MAGNETITE MINES LIMITED. — Capital/Financing Update 2010

Jul 21, 2010

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

ROYAL RESOURCES LIMITED

ABN

34 108 102 432

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to Unquoted options. be issued 2 Number of[+] securities issued or 150,000 to be issued (if known) or maximum number which may be issued

3 Principal terms of the[+] securities The options to acquire ordinary fully paid (eg, if options, exercise price and shares in the capital of the Company, have an expiry +securities, date; if the partly amount paid exercise price of 30 cents each and will expire on 19 July 2013. outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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4 Do the[+] securities rank equally in No, the options will not rank equally in all all respects from the date of respects from the date of allotment with allotment with an existing[+] class existing class of quoted securities unless the of quoted[+] securities? options are exercised. If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

5 Issue price or consideration The options are issued for no consideration. 6 Purpose of the issue Granting of incentive options to CFO. (If issued as consideration for the acquisition of assets, clearly identify those assets)

7 Dates of entering +securities 21 July 2010 into uncertificated holdings or despatch of certificates

• See chapter 19 for defined terms.

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Number +Class 8 Number and +class of all 261,532,233 Ordinary fully paid. +securities quoted on ASX ( including the securities in 4,156,509 Options expiring 31 clause 2 if applicable) October 2011 exercisable at 10 cents each. 34,835,026 Options expiring 31 October 2013 exercisable at 12 cents each.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and+class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable)	Number	+Class
	3,500,000 6,750,000 250,000 1,350,000 1,400,000 1,500,000 1,500,000 360,000 3,000,000 1,780,000 4,500,000 1,180,000 150,000	Options expiring 31 January 2011 exercisable at 20 cents each. Options expiring 30 June 2012 exercisable at 50 cents each. Options expiring 10 January 2011 exercisable at 34 cents each. Options expiring 15 January 2011 exercisable at 50 cents each. Options expiring 6 April 2011 exercisable at 25 cents each. Options expiring 6 April 2012 exercisable at 30 cents each. Options expiring 6 April 2013 exercisable at 50 cents each. Options expiring 30 June 2011 exercisable at 34 cents each. Options expiring 30 November 2013 exercisable at 30 cents each. Options expiring 30 April 2013 exercisable at 8 cents each. Options expiring 26 November 2014 exercisable at 55 cents each. Options expiring 13 May 2013 exercisable at 30 cents each. Options expiring 19 July 2013 exercisable at 30 cents each.

• See chapter 19 for defined terms.

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10 Dividend policy (in the case of a Not Applicable trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval Not Applicable required? 12 Is the issue renounceable or nonNot Applicable renounceable? 13 Ratio in which the[+] securities Not Applicable will be offered 14 +Class of +securities to which the Not Applicable offer relates 15 +Record date to determine Not Applicable entitlements 16 Will holdings on different Not Applicable registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements Not Applicable in relation to fractions 18 Names of countries in which the Not Applicable entity has[+] security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of Not Applicable acceptances or renunciations

• See chapter 19 for defined terms.

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20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell part of their entitlements through a broker and accept for the balance?	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable
	Not Applicable

• See chapter 19 for defined terms.

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• 32 How do[+] security holders dispose of their entitlements (except by sale through a broker)?

Not Applicable

• 33 +Despatch date

Not Applicable

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one )

• (a)[Securities described in Part][ 1][ (i) only ]

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and +class of all - - +securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 22 July 2010. (Director/Company secretary)

Print name: FRANK DeMARTE

== == == == ==

• See chapter 19 for defined terms.

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