IRON BEAR RESOURCES LTD — Interim / Quarterly Report 2007

Jul 30, 2007

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31 July 2007

The Company Announcements Office Australian Stock Exchange Limited

Via E Lodgement

QUARTERLY REPORT FOR PERIOD ENDING 30 JUNE 2007 AND APPENDIX 5B

Please find attached the Company’s Quarterly Report for the quarter ended 30 June 2007 together with the Appendix 5B.

Yours faithfully CAPE LAMBERT IRON ORE LIMITED

Tony Sage Executive Director

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REPORT FOR THE QUARTER ENDING 30 JUNE 2007

COMPANY HIGHLIGHTS

Corporate

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• Conditions precedent to the sale of 70% of the Cape Lambert iron ore project satisfied with the exception of Foreign Investment Review Board Approval;

• Two Board changes occurred during the quarter;

• a) Mr Ian Burston appointed Executive Chairman b) Mr Peter Landau appointed non-executive Director

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• Shareholders approved the spin out of Global Iron Limited, which will contain the Company’s rights to explore for and mine iron ore over approximately 160 tenements.

Cape Lambert Iron Ore Project

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• Golder Associates completed an initial resource estimate for the Central Target Area of 977 Mt grading 32.4% Fe at a cut-off grade of 20% Fe;

• Drilling recommenced during the quarter. At the end of the quarter, 4,425 metres of reverse circulation, and 127 metres of diamond drilling had been completed;

• Work continued on the preliminary engineering and infrastructure study, which is scheduled for completion at the end of August;

• Baseline environmental studies over the project foot print commenced during the quarter.

Portman Agreement

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• Preliminary work on the Evanston tenements commenced by Portman during the quarter, including a program of rock-chip sampling. Twenty of 43 rock-chip samples returned between 58 and 64% Fe.

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Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 2 of 14

CORPORATE

Sale of 70% Interest in Cape Lambert Iron Ore Project

During the March quarter, the Company signed a binding sale agreement to sell 70% of the Cape Lambert iron ore project (“the Project”) for US$192.5 million cash. The sale agreement was conditional on, amongst other things, shareholder approval and Cape Lambert defining a minimum Indicated Mineral Resource of 300 Mt. This resource was then required to be reviewed by an Independent Geologist. On 13 July 2007, the Company notified the ASX that the Independent Geologist had confirmed a minimum Indicated Mineral Resource of 300 Mt.

Shareholder approval, the final condition precedent required to be satisfied by Cape Lambert, was received at a General Meeting of Shareholders on 16 July 2007.

The satisfaction of the final sale agreement condition precedent is now dependent upon the Chinese Investor, Mr Ding Liguo, obtaining Foreign Investment Review Board approval.

Board Changes

On 18 May 2007, the Company announced Mr Ian Burston had been appointed Executive Chairman and Mr Peter Landau had joined the Board as a Non-executive Director. Mr Landau was re-appointed as a Director of the Company at the General Meeting of Shareholders on 16 July 2007.

Global Iron Limited

On 1 June 2007, the Company notified the market of its intention to spin out its rights to explore for and mine iron ore over approximately 160 tenements into a separate company, Global Iron Limited (“Global Iron”). Global Iron is expected to list on the ASX during August 2007, through an initial public offering of 12,500,000 shares at 20 cents per share to raise $2,500,000.

At the General Meeting of Shareholders held on 16 July 2007, the Company received Shareholder approval to proceed with the listing of Global Iron.

On successful listing, Global Iron will commence exploration on prioritised tenements and will also seek to acquire other iron ore assets in Australia and overseas.

Option to Acquire Adjacent Tenements

On 16 April 2007, the Company notified the market that it had finalised an exclusive option agreement with Mr Kim North to acquire three tenements, which are contiguous with and immediately to the east of the Cape Lambert iron ore project tenement (E47/1462) (refer Figure 1). The tenements E47/1271, E47/1233 and E47/1248 are strategically important given their proximity to the Project and the potential for the mineralisation to extend into these tenements.

Work commenced during the quarter on evaluating the prospectivity of the tenements. The Company has until 31 October 2007 to exercise the Option.

Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 3 of 14

CAPE LAMBERT IRON ORE PROJECT

Work during the quarter focused on recommencing drilling, advancing the preliminary engineering and infrastructure study and initiating baseline environmental surveys.

The Company’s objective is to define a sufficient resource base to produce 10–15 million tonne per annum of magnetite concentrate over a 20 year mine life.

Resource Estimate

During the quarter, international mining consultancy group Golder Associates Pty Ltd completed a mineral resource estimate for the Central Target Area (“CTA”)(refer Figure 2). The estimate is based on the Company’s 2006 drilling program and the earlier program of Robe River Mining Pty Ltd, totalling over 40,000 m of drilling and utilises a cut-off grade of 20% Fe. The estimate is summarised below (full resource statement appended).

Initial CTA Resource Estimate June 2007

Resource **Classification **	Million Tonnes	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	S (%)	LOI (%)
Indicated	654	32.2	39.6	1.80	0.024	0.12	5.90
Inferred	323	32.6	39.7	1.68	0.024	0.09	6.14
**Total **	977	32.4	39.6	1.76	0.024	0.11	5.98

Reverse Circulation (“RC”) Drilling

The RC drilling program (33,000 m planned for 2007) commenced in early May. This program is designed to further delineate the extent of mineralisation to the east and southeast and to the north of the CTA (refer Figure 2), building on information derived from the 2006 program. A significant amount of infill drilling is also planned to assist the geological interpretation of the structurally complex central zone of the CTA, leading to a greater level of certainty of resource estimate through that zone.

Eleven (11) holes were completed during the quarter, concentrating initially on definition and delineation of easterly and northerly extensions of the significant thickness of mineralisation encountered in holes MA209 and MA210 towards the south-eastern (inferred) boundary of the CTA during the previous program.

Total advance for the quarter was 4,425 m. A second RC rig commenced drilling in mid-July.

Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 4 of 14

Diamond Drilling

The diamond drill arrived onsite late in the quarter and commenced work towards the end of June.

The diamond program (10,000 m planned for 2007) will provide metallurgical, physical and geotechnical data as well as enhancing the stratigraphic, structural and mineralogical understanding of the resource.

Drilling began with re-entry into hole MA232, which had been terminated while still in magnetite mineralisation. By the end of the quarter, an advance of 127 m had been achieved. The early part of this aspect of the drilling program will concentrate largely on obtaining physical and metallurgical data from large-sized core.

Significant Davis Tube Recovery (“DTR”) Results

Late in the quarter, the Company received the DTR results for the first two holes in the 2007 program.

Significant DTR intercepts are summarised below.

HOLE ID	LOCATION	LOCATION		SAMPLE	SAMPLE	GRADE		DTR RESULT	DTR RESULT	DTR RESULT
	Easting (GDA94)	Northing (GDA94)	From (m)	To (m)	Interval (m)	Fe Head Grade (%)	Recoverable Mag. (Wt %)	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	S (%)
MA300	510308	7708457	268	324	56	30.3	32	63.7	8.5	0.54	0.01	0.02
			352	368	16	33.8	37	67.8	4.4	0.29	0.01	0.02

Notes:

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All holes collared vertically

Sample interval comprise 4m composites

Each 4m composite is individually tested by DTR, with all composite results averaged for the interval Sample interval is apparent, not true

DTR head samples prepared to nominally 100% passing 45 micrometers

DTR testing performed by AMDEL Limited (IML laboratory), with chemical analysis by X-ray Fluorescence Spectrometry (XRF)

Minimum reported DTR interval is 16 metres at a 9% SiO2 concentrate grade top-cut

Metallurgical Flowsheet Development and Testwork

Further refinements and improvements to preliminary process flowsheets prepared by MetChem Canada Inc. were completed.

Mineral Engineering Technical Services Pty Ltd was engaged to develop a metallurgical testwork program using diamond core. The purpose of this program is to validate the process flowsheet.

Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 5 of 14

Engineering Study

Work on the preliminary engineering and infrastructure study (“Engineering Study”) continued through the quarter. Metplant Engineering completed preliminary major equipment selection and layouts for the process plant. Connel Wagner reviewed infrastructure requirements such as; accommodation camp, water supply, power station and concentrate storage facility. Coffey Mining Pty Ltd completed a conceptual design for the tailings storage facility.

Currie and Brown Pty Ltd was engaged to provide quantity surveying and estimating services, to assist in evaluating the cost estimates for the project.

The Engineering Study is expected to be completed by the end of August.

Mining Study

Mining Solutions Consultancy Pty Ltd was engaged to undertake preliminary open pit mining studies utilising the resource estimate prepared by Golder Associates. This work is continuing.

Geotechnical and Hydrogeological Studies

Coffey Mining and Coffey Geotechnics were engaged to undertake preliminary geotechnical and hydrogeological studies.

Port Options Study

URS Australia Pty Ltd (“URS”) completed the Port Options Study late in the March quarter. During the June quarter the preferred option was identified and incorporated into the Engineering Study.

Native Title

The Company made a presentation to members of the Ngarluma Aboriginal Corporation (“NAC”) in Roebourne during the quarter. The NAC are the registered native title body corporate for the Ngarluma determination area, which covers the Project area.

Environmental Approvals

Surveys for biological baseline studies commenced during the quarter, as follows:

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• Flora and Vegetation Survey; undertaken by Mattiske Pty Ltd, with sorting and identification continuing;

• Short Range Endemic Invertebrate Survey; undertaken by Biota Environmental Sciences, with sorting and identification continuing; and

• Low Intensity Stygofauna Survey; undertaken by URS. The survey did not indicate the presence of any stygofauna. To further verify this, the boreholes will be cleansed and the survey reconducted after six months.

Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 6 of 14

Additional studies will be conducted during the coming quarter, which include a vertebrate fauna survey, soils and soils landscape survey and waste geochemical characterisation.

Second Half Work Program

Work during the second half of 2007 will focus on;

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• finalising the preliminary Engineering Study and first pass project capital and operating cost estimates;

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• continuing infill and extension RC and diamond drilling programs;

• preliminary open pit mining studies;

• commencing the metallurgical testwork program on diamond core to demonstrate the suitability of the flowsheet;

• commencing geotechnical and hydrogeological studies and continuing baseline environmental surveys.

These work programs may be amended or revised once Mr Ding settles with the Company and a joint venture is consummated.

EVANSTON AGREEMENT – PORTMAN LIMITED

Portman Limited (“Portman”) has commenced a program of work on 5 tenements located in the Evanston region. These tenements are subject to an agreement with the Company, which enables Portman to explore for and develop iron ore resources on the tenements.

Preliminary work on the tenements during the quarter included:-

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• Aerial reconnaissance by helicopter, which indicated a number of potential targets for further examination;

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• Surface reconnaissance mapping in the south eastern portion of the tenements, which recorded areas of ferruginous lateritic capping to be subject to more detailed examination; and

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• A limited program of surface rock-chip sampling comprising 43 samples of which 20 contain between 58% and 64% Fe.

Cape Lambert Iron Ore Limited Quarterly Report

31 July 2007 Page 7 of 14

Tony Sage Executive Director

The DTR information in this report is based on information complied by GV Ariti who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Ariti has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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 Ariti consents to the inclusion in this report of the matters based on his information in the form and the context in which it appears.

For more information please contact:

Cape Lambert Iron Ore Limited

Ian Burston Tony Sage

+61 (0)8 9211 0600 +61 (0)8 9380 9555

Australian Enquiries: Professional Public Relations David Tasker

+61 (0)8 9388 0944

UK Enquiries: Collins Stewart Collins Stewart Europe Limited Chris Rollason

+44 (0)20 7523 8308

Conduit PR Jos Simson Leesa Peters

+44 (0)20 7429 6603 +44 (0)20 7429 6600

Website:

www.capelam.com.au

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7750000 mN
7740000 mN
7730000 mN
EL47/1271
(Option)
7720000 mN
Wickham
EL47/1233
7710000 mN Project (Option)
Area
Karratha
Roebourne
EL47/1462
EL47/1248
7700000 mN
(Option)
7690000 mN
��������
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KARRATHA
Project
Area Figure 1
� Tenement and Project Area
KALGOORLIE Author: Date:
Drawn: Revised:
PERTH
Dwg No.: CLIO 007 Report No.:
Datum: Scale: 1 : 350 000
480000 mE 490000 mE 500000 mE 510000 mE 520000 mE 530000 mE 540000 mE
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7716000 mN
7715000 mN
Mineralised Footprint Outlined
7714000 mN From Robe Drilling
7713000 mN
7712000 mN
Extension
Areas
7711000 mN
Section
13 200 E
7710000 mN E47/1271
(Option)
7709000 mN
Central
Target
Area
7708000 mN
E47/1233
(Option)
7707000 mN
7706000 mN
E47/1462 E47/1248
7705000 mN
(Option)
1 0 1 2
Location
Map
Kilometers
KARRATHA
Project
Area Legend Figure 2
Power Line CFE 2007 Drill Hole Drill Hole Locations

KALGOORLIE Railway Line CFE 2006 Drill Hole Author: Date: June 2007
Licence Boundary Robe Drill Hole Drawn: Revised:
PERTH
Dwg No.: CLIO 015 Report No.:
Datum: GDA94 Scale: 1:50 000
506000 mE 507000 mE 508000 mE 509000 mE 510000 mE 511000 mE 512000 mE 513000 mE 514000 mE
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077641217-R01

Golder Associates Pty Ltd A.B.N. 64 006 107 857

1 Havelock Street, West Perth, WA 6005 Australia (PO Box 1914, West Perth, WA 6872 Australia) Telephone (08) 9213 7600 Fax (08) 9213 7611 http://www.golder.com

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25 June 2007

Cape Lambert Iron Ore Ltd 18 Oxford Close, Leederville WA 6007

Attention: Mr Joe Ariti

Dear Joe

RESOURCE STATEMENT FOR CAPE LAMBERT

Golder Associates Pty Ltd (Golder) has completed the Cape Lambert resource model using all available assay data as of 29 May 2007. The resource estimate was classified according to the guidelines of the Australasian Code for the Reporting of Identified Mineral Resources and Ore Reserves (JORC Code, 2004).

Classification of the resource estimate as Indicated and Inferred status was completed by Golder geologists, as described below, based on geological confidence criteria, quality and representativeness of sampling and data density.

The in situ Mineral Resource is constrained to the mineralised domain boundaries. Estimates representing extrapolations greater than 200 metres from drilling are not included in this resource statement.

ASSUMPTIONS AND METHODOLOGY

This Mineral Resource estimate is based on a number of factors and assumptions:

• All of the available historic and current drilling data was used in the geological interpretation of the resource. “Historical” data is that acquired by Robe River Iron in the 1990’s. “Current” data is that acquired by Cape Lambert Iron Ore in 2006/2007. Some of the historical data was excluded from the resource estimation.

• Stratigraphic horizons were interpreted and modelled in three dimensions to define geological domains that were used to flag the sample data for statistical analysis and grade estimation.

• The survey control for collar positions was considered adequate for the purposes of this study.

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OFFICES IN ADELAIDE, BRISBANE, CAIRNS, MAROOCHYDORE, MELBOURNE, PERTH, SYDNEY, TOWNSVILLE INDONESIA, NEW CALEDONIA, NEW ZEALAND, PEOPLE’S REPUBLIC OF CHINA, PHILIPPINES, SINGAPORE OFFICES ACROSS AFRICA, ASIA, AUSTRALASIA, EUROPE, NORTH AMERICA, SOUTH AMERICA

25 June 2007 077641217 – R01

Cape Lambert Iron Ore Ltd Attention Joe Ariti

• 2 -

• A review of the repeat assays for Head and Davis Tube Concentrate grades was completed. No discrepancies that may significantly impact on the resource were identified.

• An In situ density of 3.0 t/m[3] was assigned to the mineralised domains. This value is based on limited wire-line data and experience with similar deposits and is considered to be conservative.

• Statistical and geostatistical analysis was carried out on drilling data composited to 4 metres down hole. This included variography to model spatial continuity relationships in the geological domains.

• The Ordinary Kriging (OK) interpolation method was used for resource estimation of Head and Concentrate grades for Fe, Fe[++] , SiO2, Al2O3, TiO2, S, K2O, MgO, TiO2, P and LOI using variogram parameters defined from the geostatistical analysis. Additionally the Na2O and Davis Tube Recovery values were estimated for the concentrate only.

• Estimations for concentrate grades were weighted by Davis Tube Recovery in order to appropriately reflect the relationship between concentrate Mass Recovery and the Concentrate assays.

• Historical concentrate assays were based on single samples taken over the complete mineralised intercept(s) in a hole. For most domains these assays were not used due to the differing sample support. For the Northern lower stratigraphic horizon where no recent concentrate assays were available, historical data was used.

MINERAL RESOURCE STATEMENT

The resource estimates were classified in accordance with the guidelines of the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code, 2004). The classification was considered appropriate on the basis of geological confidence criteria, quality and representativeness of sampling and data density.

This resource has been defined using geological boundaries and a nominal cut-off grade of 20% Head Fe, Magnetic Susceptibility response and stratigraphy and includes minor internal dilution. All estimated concentrate grades were weighted by Davis Tube Recovery.

The resource is made up of a series of sub-parallel stratigraphic units gently dipping to the South East extending over 6900 metres of strike. The deposit varies in depth from sub-crop to 450 metres below surface and is up to 800 metres in width with an average unit thickness of approximately 20 metres.

The resource is based on the Ordinary Kriging interpolated block model clam_0706.bmf (Table 1 and Table 2).

Golder Associates

25 June 2007 077641217 – R01

Cape Lambert Iron Ore Ltd Attention Joe Ariti

• 3 -

Table 1: Cape Lambert in situ Mineral Resource at a nominal Head Grade cut-off of 20% Fe – Head Grades

	Domain	Domain	MTonnes	Fe	SiO2	Al2O3	P	S	LOI
Indicated	Central Lower Central Upper South Lower South Middle South Upper		285 10 266 52 41	31.65 31.87 33.05 30.99 32.28	38.92 39.89 40.03 41.17 39.84	1.71 2.08 1.76 2.23 2.03	0.023 0.033 0.024 0.025 0.026	0.11 0.09 0.11 0.15 0.16	7.67 7.74 4.52 4.41 3.95
Total			654	32.21	39.62	1.80	0.024	0.12	5.90
Inferred	Central Lower North Lower North Upper South Lower South Middle South Upper		190 16 85 23 8 0.1	33.62 32.53 31.02 32.47 27.47 33.37	39.36 38.15 40.20 40.75 42.93 39.91	1.67 1.11 1.63 1.87 2.96 2.19	0.025 0.023 0.021 0.026 0.026 -	0.08 0.03 0.11 0.11 0.24 -	4.60 10.74 9.37 3.95 5.38 2.80
Total			323	32.65	39.70	1.68	0.024	0.09	6.14
Grand Total			977	32.35	39.65	1.76	0.024	0.11	5.98
Indicated Inferred		All All	654	32.2	39.6	1.80	0.024	0.12	5.90
			323	32.6	39.7	1.68	0.024	0.09	6.14
**Total **			977	**32.4 **	39.6	1.76	0.024	0.11	5.98

	Domain	MTonnes	Fe++	K2O	MGO	TiO2	CaO
Indicated	Central Lower Central Upper South Lower South Middle South Upper	285 10 266 52 41	15.84 15.90 12.53 11.90 12.01	0.16 0.06 0.19 0.25 0.25	2.67 1.91 2.66 3.16 3.15	0.12 0.14 0.12 0.14 0.14	2.86 1.68 2.94 3.57 3.73
Total		654 13.94 0.18 2.72 0.12					2.99
Inferred	Central Lower North Lower North Upper South Lower South Middle South Upper	190 16 85 23 8 0.1	11.50 - 18.87 14.35 10.74 15.64	0.15 0.02 0.02 0.19 0.35 0.19	2.51 1.81 2.00 3.06 3.23 -	0.12 0.07 0.11 0.15 0.17 0.13	2.82 0.37 0.75 3.65 4.56 -
Total		323 13.10 0.12 2.39 0.12					2.24
Grand Total		977 13.70 0.16 2.61 0.12					2.74
Indicated Inferred	All All	654 13.94 0.18 2.72 0.12 323 13.10 0.12 2.39 0.12					2.99 2.24
**Total **		977 13.70 0.16 2.61 0.12					2.74

Golder Associates

25 June 2007 077641217 – R01

Cape Lambert Iron Ore Ltd Attention Joe Ariti

• 4 -

Table 2: Cape Lambert in situ Mineral Resource at a nominal Head Grade cut-off of 20% Fe – Davis Tube Concentrate (dtc) Grades

Class	Domain	Mtonnes	dtc_Fe	dtc_SiO2	dtc_Al2O3	dtc_P	dtc_S	dtc_LOI
Indicated	Central Lower Central Upper South Lower South Middle South Upper	285 10 266 52 41	58.50 66.10 58.45 58.80 58.75	11.60 5.98 13.35 12.05 13.47	0.59 0.34 0.64 0.61 0.66	0.01 0.01 0.01 0.01 0.01	0.09 0.01 0.12 0.12 0.23	-0.17 -1.24 -0.26 -0.91 -0.91
Total		654	58.63	12.38	0.61	0.01	0.11	-0.32
Inferred	Central Lower North Lower North Upper South Lower South Middle South Upper	190 16 85 23 8 0.1	63.24 68.28 66.15 57.43 47.17 52.65	7.25 3.65 5.40 13.72 14.21 19.24	0.40 0.12 0.38 0.67 0.68 0.85	0.01 0.03 0.01 0.01 0.01 0.01	0.04 0.12 0.02 0.10 0.10 -	-1.75 -1.97 -0.75 -0.80 0.04 -
Total		323	63.06	7.46	0.41	0.01	0.05	-1.47
Grand Total		977	59.94	10.91	0.55	0.01	0.10	-0.59
Indicated	All	654	58.63	12.38	0.61	0.01	0.11	-0.32
Inferred	All	323	63.06	7.46	0.41	0.01	0.05	-1.47
Total		977	59.94	10.91	0.55	0.01	0.10	-0.59

Class	Domain	Mtonnes	dtc_Fe++	dtc_K2O	dtc_MgO	dtc_Na2O	dtc_TiO2	dtc_CaO	Mass_Recovery
Indicated	Central Lower Central Upper South Lower South Middle South Upper	285 10 266 52 41	21.6 21.5 20.4 19.7 20.3	0.05 0.01 0.06 0.06 0.07	1.18 0.37 1.38 1.43 1.47	0.02 0.01 0.04 0.04 0.06	0.07 0.05 0.08 0.08 0.07	0.80 0.19 0.96 0.83 0.92	31.6 28.8 35.9 36.8 38.8
Total		654	20.9	0.05	1.29	0.03	0.07	0.87	34.2
Inferred	Central Lower North Lower North Upper South Lower South Middle South Upper	190 16 85 23 8 0.1	21.5 22.1 23.3 21.3 18.7 20.5	0.03 0.00 0.00 0.06 0.04 0.08	0.73 0.16 0.30 1.52 1.59 -	0.03 - 0.01 0.05 0.05 -	0.07 0.06 0.06 0.08 0.09 0.06	0.54 0.01 0.11 0.96 0.73 1.35	30.5 18.1 30.6 39.6 31.1 35.2
Total		323	21.8	0.03	0.74	0.03	0.07	0.47	30.5
Grand Total		977	21.2	0.05	1.14	0.03	0.07	0.75	33.1
Indicated	All	654	20.90	0.05	1.29	0.03	0.07	0.87	34.19
Inferred	All	323	21.78	0.03	0.74	0.03	0.07	0.47	30.53
Total		977	21.18	0.05	1.14	0.03	0.07	0.75	33.11

Golder Associates

25 June 2007 077641217 – R01

Cape Lambert Iron Ore Ltd Attention Joe Ariti - 5 -

The information in this statement of Mineral Resources is based on information compiled by Stephen Godfrey who is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient relevant experience to qualify as a Competent Person as defined in the JORC Code (2004). Stephen Godfrey consents to the inclusion of this information in the form and context in which it appears.

Yours faithfully GOLDER ASSOCIATES PTY LTD

Stephen Godfrey

Senior Resource Geologist, Ore Evaluation Services

Golder Associates

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

CAPE LAMBERT IRON ORE LTD

	ABN 71 095 047 920 Consolidated statement of cash flows		Quarter ended (“current quarter”) 30 June 2007	Quarter ended (“current quarter”) 30 June 2007
			30 June 2007
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other NetOperating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		(1,793) (794) 84 -		(5,913) (3,151) 585 313
		(2,503)		(8,166)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other – Performance Bonds 1 Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(200) (5) (60) 300 (3,851) (142)		(200) (207) (175) 473 (3,851) (142)
		(3,958)		(4,102)
		(6,461)		(12,268)

• See chapter 19 for defined terms.

Appendix 5B Page 1

30/9/2001

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(6,461)	(12,268)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other - repayment of issue proceeds - costs of share issues Net financing cash flows	1,422	1,422
	1,422	1,422
Net (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(5,039) 6,903 -	(10,846) 12,710 -
	1,864	1,864

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		158
1.25	Explanation necessaryfor an understandingof the transactions
	Executive and non executive directors salaries

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

$A’000 6,317

	$A’000
4.1 Exploration and evaluation 4.2 Development	6,317
Total

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,864	200
	-	6,703
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	1,864	6,903

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	Nil
	Nil

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs	253,439,448	253,439,448
	4,164,917	4,164,917
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	550,000 500,000 134,045,888 50,000,000 40,000,000 14,700,000 3,300,000 3,300,000	- - 134,045,888 - - - - -	Exercise price 42.7 cents 36.7 cents 27.7 cents 32.7 cents 37.7 cents 40.0 cents 90.0 cents $1.40	Expiry date 22 October 2008 9 February 2009 31 October 2008 31 October 2009 31 October 2010 31 December 2007 30 June 2008 30 June 2009
	2,064,917 2,100,000		27.7 cents 40.0 cents	31 October 2008 31 December 2007
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

==> picture [122 x 78] intentionally omitted <==

Sign here: ................................................................. (Director/Company secretary)

Date: .31 July 2007

Print name: ......Timothy Turner.............................................

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

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