GWR GROUP LIMITED — Proxy Solicitation & Information Statement 2007

Aug 8, 2007

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NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

General Meeting to be held at Main Function Room, The Celtic Club, 48 Ord Street, West Perth, Western Australia on Wednesday, the 19[th] day of September, 2007 commencing at 10.00am (WST)

GOLDEN WEST RESOURCES LIMITED

ABN 54 102 622 051

This Notice of General Meeting and Explanatory Statement should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

Corporate Directory

Directors	John Daniels (Non Executive Chairman)
	Gary Hutchinson (Managing Director)
	Peter Thompson (Executive Director)
	Michael Wilson (Executive Director)
	Alan Rudd (Non Executive Director)
	Patrick Gallagher (Non Executive Director)
	Constantino Markopoulos (Non Executive Director)
Secretary	John Palermo
Registered Office	Level 1, 284 Oxford Street
	Leederville WA 6007
	Telephone: (08) 9242 1622
	Facsimile: (08) 9443 2859
Principal Office	Suite 6, 136 Main Street
	Osborne Park WA 6017
	Telephone: (08) 9201 9202
	Facsimile: (08) 9201 9203
Auditor	Stantons International
	1stFloor, 1 Havelock Street
	West Perth WA 6005
Lawyers	Pullinger Readhead Lucas
	Commercial Lawyers
	Level 2, Fortescue House
	50 Kings Park Road
	West Perth WA 6005
Share Registry	Advanced Share Registry Services
	110 Stirling Highway
	Nedlands WA 6009
	Telephone: (08) 9389 8033
	Facsimile: (08) 9389 7871
ASX Codes	GWR
	GWRO

Corporate Directory

Notice of General Meetin g

A General Meeting of Golden West Resources Limited will be held at Main Function Room, The Celtic Club, 48 Ord Street, West Perth, Western Australia on Wednesday, the 19[th] day of September 2007 commencing at 10.00am (WST).

Ordinary Business

1 Election of Directors

To consider and, if thought fit, pass the following resolutions as ordinary resolutions:

• (a) That, for all purposes, Patrick William Gallagher, who was appointed to the Board since the last annual general meeting of the Company is re‐elected as a Director.

• (b) That, for all purposes, Constantino Markopolous, who was appointed to the Board since the last annual general meeting of the Company is re‐elected as a Director.

• (c) That, for all purposes, Peter Wayne Thompson, who was appointed to the Board since the last annual general meeting of the Company is re‐elected as a Director.

Special Business

2 Ratification of Previous Share Issues

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

That, for all purposes, Shareholders approve and ratify the previous allotment and issue of 4,699,990 Shares to the parties, for the purposes, in the amounts and on the terms set out in the Explanatory Statement.

For the purposes of Listing Rule 7.5, the Company will disregard any votes cast on this resolution by any person who participated in the issue and any of his or her associates, unless it is cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or the person chairing the meeting as proxy for a person who is entitled to vote (in accordance with a direction on the proxy form to vote as the proxy decides).

Notice of General Meeting

3 Ratification of Previous Option Issues

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

That, for all purposes, Shareholders approve and ratify the previous allotment and issue of 4,699,990 Options to the parties, for the purposes, in the amounts and on the terms set out in the Explanatory Statement.

For the purposes of Listing Rule 7.5, the Company will disregard any votes cast on this resolution by any person who participated in the issue and any of his or her associates, unless it is cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or the person chairing the meeting as proxy for a person who is entitled to vote (in accordance with a direction on the proxy form to vote as the proxy decides).

4 Ratification of Previous Option Issues

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

That, for all purposes, Shareholders approve and ratify the previous allotment and issue of 1,025,000 Options pursuant to the Offer Information Booklet issued by the Company on 13 March 2007 to the parties, for the purposes, in the amounts and on the terms set out in the Explanatory Statement.

For the purposes of Listing Rule 7.5, the Company will disregard any votes cast on this resolution by any person who participated in the issue and any of his or her associates, unless it is cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or the person chairing the meeting as proxy for a person who is entitled to vote (in accordance with a direction on the proxy form to vote as the proxy decides).

5 Issue of Options – Related Parties

To consider and, if thought fit, pass the following resolutions as ordinary resolutions:

That, for all purposes, Shareholders approve as separate resolutions, the issue of Options referred to below on the terms set out in the Explanatory Statement:

• (a) 2,000,000 Options to Peter Thompson (or his nominee);

• (b) 1,000,000 Options to Patrick Gallagher (or his nominee);

• (c) 1,000,000 Options to Constantino Markopoulos (or his nominee); and

• (d) 50,000 Options to Katharine Hutchinson (or her nominee).

For the purposes of Listing Rule 10.11 and section 224 of the Corporations Act, the Company will disregard any votes cast on the resolution by the recipients of the Options and any of their associates, unless it is cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or the person chairing the meeting as proxy for a person who is entitled to vote (in accordance with a direction on the proxy form to vote as the proxy decides).

Notice of General Meeting

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6 Approval of Issue of Shares – General

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

That, for all purposes, Shareholders approve the issue of up to 10 million Shares to the parties, for the purposes and on the terms set out in the Explanatory Statement.

For the purposes of Listing Rule 7.3, the Company will disregard any votes cast on the resolution by any person who may participate in the proposed issue and a person who might obtain a benefit (except a benefit solely in the capacity of Shareholder) and any of their associates, unless it is cast by a person as proxy for a person who is entitled to vote (in accordance with the directions on the proxy form) or the person chairing the meeting as proxy for a person who is entitled to vote (in accordance with a direction on the proxy form to vote as the proxy decides).

Explanatory Statement

The Explanatory Statement accompanying this Notice of General Meeting is incorporated in and comprises part of this Notice of General Meeting.

Shareholders are specifically referred to the Glossary in the Explanatory Statement which contains definitions of capitalised terms used both in this Notice of General Meeting and Explanatory Statement.

Proxies

Please note that:

• (a) a member of the Company entitled to attend and vote at the General Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company; and

• (c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed proxy form provides further details on appointing proxies and lodging proxy forms.

“Snap-shot” Time

The Company may specify a time, not more than 48 hours before the meeting, at which a “snap‐ shot” of shareholders will be taken for the purposes of determining shareholder entitlements to vote at the meeting.

The Company’s directors have determined that all shares of the Company that are quoted on ASX at 5.00pm (WST) on 17 September 2007 shall, for the purposes of determining voting entitlements

Notice of General Meeting

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at the General Meeting, be taken to be held by the persons registered as holding the shares at that time.

By Order of the Board of Directors

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John Palermo Company Secretary

25 July 2007

Notice of General Meeting

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Ex lanator Statement p y

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Company’s General Meeting to be held on Wednesday the 19[th] day of September 2007 commencing at 10.00am (WST).

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the resolutions in the accompanying Notice of General Meeting.

This Explanatory Statement should be read in conjunction with the Notice of General Meeting. Capitalised terms in this Explanatory Statement are defined in the Glossary.

1 Resolution 1: Election of Directors

Clause 14.3(b) of the Constitution, requires that any Director appointed by the Board, either to fill a casual vacancy or as an addition to the Board, must retire at the next meeting of Shareholders following his appointment, but is eligible for re‐election at that meeting.

2 Resolution 2: Ratification of Previous Share Issues

Since the Company’s 2006 Annual General Meeting, the Company has issued Shares to the parties detailed below.

Listing Rule 7.1 provides that a company must not, without prior approval of Shareholders, issue securities if the securities will in themselves or when aggregated with the securities issued by a company during the previous 12 months, exceed 15% of the number of securities on issue at the commencement of that 12 month period.

Listing Rule 7.4 states that an issue by a company of securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the company’s members subsequently approve it.

Under this resolution, the Company seeks from Shareholders approval for, and ratification of, the issues of Shares set out below so as to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Details of the Shares issued are set out below. The Shares comprise 6.27% of the Company’s share capital as at the date of the Notice of General Meeting.

Listing Rule 7.5 requires the following information to be given to Shareholders:

• the Company issued 2,955,556 Shares on 13 June 2007 and 1,744,434 Shares on 29 June 2007 at an issue price of $1.80 per Share; and

• the Shares were issued to various sophisticated investors.

Explanatory Statement

1

The Company intends to use the funds raised for the purposes of further exploration at the Wiluna Project including 18,760 metres of reserve drilling ($1.8m), 45,000 metres of resource drilling ($4.5m) and for general working capital purposes ($2.16m).

The Shares were issued on the terms set out in Annexure A to this Explanatory Statement.

The Board believes that the ratification of these issues is beneficial for the Company. The Board recommends Shareholders vote in favour of Resolution 2 as it allows the Company to ratify the above issues of Shares and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

3 Resolution 3: Ratification of Previous Option Issues

Since the Company’s 2006 Annual General Meeting, the Company has also issued Options to the parties detailed below. The Options were issued in conjunction with the issue of the Shares the subject of Resolution 2, on the basis of one free Option for every Share subscribed for. Accordingly no monies were raised directly from the issue of the Options.

Listing Rule 7.1 provides that a company must not, without prior approval of Shareholders, issue securities if the securities will in themselves or when aggregated with the securities issued by a company during the previous 12 months, exceed 15% of the number of securities on issue at the commencement of that 12 month period.

Listing Rule 7.4 states that an issue by a company of securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the company’s members subsequently approve it.

Under this resolution, the Company seeks from Shareholders approval for, and ratification of, the issues of Options set out below so as to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Details of the Options issued are set out below. They comprise 4.19% of the Company’s fully diluted capital as at the date of the Notice of General Meeting.

Listing Rule 7.5 requires the following information to be given to Shareholders:

• the Company issued 2,955,556 Options on 13 June 2007 and 1,744,434 Options on 29 June 2007; and

• the Options were issued to various sophisticated investors, in conjunction with the issue of Shares the subject of Resolution 2, on the basis of one free attaching Options for every Share subscribed.

No funds were raised from the issue of the Options however the Company may raise funds in the event the Options are exercised in the future, in which case the Company intends to use those funds for general working capital.

The Options were issued on the terms set out in Annexure B to this Explanatory Statement.

Explanatory Statement

2

The Board believes that the ratification of these issues is beneficial for the Company. The Board recommends Shareholders vote in favour of Resolution 3 as it allows the Company to ratify the above issues of Options and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

4 Resolution 4: Ratification of Previous Option Issue

Since the Company’s 2006 Annual General Meeting, the Company has also conducted a placement of free Options pursuant to an Offer Information Booklet dated 13 March 2007 to various employees, contractors and consultants of the Company who have been involved in the development of the Company to date and who will have an ongoing involvement in the Company.

Listing Rule 7.1 provides that a company must not, without prior approval of Shareholders, issue securities if the securities will in themselves or when aggregated with the securities issued by a company during the previous 12 months, exceed 15% of the number of securities on issue at the commencement of that 12 month period.

Listing Rule 7.4 states that an issue by a company of securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the company’s members subsequently approve it.

Under this resolution, the Company seeks from Shareholders approval for, and ratification of, the issue of Options set out below so as to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Details of the Options issued are set out below. They comprise 0.91% of the Company’s fully diluted capital as at the date of the Notice of General Meeting.

Listing Rule 7.5 requires the following information to be given to Shareholders:

• the Company issued 1,025,000 Options on 4 April 2007 for nil consideration; and

• the Options were issued to various employees, contractors and consultants of the Company who have been involved in the development of the Company to date and who will have an ongoing involvement in the Company.

No funds were raised from the issue of the Options however the Company may raise funds in the event the Options are exercised in the future, in which case the Company intends to use those funds for general working capital.

The Options were issued on the terms set out in Annexure B to this Explanatory Statement and pursuant to the Company’s Offer Information Booklet dated 13 March 2007.

The Board believes that the ratification of this issue is beneficial for the Company. The Board recommends Shareholders vote in favour of Resolution 4 as it allows the Company to ratify the above issue of Options and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

Explanatory Statement

3

5 Resolution 5: Issue of Options to Related Parties

Resolution 5 includes resolutions seeking Shareholder approval for the issue of Options to the following persons (or their respective nominees) in the following numbers.

Name	Series A	Series B	Total number of
	Options	Options	Options to be
			issued
Peter Thompson (Director)	1,000,000	1,000,000	2,000,000
Patrick Gallagher (Director)	500,000	500,000	1,000,000
Constantino Markopoulos (Director)	500,000	500,000	1,000,000
Katharine Hutchinson	50,000	Nil	50,000

The issue of Options to the above Directors is designed to reward and acknowledge the contributions to be made by them to the Company and to act as an incentive for future performance in developing the Company and its assets. The Options to be issued are in addition to the fee and remuneration package payable by the Company to the relevant Directors. The Series A Options to be issued to Mr Thompson form part of his employment package, whilst the Series B Options are intended to act as an incentive for Mr Thompson for future performance.

The issue of Options to Mrs Katharine Hutchinson, an employee of the Company since February 2005 and spouse of Mr Gary Hutchinson, the Company’s managing director, is designed to reward her services to the Company and act as an incentive for future performance. As Mrs Hutchinson is deemed a related party of the Company, she did not participate in the offer of free Options pursuant to the Company’s Offer Information Booklet dated 13 March 2007 to various employees, contractors and consultants of the Company. Pursuant to Resolution 5(d) the Directors (other than Mr Hutchinson) are seeking to reward Mrs Hutchinson in her capacity as an employee of the Company on the same basis as other employees, contractors and consultants of the Company were rewarded pursuant to the Offer Information Booklet dated 13 March 2007, through the issue of free Options. The Options proposed to be granted to Mrs Hutchinson are on the same terms and conditions as those issued under the Offer Information Booklet dated 13 March 2007.

The Series A Options to be issued to Messrs Thompson, Gallagher and Markopoulos and Mrs Hutchinson are exercisable at $2.00 on or before 31 December 2010 and are otherwise issued on the terms set out in Annexure C. The Series B Options to be issued to Messrs Thompson, Gallagher and Markopoulos are exercisable at $3.00 on or before 31 December 2011 and are otherwise issued on the terms set out in Annexure C.

A Director is deemed to be a related party of the Company. Mrs Katharine Hutchinson is deemed a related party of the Company as she is the spouse of Mr Gary Hutchinson, the managing director of the Company. The issuing of securities to a related party (or nominee) as contemplated by Resolution 5 constitutes the giving of a financial benefit to a related party and the resolutions in respect of the issue of Options to Directors and Mrs Hutchinson are put to Shareholders for that reason.

Explanatory Statement

4

Corporations Act – Chapter 2E

Section 208 of the Corporations Act prohibits a company from giving a financial benefit to a related party without prior shareholder approval.

A “related party” for the purposes of the Corporations Act is defined widely. It includes a director of a public company and specified members of the director’s family (including a director’s spouse). It also includes an entity over which a director maintains control or a person who may be seen as acting in concert with the company on the understanding that a financial benefit will be received. Further, a director of an entity that controls a public company is a related party of the company.

A “financial benefit” for the purposes of the Corporations Act is also defined widely. It includes a public company issuing securities or granting options to a related party. In determining whether or not a financial benefit is being given, it is necessary to look to the economic and commercial substance and the effect of the transaction (rather than just the legal form) and any consideration which has been given is to be disregarded, even if it is full or adequate.

The following information is provided to Shareholders in accordance with section 219 of the Corporations Act to enable them to assess the merits of the resolutions:

• (a) The related parties to whom the proposed resolutions would permit financial benefits to be given

Resolution	Related Party	No of Series A Options	No of Series B Options	Total no of Options
Resolution 5(a)	Peter Thompson	1,000,000	1,000,000	2,000,000
Resolution 5(b)	Patrick Gallagher	500,000	500,000	1,000,000
Resolution 5(c)	Constantino Markopoulos	500,000	500,000	1,000,000
Resolution 5(d)	Katharine Hutchinson	50,000	Nil	50,000

(b) The nature of the financial benefits

The proposed financial benefit to be given is the grant of the following number of Options to the following related parties of the Company for no consideration:

• (i) under Resolution 5(a), Peter Thompson ‐ 1,000,000 Series A Options and 1,000,000 Series B Options;

• (ii) under Resolution 5(b), Patrick Gallagher ‐ 500,000 Series A Options and 500,000 Series B Options;

• (iii) under Resolution 5(c), Constantino Markopoulos ‐ 500,000 Series A Options and 500,000 Series B Options; and

• (iv) under Resolution 5(d), Katharine Hutchinson – 50,000 Series A Options.

The Company has agreed to remunerate Peter Thompson in his capacity as General Manager the amount of $240,000 per annum. In the previous 12 months, Mr Thompson has received benefits from the Company in the form of consulting fees totalling $75,000. Mr Thompson does not currently hold any Shares or Options in the Company.

Explanatory Statement

5

The Company has agreed to remunerate Patrick Gallagher in his capacity as Non‐Executive Director the amount of $50,000 plus superannuation totalling $54,500 per annum. In the previous 12 months, Mr Gallagher has received benefits from the Company in the form of Director’s fees and superannuation totalling $24,091. Mr Gallagher currently holds 16,000 Shares in the Company.

The Company has agreed to remunerate Constantino Markopoulos in his capacity as Non‐Executive Director the amount of $50,000 plus superannuation totalling $54,500 per annum. In the previous 12 months, Mr Markopoulos has received benefits from the Company in the form of Director’s fees and superannuation totalling $20,982. Mr Markopoulos currently holds 3,300 Shares in the Company.

The Series A Options to be issued to Messrs Thompson, Gallagher and Markopoulos and Mrs Hutchinson are exercisable at $2.00 on or before 31 December 2010 and are otherwise issued on the terms set out in Annexure C. The Series B Options to be issued to Messrs Thompson, Gallagher and Markopoulos are exercisable at $3.00 on or before 31 December 2011 and are otherwise issued on the terms set out in Annexure C.

The Series A Options to be issued to Mr Thompson form part of his employment package, whilst the Series B Options are intended to act as an incentive for Mr Thompson for future performance.

It is a requirement of the ASIC that a dollar value be placed on the Options to be issued.

ASIC has indicated that the Black Scholes option price calculation method is acceptable where the Options cannot be readily valued by some other means. A range of values for the Options has been provided by RSM Bird Cameron Corporate Pty Ltd (ʺRSM”) using the Black Scholes method. A copy of RSM’s report is attached as Annexure D.

In determining these values, as set out in RSM’s report, the following key variables were applied by RSM:

• the Series A Options will be exercisable at $2.00 (as identified above);

• the Series B Options will be exercisable at $3.00 (as identified above);

• the Series A Options will mature on 31 December 2010;

• the Series B Options will mature on 31 December 2011;

• price volatility of the Shares is in the range of 50% to 90%;

• the risk free rate of 6.38% based on the 3 year Commonwealth Bond Rate at 17 July 2007; and

• the current Share price of $2.25, based on the closing price of Shares on ASX on 16 July 2007.

Based on the above assumptions and the volatility assumptions set out below, RSM reports that the value of the Options is as follows:

Volatility	Value of Series A Option	Value of Series B Option
50%	$2,110,000	$1,808,000
70%	$2,570,000	$2,428,000
90%	$2,986,000	$2,958,000

Explanatory Statement

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Therefore, the implied “value” being received by the related parties through the issue of the Options is as follows:

Name	Value of Series A Options	Value of Series B Options	Total Value
Peter Thompson	$1,285,000	$1,214,000	$2,499,000
Patrick Gallagher	$642,500	$607,000	$1,249,500
Constantino Markopoulos	$642,500	$607,000	$1,249,500
Katharine Hutchinson	$64,250	Nil	$64,250

(c) Directors’ recommendations on the proposed resolutions

Messrs Thompson, Gallagher and Markopoulos decline to make a recommendation in regards to proposed Resolution 5 as they each have a material interest in its outcome to the extent that the resolution provides for the issue of Options to each of them. Mr Hutchinson declines to make a recommendation in regards to proposed Resolution 5 as he has a material interest in its outcome to the extent that the resolution provides for the issue of Options to Mrs Hutchinson, Mr Hutchinson’s spouse.

The Directors (other than Messrs Thompson, Gallagher and Markopoulos) recommend that Shareholders vote in favour of the resolution in respect of the issue of Options to Messrs Thompson, Gallagher and Markopoulos because they are being issued to reward and acknowledge the contributions to be made by those Directors and to act as an incentive for future performance in developing the Company and its assets. The Directors (other than Messrs Thompson, Gallagher and Markopoulos) believe that the issue of the Options will encourage the continued support of these Directors in developing the Company and its assets. The Directors (other than Messrs Thompson, Gallagher and Markopoulos) believe that the grant of the number of Options proposed to be granted to Messrs Thompson, Gallagher and Markopoulos and the terms of those Options are appropriate and reasonable in light of these factors.

The Directors (other than Mr Hutchinson) recommend that Shareholders vote in favour of the resolution in respect of the issue of Options to Mrs Katharine Hutchinson because they are being issued in recognition of her services to the Company. The Directors (other than Mr Hutchinson) believe that the issue of the Options will act as an incentive for future performance. The Directors (other than Mr Hutchinson) believe that the grant of the number of Options proposed to be granted to Mrs Katharine Hutchinson and the terms of those Options are appropriate and reasonable in light of these factors. As set out above, the Directors (other than Mr Hutchinson) are seeking to reward Mrs Hutchinson in her capacity as an employee of the Company on the same basis as other employees, contractors and consultants of the Company were rewarded pursuant to the Offer Information Booklet dated 13 March 2007, through the issue of free Options. The Options proposed to be granted to Mrs Hutchinson are on the same terms and conditions as those issued under the Offer Information Booklet dated 13 March 2007.

Explanatory Statement

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(d) Directors’ interests in outcome of proposed resolutions

Messrs Thompson, Gallagher, Markopoulos and Hutchinson’s interests in the outcome of proposed Resolution 5 is set out above and elsewhere in this Explanatory Statement.

The remaining Directors, Dr Daniels and Messrs Wilson and Rudd, do not have an interest in the outcome of Resolution 5.

(e) All other information that is reasonably required by members in order to decide whether or not it is in the Company’s interests to pass the proposed resolution and that is known to the Company or any of its Directors

The Options shall be granted free to Peter Thompson, Patrick Gallagher, Constantino Markopoulos and Katharine Hutchinson (or their respective nominees) at an exercise price and on the conditions set out in this Explanatory Statement.

If the Options proposed to be granted to Peter Thompson, Patrick Gallagher, Constantino Markopoulos and Katharine Hutchinson (or their nominees) under proposed Resolution 5 are exercised and no other Shares and Options are issued or exercised in the meantime, the number of issued Shares would increase by 4,050,000 representing 3.49% of the total Shares (post‐exercise) on a fully‐diluted basis at that time, with the effect of diluting the shareholding of existing Shareholders by approximately 3.49%.

The following table sets out each proposed recipient’s current entitlement to Shares, Options and Options proposed to be granted under Resolution 5, and each entitlement if they exercised all Options referred to in the resolution and all Options currently held by them, assuming no other Shares are issued by the Company.

Related Party	Number of Shares	Number of Options	Number of Options under Resolution 5	Number of Shares (post– exercise)	Percentage of Shares (post‐ exercise)
Mr Thompson	Nil	Nil	2,000,000	2,000,000	2.67%
Mr Gallagher	16,000	Nil	1,000,000	1,016,000	1.36%
Mr Markopoulos	3,300	Nil	1,000,000	1,003,300	1.33%
Mrs Hutchinson	Nil	100,000	50,000	150,000	0.20%

The highest and lowest price of Shares in the past 12 months on ASX was $3.35 on 4 December 2006 and $1.05 on 24 and 25 July 2006 respectively. The closing price of Shares on 24 July 2007, the date before the date of the Notice of General Meeting, was $2.30.

ASX Listing Rule 10.11

Listing Rule 10.11 provides that an entity must not issue securities to a related party of the entity without the approval of shareholders.

Explanatory Statement

8

As noted above, Messrs Thompson, Gallagher and Markopoulos, being Directors, are related parties of the Company.

Further, as set out above, Mrs Hutchinson is a related party of the Company as she is the spouse of Mr Gary Hutchinson, the managing director of the Company.

Accordingly, under Resolution 5, the Company seeks the approval of Shareholders to allow the Company to issue Options to Peter Thompson, Patrick Gallagher, Constantino Markopoulos and Katharine Hutchinson.

The maximum number of Options that may be acquired by Messrs Thompson, Gallagher and Markopoulos and Mrs Hutchinson under Resolution 5, the issue price and terms of issue of the Options are detailed above. As the Options will be issued for no consideration there will be no funds raised from the issue of these Options to these persons. In the event that these persons exercise the Options, the Company will receive funds which will be used for general working capital.

The Company intends to issue the Options as soon as practicable following the General Meeting, but in any event, not later than 1 month after the General Meeting.

As per Listing Rule 7.2, Exception 14, if approval is given under Listing Rule 10.11, approval is not required under Listing Rule 7.1 for the issue of the Options under Resolution 5.

6 Resolution 6: Approval of Issue of Shares – General

The Company seeks approval to issue up to 10 million Shares at an issue price equal to at least 80% of the average closing price of Shares on ASX over a 5 trading day period before their issue or, if the Shares are issued under a prospectus, the date of signing of the prospectus.

The issue of all of these Shares will be equal to approximately 8.91% of the Company’s fully‐diluted share capital assuming no further issues of securities by the Company.

Funds raised will be used for regional exploration ($4 million), mapping ($0.5 million), drilling ($13.5 million), working capital ($3 million) and the remainder for the development of infrastructure $1 million) associated with the Company’s Wiluna project.

Listing Rule 7.1 provides generally that a company may not issue shares or options to subscribe for shares equal to more than 15% of the company’s issued share capital in any 12 months without obtaining shareholder approval. Resolution 6 seeks this approval.

The Shares will be allotted and issued as soon as possible but, in any case, not later than 3 months after the date of Shareholder approval to those parties determined by the Company having regard to the level of demand for the Shares, the identification of investors with a long term commitment to the Company and other factors the Company may consider appropriate. The identity of the investors is unknown at this stage.

It is anticipated that the Shares will be allotted progressively. However, the exact dates of allotment are unknown at this stage.

Explanatory Statement

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The Shares will be issued on terms and conditions set out in Annexure A. The Company will apply to ASX for official quotation of the Shares.

The Board believes that the proposed issue is beneficial for the Company and recommends Shareholders vote in favour of the resolution. It will allow the Company to retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

7 Glossary

In this Explanatory Statement, the following terms have the following unless the context otherwise requires:

Annexure annexure to this Explanatory Statement. ASIC Australian Securities and Investments Commission. ASX ASX Limited. Board board of Directors. Company Golden West Resources Limited ABN 54 102 622 051. Constitution constitution of the Company. Corporations Act Corporations Act 2001 (Cth). Director director of the Company. Option option to subscribe for a Share. Series A Option Option exercisable at $2.00 on or before 31 December 2010 and otherwise on the terms and conditions set out in Annexure C. Series B Option Option exercisable at $3.00 on or before 31 December 2011 and otherwise on the terms and conditions set out in Annexure C. Share fully paid ordinary share in the capital of the Company. Shareholder shareholder of the Company. WST Western Standard Time.

Explanatory Statement

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ANNEXURE A TERMS OF SHARES – RESOLUTIONS 2 AND 6

The following is a broad summary (though not necessarily an exhaustive or definitive statement) of the rights attaching to the shares of the Company. Full details are contained in the Constitution, available for inspection at the Company’s registered office.

(a) Share Capital

All issued ordinary shares rank equally in all respects.

(b) Voting Rights

At a general meeting of the Company, every holder of shares present in person, by an attorney, representative or proxy has one vote on a show of hands and on a poll, one vote for every fully paid share held, and for every contributing share held, a fraction of a vote equal to the proportion which the amount paid up bears to the total issue price of the contributing share.

(c) Dividend Rights

Subject to the rights of holders of shares issued with any special or preferential rights (at present there are none), the profits of the Company which the Directors may from time to time determine to distribute by way of dividend are divisible among the shareholders in proportion to the shares held by them respectively, according to the amount paid up or credited as paid up on the shares.

(d)

Rights on Winding-Up

Subject to the rights of holders with shares with special rights in a winding‐up (at present there are none), on a winding‐up of the Company all assets which may be legally distributed amongst the members will be distributed in proportion to the shares held by them respectively, according to the amount paid up or credited as paid up on the share.

(e)

Transfer of Shares

Shares in the Company may be transferred by instrument in any form which complies with the Constitution, the Corporations Act, Listing Rules and ASTC Settlement Rules.

Shares may be transferred by such means in accordance with Listing Rules and the ASTC Settlement Rules. The Directors may refuse to register a transfer of shares only in those circumstances permitted by Listing Rules and ASTC Settlement Rules.

(f)

Calls on Shares

Shares issued as fully paid are not subject to any calls for payment by the Company and will not therefore become liable for forfeiture.

Annexure A

(g) Further Increases in Capital

The allotment and issue of any new shares is under the control of the Directors and, subject to any restrictions on the allotment of shares imposed by the Constitution, Listing Rules or the Corporations Act, the Directors may allot, issue or grant options over or otherwise dispose of those shares to such persons, with such rights or restrictions as they may from time to time determine.

(h) Variation of Rights Attaching to Shares

Where shares of different classes are issued, the rights attaching to the shares of a class can thereafter only be varied by a special resolution passed at a separate General Meeting of the holders of those shares of that class, or with the written consent of the holders of at least three quarters of the issued shares of that class.

(i)

General Meeting

Each shareholder will be entitled to receive notice of, and to attend and vote at, General Meetings of the Company and to receive notices, accounts and other documents required to be furnished to shareholders under the Constitution, the Corporations Act and Listing Rules.

Annexure A

ANNEXURE B TERMS OF OPTIONS – RESOLUTIONS 3 AND 4

(a)

Exercise Date

The Options are exercisable wholly or in part at any time before 5.00pm (WST) on 31 December 2010. Options not exercised by that date shall lapse.

(b) Exercise Price

Each Option shall entitle the optionholder to acquire one Share upon payment of the sum of $2.00 per Option to the Company.

(c)

Notice of Exercise

Each Option may be exercised by notice in writing to the Company at any time before their date of expiry. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

(d) Quotation of Options and Shares on Exercise

No application will be made to ASX for official quotation of the Options. Application will be made to ASX for official quotation of the Shares issued upon exercise of Options. The Options are transferable as the optionholder thinks fit.

(e)

Participation Rights or Entitlements

There are no participating rights or entitlements inherent in the Options and optionholders will not be entitled to participate in new issues of securities offered to the Company’s shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 business days after the issue is announced so as to give optionholders the opportunity to exercise their Options before the date for determining entitlements to participate in any issue.

(f)

Shares Allotted on Exercise

Shares allotted pursuant to the exercise of Options will be allotted following receipt of all the relevant documents and payments and will rank equally with all other Shares.

(g) Reorganisation of Share Capital

In the event of a reorganisation of the issued capital of the Company, the rights of the optionholder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

(h)

Bonus Issues

If, from time to time, before the expiry of the Options the Company makes a pro rata issue of Shares to Shareholders for no consideration, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the optionholder would have received if the Option had been exercised before the date for calculating entitlements to the pro rata issue.

Annexure B

ANNEXURE C TERMS OF OPTIONS – RESOLUTION 5

1. Each Option entitles the holder, on exercise, to one fully paid ordinary share in the Company (“ Share ”).

2. The exercise price and expiry date for the Options will be as determined by the Board (in its discretion) on or before the date of issue.

3. Shares issued on exercise of Options will rank equally with other fully paid ordinary shares of the Company.

4. The Options are exercisable wholly or in part by notice in writing to the Company at any time before 5.00 pm WST on the expiry date. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt. Options not exercised by the expiry date shall lapse.

5. Options may not be transferred other than to a nominee of the holder. Quotation of Options on ASX will not be sought. However, the Company will apply to ASX for official quotation of Shares issued on the exercise of Options.

6. There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that the record date for determining entitlements to any such issue will be at least 6 ASX Business Days after the issue is announced.

7. If the Company makes an issue of Shares to Shareholders by way of capitalisation of profits or reserves (“ Bonus Issue ”), each optionholder holding any Options which have not expired at the time of the record date for determining entitlements to the Bonus Issue shall be entitled to have issued to him upon exercise of any of those Options the number of Shares which would have been issued under the Bonus Issue (“ Bonus Shares ”) to a person registered as holding the same number of Shares as that number of Shares to which the optionholder may subscribe pursuant to the exercise of those Options immediately before the record date determining entitlements under the Bonus Issue (in addition to the shares which he or she is otherwise entitled to have issued to him or her upon such exercise).

8.

In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the expiry of any Options, the number of Options to which each optionholder is entitled or the exercise price of his or her Options or both or any other terms will be reconstructed in a manner determined by the Board which complies with the provisions of the ASX Listing Rules.

Annexure C

ANNEXURE D

VALUATION OF OPTIONS PREPARED BY RSM BIRD CAMERON CORPORATE PTY LTD

Annexure D

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8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au

E-mail: andy.gilmour@rsmi.com.au Direct Telephone: 08 9261 9447 Direct Facsimile: 089261 9120 AJG:SM 910926

17 July 2007

The Directors Golden West Resources Ltd Level 1 284 Oxford Street LEEDERVILLE WA 6007

Dear Sirs

Valuation of Options: Golden West Resources Limited Black-Scholes Valuation Method

1. Introduction

Terms of Reference

• 1.1. In accordance with your instructions, we have valued the options to be issued to executives and non-executives of Golden West Resources Ltd (“GWR” or “the Company”) on 1 August 2007.

Scope of Valuation

• 1.2. The scope of the work performed in valuing the proposed GWR options has been limited to:

• 1.2.1. A review of the historical price volatility of GWR;

• 1.2.2. Sensitivity analysis using a range of price volatilities; and

• 1.2.3. Discussion with management.

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Liability limited by a RSM Bird Cameron Corporate Pty Ltd Major Offices in: RSM Bird Cameron Corporate Pty Ltd is scheme approved under ABN 82 050 508 024 Perth, Sydney, an independent member firm of RSM Professional Standards Licensed Investment Adviser Melbourne, Adelaide International, an affiliation of independent Legislation No 255847 and Canberra accounting and consulting firms.

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Disclaimer

• 1.3. The statements and opinions given in this report are given in good faith and in the belief that such statements and opinions are not false or misleading. In preparing this report we have relied upon information supplied by management, which we believe to be accurate and reliable. We have not, in preparing this report, independently verified the correctness, existence or value of any item, which is, or should be, in such information. We do not have any reason to believe that any material facts have been withheld from us, nor do we warrant that our investigation has revealed all of the matters which an audit or more extensive examination might disclose. Although the report and opinions expressed herein are based on information supplied to us, we believe the report and opinions to be accurate. However, for the above reasons, we do not warrant the accuracy or reliability of either the information supplied to us or the conclusion drawn therefrom.

Valuation Summary

• 1.4. GWR’s share price has increased markedly in the last eighteen months. As at 27 February 2006 the share price was $0.40 and it reached $3.35 on 4 December 2006. As at 16 July 2007 the share price had dropped back to $2.25. GWR has a share price volatility of approximately 70% over the last 2 years and approximately 85% in the period since December 2004.

• 1.5. We have assessed the value of the options using a range of volatilities based on the historical share volatility. The volatilities used are 50%, 70% and 90% with all other variables remaining constant.

• 1.6. Based on the variables used in this report we consider that the options have a value of:

	Option	value
Volatility	Tranche A	Tranche B
50%	$1.055	$0.904
70%	$1.285	$1.214
90%	$1.493	$1.479

Table 1: Summary of option values at different volatilities

• 1.7. We have valued the options by applying the Black-Scholes model. The key variables we have applied in the model are:

• 1.7.1. Risk Free Rate of 6.38% based on the 3 year Commonwealth Bond Rate at 17 July 2007;

• 1.7.2. Exercise Price of the Tranche A options of $2.00 on or before 31 December 2010;

• 1.7.3. Exercise Price of the Tranche B options of $3.00 on or before 31 December 2011; and

• 1.7.4. Current Share Price of $2.25, based on the closing price of GWR ordinary shares on 16 July 2007.

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• 1.8. It is proposed that the following number of options will be issued to the executives and non-executives of GWR.

Executive/Non-Executive Peter Thompson Patrick Gallagher Constantino Markopoulos TOTAL	Number of options Tranche A Tranche B 1,000,000 1,000,000 500,000 500,000 500,000 500,000	Number of options Tranche A Tranche B 1,000,000 1,000,000 500,000 500,000 500,000 500,000	Number of options Tranche A Tranche B 1,000,000 1,000,000 500,000 500,000 500,000 500,000
		2,000,000	2,000,000

Table 2: Summary of options to be issued

• 1.9. Based on the total number of options proposed to be issued the value of the Tranche A and Tranche B options under each volatility assumption is set out below:

Tranche A Options
Volatility	**Option Value **	No. of Options	Total
			Option Value
50%	$1.055	2,000,000	$2,110,000
70%	$1.285	2,000,000	$2,570,000
90%	$1.493	2,000,000	$2,986,000

Table 3 : Summary of Valuation for Tranche A Options

Tranche B Options
Volatility	**Option Value **	No. of Options	Total
			Option Value
50%	$0.904	2,000,000	$1,808,000
70%	$1.214	2,000,000	$2,428,000
90%	$1.479	2,000,000	$2,958,000

Table 4 : Summary of Valuation for Tranche B Options

2. General

2.1. If you have any queries or would like further information please do not hesitate to contact the writer.

Yours faithfully

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A J GILMOUR Director

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Golden West Resources Limited ABN 54 102 622 051

Proxy Form

Shareholder Details

Name: ………………………………………………………………………………………………………………………………………….

Address: …………………………………………………………………………………………………………………………………………….

Contact Telephone No: …………………………………………………………………………………………………………………………….

Contact Name (if different from above): …………………………………………………………………………………………………………..

Appointment of Proxy

I/We being a shareholder/s of Golden West Resources Limited and entitled to attend and vote hereby appoint

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The Chairman of the Meeting OR (mark with an ‘X’)

Write here the name of the person you are appointing if this person is someone other than the Chairman of the Meeting.

or failing the person named, or if no person is named, the Chairman of the Meeting, as my/our proxy to attend and act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Golden West Resources Limited to be held at The Pilbara Room, Sheraton Perth Hotel, 207Adelaide Terrace, Perth, Western Australia on 19 September 2007 at 10.00am (WST) and at any adjournment of that meeting.

IMPORTANT

If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote, please place a mark in this box with an ‘X’. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of the resolutions and that votes cast by him, other than as a proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on the resolutions and your votes will not be counted in computing the required majority if a poll is called. The Chairman of the Meeting intends to vote undirected proxies in favour of each resolution.

�

Voting directions to your proxy – please mark

to indicate your directions

Special Business		For	For	Against	Against	Against	Abstain*	Abstain*	Abstain*
Resolution 1.	Election of Directors
	(a) Patrick William Gallagher
	(b) Constantino Markopoulos
	(c) Peter Wayne Thompson
Resolution 2.	Ratification of Previous Share Issues
Resolution 3.	Ratification of Previous Option Issues
Resolution 4.	Ratification of Previous Option Issue
Resolution 5.	Issue of Options to Related Parties
	(a) Peter Thompson
	(b) Patrick Gallagher
	(c) Constantino Markopoulos
	(d) Katharine Hutchinson
Resolution 6.	Approval of Issue of Shares – General

*If you mark the Abstain box for a particular Resolution, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Appointment of a second proxy (see instructions overleaf)

If you wish to appoint a second proxy, state the % of your voting rights applicable to the proxy appointed by this form

%

PLEASE SIGN HERE This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented

Individual or Shareholder 1 Sole Director and Sole Company Secretary	Shareholder 2 Director	Shareholder 3
		Director/Company Secretary

Proxy Form

How to complete this Proxy Form

Your Name and Address

Please print your name and address as it appears on your holding statement and the company’s share register. If shares are jointly held, please ensure the name and address of each joint shareholder is indicated. Shareholders should advise the company of any changes. Shareholders sponsored by a broker should advise their broker of any changes. Please note, you cannot change ownership of your securities using this form.

Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a shareholder of the company.

Votes on Resolutions

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each Resolution. All your shareholding will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any Resolution by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given Resolution, your proxy may vote as he or she chooses. If you mark more than one box on a Resolution your vote on that Resolution will be invalid.

Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company Secretary on (08) 9242 1622 or you may photocopy this form.

To appoint a second proxy you must on each Proxy Form state (in the appropriate box) the percentage of your voting rights which are the subject of the relevant proxy. If both Proxy Forms do not specify that percentage, each proxy may exercise half your votes. Fractions of votes will be disregarded.

Signing Instructions

You must sign this form as follows in the spaces provided:

Individual:	where the holding is in one name, the holder must sign.
Joint Holding:	where the holding is in more than one name, all of the shareholders should sign.
Power of Attorney:	to sign under Power of Attorney, you must have already lodged this document with the
	company’s share registry. If you have not previously lodged this document for notation,
	please attach a certified photocopy of the Power of Attorney to this form when you
	return it.
Companies:	where the company has a Sole Director who is also the Sole Company Secretary, this
	form must be signed by that person. If the company (pursuant to section 204A of the
	Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign
	alone. Otherwise this form must be signed by a Director jointly with either another
	Director or a Company Secretary. Please indicate the office held by signing in the
	appropriate place.

If a representative of the corporation is to attend the meeting a “Certificate of Appointment of Corporate Representative” should be produced prior to admission. A form of the certificate is either included in the Notice of General Meeting or may be obtained from the company’s share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below not later than 48 hours before the commencement of the meeting (ie. no later than 10.00 am WST on 17 September 2007). Any Proxy Form received after that time will not be valid for the scheduled meeting.

This Proxy Form (and any Power of Attorney and/or second Proxy Form) may be sent or delivered to the company’s registered office at Level 1, 284 Oxford Street, Leederville WA 6007 or sent by facsimile to the registered office on (08) 9443 2859.

Proxy Form