ILUKA RESOURCES LIMITED — Capital/Financing Update 2005

Feb 7, 2005

Notice to the Australian Stock Exchange

8 February 2005

AMBROSIA MINERAL RESOURCE ESTIMATE

Iluka Resources Limited wishes to announce that an Inferred Mineral Resource has been estimated for the Ambrosia mineral sands deposit in the South Australian sector of the Eucla Basin. The Inferred Mineral Resource Estimate is detailed in Attachment-1.

The Ambrosia deposit is located some 2 kilometres north of the previously announced Jacinth deposit, in the south-eastern half of Iluka's wholly owned Exploration Licence 2900, approximately 200 kilometres north-west of Ceduna and 45 kilometres south of the transcontinental railway.

Iluka's Managing Director Mr Mike Folwell said "that with the addition of the Ambrosia Deposit, Iluka had now outlined a combined resource of some 8 million tonnes of heavy mineral containing more than 4 million tonnes of zircon".

"This is an outstanding result from what was an initial exploration reconnaissance program over a small portion of Iluka's total tenement portfolio in this area" he added.

Mr Folwell said "the 2005 exploration program would commence in March and would drill out both the Ambrosia and Jacinth deposits at sufficent density to enable an Indicated Resource to be estimated for each deposit. The planned drilling program would also investigate other anomalous mineralisation intersected during 2004 and continue to explore the regional potential of this new province".

Investment Community & Media contact: Geoff Wedgwood Mobile: 0409 997 256

Attachment-1

Ambrosia Inferred Mineral Resource

The Ambrosia deposit is believed to represent classic beach placer style mineralisation with a high grade "placer" core and associated overlying mineralised dunal sands. Iluka has completed sufficient work on this deposit to be able to state that the estimate has been prepared in accordance with the 2004 JORC Code The Inferred Mineral Resource Estimate as outlined below in Table 1.

Figure 1: Ambrosia Deposit Location Map

Table 1: Ambrosia Inferred Mineral Resource Estimate (+1% HM Cut-off)

Material Tonnes	HM	Clay	HM Tonnes	Zircon	Rutile	Ilmenite
(millions)	(9)	(%)	(millions)	(%)	(%)	(96)
54	3.0	11.8	1.6	55		14

Notes on Table 1:

• HM represents Heavy Mineral (Grains with a specific gravity $> 2.9$ ).
• Clav is material smaller than 53 microns in size.
• Zircon, Rutile, and Ilmenite are estimates of the percentage levels within the $\bullet$ total in situ Heavy Mineral tonnes based on laboratory results.

Resource Model Background

Five reconnaissance traverses have been drilled across the Ambrosia deposit using one of the Company's air core drilling rigs. All holes were drilled verticaly and sampled at 1.5 metre increments. Drilling density (and proximity to the nearby Jacinth deposit) is shown below in Figure 2 and approximates a $1,000 \times 100$ metre grid. The samples were logged by Company geologists on site and the samples containing anomalous mineralisation were sent to the Company's laboratory for assay. Boreholes were located using handheld GPS equipment with sub-five metre resolution. Collar elevations were assigned from a digital terrain model derived from SPOT satellite imagery.

A total of 17 composite samples were selected, across all mineralised drill sections, for mineralogical analysis. All laboratory work was conducted at the Company's Hamilton and Namgulu laboratories where in-house OAOC procedures are applied.

Figure 2: Detailed overview of the Ambrosia Deposit

Ambrosia Resource Model

A Geological Resource Model has been constructed using the Datamine Software package. The model was constructed using constraints as per normal Company practice. Block estimation techniques were aligned to the deposit strike and other geological parameters as interpreted by company geologists. The bulk density for the model was estimated using the Iluka standard formula based on operational experience gained from mining this style of mineralisation.

Preliminary economic evaluations of a number of cut-off alternatives suggest that a resource estimate based on a 1% Heavy Mineral cut-off is valid given the very high zircon content in the deposit mineralogy. Due to the relatively wide spaced nature of the sampling density it has been decided to classify the Mineral Resource Estimate in the Inferred Category. Both internal and external reviews of the Ambrosia Resource Model support the view expressed in this document.

The description of the Mineral Resource is based on information compiled by Iluka staff under the review of Peter McGoldrick who is a member of The Australian Institute of Mining and Metallurgy and a full time employee of Iluka. Peter McGoldrick has sufficient experience which is relevant to this style of mineralisation to qualify as a Competent Person as defined in the 2004 Edition of the JORC code and consents to the inclusion in the report of the matters based on information in the form and context in which it appears.