IRON BEAR RESOURCES LTD — Capital/Financing Update 2008

Aug 28, 2008

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29 August 2008

The Company Announcements Office Australian Securities Exchange Limited

Via E Lodgement

Appendix 3B – Option Exercise

Please find attached an Appendix 3B.

Yours faithfully CAPE LAMBERT IRON ORE LIMITED Timothy Turner Company Secretary

For more information please contact:

Cape Lambert Iron Ore Limited Timothy Turner

Website

+61 8 9380 9555 www.capelam.com.au

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

CAPE LAMBERT IRON ORE LIMITED

ABN

71 095 047 920

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1+Class of+securities issued or to beissued2Number of+securities issued or tobe issued (if known) or maximumnumber which may be issued3Principal terms of the+securities(eg, if options, exercise price andexpirydate;ifpartlypaid+securities, the amount outstandingand due dates for payment; if+convertiblesecurities,theconversion price and dates forconversion)	Fully paid ordinary shares
	49,180,000 Fully paid ordinary shares
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4Do the+securities rank equally in allrespects from the date of allotmentwith an existing+class of quoted+securities?If the additional securities do notrank equally, please state:the date from which they dothe extent to which they participatefor the next dividend, (in the case ofa trust, distribution) or interestpaymentthe extent to which they do not rankequally, other than in relation to thenext dividend, distribution or interestpayment5Issue price or consideration6Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	Yes
	(i) $49,860.00 (exercise of 180,000 listedoptions at 27.7 cents each)(ii) $16,023,000.00 (exercise of 49,000,000unlisted options at 32.7cents each)
	(i) Exercise of listed options (31 October 08 at27.7 cents)(ii) Exercise of unlisted options (31 October 09at 32.7 cents)

• 7 Dates of entering[+] securities into uncertificated holdings or despatch of certificates

On or about 29 August 2008

• 8 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 2 if applicable)

Number	+Class
435,562,94834,627,278	Fully Paid OrdinarySharesOptions exercisable at$0.277 each on orbefore 31 October2008

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 2

Appendix 3B New issue announcement

9Number and+class of all+securitiesnot quoted on ASX (_including_thesecurities in clause 2 if applicable)10Dividend policy (in the case of atrust, distribution policy) on theincreased capital (interests)	Nil28,000,000100,0003,300,0008,350,000	Options exercisable at$0.327 each on orbefore 31 October2009Options exercisable at$0.377 each on orbefore 31 October2010Options exercisable at$0.427 each on orbefore 22 October2008Options exercisable at$1.40 each on orBefore 30 June 2009Options exercisable at$0.50 each on orbefore 30 June2010

Part 2 - Bonus issue or pro rata issue

• 11 Is security holder approval required?

• 12 Is the issue renounceable or nonrenounceable?

• 13 Ratio in which the[+] securities will be offered

• 14 +Class of +securities to which the offer relates

• 15 +Record date to determine entitlements

• See chapter 19 for defined terms.

Appendix 3B Page 3

1/1/2003

Appendix 3B New issue announcement

16Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?17Policy for deciding entitlements inrelation to fractions18Names of countries in which theentity has+security holders who willnot be sent new issue documentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.19Closingdateforreceiptofacceptances or renunciations20Names of any underwriters21Amount of any underwriting fee orcommission22Names of any brokers to the issue23Fee or commission payable to thebroker to the issue24Amount of any handling fee payableto brokers who lodge acceptances orrenunciations on behalf of +securityholders25If the issue is contingent on +securityholders’ approval, the date of themeeting26Date entitlement and acceptance formand prospectus or Product DisclosureStatement will be sent to personsentitled27If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

Appendix 3B New issue announcement

28	Date rights trading will begin
	(if applicable)
29	Date rights trading will end (if
	applicable)

• 30 How do[+] security holders sell their entitlements in full through a broker?

• 31 How do[+] security holders sell part of their entitlements through a broker and accept for the balance?

• 32 How do +security holders dispose of their entitlements (except by sale through a broker)?

• 33 +Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities

( tick one )

• (a) ⌧[Securities described in Part 1 only ]

• (b) � All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 � If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 � If the +securities setting out the number of holders in the categories[+] securities are[+] equity securities, a distribution schedule of the additional 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• See chapter 19 for defined terms.

Appendix 3B Page 5

1/1/2003

Appendix 3B New issue announcement

37 � A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38	Numberofsecuritiesforwhich
	+quotation is sought
39	Class of+securities for which quotation
	is sought
40	Do the+securities rank equally in all
	respects from the date of allotment
	with an existing+class of quoted
	+securities?
	If the additional securities do not rank
	equally, please state:
	• the date from which they do
	• the extent to which they participate
	for the next dividend, (in the case
	of a trust, distribution) or interest
	payment
	• the extent to which they do not rank
	equally, other than in relation to the
	nextdividend,distributionor
	interest payment
41	Reason for request for quotation now
	Example: In the case of restricted securities, end of
	restriction period
	(if issued upon conversion of another
	security, clearly identify that other
	security)

Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 6

1/1/2003

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

  • The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

  • There is no reason why those[+] securities should not be granted[+] quotation.

  • An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 29 August 2008 (Director/Company secretary) Print name: Timothy Turner

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• See chapter 19 for defined terms.

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