IRON BEAR RESOURCES LTD — Capital/Financing Update 2012

Jul 12, 2012

ASX Announcement 13 July 2012

MARAMPA EXPLORATION TARGET INCREASED TO 1.01.2 BILLION TONNES

Key Points:

• Encouraging exploration drill results at Marampa Project including:

• MPDD107: 44m at 28.8% Fe from 114m at Mafuri,

• MPRC166: 34m at 38.0% Fe from surface, and

• MPRC144: 50m at 31.8% Fe from 16m at Makambo.

• Revised structural model of mineralisation by SRK reveals significant additional exploration upside at the Mafuri and Gafal deposits.

• Updated Exploration Target[1] for Marampa of 300–570 million tonnes at 21% - 32% Fe, for an aggregate 1.0–1.25 billion tonnes at 20% – 38% Fe including the July 2011 Mineral Resource.

• Exploration Target includes 6–14 million tonnes at 25% - 37% Fe of shallow, higher grade oxide mineralisation.

• Continued metallurgical testwork confirms that premium iron concentrates >65% Fe can be produced with a WHIMS processing circuit.

Australian resources and investment company, Cape Lambert Resources Limited ( ASX: CFE ) (“Cape Lambert” or the “Company”) is pleased to announce further positive exploration results and an increase in the Exploration Target[1] from its 100% owned Marampa Iron Ore Project located in Sierra Leone, West Africa (“Marampa Project” or “Marampa”) (Figure 1).

Background

The Marampa Project hosts a total Indicated and Inferred Mineral Resource of 680Mt at 28.2% Fe (“Marampa Resource Estimate” - refer ASX announcement dated 7 July 2011 for details). The Marampa Resource Estimate covers the Matukia, Gafal, Mafuri and Rotret deposits and is based on drilling and assaying (to maximum depth of -200mRL) completed to 30 May 2011.

Subsequent to 30 May 2011, the Company has completed additional exploration at Marampa including extension drilling at the Mafuri deposit,

1 The estimates of Exploration Target sizes should not be misunderstood as estimates of Mineral Resources. The estimates of Exploration Target sizes are conceptual in nature and there has been insufficient results received from drilling to date to estimate a Mineral Resource in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a Mineral Resource.

Cape Lambert is an Australian domiciled, mineral investment company. Its current investment portfolio is geographically diverse and consists of mineral assets and interests in mining and exploration companies.

The Company continues to focus on investment in early stage resource projects and companies, primarily in iron ore, copper and gold. Its “hands on” approach is geared to add value and position assets for development and/or sale.

The Board and management exhibit a strong track record of delivering shareholder value.

Australian Securities Exchange

Code: CFE

Ordinary shares 689,108,792

Unlisted Options 7,800,000 ($0.45 exp 30 Nov 2012)

Board of Directors

Tony Sage Executive Chairman Tim Turner Non-executive Director Brian Maher Non-executive Director Ross Levin Non-executive Director Claire Tolcon Company Secretary

Key Projects and Interests

Marampa Iron Ore Project Pinnacle Group Assets International Goldfields Limited

Cape Lambert Contact

Tony Sage Executive Chairman

Eloise von Puttkammer Investor Relations

Phone: +61 8 9380 9555 Email: info@capelam.com.au

Australian Enquiries

Professional Public Relations David Tasker Phone: +61 8 9388 0944 Mobile: +61 433 112 936 Email: david.tasker@ppr.com.au

UK Enquiries

Tavistock Communications Emily Fenton / Jos Simson Phone: +44 (0)207 920 3150 Mobile: +44 (0)7899 870 450

www.capelam.com.au

Cape Lambert Resources Limited[ABN 71 095 047 920 ]

Corporate – 32 Harrogate Street, West Leederville WA 6007 United Kingdom - 14 Golden Square, London W1F 9JG

ASX Announcement 13 July 2012

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scout drilling at the Makambo prospect, and detailed structural modelling of the four resource deposits. This structural work is to underpin the design of an optimum resource definition drilling program to increase resource confidence and define ore reserves for project development.

Drilling

Mafuri

A total of 1,438m of diamond (10 holes) and 1,168m of reverse circulation (“RC”) (9 holes) additional drilling and assaying have been completed at Mafuri, which were not included in the Marampa Resource Estimate. Drill hole locations and assay results are shown in Figure 2 and Table 1 respectively. Significant intersections of specular hematite mineralisation include:

• MPDD107: 44m at 28.8% Fe from 114m;

• MPDD113: 40m at 26.9% Fe from 94m; and

• MPDD112: 28m at 32.3% Fe from 130m.

These results confirm the continuation of hematite mineralisation to the west of Mafuri over a strike of 800m. This mineralisation remains open along strike and at depth.

Makambo

A total of 6,673m (47 RC holes) were drilled at the Makambo prospect. The results of these holes have not been included in the Marampa Resource Estimate, although results were previously used to determine an Exploration Target for the prospect. Drill hole locations and assay results are shown in Figure 3 and Table 2 respectively. Significant intersections of specular hematite mineralisation include:

• MPRC144: 50m at 31.8% Fe from 16m;

• MPRC154: 26m at 34.0% Fe from 30m;

• MPRC155: 44m at 26.8% Fe from 48m;

• MPRC166: 34m at 38.0% Fe from surface; and

• MPRC193: 48m at 25.5% Fe from 20m.

Drilling confirmed the existence of mineralised specular hematite schist at relatively shallow depths. There were also a number of intersections from surface suggesting that there may be a mineralised transported deposit over the area. None of the identified mineralisation has been closed along strike or at depth and due to the limited diamond drilling and outcrop, structural information is not yet available. Follow up exploration will include diamond drilling for structural interpretation and to collect samples for metallurgical test work.

Structural Evaluation

Late in 2011 the Company commissioned independent consulting geologists, SRK Cardiff UK (“SRK”) to complete a structural analysis and model of the specular hematite mineralisation of the Matukia, Gafal, Mafuri and Rotret resource deposits, and to recommend further exploration drilling and a program of resource definition drilling for Feasibility Study.

During the 2010-2011 drilling programs, the Company collected a significant amount of data from oriented diamond drill core. This required assessment prior to designing a full resource definition drilling program, including geotechnical drilling, to underpin definition of reserves for the proposed Stage 1 and Stage 2 open pit mine developments.

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ASX Announcement 13 July 2012

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SRK completed this work in May 2012, which resulted in the generation of a more refined structural control interpretation for the hematite mineralisation. In particular, SRK have proposed that the Mafuri-Gafal West mineralisation is hosted in a tight isoclinal synform with the axis trending eastsoutheast (refer Figure 4). Some segments of this fold have not been tested, especially the southern limb (refer Figures 4, 5 and 6). SRK have also proposed a conceptual alternative to the continuation of the southern limb at Mafuri (refer Figures 2 and 4).

Updated Exploration Target

The Company has previously reported an Exploration Target[2] of 0.7–1.0 billion tonnes which included the Marampa Resource Estimate (refer ASX announcement 6 February 2012). Based on drilling completed since mid-2011, and utilising the May 2012 SRK structural models, the Company has revised the total Exploration Target[2] to between 300–570 million tonnes at 21% - 32% Fe, for an aggregate 1.0–1.25 billion tonnes at 20% – 38% Fe when including the Marampa Resource Estimate. Details of the updated Exploration Target estimates are:

• A total Exploration Target[2] of 230–430 million tonnes at 20% – 35% Fe at the Mafuri, Gafal and Matukia deposits including 6–14 million tonnes at 25% – 37% Fe oxide mineralisation. This total includes potential fresh mineralisation above 200mRL (87%) and from 200 – 250mRL (10%); and

• A total Exploration Target[2] of 65–140 million tonnes at 19% – 38% Fe at the Makambo, Petifu and Toma prospects.

Further Exploration Work

Exploration drilling is now being planned to increase the Marampa resource inventory, in tandem with the design of a Feasibility resource definition drilling program.

Continued Metallurgical Testwork

Following on from the 2011 metallurgical testwork program, additional locked cycle testing (“LCT”) to evaluate the various ore types from each of the deposits has continued, based on the process flowsheet developed in the September 2011 Scoping Study (refer ASX Announcement dated 20 September 2011). Additional LCT’s have been completed on fresh ore composite samples from the Matukia deposit and have confirmed the ability to produce iron concentrates >65% Fe with low levels of deleterious elements, whilst maintaining iron recovery at approximately 86-88%. The results are shown in the following table.

Composite Sample	Feed Grade % Fe		Concentrate Grade	Concentrate Grade	Concentrate Grade		Mass Recovery %	Iron Recovery %
		Fe %	SiO2 %	Al2O3 %	P %	S %
Matukia Fresh - Cluster 2	33.14	66.0	2.17	0.74	0.008	0.003	43.4	86.5
Matukia Fresh - Cluster 6	33.16	66.0	2.25	0.66	0.009	0.004	44.1	87.8

2 The estimates of Exploration Target sizes should not be misunderstood as estimates of Mineral Resources. The estimates of Exploration Target sizes are conceptual in nature and there has been insufficient results received from drilling to date to estimate a Mineral Resource in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a Mineral Resource.

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ASX Announcement 13 July 2012

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Comminution variability testing of the various ore types at Marampa continues to progress, with the results confirming the parameters used for the process plant design in the September 2011 Scoping Study.

The Company’s Executive Chairman Mr Tony Sage said “I am extremely pleased that the exploration work at Marampa continues to confirm the significant potential of the Marampa Project.”

The Company has previously announced that it had commenced the process for pursuing an Initial Public Offering and listing of the Marampa iron ore project on the AIM market of the London Stock Exchange ( Marampa IPO ).

Having regard to the current uncertainty, and volatile nature of world capital markets, the Company has deferred commencing the Marampa IPO until at 2012 least September 2012 following the London Olympics and summer holidays in the northern hemisphere.

However, consistent with its business model, during this deferral period, the Company will continue to respond to interest received from third parties in respect to a possible asset level sale of Marampa.

Yours faithfully Cape Lambert Resources Limited

Tony Sage

Executive Chairman

Competent Person Statement:

The contents of this announcement relating to exploration results and Mineral Resources are based on information compiled by Dennis Kruger, a member of the Australasian Institute of Mining and Metallurgy. Mr Kruger is a consultant to Cape Lambert Resources Limited and has sufficient experience relevant to the styles of mineralisation and the deposit under consideration to qualify as a Competent Person, as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Kruger consents to the inclusion in this announcement of the matters compiled by him in the form and context in which they appear.

The contents of this announcement relating to metallurgy are based on information compiled by Mike Wort, a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Wort is a consultant to Cape Lambert Resources Limited and has sufficient experience relevant to the styles of mineralisation and the deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Wort consents to the inclusion in this announcement of the matters compiled by him in the form and context in which they appear.

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Figure 1: Project Location

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Figure 2: Geology and Drill Hole Location at Mafuri, Gafal and Rotret

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Figure 3: Geology and Drill Hole Location Makambo

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Figure 4: Mafuri Cross Section

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Figure 5: Mafuri Cross Section

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Figure 6: Gafal West Cross Section

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Table 1: Mafuri Deposit – Hematite Schist Drill Intersections.

Table 1: Mafuri Deposit – Hematite Schist Drill Intersections.
Hole Details	Intersection	Head Assay	LOI %	Oxidation State
Hole ID Easting Northing RL Dip Azimuth E.O.H UTM WGS84 Zone 28 Degrees m	From To Length m m m	Fe Al2O3 SiO2 P S % % % % %
MPDD106 766,603 959,680 70 -50 360 157.65	78 90 12 94 110 16	22.1 7.4 51.2 0.15 0.001 1.7 26.7 6.0 43.8 0.09 0.001 3.7		Fresh Fresh
MPDD107 766,601 959,549 73 -50 360 181.9	114 158 44	28.8 5.4 42.0 0.11 0.001 3.4		Fresh
MPDD108 766,602 959,773 69 -50 360 113.7	34 62 28 70 74 4	22.8 7.1 49.3 0.15 0.001 2.3 28.2 5.4 39.6 0.09 0.001 4.2		Fresh Fresh
MPDD109 766,202 959,749 84 -50 360 117.1	0 16 16	23.9 11.7 47.4 0.02 0.020 5.0		Oxide
MPDD110 766,202 959,649 79 -51 360 116	44 52 8	21.7 6.9 51.1 0.13 0.001 2.5		Fresh
MPDD111 766,601 959,449 72 -51 360 167.6	134 152 18	31.5 4.3 38.8 0.11 0.001 3.6		Fresh
MPDD112 766,801 959,499 69 -51 360 169.6	106 120 14 130 158 28	22.5 6.8 50.4 0.13 0.001 2.1 32.3 4.3 38.1 0.12 0.001 3.4		Fresh Fresh
MPDD113 766,902 959,347 68 -51 360 146	76 84 8 94 134 40	25.8 5.5 45.1 0.17 0.002 3.3 26.9 5.7 45.7 0.16 0.001 2.4		Fresh Fresh
MPDD114 766,803 959,398 71 -50 360 115.5	70 76 6 80 90 10	21.2 7.4 52.2 0.16 0.001 2.1 23.4 6.7 41.9 0.10 0.001 4.1		Fresh Fresh
MPRC160 766,386 959,704 73 -55 360 126	74 78 4 86 92 6	22.6 6.6 50.4 0.15 0.004 1.8 22.7 6.4 42.8 0.08 0.001 4.3		Fresh Fresh
MPRC170 766,402 959,599 76 -55 360 137	96 104 8 108 118 10	20.1 7.5 54.1 0.16 0.003 1.6 29.0 4.9 39.9 0.10 0.001 4.0		Fresh Fresh
MPRC173 766,401 959,498 78 -56 360 149	110 114 4 116 124 8	19.8 7.3 54.0 0.14 0.009 2.1 29.7 3.9 41.7 0.09 0.006 3.3		Fresh Fresh
MPRC177 766,403 959,798 77 -55 360 102	40 46 6 54 62 8	25.5 6.4 47.9 0.17 0.003 1.7 26.0 6.5 42.8 0.08 0.001 3.3		Fresh Fresh
MPRC181 766,067 959,586 73 -55 360 102	8 18 10 30 34 4	28.2 7.0 48.2 0.03 0.004 2.1 20.4 7.6 50.9 0.08 0.001 3.0		Oxide Fresh
MPRC183 766,068 959,501 70 -55 360 108	20 28 8 40 44 4	19.7 7.8 54.4 0.14 0.001 1.8 20.2 7.6 50.3 0.07 0.001 4.0		Fresh Fresh
MPRC186 766,401 959,398 78 -53 360 174	108 114 6 126 134 8	29.9 5.6 44.3 0.09 0.005 1.2 27.9 5.2 45.8 0.06 0.002 2.4		Fresh Fresh
MPRC191 766,603 959,349 72 -54 360 168	116 122 6	24.5 6.3 50.0 0.09 0.004 1.4		Fresh Fresh
	128 148 20	29.7 4.6 43.5 0.07 0.003 2.2

Notes: Lower cut-off 15% Fe, minimum intersection 4m, maximum 5m internal waste. Hole collars surveyed by DGPS. Sample intervals are 2m composites except some diamond holes where selected sample lengths were varied to fit lithological boundaries. Intersections are down hole lengths, not true widths. Chemical analysis by X-ray Flourescence Spectrometry (XRF) by Ultra Trace Limited at Canning Vale Laboratory, Perth Australia.

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Table 2: Makambo Prospect – Hematite Schist Drill Intersections.

Hole Details	Intersection	Head Assay	LOI %	Oxidation State
Hole ID Easting Northing RL Dip Azimuth E.O.H UTM WGS84 Zone 28 Degrees m	From To Length m m m	Fe Al2O3 SiO2 P S % % % % %
MPRC143 771,000 971,601 94 -55 270 77	2 12 10 24 30 6	20.3 11.2 52.7 0.02 0.010 3.5 19.7 12.1 48.8 0.05 0.005 4.6		Oxide Fresh
MPRC144 770,601 972,901 97 -50 360 150	16 66 50	31.8 5.7 42.8 0.12 0.002 2.2		Transitional
MPRC146 771,435 971,801 84 -50 270 150	0 4 4 14 26 12	30.2 11.6 35.9 0.05 0.069 7.3 25.5 8.8 49.2 0.04 0.002 2.6		Oxide Fresh
MPRC148 771,100 971,595 91 -50 270 150	0 4 4	36.3 11.8 27.4 0.02 0.040 6.8		Oxide
MPRC149 771,199 971,598 84 -50 270 150	0 6 6 58 70 12	20.6 13.4 48.3 0.05 0.037 6.1 24.9 7.1 50.0 0.23 0.003 1.4		Oxide Fresh
MPRC150 771,049 971,797 99 -51 270 150	0 8 8 74 82 8	32.4 8.5 39.1 0.02 0.009 3.7 22.0 6.5 48.3 0.08 0.003 3.8		Oxide Fresh
MPRC151 771,161 971,804 88 -49 270 150	0 6 6 38 52 14 56 70 14	29.3 13.3 35.2 0.04 0.052 7.8 24.6 10.2 44.4 0.07 0.007 4.3 32.6 5.1 39.5 0.09 0.013 2.3		Oxide Fresh Fresh
MPRC152 771,247 971,797 81 -50 270 150	0 4 4	23.4 9.6 48.5 0.05 0.056 6.2		Oxide
MPRC153 770,600 972,800 70 -53 0 150	20 26 6 32 48 16 76 82 6 98 118 20 122 148 26	19.7 11.2 53.9 0.03 0.003 3.2 19.5 10.9 54.8 0.03 0.003 3.2 37.8 4.5 36.7 0.12 0.002 0.9 26.5 6.1 44.2 0.11 0.003 3.2 26.0 6.2 45.6 0.14 0.002 2.6		Fresh Fresh Fresh Fresh Fresh
MPRC154 770,398 973,057 73 -51 0 150	0 4 4 10 20 10 30 56 26 124 150 26	37.8 8.7 30.1 0.03 0.026 5.5 33.8 6.5 40.7 0.02 0.002 1.9 34.0 6.0 39.2 0.05 0.002 2.0 29.1 7.1 44.1 0.03 0.014 1.2		Oxide Oxide Fresh Fresh
MPRC155 770,395 972,953 75 -51 0 150	24 36 12 48 92 44	23.1 9.8 51.5 0.02 0.002 2.8 26.8 6.6 45.7 0.07 0.003 2.7		Fresh Fresh
MPRC156 770,203 973,099 70 -51 0 132	0 8 8	32.4 8.1 39.1 0.02 0.017 3.6		Oxide
MPRC157 770,209 973,029 67 -51 0 150	0 8 8 20 26 6	19.3 14.1 49.5 0.02 0.022 5.7 37.8 5.6 34.7 0.03 0.002 2.2		Oxide Fresh
MPRC158 770,393 972,859 72 -50 0 150	68 92 24	26.3 6.3 44.4 0.08 0.004 2.6		Fresh

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Hole Details	Intersection	Head Assay	LOI %	Oxidation State
Hole ID Easting Northing RL Dip Azimuth E.O.H UTM WGS84 Zone 28 Degrees m	From To Length m m m	Fe Al2O3 SiO2 P S % % % % %
MPRC159 770,192 972,901 81 -52 0 150	96 112 16	25.4 6.4 47.3 0.22 0.012 1.9		Fresh
MPRC161 770,789 972,856 91 -50 360 150	56 88 32 98 104 6	25.6 6.0 46.5 0.13 0.002 1.9 17.3 8.6 54.7 0.29 0.011 1.6		Fresh Fresh
MPRC164 770,399 972,745 93 -51 0 150	122 150 28	25.7 6.3 46.6 0.10 0.002 2.6		Fresh
MPRC165 770,199 972,798 85 -51 0 150	146 150 4	18.9 7.7 51.9 0.06 0.010 2.8		Fresh
MPRC166 770,405 973,344 86 -52 0 150	0 34 34	38.0 5.2 36.2 0.03 0.003 1.9		Transitional
MPRC168 770,404 973,147 93 -52 0 150	0 4 4	24.7 19.1 33.5 0.06 0.056 10.5		Oxide
MPRC171 770,604 973,201 95 -51 0 102	0 8 8	16.6 19.4 45.4 0.04 0.030 9.0		Oxide
MPRC174 769,800 973,275 70 -51 0 106	0 22 22	19.8 8.5 57.0 0.07 0.009 2.9		Oxide
MPRC175 769,800 973,400 70 -51 0 102	0 4 4 12 18 6 32 40 8	22.9 16.1 40.1 0.04 0.045 8.8 36.4 5.7 38.5 0.03 0.008 2.0 18.6 10.9 55.8 0.09 0.005 2.8		Oxide Oxide Oxide
MPRC176 769,599 973,311 60 -51 0 140	62 72 10	25.0 5.9 47.4 0.12 0.001 3.4		Fresh
MPRC179 769,000 973,660 70 -50 0 150	136 142 6	28.7 4.0 47.8 0.15 0.001 1.7		Fresh
MPRC182 769,000 973,550 70 -51 0 150	70 82 12 90 116 26	23.7 8.3 52.1 0.07 0.002 2.2 23.4 7.2 51.7 0.06 0.001 2.5		Fresh Fresh
MPRC185 769,200 973,630 70 -51 0 150	42 46 4	26.5 6.1 44.3 0.17 0.003 2.6		Fresh
MPRC187 769,200 973,530 70 -50 0 150	100 104 4	21.3 6.8 48.7 0.11 0.003 2.9		Fresh
MPRC188 769,400 973,610 70 -50 0 136	0 12 12	22.1 16.1 42.8 0.04 0.028 6.2		Oxide
MPRC192 770,550 971,795 71 -50 270 144	0 10 10	34.1 10.0 31.2 0.03 0.023 5.6		Oxide
MPRC193 770,650 971,798 69 -50 270 150	0 12 12 20 68 48	24.5 11.2 45.5 0.03 0.043 5.6 25.5 6.7 43.8 0.07 0.002 3.7		Oxide Transitional
MPRC196 770,541 971,968 60 -51 270 150	0 16 16	26.0 10.9 44.4 0.02 0.030 5.0		Oxide
MPRC197 770,574 972,225 55 -51 270 150	2 8 6	15.4 27.1 32.4 0.08 0.050 15.0		Oxide

Notes: Lower cut-off 15% Fe, minimum intersection 4m, maximum 5m internal waste. Hole collars surveyed by DGPS. Sample intervals are 2m composites except some diamond holes where selected sample lengths were varied to fit lithological boundaries. Intersections are down hole lengths, not true widths. Chemical analysis by X-ray Flourescence Spectrometry (XRF) by Ultra Trace Limited at Canning Vale Laboratory, Perth Australia.

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