Lachlan Star Limited — Capital/Financing Update 2006

Oct 9, 2006

Toodyay Resources Ltd

ABN 88.000.759.535

Level 1 33 Ord Street West Perth, Western Australia 6005 Australia

Telephone: +61 8 9420 9300 Facsimile: +61 8 9481 2690

10 October 2006

Company Announcements Office Australian Stock Exchange Limited

By e-Lodgement

Dear Sir / Madam

Tender to Explore for Minerals at Benambra.

Toodyay Resources Ltd ("Toodyay") has submitted a tender to the Department of Primary Industries (DPI) Victoria, for the right to be the sole applicant for one block of 167.2 km2 covering the Benambra deposits and exploration acreage in northern Victoria.

The Benambra massive sulphide deposits were discovered in 1978 and comprise two orebodies. Wilga and Currawong. A mine was opened in 1992 by Denehurst limited but closed in 1998 due to poor commodity prices.

The bid for Benambra has been coordinated by Mr Peter Rolley a geologist with 25 years international experience in exploration, development and operations. He has coordinated a team of commercial and technical experts to put together a detailed work program and funding package. The work program is designed to investigate the unexplored potential of the regional tenements and extend the existing resources.

It is intended that Mr Rolley will be invited to join the board as Managing Director if the bid is successful and other board appointments are likely. Subject to shareholder approval it is proposed to issue 100m shares to Mr Rolley and his team if the bid is successful with further tranches to be issued upon certain development and production milestones being achieved.

Toodyay's bid has been supported by a joint venture proposal from Teck Cominco, the worlds largest zinc miner and an offer to assist with equity raisings from RBC Capital Markets, an international corporate and investment bank.

Tenders closed on the $5^{\text{h}}$ October 2006 and the DPI has given no guidance on the timetable for shortlisting or awarding the tender.

The company believes it has put forward a strong bid that has a good chance of success however shareholders should be aware that it is a competitive tender process and in the current market environment the project area has attracted significant interest.

Yours sincerely

Junepers

Gary Steinepreis Director