IONIC RARE EARTHS LIMITED — Capital/Financing Update 2004

May 12, 2004

Ezenet Limited ACN 083 646 477 ABN 84 083 646 477 Unit 3 73 Troy Terrace JOLIMONT WA 6014

Telephone: +618 9388 2000 Facsimile: +618 9388 2999 Email: linton@ezenet.com.au

STOCK EXCHANGE RELEASE

For immediate release

Dated 12 May 2004

EZENET LIMITED ("Ezenet") - PURCHASE OF VIDEOJOCK TECHNOLOGY

On 3 March Ezenet announced that it had exercised its option to purchase the VideoJock product package which includes the VideoJock Equipment and the VideoJock Software from the European owner, VideoJock BV. Smoovie BV is an associated entity of VideoJock BV and holds the world rights for the Smoovie product. Ezenet holds the Australian/New Zealand distribution rights to this product. Smoovie is a newly developed, miniature remote control comparable to the VideoJock product but exclusively used in conjunction with the Philips ITV television product dedicated to the Hotel and Hospitality Industry. The product is disposable and after use to access the pay-TV section of the Hotel the remote resets itself to the free-to-guest code of the Philips TV range. The Smoovie Pay TV System won the best new Technology Product of the Year Award at the Hotelympia 2004 held in London. For information on this product refer to the Smoovie website, www.smoovie.tv. Smoovie BV has entered into a worldwide product development agreement with Philips Consumer Electronics in Holland. It is expected that Ezenet in conjunction with Smoovie BV will use Australia as the ideal base from which to support the Smoovie expansion into the Pacific rim.

The principals of VideoJock BV and Ezenet have maintained close association during the purchase procedures and the installation of the VideoJock product in Australia. In the course of this Ezenet and VideoJock BV have agreed that the A\$750,000.00 cash component of the purchase price of the VideoJock product package will be satisfied by the issue of up to four million (4,000,000) fully paid ordinary shares in Ezenet in lieu of any cash. This further Agreement enhances the relationship between the Developers of the VideoJock product and Ezenet. The variation gives the Vendors a stake in Ezenet in its development and the relationship gives Ezenet the opportunity in conjunction with the Vendors to increase the functionality of the VideoJock product to the advantage of Ezenet and conserves cash reserves.

Ezenet has commenced the roll-out of the installation of the VideoJock product throughout Australia and report further to the market as this develops.

SIMON WATSON Company Secretary