Lachlan Star Limited — Capital/Financing Update 2007

Aug 8, 2007

Toodyay Resources Limited

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

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

9 August 2007

Company Announcements Office ASX Limited

By e-Lodgement

Dear Sir / Madam

TOODYAY TO ACQUIRE HIGHLY PROSPECTIVE COPPER PROJECT AND APPOINT EXPERIENCED MANAGEMENT TEAM

HIGHLIGHTS

• Toodyay Resources Limited (Toodyay or the Company) has reached agreement to acquire 100% of the issued capital of Ord Investments Pty Ltd (Ord), a copper exploration company, subject to certain conditions being satisfied and shareholder approval.

• Ord has entered into an agreement to acquire, from Straits Resources Limited (Straits), an advanced copper exploration project called Bushranger, which is contained within the 75km[2] EL5574, 25km south of Oberon, New South Wales.

• Previous exploration has identified a JORC compliant Indicated and Inferred Resource containing 124,000 tonnes of copper at a grade of 0.45% Cu at the Racecourse Prospect.

• Bushranger lies within the highly prospective Ordovician Volcanics of the Lachlan Fold Belt which host the North Parkes and Cadia porphyry copper deposits. Recent exploration has defined the Racecourse mineralised zone where reverse circulation and diamond drilling has intersected significant copper mineralisation. Potential is considered excellent for the discovery of copper or copper-gold mineralisation within the Racecourse and also Footrot and Daisy Banks prospects.

• Toodyay proposes to extend the geophysical coverage that has successfully identified the mineralisation to date and commence drilling along open strike extents of the Racecourse copper resource.

• The proposed management team has extensive experience in the exploration, financing and development of mineral assets and were responsible for the development, commissioning and operation of the Tritton copper mine in NSW.

• The consideration payable for the acquisition of Ord and Bushranger is the issue and allotment of 359,475,352 ordinary shares in Toodyay.

• As part of the transaction, Toodyay has agreed, subject to the completion of the acquisition of Ord, to raise $1.25 million by the issue of 50,000,000 shares at 2.5 cents each to clients of Euroz Securities Limited and Stripe Capital and to Straits. The proceeds, together with part of the Company’s existing funds, will be used to fund the further development of Bushranger.

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SUMMARY OF TRANSACTION

Toodyay has the right to acquire Ord. Ord has the right to acquire, from Straits, an advanced copper exploration project called Bushranger, which is contained within the 75km[2] EL5574, located 25km south of the town of Oberon, New South Wales.

Bushranger lies within the highly prospective Ordovician Volcanics of the Lachlan Fold Belt which host the North Parkes, Lake Cowal, Cadia and Ridgeway porphyry copper and gold deposits. A JORC compliant Indicated and Inferred Resource has been defined at the Racecourse Prospect containing 124,000 tonnes of copper at a grade of 0.45% copper.

The consideration for the acquisition of Ord and Bushranger, subject to shareholder approval, is the issue of 359,475,352 fully paid ordinary shares in the capital of Toodyay.

The acquisition is subject to a number of conditions precedent, including completion of the acquisition of Bushranger by Ord and shareholder approval. Toodyay has agreed, subject to completion of the acquisition of Ord, to raise $1,250,000 by the issue of 50,000,000 fully paid ordinary shares at an issue price of 2.5 cents each to clients of Euroz Securities Limited and Stripe Capital and to Straits. This placement will be used to fund the proposed exploration programme and working capital.

SUMMARY OF PROPOSED MANAGEMENT TEAM

The proposed management team has extensive experience in the exploration, financing and development of mineral assets and were responsible for the development, commissioning and operation of the Tritton copper mine in New South Wales.

The two proposed Executive Directors are Mick McMullen and Declan Franzmann.

Mr McMullen is a geologist with over 15 years experience in the minerals industry and was a founding shareholder and Executive Technical Director of Tritton Resources Limited. He has extensive knowledge of the requirements for mine development in New South Wales having been responsible for the development of the most recent base metal mine in that State. For the last 18 months, Mr McMullen has been the Manager of Audits for RSG Global, a significant minerals consulting business. During that time he has been responsible for the due diligence of numerous assets for financing institutions and as part of M+A activities. Mr McMullen has a detailed knowledge of the debt and equity capital markets.

Declan Franzmann is a mining engineer with more than 15 years experience in operational mine management and engineering roles in Australia. His previous experience includes roles as the Manager of Mining at both the CSA and Tritton copper mines in New South Wales. Mr Franzmann operates a consulting company providing mine engineering and geology services to a variety of companies and is a Non Executive Director of Every Day Mine Services, a listed mine service company based in Cobar.

The proposed non Executive Directors are Hamish Bohannan and Tom Duckworth.

Mr Bohannan is a mining engineer with over 30 years experience in the minerals industry. His former roles include:

• Managing Director of Gallery Gold;

• Executive General Manager of Operations for Iluka;

• General Manager for both the Leinster and Kambalda Nickel Operations of WMC; and

• Executive General Manager of Operations for Mt Lyell.

Mr Bohannan is currently Managing Director of Braemore Resources, an AIM listed company with nickel and platinum assets, and a Non Executive Director of Tectonic Resources. He has detailed knowledge of the requirements for developing and operating a mine, as well as extensive understanding of the debt and equity markets.

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Mr Duckworth is a metallurgist with over 47 years experience. His previous roles include:

• Responsibility for all process aspects of the Tritton mine development and ongoing refinementsto that process plant;

• Responsibility for Engineering, Process Design and Commissioning of Hellyer Base Metalprocess plant in Tasmania;

• Founding director of Signet Engineering;

• Responsibility for the Process Design for the Cannington base metal process plant; and

• Chief Metallurgist for BP Seltrust, including responsibility for the Teutonic Bore process plant.

The proposed CFO/Company Secretary is Bob Anderson. Mr Anderson has 20 years experience as an accountant and was previously CFO/Company Secretary at Tritton Resources Limited, responsible for the day to day finances of the company during the construction and operation phases of the Tritton mine. He has extensive knowledge of the requirements of the ASX and the Corporations Act.

DESCRIPTION OF BUSHRANGER PROJECT

The Bushranger Project lies within the highly prospective Ordovician Volcanics of the Lachlan Fold Belt in the Rockley-Gulgong magmatic arc. The project area hosts a variety of magmatic intrusive centres with shoshonitic monzonites and monzodiorites intruding their surrounding volcaniclastics and volcanic packages. These Ordovician volcanics host the North Parkes, Lake Cowal, Cadia and Ridgeway porphyry copper and gold deposits, and this style of deposit is the exploration target at Bushranger.

Previous exploration has identified several porphyry’s with copper, gold and silver mineralisation over a strike length of 5km as shown in the figure below.

Significant historical intersections to date include:

• RCJ2 - 65m @ 0.60% copper • BRC013 - 52m @ 0.72% copper • BRC025 - 49m @ 0.70% copper • BRC016 - 30m @ 0.65% copper • BRC014 - 2m @ 8.07g/t gold

The most advanced of these is the Racecourse Prospect, where a JORC compliant resource has been estimated as shown in the table below:

Cut Off(%Cu)	Category	Tonnes(Mt)	Copper Grade(%)	Contained Copper(t)	Silver Grade(g/t)	Contained Silver(oz)
0.3	Indicated Inferred	14.1 13.6	0.47 0.43	66,091 58,308	2.1 1.6	949,402 697,531
	Total	27.6	0.45	124,399	1.9	1,646,933

Grade estimation was completed using ordinary kriging for copper and silver, and inverse distance squared for gold. A block size of 20m x 50m x 20m was used in the block model which is considered appropriate given the drill spacing.

The Racecourse Prospect covers a significant copper (and minor gold) mineralised zone of 1000 metres strike length. The tabular mineralised zone varies from 30 to 130m in width and has been intersected to a depth of 350m.

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Mineralisation occurs as fine grained disseminations, fracture coatings, veinlets and stinger veins of pyrite and chalcopyrite within and adjacent to the margins of the monzonite. Potential exists for porphyry style subvolcanic intrusive copper-gold and pyrite systems as at Mt Lyell as well as for massive sulphides with copper, lead and zinc. There is additional potential for structurally hosted gold-arsenic mineralisation associated with faulted lithologic contacts south east of the Racecourse Prospect.

Bushranger has been covered by geophysics in the form of airborne magnetics and radiometrics, ground Induced Polarisation (IP) and Electromagnetics (EM). This has successfully located the Racecourse Prospect and several others including the Footrot and White Springs Prospects. The IP coverage has been limited to a trial area immediately over the Racecourse Prospect, but this appears to have been particularly successful in delineating the copper mineralisation as shown in the figure below. The IP anomaly is open to the north, and one drillhole 100m north of the IP coverage appears to confirm the continuation of the copper mineralisation.

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==> picture [492 x 342] intentionally omitted <==

The Bushranger Project is predominately on cleared farmland used for grazing. Access is good with numerous unsealed major and minor roads and tracks. Land is mostly freehold and only minor areas of crown land exist within the Project. No Native Title claim exists over the area. The Project is well serviced by existing infrastructure. The sealed Oberon to Goulburn road passes through the project area, as does a major power transmission line. The Oberon dam lies 5km to the north of the tenement boundary.

The Project area has a history of mining at the nearby Burraga Copper mine 10km southwest and more recently at the Lucky Draw Gold Mine 10km west of the tenement. The Lucky Draw Gold Mine was reported to have Reserves of 1.5Mt grading 3.5g/t Au and produced in the order of 200,000 ounces of gold between 1988 and 1991.

The Company intends to commence exploration on the Bushranger Project as soon as possible after completion of the acquisition of Ord. The initial intention is to extend the IP survey to the remainder of the postulated strike length of the copper mineralisation and to drill the strike extents when identified.

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EFFECT ON CAPITAL STRUCTURE

The capital structure on completion of the placement and transaction will be as follows:

Capital Structure Shares Existing Shareholders Acquisition Placement Total Options Existing on issue	Number 359,475,352 359,475,352 50,000,000 768,950,704 20,000,000 1c options expiring on 31 December 2008

BALANCE SHEET

The following is a balance sheet of the Company as at 31 July 2007, together with a proforma balance sheet on the basis that the placement is completed:

Current Assets Cash assets 1 Trade and other receivables TOTAL CURRENT ASSETS Non Current Assets Investment in Ord and Bushranger project TOTAL NON CURRENT ASSETS TOTAL ASSETS Current Liabilities Trade and other payables TOTAL CURRENT LIABILITIES NET ASSETS EQUITY Issued capital 2 Reserve – option premium Accumulated losses TOTAL EQUITY	As at 31 July 2007 $ Proforma after capital raising and completion of the transaction $ 1,188,000 2,363,000 45,000 45,000
	1,233,000 2,408,000
	- 7,189,507
	- 7,189,507
	1,233,000 9,597,507
	18,000 18,000
	18,000 18,000
	1,215,000 9,579,507
	129,320,833 137,685,340 667 667 (128,106,500) (128,106,500)
	1,215,000 9,579,507

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Note

1. The movement in the cash assets is reconciled as follows:

Cash assets: Opening balance Placement of Shares at 2.5 cents Costs of the transaction/transaction Closing balance 2. The movement in the issued capital is reconciled as follows: Issued capital: Opening balance Placement of Shares at 2.5 cents Issue to acquire Ord and Bushranger project at a deemed issue price of 2 cents Costs of the placement/transaction Closing balance	$ 1,188,000 1,250,000 (75,000) 2,363,000
	$ 129,320,833 1,250,000 7,189,507 (75,000)
	137,685,340

PROPOSED TIMETABLE

A general indicative timetable of events and activities is set out below:

Despatch Notice of Meeting Hold Shareholder Meeting to approve the Acquisition and Placement Complete Placement

August 2007 September 2007 September 2007

Contact details:

Gary Steinepreis Director Ph: +61 8 9420 9300

Mick McMullen Proposed Director Ph: + 61 (0) 429350003

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mick McMullen, who is a Member of The Australasian Institute of Mining and Metallurgy. Mick McMullen is employed by McMullen Geological Services Pty Ltd. Mick McMullen 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’. Mick McMullen consents to the inclusion of the matters based on his information in the form and context in which it appears.

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