on the eastern edge of the belt and oriented north-northwest (5⁰ to the lithological strike). These structures have a major control on gold mineralisation within the region hosting almost all of the known gold mineralisation. Smaller shears occur elsewhere in the BIFs, mafics and ultramafics. These often have localised gold mineralisation associated with them.

Faulting has further disrupted the area into three regions oriented northwest and southwest. The timing of gold mineralisation is consistent with that found the elsewhere in the Southern Cross Granite Greenstone terrane. The Comedy Synform (closure centred on 794 200mE / 7 040 450mN is a regional scale isoclinal fold that the trends north and gently plunges south. It is located approximately 100m to the west of the Joyners Find Mine lying along the eastern side of the JSZ.

Gold mineralisation occurs within the steeply dipping Units and as shear hosted quartz veins. The gold hosted within the BIF is extremely fine grained, likely to be epigenetic and is associated with pyrite and arsenopyrite. The quartz vein style of gold mineralisation occurs within mafic and ultramafic lithologies.

2.3.2 Iron

Five horizons, termed Units A, B, C, D and E, have been recognised in the area from surface geological mapping and / or aeromagnetic survey, and the BIFs within these have the potential to host iron mineralisation.

Stratigraphy

From GWR reports, the stratigraphy of the belt can be simplistically summarised as follows (sequence is assumed to become younger to the west):

Granite.

Brilliant Shear - along granite contact / within lower part of below sequence.

Mafic / ultramafic rocks interlayered with thin BIFs (Units A and B), pyritic shales and chert – 1,000m to 2,000m thick.

Joyners Find Shear within upper section of above strata.

• Basalts with minor shales (up to 200m thick).
• Unit C (500m to 800m thick) BIF, schists.
• Clastic sediments, minor ultramafics (estimated approximately 500m+ thick).
• Unit D and Unit E (these are yet to be confirmed by drilling).

Of the five horizons, only Units B and C have to date been demonstrated to host iron deposits in limited areas of the northern section of the tenements (the various deposits in Units B and C). These Units have been the main target for previous GWR exploration. Updates of resource calculations for the C4 deposit and new calculations for the C1, C2, C3, C5 and C Regional deposits have recently been completed. Exploration drilling is in progress in the poorly exposed southern area, but results of this work have not been seen to date. One section seen in the far south of the tenement during the site visit had intersected what looked like superficial low grade goethite-limonite material in the Unit C in two holes. It is understood that no high grade iron mineralisation has been intersected to date.

In the north, Unit A is thin in outcrop but has not yet been examined in detail. Units D and E are interpreted to occur to the west beneath younger cover from aeromagnetic data, and have not been evaluated. Their potential is unknown. The Unit A outcrops and Unit D and E locations were not visited on the site tour.

The stratigraphy of Units B and C as far as are currently known is:

• Unit B has been drilled along some 8km of its 15km strike length and is approximately 80m thick overall. It comprises up to six thin, steeply dipping BIFs (but usually only two or three are enriched), that when aggregated together are only some 15m to 20m thick. Thick schist horizons separate these BIFs and thin internal schist partings are also noted within the BIFs. This unit hosts the Joyners Find, Joyners Find North, Bowerbird and Bowerbird North deposits. Iron mineralisation has been intersected to depths of about 70m. The aggregated strike length of these deposits is some 2,600m. Comments on water table / wet samples are not recorded.
• Unit C outcrops out over approximately 25km in the northern area and is some 500m thick. There appear to be two main (upper and lower) BIF horizons separated by an internal thick schist horizon. This is recognised on the surface as a soil/laterite covered flat area and is also apparent on the aeromagnetic data, but not through the entire area. The appearance of the BIF varies from a uniform grey-blue colour, through red-black to black-white reflecting different iron oxide content. The continuity of these horizons and any preferred relationships to the iron mineralisation has not been detailed. This unit hosts the major and generally well delineated C3 and C4 deposits, and the smaller C1, C2, C5 and C Regional deposits which still need considerable extra drilling to fully define the mineralised envelope modelled to date. Mineralisation has been intersected to depths of over 120m in the C4 deposit, but is generally shallower. Water table is reported as being approximately 40m down hole, but samples below that depth are often report dry, due to minimal water inflows.

		Table 2.3.2_1 Golden West Resources Wiluna West Project Iron Deposits Northing Extents
Northing Horizon Deposit
		Minimum	Maximum
Unit B	Bowerbird	7 037 600mN	7 044 400mN
	Bowerbird North	7 044 400mN
	Joyners Find	7 032 200mN	7 033 800mN
	Joyners Find North	7 033 800mN
Unit C	C1	7 032 000mN	7 032 750mN
	C2	7 033 900mN	7 035 750mN
	C3	7 039 900mN	7 041 750mN
	C4	7 045 000mN	7 047 800mN
	C5	7 039 900mN	7 041 750mN
	C Regional	7 045 000mN	7 047 800mN

In the southern 20km section of the tenements (south of the Ullala road), much of the bedrock is under Tertiary sand cover, and only limited or poor BIF exposure is present. Based on the aeromagnetics and limited outcrop data, the Unit B and C horizons are interpreted to continue under the cover. Drilling has only recently commenced in this area.

In the northern 25km long section of the tenements, Proterozoic rocks (conglomerates and sandstones) of the Yerrida Basin form cover in the far north / central east parts. It has been noted that isolated pebbles of iron mineralisation are found within the basal conglomerate, indicating that some early iron mineralisation originally occurred in the Proterozoic.

Structure

The sequence dips steeply to the west (approximately 75^o ), with some local vertical or easterly dips. The major Joyners Find Shear Zone (up to 1km wide) cuts through the central section of the northern section of the lease on the western side of the Unit B, effectively separating the Units A and B from the Unit C and higher sections of the stratigraphy. The Brilliant shear occurs along the eastern side of the Unit A / granite contact. The general sense of movement along the shears is unknown.

Regionally, a major deformation resulted in faulting and folding into tight / isoclinal folds oriented north-south with west dipping axial planes most evident within the BIF ridges which are variably deformed and intensely folded (on a micro-scale at least). However, major folding has not been recorded within the local belt within drilled areas with the exception of one major, south plunging syncline (Comedy Synform, closure centred on 794 200mE / 7 040 450mN) mapped within the mafic/ultramafic/BIF Unit B sequence. Another is possibly indicated on the aeromagnetics in Unit A to the east of Bowerbird. However at the C4 deposit, Coffey Mining suggests that the BIF horizon geometry could be in part reflect similar isoclinal folding within the Unit C sequence.

From the aeromagnetic maps, northeast trending features can be seen and are likely to be faults or possible dykes cross-cutting the belt. One of these features forms the southern boundary to the C4 deposit. It is noted that some minor East-West vertical cross faults have needed to be interpreted for the C4 cross sections, supported by the gravity data (refer Snowden C4 modelling report). Whether these are real or artefacts to aid interpretation and there is some other explanation needs resolution in due course.

Iron Ore Types and Hardness

The constituent iron ore (or material) types and their inherent hardness influence the percentage of and the grade split of the lump and fines products obtained from an operating iron ore mine. It is necessary to understand the distribution and physical (metallurgical) and chemical characteristics of these material types via a metallurgical test work programme. The latter is proposed as an integral part of a forthcoming diamond drill program.

Examination of Units B and C indicate that they appear to host different iron mineralisation types possibly reflecting a different genesis.

• Unit B iron mineralisation in outcrop and near surface typically presents as thin horizons of a very hard, massive, non-porous material type. Its mineralogy is likely to be a combination of magnetite and hematite and is moderately to strongly magnetic. However, from several holes examined in the field, the material type can become quite porous and softer at depth, perhaps even dust like.
• The retention of a strong magnetic character at the surface possibly reflects some metamorphic / metasomatic event or is inherited from an original magnetite-rich BIF. It is not known whether the adjacent Joyners Shear is associated (genetically) with this material type.
• Unit C material types in contrast, whilst having some hard massive areas notionally similar to the Unit B, generally appear in outcrop as a laminated biscuit material type. Down hole, the ore types range from hard to biscuit to some dust like hematite types which are generally, but not completely, non-magnetic. The Unit C deposits exhibit a goethitic, hydrated (or hardcap) zone at near surface. A similar alteration was also noted at some upper and / or lower parts of the iron enrichment envelope where ground waters had percolated along contacts with adjacent schists. These material types generally appear to be similar to the supergene ores of the Hamersley Ranges of the Pilbara region in Western Australia, though less goethitic.

To achieve an appropriate product volume within defined chemical characteristics, mining is likely to need to blend a number of different material types. Based on the examination of RC drill samples, it is considered that the lump to fine ratios of the material types will locally vary from a 20% lump content for dust like type material, through 40% lump content for biscuit to +60% lump content for massive non-porous material. The presence of softer ores together with soft intercalated / adjoining schist material will impact on the product grades generating a greater grade split between lump and fines. Currently, the GWR expectation of an overall 60:40 lump to fine ratio is considered to be optimistic by Coffey Mining and an overall ratio of 40:60 lump to fine ratio is more probable, based on the current data available.

Mineralogy

Microscopic examination of polished sections is used as one technique to identify component minerals to aid in the understanding of chemical and physical (metallurgical) characteristics.

Currently, no mineralogical work has been completed on any of the material types.

2.3.3 Uranium

Superficial calcrete deposits occurring within palaeo-drainage channels host uranium deposits are found regionally and locally in areas to the south and east. In the south easternmost part of the tenement area, calcrete as identified by GWR radiometric surveys is thought to have the potential to host uranium mineralisation similar in style to that seen in calcrete at the Dawson Hinkler Well Project (U3O8 Limited) along palaeochannel to east-northeast immediately across the GWR tenement boundary. The Centipede and Lake Way deposits (Nova Energy Limited, 7Mt of 0.05% U3O8) are further to the east in the same palaeochannel. The large Yeelirrie deposit (BHPBilliton) is within 25km to the southwest in a separate palaeochannel.

2.4 Exploration History

Between 1912 and 1945, the region produced some 31,500 tonnes of gold ore at an average grade 10.4g/t Au with Joyners Find and Brilliant Mines being the largest producers. There are other historical mine workings and prospecting pits to be found in more than 20 separate locations over a distance of 15 km confined to the better exposed portions of the greenstone belt.

Further gold exploration has been carried out within the project area since 1980. The peak of exploration activities were between 1984 and 1990 with minimal exploration undertaken from 1990 to 1999. Approximately 20,000m of RC drilling and 15,000m of RAB drilling, 3,000 soil samples and 580 rock chip samples have been collected. Detailed and regional geological mapping was also undertaken along with aeromagnetic and aerial photography surveys.

Since 1990, more than 20 gold deposits and occurrences have been identified within the Wiluna West Project area. Although most of these deposits are relatively small, their full extent, particularly at depth and their inter-relationships has not been fully defined.

The existence of iron ore in outcrop was noted by the Geological Survey in their 1:250 000 scale regional mapping in the late 1970's, but GWR were the first to systematically explore the area and since 2005 have completed extensive drilling programmes on the bedrock ores (> 700 holes). Extensive surface chip sampling had previously been completed of the outcropping Units. Some trenches were excavated in Unit B scree (or detrital) ore areas were sampled and sent for metallurgical evaluation, but the ore thickness was very thin (< 1m). GWR consider it unlikely that a significant scree deposit will be found along the flanks of the deposits. It may be possible that localised similar deposits could be located within palaeochannels in the region.

Exploration drilling is evaluating gold targets generated from the analysis of surface mapping and aeromagnetics. As part of the evaluation of the iron mineralisation, 4m composite samples are being generated and submitted for gold assaying. Currently, not all the prospective areas for iron mineralisation have been so tested.

Limited GWR drilling on a single traverse had previously located the palaeochannel in a search for possible uranium enrichment, but sampling returned no anomalous values at the time. A later radiometric survey indicated the existence of a radiometric anomaly on calcrete over about 1km in length, but this area has not been tested to date.

2.4.1 Geophysics

Geophysical surveys are an integral component of modern exploration. The usual data collected includes gravity, magnetics, radiometrics, orientation, density and resistivity variously from aerial or surface surveys and down hole logging. Once the collected measurements are processed, the resultant maps and logs can be used to identify the mineralised horizons.

Aeromagnetics

The lease area has good aeromagnetic coverage (recorded along west-east lines spaced at 50m apart and flown at a nominal 35m height clearance). GWR have recognised and targeted obvious features and have requested Southern Geoscience Consultants to conduct further analysis to delineate other possible exploration targets, as well as to identify structural elements like faulting and folding. Coffey Mining support the need for a reappraisal of the aeromagnetic data to see if subtle (cross-cutting) features with potential to host mineralisation can be located.

Gravity

A local ground gravity survey was completed by GWR over the C4 deposit, which has a gravity high / aeromagnetic low response. Further gravity work may well be of benefit, although it should be noted that not all deposits may reflect a gravity high if there is no contrast with adjoining BIF, as porous ore and non-porous, unenriched BIF can have similar densities.

Down hole geophysical logging

To date, a small amount of down hole logging has only been carried out on the project. A down hole logging unit is scheduled to obtain essential drill hole orientation data (gyro tool essential due to the magnetic nature of some areas). The majority of drill holes have been drilled at an angle of 60^o dipping to the east. From the collected gyro orientation data, samples will be correctly position in 3D space. The opportunity should also be taken to run the whole range of tools available (density, gamma, resistivity, magnetic susceptibility, etc) across selected lines of drill holes at all deposits to evaluate use of same. The resultant logs at a spatial resolution of 0.1m have proved elsewhere to be a useful diagnostic of geology (both stratigraphy and possibly structure), as well as magnetite content.

2.4.2 Geological Mapping

GWR has access to geological mapping of the B and C Units at scales varying from 1:1 000, 1:2 000 (GWR) to 1:5 000 (initial rapid reconnaissance work), and further mapping in the southern area is in progress. A regional 1:25 000 scale map is utilised for overview work. This is believed to largely represent the original 1:5 000 mapping and discussions on site mentioned that a new regional map to reflect the GWR detailed mapping would be produced. Comment has been made earlier on the apparent lack of recognition / definition of isoclinally folded areas (often preferential hosts to mineralisation) within the Unit C BIFs. A (re)appraisal / review of the (C Range) mapping by a structural geologist may be beneficial to see whether meso- or macro-scale folds are present. This would assist future target generation and orebody model interpretations.

Similarly, the development of a detailed lithologic section for Unit C horizons may pay dividends in understanding whether lithology also influences preferred enrichment horizons, and coincidentally may help understand / delineate any detail fold structures present. It was noted on the site visit that some areas mapped as 'mineralised' i.e. bedrock ore, more probably represented surface lateritisation associated with a Tertiary Yilgarn surface, rather than with enrichment indicating any likelihood of extension to depth. Remnants of this surface can be seen along most of the Unit C and B ranges and in some areas of the valley between these ranges. This sounds a note of caution when examining the red 'mineralised' areas of the geological mapping.

2.4.3 Drilling

The main method of drilling is reverse circulation (RC) with a 4½ or 5½ inch hole diameter and usually with a 1m sample interval. The distribution of drilling as retrieved from the provided database is shown in Table 2.4.3_1.

		Table 2.4.3_1 Golden West Resources Wiluna West Project Drilling Summary – Iron Ore – October 2007
BIF Unit	Deposit / Prospect (as per Database)	Drilling Method	Number of Holes
	Unit B	Reverse circulation	71
	Unit B West Limb	Reverse circulation	18
B	Bowerbird	Reverse circulation	56
	Bowerbird North	Reverse circulation	15
	Unit C	Reverse circulation	10
	C1	Reverse circulation	38
	C1 South	Reverse circulation	39
	C2	Reverse circulation	63
	C3	Reverse circulation	153
C	C3 North	Reverse circulation	28
	C3 South	Reverse circulation	6
	C4	Reverse circulation	169
	C5	Reverse circulation	82
	C5 North	Reverse circulation	7

Source GWR.MDB – 19/10/2007

Examination of some deposit cross sections (e.g. C3 – 7 040 200mN) reveals that ore blocks are sometimes drawn without full acknowledgement of the stratigraphy / dip. Coffey Mining strongly believe that all interpretations should be looking to put as much 'geology' as is available into the cross sections, particularly in these early days of a 'new' iron ore area. Coffey Mining also note that problems exist in some holes with lithological logging, with 'shale' logged but returning +64% Fe assays; this also indicates lack of geological data validation.

Resolution of such structural / lithologic discrepancies is as critical to deposit cross sectional interpretations as their impact on future geotechnical / pit design issues.

2.4.4 Environmental Issues

Due to current DEC environmental constraints regarding exploration on BIF ranges, no drilling on any BIF outcrops in the southern area (despite the fact that they could not be classed as ridges in the traditional sense) has been possible to date. Consequently, relatively recent drilling to test this area's potential has only been possible along strike from the ridges on nonridge, poor to no outcrop areas, or on concealed targets based on aeromagnetics.

2.5 Mineral Resources – Iron Ore

2.5.1 Summary

Within the Project, both iron and gold mineral resources have been publicly reported by GWR. The Mineral Resources have been estimated by ordinary kriging through external consultants, Snowden Mining Industry Consultants (Snowden) and by sectional area (GWR).

A total iron Inferred Mineral Resource of 86.1Mt @ 60.2%Fe has been reported by GWR, as shown in Table 2.5.1_1.

	Table 2.5.1_1 Golden West Resources Limited Wiluna West Project Iron Ore Inferred Mineral Resources November 2007
Estimate Lower Tonnes Fe Si02 Al2O3 P LOI % Deposit of
Method Cut Off (Mt) (%) (%) (%) (%) (%) Total
Unit B
Bowerbird	Block	50%Fe	9.47	59.8	7.7	3.5	0.06	2.70	11
Bowerbird North	Sectional	§50% Fe	1.95	61.5	5.3	3.2	0.04	2.10	2
Joyners Find	Block	§50% Fe	7.75	64.6	3.1	1.9	0.02	2.00	9
Joyners Find North	Sectional	§50% Fe	3.57	63.1	4.8	2.5	0.03	2.10	4
Unit B Total			22.74	62.1	5.5	2.8	0.04	2.3	26
Unit C
C1	Block	50% Fe	4.20	58.5	7.2	3.3	0.09	5.2	5
C2	Block	50%Fe	3.40	60.1	6.0	2.1	0.03	6.0	4
C3	Block	50% Fe	23.3	59.1	8.6	2.1	0.07	4.4	27
C4	Block	50%Fe	24.1	59.6	9.2	2.5	0.03	2.7	28
C5	Block 50% Fe 4.40 60.6 8.9 2.1 0.12 3.8 5
C Regional Block 50%Fe 4.00 60.6 9.3 1.4 0.03 1.7 5
Unit C Total			63.40	59.4	8.7	2.3	0.06	3.7	74
TOTAL			86.14	60.2	7.8	2.4	0.05	3.3	100

Note: Snowden compiled block estimates, GWR compiled sectional estimates

Deposits within Unit B at Bowerbird, Bowerbird North, Joyners Find and Joyners Find North represent 26% (23Mt) of the area's present Mineral Resource tonnage and are present along a total strike length of some 4.8km. The remaining tonnage, 63Mt (74%), is sourced from various Unit C deposits which aggregate some 7.9km of mineralised strike length along that range. Deposits C3 and C4 are the largest in the area and represents approximately 55% (47Mt) of the Project's overall resource. C4 is the largest deposit with approximately 28% of the overall resources whilst C3 represents a further 27%.

Coffey Mining considers that the section based estimates used for Bowerbird North, Joyners Find and Joyners North are of low quality and recommend that they be revisited using industry standard block modelling techniques.

Coffey Mining considers that there is insufficient data to demonstrate geological and grade continuity to support the Inferred Mineral Resource estimates for the C1, C5 and C Regional deposits. Further drilling is required to confirm these estimates.

Coffey Mining considers Snowden's Inferred Mineral Resource estimates for Bowerbird, C2, C3 and C4 as acceptable. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

Following the resource calculations for the enrichment areas delineated to date, the potential of the entire 25km Unit C northern area now appears to have been examined. It is irregularly tested by drill holes along some 18.5km of its 25km strike length. Within that tested area, the deposits' enrichment extent totals approximately 7.9km of strike. Several areas have no drill holes where only BIF is seen in outcrop.

The C3 and C4 deposits appear to host the only significant enrichment to date, and have been delineated by 40m x 40m drilling in parts of C4, through 100m, 200m and 400m spaced sections often with irregularly spaced holes along those sections in other parts. C3 has a more variable, wider grid. The C1, C2, C5 and C Regional deposits at present appear to comprise more limited enrichment. Much of the drilling in the latter areas comprises wide grid spacings (200m / 400m) and tonnage envelopes have often been extrapolated from single drill hole intersections. Considerable further drilling is required across these areas to properly understand the mineralisation extent. It is noted that about 40% or more of the C1, C2 and C3 deposits (approximately 4.5km of the enriched strike length) consist of hydrated, near surface mineralisation rather than deeper and higher grade low silica enrichment.

A generally more systematic approach to future drilling is required to test the full mineralised sequence. This would allow for a better appreciation of the mineralisation's setting to be gained.

The potential of the A Unit horizon is unknown but is possibly potentially prospective.

The potential of the Unit B and C horizons in the southern tenement area is difficult to comment on, although the potential for Unit C is perhaps bright given the occurrence of significant enrichment in this unit in the northern area.

The assumed in situ dry bulk densities need to be verified by both direct measurements of diamond core and down hole geophysical measurement as is the standard industry approach. The value of 4.0t/m³ used in resource calculations for the Unit B mineralisation is considered high and only applicable to near surface hard non-porous material. For the Unit C mineralisation, 4.0t/m³ and 3.5t/m³ values have been used for the low silica and hydrated / high silica respectively. Similar comments apply to the higher value while for the hydrated horizon is likely to be lower than the 3.5t/m3 due to the presence of goethite, ochreous goethite and often porous and cavernous nature of this horizon. For the high silica horizon, a lower density than 3.5t/m³ could also be expected.

2.5.2 Bowerbird Deposit

Snowden was engaged to undertake a resource modelling and estimation study for the Bowerbird deposit in April 2007. This deposit is occurs within Unit B roughly between 7 040 700mN and 7 041 900mN (about 1.2km strike length). The deposit was initially drilled on 100m spaced east west orientated section lines with holes spaced approximately 30m apart. An infill program reduced this spacing to 50m sections on which at least one hole was drilled. All drilling was RC with samples taken at 1m intervals.

Snowden conducted a validation of the drilling database and identified issues for GWR to resolve. For the study, the drilling database contains collars, down hole surveys, geology logs and assays, as shown in Table 2.5.2_1.

	Table 2.5.2_1
Golden West Resources Limited
	Wiluna West Project Bowerbird Deposit Drilling Summary
	Number of Drill holes
	Complete Records	Incomplete Records
Surveyed collar locations	57	0
Down hole surveying	11 46
Lithological Logs	50 7
Assaying†	56	1

† Not all drill hole samples have been submitted for assay

Snowden had no QA/QC data made available and has recommended that it be available for future studies. Coffey Mining concurs with this view and suggests a QA/QC program be an integral part of exploration programs.

A geological model was constructed comprising a topographic DTM and outlined mineralisation using a 50%Fe lower cut off. Three broad BIF horizons (West, Central and East) were interpreted are made of sub-horizons of varying strike length and thickness. This interpretation was prepared by GWR and modified by Snowden to best fit the available data. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 1m (N-S) by 5m (E-W) by 1m (elevation) size to allow for effective volume representation. The model conforms to north-south orientation of the mineralisation.

Drilling data was composited to a nominal length of 1m down-hole, matching the usual sampling interval and a multiple of the intended bench height of 5m. The composites have been constrained by stratigraphic and mineralisation boundaries. Coffey Mining considers that a 2m composite would have been more appropriate choice.

Statistical and variographic analyses were conducted on the domained composite data. An outlier analysis was conducted and no obvious outliers were observed. Snowden concluded that there was no need for top cuts to be applied.

Nuggets determined from the modelled experimental variograms were set at 20% for all elements. For directional variograms, Snowden determined the strike of mineralisation was orientated as 0° i.e. north south (major direction) and dipping at 90° i.e. vertical (semi-major). Overall modelled ranges for each element varied from 140m to 270m for the major axis, between 25m to 90m semi-major axes and between 25m to 40m for the minor.

Prior to grade estimation, search neighbourhood orientation was adjusted to 70^o to the west for southern half of the deposit (<7 041 276mN) and vertical for the northern half. These orientations match the general dips of the modelled horizons. Grade estimation was carried out using the geostatistical method of Ordinary Kriging (OK). For a successful estimate, the number of composites selected was between 5 and 14 for the minimum to 40 as a maximum. These composites were selected within a volume of 140m by 40m by 10m, 7m or 30m. First of two subsequent passes used a factor of two to increase the volume while reducing the minimum of samples to 4 and 6. For the final pass, the volumes were increased by a factor of 10 in all directions and reduced the required minimum number to three composites. Coffey Mining considers the third pass strategy as inappropriate as all composites within the domain are selected for the estimate.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. Grade trend plots comparing incremental average block grades and composites were compiled. These showed a reasonable level of agreement as would be expected with ordinary kriging.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category as shown in Table 2.5.2_2. Snowden considers that the lack of QA/QC data, the lack of in situ dry bulk density data and geological confidence as the most important influencing factors for assigning the Inferred resource category. Coffey Mining supports Snowden's view.

			Table 2.5.2_2 Golden West Resources Limited
			Wiluna West Project Bowerbird Deposit Inferred Mineral Resources – April 2007 At a 50% Fe Lower Cut-off
	Tonnes	Fe	SiO2	Al2O3	P	LOI
	(Mt) (%) (%) (%) (%) (%)
Total	9.5	59.9	7.7	3.5	0.056	2.7

2.5.3 Bowerbird North Deposit

The mineral resource for this deposit was calculated using the sectional end area method by GWR. The first step is to determine of the area of outlined mineralisation on the section. Next, each section is assigned a width of influence. This is usually the nominal drill section spacing where the spacing is regular. For irregular grids, the distance to next section is determined on either side, then halved and added together to become the width of influence. The volume can then be calculated.

To determine the average grade of the section, the length-weighted average of the sample grades is calculated. This process can be used for the determination of the average in situ dry bulk density if the data is available. Tonnage can now be calculated using the calculated volume and average density or a nominal value.

For this Mineral Resource, eight sections are used in the calculation where each section was assigned with 100m width of influence. There are three near vertical mineralised horizon outlined on the sections but only one is continuous. A total of 294 samples from 21 drill holes are used in the calculation. An in situ dry bulk density of 4.0t/m³ was assumed which Coffey Mining considers only to be representative of near surface material. GWR have assigned an Inferred category to the resource, as summarised in Table 2.5.3_1.

	Table 2.5.3_1 Golden West Resources Limited Wiluna West Project Bowerbird North Deposit Mineral Resources – April 2007 As Compiled by GWR
	No. of Area Tonnes Fe SiO2 Al2O3 P LOI MgO MnO S
(mN)	Section Holes/ (m2 ) (Mt) (%) (%) (%) (%) (%) (%) (%) (%) Samps
7042400	5 / 139	1,101	0.44	61.13	6.37	2.12	0.033	1.71	1.004	0.029	0.054
7042500	2 / 14	324	0.13	55.09	10.18	6.54	0.02	3.26	0.424	0.022	0.009
7042600	1 / 4	169	0.07	54.21	7.85	6.14	0.013	3.13	4.810	0.028	0.001
7042700	1/5	218	0.09	66.27	2.54	1.61	0.011	0.53	0.366	0.018	0.001
7042800	3 / 54	653	0.26	63.54	3.82	2.60	0.056	1.64	0.512	0.036	0.003
7042900	2/4	361	0.14	63.05	4.50	3.32	0.028	1.54	0.040	-	0.005
7043000	2 / 17	1,153	0.46	61.98	4.64	3.54	0.036	2.22	0.591	0.038	0.002
7043100 2/6 140 0.06 61.59 5.28 3.50 0.048 2.44 0.242 0.018 0.007
7043200 3 / 51 748 0.30 61.57 4.73 2.90 0.058 2.71 1.042 0.156 0.007
TOTAL			1.95	61.47	5.33	3.18	0.038	2.08	0.817	0.048	0.015

Note: Tonnage was calculated using sectional area with width of influence of 100m and a density 4.0 t/m³

Coffey Mining considers that the resource estimate is of the right order of magnitude but the grade estimate is of a low quality. The data density is considered to be generally insufficient to outline the mineralisation and grade continuity with a high degree of confidence. Coffey Mining suggests that an accepted industry block modelling approach be used as has been completed for the Bowerbird North deposit.

2.5.4 Joyners Find Deposit

Snowden was engaged to undertake a resource modelling and estimation study for the Joyners Find deposit in October 2006. This deposit occurs within Unit B between 7 032 900mN and 7 034 100mN (about 1.2km strike length). The deposit has been explored using RC drilling spaced along 200m east west section lines with up four holes per section.

Snowden conducted a validation of the drilling database and identified issues for GWR to resolve. For the study, the drilling data provided design collar locations, drill hole setup orientation as the down hole survey, geology logs and assays as shown in Table 2.5.4_1. Assaying was completed for iron on 1m intervals (not all intervals were assayed) and for gold on 4m intervals. Total oxide percentage was calculated as an integral part of the validation of the data set.

Snowden could not identify samples as either duplicates or standards and therefore did not complete any analysis and has recommended that the data be labelled to allow a QA/QC analysis to be completed. Coffey Mining agrees and considers that it is essential to assess the integrity of the sampling and assaying and robustness of the results.

A geological model was constructed comprising a topographic DTM and sectional interpretations of the BIF horizons using surface mapping and down hole geological logs and assays. Three continuous BIF horizons were interpreted with a further three discontinuous horizons in between. This interpretation was prepared by GWR. A parent cell, 2.5m (N-S) by 100m (E-W) by 20m (elevation) was selected, with sub-celling down to a 0.5m (N-S) by 12.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to north-south orientation of the mineralisation. Snowden have recommended that as the BIF horizons are thin that diamond drilling be used to establish their true thickness. Coffey Mining agrees that this is required to assess the internal partings and the impact of edge dilution associated with RC drilling. Coffey Mining also suggests that the height of the parent block be modified to match the intended mining bench size as currently used in mining industry.

Snowden did not consider it necessary to composite drilling data as the nominal sample length was 1m down-hole. It is assumed that the main reason was that the BIFs are generally thin and in parts only 1m to 3m in thickness. The composites have been constrained by stratigraphic and mineralisation boundaries. Coffey Mining suggests an investigation be completed as to the suitability of the 1m composite length.

Statistical and variographic analyses were conducted on the domained composite data. Snowden conducted an outlier analysis and concluded that a number of extreme alumina, magnesium, manganese, sulphur and silica grades be reduced to a nominated level. The reason was reduce the impact of narrow horizons of internal waste that could not be domained. Coffey Mining considers this approach is not appropriate as it is unlikely that these thin waste horizons will be removed selectively and thus will be an integral part of the product produced.

Nuggets determined from the modelled experimental down-hole variograms were quite variable (8%Fe to 62%Fe). For directional variograms, Snowden determined the strike of mineralisation was orientated as 190° i.e. slightly west of south (major direction or strike) and dipping at 75° towards the west (semi-major or dip direction). Overall modelled ranges for each element varied from 20m to 60m and applied to both the major and semi-major axes. Coffey Mining considers these ranges as short for the strike direction as the drilling is spaced along 200m apart lines.

Search neighbourhood were orientated to match that of the modelled variography of each domain. Grade estimation was carried out using the geostatistical method of Ordinary Kriging (OK). For a successful estimate, between 10 and 20 composites were selected within a volume of 250m by 250m by 50m. A second pass maintained the same volume but reduced the number of samples to between 5 and 20. A third and final pass used a volume of 500m by 500m by 100m and further reduced the number of samples to between 2 and 20. Coffey Mining considers the selected estimation approach to be reasonable for a first pass.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. Grade trend plots comparing incremental average block grades and composites were compiled. These showed a reasonable level of agreement as expected with ordinary kriging.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm grade continuity, no surveyed collar locations, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. Also, a Snowden desktop review (September, 2005) concluded that open pit mining may be viable down to a 560mRL. Hence, the reported resource was restricted to material above 560mRL, as shown in Table 2.5.4_1.

						Table 2.5.4_1	Golden West Resources Limited
	Wiluna West Project Joyners Find Deposit Mineral Resources – October 2006 As Reported by Snowden
Tonnes	Fe	SiO2	Al2O3	P	LOI	CaO	K2O	MgO	MnO	Na2O	S	TiO2
(Mt)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
Inferred – Above 560mRL
3.90	64.1	3.67	2.13	0.025	1.70	0.03	0.008	0.46	0.03	0.02	0.009	0.09
Unclassified – Above 500mRL
7.75	64.6	3.10	1.94	0.016	1.98	0.02	0.009	0.33	0.03	0.02	0.009	0.08

Snowden Report Table 6.2 and Table 6.3 report - 061030_JPG_Draft_5755_GOLWES_Joyners_Res_Est_R.pdf

Subsequently, GWR have reviewed the Snowden's work and have concluded that based on "substantially increased iron ore price and more comprehensive financial studies", there is opportunity to extract all the material above 500mRL. On this basis, GWR reclassified the total unclassified resource of Snowden and assigned it to an Inferred category thus taking ownership of this publicly reported Mineral Resource of 7.75Mt @64.6% Fe.

Coffey Mining considers that resource classification should comply with the JORC Code Guidelines. There are a number of different elements to be considered including data quality and density, confidence in continuity of stratigraphy, lithology, structure, mineralisation, material type and grade, quality of the estimate and so on. It is also in consideration of the opportunity to be mined. No one factor is dominant. It is recommended that the classification is critically reviewed by GWR and Snowden to assess its compliance with the JORC Code Guidelines.

2.5.5 Joyners North Deposit

The Mineral Resource is calculated by GWR using the sectional end area method as described in Section 2.5.3.

For this Mineral Resource, four sections are used in the calculation where each section was assigned with 400m width of influence. There are three near vertical mineralised horizon outlined the sections. Two are continuous. A total of 65 samples from nine drill holes are used in the calculation. An in situ dry bulk density of 4.0t/m³ was assumed which Coffey Mining considers only to be representative of near surface material. GWR have assigned an Inferred category to the resource, as shown in Table 2.5.5_1.

					Table 2.5.5_1	Golden West Resources Limited
Wiluna West Project Joyners Find North Deposit Mineral Resources – April 2007 As Compiled by GWR
Section	No. of	Area	Tonnes	Fe	SiO2	Al2O3	P	LOI	MgO	MnO	S
(mN)	Holes/ Samps	(m2 )	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
7034000	3 / 23	664	1.06	61.9	5.44	3.69	0.017	1.88	0.147	0.018	0.008
7034400	2 / 12	431	0.69	64.7	4.40	1.02	0.046	1.56	0.269	0.057	0.027
7034800	2 / 14	631	1.01	64.0	3.58	1.92	0.030	2.58	0.334	0.041	0.004
7035200	2 / 16	505	0.81	62.3	5.66	2.83	0.033	2.08	0.309	0.021	0.010
TOTAL			3.57	63.1	4.76	2.48	0.030	2.06	0.260	0.033	0.011

Note: Tonnage was calculated using sectional area with width of influence of 400m and a density 4.0 t/m³

Coffey Mining considers this resource estimate to be very optimistic as the estimate is based on widely spaced sections, variability in mineralised horizons, the low numbers of holes and samples on each section and the assumed in situ bulk density to be too high. The mineralised horizons are generally of a thin nature and there is variability in dip and thickness as well in the thickness of the separating waste material. It is possible that the estimate is of the right order of magnitude but it is considered that the current data density is insufficient to estimate the resource with any confidence. Coffey Mining suggests that further drilling be undertaken before an accepted industry block modelling approach is used to complete an updated resource estimate for the deposit.

2.5.6 C1 Deposit

Snowden was engaged to undertake a resource estimation study for the Unit C deposits in October 2007. The C1 deposit is the southernmost known in the Unit C horizon. The area bounded by 7 029 000mN and 7 033 000mN was considered for the resource estimate.

Snowden conducted a validation of the drilling database and determined that it was incomplete and that a number of inconsistencies within the collars, down-hole surveys, geology logs and assay tables. The identified issues were forwarded for GWR to resolve.

For QA/QC analysis, Snowden were initially provided with 82 field duplicates and 177 standards. This data was located within C4, C5 and C Regional deposits only. Subsequently, a further 131 field duplicate results (Fe only) and 386 standard assays were provided covering the other deposits. Snowden are awaiting the delivery of the complete set of data that includes all grade items for field duplicate, standards and repeat assay before commenting on the integrity of the sampling and assaying and robustness of the results. Coffey Mining considers that QAQC analysis is critical item in the declaring Mineral Resources and as such, must be addressed.

A geological model was constructed comprising a topographic DTM and sectional interpretations of the BIF horizons using surface mapping and down hole geological logs and assays. This interpretation was prepared by GWR. The deposit consists of eight discontinuous horizons of which five are based on intercepts from a single drill hole. There are two areas where mineralisation is continuous over a 500m and 800m strike length. The low silica type mineralisation is subdivided into two horizons, above and below the hydrated surface. Eight enclosed wireframes have used to outline mineralised horizons with two surface wireframes used to represent the topography and hydrated mineralisation boundary. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 0.5m (N-S) by 2.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to the north south orientation of the mineralisation.

Snowden reviewed sample length by deposit and found the usual sample length was 1m for the C1 deposit. Snowden concluded that a one metre composite was representative of the bulk of the sampling for this and other deposits. Coffey Mining assumed that the main reasons were that the BIFs are generally thin and if composites of 2m or more in length were generated, there would be more residuals and the number of available data for statistical and geostatistical analyses as well as estimation would be reduced by around half or more. Coffey Mining suggests further investigation be completed as to the suitability of the 1m composite length.

Statistical and variographic analyses were conducted on the domained composite data. Snowden conducted an outlier analysis and concluded that a number of extreme silica and alumina and applied a high grade cut (top cut) of 25%Fe and 19%Fe respectively to the non-hydrated low silica mineralisation. It is not stated by Snowden that other grade items were adjusted to ensure that a total oxide balance of 100% was maintained. The values that Snowden considers as outliers are either as a result of waste partings within the host BIF horizon that could not be practically domained or mixed material samples at the boundaries as a result of RC drilling. The order of magnitude of these effects will be dependent on the geometry of the horizons involved. Coffey Mining considers the application of high grade cuts (top cuts) is not appropriate as it is unlikely that these thin waste horizons or edge dilution will be eliminated totally by selective mining and will be an integral part of the product produced.

Snowden generated an experimental down-hole variogram for each grade item on grouped data (individual host BIFs or hydrated and non-hydrated were distinguished). The determined nuggets were quite variable, 7%Fe to 23%Fe. As there were insufficient samples, no robust directional variography was obtained for the deposit. Snowden adopted the ranges obtained for the C3 deposit and combined these with down hole nuggets to synthesise variogram models for each grade item. The mineralisation was determined to have a north-south strike and an 80° dip to the west. Overall ranges for each element varied from 200m to 500m along strike (major axis), 40m to 70m down dip (semi-major axis) and 25m to 50m across strike (minor axis).

Search neighbourhood were orientated to match that of the modelled variography of each domain. Grade estimation was carried out using the geostatistical method of Ordinary Kriging (OK). For a successful estimate, between 6 and 30 composites were selected within a volume of 150m by 50m by 20m. For a second pass, the volume was expanded by a factor of two in all directions with the minimum number of samples reduced to two. A third and final pass used a volume of 450m by 150m by 60m (a factor of three) and the minimum and maximum number of samples remained the same as for the second pass. A soft and hard boundary approach was used to obtain sufficient data for block estimates to be obtained. Coffey Mining considers the selected estimation approach to be generally reasonable although it must be said that the minimum number of samples is low, given the 1m composites used.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. In comparing the global means of the blocks and composites, Snowden consider that there is an element of overestimation if the ratio exceeded 1.2 or underestimation if the ratio is less than 0.8. They concluded that there was some overestimation in the non-hydrated material as a result of extrapolation and some of the soft boundaries applied. Both these issues are the result of insufficient data.

The in situ dry bulk density as applied to hydrated material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation and were supplied by GWR. Snowden has recommended that a specific programme be undertaken to verify these assumed values.

Snowden has estimated that 60% of the resource estimate being based on extrapolation with 50m along strike and 100m down dip on a nominal section spacing of 200mN by 40mE. This is excessive in Coffey Mining's opinion, given the uncertainty in continuity of stratigraphy, lithology, mineralisation and grade.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm geological and grade continuity, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. The reported Inferred Mineral Resource for C1 deposit is 4.2Mt @58.5% Fe as shown in Table 2.5.6_1.

				Table 2.5.6_1	Golden West Resources Limited
	Wiluna West Project C1 Deposit Inferred Mineral Resources – October 2007 At a 50% Fe Lower Cut-off
Zone	Domain	Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
Hydrated	10000	(Mt) 2.2	(%) 60.2	(%) 5.5	(%) 3.4	(%) 0.10	(%) 4.3	(%) 48
Low Silica	20200 2.0 56.6 9.1 3.2 0.07 6.3 52
TOTAL		4.2	58.5	7.2	3.3	0.09	5.2	100

Coffey Mining considers that there is insufficient data to demonstrate geological and grade continuity to support the Inferred Mineral Resource estimate and suggests that the estimate may be optimistic. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

2.5.7 C2 Deposit

The C2 deposit also occurs within the Unit C horizon and is located about 1km to the north of the southernmost C1 deposit. The area for the resource estimate is bounded by 7 033 800mN and 7 036 250mN.

Snowden were engaged to estimate the resources within the Unit C deposits and undertook database validation and evaluation of data quality as described in Section 2.5.6.

As with the C1 deposit, a geological model was constructed comprising a topographic DTM and GWR sectional interpretations of the host BIF horizons. The deposit consists of 12 discontinuous horizons of which nine are based on intercepts from a single drill hole. There are three areas where mineralisation is continuous over a 100m, 100m and 225m strike length. The low silica type mineralisation is subdivided into two horizons, above and below the hydrated surface. Twelve enclosed wireframes have used to outline mineralised horizons with two surface wireframes used to represent the topography and hydrated mineralisation boundary. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with subcelling down to a 0.5m (N-S) by 2.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to north-south orientation of the mineralisation.

Snowden computed 1m composites and then conducted statistical and variographic analyses on the domained data. An outlier analysis concluded that a number of extreme magnesium and manganese and applied a high grade cut (top cut) of 0.1% and 0.18% respectively to the hydrated mineralisation. These outliers are likely be related to localised lithological variation. Coffey Mining considers the application of top cuts is not appropriate, as described in Section 2.5.6.

Experimental down-hole variograms were generated for each grade item on grouped data (individual host BIFs or hydrated and non-hydrated were distinguished). The determined nuggets were quite variable, 3%Fe to 35%Fe and generally higher than for C1. The mineralisation was determined to have a north south strike and an 80° dip to the west. As with C1 deposit, there were insufficient samples to obtain robust directional variography and Snowden adopted the same approach to synthesise variogram models for each grade item.

The same search neighbourhood as used for C1 was used. Grade estimation was carried out using OK. A soft and hard boundary approach was also used to obtain sufficient data for block estimates to be obtained.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. In comparing the global means of the blocks and composites, Snowden consider that there is an element of overestimation if the ratio exceeded 1.2 or underestimation if the ratio is less than 0.8. For the non-hydrated material, low ratios obtained for P and MgO indicating underestimation and high ratios for S, MnO and LOI indicating overestimation. In the case of Phosphorus, the fact that there are fewer composites available (128 versus 210 for Fe) could offer a partial explanation. Snowden concluded that both over

and underestimation was the direct result of extrapolation and the use of soft boundaries. Coffey Mining considers this issue a direct result of insufficient data.

The in situ dry bulk density as applied to hydrated material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation was supplied by GWR.

Snowden has estimated that 40% of the resource estimate being based on extrapolation with 50m along strike and 75m down dip on a nominal section spacing 100mN by 40mE. This is excessive in Coffey Mining's opinion, given the uncertainty in continuity of stratigraphy, lithology, mineralisation and grade.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm geological and grade continuity, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. The reported Inferred Mineral Resource for C2 deposit is 3.4Mt @60.1% Fe as shown in Table 2.5.7_1.

				Table 2.5.7_1
	Golden West Resources Limited
			Inferred Mineral Resources – October 2007	Wiluna West Project C2 Deposit At a 50% Fe Lower Cut-off
		Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
Zone	Domain	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Hydrated	10000	2.2	60.2	5.5	2.2	0.02	6.3	62
Low Silica	20200 1.3 59.8 6.9 2.1 0.04 5.4 38
TOTAL		3.4	60.1	6.0	2.1	0.03	6.0	100

Coffey Mining considers Snowden's Inferred Mineral Resource estimate reasonable. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

2.5.8 C3 Deposit

The C3 deposit is located within the Unit C horizon about 2.5km to the north of the C1 and C2 deposit. The area for resource estimation is bounded by 7 038 375mN and 7 043 125mN.

Snowden were engaged to estimate the resources within the Unit C deposits and undertook database validation and evaluation of data quality as described in Section 2.5.6.

A geological model was constructed comprising a topographic DTM and GWR sectional interpretations of the host BIF horizons. The deposit consists of 17 horizons of which five are based on intercepts from a single drill hole. There are several mineralised horizons that are interpreted to be continuous over a 2km strike length. The low silica type mineralisation is subdivided into two horizons, above and below the hydrated surface. Seventeen enclosed wireframes have used to outline mineralised horizons with two surface wireframes used to represent the topography and hydrated mineralisation boundary. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 2.5m (N-S) by 12.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to the north south orientation of the mineralisation.

Snowden computed 1m composites and then conducted statistical and variographic analyses on the domained data. An outlier analysis concluded that a number of extreme for Al2O3, S, MgO and MnO and applied a high grade cut (top cut) of 12.5%, 0.8%, 0.4% and 0.5% respectively to the hydrated mineralisation. For non-hydrated material, a high grade cut of 0.3%, 0.4% and 0.3% was applied to S, MgO and MnO respectively. These outliers are likely be related to either localised lithological variation such as waste partings within the host BIF horizon, that could not be practically domained, or mixed material samples at the boundaries as a result of RC drilling. Coffey Mining considers that the application of top cuts is not appropriate as described in Section 2.5.6.

Experimental down-hole variograms were generated for each grade item on grouped data (individual host BIFs or hydrated and non-hydrated were distinguished). The determined nuggets were quite variable, 7%Fe to 39%Fe. The mineralisation was determined to have a north south strike and a 90° (vertical) dip. There are insufficient samples, particularly down dip, to obtain robust directional variography for all grade items. Overall ranges for each element varied from 200m to 500m along strike (major axis), 40m to 70m down dip (semi-major axis) and 25m to 50m across strike (minor axis).

The same search neighbourhood was used as for C1 and C2. Grade estimation was carried out using OK. A soft and hard boundary approach was also used here to obtain sufficient data for block estimates to be obtained.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. In comparing the global means of the blocks and composites, Snowden considered there was no significant over or under estimation. The only exception was a slight overestimation in MgO grade for the non-hydrated material resulting from extrapolation.

The in situ dry bulk density as applied to hydrated material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation and were supplied by GWR.

Snowden has estimated that 50% of the resource estimate has been based on extrapolation (50m along strike and 100m down dip on nominal section spacing 200mN by 40mE). This is excessive in Coffey Mining's opinion, given the uncertainty in continuity of stratigraphy, lithology, mineralisation and grade.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm geological and grade continuity, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. The reported Inferred Mineral Resource for C3 deposit is 23.3Mt @59.1% Fe, as shown in Table 2.5.8_1.

				Table 2.5.8_1 Golden West Resources Limited
	Wiluna West Project C3 Deposit Inferred Mineral Resources At a 50% Fe Lower Cut-off
		Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
Zone	Domain	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Hydrated	10000	9.7	59.2	7.3	2.4	0.07	5.2	42
Low Silica	20200 13.5 59.0 9.5 1.8 0.07 3.8 58
TOTAL		23.3	59.1	8.6	2.1	0.07	4.4	100

Coffey Mining considers Snowden's Inferred Mineral Resource estimate as acceptable. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

2.5.9 C4 Deposit

The C4 deposit is located about 12km to the north of the C1 deposit and about 2km north of C3 deposit. The area considered for this Unit C deposit resource estimate is bounded by 7 045 100mN and 7 046 800mN, about 1.3km in strike length.

Snowden conducted a validation of the drilling database and evaluation of data quality as described in Section 2.5.6.

Since the April 2007 resource estimate, drilling has been predominantly to north of the deposit with the remaining to the south. No updated interpretation was provided by GWR. Snowden made some minor changes to the interpretation based on this new drilling including an additional horizon and adjustment of three other horizons.

A geological model was constructed comprising a topographic DTM, an interpreted surfaces between a hydrated and high and low silica iron mineralisation (19 wireframes in total). These three horizons have been further subdivided by intervening faults. An ultramafic unit has been modelled along the eastern side. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 2.5m (N-S) by 12.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to the north south orientation of the mineralisation.

Drilling data was composited to a nominal length of 1m down-hole, matching the usual sampling interval and a multiple of the intended bench height of 5m. The composites have been constrained by stratigraphic and mineralisation boundaries. Snowden has recognised that some 9% of the samples are of 2m in length but considers the impact of splitting these samples as minor. Coffey Mining considers that a 2m composite would have been a better choice and suggests a review of the composite length be undertaken in as part of next study.

Statistical and variographic analyses were conducted on the domained composite data. An outlier analysis was conducted and Snowden concluded that a high grade should be applied to limit the extreme values from having an undue influence, as shown in Table 2.5.9_1.

		Table 2.5.9_1 Golden West Resources Limited
	Wiluna West Project C4 Deposit High Grade Cuts (Top cuts) As Applied
Mineralisation	Domain	SiO2 (%)	Al2O3 (%)	S (%)	MgO (%)	MnO (%)	LOI (%)
Hydrated	10000 0.17 0.4 0.07
High Silica	20100 20 0.04 0.12
Low Silica	20200	35	20	0.04		0.50

It is not stated by Snowden whether other grade items were adjusted to ensure that a total oxide balance of 100% was maintained. The values that Snowden considers as outliers are either as a result of waste partings within the host BIF horizon that could not be practically domained or mixed material samples at the boundaries as a result of RC drilling. The order of magnitude of these effects will be dependent on the geometry of the horizons involved. Coffey Mining considers the application of high grade cuts is not appropriate as it is unlikely that these thin waste horizons or edge dilution will be eliminated totally by selective mining and will be an integral part of the product produced.

Nuggets determined from the modelled experimental down-hole variograms were generally low (6% to 8%) except for MgO (31%) and MnO (23%). For directional variograms, Snowden determined the strike of mineralisation was orientated as 10° i.e. slightly east of north south (major direction) and dipping at 60° towards the west (semi-major). Overall ranges for each element varied from 195m to 450m along strike (major axis), 35m to 80m down dip (semi-major axis) and 30m to 50m across strike (minor axis).

The same search neighbourhood radii as used for all Unit C deposits were applied. For each domain, the search volume and variography was orientated to match the trends of the mineralisation wireframes. Grade estimation was carried out using OK. Generally, a hard boundary approach was used here as sufficient data within each domain to obtain block estimates. The exceptions were the hydrated domains where a soft boundary was applied to the high/low silica boundary and the mineralised zones between faults 1 and 2. For a successful estimate, between 6 and 30 composites were selected within a volume of 150m by 50m by 20m. Two subsequent passes used volumes of 300m by 100m by 40m and 450m by 150m by 60m and reduced the minimum number of samples to 2. Coffey Mining considers the selected estimation approach to be reasonable, although it must be said the minimum number of samples is low given the 1m composites used.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. Grade trend plots comparing incremental average block grades and composites were compiled. These showed a reasonable level of agreement as expected with OK. In comparing the global means of the blocks and composites, Snowden consider that there is an element of overestimation if the ratio exceeded 1.2 or underestimation if the ratio is less than 0.8. No significant under or overestimation was noted indicating there is sufficient data to obtain reasonable estimates.

The in situ dry bulk density as applied to hydrated and high silica material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation and were supplied by GWR.

Snowden has estimated that 10% of the resource estimate has been based on extrapolation using 100m along strike and 100m down dip on a nominal section spacing 50mN by 40mE. Coffey Mining considers this extrapolation as reasonable.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Although there is an improved confidence gained from the extra drilling, the lack of QA/QC data and the lack of in situ dry bulk density data are the reasons cited by Snowden for maintaining Inferred resource category. The reported Inferred Mineral Resource for C4 deposit is 24.1Mt @59.6% Fe as shown in Table 2.5.9_2.

				Table 2.5.9_2
					Golden West Resources Limited
	Wiluna West Project C4 Deposit Inferred Mineral Resources – October 2007 At a 50% Fe Lower Cut-off
		Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
Zone	Domain	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Hydrated	10000	3.9	54.5	10.5	5.1	0.03	5.8	16
High Silica	20100	5.5	54.6	18.1	1.8	0.03	1.6	23
Low Silica	20200 14.7 62.9 5.5 2.1 0.04 2.3 61
TOTAL		24.1	59.6	9.2	2.5	0.03	2.7	100

Coffey Mining agrees with Snowden's assessment of the C4 deposit as an Inferred Mineral Resource. This resource is considered to be the key deposit owned by GWR. Further drilling is required to enhance structural knowledge of folding and faulting that will influence the likelihood of delineating further resources.

2.5.10 C5 Deposit

The C5 deposit is located about 0.25km to the north of the C4 deposit. The area considered for this the Unit C deposit resource estimate is bounded by 7 046 800mN and 7 048 300mN (1.5km strike length).

Snowden conducted a validation of the drilling database and evaluation of data quality as described in Section 2.5.6.

As with the other Unit C deposits, a geological model was constructed comprising a topographic DTM and GWR sectional interpretations of the host BIF horizons. The deposit consists of five discontinuous horizons of which two are based on intercepts from a single drill hole. There are two horizons that have been interpreted with strike continuity of about 250m and 500m over three variably spaced sections. These horizons have been subdivided into low silica and high silica type mineralisation as well separated into above and below the hydrated surface. An ultramafic unit has been modelled along the eastern side. In all, nine wireframes have used to outline the topography, the mineralisation, the hydrated boundary and the ultramafic unit. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 0.5m (N-S) by 2.5m (E-W) by 2.5m (elevation) size to allow for effective volume representation. The model conforms to the north south orientation of the mineralisation.

Snowden computed 1m composites and then conducted statistical and variographic analyses on the domained data. The hydrated horizon contains only nine data points. An outlier analysis concluded that a number of extreme silica, sulphur, magnesium and manganese and applied a high grade cut (top cut) of 40%, 0.04%, 0.5% and 0.16% respectively to the low silica mineralisation. These outliers are likely be related to localised lithological variation and mixed material samples at the boundaries as a result of RC drilling. Coffey Mining considers the application of high grade cuts (top cuts) is not appropriate as described in Section 2.5.6.

Experimental down-hole variograms were generated for each grade item on grouped data and individual host BIFs or hydrated and non-hydrated were distinguished. The determined nuggets were quite variable, 2%Fe to 40%Fe. The mineralisation was determined to have a north south strike and an 80° dip to the west. As with other Unit C deposits, when there were insufficient samples to obtain robust directional variography, Snowden has synthesised variogram models for each grade item using the ranges obtained from another deposit, C4 deposit in this case.

The same search neighbourhood as used for all the Unit C deposits was used. Grade estimation was carried out using OK. A soft and hard boundary approach was also used here to obtain sufficient data for block estimates to be obtained.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. In comparing the global means of the blocks and composites, Snowden consider there is for the hydrated material, an element of overestimation for SiO2, Al2O3, MgO and MnO and underestimation in P is attributable to the low sample numbers and the use of a soft boundary. There is some underestimation for LOI in non-hydrated high silica domain.

The in situ dry bulk density as applied to hydrated and high silica material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation and were supplied by GWR.

Snowden has estimated that 20% of the resource estimate being based on extrapolation, using 50m along strike and 65m down dip on a nominal section spacing 200mN by 40mE. This is reasonable in Coffey Mining's opinion.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm geological and grade continuity, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. The reported Inferred Mineral Resource for C5 deposit is 4.4Mt @59.1% Fe as shown in Table 2.5.10_1. The Phosphorus at 0.12% is considered to be high when compared to other iron deposits.

				Table 2.5.10_1 Golden West Resources Limited
Wiluna West Project C5 Deposit Inferred Mineral Resources – October 2007 At a 50% Fe Lower Cut-off
		Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
Zone	Domain	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Hydrated	10000	0.3	59.6	6.9	2.6	0.12	4.7	82
High Silica	20100	0.5	55.3	16.7	0.9	0.08	2.3	11
Low Silica	20200	3.6	59.6	8.0	2.2	0.12	4.0	7
TOTAL		4.4	59.1	8.9	2.1	0.12	3.8	100

Coffey Mining considers that the Inferred Mineral Resource estimate is reasonable. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

2.5.11 C Regional

The C Regional deposit occurs within the Unit C horizon about 0.6km to the north of the C5 deposit. The resource estimate is in consideration of an area bounded by 7 048 300mN and 7 052 000mN.

Snowden conducted a validation of the drilling database and evaluation of data quality as described in Section 2.5.6.

As with the previous Unit C deposits, a geological model was constructed comprising a topographic DTM and GWR sectional interpretations of the host BIF horizons. The deposit consists of six discontinuous horizons including one which is based on intercepts from a single drill hole and another two based on intercepts from two drill holes. There are three mineralised horizons exhibiting continuity over more a single cross section. These horizons have been subdivided into low silica and high silica type mineralisation as well separated into above and below the hydrated surface. A palaeochannel and a ultramafic unit have also been modelled. In all, ten wireframes have used to outline the topography, the mineralisation, the hydrated boundary, the ultramafic unit and the palaeochannel. A parent cell, 10m (N-S) by 25m (E-W) by 5m (elevation) was selected, with sub-celling down to a 1m (N-S) by 5m (E-W) by 0.5m (elevation) size to allow for effective volume representation. The model conforms to the north south orientation of the mineralisation.

Snowden computed 1m composites and then conducted statistical and variographic analyses on the domained data. An outlier analysis concluded that a number of extreme silica, alumina, magnesium, manganese and loss on ignition and applied a high grade cut (top cut) of 30%, 5%, 0.6%, 0.3% and 7% respectively to the non-hydrated low silica mineralisation. A high grade cut of 0.16% was applied to manganese in the non-hydrated low silica domain. These outliers are likely be related to localised lithological variation and mixed material samples at the boundaries as a result of RC drilling. Coffey Mining considers that the application of high grade cuts (top cuts) is not appropriate as described in Section 2.5.6.

Experimental down-hole variograms were generated for each grade item on grouped data (individual host BIFs or hydrated and non-hydrated were distinguished). The determined nuggets were quite variable, 11%Fe to 27%Fe. The mineralisation was determined to have a 10° west of north strike and a 60° dip to the west. As with C5 deposit, Snowden has synthesised variogram models for each grade item using the C Regional nuggets together with the ranges obtained for C4 deposit.

The same search neighbourhood as used for all Unit C deposits was used. The search neighbourhood was orientated to match that of the variography. Grade estimation was carried out using OK. A soft and hard boundary approach was also used here to obtain sufficient data for block estimates to be obtained. As there were no samples within the hydrated domains, all samples were used in grade estimation.

As a validation step, visual and statistical comparisons between samples and block estimates were conducted by Snowden. In comparing the global means of the blocks and composites, Snowden consider there is an element of overestimation for MgO and LOI in the non-hydrated low silica domain. Snowden concluded that overestimation was the direct result of extrapolation of grades. Coffey Mining considers this issue a direct result of insufficient data.

The in situ dry bulk density as applied to hydrated and high silica material was 3.5t/m³ with 4.0t/m³ used for low silica mineralisation and were supplied by GWR.

Snowden has estimated that 50% of the resource estimate being based on extrapolation, using 200m along strike and 70m down dip on a nominal section spacing 400mN by 40mE. This is excessive in Coffey Mining's opinion, given the uncertainty in continuity of stratigraphy, lithology, mineralisation and grade.

Snowden has applied the guidelines contained in the JORC Code (2004) in determining the Inferred Resource category. Snowden reasoned that further drilling is required to confirm geological and grade continuity, the lack of QA/QC data and the lack of in situ dry bulk density data as the important influencing factors. The reported Inferred Mineral Resource for C Regional deposit is 4.0Mt @60.6% Fe as shown in Table 2.5.11_1.

				Table 2.5.11_1 Golden West Resources Limited
Wiluna West Project C Regional Deposit Inferred Mineral Resources – October 2007 At a 50% Fe Lower Cut-off
Zone	Domain	Tonnes	Fe	SiO2	Al2O3	P	LOI	Proportion
		(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Hydrated	10000	0.1	56.7	12.9	2.2	0.03	3.3	3
High Silica	20100	0.6	57.2	15.5	1.4	0.02	0.9	16
Low Silica	20200 3.2 61.4 8.1 1.3 0.03 1.8 81
TOTAL		4.0	60.6	9.3	1.4	0.03	1.7	100

Coffey Mining considers that there is insufficient data to demonstrate geological and grade continuity to support Inferred Mineral Resource estimate. Further drilling is required to confirm the estimate and it is likely that this work will extend the current resources.

2.6 Mineral Resources - Gold

2.6.1 Summary

Within the Wiluna West Project, the gold resources have been estimated by using a sectional end area approach. A total gold Measured and Indicated Mineral Resource of 788,000t @ 3.5 g/t Au has been reported by GWR, as shown in Table 2.6.1_1.

There are nine contributing deposits. The Iron Monarch and Eagle East deposits have estimated by GWR with the remaining resources are as reported by SIPA Resources Limited. The reports are to be found on the WAMEX Open File database.

The available GWR documentation provides no details on the assessment of data quality, historical data validation, insitu dry bulk density determination and criteria used in assigning the resource category. Coffey Mining has not reviewed the detail of the historic resources and cannot comment on the veracity of the calculations or the assigned classification. However, Coffey Mining considers the section based estimates are of lower quality and recommends that they be revisited using industry standard block modelling techniques.

				Table 2.6.1_1
			Golden West Resources Limited
	Wiluna West Project
Gold Mineral Resources – April 2005 As Compiled by GWR
Geology Resource Tonnes Gold Grade Gold Metal Company / Deposit
	Shear	Style	Category	(t)	(g/t)	(oz)	Date
Iron Monarch		BIF	Indicated	140,000	3.0	13,500
Eagle East		BIF	Indicated	102,000	3.7	12,000	GWR 2005
Hawk	Joyners	BIF	Indicated	42,000	2.5	3,400
Iron King	Shear Zone	BIF	Indicated	163,000	3.3	17,300
Iron Duke	(JSZ)	BIF	Indicated	143,000	2.6	12,000
Goldfinch		BIF	Indicated	72,000	3.0	6,900
Bronzewing		Qtz	Indicated	30,000	5.5	5,300	Sipa 1990
			Measured	21,000	7.6	5,100
Bottom Camp	Brilliant Shear Zone	Qtz	Indicated	16,000	5.5	2,800
Brilliant/ Brilliant North	(BSZ) Indicated Qtz 59,000 4.6 8,700
TOTAL			Rounded	788,000	3.5	87,000

Note: Gold mineralisation was outlined using a 1 g/t Au lower cut off.

2.6.2 Iron Monarch Deposit

The mineral resource has been calculated by GWR (M. Wilson) using the sectional end area method as described in Section 2.5.2.

Data from both previous explorers (SIPA Resources Limited and Homestake Gold of Australia – between 1980 and 1996) and GWR was used. The historic data consisted of 1m samples taken from relatively shallow RC drill holes. All samples were fire assayed and duplicate and laboratory check samples were collected on a regularly basis. No down hole surveys were available with the historic data. SIPA also used a sectional method to estimate resources and applied an insitu bulk density of 2.9t/m³ to derive tonnages.

Between December 2004 and February 2005, GWR drilled 24 4½" RC holes (1,800m) taking samples at 1m intervals. The samples were submitted for fire assay analysis. In the process of surveying drill hole collar locations (local grid), historic holes were resurveyed with no significant difference found. This has resulted in an overall drill spacing of 20m by 20m.

For sections between 32 860mN and 33 100mN (13 sections), the gold mineralisation outline was interpreted using a 1g/t Au lower cut off although where a single intercept was only present a 0.5g/t Au was accepted. In outlining the mineralisation, consideration was given to the minimum width (2m to 3m down hole) and internal dilution (a maximum 1m was accepted). Half the drill hole spacing was used as a guide to up dip and down dip extension of the mineralisation envelope. The outlined mineralisation was digitised using Interdex Software. In calculating volumes, half the distance to the adjacent section was adopted as the area of influence of each section.

Two different high grade cuts (top cuts), 10g/t Au and 20g/t Au were trialled. No information was provided on how the high-grade cuts were derived. Finally, the arithmetic mean of the gold grades for each section for the uncut data and for each of the high grade cut datasets i.e. three in total.

An in situ dry bulk density of 2.9t/m³ was applied as used by SIPA. GWR have assigned an Indicated category to the Resource in consideration of the close spaced drilling and reasonable mineralisation continuity. There is a significant increase in the GWR Mineral Resource from that determined by SIPA, as shown in Table 2.6.2_1.

		Table 2.6.2_1 Golden West Resources Limited
		Wiluna West Project Iron Monarch Gold Deposit Mineral Resources Comparison – April 2005 As Compiled by GWR
	Tonnes	Gold Grade	Gold Metal
Compiled By	(t)	(g/t)	(oz)
Sipa	57,000	3.9	7,147
GWR	149,000	3.0	14,372
% Difference	+160	-23	+100

An independent review of the resource estimate carried out by Geological Investigations Pty Ltd concluded that the resource estimate was reasonable and in accordance with JORC Code (2004) guidelines.

Coffey Mining considers it likely that the resource estimate is of the right order of magnitude but the grade estimate is of a low quality. Coffey Mining suggests an accepted industry block modelling approach is used to confirm the resource estimate for the deposit.

2.6.3 Eagle East Deposit

The Mineral Resource has been calculated by GWR using the sectional end area method as described in Section 2.5.2.

Data from both previous explorers (SIPA Resources Limited and Homestake Gold of Australia between 1980 and 1996) and GWR was used. The historic data consisted of 1m samples taken from relatively shallow RC drill holes. All samples were fire assayed and duplicate and laboratory check samples were collected on a regularly basis. No down hole surveys were available with the historic data. Sipa also used a sectional method to estimate resources and applied an insitu bulk density of 2.9t/m³ to derive tonnages.

Between May and April 2005, GWR drilled 12 4½" RC holes (896m) taking samples at 1m intervals. The samples were submitted for fire assay analysis. Drill hole collar locations (local grid) were surveyed using a differential GPS instrument. This has resulted in an overall drill spacing of 20m by 20m.

For sections between 37 100mN and 37 220mN (13 sections), the gold mineralisation outline was interpreted using a 1g/t Au lower cut off although where a single intercept was only present a 0.5g/t Au was accepted. In outlining the mineralisation, consideration was given to the minimum width (2m to 3m down hole) and internal dilution (a maximum 1m was accepted). Half the drill hole spacing was used as a guide to up dip and down dip extension of the mineralisation envelope. The outlined mineralisation was digitised using Interdex Software. In calculating volumes, half the distance to the adjacent section was adopted as the area of influence of each section.

Two different high grade cuts (top cuts), 10g/t Au and 20g/t Au were trialled. No information was provided on how the high-grade cuts were derived. Finally, the arithmetic mean of the gold grades for each section for the uncut data and for each of the high grade cut datasets i.e. three in total.

An in situ dry bulk density of 2.7t/m³ was applied and based on the average of SIPA determinations, 2.74t/m³ at the adjacent Eagle prospect. GWR have estimated an Indicated Mineral Resource of 102,000t @3.7g/t Au.

An independent review of the resource estimate carried out by Geological Investigations Pty Ltd concluded that the resource estimate was reasonable and in accordance with JORC Code (2004) guidelines.

Coffey Mining considers it likely that the resource estimate is of the right order of magnitude but the grade estimate is of a low quality. Coffey Mining suggests an accepted industry block modelling approach is used to confirm the resource estimate for the deposit.

2.7 Uranium

GWR has drilled a single line of 26 RC holes (1,232m) to confirm the existence of the palaeochannel as modelled in the adjacent U3O8 Limited tenement and to investigate its stratigraphy. A total of 323 samples were collected. From this program, only samples within seven holes returned assays results around or in excess of 20ppm U and only two samples exceed 50ppm U.

Later radiometric surveys located anomalies over calcrete which have not yet been drilled

This prospect is in the very early stages of exploration and no Mineral Resources have been defined.

2.8 Proposed Mining Operations

No mining study work has been undertaken on this project and no mine design work has been completed thus far.

2.9 Metallurgy and Processing

2.9.1 Gold

Metallurgical test work, completed in 1985 by Edward L Bateman for Teck Exploration and SIPA concluded that heap leaching was not a viable process as recoveries were very low due to the fineness of the gold.

Other work completed by T D Field also in 1985 suggested that a conventional grinding and agitation circuit would be the best approach.

Coffey Mining suggests that an update of the metallurgical work be undertaken for any future work.

2.9.2 Uranium

No work has been undertaken to date.

2.9.3 Iron

No comprehensive metallurgical or mineralogical studies have been completed for the iron deposits.

However to evaluate potential scree resources, some 60 bulk samples stored in 200 litre drums were collected from trenches and dispatched to SGS Laboratory for metallurgical testing under the guidance of Snowden. The test work identified higher grade Fe occurred in the coarser fractions (>31.5mmm) but usually only accounts for less than 35% of the sampled material. Detrital thicknesses were minimal (> 1m) and no further work was done on this material.

Samples obtained from an upcoming diamond drill program on the main bedrock deposits will be submitted for metallurgical test work by GWR to determine the physical characteristics (e.g. lump to fines ratio, decrepitation, tumble index etc) and density values for the various types of iron mineralisation. The physical characteristics have a direct impact on the value of potential mine products.

2.10 Infrastructure

2.10.1 Current Infrastructure

The site is currently undeveloped.

During the Murchison gold rush, there was a State run narrow gauge rail network from Geraldton out to Meekatharra, Wiluna and Sandstone. The track now ends at Mullewa with a (wheat) seasonal track extending a further 30km east of Mullewa to Pindar, some 500km from Wiluna.

2.10.2 Oakajee Option

There are a number of high-level descriptions of the work that needs to be done to develop the transport system in the Mid West region for the export of iron ore from Wiluna West through to the proposed port of Oakajee.

The rail route distance from Wiluna West to the proposed Oakajee port is approximately 645km. Route distances are:

• Wiluna West to Wilgemia 235km
• Wilgemia to Oakajee 410km

The Wiluna West trains will need to run on a GWR dedicated new track between Wiluna West and Wilgemia. From Wilgemia, the trains would share the track constructed by a third party rail infrastructure consortium with other trains run for other iron ore mining operations to the north.

This rail and the Oakajee port infrastructure is not expected to be in place within the next five years.

2.10.3 Esperance Option

The rail route distance from Wiluna West to the Esperance port is approximately 932km. This port consists of an existing deep water iron ore export facility that could be upgraded in the next two to five years to facilitate the Wiluna West ore.

The Wiluna township is approximately 300km north of Leonora, which is connected to Kalgoorlie and then Esperance by 647km of standard gauge railway.

Until the rail line and loading facilities were constructed at the Wiluna West site, ore could be trucked by multiple trailer road trains to Leonora and loaded into rail cars by front end loaders at a temporary rail siding.

The existing rail network would need additional passing loops, locomotives and rail cars.

Esperance port would require upgrading and an additional rail car dumper, storage shed and associated ore handling infrastructure.

The key timing determinate for the Esperance option is the delivery and installation of the rail car dumper and associated rail sidings and ore storage sheds.

3 DOHERTY'S PROJECT

3.1 Introduction

The Doherty's project is located 65km north of Sandstone and 600km northeast of Perth (Figure 3.1_1) within the East Murchison Mineral field and the historic Barrambie mining centre. It is also approximately 100km south west of the Wiluna West project. The single tenement of 176 hectares encompasses an area of the Barrambie Greenstone Belt.

Within the tenement, gold resources have been identified and there is potential to enhance and extend these resources. An Indicated resource of 26,700 tonnes @ 23.8g/t Au has been reported for the Project.

Source: Golden West Resources

3.2 Tenement Status and Permitting

The GWR tenement holdings consist of a single granted Exploration Licence 65km northwest of Sandstone and 140km southwest of Wiluna in Western Australia (Table 3.2_1).

		Table 3.2_1
		Golden West Resources
		Doherty's Project Tenement Schedule
		Proportion	Date
Tenement	Registered Holder	Held	Granted	Expires	Area
M57/619	Golden West Resources Ltd	100/100	26/02/2007	25/02/2028	176 ha

3.3 Geology and Mineralisation

Regional Geology

The Barrambie Greenstone Belt is folded into a major anticline which plunges to the northwest. The eastern limb of the anticline contains a well formed synclinorium while only remnants of western limb of the major anticline are to be found. The project is located at the southern end of the belt.

Within the area, a variety of lithologies are present including dolerites, mafics, Barrambie Clastics and felsic volcanics intruded by porphyries and gabbros. These the rocks are tightly folded and disrupted by faults, cross faults and shears. Several phases of granite have also intruded the sequence.

Gold has been mined historically from north-south trending quartz reefs of 2m to 5m in thickness.

Local Geology

The lithologic sequence at the Doherty's Project consists of quart-chlorite schists, felsic volcanoclastics, metasediments, banded iron-formations (BIFs), dolerite and granite. The BIF horizons containing grey chert, magnetite and some pyrite form prominent northwest-southeast trending ridges in the area. Quartz eye tuffs overly the sequence and these have been subsequently intruded by albite porphyries. The sequence is isoclinally folded with minor folds plunging to the northeast at 30^o . An axial plane schistosity subparallel to the bedding is well developed. Axial plane shears trend north-northwest and are offset by east-west faults.

Mineralisation

At Doherty's, the gold mineralisation is found within quartz vein filled shears in altered albite porphyry. The mineralised shoots plunge at 30° to north-northwest within a folded sequence. These quartz reefs are narrow (average 0.5m wide) containing sulphides predominantly pyrite, scheelite, chlorite and silica. The historical mine plans and mapping suggests that the mineralisation shows a high degree of continuity.

Samson Exploration work carried out between 1986 and 1990 identified two shoots at Doherty's, the A and B shoots.

3.4 Exploration History

Gold was first discovered in the Barrambie Belt in 1905. There are three historical workings, Doherty, Old Camp and South Shear which produced 27,308oz Au.

Between 1986 and 1990, Samson Exploration NL carried out detailed surface and underground geological mapping, RAB drilling, diamond drilling and underground mining. The underground activities included shaft sinking and level development (6 and 8 levels). The underground workings were surveyed, mapped and sampled in detail and excellent records have been located. The Doherty's mine is completely stoped out above the 4 level (55m vertical).

GWR completed a program of nine RC drill hole with four holes in the vicinity of B Shoot and the remainder in the A Shoot. The program returned 48 anomalous values above 0.1g/t Au of which the maximum was 0.99g/t Au.

3.5 Mineral Resources

A resource estimate has been prepared for gold mineralisation based a sectional end area methodology as describe in Section 2.5.2. The data was obtained from WAMEX database.

The sample data and mine working have locations based on a local grid. GWR re-established the local grid and confirmed the locations of the previous drilling and mine workings.

The gold mineralisation has been outlined at 20mRL increments between 460mRL and 360mRL, as shown in Table 3.5_1, using a 1g/t Au lower grade cut off i.e. mineralisation outlines are in plan view rather than in section. The outlines have then been digitised (Southern Cross Surveys) and then adjusted to ensure they were a minimum of 1m in width. The volume was then calculated.

A combination of level face sampling (channel sample) and diamond drilling were obtained from reports. The gold assays were determined using fire assays. No detail was available for review to confirm locations and grades. GWR RC drilling results were not used in the calculation.

A high grade cut (top cut) of 100g/t Au was applied to the gold assay results obtained from the available Samson diamond drilling and level face sampling. For mineralised intercepts of greater than one metre, the intercept was adjusted back to one metre. The average of all assays was then calculated. No information was provided on how the high grade cut was arrived at nor the reasoning or purpose for reducing the intercept. Coffey Mining considers this average grade is not an adequate local estimator of grade.

The in situ dry bulk density of 2.6t/m³ was derived from averaging 37 samples collected by Samson Exploration in 1987.

					Table 3.5_1 Golden West Resources Doherty's Project Indicated Mineral Resource – April 2005 Gold
Block Number	RL Range	Area	Density	Width	Tonnes	Au Grade		Contained Gold
		(m2 )	(t/m3 )	(m)	(kt)	(g/t)	(g)	(oz)
1	460 - 440	1,758	2.6	1	4.6	23.8	108,785	3,498
2	440 - 420	1,952	2.6	1	5.1	23.8	120,790	3,883
3	420 - 400	2,141	2.6	1	5.6	23.8	132,485	4,259
4	400 - 380	2,031	2.6	1	5.3	23.8	125,678	4,041
5	380 - 360	2,000	2.6	1	5.2	23.8	123,760	3,979
TOTAL					25.7	23.8	611,498	19,660

From Annual Report 2006 - Table 2: Summary Doherty's Resource - April 2005 - DOH_A_2006.pdf

The Doherty's resource estimate of 25,700 tonnes @23.8g/t Au for 19,660 ounces of contained gold has been assigned an Indicated category.

A reporting error in of the tonnage and contained metal has been made by GWR, as shown in Table 3.5_2. There is a variation of 1,000 tonnes (25,700 tonnes and 26,700 tonnes) and a difference of 770 ounces (19,660oz and 20,430oz) in the contained gold metal. The source of the errors is likely to typographical in origin.

	Table 3.5_2 Golden West Resources
	Doherty's Project Reported Gold Mineral Resource Discrepancies
	Tonnes	Au Grade	Gold Metal
	(kt)	(g/t)	(oz)
Resource Report†	25.69	23.8	19,660
Technical Report† Text	26.70	23.8
Technical Report† Table	25.69	23.8	19,660
Annual Reports‡	25.70	23.8	20,430

† Table 1: Report on Doherty's Resource Estimate – April 2005 – Report Doherty's Resource _April 2005_.pdf and in

Table 2: Doherty's Annual Technical Report on P57/972 January 2006 - DOH_A_2006.pdf ‡ From Annual Report 2005, 2006, 2007

The available GWR documentation provides no details on the assessment of data quality, historical data validation and criteria used in assigning the resource category. Coffey Mining suggests that an industry accepted block modelling approach be used for narrow vein mineralisation at Doherty's deposit.

There is potential for further mineralisation to be found both at depth and within the western limb.

4 BULLABULLING SOUTH PROJECT

4.1 Introduction

The Bullabulling South Project is located 35km southwest of Coolgardie and 80km southwest of Kalgoorlie in the Coolgardie Mineral Field, Western Australia. The single tenement covers an area of approximately 87km² . The project is located at the southern end of the highly mineralised Coolgardie-Bullabulling Greenstone Belt which has produced more than 3 million ounces of gold.

Source: Golden West Resources Limited

4.2 Tenement Status and Permitting

The Project comprises of one tenement, Exploration Licence E15/762, and covers an area of approximately 87km² . GWR originally had a farm-in Agreement with Ramelius Resources Ltd, however the latter withdrew from the agreement in June 2006 and returned the tenement to GWR.

		Table 4.2_1
		Golden West Resources
		Wiluna West Project Tenement Schedule
Tenement	Registered Holder	Proportion Held	Date Granted	Expires	Area1
E15/762	Golden West Resources Ltd	100/100	21/10/2003	20/10/2008	16 blocks

¹ A graticular block is an area described by 5 minute latitude by 5 minute longitude increments on 1:1,000,000 plans of Western Australia.

4.3 Geology and Mineralisation

Regional Geology

Located on the western side of the Norseman-Wiluna Greenstone Belt, within the Coolgardie Domain of the Kalgoorlie Terrane, the Bullabulling South Project is where the southwest trending Coolgardie belt swings to the northwest. The area has undergone middle to upper amphibolite facies metamorphism and the stratigraphy consists of a lower basalt unit overlain by a komatiite unit, which is overlain by felsic volcanic and sedimentary rocks.

There is little outcrop with the area largely obscured by cover. Recent aeromagnetic surveys and drilling has discovered that the greenstone belt at Gnarlbine to extend significantly further south than previously interpreted on geological maps. The aeromagnetics has also identified several major structures.

Local Geology

Soil almost completely covers the project area and weathering extends to depths of more than 40m. Beneath the cover, geological mapping and drilling have identified felsic to intermediate metasediments overlying komatiite that strikes north-south and dips to the west. This sequence is intruded by pegmatite. Amphibolite, gabbro and dolerite have also been identified in the area. Structurally, the area is complex with three deformational events recognised including thrusting, folding and faulting. The Bullabulling and Reptile Shears are the main structural features.

Two large gold-in-soil anomalies have been delineated, the Triton and Canyon prospects (Figure 4.3_1). From drilling of the Canyon prospect which overlies both the Reptile and Bullabulling Shear Zones, anomalous gold intercepts (up to 2g/t Au) were found to be coincident with the saprolite-saprock interface below transported overburden.

Source: Golden West Resources

4.4 Exploration History

Anaconda and Union Miniere jointly evaluated the area for copper and nickel in 1960's. To the north of the tenement, Western Mining Corporation, Valiant Consolidated and Hill Minerals (jointly), Kalgoorlie Consolidated Gold Mines, Resolute Samantha Limited (Resolute) and others have previously explored for nickel and gold in the vicinity of the Bullabulling Shear. There have been a number of exploration successes including the Bacchus, Gibraltar and Phoenix mines. Resolute conducted soil sampling and drilling in the region including the north central part of the GWR tenement in the mid 1990's. Their work outlined the Canyon Anomaly based on values of in excess of 10ppb Au along an east-northeast trend some 7km in length. Along strike, there are the Grosmont and Golden Web mines. This anomaly cuts across the Bullabulling Shear Zone.

During the same period, Triton Resources Ltd were exploring in the southern half of the tenement. Their aeromagnetic survey, soil sampling and auger drilling outlined the Triton Anomaly at a 10ppb Au lower grade cut off. This anomaly is roughly circular and about 1,500m in diameter.

Dreadnought Mining NL and Linden Gold Pty carried out further evaluation the area. Eventually, the latter concluded the anomalies were transported as drilling returned no significant mineralised gold intercepts.

GWR have compiled all the geochemistry and drilling results into a database and maps from the available WAMEX Open File Reports.

4.5 Mineral Resources

To date, GWR has not reported any mineral resources for this project.

The exploration prospectivity centres on further exploration of the outlined geochemical anomalies and the Bullabulling and Reptile Shears that traverse the tenement. Gold operations are located along the shear zone and along strike of the anomalies. There is a superficial soil cover which conceals the Bullabulling Shear.

GWR have been identified two targets. The first is an area to the south of existing air core drilling to the interpreted greenstone-granite contact. The aim is to complete the previous work and to test a magnetic high. The second target area is to also examine a magnetic high near a similar greenstone-granite contact within the area of the Reptile Shear.

Coffey Mining deems that exploration designed to test geophysical and / or geochemical anomalies in the vicinity of the Bullabulling and Reptile Shears and / or greenstone/granite contact is appropriate.

5 TECHNICAL VALUATION BACKGROUND

5.1 Introduction

The opinions expressed and conclusions drawn with respect to this valuation are appropriate at the valuation dates. The valuation is only valid for this date and may change with time in response to variations in economic, market, legal or political conditions in addition to on going exploration results. The objective of a mineral asset valuation is to establish a "fair market" value for an asset in the context of all the foregoing factors.

5.2 Fair Market Value of Mineral Assets

Mineral assets are defined in the Valmin Code as all property including, but not limited to real property, mining and exploration tenements held or acquired in connection with the exploration, the development of and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

Regardless of the valuation techniques adopted, the consideration must reflect the perceived "fair market value", which is described in Definition 41 of the Valmin Code as "the estimated amount of money, or the cash equivalent of some other consideration for which, in the opinion of the Expert reached in accordance with the provisions of the Valmin Code, the mineral asset or security should change hands on the Valuation Date between a willing buyer and a willing seller in an 'arm's length' transaction, wherein each party had acted knowledgeably, prudently and without compulsion".

In effect, therefore, the valuation expert is assumed to have the knowledge and experience necessary to establish a realistic value for a mineral asset. The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change. Other factors that can influence the valuation of a specific asset include the size of the company's interest, whether it has sound management and the professional competence of the asset's management. All these issues can influence the market's perception of a mineral asset over and above its technical value.

5.3 Valuation Methods

When valuing an exploration or mining tenement, the Expert is attempting to arrive at a value that reflects the potential of the tenement to yield an ore reserve and which is, at the same time, in line with what the tenement will be judged to be worth when assessed by the market. Arriving at the value estimate by way of a desktop study is somewhat difficult because there are no hard and fast rules and no single industry-accepted approach.

It is obvious that on such a matter, based entirely on professional judgement, where the judgement reflects the valuation Expert's previous geological experience, local knowledge of the area, knowledge of the market and so on, that no two valuers are likely to have identical opinions on the merits of a particular property and therefore, their assessments of value are likely to differ, sometimes markedly.

There are numerous recognised methods used in valuing "mineral assets". The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset, and the quantity and type of information available in relation to any particular asset.

The Valmin Code, which is binding upon "Experts" and "Specialists" involved in the valuation of mineral assets and mineral securities, defines the level of asset maturity under the following categories: -

• "Exploration Areas" refer to properties where mineralisation may or may not have been identified, but where a mineral resource has not been identified.
• "Advanced Exploration Areas and Pre-Development Projects" are those where Mineral Resources have been identified and their extent estimated, but where a positive development decision has not been made.
• "Development Projects" refers to properties which have been committed to production, but which have not been commissioned or are not operating at design levels.
• "Operating Mines" are those mineral properties, which have been fully commissioned and are in production.

The various recognised valuation techniques are designed to provide the most accurate estimate of the asset value in each of these categories of project maturity. In some instances, a particular mineral property or project may include assets that logically fall under more than one of these categories.

In the case of Pre-development, Development and Mining Projects, where Measured and Indicated Resources have been estimated and mining and processing considerations are known or can be reasonably determined, valuations can be derived with a reasonable degree of confidence by compiling a discounted cash flow (DCF) and determining the net present value (NPV).

Where mineral resources remain in the Inferred category, reflecting a lower perceived level of technical confidence, the application of mining parameters is inappropriate and their economic value can therefore not be demonstrated using the more conventional DCF/NPV approach. A similar situation may apply where economic viability cannot be readily demonstrated for a resource assigned to a higher confidence category. In these instances it is frequently appropriate to adopt the in situ Resource (or "Yardstick") method of valuation for these assets. This technique involves application of a heavily discounted valuation of the total in-situ metal contained within the resource. This may vary substantially in response to a range of additional factors including physiography, infrastructure and the proximity of a suitable processing facility.

In the case of Exploration Areas, and to a lesser extent Advanced Exploration Areas, however, the potential is more speculative and the valuation is dependent to a large extent on the informed, professional opinion of the valuer.

Where useful previous and committed future exploration expenditure is known or can be reasonably estimated, the Multiple of Exploration Expenditure ("MEE") method is considered to represent one of the more appropriate valuation techniques. This method involves assigning a premium or discount to the relevant effective Expenditure Base ("EB"), represented by past and future committed expenditure, through application of a Prospectivity Enhancement Multiplier ("PEM"). This factor directly relates to the success or failure of exploration completed to date, and to an assessment of the future potential of the asset. The method is based on the premise that a "grass roots" project commences with a nominal value that increases with positive exploration results from increasing exploration expenditure. Conversely, where exploration results are consistently negative, exploration expenditure will decrease along with the value.

Other valuation methods can be adopted to assist in confirming conclusions drawn from the MEE approach. Where sale transactions relating to mineral assets that are comparable in terms of location, timing and commodity, and where the terms of the sale are suitably "arms length" in accordance with the Valmin Code, such transactions may be used as a guide to, or a means of, valuation.

6 IRON ORE ASSETS

6.1 Resources

The GWR Projects have been classified as containing Inferred Mineral Resources in accordance with the JORC Code guidelines (2004), based on the confidence level of the key criteria considered during resource classification.

6.2 Valuation Method

In valuing the GWR Iron Ore Resources, Coffey Mining has elected to adopt the In-situ Resource (or "Yardstick") method of valuation for these Resources. This technique involves application of a heavily discounted valuation of the total in-situ metal contained within the resource based on recent transactions.

6.3 Iron Ore Pricing

Iron ore is usually sold in US currency expressed as US cents per dry tonne unit or per dry long ton unit. A 'unit' is one percent iron. To convert price per unit to price per tonne, the unit price is multiplied by the dry percentage iron in the ore. The ore is sold on an FOB basis (that is, loaded at the seller's wharf on a vessel supplied by the buyer), or CIF (delivered to the buyer's wharf in a vessel supplied by the seller).

For the Japanese Financial Year (JFY) 2007 starting April 1, the price of Hamersley fine ore was US\$0.8042 per dry long tonne unit.¹ .

For the JFY 2007 starting April 1, the price of Hamersley lump ore was US\$1.0264 per dry metric tonne unit. ²

To determine the A\$ price per wet metric tonne unit, a process to convert from US\$ per dry long tonne units is shown in Table 6.1.3_1

	Table 6.1.3_1
	Golden West Resources
	Revenue Calculations - October 2007
Fe Fines Price	US\$	\$0.8042/dltu
Fe Lump Price	US\$	\$1.0264/dltu
Exchange rate	A\$/US\$	A\$1.00/USD\$0.8772
Lump/Fines Split	%	40/60
Average Fe price	AUD\$	\$1.03/dmtu

¹ Rio Tinto News Release 22 December 2006

² Rio Tinto News Release 22 December 2006

To determine the A\$ price per tonne of ore, the conversion is A\$ per wet tonne unit multiplied by the iron content of the ore in question.

The valuations are based on the Australian dollar/US dollar exchange rate (0.8772) applicable as at the valuation date (25 November 2007).

6.4 Environment

Information to date indicates that the Project areas do not contain any unique flora or fauna regarded as being rare, threatened or endangered.

Coffey Mining is not aware of any specific environmental constraints on any of the Project areas.

6.5 Native Title

The tenements may be subject to Native Title Claims and will be dealt with through the normal administrative process.

Coffey Mining is not aware of any sacred site or areas of significance within any of the tenements.

6.6 Comparable Transactions

6.6.1 Exploration Projects

The transactions identified have specifically targeted sizeable tenement holdings over historic mineral fields in western and northern Australia which are considered prospective for either low to high-grade structurally hematite deposits. The transactions identified along with the implied cash-equivalent values are summarised in Table 6.6.1_1.

		Table 6.6.1_1 Golden West Resources
		Recent Market Transactions Involving Hematite Exploration Projects
Project	Transaction Details	Asset Details	Area (km2 )	Purchase price 100% basis (A\$)	Implied value/km2 (A\$)
	Advanced or Strategically Located Project Transactions
Assorted	In July 2006, Polaris Metals NL ("Polaris") acquired all of the iron assets of Heron Resources Ltd for 29.7M shares at a stated price of A\$0.185/share and 15M options exercisable at A\$0.30/option.	The tenements are located in the Yilgarn and Pilbara regions of Western Australia and principally contain CID and hematite targets	208	\$5.5M (excluding options)	\$26,400
Robertson Range, Davidson Creek, Enachedong	In September 2005, NiQuest Ltd (now FerrAus Ltd) acquired all of the issued capital of Australian Manganese Pty Ltd for A\$0.275M cash, 50M shares at a deemed price of A\$0.32/share and 3M options with a strike price of A\$0.25/option.	The principal assets of Australian Manganese Pty Ltd are the Robertson Range, Davidson Creek and Enachedong Projects located in the Pilbara region of Western Australia. The Robertson Range and Davidson Creek Projects contain portions of the iron prospective Marra Mamba Formation. The Enachedong Project is reported to be prospective for manganese mineralisation.	563	\$16.27M (excluding options)	\$28,900
Goldsworthy	In August 2005, Polaris acquired from Leviathan Resources Ltd a 70% interest in the Goldsworthy Project for A\$2.5M in exploration expenditure over 4 years.	The Goldsworthy Project adjoins BHP Billiton's former Mt Goldsworthy iron mine in Western Australia.	120	\$3.57M	\$29,800
Ravensthorpe	In May 2005, Resource Mining Corporation Ltd ("RMC") acquired from Traka Resources Ltd a 51% interest in the Ravensthorpe Project for A\$0.2M in cash and A\$5.5M in exploration expenditure over a five year period.	The Ravensthorpe Project is located in southern Western Australia. Previous costeaning and shallow percussion drilling on the project has identified zones of martite goethite rich BIF with subordinate hematite.	233	\$11.18M	\$48,000
Argyle	In October 2004, Mount Gibson acquired from RMC a 4.9 % indirect interest in the Argyle Project by the placement of 100M RMC shares (stated price of A\$0.005/share) and 100M A\$0.002 options.	The Argyle Project is located in the Kimberley region of Western Australia and contains reported hematite mineralisation over a strike length of 9km.	177	\$10.20M (excluding options)	\$57,700

		Table 6.6.1_1 Golden West Resources Recent Market Transactions
		Involving Hematite Exploration Projects
Project	Transaction Details	Asset Details	Area (km2 )	Purchase price 100% basis (A\$)	Implied value/km2 (A\$)
Argyle	In May 2004, RMC acquired from Gauntlet Mining Corporation a 75% interest in the Argyle Project for A\$0.25M in cash and A\$3.075M in exploration expenditure.	As above	177	\$4.43M	\$25,000

Analysis of these market transactions indicates that the implied value of advanced iron exploration projects have implied values generally between \$25,000/km² and \$60,000/km² .

The majority of these transactions predate the current boom in iron ore prices. Given the increasing demand and subsequent 125% increase in the price for iron ore over the last few years and the forecast 20% price increases for the next few years, these transaction numbers may be seen as conservative.

6.6.2 Resource Projects

To establish a benchmark market value for in-ground tonnes for hematite resource projects, a review has been carried out a search for publicly available information on recent market transactions involving open pit hematite resources in Australia. Table 6.6.2_1 summarises several recent market transactions identified.

For the valuation of hematite resources, Coffey Mining's approach is to value them separately by assigning a dollar value per hematite resource tonne in the ground.

		Table 6.6.2_1 Golden West Resources Recent Market Transactions Involving Hematite Resource Projects in Australia
Project	Transaction Details	Asset Details	Implied Project Value on 100% basis (A\$)	Implied value per tonne of contained iron (A\$)
Koolan Island	In December 2006, Mount Gibson Iron acquired Aztec Resources Ltd ("Aztec") by offering a share swap that valued Aztec shares at \$0.286/share.	The principal mineral asset of Aztec is the advanced Koolan Island Project located in the Kimberley region of Western Australia. The Koolan Island Project includes a combined Measured, Indicated and Inferred Resource of 53.3Mt grading 64.6% Fe.	\$106.4M	\$3.09
Peculiar Knob	In August 2006, Western Plains Gold acquired Southern Iron for \$6.1M in script	The principal mineral asset of Southern is the Peculiar Knob deposit located in South Australia. The deposits consist of Inferred Resources of 20.7Mt grading 63.2% Fe.	\$6.1M	\$0.47
Hope Downs	In July 2005, Hancock Prospecting Pty Ltd exercised its option to acquire the 49% interest it did not already own in the Hope Downs Project from Kumba Resources Ltd for A\$241.7M.	The Hope Downs Project includes a combined resource of approximately 800Mt grading 61.5% Fe. Included in this Resource is a Proven and Probable Reserve of 473Mt.	\$493.3M	\$1.00

Analysis of these market transactions indicates that the implied value of advanced iron exploration projects have implied values generally between \$0.47/t contained Fe and \$3.00/t contained Fe.

The upper range of the value/t Fe estimates are transactions of advanced projects at the conclusion of their feasibility studies at the time of purchase, with a high percentage of their resource tonnes converted to Reserves and detailed construction plans in place.

However, given the increasing demand and subsequent 125% increase in the price for iron ore over the last few years and the forecast 20% price increases for the next few years, these transaction numbers may be seen as conservative.

In consideration of these issues, Coffey Mining estimate that the current market value of an inground tonne of contained iron ore could lie in the range of \$0.55/t to \$5.00/t.

6.7 Wiluna West Iron Ore Valuation

A total iron ore Inferred Mineral Resource of 86.14Mt @ 60.2% Fe is reported by GWR, as shown in Table 6.7_1.

			Golden West Resources Limited Wiluna West Project Iron Ore Mineral Inferred Resources – November 2007	Table 6.7_1
Deposit	Estimate	Lower	Tonnes	Fe	Si02	Al2O3	P	LOI	%
	Method	Cut Off	(Mt)	(%)	(%)	(%)	(%)	(%)
Bowerbird	Block	50%Fe	9.47	59.8	7.7	3.5	0.06	2.70	11
Bowerbird North	Sectional	§50% Fe	1.95	61.5	5.3	3.2	0.04	2.10	2
Joyners Find	Block	§50% Fe	7.75	64.6	3.1	1.9	0.02	2.00	9
Joyners Find North	Sectional	§50% Fe	3.57	63.1	4.8	2.5	0.03	2.10	4
Unit B Total			22.74	62.1	5.5	2.8	0.04	2.3	26
Unit C
C1	Block	50% Fe	4.20	58.5	7.2	3.3	0.09	5.2	5
C2	Block	50%Fe	3.40	60.1	6.0	2.1	0.03	6.0	4
C3	Block	50% Fe	23.30	59.1	8.6	2.1	0.07	4.4	27
C4	Block	50%Fe	24.10	59.6	9.2	2.5	0.03	2.7	28
C5	Block	50% Fe	4.40	60.6	8.9	2.1	0.12	3.8	5
C Regional	Block	50%Fe	4.00	60.6	9.3	1.4	0.03	1.7	5
Unit C Total			63.40	59.4	8.7	2.3	0.06	3.7	74
TOTAL			86.14	60.2	7.8	2.4	0.05	3.3	100

Note: Snowden compiled block estimates, GWR compiled sectional estimates

The valuation calculated for the GWR Iron Ore resources is a factor of the following for each of the individual Resources:

• the overall confidence in the resource;
• drill hole spacing that has been undertaken on the resource to date;
• the size of the resource;
• ore type and marketability;
• mining issues of strip ratio and continuity; and
• the proximity to infrastructure such as roads, power, water, rail and port.

The total iron ore Resources are split between a number of smaller deposits, rather than one single significant orebody.

Table 6.7_2 outlines the various mining issues assessed in the valuation of the individual assets.

The site is currently undeveloped and no infrastructure exists in the region. The project is reliant on other operations establishing both the regional power, transport and port infrastructure required for project success prior to commencement of its operations. This valuation range acknowledges that no firm development decision has been announced by other projects in the area to development this key site infrastructure.

							Table 6.7	2
							Golden West Resources Limited	_
							Wiluna West Project Ore Iron
		Drill		Material					Extrapolation		Tonne s
Deposit		Nominal spacing		type† (%)		Geometry	Estimate Method	btwn	Section On	% Cross		Ratio Strip	Comment
	btwn	along	MH	HS HY	LS				Along strike	Down dip	(Mt)
Unit B
Bowerbird	50	40	100			to 10m), some discontinuous, thickening possible; waste is Multiple narrow (variable 1m steep dip, some localised of similar thicknesses in between or greater.	Block				9.5	high	Selective mining required, unlikely all resource will be recovered as some parts too thin; more material extent; expected high level of dilution. drilling to get extents due to discontinuous horizons; need to define harder massive
B Bowerbird North	100	varies 40	100			holes, intervening waste is of some pods based on single discontinuous, steep dip; Multiple, narrow, some greater thicknesses in between pods.	Sectiona (9)				2.0	high	unlikely all resource will be recovered as some parts too thin; more drilling to get extents due Very small deposit; selective mining required, to discontinuous horizons particularly pods; expected high levels of dilution.
Joyners Find	200		100			some discontinuous, steep Multiple, narrow (variable), dipping.	Block				7.8	high	economically recovered; down dip extension and strike continuity of western most (75%) Selective mining, some parts too thin to be based on 2 holes only.
Find North Joyners	400	40	100			intervening waste in between. discontinuous, steep dip; large thicknesses of Multiple, narrow,	Sectiona (4)				3.6	high	drilling to define horizon, grade continuity; very unlikely all resource will be recovered as some Relatively small deposit; selective mining, parts too thin; wide spaced drilling; more optimistic re continuity of mineralisation horizon.

									Table 6.7	2
									Golden West Resources Limited	_
									Wiluna West Project Ore Iron
			Drill			Material					Extrapolation			Tonne s
Deposit	Unit		Nominal spacing			type† (%)		Geometry	Estimate Method		On Cross Section				Ratio Strip	Comment
		btwn	along	MH	HY	HS	LS			btwn	Along strike	Down dip	%	(Mt)
C Unit
								discontinuous, steep dipping. Multiple, narrow,								selective mining required, unlikely all resource Drill spacing variable; relatively small deposit;
C1		200	40		48		52		Block	400	50	100	60	4.2	high	will be recovered as some parts too thin; more horizons; expected high levels of dilution; very drilling to get extents due to discontinuous optimistic (50% extrapolated).
								discontinuous, steep dipping. Multiple, narrow,								selective mining required, unlikely all resource Drill spacing variable; relatively small deposit;
C2		100	40		62		38		Block	100	50	75	40	3.4	high	will be recovered as some parts too thin; more drilling to get extents due to discontinuous horizons; expected high levels of dilution.
	C							discontinuous, steep dipping. Multiple, narrow, some								unlikely all resource will be recovered as some Drill spacing variable; sizeable deposit, long strike length; selective mining required,
C3		200	40		42		58		Block	300	50	100	50	23.3	high	levels of dilution; hydrated could be an issue re parts too thin; more drilling to get extents due meeting product specs and target tonnage; to discontinuous horizons; expected high optimistic (50% extrapolated).
C4		50	40		16	23	61	Synclinal keel, thickened.	Block	100	100	100	10	24.1	low	hydrated could be an issue re meeting product less of an issue; normal bulk mining probable; Sizeable deposit, long strike length; dilution is
																specs and target tonnage.

									Table 6.7	2 _
									Golden West Resources Limited
									Wiluna West Project Ore Iron
			Drill			Material					Extrapolation			Tonne s
Deposit	Unit		Nominal spacing			type† (%)		Geometry	Estimate Method	btwn	On Cross Section		%		Ratio Strip	Comment
		btwn	along	MH	HY	HS	LS				Along strike	Down dip		(Mt)
C5		200	40		7	11	82	discontinuous, steep dipping. Multiple, narrow, some	Block	200	50	60	20	4.4	high	required, unlikely all resource will be recovered as some parts too thin; more drilling to get Relatively small deposit; selective mining extents due to discontinuous horizons; expected high levels of dilution.
Regional C		400	40		5	15	80	discontinuous, steep dipping. Multiple, narrow,	Block	400	50	70	50	4.0	high	Relatively small deposit; too widely spaced to demonstrate mineralisation horizon continuity discontinuity at a much closer spacing (50% extrapolated); unlikely all resource will be especially when other deposit show recovered as some parts too thin.
TOTAL														86.1
Notes: †								MH = massive hematite near surface with softer dust and biscuit ores below,
HY= hydrated i.e. goethitic equivalent of hardcap,
LS=low silica i.e. hematitic HS=high silica,
								All density assumed 3.5t/m3 for HY and HS and 4.0t/m3 for LS; these appear to be high
								All drilling RC – widths may be exaggerated in some cases and underestimated in others

Coffey Mining is of the opinion that for the valuation purposes, the top value that can be assigned for Inferred Resources is approximately \$2.20/t and lesser figures must be assigned, depending on the factors impacting the individual resources.

		Table 6.7_3 Golden West Resources Limited
		Iron Ore Valuation Summary (25 November 2007)
			Valuation (to three significant figures)
Project	Mt Fe	Low \$M	High \$M	Preferred \$M
Bowerbird	9.47	2.93	26.36	8.79
Bowerbird North	1.95	0.62	5.58	1.24
C1	4.20	1.27	11.44	2.54
C2	3.40	1.06	9.51	3.17
C3	23.30	7.12	64.10	28.49
C4	24.10	7.43	66.86	29.72
C5	4.40	1.38	12.41	2.76
C Regional	4.00	1.25	11.28	2.51
Joyners Find	7.75	2.59	23.31	5.18
Joyners Find North	3.57	1.17	10.49	2.33
Total	\$M	26.82	241.35	86.72

A summary of the individual resources and their values are shown in Table 6.7_3.

Employment of the in situ resource valuation technique would arrive at a valuation of between \$26.82 Million and \$241.35 Million. Coffey Mining has elected to value the Inferred Resource of 86.3Mt at a preferred value of \$86.72 Million.

This valuation acknowledges that no firm development decision has been announced for the other iron ore projects in the area or the Oakajee Port development. This development decision, and the associated infrastructure and port development, will materially increase the valuation of the Wiluna West iron ore assets.

In valuing the exploration potential associated with the Wiluna West iron ore, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method.

As far as can be reasonably ascertained, exploration expenditure on the Wiluna West Iron Ore Projects since 2005 approximates \$2.75 Million.

Employment of the Multiple of Exploration Expenditure (MEE) valuation technique would arrive at a valuation of between \$2.75 Million and \$8.25 Million utilising Prospectivity Enhancement Multipliers (PEM) of 1.0 and 3.0 respectively, within which we have selected a preferred value of \$5.0 Million.

7 OTHER ASSETS

7.1 Introduction

Valuation of the other projects is based primarily on the exploration potential mainly for gold and uranium.

In order to estimate a value for these additional resources, Coffey Mining has elected to apply the In-situ or Yardstick method of valuing the contained metal. The valuations are based on the London Metal Exchange (LME) closing seller spot gold price (US\$824.25/oz) and the Australian dollar/US dollar exchange rate (0.877) applicable as at the valuation date (25 November 2007).

7.2 Wiluna West Gold Projects

The Wiluna West Project contains an Indicated Resource of 788,000t @3.5g/t Au, containing 87,000oz Au.

Coffey Mining has have elected to apply the in situ Resource valuation technique by discounting the in-ground resource to a range from 2% to 4.5% of the in-ground value of the contained gold at present prices.

This provides a valuation range for the Project of between \$1.58 Million and \$3.55 Million.

As previously noted, Coffey Mining considers the gold resource estimates are of lower quality than the current stated Indicated status and recommends that they be revisited using industry standard block modelling techniques.

Coffey Mining has elected to treat the previous SIPA calculated Resources as Inferred Resources, due to the age since reporting and the lack of verifiable resource statements

Coffey Mining has elected to value the Indicated Resource of 25,136oz at 3% of In-situ contained gold content and the Inferred Resource of 61,557oz at 2% of In-Situ contained gold content. This provides a preferred value of \$1.81 Million.

In valuing the exploration potential associated with the Wiluna West Gold Projects, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method.

As far as can be reasonably ascertained, exploration expenditure on the Wiluna West Gold Projects since 2005 approximates \$20,000. Most of the exploration expenditure to date has focussed on the iron ore deposits.

Employment of the Multiple of Exploration Expenditure (MEE) valuation technique would arrive at a valuation of between \$0.02 Million and \$0.06 Million utilising Prospectivity Enhancement Multipliers (PEM) of 1.0 and 3.0 respectively, within which range we have selected a preferred provisional value of \$0.05 Million.

7.3 Wiluna West Uranium Projects

Coffey Mining considers the land holding to be prospective and the potential of locating significant uranium mineralisation as reasonable.

In the absence of an alternative means of valuation, Coffey Mining has elected to assign a notional value of \$0.1 Million to the Project.

7.4 Doherty's Project

The Doherty's Project contains an Indicated Resource of 25,700t @23.8g/t Au, containing 19,660oz Au.

Coffey Mining has elected to apply the in situ Resource valuation technique by discounting the in-ground resource to a range from 2% to 4.5% of the in-ground value of the contained gold at present prices.

This provides a valuation range of between \$0.36 Million and \$0.80 Million within which we have selected a preferred value of \$0.53 Million.

In valuing the exploration potential associated with the Doherty's Gold Projects, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method.

As far as can be reasonably ascertained, exploration expenditure on the Project approximates \$20,000.

Employment of the Multiple of Exploration Expenditure (MEE) valuation technique would arrive at a valuation of between \$0.02 Million and \$0.06 Million utilising Prospectivity Enhancement Multipliers (PEM) of 1.0 and 3.0 respectively, within which range we have selected a preferred provisional value of \$0.05 Million.

7.5 Bullabulling South Projects

In valuing the exploration potential associated with the Bullabulling South Projects, Coffey Mining has elected to apply the Multiple of Exploration Expenditure method.

Since 2004, GWR has committed \$83,791 to exploration expenditure over the Bullabulling South Project area. .

Employment of the Multiple of Exploration Expenditure (MEE) valuation technique would arrive at a valuation of between \$0.08 Million and \$0.25 Million utilising Prospectivity Enhancement Multipliers (PEM) of 1.0 and 3.0 respectively, within which range we have selected a preferred provisional value of \$0.15 Million. .

7.6 Material Agreements

For the Jindalee Resources Limited owned tenements, E53/1089-I and M53/1078-I, there is a joint venture agreement through which GWR must spend \$400,000 on exploration within 4 years commencing 1st April 2004 to earn a 60% interest.

Coffey Mining understands that holds a 100% unencumbered interest in the remainder of the tenements comprising the Projects and there are no material agreements or non-statutory royalties that apply.

The State royalties are broadly incorporated within the heavily discounted value assigned to the additional resources. As such, no further adjustments are required to the provisional value assigned to this component of the Project assets. Valuation of the remaining exploration potential is considerably more tenuous and bears little synergy with a production scenario. It is therefore inappropriate to adjust the value of this asset component to reflect the State royalties.

Coffey Mining are not aware, nor have we been made aware, of any other agreements that have a material influence on the provisional valuations and, on this basis, no further adjustments are necessary.

7.7 Valuation Summary

A summary of the adjusted Project valuations is provided in Table 7.7_1 below.

		Table 7.7_1 Golden West Resources Limited Valuation Summary (25 November 2007)
			Valuation (to three significant figures)
Project		Low \$M	High \$M	Preferred \$M
Wiluna West Iron Ore Projects	Resources	26.82	241.35	86.72
	Exploration	2.75	8.25	5.00
Wiluna West Gold Projects	Resources	1.58	3.55	1.81
	Exploration	0.02	0.06	0.05
Wiluna West Uranium Projects	Exploration	0.00	0.10	0.10
Doherty's Project	Resources	0.36	0.80	0.53
	Exploration	0.02	0.06	0.05
Bullabulling South Project	Exploration	0.08	0.25	0.15
Total	\$M	31.62	254.42	94.41

The value of Golden West Resources Limited's 100% equity interest in the Projects is considered to lie in a range from \$31.62 Million to \$254.42 Million, within which range Coffey Mining has selected a preferred technical value of \$94.41 Million.

8 GLOSSARY OF TECHNICAL TERMS

anomaly	An area where results are higher (or sometimes lower) than expected.
anticline	A convex fold-like structure.
axial plane	The geometric plane that intersects the crest or trough of a fold, about which the limbs are more or less symmetrically arranged.
backfill	The practice of filling underground voids created by mining, usually with mullock.
basement	Crust of the earth underlying younger sedimentary deposits.
BIF	Banded iron-formation - an iron-rich (+/- 30% Fe) and siliceous (+/- 50% SiO2) sedimentary rock. Host rock for the iron ores
breccia	Rock comprising angular fragments enclosed in a matrix, usually the result of persistent fracturing by tectonic or hydraulic means.
capital costs	Costs assigned to the purchase of plant and equipment for a project, or for the development of infrastructure, which can be depreciated or amortised.
chert	Fine grained sedimentary rock composed of cryptocrystalline silica.
chlorite	A green coloured hydrated aluminium-iron-magnesium silicate mineral common in metamorphic rocks.
competent	Refers to a rock, which tends to deform in a brittle, rather than ductile manner when stress is applied.
composite	A statistical technique wherein all sampled intervals are given the same length or alternatively, combining more than one sample interval or result to provide an average.
concentrate	In processing, the product which contains a higher concentration.
Cut-off grade	The grade used in grade tonnage reporting wherein only blocks which return a value above the particular cut off grade are reported.
deleterious impurities	Elements in concentrates for which a charge is made because the cost of separation during smelting exceeds their sale value.
dilation zones	Zone of tension developed within rocks during deformation, and which may localise the flow of fluids through the rock sequence.
diluted resource	Model of a mineralised zone that includes waste, to account for minimum mining parameters.
dilution	The proportion of material which is planned or inadvertently included during mining operations, and which is generally of a significantly lower grade than the ore zone of interest.
disseminated	Distributed finely and evenly throughout.
dolerite	A medium grained basic intrusive rock composed mostly of the minerals pyroxene and sodium-calcium feldspar.
down hole survey	The electronic or physical measurement of the three dimensional position and orientation of a drill hole, measured by means of lowering instruments down the hole.
dyke	A tabular body of intrusive igneous rock, crosscutting the host strata at an angle.
EM	A geophysical technique whereby transmitted electromagnetic fields are used

	to energise and detect conductive material beneath the earth's surface.
feasibility study	An advanced study undertaken to determine the economic viability of a mineral deposit to a reasonable degree of accuracy.
fines	This crushed iron ore of a size less than a nominal 6mm
footwall	The mass of rock lying below a fault, vein or zone of mineralisation.
geophysical survey	The exploration of an area in which geophysical properties and relationships unique to the area are mapped by one or more geophysical methods.
geotechnical	Rock quality and structural investigations of rock masses.
gossan	A ferruginous deposit remaining after the oxidation of the original sulphide minerals in a vein or ore zone.
ground support	Materials such as rock bolts, meshing, pillar supports and concrete used to prevent rocks from spalling from underground openings.
ha	A hectare is a measure of area.
hangingwall	The mass of rock above a fault, vein or zone of mineralisation.
hematite	An iron oxide mineral Fe2O3.
Indicated Resource	Insitu mineral resource calculated with a moderate confidence level, and to which economic parameters have not been applied.
Inferred Resource	Insitu mineral resource calculated with a low confidence level, and to which economic parameters cannot be applied.
iron ore	This is generic term used in exploration and mining in the Pilbara to describe anomalous concentrations of hematite, goethite and limonite minerals. The term as used does not imply ore and is not associated with Ore Reserves as defined by JORC Code (2004).
isoclinal	Folds with relatively long, parallel limbs.
JORC Code	Guidelines published by the Joint Ore Reserves Committee (JORC), which relate to the requirements and standards applicable to reporting of mineral resources and ore reserves to the Australian Stock Exchange.
lag	Residual surficial material, comprising resistant fragments, such as quartz and ironstone.
level	A main underground roadway or passage driven along a level course to afford access to stopes or workings and to provide ventilation and a haulage way for the removal of ore or waste.
lump	This crushed iron ore of a size greater than a nominal 6mm
lump:fines	Lump to Fines ratio expressed as percentages.
lump:fines split	Grade split (or difference) between lump and fine iron ores
mafic	Descriptive of rocks composed dominantly of magnesium, iron and calcium rich minerals.
magnetite	A naturally occurring oxide of iron (FeO4) which produces a strong magnetic response.
massive sulphide	Rock containing abundant sulphides that can form close to 100% of the mass.
mean grade estimate	Average estimated grade of an element or mineral within a deformed block of rock.
Measured Resource	That portion of Mineral Resource of which tonnage or volumes is estimated from

	dimensions revealed in outcrops, pits, trenches, drill holes or mine workings, supported where appropriate by other exploration techniques The sites used for inspection, sampling and measurement are so spaced that the geological character, continuity, grades and nature of the material are so well defined that the physical character, size, shape, quality and mineral content are established with a high degree of certainty.
metallurgical recovery	Proportion of a metal or mineral of economic interested recovered during processing.
metallurgical test work	The testing of ore samples in order to define the metallurgical characteristics of the ore.
Mineral Resource	A concentration or occurrence of material of intrinsic economic interest in or on the earth's crust in such form and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
mining costs	Cash cost of extracting ore on an on-going basis, exclusive of the capital cost of infrastructure, plant and equipment.
mining recovery	The proportion of material which is successfully mined and transported to the processing facility.
operating costs	The sum of the costs of mining, beneficiation, and administration gives the operating cost of a mine.
Ore Reserve	That part of the resource that meets minimum physical and chemical criteria related to specified mining and production practices, including those of grade, quality, thickness and depth, and can be reasonably assumed to be economically and legally extractable or producible at the time of determination. The feasibility of the specified mining and production practices must have been demonstrated or can be reasonably assumed on the basis of tests and measurements.
parasitic fold	Small scale fold on the limb of a layer fold.
Probable Reserve	A 'Probable Ore Reserve' is the economically mineable part of an Indicated, and in some circumstances Measured, Mineral Resource. It includes diluting minerals and allowances for losses that may occur when the material is mined, processed and sold.
process plant	Referring to the plant and equipment associated with the crushing and extraction of metals or minerals from ore, and disposal of waste.
production rate	Rate of extraction during mining, usually expressed in terms of tonnes of ore or amount of contained metal per year.
Proved Reserve	A 'Proved Ore Reserve' is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined, processed and sold.
pyrite	A sulphide mineral of iron, FeS2.
quartzite	A sandstone composed predominantly of grains of quartz.
regolith	The layer of fragmental and unconsolidated material, which overlies or covers insitu basement rock.
resources	Insitu mineral occurrence from which valuable or useful minerals may be recovered.
Reverse Circulation (RC)	A drilling method in which the fragmented sample is brought to the surface inside the drill rods, thereby reducing contamination. Commonly used with a

	percussion hammer bit.
Rotary Air Blast (RAB)	Drilling method employing a repeated rotary on a drill bit, which yields sample material delivered to the surface outside the rod string by compressed air.
schist	A micaceous crystalline metamorphic rock having a foliated or parallel structure due to the recrystallisation of the constituent minerals.
shale	A fine grained, laminated sedimentary rock formed from clay, mud and silt.
siderite	An iron carbonate, FeCO3.
silicification	Replacement by, or introduction of, appreciable quantities of silica (e.g. quartz, SiO2).
silicified	The alteration or replacement of primary minerals by silica.
spot price	Price for which a commodity is sold on at-call basis.
stockpile	Dump of broken and transported waste, or ore awaiting processing.
stope	An underground excavation formed by the extraction of ore.
stratigraphic horizon	Horizon defined by a single sedimentary layer.
sulphide	A general term to cover minerals containing sulphur and commonly associated with mineralisation.
tailings	The finely-ground waste product from ore processing.
thrusts	A reverse fault or shear that has a low angle inclination to the horizontal.
ultramafic	Igneous rocks consisting essentially of ferromagnesium minerals with trace quartz and feldspar.
variograms	A plot of the variance (one-half the mean squared difference) of paired sample measurements as a function of the distance (and optionally of the direction) between samples.
wireframe	A computer technique to form a surface, or enclose a volume, with an imaginary, continuous array of two dimensional shapes.

9 REFERENCES

AusIMM.1998. Code and Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (The Valmin Code) issued April 1998. AusIMM.

Carter, P, October 1987; Channings – Annual and Partial Surrender Report 1986 - 1987, Noranda Australia Limited Tenement E53/50 reported by Sipa Resources Limited, WAMEX Open File Report A 21311

Doepel, M G, September 1986; Joyners Find Prospect – Annual Report 1st January 1985 to 14th July 1986, Noranda Australia Limited Tenement ML53/33 and EL 53/49 reported by Teck Explorations Limited / Sipa Resources Limited, WAMEX Open File Report A 18577

Doepel, M G, September 1987; Joyners Find Prospect – Annual Report 15th July 1986 to 14th July 1987, Noranda Australia Limited Tenement M53/33 reported Sipa Resources Limited, WAMEX Open File Report A 21640

Gotley, S, April 2007; C4 Resource Estimate, Wiluna West, Project No. 5755, Snowden Mining Industry Consultants for Golden West Resources Limited, unpublished draft report

Gotley, S, April 2007; C4 and Bowerbird April 2007 Mineral Resource Estimates, Wiluna West, Project No. 5755, Snowden Mining Industry Consultants for Golden West Resources Limited, unpublished memo addressed to Alan Rudd

Gotley, S, October 2007; Unit C Deposits Resource Estimate, Wiluna West, Project No. 5755, Snowden Mining Industry Consultants for Golden West Resources Limited, unpublished draft report

Graindorge, J, October 2006; Joyner's Find Iron Ore Project Resource Estimate, Wiluna West, Project No. 5755, Snowden Mining Industry Consultants for Golden West Resources Limited, unpublished draft report

Hutchison, G W, July 2007; West Wiluna Project Presentation, Golden West Resources Limited

JORC, December 2004; Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004 Edition (The JORC Code) as prepared by The Joint Ore Reserves Committee(JORC) of The Australasian Institute of Mining And Metallurgy(AusIMM), Australasian Institute of Geoscientists(AIG) and Minerals Council of Australia(MCA)

Kelly, M C, November 2005; Wiluna West Annual Technical Report on P53/1024-1033 for the period 20th September 2004 to 19th September 2005, C153/2002, Golden West Resources Limited, TR018

Kelly, M C, December 2005; Wiluna West Annual Technical Report on E53/1114 for the period 24th September 2004 to 23rd September 2005, Golden West Resources Limited, TR019

Kelly, M C, January 2006; Doherty's Annual Technical Report on P57/972 for the period 9th January 2005 to 8th January 2006, Golden West Resources Limited, TR020

Kelly, M C, November 2006; Combined Wiluna West Annual Technical Report on E53/1159, 1114, 116,1173, M53/1016-1018 for the period 24th September 2005 to 23rd September 2006, C73/2006, Golden West Resources Limited, TR027

Kelly, M C, February 2007; Bullabulling South Annual Technical Report on E15/762 for the period 20/10/2005 to 21/10/2006, Golden West Resources Limited, TR029

Kelly, M C, April 2007; Wiluna West Annual Technical Report on E53/1089, M53/1078 for the period 4th March 2006 to 3rd March 2007, Golden West Resources Limited, TR028

Lowe, K, April 2007; Bowerbird Resource Estimate, Wiluna West, Project No. 5755, Snowden Mining Industry Consultants for Golden West Resources Limited, unpublished draft report

Moseley, N, January 1991; Wiluna Gold Project, Channings Joint Venture, M53/148 Wren Prospect, Reverse Circulation Percussion Drilling Programme, December 1990, – Annual and Partial Surrender Report 1986 - 1987, Noranda Australia Limited Tenement E53/50 reported by Sipa Resources Limited / Plutonic Operations Ltd, WAMEX Open File Report A 33156

Wilson, M R, April 2005; Report on Eagle East Resource Estimate, Golden West Resources Limited, unpublished report

Wilson, M R, April 2005; Report on Iron Monarch Resource Estimate, Golden West Resources Limited, unpublished report

Wilson, M R, April 2005; Report on Doherty's Resource Estimate, Golden West Resources Limited, unpublished report

Wilson, M R, October 2007; Technical Presentation, Golden West Resources Limited

Wyatt, J D, April 2005; Independent Geologist Resource Statement, Wiluna West and Doherty Projects, Geological Investigations Pty Ltd for Golden West resources Limited, unpublished memo addressed to directors

February, 2004; Golden West Resources, Technical Review, Projects, January 2004, unpublished report

August 2005; Annual Report 2006, Golden West Resources Limited.

August 2006; Annual Report 2006, Golden West Resources Limited.

August 2007 Annual Report 2007, Golden West Resources Limited.

Strachan, P, June 2007; Golden West Resources Limited, Update on Iron Project, Strachan Corporate Pty Ltd, AFSL 259730, report

Vearncombe, J 1987; Report on structural mapping of Joyners and Brilliant shear zones. SIPA Resources Limited.

Golden West Resources Limited ABN 54 102 622 051

Phone: (08) 9201 9202 Fax: (08) 9201 9203

Suite 6, 136 Main Street Osborne Park Western Australia 6017

PO Box 260 Osborne Park Western Australia 6917

www.goldenwestresources.com admin@goldenwestresources.com