INVESTOR CENTRE LIMITED — Proxy Solicitation & Information Statement 2011

Jan 12, 2011

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ACN 074 009 091

NOTICE OF GENERAL MEETING

AND

EXPLANATORY STATEMENT

Date of Meeting: 16 February 2011 Time of Meeting: 10:00AM Place of Meeting: Unit 18, 28 Belmont Avenue, BELMONT, WA

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NOTICE OF GENERAL MEETING

Notice is hereby given that a General Meeting of shareholders of Ferrowest Limited (“Ferrowest” or ”the Company”) will be held on Wednesday , 16 February 2011 at 10:00AM, at Unit 18, 28 Belmont Avenue, Belmont, Western Australia (“the Meeting”).

The Explanatory Statement to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Statement and the Proxy Form are part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on 14 February 2011 at 5.00pm (WST). The following agenda items are to be considered at the Meeting and Resolutions 1 to 7 inclusive are discussed in the Explanatory Statement to shareholders included in this Notice.

RESOLUTION 1 – RATIFICATION OF PLACEMENT ON 1 NOVEMBER 2010

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the prior allotment and issue of 2,300,000 fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is ratified and approved.”

The Company will disregard any votes cast on this Resolution by the parties who participated in the issue as listed in the Explanatory Statement and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

RESOLUTION 2 – RATIFICATION OF PLACEMENT ON 2 DECEMBER 2010

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the prior allotment and issue of 10,000,000 fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is ratified and approved.”

The Company will disregard any votes cast on this Resolution by the parties who participated in the issue as listed in the Explanatory Statement and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

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FERROWEST LIMITED (ACN 074 009 091)

RESOLUTION 3 – APPROVAL FOR ISSUE OF SHARES IN SETTLEMENT OF CONVERTIBLE NOTE INTEREST

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the allotment and issue of 122,573 fully paid ordinary shares in the capital of the Company to the holders of convertible notes or their nominee in satisfaction of interest accrued and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is approved.”

The Company will disregard any votes cast on this Resolution by the parties who will participate in the issue as listed in the Explanatory Statement and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

RESOLUTION 4 – APPROVAL FOR ISSUE OF SHARES TO DIRECTORS AND RELATED PARTIES IN SETTLEMENT OF CONVERTIBLE NOTE INTEREST

“That, for the purposes of ASX Listing Rule 10.11, and for all other purposes, the allotment and issue of 457,433 fully paid ordinary shares in the capital of the Company to directors and related parties of the Company that are holders of convertible notes or their nominee in satisfaction of interest accrued and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is approved.”

For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this 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 an ordinary security holder, if the resolution is passed, and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

RESOLUTION 5 – APPROVAL FOR ISSUE OF SHARES TO RELATED PARTIES OF THE COMPANY IN SETTLEMENT OF FEES ACCRUED

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, the allotment and issue of 739,165 fully paid ordinary shares in the capital of the Company to related parties of the Company or their nominee in satisfaction of fees accrued by those parties for services rendered to the Company and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is approved.”

For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this 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 an ordinary security holder, if the resolution is passed, and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

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FERROWEST LIMITED (ACN 074 009 091)

RESOLUTION 6 – APPROVAL FOR ISSUE OF SHARES IN SETTLEMENT OF FEES ACCRUED

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the allotment and issue of 80,000 fully paid ordinary shares in the capital of the Company to Mandevilla Pty Ltd or its nominee in satisfaction of consulting fees and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is approved.”

The Company will disregard any votes cast on this Resolution by the parties who will participate in the issue as listed in the Explanatory Statement and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

RESOLUTION 7 – ALLOTMENT OF OPTIONS TO ROBERT HARRY DUFFIN OR HIS NOMINEE

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act and for all other purposes, the allotment and issue of 3,325,000 options over shares in the capital of the Company to Mr. Robert Harry Duffin or his nominee by way of remuneration on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting and otherwise on the basis set out therein, is approved.”

For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this 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 an ordinary security holder, if the resolution is passed, and any associate of them. However, the Company need not disregard a vote if 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 it is cast by 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.

Proxy and Voting Entitlement Instructions are included on the Proxy Form accompanying this Notice of General Meeting.

Dated at Perth this 31[st] day of December 2010. By order of the Board of Directors.

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Brett Manning Managing Director

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EXPLANATORY STATEMENT

1. INTRODUCTION

This Explanatory Statement is intended to provide shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of General Meeting for Ferrowest Limited.

The Directors recommend that shareholders read this Explanatory Statement before determining whether to support the Resolutions or otherwise.

Shareholders should note that all the Directors approved the proposal to put the Resolutions to shareholders as outlined in the Notice of General Meeting and to prepare this Explanatory Statement.

2. DEFINITIONS USED IN THIS STATEMENT

Act means the Corporations Act 2001 (Cth), as amended from time to time.

ASIC means Australian Securities and Investment Commission.

ASX means ASX Limited.

ASX Listing Rules or Listing Rules means the official listing rules of ASX as amended from time to time. Board means the board of directors of the Company.

Company or Ferrowest means Ferrowest Limited (ACN 074 009 091).

Director means a director of the Company as at date of the Notice of Meeting.

Explanatory Statement or Statement means the explanatory statement to the Notice.

Meeting or General Meeting means the meeting convened by the Notice.

Notice or Notice of General Meeting means the notice of meeting accompanying this Explanatory Statement.

Option means an option to acquire an ordinary share in the capital of the Company in accordance with the terms specified at Annexure “A”.

Resolution means a shareholder resolution contained in the Notice.

Share means a fully paid ordinary share in the capital of the Company.

3. ASX LIMITED (“ASX”) LISTING RULE REQUIREMENTS

ASX Listing Rule 7.1 relevantly provides that the prior approval of the shareholders of the Company is required to an issue of equity securities if the securities will, when aggregated with the securities issued by the Company during the previous 12 months, exceed 15% of the number of securities on issue at the commencement of that 12 month period.

The issue and allotment of Shares outlined in resolutions 1 to 2 did not exceed the 15% limit, however, ASX Listing Rules 7.1 and 7.4 provide that, where a company at a general meeting ratifies an issue of equity securities, the issue will be treated as having been made with approval for the purpose of ASX Listing Rule 7.1, thereby enabling the company to issue further equity securities without exceeding the 15% in 12 months limitation. Shareholder approval is sought so as to refresh Ferrowest’s 15% equity security placement limit pursuant to ASX Listing Rule 7.1. The information required by ASX Listing Rules 7.1, 7.3 and 7.5 to be provided to shareholders is contained within this Explanatory Statement and the Notice of General Meeting.

ASX Listing Rule 10.11 relevantly provides that the prior approval of shareholders of the Company is required for the issue of equity securities to a related party. If approval is given for the issue of securities under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1. ASX Listing Rule 10.13 sets out the information to be provided to shareholders in the Notice of Meeting. The company is seeking shareholder approval to the proposed issue of Shares to related parties pursuant to Resolutions 4 and 5 and Options pursuant to Resolution 7.

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4. CORPORATION ACT REQUIREMENTS

Chapter 2E of the Corporations Act prohibits, subject to certain exceptions, a company from giving a financial benefit to a related party of the company without prior shareholder approval.

The parties to which resolutions 4, 5 and 7 relate are considered "related parties" for this purpose. The issue of Shares to the related parties under Resolutions 4 and 5 and the issue of Options under Resolution 7 constitutes a "financial benefit" for this purpose.

The information required by Chapter 2E of the Corporations Act to be provided to shareholders for Resolutions 5 and 7 is contained within this Explanatory Statement and the Notice of General Meeting.

Resolution 4 also pertains to “related parties” but is exempt from the Chapter 2E requirements of the Act as it is an “arms length” transaction in accordance with the terms of the Convertible Note Deed to which it relates. Shareholders previously granted approval for the related parties to participate in the Convertible Notes at a prior General Meeting of the Company. Approval of Resolution 4 is, however, still required under the Listing Rules as explained paragraph 3 above.

Shares issued as outlined in resolutions 1 and 2 were issued in reliance upon Section 708 of the Act and therefore no disclosure document was needed. The proposed issue of Shares and Options in accordance with resolutions 3, 4, 5, 6 and 7 will also be made in reliance upon Section 708 of the Act and will not require a disclosure document.

5. RATIFICATION OF PLACEMENT (1 November 2010) – Resolution 1

Resolution 1 of the Notice of General Meeting proposes the ratification of the issue and allotment of 2,300,000 Shares on 1 November 2010, thereby satisfying the requirements of ASX Listing Rule 7.4.

In compliance with the information requirements of ASX Listing Rule 7.5, shareholders are advised of the following particulars in relation to the placement:

• (a) Number of securities allotted:

• 2,300,000 Shares

• (b) Price at which the securities were issued:

• 8.6 cents per Share

• (c) Terms of the securities:

The Shares rank equally in all respects with the existing Shares on issue.

• (d) Names of the allottee:

• Bucephalus Special Situations Fund

• (e) Intended use of funds raised:

The purpose of the issue was to provide funds for working capital expenditure.

6. RATIFICATION OF PLACEMENT (2 December 2010) – Resolution 2

Resolution 2 of the Notice of General Meeting proposes the ratification for the issue and allotment of 10,000,000 Shares on 2 December 2010, thereby satisfying the requirements of ASX Listing Rule 7.4.

In compliance with the information requirements of ASX Listing Rule 7.5, shareholders are advised of the following particulars in relation to the placement:

• (a) Number of securities allotted:

• 10,000,000 Shares.

• (b) Price at which the securities were issued:

• 15 cents per Share.

• (c) Terms of the securities:

The Shares rank equally in all respects with the existing Shares on issue.

• (d) Name of the allottee:

Sin‐Tang Mining Pty Ltd.

• (e) Intended use of funds raised:

The purpose of the issue was to provide funds for further exploration and study works on the Company’s projects and for working capital expenditure.

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7. APPROVAL FOR ISSUE OF SHARES IN SETTLEMENT OF CONVERTIBLE NOTE INTEREST – Resolution 3

Resolution 3 of the Notice of General Meeting proposes approval for the issue and allotment of 122,573 Shares in satisfaction of interest payments accrued by the Company to holders of certain Convertible Notes.

It is a term of the Convertible Notes currently on issue that the holder may elect to take payment for the interest accrued against their Convertible Note holding in the form of Shares, with the issue price for those Shares being 85% of the Volume Weighted Average Price of the Company’s ordinary Shares quoted on the Australian Securities Exchange over the ten (10) trading days immediately preceding the date on which the interest falls due.

The proposed allottees specified below have indicated that they wish to receive their interest payments in Shares.

In compliance with the information requirements of ASX Listing Rule 7.3, shareholders are advised of the following particulars in relation to the placement:

• (a) Number of securities proposed to be issued and allotted:

122,573 Shares as detailed in (e) below.

• (b) Terms of the securities:

The Shares will rank equally in all respects with the existing Shares on issue.

• (c) The date by which the Company will issue and allot the securities:

The securities will be issued within five (5) business days of receiving shareholder approval.

• (d) Price at which the securities will be issued:

The issue price calculated in accordance with the terms of the Convertible Note Deeds for each interest period is specified in (e) below.

• (e) Names of the allottees:

Kirsten Christine Schweder 11,618 Shares at $0.1073 per Share (30 June 2010 interest) 19,539 Shares at $0.0638 per Share (30 September 2010 interest) 9,701 Shares at $0.1285 per Share (31 December 2010 interest) Russlan Zuks 23,235 Shares at $0.1073 per Share (30 June 2010 interest) 39,078 Shares at $0.0638 per Share (30 September 2010 interest) 19,402 Shares at $0.1285 per Share (31 December 2010 interest)

• (f) Intended use of funds raised: No funds are raised as a result of these Share issues. The issue of these Shares extinguishes a liability for the Company to pay interest on its Convertible Notes to the Note holders specified.

The Company is contractually obliged to issue the Shares to the holders under the terms of the Convertible Note Deeds if they so elect. If shareholders do not pass this Resolution 3 at the Meeting, the Directors will be required to issue the necessary Shares under the 15% placement capacity granted by Listing Rule 7.1 and the effect will be that less capacity will remain for the Directors to make other placements during the following 12 months. This may negatively impact the Company by reducing the options available to Directors to allot Shares in the capital of the Company.

8. APPROVAL FOR ISSUE OF SHARES TO DIRECTORS AND RELATED PARTIES IN SETTLEMENT OF CONVERTIBLE NOTE INTEREST – Resolution 4

Resolution 4 of the Notice of General Meeting proposes approval for the issue and allotment of 457,433 Shares to Directors and related parties in satisfaction of interest payments accrued by the Company to the specified parties in their capacity as holders of Convertible Notes of the Company.

Background

It is a term of the Convertible Notes currently on issue that a holder may elect to take payment for the interest accrued against their Convertible Note holding in the form of ordinary fully paid Shares in the capital of the Company, with the issue price for those Shares being 85% of the Volume Weighted Average Price of the Company’s ordinary Shares quoted on the Australian Securities Exchange over the ten (10) trading days immediately preceding the date on which the interest falls due.

Members previously approved (at the 2008 Annual General Meeting of the Company) the issue of the Convertible Notes to Directors and related parties of the Company and for their conversion to shares under the terms of the Convertible Note Deeds if required.

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The Directors and related parties chose to defer payment of the interest on their Convertible Note holding in June 2010, September 2010 and December 2010 to preserve the cash reserves of the Company. In taking this decision, the Directors and related parties have missed the ‘opportunity’ of being able to re‐invest the interest payments at the end of each of the respective quarters. The Directors and related parties are now seeking shareholder approval in accordance with Listing Rule 10.11 to receive Shares in payment of these outstanding interest amounts using the formula and terms that are available to other Convertible Note holders (i.e. holders that are not Directors or related parties) in accordance with the Convertible Note Deeds. If approved, this will have the affect of recovering some of the opportunity cost forgone by the Directors and related parties and payment by the issue of Shares will not reduce the Company’s cash reserves.

The Directors and related parties, specified below, have indicated that they wish to receive their interest payments in Shares, subject to the prior approval of the shareholders of the Company.

In compliance with the information requirements ASX Listing Rule 10.13 shareholders are advised of the following particulars in relation to the placement:

• (a) Number of securities proposed to be issued and allotted:

• 457,433 Shares as detailed in (c) below

• (b) Price at which the securities will be issued:

The issue price calculated in accordance with the terms of the Convertible Note Deeds for each interest period is specified in (c) below.

• (c) Names of the allottees:

1. Allottee’s Name 2. Relationship to the Company	Date when interest was due	No. of Shares for thatperiod	Issue Price under terms of the Notes	Total Shares to be issued
1. BL & E Manning ATF The BL & E Manning Superannuation Fund 2. A related party of Brett Manning, a Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	8,132 13,677 6,791	$ 0.1073 $ 0.0638 $0.1285	28,600
1. Brett Manning 2. A Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	3,485 5,862 2,910	$ 0.1073 $ 0.0638 $0.1285	12,257
1. GG & MA Johnston ATF The G & M Johnston Super Fund 2. A related party of Graeme Johnston, a Director of the Company	31‐Dec‐09 31‐Mar‐10 30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	25,842 31,186 34,854 58,616 29,102	$ 0.1463 $ 0.1186 $ 0.1073 $ 0.0638 $0.1285	179,600
1. PJ Evers & KC Schweder ATF The Rocky Hill Super Fund 2. A related party of Phil Evers, a Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	11,618 19,539 9,701	$ 0.1073 $ 0.0638 $0.1285	40,858
1. Irrawaddy Investments Pty Ltd 2. A related party of Robert Duffin, a Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	13,942 23,447 11,641	$ 0.1073 $ 0.0638 $0.1285	49,030
1. BE & KB Wyatt ATF Wyatt Family Superannuation Fund 2. A related party of Barry Wyatt, a Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	11,618 19,539 9,701	$ 0.1073 $ 0.0638 $0.1285	40,858
1. Margaret Anne Johnston 2. The spouse of Graeme Johnston, a Director of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	11,618 19,539 9,701	$ 0.1073 $ 0.0638 $0.1285	40,858
1. Ferrore Pty Ltd 2. A related party of all of the current Directors of the Company	30‐Jun‐10 30‐Sep‐10 31‐Dec‐10	18,588 31,262 15,522	$ 0.1073 $ 0.0638 $0.1285	65,372
				457,433

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• (d) Terms of the securities:

The Shares will rank equally in all respects with the existing Shares on issue.

• (e) The date by which the Company will issue and allot the securities:

The securities will be issued within five (5) business days of receiving shareholder approval

• (f) Intended use of funds raised:

No funds are raised as a result of these Share issues. The issue of these Shares extinguishes a liability for the Company to pay interest on its Convertible Notes to the Note holders specified.

9. APPROVAL FOR ISSUE OF SHARES TO RELATED PARTIES OF THE COMPANY IN SETTLEMENT OF FEES ACCRUED – Resolution 5

Resolution 5 of the Notice of General Meeting proposes approval for the issue and allotment of 739,165 Shares to related parties of the Company in satisfaction of fees accrued by the Company to those parties for services rendered to the Company.

Background

The Directors and related parties of the Company have chosen to defer payment of fees accrued to the Company for services rendered to it by those parties for the last 15 months to preserve the cash reserves of the Company during the difficult period in the aftermath of the global financial crisis. In taking this decision, the Directors and related parties have missed the ‘opportunity’ of being able to benefit from the payment of these fees for an extended period.

On 21 December 2010 the Board resolved that, subject to the prior approval of the shareholders of the Company, the Company would offer Directors and the related parties that currently have accrued fees to extinguish some or all of this liability through the issue of Shares in settlement of the amounts with the issue price for determining the number of Shares being 15 cents per Share.

The proposed issue price of 15 cents per Share is the same as the most recent major Share issue made by the Company on 2 December 2010. The closing price of the Company’s Shares on the day the Board approved this Notice, 31 December 2010, was 15 cents. The 15 cents per Share resolved by the Directors is therefore also the market price of the company’s Shares at the date of this Notice.

Section 208 of the Act prohibits (with some exceptions) the Company giving a financial benefit to Directors or related parties unless specifically approved in advance by shareholders of the Company as contemplated in Section 208(1)(a) of the Act. The related parties, as defined by Section 228 of the Act, specified below have indicated that, subject to prior approval by the shareholders of the Company, they would wish to receive payment of their fees in Shares.

Mr. Robert Duffin – Chairman: Unpaid Directors’ Fee for Q4/2009 and Q1 to Q4 inclusive for 2010 ($74,305.20)

Mr. Brett Manning – Managing Director: Unpaid Remuneration (after tax) from 2009 ($36,569.55)

In compliance with the information requirements of Section 219 of the Act and ASX Listing Rule 10.13 shareholders are advised of the following particulars in relation to the placement:

• (a) Number of securities proposed to be issued and allotted:

• 739,165 Shares as detailed in (f) below

• (b) Price at which the securities will be issued: $0.15 per Share

• (c) The date by which the Company will issue and allot the securities:

The securities will be issued within five (5) business days of receiving Shareholder approval

• (d) Terms of the securities:

The Shares will rank equally in all respects with the existing Shares on issue.

• (e) Intended use of funds raised:

• No funds are raised as a result of these Share issues. The issue of these Shares extinguishes a liability for the Company to pay fees to the related parties specified.

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(f) Names of the allottees:

1.	Allottee’s Name 2. Relationship to the Company 3. Person(s) who would receive a benefit	Shares to be issued
1.	Resource Equity Consultants Pty Ltd	495,368
	2. A related party of Robert Duffin, a Director of the Company
	3. Robert Duffin
1.	Brett Manning	185,643
	2. A Director of the Company
	3. Brett Manning
1.	BL & E Manning Super Fund	58,154
	2. A related party of Brett Manning, a Director of the Company
	3. Brett Manning

At the date of this Notice, the closing share price of the Company’s ordinary shares and the proposed issue price of the shares under Resolution 5 are both 15 cents and therefore if the shares had been issued on the date of this Notice, the Directors specified above would not receive any benefit as a result of the transaction.

However, the share price of the Company’s shares may increase or decrease between the date of this Notice and the date of the General Meeting. If the share price increases, the Directors will accrue a benefit and if the share price falls, the Directors will suffer a loss.

The table below shows the benefit or loss that would apply for each 1 cent change in share price between the date of this Notice and the date of the General Meeting.

Directors	Movement in Ferrowest shareprice from 15 cents	Benefit to Directors if Resolution 5 ispassed
Robert Duffin	+/‐$0.01	+/‐$4,953.68
Brett Manning	+/‐$0.01	+/‐$2,437.97

The issue of the shares in accordance with Resolution 5 will have a dilutionary effect on the current shareholder value of 0.8%. This does not take into account the affect of Resolutions 3, 4 or 6 if passed by the members.

The issue of shares in accordance with Resolution 5 will increase the voting power of the relevant Directors as specified below:

ed below:
Directors	Current % voting power	% voting power if Resolution 5 ispassed	Cumulative % voting power if all Resolutions arepassed
Robert Duffin	2.75%	3.20%	3.30%
Brett Manning	2.69%	2.93%	3.01%

The Company is contractually obliged to pay the fees due to the related parties specified above. The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in respect of the proposed issue of Shares other than If shareholders do not pass this Resolution 5 at the Meeting, the effect will be that the Company will not need to issue the Shares and no dilution will occur but it will be required to pay $110,874.75 from the cash of the Company, thereby reducing the cash reserves and available funds.

Directors’ Recommendation

Messer’s Duffin and Manning have an interest in Resolution 5 and therefore have advised that they do not want to make a recommendation to shareholders in regard to the Resolution. The Directors of the Company who do not have an interest in Resolution 5 unanimously recommend that shareholders pass the resolution as it will reduce the Company’s liabilities without diminishing its cash reserves or materially diluting shareholder value.

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10. APPROVAL FOR ISSUE OF SHARES IN SETTLEMENT OF FEES ACCRUED – Resolution 6

Resolution 6 of the Notice of General Meeting proposes approval for the issue and allotment of 80,000 Shares at an issue price of 15 cents per Share to Mandevilla Pty Ltd in satisfaction of $12,000 in fees accrued through the provision of consulting services to the Company.

In compliance with the information requirements of ASX Listing Rule 7.3, shareholders are advised of the following particulars in relation to the placement:

• (g) Number of securities proposed to be issued and allotted:

• 80,000 Shares

• (h) The date by which the Company will issue and allot the securities:

The securities will be issued within five (5) business days of receiving Shareholder approval

• (i) Price at which the securities will be issued:

• $0.15 per Share

• (j) Terms of the securities:

The Shares will rank equally in all respects with the existing Shares on issue.

• (k) Name of the allottee:

• Mandevilla Pty Ltd or its nominee

• (l) Intended use of funds raised:

• No funds are raised as a result of these Share issues. The issue of these Shares extinguishes a liability for the Company to pay fees to the party specified.

The Company is contractually obliged to pay the consulting fees to Mandevilla Pty. Ltd. If shareholders do not pass this Resolution 6 at the Meeting, the Directors will be required to pay the fees in cash. This will reduce the Company’s cash reserves.

11. ALLOTMENT OF OPTIONS TO ROBERT HARRY DUFFIN OR HIS NOMINEE – Resolution 7

When, in 2006, the Board of Directors invited Mr. Robert Harry Duffin (Mr. Duffin) to join the Board as Chairman, the agreed remuneration was set at $54,500 per annum and 3,325,000 options with an exercise price of 20 cents per option and an expiry date of 1 January 2011. It was envisaged at that time that the option component provided a valuable incentive given the expected timetable for the development of the Company’s main project.

In the intervening period, the onset of the global financial crisis delayed the progress of the Company’s main project, arguably, by more than 12 months. This event was entirely beyond the control of the Company and obviously not anticipated by the Directors when Mr. Duffin’s remuneration package was originally set. The options granted in 2006 will expire on 1 January 2011 (the day after this Notice was authorised). It is the view of the Directors (other than Mr. Duffin who has an ‘interest’ in Resolution 7) that the remuneration package originally implemented would have achieved its aims if not for the onset of the global financial crisis.

Therefore the Board proposes 3,325,000 Options with an exercise price of 20 cents per Option and an expiry date of 1 January 2012 be allotted to Mr. Duffin. The Directors believe that the future success of the Company will depend in large measure on the skills and motivation of the people engaged in and overseeing the management of the Company's operations. It is therefore important that the Company is able to provide appropriate remuneration to its executives.

Issue of options as part of the remuneration packages of directors and key consultants is a well established practice of junior public listed companies and, in the case of the Company, has the benefit of conserving cash whilst properly rewarding directors and consultants.

If Resolution 7 is approved, the Options will be issued for no cash consideration within one month after the date of the General Meeting. The Options will be issued on the terms and conditions set out in Annexure “A” to this Explanatory Statement. The Options proposed to be issued to Mr. Duffin or his nominee, will not be listed and will not be transferable.

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In accordance with section 219 of the Act, the following information is provided to shareholders to allow them to assess whether or not it is in the Company's interests to pass Resolution 7:

• (a) Mr. Duffin or his nominee is the related parties to whom the proposed Resolution would permit a financial benefit to be given. He is a related party to the Company by virtue of section 228 of the Act.

• (b) The nature of the financial benefit to be given to Mr. Duffin is the allotment of the Options free of charge on the terms and conditions set out in Annexure "A”.

• (c) On the basis of the indicative Option value, as detailed herein, the total value of Options proposed to be issued to Mr. Duffin is $106,400. The Options are unlisted and non transferable. The Options must be exercised by the expiry date, after which date such Options automatically lapse.

• (d) The current annual director’s remuneration for Mr. Duffin as Chairman is $54,500 (including superannuation) per annum and this amount has been accrued and/or paid annually for the last three financial years as set out in the Company’s audited accounts.

• (e) At the date of this Notice, Mr. Duffin had the following interest (either directly or indirectly) in securities of the Company:

• 2,615,131 ordinary fully paid shares

• 3,325,000 unlisted options expiring 1 January 2011, exercisable at 20 cents each*

625,000 listed options expiring 30 June 2011, exercisable at 25 cents each

• 350,000 convertible notes with a face value of 40 cents each and coupon rate of 10%, maturing mid 2011 250,000 unlisted options incentive options expiring 31 January 2011, exercisable at 47 cents each[#]

• 250,000 unlisted options incentive options expiring 31 January 2011, exercisable at 57 cents each[#]

• 250,000 unlisted options incentive options expiring 31 January 2011, exercisable at 67 cents each[#]

• Expiring the day after the date of this Notice

• # Expiring before the General Meeting

• (f) There is no other information known to the Directors or the Company that is reasonably required by shareholders to make a decision whether or not it is in the Company's interests to pass Resolution 7, other than as set out throughout this Explanatory Statement.

If the Options are issued pursuant to the proposed Resolution 7, the Company considers the following benefits arise:

• Mr Duffin will have an increased vested interest in the affairs of the Company. As options are a performance based incentive, they will have that incentive to ensure the market price of the shares of the Company increases to create value in the Options and this will benefit all shareholders.

• The issue of options is a non‐cash form of remuneration, thus conserving liquid funds.

• The exercise of the Options will provide working capital for the company at no significant cost. If all the Options proposed to be issued pursuant to Resolution 7 are ultimately exercised, an amount of $665,000 would be raised.

The potential cost to the Company of the issue of 3,325,000 Options pursuant to Resolution 7 is that there will be a dilution of the issued share capital if the Options are exercised. Based on the 95,151,367 Shares currently on issue, the exercise of all of the proposed Options would have a dilution effect of approximately 3.4% of shareholders interest in the Company. If the other existing options and convertible notes on issue that are held by third parties were also to be exercised, the dilution effect on a fully diluted basis would be approximately 2.6%.

The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in respect of the proposed issue of Options other than, if the options are exercised at a time when the market price of the Company's shares is greater than the exercise price of the Options, there will be a detriment insofar as the Company will be required to issue shares at a price lower than it might otherwise have been able to, with the result that less funds will be raised.

The value of the Options to be issued has been calculated using the Black‐Scholes Option Pricing Model (“the Model”). The value of an Option calculated by the Model is a function of a number of variables.

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The indicative value of the Options has been prepared using the following variables:

Valuation Date	31 December 2010
Expiry Date	1 January 2012
Underlying Share Price	15 cents
Exercise Price	20 cents
Expected Life	365 days
Risk Free Rate	6.75%
Volatility	73%
Black‐Scholes Notional Value	3.2 cents

The underlying share price of 15 cents is based on the closing price of the shares on 31 December 2010.

Based on the above variables, the indicative value of the Options proposed to be issued to Mr. Duffin is $106,400.

The Company’s Shares are listed for quotation on ASX. Over the last twelve months the trading history of the shares has been as follows:

	Shares
	Date	Price
Low	2/8/10 and 21/9/10	7.0¢
High	30/3/10	22.0¢
Latest Available Price	31/12/10	15.0¢

Director’s Recommendation

Mr. Duffin has an interest in Resolution 7 and therefore does not wish to make a recommendation to members. The Directors of the Company that do not have an interest in Resolution 7 unanimously recommend approval to members in their capacity as directors for the reasons set out in this Section 11 of the Explanatory Statement.

ASX Requirements

In compliance with the information requirements of ASX Listing Rule 10.13 members are advised of the following particulars in relation to the proposed issue of Options under Resolution 7:

• (a) Maximum number of options to be issued:

3,325,000 Options exercisable at 20 cents each

• (b) Date by which the Company will issue options:

No later than one month after shareholder approval.

• (c) Price at which options to be issued:

The Options are being issued for no consideration to remunerate Mr. Duffin as an incentive for future services.

(d) Name of the allottee:

• Mr. Robert Harry Duffin or his nominee.

• (e) Terms of issue:

The Options will be issued on the terms and conditions as outlined in Annexure “A”.

(f) Intended use of funds raised:

The Options will be issued for no consideration. There are no funds being raised from the allotment as the Options will be issued as an incentive for future services.

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ANNEXURE "A"

Terms and Conditions of Options

The options granted will entitle the holder to subscribe for and be allotted Shares as follows:

• (i) Each option entitles the holder to subscribe for and be allotted one fully paid ordinary share upon payment of $0.20 per option.

• (ii) The options shall lapse at 5.00pm Western Standard Time on 1 January 2012 (expiry date).

• (iii) The options shall be exercisable wholly or in part by notice in writing to the directors of the Company together with payment of $0.20 per option at any time up until the expiry date.

• (iv) The options are non‐transferable and no application will be made to the ASX for Official Quotation of the options.

• (v) There are no participating rights or entitlements inherent in the options and holders of the options will not be entitled to participate in new issues of capital which may be offered to shareholders during the currency of the option.

• However, option holders have the right to exercise their options prior to the date of determining entitlements to any capital issues to the then existing shareholders of the Company made during the currency of the options, and will be granted a period of at least 5 business days before the date for determining entitlements to exercise the options.

• (vi) There are no rights to a change in exercise price, or in the number of Shares over which the options can be exercised, in the event of a pro rata or bonus issue of securities by the Company prior to the exercise of any options.

• (vii) Within 10 business days of receipt of a properly executed option notice and the required application monies the number of shares specified in the notice will be allotted.

• (viii) Shares issued on the exercise of the options will rank pari‐passu with the then existing issued ordinary shares.

• (ix) The Company will apply for Official Quotation by ASX of all shares issued upon exercise of the options within three business days after the date of allotment of those shares.

• (ix) In the event of any reorganisation (including reconstruction, consolidation, subdivision, reduction or return) of the issued capital of the Company, the options will be reorganised as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged.

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FERROWEST LIMITED PROXY FORM – 16 FEBRUARY 2011

==> picture [116 x 71] intentionally omitted <==

The Secretary Ferrowest Limited Unit 18, 28 Belmont Avenue BELMONT WA 6104

I/We (full name) ________________

of________________

being a member(s) of Ferrowest Limited, hereby appoint as my/our proxy

---

of_________________

or, failing him/her the Chairperson of the Meeting to attend and vote for me/us at the general meeting of the Company to be held at 10.00AM on Wednesday, 16 February 2011 and at an adjournment thereof in respect of ____% of my/our shares or, failing any number being specified, ALL of my/our shares in the Company.

	RESOLUTIONS	FOR	AGAINST	ABSTAIN
1	Ratification of placement of 2,300,000 shares on 1 November 2010	�	�	�
2	Ratification of placement of 10,000,000 shares on 2 December 2010	�	�	�
3	Approval for issue of shares in settlement of convertible note interest	�	�	�
4	Approval for issue of shares to directors and related parties of the	�	�	�
	Company in settlement of convertible note interest
5	Approval for issue of shares to related parties of the Company in	�	�	�
	settlement of fees accrued
6	Approval for issue of shares in settlement of fees accrued	�	�	�
7	Allotment of options to Robert Harry Duffin or his nominee	�	�	�

INSTRUCTIONS AS TO VOTING

If the Chairperson of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect to the � resolutions, please place a mark in the box.

By marking this box, you acknowledge that the Chairperson of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution and that votes cast by the Chairperson of the meeting other than as proxy holder will be disregarded because of that interest.

If you do not mark the box, and you have not directed your proxy how to vote, the Chairperson cannot cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution.

If the member is an individual or joint holder:

______ ______ Usual Signature Usual Signature Dated this day of 2011.

If the member is a Company:

Signed in accordance with the Constitution of the company in the presence of:

_______ ______ Director/Sole Director Director/Secretary Dated this day of 2011.

NOTES

1. A member entitled to attend and vote is entitled to appoint not more than two proxies.

2. Where more than one proxy is appointed and that appointment does not specify the proportion or number of the member’s votes, each proxy may exercise half of the votes.

3. A proxy need not be a member of the Company.

4. A proxy is not entitled to vote unless the instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed is either deposited at the registered office of the Company (Unit 18, 28 Belmont Avenue, BELMONT WA 6104) or sent by facsimile to that office on Fax: 08 9277 2655 to be received not less than 48 hours prior to the time of the meeting.

5. If the member is a company it must execute under its Common Seal or otherwise in accordance with its Constitution.

6. The Chairperson intends to vote all undirected proxies in favour of all resolutions.