IRON BEAR RESOURCES LTD — Capital/Financing Update 2007

Mar 29, 2007

30 March 2007

The Company Announcements Office Australian Stock Exchange Limited

Via E Lodgement

Chinese investor behind US\$192.5 million (approx AUD\$250 million) Cape Lambert Iron Ore Project purchase to take significant equity stake in Cape Lambert Iron Ore Ltd ("CFE")

• Chinese investor, Mr Ding Liguo, to purchase 40 million unlisted CFE Options ("Options")
• Acquisition follows the recent conditional agreement to purchase 70% of Cape Lambert Iron Ore Project, for approximately AUD\$250 million
• Mr Ding has confirmed his intention to convert Options to ordinary shares in the near future (providing approx AUD \$15 million to company)
• Following conversion of options Mr Ding will have approximate 13.7% stake in company

Iron ore exploration and development company Cape Lambert Iron Ore Limited (ASX: CFE, AIM: CLIO) ("Cape Lambert") has been advised by Mr Ding Liquo that he has entered into a contract to acquire 40 million Cape Lambert Options from a third party.

The purchase of these Options by Mr Ding follows the announcement earlier this week that Best Decade Holdings Limited had entered into a binding conditional agreement with Cape Lambert to acquire 70 per cent of its namesake iron ore project in Western Australia for AUD\$250 million.

The Options to be acquired are due to expire on 31 October 2010, with an exercise price of AUD 37.7 cents, however Mr Ding has formally indicated to the company that he intends to convert the Options to ordinary shares in the near future (this would generate \$15.08 million for the Company). On conversion of the Options Mr Ding will hold approximately 13.7 per cent of the issued capital in Cape Lambert and will become one of the company's top five shareholders.

In addition to the acquisition of the Options the Company has accepted a request from Best Decade Holdings Limited that the purchaser of the 70% interest in the Cape Lambert Project (as announced to ASX/AIM on 27 March 2007) will be Mr Ding Liguo the sole beneficiary and a Director of Best Decade Holdings Limited.

Cape Lambert Director Tony Sage said: "We believe that Mr Ding's acquisition of these Options and confirmation to us that he intends to convert them into a significant equity position in the company proves how highly he regards our management and technical teams, and most importantly our plans moving forward."

Yours faithfully

CAPE LAMBERT IRON ORE LTD

Tony Sage Executive Director

For more information please contact:

Cape Lambert Iron Ore Ltd

Tony Sage +61 8 9380 9555

lan Burston +61 0 413 998 784

Australian Enquiries:

Professional Public Relations - David Tasker +61 8 9388 0944/ +61 433 112 936

UK Enquiries:

Collins Stewart - Miikka Haromo +44 (0) 20 7523 8000

Conduit PR - Leesa Peters +44 (0) 20 7429 6600/ +44 (0) 781 215 9885

Website: www.capelam.com.au