HAWSONS IRON LTD - Capital/Financing Update 2008

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CARPENTARIA EXPLORATION LIMITED ACN 095 117 981

SHORT FORM PROSPECTUS

For a pro-rata non-renounceable entitlements issue of 1 New Option, exercisable at 30 cents on or before 30 June 2010, for every 2 Shares held by Shareholders at an issue price of 1 cent per New Option to raise up to approximately $325,000. The issue is not underwritten.

THIS ENTITLEMENTS ISSUE CLOSES AT 5:00PM EST ON 23 JUNE 2008.

VALID ACCEPTANCES MUST BE RECEIVED BEFORE THAT TIME.

Please read the instructions in this Prospectus and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement. The securities offered by this Prospectus should be considered as speculative.

Corporate Directory

Registered Office

55 Little Edward Street Ground Level, Boundary Court Spring Hill Qld 4000

PO Box 1019 Spring Hill QLD 4004

Directors

Nick Sheard ( Executive Chairman ) Mike Chester ( Non-Executive Director ) Bob Hair ( Non-Executive Director ) Stan Macdonald ( Non-Executive Director )

Contents
Summary of Important Dates Important Notices Letter from Chairman Section 1 – Details of the Offer	3 4 7 8
Section 2 – Information deemed to be Incorporated in this Prospectus Section 3 – Company Overview	12 16
Section 4 – Capital Structure Section 5 – Terms and Conditions of New	25
Options	26
Section 6 – Key Investment Risks	31
Section 7 – Additional Information	34
Section 8 – Materials Contracts	38
Section 9 – Consents	39
Section 10 – Authority of Directors	40
Section 11 – Glossary	41

Company Secretary

Chris Powell Bruce Acutt

Company Website

www.carpentariaex.com.au

Company Contact Details

Telephone: +61 7 3161 3801 Facsimile: +61 7 3161 3786

Email: [email protected]

Solicitors to the Issue

TressCox Lawyers Level 39, Central Plaza One 345 Queen Street Brisbane Qld 4000

Auditor

PKF Level 6, 10 Eagle Street Brisbane Qld 4000

Share Registry

Link Market Services Limited Level 12, 300 Queen Street Brisbane Qld 4000

Investor enquires

For information about this Prospectus contact: - Nick Sheard – Executive Chairman; or - Chris Powell – Company Secretary Phone: 07 3161 3801 Fax: 07 3161 3786 E-mail: [email protected]

ASX Code

Shares: CAP

Summary of Important Dates

Date of Prospectus	19 May 2008
Prospectus lodged with ASIC and ASX	19 May 2008
Record Date for Entitlements to New Options	2 June 2008
Opening Date and despatch of Prospectus	6 June 2008
Closing date for Acceptances	23 June 2008
Deferred settlement trading commences	24 June 2008
Dispatch of New Options transaction confirmation statements	1 July 2008

These dates are indicative only and may be subject to change.

The Directors may extend the Closing Date by giving at least 6 Business Days’ notice to ASX prior to the Closing Date. Accordingly, the date on which the New Options are expected to commence trading on ASX may vary.

Important Notices

This Prospectus is dated 19 May 2008.

A copy of this Prospectus was lodged with ASIC on 19 May 2008. ASIC and ASX and their respective officers take no responsibility for the content of this Prospectus.

No New Options will be issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus. Application will be made to ASX within seven (7) days after the date of this Prospectus for admission of the New Options offered by this Prospectus to be granted Quotation.

No person is authorised to give information or make any representations in connection with this Prospectus which are not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Directors in connection with the issue of the New Options.

Applicants should read this Prospectus in its entirety and, if in any doubt, consult with their professional advisers before deciding whether to apply for the New Options. There are risks associated with an investment in Carpentaria Exploration Limited, and the New Options offered under this Prospectus should be regarded as a speculative investment. The New Options offered under this Prospectus carry no guarantee with respect to return on capital investment or the future value of the New Options or Shares resulting from the exercise of Options.

Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that this Prospectus does not of itself contain all information that is generally required to be set out in a document of this type. Rather, this Prospectus incorporates by reference information contained in a document that has been lodged with ASIC prior to the date of this Prospectus.

A number of sections and parts of the IPO Prospectus referred to in this Prospectus are taken by section 712(3) of the Corporations Act to be included in this Prospectus. In addition, the HalfYearly Financial Report and the Quarterly Reports lodged with ASIC are referred to in this Prospectus and are taken by section 712(3) of the Corporations Act to be included in this Prospectus.

In referring to the IPO Prospectus, the Company:

(a) identifies the IPO Prospectus as being relevant to the offer of New Options under this Prospectus and containing information that will provide investors and their professional advisers information to assist them in making an informed assessment of:
(i) the rights and liabilities attaching to:
- (A) the New Options; and
- (B) the underlying securities;
(ii) the capacity of the Company to issue the underlying securities; and
(iii) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company;

(b) refers investors and their professional advisers to Section 2 of this Prospectus which summarises the information in the IPO Prospectus deemed to be incorporated in this Prospectus;
(c) informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the IPO Prospectus by contacting the Company at its registered office during normal business hours during the Offer Period; and
(d) advises that the information in the IPO Prospectus will be primarily of interest to investors and their professional advisers or analysts.

Other than as set out in this Prospectus, no information or document on the Company’s website is incorporated by reference in this Prospectus and any information or document other than this Prospectus should not be relied on by potential investors.

Restrictions on Distribution

The Company has decided that it will not make offers of New Options under the Rights Issue to Shareholders with registered addresses outside Australia or New Zealand. This decision was made having regard to the number of Shareholders with registered addresses outside Australia or New Zealand, the number and value of New Options those Shareholders would have been offered and the cost of complying with the legal and regulatory requirements in the relevant countries outside Australia.

No action has been taken to register or qualify the New Options, the Rights Issue or this Prospectus or otherwise to permit a public offering of New Options in any jurisdiction outside Australia and New Zealand.

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. It is the responsibility of Applicants who are citizens or residents of jurisdictions outside of Australia and New Zealand to ensure compliance with all laws of any jurisdictions which are relevant to their Applications.

Prospectus Availability

This Prospectus is available to download and view as an electronic version on Carpentaria’s web site at www.carpentariaex.com.au. Any person may obtain a free paper copy of the Prospectus by contacting the Company by telephone on (07) 3161 3801, by facsimile on (07) 3161 3801 or by e-mail at [email protected] with their request. Persons who access the electronic version of this Prospectus should ensure they download and read the entire Prospectus.

Entitlement and Acceptance Forms

The Corporations Act prohibits any person from passing an Entitlement and Acceptance Form on to another person unless it is attached to a hard copy of this Prospectus or the complete and unaltered electronic Prospectus (whether printed or remaining in an electronic medium).

Acceptances under the Offer must be made by completing a paper copy of the Entitlement and Acceptance Form attached to this Prospectus. Replacement forms can be obtained by contacting the Company by telephone on (+617) 3161 3801, by fax on (+617) 3161 3786 or by email at [email protected]. Carpentaria will not accept a completed Entitlement and Acceptance Form if it has reason to believe that an Entitlement and Acceptance Form lodged by

an Applicant was not accompanied by, or attached to, the Prospectus or if it has reason to believe that the Entitlement and Acceptance Form has been altered or tampered with in any way.

Definitions and glossary

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of the upper case in the first letter. Details of the abbreviations and definitions used are set out in Section 11 of this Prospectus.

Privacy Disclosure

The Company collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant's option and shareholding in the Company.

By submitting an Entitlement and Acceptance Form, each Applicant agrees that the Company may use the information provided by the Applicant on the Entitlement and Acceptance Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and thirdparty service providers, including mailing houses and professional advisers, and to ASX and regulatory authorities.

The Corporations Act requires the Company to include information about security holders (including name, address and details of the securities held) in its public register. The information contained in the Company's public register must remain there even if that person ceases to be a security holder. Information contained in the Company's registers is used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and for compliance by the Company with legal and regulatory requirements.

If the Applicant does not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process that Application efficiently, or at all.

An Applicant has a right to gain access to the information that the Company holds about that person, subject to certain exemptions under law. A fee may be charged for such access. Access requests must be made in writing to the Company's registered office. Any information or representation not so contained may not be relied on as having been authorised by the Directors in connection with the Issue.

To make a request for access or to obtain further information about the Company’s privacy policy please contact the Company Secretary by telephone on (+617) 3161 3801, by fax on (+617) 3161 3786 or by email at [email protected].

Letter from Chairman

19 May 2008

Dear Shareholder,

The Board is pleased to offer Shareholders the opportunity to participate in a non-renounceable entitlements issue of New Options on the basis of 1 New Option for every 2 Shares held on 2 June 2008. The New Options are exercisable at 30 cents ($0.30) up to 30 June 2010.

This Offer was foreshadowed in the IPO Prospectus as a pro rata option issue to Shareholders approximately 3 months following completion of the in specie distribution of Shares by Giralia Resources N.L. The in specie distribution of 27,200,000 Shares was completed by Giralia Resources N.L on 11 February 2008.

Since the Company’s Listing on 14 November 2007, the Company has maintained an active exploration program in New South Wales and Queensland. Since Listing, drilling was commenced at the Glen Isla Project in New South Wales, a major airborne electromagnetic ( VTEM ) survey was flown over the Combaning licence, additional tenements have been applied for, completion of the acquisition of Bulldozer Prospecting Pty Ltd (a company that held strategic tenements), and farm in and farm out of tenements have occurred.

Moving forward we are maintaining the strategy of exploring in areas with known mineralised systems and have expanded our search criteria to include strategic minerals such as tin, tungsten, rare earth metals and iron ore. It is the Company’s intention to continue this strategy with an active program in order to facilitate rapid discovery and build shareholder value.

The Board recommends that all Shareholders take up their Entitlement. I note that the Directors who hold Shares have indicated that they will be taking up their Entitlements.

Please note that the Closing Date for acceptances of this Offer is 5.00 pm EST on 23 June 2008. The Entitlements Issue is not underwritten.

On behalf of the Board, I thank you for your support since Listing and in the future.

Yours faithfully

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Nick Sheard Executive Chairman

Section 1 – Details of the Offer

1.1. The Entitlements Issue

The Company currently has 65,000,000 Shares on issue.

The Company is making a pro-rata non-renounceable entitlements issue to Shareholders who are registered at 5.00 pm EST on 2 June 2008 of up to 32,500,000 New Options at an issue price of $0.01 (1 cent) each to raise up to approximately $325,000 (before costs of the Issue).

The New Options will be offered on the basis of one (1) New Option for every two (2) Shares held on the Record Date.

1.2. Terms of New Options

The key terms of the New Options are as follows:

(a) the exercise price of each New Option is 30 cents ($0.30);
(b) each New Option has an expiry date of 5:00 pm EST on 30 June 2010 ( Expiry Date ); and
(c) the New Options are exercisable at any time from the date of issue until Expiry Date.

The full terms and conditions of the New Options are set out in Section 5.

1.3. Purpose of the Entitlements Issue

In the event holders of Existing Options exercise their Existing Options on or before the Record Date, a greater number of Shares will be on issue which may result in a greater number of New Options being issued under this Prospectus.

The funds to be raised under this Offer will be applied to working capital and expenses of the Issue, as set out below:

Use of Funds Working capital Expenses of the Issue Total	Amount $285,000 $40,000
	$325,000

1.4. Entitlement

The Entitlement of each Shareholder is shown on the enclosed Entitlement and Acceptance Form. Where the number of New Options to which a Shareholder is entitled contains a fraction, the number will be rounded down to the nearest whole number of New Options.

1.5. Minimum Subscription

There is no minimum subscription. The reason that no minimum subscription has been set is that the Company has sufficient working capital available to meet its objectives as set out in the IPO Prospectus. Any capital raised pursuant to this Offer will be applied as additional working capital and will have no effect on the existing budgets and work programs of the Company.

1.6. Oversubscriptions

The Offer is not underwritten and the Directors reserve the right to issue any shortfall at their discretion within a period of three months after the Closing Date.

1.7. Issue Price

The issue price is $0.01 (1 cent) for each New Option payable in full in Australian currency on acceptance of the Entitlements Issue. Payment may be made by one of the following methods:

Cheque drawn on and payable at any Australian bank;
Money order;
Bank draft drawn on and payable at any Australian bank; or
Via BPay. The Application Form sets out the details of the biller code, each Shareholder’s BPay reference number and the instructions of how to pay via BPay. In the event payments are made via BPay, the Shareholder does not need to complete or return the acceptance attached to the Entitlement and Acceptance Form.

1.8. Acceptance

Shareholders may accept their Entitlement in full or part by returning a completed Entitlement and Acceptance Form to the Company’s Share Registry by 5.00 pm EST on the Closing Date.

Acceptance of a completed Entitlement and Acceptance Form creates a legally binding contract between the Applicant and the Company for the number of New Options accepted. The Entitlement and Acceptance Form does not need to be signed to be a binding acceptance of New Options. If the Entitlement and Acceptance Form is not completed correctly it may still be treated as valid. The Directors' decision as to whether to treat the acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

1.9. Action Required

If you wish to take up all or part of your Entitlement, complete the enclosed Entitlement and Acceptance Form in accordance with the instructions set out and lodge the Entitlement and Acceptance Form, together with your cheque, money order or draft for the amount shown on the Entitlement and Acceptance Form, so that it is received by the Company’s Share Registry, by no later than 5.00 pm EST on the Closing Date.

Cheques and drafts should be made payable to “Carpentaria Exploration Limited – Application Account” and crossed “Not Negotiable”.

Mailing address: Hand Delivery address: Link Market Service Limited Link Market Service Limited Carpentaria Exploration Level 12 300 Queen Street Limited Rights Issue Brisbane QLD 4000 Locked Bag 3415 Brisbane Qld 4001

Payments will be accepted via BPay. The Application Form sets out the details of the biller code, each Shareholder’s BPay reference number and the instructions of how to pay via BPay. In the event payments are made via BPay, the Shareholder does not need to complete or return the acceptance attached to the Entitlement and Acceptance Form.

1.10. No Rights Trading

The Entitlements Issue is made on a non-renounceable basis. This means that there will be no trading of rights and you may not sell your rights and Entitlements which you do not wish to accept. If you do not take up your Entitlement to New Options under your Entitlement by the Closing Date, the offer to you will lapse.

1.11. No Underwriting

This Offer is not underwritten.

1.12. Closing Date

The Closing Date for the Entitlements Issue is 5.00 pm EST on 23 June 2008, unless extended by the Directors in accordance with the Listing Rules and the provisions of this Prospectus.

1.13. Offer Period

This Prospectus will be despatched to Shareholders on 6 June 2008. The Entitlements Issue closes on the Closing Date.

1.14. Allotment

Application monies will be held in trust until allotment of the New Options. Interest earned on the application monies will be retained for the benefit of the Company.

The New Options will be allotted and issued as soon as practicable after the Closing Date unless the Closing Date is extended by the Directors in accordance with the Listing Rules and the provisions of this Prospectus.

Statements of holding for the New Options will be mailed as soon as possible after the Closing Date.

No New Options will be allotted and issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus.

1.15. Quotation

Application for official quotation of the New Options will be made by the Company to ASX within seven (7) days of the date of this Prospectus. Application for Quotation of Shares allotted and issued as a result of the exercise of New Options will be made within three (3) Business Days of allotment and issue.

1.16. Overseas Shareholders

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. It is the responsibility of Applicants who are citizens or residents of jurisdictions outside of Australia to ensure compliance with all laws of any jurisdictions which are relevant to their Applications.

1.17. CHESS

The Company participates in CHESS, which is operated by ASTC, in accordance with the Listing Rules and ASTC Settlement Rules.

Under CHESS, the Company will not issue certificates to investors. Instead holders of New Options will receive a statement of their holdings in the Company. If an investor is broker-sponsored, ASTC will send to the investor a CHESS statement.

1.18. Enquiries

If you have any questions concerning your Entitlement, please contact the Company by telephone on (07) 3161 3801, by facsimile on (07) 3161 3786 or by email at [email protected]. Alternatively, you may contact your professional adviser.

Section 2 – Information deemed to be incorporated in this Prospectus

2.1 . Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act.

This means that this Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. However this Prospectus incorporates by reference information contained in a document that has been lodged with ASIC prior to the date of this Prospectus.

The information to be incorporated by reference into this Prospectus is summarised below.

The Company informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the IPO Prospectus by contacting the Company at its registered office during normal business hours during the Offer Period. The IPO Prospectus will also be available by searching ASIC’s records in relation to the Company, or by visiting the Company’s website at www.carpentariaex.com.au.

2.2 . Summary Of Information Deemed To Be Incorporated

Set out below is a summary of the information contained in the IPO Prospectus that is deemed to be incorporated in this Prospectus to assist investors and their professional advisers to determine whether, for the purposes of making an informed investment decision in relation to the New Options, they should obtain a copy of the IPO Prospectus.

The Sections referred to below are a reference to sections in the IPO Prospectus.

Section 3 Project Overview

Section 3 contains a summary of the exploration philosophy of the Company and provides information relating to its exploration interests in Queensland and New South Wales.

The projects and prospects detailed in Sections 3 and 5 include the following:

Project name	Location	Prospect	Ownership by Carpentaria
Mt Agate	Queensland	Copper/Gold/Uranium	100%
Glen Isla	New South Wales	Gold	100%*
Combaning	New South Wales	Nickel, Gold	100%
Cargoon	Queensland	Nickel	100%*
Waterford	Queensland	Uranium	100%
Lady Inez	Queensland	Copper	100%
Redbank	Queensland	Nickel	100%

Whilst these tenements are currently in the name of Giralia Resources N.L., applications to transfer the tenements to the Company have been lodged and are currently pending.

Details of tenements acquired since the date of the IPO Prospectus are set out in Section 3.2 of this Prospectus.

Section 4 Profiles of Directors and Management

Section 4 contains information relating to three Directors, Nick Sheard, Bob Hair and Stan Macdonald, the exploration manager, Mr Doug Brewster, and joint company secretaries, Mr Bruce Acutt and Mr Chris Powell.

Section 5 Independent Geological Report

Section 5 consists of the report prepared by the independent geologist, Vidoro Pty Ltd. The report describes in detail the geological setting of, and historical mining and exploration on, the mining tenements held by the Company. The report also sets out details of proposed exploration programs and expenditure on the mining exploration tenements.

Section 6 Independent Solicitor’s Report

Section 6 consists of the report prepared by the independent solicitor, Hopgood Ganim Lawyers. The report describes in detail the mining tenements and mining tenement applications held by the Company. The report contains a summary of applicable laws governing exploration for and mining of minerals in Queensland and New South Wales. The report also sets out general information in relation to environmental issues, native title and Aboriginal and cultural heritage.

Section 7 Independent Accountant’s Report

Section 7 consists of the report prepared by the independent accountant, Mack & Co. The report describes in detail the historical and pro-forma financial information. The proforma statements reflect the position of the Company on the basis that various transactions, including the issue of all the Shares offered under the IPO Prospectus, have been completed.

Mack & Co, following its review of the historical and pro-forma financial statements, was of the view that nothing had come to its attention that caused it to believe that the historical information, as set out in the IPO Prospectus, was not presented fairly and in accordance with the Australian Equivalents to International Financial Reporting Standards.

Section 8 Corporate Governance

Section 8 sets out the Company’s key corporate governance policies and statements. These policies and statements are or relate to:

statement of conformity with ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations or reasons for not conforming where applicable
Audit Process
Auditor Independence
Board Charter
Share Trading Policy
Continuous Disclosure
Ethical Standards

Communications with Shareholders

Section 9 Risk Factors

Section 9 sets out a number of risk factors that may impact on the success and future profitability of Carpentaria and are therefore relevant to the potential investment in the Company. The factors are not intended to be exhaustive, and include the following:

9.1 Economic Risks
9.2 Market Conditions
9.3 Security Investments
9.4 Exploration and Evaluation Risks
9.5 Commodity Price and Exchange Rate Risks
9.6 Environmental Risks
9.7 Native Title and Title Risks
9.8 Investment Risks Specific to Uranium Mining Companies
9.9 Joint Venture Parties, Agents and Contractors
9.10 Future Capital Requirements
9.11 Potential Acquisitions
9.12 Resource Estimations
9.13 Reliance on Key Personnel

Further risks are set out at Section 6 of this Prospectus.

Section 10 Additional Information

Section 10 sets out the additional information under the IPO Prospectus, and includes the following:

10.1 Incorporation
10.2 The Rights Attaching to Shares
10.3 Material Contracts:
(a) Corporate Fee Agreement
(b) Director and Officer Protection Deeds
(c) Tenement Acquisition Agreement
(d) Executive Services Agreement
(e) Consulting Agreement
(f) Employee Share Option Plan.

10.4 Interests of Directors (including Directors’ remuneration)
10.5 Consents
10.6 Interests of Experts and Advisers
10.7 Litigation
10.8 Expenses of the Offer
10.9 Restricted Securities
10.10 CHESS
10.11 Tax Considerations
10.12 Distribution of IPO Prospectus
10.13 Non-Resident Investors
10.14 Privacy

2.3. Financial Information

The Company lodged with ASIC the following documents:

(a) 30 January 2008 - Quarterly Cash Flow Reports for the quarter ended 31 December 2007;
(b) 14 March 2008 - Half yearly report and accounts; and
(c) 22 April 2008 - Quarterly Cash Flow Reports for the quarter ended 31 March 2008.

The above documents are taken by section 712(3) of the Corporations Act 2001 to be included in this Prospectus.

Section 3 – Company Overview

3.1. Overview

A comprehensive overview of the Company and its operations is set out in the IPO Prospectus. Persons considering subscribing for New Options under this Prospectus should refer to Section 2 of this Prospectus for a summary of the information contained in the IPO Prospectus deemed to be incorporated in this Prospectus.

As described in Section 3.3 of the IPO Prospectus, the Company proposed an exploration budget of $2,667,000 for its Queensland and New South Wales tenements in the first year following Listing in the event the initial public offering was fully subscribed.

The actual manner in which the exploration expenditure is incurred may vary having regard to numerous factors, including the results of ongoing exploration activities and other such matters as outlined in Section 3 of the IPO Prospectus. As of the date of this Prospectus, however, the overall scope of the exploration programs and budgets set out in relation to exploration in Queensland and New South Wales remain unchanged, except as varied and described in Section 3.2 of this Prospectus.

The offer referred to in the IPO Prospectus, under which the Company sought to raise up to $7,500,000 by the issue of up to 30,000,000 Shares, was oversubscribed. The Company listed on the ASX on 12 November 2007 and, on 14 November 2007, allotted and issued 30,000,000 Shares at $0.25 per Share. There are currently 65,000,000 Shares on issue.

Carpentaria’s largest shareholder upon Listing was Giralia, with 34,000,000 Shares (52.31% of the issued capital). Giralia announced on 12 November 2007 that it intended, subject to the approval of Giralia’s shareholders, to distribute its Shares in specie to its shareholders. The Giralia shareholder approval to the reduction in Giralia capital was obtained on 31 January 2008, and an in specie distribution of approximately 27,200,000 Shares was effected by Giralia.

3.2. Other Circumstances or Matters Subsequent to the IPO Prospectus

(a) Appointment of new Director

On 10 January 2008 the Company announced that Michael Peter Chester would become a Director, effective from 15 January 2008. Mr Chester has over 23 years experience in stock-broking and investment banking, including extensive experience in initial public offerings, corporate advisory work and equity placements across the industrial and mining sectors in listed and unlisted companies.

(b) Grant of options under Company’s ESOP

On 2 May 2008, the Company granted 500,000 options under its employee share and option plan. The options have an exercise price of 27 cents and expire on 30 June 2010.

(c) Redbank farm-out

On 21 February 2008, the Company and GBM Resources Limited ( GBM ) announced that an agreement had been reached for GBM to earn up to an 80% interest in the Redbank Nickel Project, EPM14840, 140 kilometres northwest of Townsville.

The key terms for GBM to earn an interest in EPM14840 are:

Stage 1: GBM completes a 150 metre drilling program by 31 April 2008.
Stage 2: After successful completion of Stage 1, GBM can elect to earn a 51% beneficial Joint Venture interest by contributing $1,000,000 within 18 months.
Stage 3: At the completion of Stage 2 and in the event that the Company does not elect to contribute, GBM can increase its Joint Venture interest to 65% by contributing a further $2,000,000 within 36 months.
Stage 4: At the completion of Stage 3 and in the event that the Company does not elect to contribute, GBM can increase its joint venture interest to 80% by contributing a further $2,000,000 within 24 months.

In the event the Company does not elect to contribute to the Joint Venture, then its 20% Joint Venture interest will convert to a 5% net profit royalty in relation to minerals extracted and sold by GBM.

Due to weather constraints in north-west Queensland, both the Company and GBM have agreed to delay the drilling.

(d) Euriowie Joint Venture

In December 2007, the Company entered into a joint venture with Sunrise Minerals Pty Ltd ( Sunrise ) in relation to EL 6936 which is owned by Sunrise. Under the joint venture the Company has the right to earn a 100% interest in all Group 1 Metals (excluding lithium) and will pay Sunrise a 1% NSR on any future mine production. EL 6936 is located 50 kilometres northeast of Broken Hill and contains moderate to low grade metasediments predominately belonging to the Sundown and Paragon sub-Groups of the Willyama Supergroup.

EL 6936 covers anomalous zinc in stream sediments defined by previous explorers and it is generally considered that the area is prospective for low sulfide style lead zinc deposits similar to the zinc rich shale hosted stratiform deposit, Century Deposit, in north-west Queensland.

EL 6936 is also prospective for tin, tantalum and other rare metals. It includes most of the Euriowie Pegmatite Tin field. The field contains a large number of small pits primarily worked between 1884 and 1900, although sporadic production continued until the middle of the twentieth century. Historic estimates suggest approximately 185 tonnes of cassiterite (approximately 140 tonnes of tin) were produced during the pre 1907 mining phase. The two major known producers in the field were Lady Don and Trident which are both in the joint venture tenement. Mineralisation comprises sporadically distributed cassiterite in pegmatite which also has potential for rare metals including tantalum, beryllium and niobium.

Exploration for base metals and other strategic minerals is anticipated to start in the June 2008 quarter.

(e) Panama Hat Farm-in

On 8 April 2008, Carpentaria announced that it had completed an agreement with Stellar Resources Limited ( Stellar ) to farm-in into Stellar’s New South Wales

tenement EL 6556 located in the highly prospective Proterozoic Broken Hill Block (see figure 1).

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Figure 1: Location of Panama Hat EL 6556 on aeromagnetic image.

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The agreement requires Carpentaria to spend $80,000 in 18 months to gain the right to earn 51% equity in EL 6556 by subsequently spending a further $1,000,000. Stellar may then elect to contribute. If Stellar elects not to contribute, Carpentaria can increase its interest to 70% equity in the tenement by spending a further $1,000,000. Should Carpentaria earn 70% equity, Stellar may elect to contribute to future expenditure pro-rata or convert its remaining equity to a 9% free carried interest to completion of a bankable feasibility study.

EL 6556 is prospective for iron-formation hosted gold mineralisation. A significant number of small historical workings (see figure 2) is present on quartz+/- sulfide veins and pods hosted by several iron-forming units within EL 6556. Previous explorers have returned erratic but high-grade gold concentrations from surface and costean rock samples at a number of localities within EL 6556.

Figure 2: Panama Hat Location of Prospects.

Examples of previous explorers’ rock sample results include:

Williams Prospect	–	maximum	54.25	g/t	Au
Panama Hat Prospect	–	maximum	29.30	g/t	Au
Jutland Tank Prospect	–	maximum	72.45	g/t	Au
Willyong Tank Prospect	–	maximum	41.85	g/t	Au
Huonville Fence Prospect	–	maximum	41.70	g/t	Au
Mulculca Telephone Prospect	–	maximum	116.7	g/t	Au

These prospects define a mineralised zone of approximately 8 by 2 kilometres, which will be the focus for the June 2008 quarter when Carpentaria plans to undertake detailed innovative electrical geophysical surveys in an attempt to map interpreted gold bearing quartz +/- sulfide rich portions of the host iron formation units in three dimensions. Priority targets identified by electrical geophysics will be drill tested.

This agreement further consolidates Carpentaria’s tenement position in the highly prospective Broken Hill mineral province.

(f) Bulldozer Prospecting Pty Ltd Acquisition

Carpentaria acquired the company Bulldozer Prospecting Pty Ltd ( Bulldozer ) on 5 March 2008. Bulldozer holds two exploration licences in New South Wales EL 6931 - ‘Tanners Creek’ and EL 6857 - ‘Laing’s Lode’.

Tanners Creek (EL 6931) is located in central New South Wales and is a large licence that adjoins the Glen Isla tenement, EL 6246. Tanners Creek covers extensions of the same volcanic sequence that hosts the Glen Isla epithermal gold prospect and consolidates Carpentaria’s control of this geologically prospective unit.

Laing’s Lode (EL 6857) is located approximately 30 kilometres due north of Broken Hill. It covers metasediments of the Broken Hill group, which host the giant Broken Hill silver, lead, zinc massive sulfide ore body. EL 6857 includes the Laing’s Lode Prospect, which comprises a number of narrow, gossanous units exposed over a strike length of approximately 500 metres where prior rock chip sampling by CRA Exploration Pty Ltd ( CRAE ) encountered some very elevated metal concentrations, including 45.6% lead and 220 ppm silver. Regional stream sediment samples from EL 6857 are also zinc anomalous. CRAE drilled three relatively shallow and widely spaced open percussion holes at Laing’s Lode, which returned a maximum result of 2m and 0.38% Zinc. These results are encouraging and Carpentaria will undertake further work to investigate economic potential.

(g) New Tenements

Table 1 below sets out the tenements that have been acquired by the Company since the IPO Prospectus.

Project name	Tenement number	Location	Beneficial interest	Status	Approx. km2 area
Combaning	EL 6901	Cootamundra, NSW	100%	Granted	605.4
Laings Lode*	EL 6857	Broken Hill, NSW	100%	Granted	23.4
Tanners Creek*	EL 6931	Narromine, NSW	100%	Granted	269.9
Waterford**	EPM 16393	Boulia, Queensland	100%	Granted	317.3

* These tenements are owned by Bulldozer Prospecting Pty Ltd, a wholly owned subsidiary of the Company.

** Waterford was granted to the Company by the Queensland Department of Mines and Energy on the 22 April, 2008.

Table 2 below sets out the tenements that have been applied for by the Company since the IPO Prospectus but have not yet granted. Burta and Kallara are two very recent licence applications (see figure 3) that are yet to be considered by the NSW Department of Primary Industries. Both applications have been made to consolidate Carpentaria’s general tenement position in the vicinity of already established Broken Hill and Combaning areas.

Project name	Tenement number	Location	Beneficial interest	Status	Approx. km2 area
Burta	ELA 3467	Menindee, NSW	100%	Application	289.7
Kallara	ELA 3470	Cootamundra, NSW	100%	Application	22.7

Table 3 below sets out the additional projects which have been entered into by the Company since the IPO Prospectus and the tenements to which those projects relate.

Project name	Tenement number	Location	Interest	Approx. km2 area
Euriowie	EL 6936	Broken Hill, NSW	Joint Venture agreement. See Section 3.2(d),	90.9
Panama Hat	EL 6556	Menindee, NSW	Farm in agreement. See Section 3.2(e).	110.5

Exploration Activities

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Figure 3 – Company’s exploration tenements May 2008.

(h) Glen Isla – EL 6246

The Company announced on 10 December 2007 that encouraging initial exploration results had been returned from the Glen Isla prospect located in New South Wales. Whilst the Glen Isla prospect is currently in the name of Giralia Resources N.L., the Company has lodged with the NSW Department of Primary Industries an application to transfer EL 6246 to the Company and is currently pending.

Previous explorers at the prospect located a moderate dipping epithermal silicasinter unit exposed over 700 metres and a separate silica-pyrite altered rhyolite breccia zone. Drilling by the previous explorers intersected a number of long lowgrade gold intersections down dip from exposed sinter with examples including 396 metres at 0.13 g/t gold. Limited drilling of the separate sub-vertical breccia zone intersected slightly higher gold grades with a geochemical signature typical of upper levels of a mineralised epithermal system. The best prior breccia-zone intersection was 41 metres at 0.54 g/t gold, including 1 metre at 1.12 g/t gold in GIRPD11D (see figure 4).

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Figure 4 Aerial photograph showing EL 6246 boundary, Carpentaria diamond holes in red and selected previous holes in black.

Recent work by Carpentaria including surface soil geochemical sampling, geological mapping and detailed analysis of historical data has extended the strike and dip potential of both sinter and breccia mineralisation. In addition, a 16 hole mixed diamond and RC drilling program with a nominal aggregate metreage of approximately 2500 metres is being conducted.

To date, Carpentaria has completed 4 diamond holes at Glen Isla totalling 642.8m, to test high priority geological/geochemical targets and confirm structural interpretations (see figure 4).

Initial drill core scrutiny confirms that all holes intersected interleaved basalt and rhyolite with several zones of intense replacement style silica-pyrite-sericite alteration and discrete breccia-sheets typical of an epithermal system. Features of note in recently obtained drill core include:

(a) a silica pyrite altered breccia with a visually estimated 10% by volume pyrite intersected for 3.1 metre down-hole from 49.5mbc in hole DD08GIA30; and
(b) an intensely silica-pyritecarbonate epithermal sinter intersected for 37.9 metres from 113.6mbc in DD08GIA31.

Diamond Core Drill Rig at Glen Isla

The epithermal sinter unit encountered in DD08GIA31 also contained narrow breccia-sheets with a visually estimated pyrite plus arsenopyrite content of up to 10% by volume. The diamond drilling has been completed and final geological interpretation and geochemical analyses are yet to be received. A further 12 hole RC program will test surface geochemical and geological targets defined by Carpentaria when a rig becomes available.

==> picture [189 x 254] intentionally omitted <==

Diamond Drill Core at Glen Isla

(i) Combaning EL 6901

EL 6901 at Combaning covers parts of the Temora and Springdale Goldfields in New South Wales, which are both notable past gold producers. EL 6901 is located 40 kilometres northeast of Wagga Wagga. The Gidginbung gold mine, which produced 677,000 ounces of gold from 1986 to 1996, is located approximately 12 kilometres northwest of EL 6901.

In the March 2008 Quarterly Report Carpentaria announced that a helicopter borne electromagnetic survey ( VTEM ) to define gold, nickel and other base metal targets had been completed (see figure 6). 1848 line kilometres of both electromagnetic and magnetic data were collected. Initial interpretation of data from the survey has identified a

number of exploration targets, including high-priority anomalies at the Ingola and Wave Hill localities (see figure 5).

The high-priority Ingola target is a discrete elongate aeromagnetic anomaly that has not been previously drill tested (see figure 5). The anomaly is located on a splay of the Bethunga Shear and has similarities to the Merri Hill magnetic anomaly, four kilometres to the north-west, where historic drilling around the margins of the anomaly returned significant gold and nickel results as shown in figure 5. Drilling will target the source and the margins of the Ingola magnetic anomaly for gold and nickel.

Another priority target at Wave Hill comprises several airborne electromagnetic ( AEM ) targets adjacent to a large high amplitude sub-circular aeromagnetic anomaly. One of the AEM targets is located within a prominent embayment of the magnetic anomaly, whilst the other AEM targets are situated on the rim of the magnetic feature. The AEM anomalies have been interpreted as shallow weakly conductive features possibly sourced by tourmaline-quartz-topaz breccia in the carapace of buried granite pluton with potential for intrusion related tin-tungsten and precious metal mineralisation.

Several other geophysical targets have been identified and field checked. These will be prioritised further for additional work following the evaluation of the Wave Hill and Ingola anomalies. Subject to winter cropping access, drilling at Ingola and Wave Hill is anticipated to be conducted in June 2008.

==> picture [173 x 48] intentionally omitted <==

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==> picture [173 x 105] intentionally omitted <==

Figure 5: Combaning EL 6901 regional aeromagnetic image, target locations and significant prior drill intersections.

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Figure 6: Helicopter borne VTEM-Magnetic Survey in progress at Combaning, EL6901 – February 2008.

(j) Mt Agate EPM 14955

In the March 2008 Quarterly Report Carpentaria announced that it had completed a comprehensive mineral potential review of the Mt Agate Tenement (EPM 14955) which identified two high priority targets for proterozoic iron oxide hosted copper-gold (IOCG) mineralisation. The review identified magnetic anomalies with sources buried beneath shallow syn-mineral (host rock) cover with surface indications of mineralisation.

The two high priority targets, QMH and Mt Shelia, are shown in Figure 7. Both targets are magnetic anomalies hosted by Mesoproterozoic metamorphic sediments and volcanics proximal and potentially transecting the mapped intrusive contact of the Wimberu Batholith which is a component of the regionally fertile Williams Naraku granitic suite.

==> picture [260 x 277] intentionally omitted <==

The target at each magnetic anomaly is blind/buried magnetite bearing IOCG style mineralisation analogous to Ernest Henry or other similar deposits in the Mt Isa Block. A secondary, but very closely related target is base/precious metal mineralised massive sulfide magnetic skarn hosted by contact metasomatised iron-rich or calcareous sedimentary units.

A work program to further investigate these and other targets via mapping, sampling and surface geophysics has been formulated and will be implemented, with a view to drill testing, once access to EPM 14955 is achieved later in 2008.

Figure 7: EPM 14955 - Mt Sheila & QMH target locations on aeromagnetic image.

The information in Section 3 of this Prospectus that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Nick Sheard, who is a Member of the Australian Institute of Geoscientists and is a Registered Professional Geoscientist - Mineral Exploration and Geophysics . Mr Sheard is a full time employee of Carpentaria, has sufficient expertise which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Sheard, based on his information, consents to the inclusion of the matters set out in Section 3 of this Prospectus in the form and context in which it appears.

Section 4 – Capital Structure

Under the Offer, 32,500,000 New Options will be available for issue subject to valid Entitlement and Acceptance Forms and subscription funds being received by the Company.

Should all Shareholders subscribe for their Entitlement under this Offer, the Company’s current capital structure will be as follows:

Number of Shares on issue as at the date of this Prospectus* 65,000,000 Existing Options 4,200,000 Number of New Options that may be issued pursuant to this Prospectus 32,500,000 Maximum Total Options on issue following issue under this Prospectus 36,700,000

After expenses of the Offer, the proceeds from the issue of New Options will be approximately $285,000. These funds will be applied to the working capital requirements of the Company.

As at the date of this Prospectus, there are 57,211,780 fully paid ordinary shares on issue and 7,788,220 fully paid ordinary shares restricted until 14 November 2009.

Section 5 – Terms and Conditions of New Options

5.1. Terms and Conditions of New Options

The New Options will entitle the holders to subscribe for fully paid ordinary shares in the Company on the following terms.

(1)

Entitlement

Each New Option entitles the holder to subscribe for, and be allotted, one Share upon exercise of each New Option.

(2) Exercise Price

The exercise price of each New Option is 30 cents ($0.30) ( Exercise Price ).

(3) Expiry Date

Each New Option has an expiry date of 5:00 pm EST on 30 June 2010 ( Expiry Date ).

(4) Exercise Period

The New Options are exercisable at any time from the date of issue until Expiry Date.

(5) Notice of Exercise

5.1 The New Options may be exercised by notice in writing to the Company and together with payment of the Exercise Price for each New Option being exercised. Any notice of exercise of a New Option received by the Company will be deemed to be a notice of the exercise of that New Option as at the date of receipt.
5.2 Remittances must be payable to ‘Carpentaria Exploration Limited’ and cheques should be crossed ‘Not Negotiable’.

(6)

Shares Issued on Exercise

Shares issued on exercise of the New Options will rank equally with all existing Shares on issue, as at the exercise date, and will be subject to the provisions of the Constitution of the Company.

(7)

Quotation of New Options

The Company will make application within seven (7) days after the date of issue of the New Options to ASX for quotation of the New Options.

(8)

Timing of Issue of Shares

After a New Option is validly exercised, the Company must as soon as possible:

(a) issue and allot the Share upon exercise of the New Option; and
(b) do all such acts, matters and things to obtain the grant quotation of the Share on the ASX no later than three Business Days from the date of exercise of the New Option and receipt of cleared funds equal to the sum payable on the exercise of the New Option.

(9) Participation in New Issues

There are no participation rights or entitlements inherent in the New Options and holders of the New Options will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least seven Business Days after the issue is announced. This will give the holders of the New Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

(10) Adjustment for Bonus Issue of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

(a) the number of Shares which must be issued on the exercise of a New Option will be increased by the number of Shares which the holder of the New Option would have received if the holder of the New Option had exercised the New Option before the record date for the bonus issue; and
(b) there will be no change to the Exercise Price.

(11) Adjustment for Rights Issue

If the Company makes an issue of securities pro rata to existing security holders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment) the Exercise Price of a New Option will be reduced according to the following formula.

O’ = O – E[P-(S+D)] N+1
O’ = the new exercise price of the New Option
O = the old Exercise Price of the New Option.
E = the number of underlying securities into which one New Option is exercisable.
P = average market price per security weighted by reference to the volume of the underlying securities during the 5 trading days ending on the day before the exrights date or ex-entitlement date.
S = the subscription price of a security under the pro rata issue.
D = the dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue).
N = the number of securities with rights or entitlements that must be held to receive a right to one new security

(12)

Adjustments for Reorganisation

12.1 In the event of any reconstruction or reorganisation (including consolidation, sub-division, reduction or return of the capital of the Company), the rights of an Optionholder will be changed in accordance with the Listing Rules of the ASX applying to a restructure or reorganisation of the capital at the time of that restructure or reorganisation, provided always that the changes to the terms of the Options do not result in any benefit being conferred on the Optionholder which is not conferred on Shareholders of the Company.
12.2 In any reorganisation as referred to in paragraph 12.1, New Options will be treated in the following manner:

(a) in the event of a consolidation of the share capital of the Company, the number of New Options will be consolidated in the same ratio as the ordinary share capital of the Company and the exercise price will be amended in inverse proportion to that ratio;
(b) in the event of a subdivision of the share capital of the Company, the number of New Options will be subdivided in the same ratio as the ordinary share capital of the Company and the exercise price will be amended in inverse proportion to that ratio;
(c) in the event of a return of the share capital of the Company, the number of New Options will remain the same and the exercise price will be reduced by the same amount as the amount returned in relation to each ordinary share;
(d) in the event of a reduction of the share capital of the Company by a cancellation of paid up capital that is lost or not represented by available assets where no securities are cancelled the number of New Options and the exercise price of each New Option will remain unaltered;
(e) in the event of a pro-rata cancellation of shares in the Company, the number of New Options will be reduced in the same ratio as the ordinary share capital of the Company and the exercise price of each New Option will be amended in inverse proportion to that ratio; and
(f) in the event of any other reorganisation of the issued capital of the Company, the number of New Options or the exercise price or both will be reorganised (as appropriate) in a manner which will not result in any benefits being conferred on the Optionholder which are not conferred on shareholders.

(13) New Options transferable

Subject to the Corporations Act, Listing Rules, the Constitution and any other applicable laws, the New Options are transferable.

(14)

Notices

Notices may be given by the Company to the Optionholder in the manner prescribed by the Constitution of the Company for the giving of notices to Shareholders and the relevant provisions of the Constitution of the Company will apply with all necessary modification to notices to be given to the Optionholder.

(15) Rights to Accounts

The Optionholder will be sent all reports and accounts required to be laid before Shareholders in general meeting and all notices of general meeting of Shareholders. However, if the Optionholder is not a Shareholder, it will not have any right to attend or vote at these meetings.

5.2. Rights attaching to Shares upon Exercise of New Options

Full details of the rights attaching to Shares are set out in the Company’s Constitution, a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours.

All Shares issued pursuant to the New Options will, from the time they are issued, rank pari passu with all the Company’s existing Shares on issue. The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary

is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

(a) General

The rights attaching to the Shares arise from a combination of the Company’s Constitution, the Corporations Act, the ASX Listing Rules and general law. A copy of the Company’s Constitution is available for inspection during business hours at its registered office.

A summary of the more significant rights is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of the Company’s shareholders. To obtain such a statement, persons should seek independent legal advice.

(b) Voting Rights

Subject to the Constitution of the Company and any rights or restrictions at the time being attached to a class of shares, at a general meeting of the Company every Shareholder present in person, or by proxy, attorney or representative has one vote on a show of hands, and upon a poll, one vote for each Share held by the Shareholder and for each partly paid share held, a fraction of one vote equal to the proportion which the amount paid up bears to the amounts paid or payable on that share. In the case of an equality of votes, the chairperson has a casting vote.

(c) Dividends

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, the Company may pay dividends as the Directors resolve but only out of profits of the Company. The Directors may determine the method and time for payment of the dividend.

(d) Winding up

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, on a winding up of the Company any surplus must be divided among the shareholders of the Company in proportion to which the amount paid on the Shares bears to the total amount paid and payable on the Shares of all shareholders of the Company.

(e) Transfer of Shares

Generally, shares are freely transferable, subject to satisfying the requirements of the ASX Listing Rules, ASTC Rules, the ACH Clearing Rules and the Corporations Act. The Directors may decline to register any transfer of Shares but only where permitted to do so by the Corporations Act, the ASX Listing Rules, the ASTC Rules, the ACH Clearing Rules or under the Company’s Constitution.

(f) Directors

The Constitution and the ASX Listing Rules contain provisions relating to the rotation and election of Directors.

(g) Calls on Shares

Subject to the Corporations Act and the terms of issue of a share, the Company may, at any time, make calls on the shareholders of a share for all, or any part of, the amount unpaid on the share. If a shareholder fails to pay a call or instalment of a call, the Company may, subject to the Corporations Act and ASX Listing Rules, commence legal action for all, or part of the amount due, enforce a lien on the share in respect of which the call was made or forfeit the share in respect of which the call was made.

(h) Further Increases in Capital

Subject to the Corporations Act, the ASX Listing Rules, the ASTC Rules and the ACH Clearing Rules and any rights attached to a class of shares, the Company (under the control of the Directors) may allot and issue shares and grant options over shares, on any terms, at any time and for any consideration, as the Directors resolve.

Section 6 – Key Investment Risks

Shareholders should be aware that there are company specific and market risks associated with any share investment. The trading price of the New Options may be volatile and subject to wide fluctuations in response to various factors such as significant movements in world equity markets, additions or departures of key personnel, litigation, media reports, the results of exploration activity, variations in the Company’s operating results or new operations conducted by the Company or its competitors.

Key investment risks for investing in securities in Carpentaria were identified in the IPO Prospectus. Those risks are incorporated into this Prospectus under Section 3 of this Prospectus.

The Company has identified the following additional risks:

Stock Market Fluctuations

The price of securities listed on the ASX may rise or fall due to numerous factors which may affect the market performance of the Company. The New Options to be issued under this Prospectus carry no guarantee in respect of profitability, dividends, return of capital or the price at which the Shares issued upon exercise of the New Options trade on ASX.

The securities prices of many companies have in recent times been subject to fluctuations which in many cases reflect a diverse range of non company specific influences such as commodity prices, currency movements, interest rates, global hostilities and tensions, acts of terrorism and the general state of the economy.

The recent volatility in the share market has resulted in significant price volatility that in many circumstances is unrelated or disproportionate to the operating performance of companies. Such market fluctuations may materially and adversely affect the value of the New Options.

No assurances can be given that the Company’s market performance will not be adversely affected by any such market fluctuations or factors.

Exploration Risk

Resource exploration involves significant risks where experience, knowledge and evaluation may not be able to overcome. There is no assurance that resources will be discovered or, in the event a discovery is made, that commercial quantities of resources can be recovered or realised from the Company’s licensed acreage.

Of specific relevance to Carpentaria is the geographic focus of exploration in Queensland and New South Wales. Investment sentiment to regions may vary, depending upon the perceived prospectivity and factors such as discovery. Accordingly, no guarantee as to investment support can be given.

Demand for resources

The demand for, and price of, resources is highly dependent upon a variety of factors, including international supply and demand, the level of consumer product demand, weather conditions, the price and availability of fuels, actions taken by governments and international cartels, and global economic and political developments.

Resource drilling activities are subject to numerous risks, many of which are beyond the Company’s control. The Company’s operations may be curtailed, delayed or cancelled as a

result of weather conditions, mechanical difficulties, shortage or delays in the delivery of rigs and/or other equipment and compliance with governmental requirements.

Ability to Exploit Successful Discoveries

It may not always be possible for the Company to participate in the exploitation of any successful discoveries which may be made in any areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities.

It may or may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company.

Environmental Regulations

The Company is subject to environmental laws and regulations in connection with all its operations. Although the Company believes that it is in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities that could subject the Company to extensive liability.

The Company may require approval from the relevant authorities before it can undertake activities which are likely to impact upon the environment. The Company is unable to predict the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would materially increase the Company’s cost of doing business or affect its operations in any area.

Competition

Some competitors of the Company have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. There can be no assurance that the Company can compete effectively with these companies.

Requirements for Capital

Depending upon the Company’s ability to generate income from its existing projects, the Company may require further financing in addition to amounts raised in this Offer. Any additional equity financing may be dilutive to Shareholders.

In the event the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.

Reliance on Key Management

The responsibility of overseeing the day-to-day operations and the strategic management of the Company is substantially dependent upon its management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one, or a number of, these employees or consultants cease to provide services to the Company.

The Company’s future success also depends upon its continuing ability to attract and retain highly qualified personnel. The ability to attract and retain the necessary personnel could have a material effect upon the Company’s business, results of operations and financial position.

Transport Risks and Costs

Access to sufficient capacity of efficient and reliable transport infrastructure will be a key factor in any development of the Company’s resources. Key transport risks include restrictions on rail access to ports, restrictions on the use of public roads and dependency on contractors and other third parties for haulage and loading.

Section 7 – Additional Information

7.1. Market Prices of Shares

Quotation of the Company’s Shares commenced on 14 November 2007 and, consequently, the trading history on ASX as at the date of this Prospectus is limited to the period since that date.

The highest and lowest recorded market sale prices of the Company’s Shares quoted on ASX during the period from commencement of Quotation to the date of this Prospectus were:

Highest : 35 cents on 14 November 2007

Lowest : 8.1 cents on 18 April 2008

The last market sale price of the Company’s Shares on ASX on the last day that trading took place in these shares prior to the date of this Prospectus was 9.7 cents on 16 May 2008.

The Company’s Existing Options are currently not quoted on ASX.

7.2 . Taxation

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the New Options. Neither Carpentaria nor any of its officers accepts any liability or responsibility in respect of the taxation consequences of the matters referred to in this Prospectus or any other taxation consequences connected with an investment in New Options or dealing with an Entitlement under this Entitlements Issue.

7.3 . Legal Proceedings

There is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

7.4. Continuous Disclosure and Documents Available for Inspection

The Company is listed on ASX and its Shares are quoted on ASX.

As required by section 712(1) of the Corporations Act, the Company will provide, free of charge, a copy of any of the documents (or parts) taken to be included in this Prospectus as listed in Sections 2 and 3 of this Prospectus to a shareholder who requests it during the Offer Period. Copies of the IPO Prospectus, the Half-Year Financial Report and the Quarterly Reports are posted on the Company's website at www.carpentariaex.com.au.

The Company is a “disclosing entity” for the purposes of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, as a company admitted to the official list of ASX, the Company is subject to the Listing Rules, which require continuous disclosure to the ASX of any information held by the Company, which, subject to exceptions, a reasonable person would expect to have a material effect on the price or value of securities of the Company.

Section 713 of the Corporations Act allows a company to issue a prospectus with an alternative general disclosure test, relying upon documents lodged with ASIC pursuant to this obligation. However, as the Company's Shares have not been continuously quoted

securities for a period of 3 months prior to the date of this Prospectus, the Prospectus is issued in accordance with section 712 of the Corporations Act.

The Company will provide a copy of all documents lodged with ASX in accordance with the continuous disclosure requirements since the Company’s official quotation on ASX on 15 November 2007. As at the time of lodging this Prospectus these ASX announcements are as follows:

SUBJECT OF ANNOUNCEMENT	DATE LODGED
Initial Director`s Interest Notice x 3	16 November 2007
Form 603 - Becoming a substantial holder from GIR	16 November 2007
Appendix 3B	7 December 2007
Progress report	10 December 2007
Appendix 3X, Initial Director’s Interest Notice	10 January 2008
Announcement of appointment of Mike Chester as a Director	10 January 2008
Corrected Appendix 3X, Initial Director’s Interest Notice	11 January 2008
Quarterly Cashflow Report December 2007	30 January 2008
Quarterly Activities Report - December 2007	30 January 2008
ASX Circular: GIR: Reorganisation of Capital	1 February 2008
Exploration Update	20 February 2008
GBZ: Nickel Farm In and Joint Venture Agreement	21 February 2008
Becoming a substantial holder	22 February 2008
Change in substantial holding from GIR	27 February 2008
Half Yearly Report and Accounts	14 March 2008
Drilling Commences at Glen Isla	2 April 2008
Progress Report	8 April 2008
Quarterly Activities Report and Cash Flow Reports – March 2008	22 April 2008
Appendix 3B	2 May 2008
Details of Change to Share Registry address	5 May 2008
Appendix 3Y – Change in Directors Interests Notice	15 May 2008

In accordance with the continuous disclosure obligations, the Company may from time to time make further ASX announcements which will be posted on the ASX website and the Company's website.

7.5. Interests of Directors

Other than as disclosed in this Prospectus:

(a) no Director has or during the last two (2) years had any interest in:
(i) the formation or promotion of the Company; or
(ii) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Entitlements Issue; or
(iii) the Entitlements Issue; and
(b) no amounts (whether in cash or shares or otherwise) have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person to a Director of the Company to induce him to become, or to qualify him as, a Director, or otherwise for services rendered by him or in connection with the promotion or formation of Carpentaria or the Entitlements Issue.

As at the date of this Prospectus, no Director has any direct or indirect interest in securities in the Company other than as set out in the table below.

Name	Shares at date of Prospectus	Existing Options	New Options to be acquired under Entitlements Issue
Nick Sheard	Nil	1,000,000	Nil
Mike Chester	86,401	Nil	43,201
Bob Hair	20,000	500,000	10,000
Stan MacDonald	1,424,669	500,000	712,335

All Directors have indicated that they and their associates intend to subscribe for their full Entitlement of New Options.

Remuneration of Directors

The current maximum Directors' remuneration, as approved by Shareholders, is $220,000 per annum collectively. Non-executive Directors of the Company are paid $30,000 per annum, plus superannuation contributions in accordance with statutory requirements.

Director and Officer Protection Deeds

As described in Section 10.3(b) of the IPO Prospectus, the Company has entered into a deed of indemnity and access with each of its Directors and the Company Secretary ( the Deed ). A Deed was also entered into with Mr Chester, who was appointed after the Company’s Listing, on 15 January 2008. Under the Deeds, the Company will indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company. The Company may maintain insurance policies for the benefit of the relevant officer for the term of the appointment and for a period of seven (7) years after retirement or resignation. The Deeds also provide for the right to access Board papers.

Executive Agreement with Executive Chairman

Section 10.3(d) of the IPO Prospectus describes an executive services agreement between the Company and Mr Nick Sheard, under which the services of Mr Sheard are provided as Executive Chairman of the Company.

7.6. Interests of Experts and Other Named Parties

Other than as disclosed in this Prospectus:

(a) no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation and distribution of this Prospectus, nor any firm in which any of those persons is or was a partner, has or has had, in the two (2) year period ending on the date of this Prospectus, an interest in:
(i) the formation or promotion of the Company, or
(ii) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Entitlements Issue, or
(iii) the Entitlements Issue; and
(b) no amounts (whether in cash or shares or otherwise) have been paid or agreed to be paid to any person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus or to any firm in which any of those persons is or was a partner in the two (2) year period ending on the date of this Prospectus, and no benefits have been given to any such person for services rendered in connection with the promotion or formation of Carpentaria Exploration or the Entitlements Issue.

TressCox Lawyers has acted as legal adviser to the Company in relation to this Prospectus. The Company estimates that it will pay TressCox Lawyers a total of $30,000 for these services. During the 24 months preceding lodgement of this Prospectus with ASIC, TressCox Lawyers has not received any other fees for services as legal adviser to the Company other than in relation to this Prospectus.

7.7. Expenses of the Entitlements Issue

The total expenses of the Entitlements Issue are estimated to be $40,000, comprising legal and due diligence costs of $30,000 and printing and other administrative expenses, including ASX quotation fees, of $10,000.

Section 8 – Material Contracts

Sections 7 and 10.3 of the IPO Prospectus, which are referred to in Section 2 of this Prospectus, describe certain contracts to which the Company is a party that were considered by the Directors as being material to enable investors to make an informed assessment of the Shares being offered under the IPO Prospectus. Section 3.2 of this Prospectus sets out any material amendments to these contracts and any other contracts to which the Company is a party that are considered by the Directors as being material to enable investors to make an informed assessment of the Shares being offered under the IPO Prospectus. Investors and their professional advisers are referred to those sections of the IPO Prospectus and this Prospectus in relation to those material contracts.

No additional contracts to which the Company is a party are considered by the Directors to be material to enable investors to make an informed assessment of the New Options being offered under this Prospectus.

Section 9 - Consents

The following persons have each consented to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with ASIC.

Mack & Co in relation to the Independent Accountant’s Report in Section 8 of the IPO Prospectus and the reference to this report in this Prospectus. Mack & Co has not authorised or caused the issue of any part of this Prospectus.

PKF in relation to the Audit Report forming part of the Half-Yearly Financial Report and the reference to this report in this Prospectus. PKF has not authorised or caused the issue of any part of this Prospectus.

Hopgood Ganim in relation to the Solicitor’s Report set out in Section 9 of the IPO Prospectus and the reference to that report in this Prospectus. Hopgood Ganim has not authorised or caused the issue of any part of this Prospectus.

TressCox Lawyers has consented to be named in this Prospectus as solicitors to the Issue. TressCox Lawyers has not authorised or caused the issue of any other part of this Prospectus.

Vidoro Pty Ltd in relation to the Independent Geological Report set out in Section 5 of the IPO Prospectus and the reference to that report in this Prospectus. Vidoro Pty Ltd has not authorised or caused the issue of any part of this Prospectus.

Link Market Services Limited has given its written consent to the issue of this Prospectus with its name included and has not withdrawn its consent before the lodgement of this Prospectus with ASIC. Link Market Services Limited did not have any involvement in the preparation of any part of this Prospectus other than being named in this Prospectus in the capacity in which it is so named.

Each of the parties has granted its consent on the basis that:

(a) it does not make, or purport to make, any statement in this Prospectus, or on which a statement made in this Prospectus is based, other than as specified in this section; and
(b) to the maximum extent permitted by the law, it expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in the Prospectus with the consent of that party, as specified in this Section.

Section 10 – Authority of Directors

Each of the Directors of Carpentaria Exploration Limited has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act and has not withdrawn that consent.

This Prospectus is issued by Carpentaria Exploration Limited. Its issue was authorised by a resolution of the Directors and it is signed by a Director on behalf of all Directors.

Dated the 19th day of May 2008.

Bob Hair Signed for and on behalf of CARPENTARIA EXPLORATION LIMITED

Section 11 - Glossary

Entitlement and Acceptance	means the entitlement and acceptance form enclosed with this
Form	Prospectus.
Applicant	means a person who submits an Application.
Application	means a valid application to subscribe for New Options.
ASIC	means Australian Securities and Investments Commission.
ASTC	means ASX Settlement and Transfer Corporation Pty Ltd (ACN
	008 624 691).
ASTC Settlement Rules	means the operating rules of ASTC.
ASX	means ASX Limited (ACN 008 624 691).
Board	means the Board of Directors of Carpentaria, unless the context
	indicates otherwise.
Bulldozer	means Bulldozer Prospecting Pty Ltd (ACN 125 564 865).
Business Day	means a day other than a Saturday or Sunday on which banks
	are open for business in Brisbane, Queensland.
Carpentaria_or_the Company	means Carpentaria Exploration Limited (ACN 095 117 981).
CHESS	means ASX Clearing House Electronic Subregistry System.
Closing Date	means the date on which the Offer closes, being 23 June 2008
	or such other date as the Directors may determine in
	accordance with the Listing Rules or this Prospectus.
Corporations Act	means the Corporations Act 2001 (Cth).
CRAE	means CRA Exploration Pty Ltd, now named Rio Tinto
	Exploration Pty Limited (ACN 000 057 125).
Department	means the relevant government department.
Directors	means the directors of the Company from time to time.
Dollars	or $ means Australian dollars unless otherwise stated.
Entitlement	means the number of New Options to which each Shareholder is
	entitled as at the Record Date.
Entitlements Issue	means a pro-rata non-renounceable entitlements issue to
	Shareholders who are registered at 5.00pm EST on the Record
	Date of up to 32,250,000 New Options at an issue price of $0.01
	(1 cent) each to raise up to approximately $325,000 (before
	costs of the Issue).
EST	means Eastern Standard Time, Brisbane, Australia.

Existing Options	means Options that have been granted as at the date of this
	Prospectus.
GBM	means GBM Resources Limited (ACN 124 752 745).
Giralia	means Giralia Resources NL (ACN 009 218 204).
Glossary	means this glossary.
Group 1 Metals	means as applied by the NSW Department of Primary Industry
	under the_Mining Act 1992_including antimony, arsenic, bismuth,
	cadmium, caesium, chromite, cobalt, columbium, copper,
	galena, germanium, gold, indium, iron minerals, lead, lithium,
	manganese, mercury, molybdenite, nickel, niobium, platinum
	group minerals, platinum, rare earth minerals, rubidium,
	scandium and its ores, selenium, silver, sulphur, tantalum,
	thorium, tin, tungsten and its ores, vanadium, zinc and zirconia.
Half-Yearly Financial Report	means the Half-Year Financial Report of the Company for the
	period to 31 December 2007 lodged with ASIC and ASX.
IPO Prospectus	means the prospectus lodged by the Company with ASIC dated
	7 September 2007.
Issue	means the issue of New Options pursuant to this Prospectus.
Listing	means the listing of the Company on ASX, through which trading
	in the Company’s Shares commenced on Wednesday, 14
	November 2007.
Listing Rules	means the official Listing Rules of ASX.
New Option	means an option to subscribe for one Share exercisable at 30
	cents on or before 5:00pm EST on 30 June 2010 and issued on
	the terms and conditions set out in this Prospectus.
NSR	means net smelter royalty.
Offer	means the offer of New Options pursuant to this Prospectus.
Offer Period	means the period commencing on the Opening Date and ending
	on the Closing Date.
Official List	means the official list of ASX.
Opening Date	means the date on which the Offer opens.
Prospectus	means this prospectus dated 19 May 2008 for the issue of up to
	32,500,000 New Options.
Quarterly Report	means the Company's Quarterly Activities Report and Quarterly
	Cash flow Report (Mining Exploration entity quarterly report).
Quotation	means quotation of the Shares or New Options on ASX as the
	case may be.

Record Date means 7.00pm AEST on 2 June 2008. Share means a fully paid ordinary share in the Company. Shareholder means a holder of Shares. Share Registry means Link Market Services Limited (ACN 083 214 537). Stellar means Stellar Resources Limited (ACN 108 768 961). Sunrise means Sunrise Minerals Pty Ltd (ACN 122 063 129). Vidoro Pty Ltd means Vidoro Pty Ltd (ACN 094 217 482). VTEM means Versatile Transient Electro-Magnetic method, a form of geophysical survey.