BIDDER'S STATEMENT AND OFFER

Lake Resources N.L. By: ABN 49 079 471 980

To Purchase All Of Your Shares In: DiamonEx Limited ABN 26091951978

This Bidder's Statement and Offer is dated 24 December, 2003 and lodged with the Australian Securities and Investments Commission pursuant to section 633(1) of the Corporations Act. The Australian securities and Investments Commission takes no responsibility for the content of this Bidder's Statement and Offer Document.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to how to act, you should consult your financial or legal adviser immediately

To accept this Offer:

Please complete the enclosed acceptance form and return it as soon as possible in the reply paid envelope provided.

1. OVERVIEW OF THE OFFER
$2.$ PROFILE OF LAKE RESOURCES N.L.
STATEMENT OF INTENTIONS $3.$
$4.$ INFORMATION ABOUT TARGET SECURITIES
SOURCES OF CONSIDERATION 5.
1. TAXATION CONSIDERATIONS

Lake Resources N.L. A B N 49 079 471 980

BIDDERS STATEMENT AND OFFER FOR ALL SHARES IN DiamonEx Limited ABN 26 091 951 978

1. OVERVIEW OF THE OFFER

$1.1$ DESCRIPTION OF OFFER

Full details of the Offer are contained in the attached document marked "Schedule – Offer". Following are brief details:

	Lake Resources N.L. ABN 49 079 471 980 (in this document referred to as $"Take"$ )
TO AQUIRE	All of Your Shares For the consideration of one share in Lake for every one share you hold in DiamonEx Limited
TARGET	DiamonEx Limited ABN 26 091 951 978 (in this document referred to as "the Company")

Lake is a company registered in Brisbane, Australia. Lake operates in Sweden, Pakistan and Argentina from its head office in Brisbane.

Lake offers to acquire all of Your Shares in the Company for the consideration of one share in Lake for every one share you hold in the Company. The Company, if successfully acquired, will become a wholly owned subsidiary of Lake, operating independently of Lake, and have available the management and executive resources of its parent company and the Brisbane office as necessary.

$1.2$ LETTER FROM THE CHAIRMAN

Dear DiamonEx Limited shareholders:

I am pleased to enclose Lake's Offer to acquire all of Your Shares in the Company for one share in Lake for every one share you hold in the Company. Lake shares are listed on the Australian Stock Exchange Limited and its price quoted daily.

The assets of Lake include;

EXPLORATION ASSETS

Exploration areas in Sweden
Exploration areas in Pakistan adioining those of Tethyan Copper Company $\bullet$ Limited, a recent successful listing on the Australian Stock Exchange Limited
A regional geological study of extensive areas of Argentina
Cash of \$684,000 at 30 September, 2003.

"SEED CAPITAL" ASSETS

One million shares in Mincor Resources N.L.
Two million shares in DiamonEx Limited
296,736 shares in Tethyan Copper Company Limited $\bullet$
Entitlement of 6,150,000 shares in Kanowna Consolidated Gold Mines Ltd $\bullet$

Beside the shares in Lake that your will receive, our Offer ensures that funds will be available to the Company to maintain its exploration holdings in Botswana initially through loan funds from Lake. The Annual Report 2003 of the Company shows that the Company has not met its expenditure commitments to the Republic of Botswana. Your investment in the Company may be at risk.

The Lake Offer does not include your options in the Company so you will retain part of the upside potential of the Company if it is successful.

Directors of Lake and their associates plan to accept the Offer for the shares they hold in DiamonEx Limited unless a higher offer is received. This includes Mr P Gilchrist who is a director of Lake and the Company.

More detailed explanations of how these plans will benefit you are set out in the following Offer to acquire Your Shares.

I urge you to accept our Offer.

Sincerely yours.

K.J.Foots. Chairman. Lake Resources N.L.

$1.3$ TERMS AND CONDITIONS OF THE OFFER

The terms and conditions of the Offer are set out in the attached document marked "Schedule – Offer". You should read the terms and conditions of the Offer carefully. They include, but are not limited to, the following matters:

A. The period which the Offer remains open for acceptance;
The consideration offered: $\mathbf{B}$ .
$\mathbf{C}$ . The manner in which you may accept the Offer:
D. The circumstances in which Lake may withdraw the Offer:
E. Conditions which, if not satisfied, Lake is not required to complete the acquisition of Your Shares;
$F_{\rm L}$ The right of Lake to waive those conditions:
$G₁$ The time and manner of payment of the purchase consideration:
H. The circumstances in which you may withdraw your acceptance of the Offer.

In accordance with Section 617(2) of the Corporations Act, this Offer extends to securities that come to be in the bid class (that is the ordinary shares) after the Offer Date and before the end of the Offer Period as a result of the conversion of. or exercise of rights attached to other securities.

Some of the terms used in this Bidders Statement and the Offer are defined in clause 11 of the Offer.

HOW MUCH YOU WILL RECEIVE FROM OUR OFFER $1.4$

Under our Offer, you will receive one share in Lake for every one of Your Shares in the Company.

Our Offer is subject to certain conditions which are detailed in clause 8 of the Offer.

These conditions are intended to protect the position of Lake if there are any unexpected adverse changes in the business and the financial position of the Company before the Closing Date. Based upon the information which is available to Lake, we are confident that the conditions will be met. Lake may withdraw the Offer if any of the conditions are not met. Alternatively, Lake may decide to waive its right to withdraw the Offer.

You will receive your shares in Lake within the time provided in clause 9.1 of the Offer, but in any event the payment date will not be later than 21 days after the Closing Date.

$1.5$ WHY YOU SHOULD ACCEPT OUR OFFER

First, our Offer of one share in Lake for each share you hold in the Company represents a very significant premium over the last sale price of shares by the Company which is shown in the Annual Report 2003 of the Company as ten cents per share.

Secondly, you will retain some upside potential in the Company as this Offer does not include purchase of any options you hold in the Company.

Thirdly, shares in Lake are listed on The Australian Stock Exchange Limited and thus more saleable than shares in the Company. The Company has not been listed on The Australian Stock Exchange Limited despite the recent surge in fund raising by small explorers both in Australia and overseas. Liquidity in Lake shares should increase as Lake expands the number of shares on issue through this Offer.

Finally, acceptance of this Offer will ensure funds are immediately available to the Company to satisfy its commitments in Botswana and secure the assets of the Company. The Annual Report 2003 of the Company shows commitments of \$965,000 for the year 2002/2003 and an exploration expenditure of only \$324,344 in that year. The Company is therefore not meeting its exploration commitments presumably placing the assets of the Company at risk. The Annual Report 2003 also reports a commitment of \$2,000,000 for 2003/2004 but a cash balance of only \$126,975 at 30 June, 2003 and no comment on any subsequent fund raising to $1^st$ September, 2003 in the Directors' Report.

HOW TO ACCEPT OUR OFFER $1.6$

You can accept the Offer by completing the enclosed Form of acceptance and Transfer and return it in the enclosed pre-paid envelope. Subject to extensions made pursuant to the Corporations Act, the Offer closes at 5:00 pm Brisbane time on 6 February, 2004. All acceptances of offers must reach Brisbane before that date.

PROFILE OF LAKE RESOURCES N.L. $2.$

Lake is a company registered in Australia. It has operated in Australia since 1997 and was admitted to the official list of The Australian Stock Exchange Limited on 29 August, 2001. Its offices are at Level 2, 183 North Quay, Brisbane. The substantial shareholder in Lake is Billiton Development Far East B.V., a subsidiary of BHPBilliton Limited holding 12.27% of the ordinary shares in Lake.

Full details of Lake including Annual Reports, Quarterly Exploration Reports and Quarterly Cash Reports are available on Lake's website at www.lakeresources.com.au for your examination or are available from the office of Lake.

STATEMENT OF INTENTIONS $3.$

This section sets out the intention of Lake based on the facts and information concerning the Company, its business and general business environment, which are known to Lake from the Annual Report 2003 of the Company at the time of preparing the Bidder's Statement. The statements set out in this section are statements of current intentions only, and these may vary as new information becomes available or circumstances change.

$3.1$ INTENTIONS TO ADDRESS PRESENT ISSUES FACING THE COMPANY

Based on the Annual Report 2003, it is clear that the Company faces a number of problems deriving from the limited resources presently available to it, which Lake intends to address upon successful acquisition, as detailed below:

$3.2$ RECAPITALISATION

Lake intends to recapitalise the Company so it can meet its expenditure commitments in Botswana to the Republic of Botswana. In the first instance Lake intends to lend funds to the Company so that exploration can be continued. It then intends to underwrite a rights issue by the Company to fully fund the exploration commitments for 2003/2004.

$3.3$ INTENTIONS IN RESPECT OF EXECUTIVE DIRECTORS

Lake intends to remove the Executive Directors of the Company from the board and restructure the board of the Company to provide a set of skills appropriate to development of a diamond mining company.

INTENTIONS IN RESPECT OF LOCATION 3.4

The operations of the Company will be moved to Botswana.

3.5 INTENTIONS IN RESPECT OF LISTING

It is Lake's intention to seek a dual compliance listing of Lake on the Botswana Stock Exchange. Lake will also investigate the possibility of a separate listing of the Company on the Botswana Stock Exchange.

INTENTIONS IN RESPECT OF COMPULSORY ACQUSITION 3.6

In the event that Lake is successful in aquiring 90% or more of the Company Shares, Lake intends to proceed with the compulsory acquisition of the outstanding Company Shares in accordance with the provisions of the Corporations Act.

$3.7$ INTENTIONS IN RESPECT OF BUSINESS AND ASSETS

Other than as set out above, it is the intention of Lake :

$\mathbf{A}$ . to continue the present business of the Company:
$\mathbf{B}$ . to continue the current name of the Company:
not to make any maior changes to the business of the Company and not to $C_{\cdot}$ redeploy any of the fixed assets of the Company.

4. INFORMATION ABOUT TARGET SECURITIES

$4.1$ SHARE STRUCTURE

At the date of this Bidder's Statement, Lake understands from the Annual Report 2003 that there are 24,625,000 ordinary shares in the Company on issue plus 19,317,500 options exercisable at \$0.20 per share up till 30 June, 2006.

$4.2$ VOTING POWER OF LAKE

Lake currently owns two million shares in the Company.

$4.3$ INTERESTS IN TARGET SECURITIES

Neither Lake nor any associates of Lake has during the four months before the date of this Bidder's Statement, or at any other time:

$\mathbf{A}$ . provided, or agreed to provide, consideration for shares in the Company except pursuant to this document; or
$\mathbf{B}$ . given or offered or agreed to give any benefit to another person which was likely to induce the other person or an associate to accept an offer under this bid or to dispose of shares in the Company.

SOURCES OF CONSIDERATION 5.

$5.1$ MAXIMUM CONSIDERATION

The consideration for the acquisition of the Company shares under the Offer is to be satisfied by the issue of new shares in Lake.

The maximum consideration of new shares in Lake which would be payable under the Offer for all of the Company Shares on issue is 24,625,000 shares in Lake.

TAXATION CONSIDERATIONS 6.

6.1 INTRODUCTION

The following is intended to provide only a general overview of the Australian taxation implications for Australian residents in disposing of the Company Shares. This summary is not intended to be comprehensive and is based upon the interpretation by Lake of income tax legislation currently in force at the date of this Bidder's Statement.

The Company shareholders should not rely on these comments as advice in relation to their own affairs. The taxation laws are complex and there could be implication in addition to those generally described below. It is recommended that the Company shareholders consult their own tax advisers for advice applicable to their individual needs and circumstances. Lake does not accept any responsibility for the tax implications for individual shareholders.

The implications for non-resident shareholders vary according to their particular circumstances. It is recommended that non-resident Company shareholders consult their own tax advisers for tax advice applicable to their jurisdiction and individual needs and circumstances.

$6.2$ ACCEPTANCE OF THE OFFER AND DISPOSAL OF SHARES

Acceptance of the Offer will involve the disposal by the Company shareholders of their Shares. This change in the ownership of the Shares will constitute a capital gains tax event for Australian capital gains tax purposes.

The Company shareholders who are Australian residents may make a capital gain on the transfer of Shares. Taxation relief for share for share takeovers should be available to most shareholders

6.3 GOODS AND SERVICES TAX

The disposal of Company shares by a Company shareholder, who is registered for GST, will be the supply of a security for GST purposes, which will be classified as an input taxed (financial supply). This means that the Company shareholders will not be liable for GST on the disposal of the Company Shares.

The supply of Company Shares by a Company shareholder who is not registered for GST will be classified as a non-taxable supply, which also means that the GST is not required to be charged on the disposal of the Shares.

The Company shareholders who are registered for GST may not be entitled to claim input tax credits for acquisitions made by them which relate to the disposal of the Company Shares. For example, the shareholders may not be entitled to claim input tax credits for the GST paid on accounting or legal fees incurred by the shareholder which relate to the disposal of the Company Shares. However, the denial of input tax credits for the Company shareholders is subject to the financial acquisitions threshold which provides that full input tax credits can be claimed for

these acquisitions, provided the supplier makes financial acquisitions (i.e. acquisitions related to financial supplies) below set thresholds. We recommend that Company shareholders week further advice in this regard.

Those shareholders who are not registered for GST will not be entitled to claim input tax credits for GST charged on any acquisitions made by the shareholder (for example, legal or accounting fees), irrespective of the purpose for which the acquisitions are made.

STAMP DUTY $6.4$

There will be a stamp duty payable for the transfer of Your Shares. Lake will bear the cost of the stamp duty. You will not have to pay it.

$SCHEDULE - OFFER$

Lake Resources N.L. ABN 49 079 471 980

and

DiamonEx Limited ABN 26 091 951 978

$\mathbf{1}$ . THE OFFER

$1.1$ Lake offers to acquire from you on the terms of this Offer all of Your Shares.
$1.2$ Offers on terms identical to those contained in this Offer have been sent or will be sent to all holders of the Company Shares registered as such in the Register of Members of the Company at 5:00 pm on the Offer Date.
$1.3$ After service of the Bidder's Statement but before the expiration of the Offer Period, the maximum number of the shares which Lake proposes to acquire is all of the Company Shares, being all issued shares in the Company.
Other than the Company Shares, as at the Offer Date, there were no other classes $1.4$ of shares on issue in the Company other than options exerciseable at \$0.20 per share up till 30 June, 2006.
$1.5$ Lake will be entitled to any dividend declared in respect of Your Shares after the Offer Date.

$2.$ OFFER PERIOD/CLOSING DATE

$2.1$ This Offer will, unless withdrawn, remain open during the period commencing on the Offer Date and ending at 5:00 pm Brisbane time on the Closing Date.

$\overline{3}$ . CONSIDERATION FOR SHARES ACOUIRED

Subject to clause 3.2, the consideration offered by Lake for the acquisition of all Your Shares is one share in Lake for every one of Your Shares in the Company.

$\blacktriangleleft$ ENTITLEMENT TO OFFER

$4.1$ Under Section 653B of the Corporations Act:
$(a)$ Your Shares may in certain circumstances be treated as being held in one or more separate parcels; or
$(b)$ Where shares or an interest in shares are held by you as trustee for, as nominee for, or otherwise on behalf of or on account of, another person, those shares so held may be treated as being held in a separate parcel.
$4.2$ If at the time this Offer is made or at any time during the Offer Period and before you accept this Offer another person is, or becomes entitled to be, registered as the holder of any of Your Shares then:
An Offer corresponding to this Offer is to be treated as having been made $(a)$ to that other party in respect of those shares;
An Offer corresponding to this Offer is to be treated as having been made $(b)$ to you in respect of the balance (if any) of Your Shares;
$(c)$ This Offer is to be treated as having been withdrawn.
$4.3$ If at any time during the Offer Period and before this Offer is accepted you are a trustee or nominee of a distinct parcel of Your Shares or otherwise hold a distinct parcel of Your Shares or otherwise hold a distinct parcel of Your Shares on account of another person within the meaning of section 653B of the Corporations Act:
An Offer corresponding to this Offer is deemed to have been made to you $(a)$ relation to each distinct parcel of Your Shares;
$(b)$ To accept this Offer you must give to Lake a notice in writing stating that the relevant shares consist of distinct parcels and specify the number of Your Shares in respect of which you wish to accept this Offer for each distinct parcel of shares which you hold; and
Upon giving the notice you are deemed to have accepted that $(c)$ corresponding Offer.
$4.4$ This Offer extends to securities that come to be in the hid class after the Offer Date and before the end of the Offer Period as a result of the conversion of, or exercise of rights attached to other securities in accordance with Section 617(2) Corporations Act.

$\tilde{\mathbf{S}}$ . ENTITLEMENT OF LAKE

$5.1$ The total number of shares on issue in the Company at the Offer Date is 24,625,000.
5.2 Immediately before this Offer was sent, Lake was entitled to two million of those shares in the Company.

6. HOW TO ACCEPT

6.1 You may accept this Offer at any time during the Offer Period.
$6.2$ Subject to Section 653B of the Corporations Act, you may accept this Offer only in respect of all Your Shares. The Acceptance Form is included with this Offer. The Acceptance Form constitutes part of this Offer.
6.3 To accept this Offer, you must complete and sign the Acceptance Form enclosed with the Offer, and return it to Lake at Level 2,183 North Quay, Brisbane, 4000, so it is received not later than 5:00pm on the Closing Date.
6.4 When accepting this Offer, you should also ensure that if the accepting shareholder:
$(a)$ is a corporation, its ABN is affixed to the Acceptance Form in accordance with its memorandum and articles of association or other constituent's documents:
$(b)$ is deceased, the Acceptance Form is signed by the person or persons authorised to administer the estate of the deceased shareholder: or
$(c)$ is one of two or more joint holders that all such holders sign the Acceptance Form; or
$(d)$ is accepting through an attorney under power that:
- the power of attorney has not been revoked; $(i)$
- $(ii)$ the donor of the power of attorney has not died:
- $(iii)$ the power of attorney has been validly executed:
- $(iv)$ the power of attorney duly empowers the attorney to sign a form such as the Acceptance Form; and
- $(v)$ the attorney duly signs the Acceptance Form.
6.5 When accepting this Offer, you should also:
$(a)$ forward all certificates relating to Your Shares or fulfil all the requirements of Lake and the Company to enable the registration of Lake as a good faith purchaser of Your Shares for value and without notice;
$(b)$ if you are accepting this Offer as the personal representative of a deceased shareholder, forward for inspection evidence satisfactory to Lake of your unqualified authority to do so (eg. the relevant grant of probate or letter of administration or an office copy of either of them) and your compliance with any material law as to the administration of estate and the payment of duty on the estate:
$(c)$ if the Acceptance Form is executed by any attorney for inspection, forward the power of attorney; and
$(d)$ if the estate of the deceased shareholder was liable to pay estate death probate or succession duties, forward evidence of the payment of such duties.
6.6 Acceptance of the Offer is not complete until the completed Acceptance Form has been received at the address set out in clause 6.3 of this Offer and the requirements of clauses 6.3, 6.4 and 6.5 of this Offer have been met, provided that

Lake may in its sole discretion waive at any time prior to the end of the Offer Period all or any of those requirements; and

6.7 Where the requirements of clause 6 of this Offer have been complied with in respect of some but not all of Your Shares. Lake may in its sole discretion take your acceptance of the Offer complete in respect of those Company Shares for which those requirements have been complied with but not in respect of the remainder. By signing and returning the Acceptance Form in accordance with this Offer, you do, and are deemed to:
$(a)$ accept this Offer:
$(b)$ agree to transfer Your Shares to which your acceptance relates to Lake for the consideration specified in clause 3.1 of this Offer;
warrant to Lake as a fundamental term that on the date of registration of $(c)$ the transfer of Your Shares to which your acceptance relates to Lake, your Shares to which your acceptance relates are free from encumbrances:
authorise Lake (by its employees or agents) to complete on your behalf on $(d)$ the Acceptance Form the correct details of Your Shares, fill in any blanks remaining on the Acceptance Form and rectify any error in or omission from the Acceptance Form:
$(e)$ irrevocably appoint Lake and its directors from time to time jointly and severally as your attorney in your name and on your behalf to attend and vote in respect of Your Shares to which your acceptance relates at any and all meetings of the Company held subsequent to the date of receipt by Lake of the Acceptance Form unless and until the contract created by your acceptance of this Offer is avoided by operation of law; and
irrevocably authorise and direct the Company to pay to, or account to Lake $(f)$ for all dividends and other distributions and entitlements, whether cash or otherwise, which are declared, paid, made or which arise or accrue in respect of the Company Shares which Lake acquires pursuant to this Offer. Any dividends, distributions and entitlements received by Lake will be accounted for by Lake to you if this Offer is withdrawn or the contract formed by your acceptance of this Offer is rendered void.

7. WITHDRAWAL OR VARIATION OF OFFER

$7.1$ Lake may withdraw this Offer at any time with the consent of the Commission which consent may be given subject to such conditions (if any) as are specified in the consent.
$7.2$ Lake may withdraw this Offer if a Prescribed Occurrence happens.
$7.3$ Lake may at any time, and from time to time, vary this Offer in accordance with Divisions 2 and 3 of Part 6.6 of the Corporations Act.

$7.4$ Lake 's obligation to perform the contract arising from this Offer is further subject to the conditions provided for in clause 8 below.

8. CONDITIONS OF THE OFFER

$8.1$ This Offer is subject to the conditions that Lake will not be obliged to complete the acquisition of any of Your Shares:
unless Lake has received acceptances of this Offer in respect of not less $(a)$ than 51% of the shares on issue at the Offer Date:
$(b)$ if between the Offer Date and the Closing date a Prescribed Occurrence happens;
unless the Company provides to Lake, on or before the date being 14 days $(c)$ prior to the Closing Date, evidence in the form of a statement certified by an authorised officer of the company's financiers, to the effect that the Company Borrowings as at the date being 14 days prior to the Closing Date, do not materially exceed \$200,000;
$(d)$ if any employees or consultant has been engaged on terms whereby the employment cannot be terminated upon one month's notice or less, and without payment of any penalty or termination amount other than for the period of notice and statutory entitlements, or changes are made to the terms of employment of an existing employee or consultant to the same effect:
$(e)$ if after the Offer Date there is any material adverse change in the nature of the business or the trading of the business.
$8.2$ Subject to the provisions of the Corporations Act, the above conditions are conditions subsequent and breach or non-fulfilment of any such conditions would not prevent a contract arising from acceptance of this Offer.
8.3 Subject to the provisions of the Corporations Act and until the end of the Offer Period, Lake is entitled to the benefit of the conditions in clause 8.1 or to rely on any non-fulfilment of any of them. Lake may, in accordance with Section 650F of the Corporations Act, and without limiting your rights under clause 10, declare this and every other Offer to be free from all or any of the conditions in:
clause $8.1(c)$ not later than 3 business days after the end of the Offer $(a)$ Period or:
any other case not more than 14 days nor less than 7 days before the $(b)$ Closing Date.
8.4 Where at the end of the Offer Period:
the Offers have at any time been subject to a defeating condition; and $(a)$
Lake has not declared the Offers to be free from the conditions within the (b) period before the date applicable under Section 630(3) of the Corporations Act: and
$(c)$ the conditions have not been fulfilled.

all contracts resulting from the acceptance of the Offer, and/or acceptances that have not resulted in binding contracts, are void.

8.5 Lake will give notice on the status of the conditions in accordance with section 630(1) of the Corporations Act not more than 14 days and not less than 7 days before the end of the Offer Period. Lake specifies 24 January, 2004 as the date on which notice on the status of the conditions will be given, subject to extension in accordance with section 630(2) of the Corporations Act.
8.6 The Offer is not subject to discriminatory conditions, and nor is it subject to conditions which turn on Lake 's or Lake 's associates' opinion or requiring payments to officers of the Company.

9. SATISFACTION OF LAKE'S OBLIGATIONS

9.1 Subject to the Corporations Act, the payment date will be not later than one $(1)$ month after the later of:
the date on which this Offer is accepted and Lake is given the Acceptance $(a)$ Form: or
$(b)$ the date on which this Offer or the contract resulting from the acceptance of this Offer becomes unconditional.

but in any event the payment date will not be later than 21 days after the Closing Date.

$9.2$ A Holding Statement for the shares in Lake which you become entitled will be posted to you at the address shown on the Acceptance Form received by Lake, no later than the payment date. The Holding Statement will be posted to you by ordinary mail by the Share Registry of Lake.
9.3 If Lake is not given the Acceptance Form within one (1) month after the end of the Closing Date, Lake, may at its option, void the takeover contract.

10. RIGHTS TO WITHDRAW ACCEPTANCE

$10.1$ You may withdraw your acceptance of this Offer if:
the bid is subject to a defeating condition; and $(a)$
Lake varies the Offer under the bid in a way that postpones for more than (b) one (1) month the time when Lake has to meet its obligations under the bid: and
you are entitled to be given notice of the variation under subsection $(c)$ 650D(1) of the Corporations Act.
$10.2$ To withdraw your acceptance, you must:
in the case of a withdrawal pursuant to clause 10.1, give Lake notice $(a)$ within one $(1)$ month beginning on the day after the day on which the copy of the notice of the variation was received; and
return immediately any consideration received by you for accepting the $(b)$ Offer.

$11.$ DEFINITIONS

In this Offer Document, unless the context otherwise requires:

Acceptance Form means the form of acceptance and transfer which accompanies and forms part of the Offer Document:

Bidder's Statement means the bidder's statement prepared in accordance with Division 2, Part 6.5 of the Corporations Act and attached to this Offer Document;

Closing Date means the $6^th$ day of February, 2004, or any date to which the Offer Period is extended in accordance with section 650C of the Corporations Act, whichever is the later:

Commission means the Australian Securities and Investments Commission:

Company means DiamonEx Limited, ABN 26 091 951 978, a company incorporated in the State of Queensland whose registered office is at Level 2,183 North Ouay, Brisbane, OLD, 4000;

Company Borrowings means all borrowings by the Company including loans, bill facilities, overdraft facilities and all other financial accommodation but excluding finance and operating leases, and trade creditors;

Company Shares means:

ordinary shares in the capital of the Company on issue at the Offer Date; $(a)$ and
ordinary shares which arise after the Offer Date and prior to the end of the $(b)$ Offer Period due to the conversion or exercise of rights attaching to shares described in paragraph (a) above,

together with all rights attaching to such shares (including, without limitation, any right to accrued dividends);

Corporations Act means the Corporations Act 2001 as amended from time to time (includes, without limitation, the Modifications);

Lake means Lake Resources N.L., ABN49 079 471 980, a company whose registered office is at Level 2.183 North Ouay, Brisbane, OLD, 4000.

Material and materially means, when in reference to an amount, more than 5% of the amount to which it is to be compared, and when in reference to trading figures or stock values means more than 5% of the relevant trading figures, sales figures or stock values (as the case may be) of the Company for the Comparable period immediately preceding the date of the Offer;

Modifications means the modification to the Corporations Act referred to in paragraph 7 of the Bidder's Statement;

Offer means the offer for acquisition of the shares in the Company, contained in this document:

Offer Date means the 8th day of January, 2004:

Offer Document means this document and the Acceptance Form;

Offer Period means the period during which the Offers are intended to remain open for acceptance, being the period from the Offer Date to the Closing Date;

Prescribed Occurrence means:

$(a)$ the Company or any of its subsidiaries resolves to reduce its share capital in any way:
the Company or any of its subsidiaries enters into a buy-back agreement or $(b)$ resolves to approve the terms of the buy-back agreement;
$(c)$ the Company or any of its subsidiaries makes an allotment of or grants an option to subscribe for, any of its shares, or agrees to make such an allotment or grant such an option;
the Company or any of its subsidiaries converts all or any of its share into $(d)$ a larger or smaller number of shares;
the Company or any of its subsidiaries issues, or agrees to issue, $(e)$ convertible notes:
the Company or any of its subsidiaries disposes or agrees to dispose, of the $\bigoplus$ whole, or a substantial part of its business or property;
the Company or any of its subsidiaries charges, or agrees to charge, the $\left( \varrho \right)$ whole, or a substantial part, of its business or property;
the Company or any of its subsidiaries resolves that it be wound up; $(h)$
$(i)$ a provisional liquidator of the Company or any of its subsidiaries is appointed;
an order is made by a Court for the winding up of the Company or any of $(i)$ its subsidiaries:
an administrator of the Company or any of its subsidiaries is appointed $(k)$ under Sections 436A, 436B or 436C of the Corporations Act:
$(1)$ the Company or any of its subsidiaries executes a Deed of Company Arrangement;
$(m)$ a receiver, or a receiver and manager, is appointed in relation to the whole. or a substantial part, of the property of the Company or any of its subsidiaries;

Your Shares means such of the Company Shares in respect of which you are registered as a holder in the Register of Members of the Company at 5.00 pm on 24th December, 2003, the Offer Date;

The directors of Lake Resources N.L. have, under a unanimous resolution passed by all of the directors of Lake Resources N.L., approved this Offer.

SIGNED for and on behalf of Lake Resources N.L.

Director/Secretary

Dated: 24 December, 2003.

FORM OF ACCEPTANCE AND TRANSFER, AND INSTRUCTIONS TO COMPLETE

THIS IS THE FORM OF ACCEPTANCE FOR THE OFFER BY LAKE RESOURCES N.L. ('Lake') FOR ALL OF YOUR ORDINARY SHARES IN DIAMONEX LIMITED ("the Company")

THIS IS AN IMPORTANT DOCUMENT

BEFORE COMPLETING, PLEASE READ THE INSTRUCTIONS WHICH FOLLOW THIS FORM OF ACCEPTANCE

If the details in Sections A and B are incorrect, please amend in accordance with the instructions accompanying this form. The definitions and interpretation provision in the Offer apply to this Form, except as otherwise stated.

$A₁$ NAME AND ADDRESS OF SHAREHOLDER

B. NUMBER OF ORDINARY SHARES REGISTERED IN YOUR NAME

$\mathbf{C}$ TERMS AND CONDITIONS

If you accept this Offer, you will receive---------shares in Lake

By accepting, you agree to:

1. ACCEPT the Offer by Lake in respect of all the Company Shares held by you.
TRANSFER Your Shares to Lake for the consideration specified in the 2. Offer.
1. AGREE that any contract which arises from your accepting the Offer will be governed by the laws of Queensland.
$4.$ Subject to the Offer for the Company Shares being declared free from the conditions in clause 8.1 of the Offer, and with effect from the date on which the Offer for the Company Shares is so declared free from the conditions, IRREVOCABLY APPOINT Lake (and any nominee of Lake from time to time, and each of them) as your attorney, for you and on your behalf to:
attend and vote in respect of Your Shares at any and all general $(a)$ meeting of the Company:
$(b)$ requisition (or join in requisitioning) or convene (or join in convening general meetings of the Company, in accordance with sections 246 and 247 of the Corporations Act and the Company's Articles of Association:
execute all forms, notices, instrument s(including instruments $(c)$ appointing a person nominated by Lake as a proxy in respect of any of Your Shares) and resolutions relating to Your Shares;
$(d)$ generally to exercise all powers and rights which you may have as the registered holder of Your Shares, and in exercising the powers conferred by this power of attorney, Lake's nominee or nominees will be entitled to act in the interests of the Lake as the beneficial owner and intended registered holder of those shares; and,
authorise Lake, prior to the registration of this transfer, to transmit $(e)$ Your Shares to any register maintained by the Company which Lake in its absolute discretion considers convenient or desirable.

TO ACCEPT THIS OFFER D.

To accept this Offer, simply sign where indicated below, and return this Form to Lake in accordance with the instructions set out on the back of this Form, so that it is received by Lake no later than 5:00 pm (Old time) on $6^th$ February, 2004.

SIGN HERE TO ACCEPT $\mathbf{F}_{\alpha}$

Signature

Name (please print)

Date

PLEASE NOTE THAT THIS OFFER CLOSES AT 5:00 PM OLD TIME ON THE 6TH FEBRUARY, 2004.

INSTRUCTIONS ON HOW TO ACCEPT THIS OFFER, AND REQUEST FOR FURTHER INFORMATION

NAME AND ADDRESS $\mathbf{A}$ .

Please CHECK that the name, address and shareholding shown on the Form are correct. If not, please alter and initial.

$\mathbf{R}$ . LOST, DESTROYED OR UNAVAILABLE CERTIFICATES

If you have shares certificates for the Company Shares and any of these certificates are not readily available, you should:

Complete and return the Form immediately; and
Forward the certificates and other relevant documents as soon as possible, so that Lake receives them before the end of the Offer Period.

If you do not forward the certificates by this time you should advise Lake before the date 21 days after the end of the Offer Period. Otherwise, the certificate will be deemed to have been lost or destroyed.

$\overline{C}$ . SIGNING AND DATING THE FORM

Individuals

If the Company Shares are held in your own name, you must sign the Form personally unless you follow the Power of Attorney described below.

Joint Holdings

If the Company Shares are registered in the names of joint holders, all holders must sign the Form.

Corporations

A corporation must execute the Form or by Power of Attorney, or in such other manner as permitted by the constitution for the corporation or the Corporations Act. If signing other than under the common seal, please provide evidence of the authority to do so.

Power of Attorney

If the Form is signed under Power of Attorney:

the relevant Power of Attorney must be produced for noting by the Company (unless already noted); and

the attorney is deemed to have declared that he or she has not received notice of revocation of the power.

Deceased Estates

If the Company Shares are registered in the name of a deceased person the Offer may be accepted by the executors or administrators. In this case, the Probate or letters of Administration must be produced for noting by Lake (unless already noted).

D. RETURN OF FORM OF ACCEPTANCE AND TRANSFER

Please POST or DELIVER to the relevant following address as soon as possible:

The COMPLETED Form;
Your SHARE CERTIFICATE(S) (if any); and
All other relevant documents,

so that they are received by Lake before 5:00 pm on 6 February, 2004

Postal Address	Delivery Address
Lake Resources N.L.	Lake Resources N.L.
GPO Box 1239,	Level 2, 183 North Quay,
Brisbane, QLD, 4001	Brisbane, QLD, 4001

Overseas Shareholders

The Company shareholders resident overseas are urged to forward their Forms by AIRMAIL. They should not use the enclosed reply paid envelope.