ILUKA RESOURCES LIMITED — Capital/Financing Update 2004

Jun 28, 2004

Notice to the Australian Stock Exchange

29 June 2004

ILUKA AND ADELAIDE RESOURCES FORM COLONA JOINT VENTURE

Iluka Resources Limited ("Iluka") and Adelaide Resources Limited ("ARL") have formed the Colona Joint Venture to explore for heavy minerals within ARL's Exploration Licences 2840 and 2841 covering 3,766 sq km in the Barton-Colona area of the Eucla Basin in the south-west of South Australia.

The Colona Joint Venture is confined to the cover sediments which overlie the crystalline basement rocks and their weathered products. Exploration of the basement in EL2841 is subject to the Barton Joint Venture between Adelaide Resources and Inco Resources (Australia) Pty Limited with the objective of exploring for nickel. The terms of the Barton Joint Venture were announced on 15 March 2004

Under the terms of the Colona Joint Venture, Iluka will earn a 51% interest by meeting the following obligations:

• $\blacksquare$ completing 2,500 metres of drilling in the first year; and
• . incurring expenditure of A\$1 million over the following five years including \$200,000 in each of the second and third years.

Once Iluka has earned its 51% interest. ARL has the option of contributing its 49% share of ongoing expenditure or alternatively reverting to a 30% interest carried to completion of a positive bankable feasibility study.

Enquiries:	Mr Geoffrey Wedgwood
	Group Manager External Affairs
	Ph: (08) 9360 4751
	Mob: 0409 997 256