MATSA RESOURCES LIMITED — Capital/Financing Update 2005

Nov 1, 2005

KALGOORLIE-BOULDER RESOURCES LTD ABN 48 106 732 487

2 November 2005

Release to ASX

ASX Code: KAL

SHORT FORM PROSPECTUS

The Company advises that it has lodged a short form prospectus with the Australian Securities and Investments Commission. The prospectus is dated 2 November 2005 and was prepared in accordance with section 712 of the Corporations Act.

By the prospectus, the Company is offering:

• (a) up to 10,000,000 ordinary shares in the Company at an issue price of 20 cents per share together with one free option for every two shares subscribed for and issued, to selected clients of Delta Securities and to persons approved at the absolute discretion of the Directors:
• (b) 3,750,000 options to Delta Securities for nil consideration as part consideration for services by Delta Securities with respect to the placement.

Each of the abovementioned options give the holder the right to subscribe for 1 share in the Company at an exercise price of 20 cents on or before 31 July 2008. The options are to be listed.

The offer contained in the prospectus is conditional on shareholder approval being obtained for their issue at the annual general meeting of the Company to be held on 30 November 2005.

Yours sincerely

John Coles Company Secretary

KALGOORLIE-BOULDER RESOURCES LTD

ACN 106 732 487

SHORT FORM PROSPECTUS

In relation to the placement of up to 10,000,000 New Shares at an issue price of 20 cents per New Share and one free New Option for every two New Shares subscribed for to raise up to \$2.0 million and the placement of 3,750,000 New Options for nil consideration.

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. The Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type but refers to other documents, the information of which is deemed to be incorporated in this Prospectus.

$\sim 10^{-11}$

This Prospectus provides important information to assist investors in deciding whether or not to invest in the Company and should be read in its entirety. If, after reading this Prospectus, you have any questions relating to an investment in the Company, you should consult your professional advisor. The New Shares and New Options the subject of this Prospectus should be considered speculative.

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Contents

	IMPORTANT INFORMATION	2
$\mathbf{1}$ .	CORPORATE DIRECTORY	4
$\mathbf{2}$ .	INDICATIVE TIMETABLE	5
3.	INVESTMENT OVERVIEW	6
4.	DETAILS OF THE OFFER	9
5.	CAPITAL STRUCTURE & FINANCIAL INFORMATION	13
6.	RISKS	18
7.	ADDITIONAL INFORMATION	21
8.	INCORPORATION OF DOCUMENTS BY REFERENCE	28
9.	DIRECTORS CONSENT	33
10.	DEFINITIONS	34

IMPORTANT INFORMATION

This Prospectus is dated and was lodged with ASIC on 2 November 2005. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus.

Investors should read this document in its entirety and, if in doubt, should consult their professional advisers before deciding whether to subscribe for New Shares and New Options pursuant to the Offer. There are risks associated with an investment in the Company and the New Shares and New Options offered under this Prospectus must be regarded as a speculative investment. The New Shares and New Options offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the New Shares and New Options.

No New Shares or New Options will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. The Company will apply to ASX within 7 days of the date of this Prospectus for Official Quotation of the New Shares and New Options offered by this Prospectus.

Certain terms and abbreviations used in this Prospectus (usually commencing with a capital letter) have defined meanings which are explained in section 10 of this Prospectus.

Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that the Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. Rather, the Prospectus incorporates by reference, information contained in documents that has been lodged with ASIC.

This Prospectus refers to the prospectus issued by the Company on 22 February 2005 offering for subscription 16,000,000 Shares at an issue price of 20 cents per share ('IPO Prospectus'), the annual financial report for the year ended 30 June 2005 ('Financial Report'), the notice of annual general meeting dated 21 October 2005 in relation to the annual general meeting of the Company to be held on 30 November 2005 ('Notice of AGM'), and accompanying explanatory memorandum ('Explanatory Memorandum') and the ASX announcements made by the Company since the Company was admitted to the Official List of the ASX ('ASX Announcements'). In referring to the IPO Prospectus, Financial Report, Notice of AGM and Explanatory Memorandum, and ASX Announcements, the Company:

• $(a)$ identifies the IPO Prospectus. Financial Report, the Notice of AGM and Explanatory Memorandum, and ASX Announcements as being relevant to the offer of New Shares and New Options under this Prospectus and containing information that will assist investors and their professional advisers to make an informed assessment of:
• $\left(\mathbf{i}\right)$ the rights and liabilities attaching to the New Shares and New Options, and the underlying securities;
• the capacity of the Company to issue the New Shares, the New Options and the $(ii)$ underlying securities; and
• the assets and liabilities, financial position and performance, profits and losses $(iii)$ and prospects of the Company;
• refers investors and their professional advisers to section 8 of this Prospectus which $(b)$ summarises the information in the IPO Prospectus, the Financial Report, the Notice of

AGM and Explanatory Memorandum, and ASX Announcements deemed to be incorporated in this Prospectus; and

• $(c)$ informs investors and their professional advisers that they are able to obtain a copy of the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum, and ASX Announcements, free of charge, by contacting the Company at its registered office between the date of this Prospectus and the Closing Date; and
• $(d)$ advises that the information in the IPO Prospectus. Financial Report, Notice of AGM and Explanatory Memorandum, and ASX Announcements will be primarily of interest to investors and their professional advisers and analysts.

Electronic Prospectus

An electronic version of this Prospectus is. available online af www.kalgoorlieboulderres.com.au. The offer constituted by the electronic version of this Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia. Applications may only be made on the Application Form attached to or accompanying this Prospectus. There is no facility for Applications to be accepted electronically or by applying online.

The Corporations Act prohibits any person from passing on to another person the Application Form unless it is attached to or accompanied by a complete and unaltered version of the Prospectus. The Company will not accept a completed Application Form if it has reason to believe that the Applicant has not received a complete and unaltered copy of the Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at admin@kbrl.com.au or by telephone on (08) 9228 9742.

Exposure Period

This Prospectus is subject to an exposure period of 7 days from the date of lodgement with ASIC. During the exposure period the Corporations Act prohibits the Company from accepting any Applications. The exposure period may be extended by ASIC for a further 7 days. The purpose of the exposure period is to allow market participants to examine the Prospectus prior to the raising of funds. If any deficiencies are found in the Prospectus, then any Applications that are received during the exposure period will be dealt with in accordance with section 724 of the Corporations Act. The Company will not process Applications that are received during the exposure period until after expiry of the exposure period. No preference will be conferred on Application Forms received during the exposure period and all Application Forms received during the exposure period will be treated as if they were simultaneously received on the Opening Date.

Shareholder Approval

The offer of New Shares and New Options is conditional on Shareholder approval being obtained for their issue at the annual general meeting of the Company to be held on 30 November 2005.

$1_r$ CORPORATE DIRECTORY

Directors

Trevor Matthews (Managing Director) David Prentice (Non-Executive Director) Kenneth Allen (Non-Executive Director)

Company Secretary

John Coles

Registered Office

48 Lake Street Northbridge WA 6003

Telephone:	+61 (0)8 9228 9742
Facsimile:	+61 (0)8 9228 8685
Email:	admin@kbrl.com.au
Website:	www.kalgoorlieboulderres.com.au

Postal Address

PO Box 312 Northbridge WA 6003

Auditors

Ord Partner Level 2 47 Colin Street West Perth WA 6005

Solicitors

Gadens Lawyers Level 32 St Martins Tower 44 St Georges Terrace Perth WA 6000

Share Registry

Advanced Share Registry Services* 110 Stirling Highway Nedlands WA 6909

$\star$ This entity has not been involved in the preparation of this Prospectus and its name is included for information purposes only.

$2.$ INDICATIVE TIMETABLE

Lodgement of Prospectus	2 November 2005
Opening date	9 November 2005
Closing date	30 November 2005
Trading of New Shares and New Options expected to commence on ASX	7 December 2005

The above dates are indicative only and may vary, subject to the requirements of the ASX
Listing Rules and the Corporations Act. The Company reserves the right to close the Offer earlier than the stated closing date or to extend the closing date.

The offer of New Shares and New Options is conditional on Shareholder approval being obtained for their issue at the annual general meeting of the Company to be held on 30 November 2005.

$3₁$ INVESTMENT OVERVIEW

$3.1$ Company overview and reference to incorporated documents

A comprehensive overview of the activities of the Company is set out in the IPO Prospectus, Financial Report, and ASX Announcements. Persons considering participating in the Offer under this Prospectus should refer to section 8 for a summary of the information contained in the IPO Prospectus, Financial Report and ASX Announcements which is deemed to be incorporated in this Prospectus.

$3.2$ Review of operations since Listing

The Company was admitted to the Official List on 20 April 2005. The Company's objective, as stated in the IPO Prospectus, is to generate returns to Shareholders through the exploration of existing deposits and the discovery and development of other projects.

The Company has undertaken a drilling programme on its advanced projects targeting gold and nickel mineralisation. The focus has been on expanding and upgrading the existing gold resources at the Company's Jackpot and Broad Arrow projects and to advance both projects to mining status.

The Company has also expanded its portfolio through a programme of tenement acquisition and project selection. In addition to expanding its portfolio of gold and nickel tenements, the Company has acquired a portfolio of uranium tenements. The Company has also entered into a joint venture to explore the Kintyre East Uranium Project. The acquisition of the uranium assets is a strategic move to expose the Company to raising uranium prices as demand continues to outstrip supply.

On 14 October 2005, the Company announced its entry into an agreement to acquire, through its wholly owned subsidiary. Kal Energy Pty Ltd, a 75% working interest in oil and gas leases covering 640 acres in Okmulgee County, Oklahoma, in the USA pursuant to the Wilson Prospect Letter Agreement (which is summarised in section 7.2).

$3.3$ Purpose of the Offer

The purpose of the Offer is to raise up to \$2,000,000 to be applied towards payment of an instalment of US\$1,200,000 under the Wilson Prospect Letter Agreement, for working capital, to meet the expenses of the Offer and to fund the currently budgeted obligations for planned operations in the next 12 months although the level of participation in certain projects may need to be adjusted.

If the Offer is fully subscribed the Company will issue 10,000,000 New Shares and 8,750,000 New Options pursuant to this Prospectus to raise \$2,000,000 before costs of the Offer. If the Offer is not fully subscribed, the Company will issue such lesser number of New Shares and New Options as are actually subscribed for. If the Offer is not fully subscribed, the Company will still be in a position to fund the majority of its currently budgeted financial obligations for planned operations in the next twelve months although the level of participation in certain projects may need to be reduced.

The Wilson Prospect Letter Agreement is an agreement between the Company and Metro Energy Group, Inc. ('Metro Energy') dated 10 October 2005 whereby Metro Energy, an experienced US based oil and gas explorer, has agreed to sell to the Company a 75% working interest in certain oil and gas leaseholds located in Okmulgee County, Oklahoma in the USA ('Leases'), along with two existing well bores, and related surface and subsurface equipment. The total purchase price to be paid by the Company to Metro Energy as consideration is US\$3,000,000 to be paid as follows:

• The sum of US\$300,000 to be paid upon execution of the Wilson Prospect Letter $(a)$ Agreement (this amount has been paid);
• A further sum of US\$1,200,000 to be paid within 30 days of the execution of the Wilson $(b)$ Prospect Letter Agreement ('Instalment');
• $(c)$ A further sum of US\$1,500,000 to be paid in instalments:
• The first instalment of US\$500,000 to be paid on 31 December 2005; $(i)$
• The second instalment of US\$500,000 to be paid on 31 March 2005; and $(ii)$
• $(iii)$ The final instalment of US\$500,000 to be paid on 30 June 2006.

Metro Energy has agreed to undertake and fund a drilling, reworking, infrastructure installation, and upgrade program in respect of the Leases.

A summary of the Wilson Prospect Letter Agreement is included in section 7.2 of this Prospectus.

A further purpose of the Offer is to issue to Delta Securities 3,750,000 New Options as part consideration for services provided under the Share Placement Agreement (which is summarised in section 7.3) in a manner which will facilitate trading in the New Options, within 12 months after the date of their issue.

$3.4$ Utilisation of funds

As set out in section 4.3, the minimum subscription under the Offer is \$1,500,000. The full subscription to the Offer is \$2,000,000. The following table illustrates the expected use of the funds raised from the Offer if the minimum subscription is achieved and if the Offer is fully subscribed.

Description	Minimum Subscription (\$)	Full Subscription (\$)
Contribution towards the Instalment of US\$1,200,000 under the Wilson Prospect Letter Agreement	1,382,500*	1,600,000*
Working Capital	$\blacksquare$	260,000
Expenses of the Offer	117,500	140,000
Total	1,500,000	2,000,000

The information set out in the above table is a statement of present intention as at the date of this Prospectus. The exact quantum of funds expended by the Company on any particular item will depend on numerous factors which cannot be ascertained with complete accuracy at the date of this Prospectus.

If more than the minimum subscription to the Offer is raised, but the Offer is not fully subscribed, the amount raised by the Offer will be applied firstly to the expenses of the Offer. then towards the Instalment of US\$1,200,000 under the Wilson Prospect Letter Agreement, and then towards working capital. If the Offer is not fully subscribed the Company will be in a position to fund the majority of its currently budgeted financial obligations and planned operations in the next 12 months although the level of participation in certain projects may need to be reduced.

*The second payment pursuant to the Wilson Prospect Letter Agreement is in United States dollars. Calculated using an exchange rate of US\$0.75 to A\$1.00 (which was the quoted rate by the Reserve Bank of Australia on 25 October 2005). The amount of the second payment in Australian dollars would be A\$1,600,000. This figure is provided for illustrative purpose only. The actual Australian dollar expenditure by the Company in meeting the second payment could be adversely affected by fluctuations in the exchange rate. Please refer to section 6 for a discussion of the material risks associated with an investment in the Company.

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DETAILS OF THE OFFER 4.

$4.1$ The Offer

By this Prospectus, the Company is offering:

• $(a)$ up to 10,000,000 New Shares at an issue price of 20 cents per New Share together with one free New Option for every two New Shares subscribed for and issued, to raise up to \$2,000,000 (before expenses of the Offer), to selected clients of Delta Securities, and to persons approved at the absolute discretion of the Directors: and
• $(b)$ 3,750,000 New Options to Delta Securities as part consideration for services provided by Delta Securities under the Share Placement Agreement (summarised in section 7.3) in relation to the Offer.

The New Shares offered under this Prospectus will rank equally with the existing fully paid Shares of the Company on issue.

Each New Option gives the holder the right to subscribe for a Share at 20 cents on or before 31 July 2008.

Please refer to section 7.4 for a summary of rights attaching to the New Shares and section 7.5 for a summary of the terms and conditions of the New Options.

$4.2$ Conditional Offer

The Offer is conditional on Shareholders approving the issue of the New Shares and New Options offered under this Prospectus at the annual general meeting of the Company to be held on 30 November 2005.

If Shareholder approval is not obtained the Offer will not proceed and all Application Money will be refunded to Applicants as soon as reasonably practicable (without interest).

$4.3$ Minimum Subscription

The minimum subscription to the Offer is 7,500,000 New Shares to raise \$1,500,000 before the expenses of the Offer.

The Company will not issue any New Shares or New Options pursuant to the Offer until the minimum subscription is satisfied.

The 3,750,000 New Options offered to Delta Securities as part consideration for services provided by Delta Securities under the Share Placement Agreement (summarised in section 7.3) in relation to the Offer will be issued if the minimum subscription is reached.

If the minimum subscription is not reached within 4 months of the date of this Prospectus, all Applications pursuant to the Offer will be dealt with in accordance with the requirements of the Corporations Act.

4.4 Oversubscriptions

The Company will not accept oversubscriptions.

4.5 Underwriting

The Offer is not underwritten.

4.6 How to Accept

Applications under the Offer must be made using the Application Form which is attached to this Prospectus (and headed 'Application Form').

Application Money must be paid in full at the issue price of 20 cents per New Share. Applications for New Shares (with one free attaching New Option for every 2 New Shares applied for and issued) must be for a minimum of 10,000 New Shares and thereafter in multiples of 5,000 New Shares. Completed Application Forms and accompanying cheques must be delivered or mailed to:

Delivered to:	Mailed to:
Kalgoorlie-Boulder Resources Ltd	Kalgoorlie-Boulder Resources Ltd
48 Lake Street	PO Box 312
NORTHBRIDGE WA 6003	NORTHBRIDGE WA 6003

by no later than 5.00pm WST on 30 November 2005.

Cheques and drafts should be made payable to 'Kalgoorlie-Boulder Resources Ltd' and crossed 'Not Negotiable'.

Pending the allotment and issue of New Shares and New Options or payment of refunds pursuant to this Prospectus, all Application Money will be held by the Company on trust for the Applicants in a separate bank account as required by the Corporations Act. No interest will be paid on refunded amounts.

Applications pursuant to the Offer will not be accepted after the Closing Date.

4.7 ASX Listing

The Company will apply to the ASX within 7 days after the date of this Prospectus for the New Shares and New Options offered under this Prospectus to be admitted to Official Quotation.

If the ASX does not grant permission for the New Shares and New Options offered under this Prospectus to be admitted to Official Quotation within 3 months after the date of this Prospectus, or such longer period as permitted under the Corporations Act, none of the New Shares or New Options offered by this Prospectus will be allotted or issued. In that circumstance all Applications will be dealt with in accordance with the Corporations Act.

4.8 Allotment

The New Shares and New Options offered under this Prospectus will be allotted and issued as soon as practicable after the Closing Date.

Statements of holding will be mailed as soon as possible after the Closing Date.

The Directors reserve the right to reject any Application for New Shares (with one free attaching New Option for every 2 New Shares applied for and issued) under the Offer and to allot a lesser number of New Shares (with one free attaching New Option for every 2 New Shares applied for and issued) than an Applicant has applied for.

No New Shares or New Options will be allotted and issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Overseas Shareholders 4.9

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe such Any failure to comply with such restrictions may constitute a violation of restrictions. applicable securities law.

No action has been taken to register or qualify the New Shares and New Options or otherwise permit a public offering of the New Shares and New Options the subject of this Prospectus in any jurisdiction outside Australia. It is the responsibility of Applicants outside Australia to obtain all necessary approvals for the allotment and issue of New Shares and New Options under this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained.

4.10 CHESS

The Company participates in the Clearing House Electronic Subregister System ('CHESS'). CHESS is operated by ASX Settlement and Transfer Corporation Pty Ltd ('ASTC'), a wholly owned subsidiary of ASX, in accordance with the ASX Listing Rules and the ASTC Settlement Rules.

Under CHESS, the Company will not issue certificates to investors. Instead, security holders will receive a statement of their holdings in the Company. If an investor is broker sponsored, ASTC will send a CHESS statement to the investor.

4.11 Risk Factors

Prospective investors in the Company should be aware that subscribing for New Shares and New Options that are the subject of this Prospectus involves a number of risks. These risks are set out in section 6 of this Prospectus and investors are urged to consider those risks carefully (and if necessary, consult their professional adviser) before deciding whether to invest in the Company.

The risk factors set out, or referred to, in section 6 of this Prospectus, and other general risks applicable to all investments in listed securities not specifically referred to, may in future affect the value of the New Shares and New Options. Accordingly, an investment in the Company should be considered speculative.

4.12 Financial Forecasts

The Directors have considered the matters set out in ASIC Policy Statement 170 and believe that they do not have a reasonable basis to forecast future earnings for the Company on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projected information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

4.13 Privacy Statement

The Company collects information about each Applicant from an Application Form for the purposes of processing the Application Form and, if the Application is successful, to administer the Applicant's security holding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Company's share registry, the Company's related bodies corporate, agents, contractors and third party service providers, (including mailing houses), ASX, ASIC and other regulatory authorities,

If an Applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's registers is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

4.14 Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that the Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. Rather, the Prospectus incorporates by reference information contained in a document that has been lodged with ASIC. The information to be incorporated by reference into this Prospectus is summarised in section 8 of this Prospectus and will primarily be of interest to investors and their professional advisors or analysts.

The Company informs investors and their professional advisers that they are able to obtain a copy of the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum, and ASX Announcements, free of charge, by contacting the Company at its registered office during the currency of this Prospectus. The IPO Prospectus, the Financial Report, Notice of AGM and Explanatory Memorandum, and ASX Announcements will also be available by searching ASIC's and ASX's records in relation to the Company.

CAPITAL STRUCTURE & FINANCIAL INFORMATION 5.

$5.1$ Capital Structure

Assuming the Offer is fully subscribed and that no Options are exercised prior to the Closing Date the capital structure of the Company will be:

Shares	No. of Shares
Currently on issue	33,505,444
New Shares offered under the Offer	10,000,000
Total on issue at completion of the Offer	43,505,444

The New Shares offered under this Prospectus will rank equally with the existing fully paid Shares of the Company on issue.

A summary of the rights attaching to the New Shares is set out in section 7.4 of this Prospectus.

Options	No. of Options	Exercise Price	Exercise Date
Options currently on issue	5,000,000	20 cents	31 July 2008
Options currently on issue	6,000,000	30 cents	31 July 2008
A Options	2,250,000	30 cents	31 July 2008
B Options	2,250,000	40 cents	31 July2008
New Options offered under the Offer	8,750,000	20 cents	31 July 2008
Total on issue at completion of the Offer	24,250,000

The terms and conditions attaching to the Options currently on issue having an exercise price of 20 cents and exercise date of 31 July 2008 ('20 cent Option expiring 31 July 2008') and the Options having an exercise price of 30 cents and an exercise date of 31 July 2008 ('30 cent Option expiring 31 July 2008') are set out in section 14.5 of the IPO Prospectus. These Options are not listed.

The A Options and the B Options are to be issued to Directors and senior executives of the Company subject to approval by the Shareholders of the Company at an annual general meeting of the Company to be held on 30 November 2005. These Options (if approved) will be unlisted. The terms and conditions of the A Options and the B Options are set out in the Explanatory Memorandum which accompanies the Notice of AGM.

The terms and conditions of the New Options are set out in section 7.5 of this Prospectus. Subject to compliance with the requirements of the Corporations Act and the ASX Listing Rules, an application will be made for the New Options to be granted Official Quotation.

$5.2$ Restricted Securities

The following table sets out details of the Shares and Options of the Company which have been issued as restricted securities in accordance with the ASX Listing Rules:

Class of Security	Number	Date ceasing to be Restricted Securities
Shares	1,710,000	18 February 2006
Shares	775,000	11 April 2006
Share	11,815,044	20 April 2007
20 cent Option expiring 31 July 2008	5,000,000	20 April 2007
30 cent Option expiring 31 July 2008	6,000,000	20 April 2007

5.3 Financial Information

The Company has lodged with ASX its Financial Report for the year ended 30 June 2005. which incorporates the independent audit report, the Directors' report and the auditors' independence declaration. The Company has also lodged its Quarterly Cash Flow Report for the quarter ended 30 September 2005 with ASX. These reports are referred to in this Prospectus and are taken by section 712(3) of the Corporations Act to be included in this Prospectus.

Set out below is the Company's pro-forma statement of financial position as at 30 September 2005.

Basis of Preparation

These following statements have been prepared to provide Shareholders with information on the assets and liabilities of the Company.

The first column is a statement of financial position based on unaudited management accounts as at 30 September 2005. The second column contains a pro-forma statement of financial position following the Offer pursuant to this Prospectus (assuming it is fully subscribed). The financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

Unaudited Statement of Financial Position and Pro-forma Financial Position as at 30 September 2005

	Unaudited Management Accounts at 30 September 2005	Pro-Forma Unaudited Management Accounts at 30 September 2005
	\$	S
CURRENT ASSETS Cash assets
Receivables	1,975,147 173,451	1,834,024 173,451
Other	10,487	10,487
TOTAL CURRENT ASSETS	2,159,085	2,017,962
NON-CURRENT ASSETS Exploration and evaluation
expenditure	2,166,117	4,167,240
Plant and equipment	71,304	71,304
Other financial assets	16,155	16,155
TOTAL NON-CURRENT
ASSETS	2,253,576	4,254,699
TOTAL ASSETS	4,412,661	6,272,661
CURRENT LIABILITIES
Payables	80,924	80,924
TOTAL CURRENT
LIABILITIES	80,924	80,924
TOTAL LIABILITIES	80,924	80,924
NET ASSETS	4,331,737	6,191,737
EQUITY
Contributed equity	4,625,629	6,485,629
Reserves	5,280	5,280
Accumulated losses	(299, 172)	(299, 172)
TOTAL EQUITY	4,331,737	6,191,737

Notes to the Unaudited Pro-Forma Statement of Financial Position

$\mathbf{1}$ . Actual and Proposed Transactions

The actual and proposed transactions adjusting the 30 September 2005 unaudited Statement of Financial Position to arrive at the Unaudited Pro-Forma Statement of Financial Position of the Company is as follows:

• The initial payment of US\$300,000 (A\$401,123) paid upon execution of the Wilson Prospect Letter Agreement.
• The issue of 10,000,000 New Shares pursuant to this Prospectus at an issue price of 20 cents per New Share to raise \$2,000,000
• The payment of expenses associated with the Offer incurred by the Company of \$140,000.

• The second payment of US\$1,200,000 (A\$1,600,000) pursuant to the Wilson Prospect Letter Agreement. The payment pursuant to the Wilson Prospect Letter Agreement is in United States dollars and based on an exchange rate of US\$0.75 to $A\bar{3}1.00.$

$2.$ Cash Assets

$3.$

4.

The movement in cash is as follows:

	\$
Cash assets as per unaudited management accounts as 30
September 2005	1,975,147
Initial payment of US\$300,000 upon execution of the Wilson Prospect Letter Agreement	(401, 123)
Issue of 10,000,000 New Shares pursuant to this Prospectus at
an issue price of 20 cents	2,000,000
Payment of expenses associated with the Offer	(140,000)
Second payment of US\$1,200,000 pursuant to the Wilson Prospect Letter Agreement	(1,600,000)
Cash assets as per pro-forma unaudited management
accounts as 30 September 2005	1,834,024
Exploration and Evaluation Expenditure
	\$
Balance as per unaudited management accounts as 30
September 2005	2,166,117
Initial payment of US\$300,000 upon execution of the Wilson Prospect Letter Agreement	401,123
Second payment of US\$1,200,000 pursuant to the Wilson Prospect Letter Agreement	1,600,000
Balance as per pro-forma unaudited management accounts as 30 September 2005	4,167,240
Contributed Equity
	\$
Balance as per unaudited management accounts as 30
September 2005	4,625,629
Issue of 10,000,000 New Shares pursuant to this Prospectus at an issue price of 20 cents	2,000,000
Payment of expenses associated with the Offer	(140,000)
Balance as per pro-forma unaudited management
accounts as 30 September 2005	6,485,629

Impact of International Accounting Standards 5.

For reporting periods beginning on or after 1 January 2005, the Company must comply with Australian Equivalents to International Financial Reporting Standards ('AIFRS') as issued by the Australian Accounting Standards Board.

A comprehensive overview of the impact of adoption of AIFRS is set out in the Financial Report. Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to Note 26: Impact of Adoption of Australian Equivalents to International Financial Reporting Standards in the Financial Report and section 8 of this Prospectus for a summary of the information contained in the Financial Report deemed to be incorporated in this Prospectus.

6. Commitments

A comprehensive overview of the commitments of the Company is set out in the Financial Report. Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to Note 19: Commitments in the Financial Report and section 8 of this Prospectus for a summary of the information contained in the Financial Report deemed to be incorporated in this Prospectus.

The total purchase price to be paid by the Company to Metro Energy under the Wilson Prospect Letter Agreement is US\$3,000,000 to be paid as follows:

• The sum of US\$300,000 to be paid upon execution of the Letter Agreement. $(a)$
• $(b)$ A further sum of US\$1,200,000 to be paid within 30 days of the execution of the Letter Agreement.
• $(c)$ A further sum of US\$1,500,000 to be paid in instalments:
• $(1)$ The first instalment of US\$500,000 to be paid on 31 December 2005.
• $(ii)$ The second instalment of US\$500,000 to be paid on 31 March 2005.
• $(iii)$ The final instalment of US\$500,000 to be paid on 30 June 2006.

The initial payment of US\$300,000 has been paid and the proceeds of the capital raising pursuant to this Prospectus will be used to fund the second instalment of US\$1,200,000.

6. RISKS

The business activities of the Company are subject to various risks that may impact on the future performance of the Company. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which Shares and Options will trade and should be considered speculative. There are a number of risk factors that investors should consider before deciding whether or not to invest in Shares and Options offered pursuant to this Prospectus.

A comprehensive overview of the risks faced by the Company at the time of listing is set out in Section 13 of the IPO Prospectus. Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to the Section 13 of the IPO Prospectus, and section 8 of this Prospectus for a summary of the information contained in the IPO Prospectus deemed to be incorporated in this Prospectus.

The list of risk factors described in the IPO Prospectus ought not be taken as an exhaustive of the risks faced by the Company or by investors in the Company. The list of risk factors identified in the IPO Prospectus, and others not specifically referred to in the IPO Prospectus, may in the future materially affect the financial performance of the Company and the value of the Shares and Options of the Company.

In addition to the risks identified in the IPO Prospectus, the purchase of the interest in the Leases pursuant to the Wilson Prospect Letter Agreement announced to ASX on 14 October 2005, exposes the Company to the following additional risks:

$6.1$ Shareholder Approval

Shareholder approval is being sought for the issue of the New Shares and New Options on the basis of this Prospectus. Shareholder approval is being sought at the Annual General Meeting to be held on 30 November 2005. If approval is not granted by Shareholders, the Company will have to find alternative finance to fund the remaining payments under the Wilson Prospect Letter Agreement. There is no guarantee that acceptable sources of funds will be found in the future. A lack of funds to service the payments under the Wilson Prospect Letter Agreement could have a material adverse effect on the Company and its prospects.

$6.2$ Oil and Gas Price Fluctuations

The price of oil and gas will depend on available markets at acceptable prices and transmission and distribution costs. Any substantial decline in the prices of oil and gas or an increase in transmission or distribution costs could have a material adverse effect on the Company.

$6.3$ Exploration and Production

The future profitability of the Company and the value of its securities are directly related to the results of exploration. There are inherent risks in exploration activities. No assurances can be given that funds spent on exploration will result in discoveries that will be commercially viable.

No guarantees can be given as to the flow rates of wells drilled by the Company from time to time and investors should be aware that there is no guarantee that flow rates on wells drilled by the Company will remain consistent over a period of time. Flow rates may also be affected by climatic conditions outside of the control of the Company.

6.4 Drilling

Drilling activities may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, shortages or delays in the delivery of rigs and/or other equipment.

$6.5$ Operating

Industry operating risks include fire, explosions, blow outs, pipe failures, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures, or discharge of toxic gases. The occurrence of any of these risks could result in substantial losses to the Company due to injury or loss of life; damage to or destruction of property, natural resources, or equipment; pollution or together environmental damage, cleanup responsibilities, regulatory investigation; penalties or suspension of operations. Damages occurring to third parties as a result of such risks may give rise to claims against the Company.

Environmental Risks $6.6$

Oil and gas exploration, development and production can be potentially environmentally hazardous giving rise to substantial costs for environmental rehabilitation, damage control, and losses.

$6.7$ Commercialisation

Even if the Company recovers potentially commercial activities of oil or gas, there is no quarantee that the Company will be able to successfully transport the oil or gas to commercially viable markets or sell the oil or gas to customers to achieve a commercial return.

6.8 Insurance

Insurance of all risks associated with oil and gas exploration and production is not always available and, where available, the cost can be high. The Company will have insurance in place considered appropriate for the Company's needs. The Company will not be insured against all possible losses, whether because of the unavailability of cover or because the premiums may be excessive relative to the benefits that would accrue.

6.9 Adequacy of Capital and Capital Raising

The Company may raise additional capital in order to fund the remainder of the Wilson Prospect Letter Agreement payments and/or drilling programmes by the issue of securities. This would have the effect of diluting the security holdings of existing security holders. There is no guarantee that acceptable sources of funds will be found in the future. A lack of capital could have a material adverse effect on the Company and its prospects.

$6.10$ Metro Energy - Key Contractor

The Company's success in relation to the exploration and development of the Leases is largely dependent on the core competencies and services of Metro Energy. The loss or nonperformance of Metro Energy as a contractor could have a material adverse effect on the Company.

$6.11$ Regulatory Approvals

The Company will require government regulatory approvals for its operations and facilities installations. This may from time to time affect timing and scope of work to be undertaken.

6.12 Access

The Company, in order to conduct its exploration programmes, may require approval from government and non-government bodies to facilitate access to blocks and tenements in which it has an interest.

6.13 Exchange Rate

The payments due under the Wilson Prospect Letter Agreement are payable in US currency and payment obligations in relation to the exploration and development of the Leases will be payable in US currency. To the extent that there are unfavourable movements in the exchange rate, the Company's obligations expressed in Australian currency will increase.

Oil and gas revenues will be earned in US currency and, consequently, exchange rate fluctuations will also impact on any future earnings.

$5.14$ Taxation

Profits arising from the discovery and commercialisation of oil and gas fields will be subject to US taxation. The tax treatment could vary significantly from that applied in Australia.

$6.14$ Legal Title

The matter of confirming the Company's title to the Leases is a continuous process. Regulatory approval is required to the transfer of the Leases to the Company. The transfer of title in relation to each Lease may not occur until the commencement of drilling a well on the Lease. In the event that, at that time, clear title cannot be determined then the transfer of the Lease and drilling on the Lease could be delayed or halted indefinitely.

The Company has paid US\$300,000 and may pay the Instalment of US\$1,200,000 under the Wilson Prospect Letter Agreement prior to Metro Energy assigning the interest in the Leases to the Company. In the event Metro fails to assign the interest in the Leases to the Company, the Company will have to take action in the State of Oklahoma to seek a judicial order to compel performance by Metro of its obligations under the Wilson Prospect Letter Agreement and assign title to the Company. There is also a risk that, if successful, damages may be the remedy ordered by the court rather than an order compelling performance.

6.15 Changes in Accounting Standards

For reporting periods beginning on or after 1 January 2005, the Company must comply with Australian Equivalents to International Financial Reporting Standards as issued by the Australian Accounting Standards Board. These changes will affect the way in which certain items are reported in the Company's financial statements.

7. ADDITIONAL INFORMATION

$7.1$ Material Contracts

Set out below is a summary of the material contracts entered into by the Company since the IPO Prospectus. A comprehensive overview of the material contracts entered into by the Company at the time of listing is set out in Section 12 Part 5 of the IPO Prospectus. Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to the Section 12 Part 5 of the IPO Prospectus, and section 8 of this Prospectus for a summary of the information contained in the IPO Prospectus deemed to be incorporated in this Prospectus.

$7.2$ Wilson Prospect Letter Agreement

On 10 October 2005 the Company entered into an agreement with Metro Energy which, subject to its completion, will see it acquire a 75% working interest, equalling a 56.25% net revenue interest in the Leases ('Sale Interest') located in Okmulgee County, Oklahoma, USA together with two existed well bores, and related surface and subsurface equipment ('Wilson Prospect Letter Agreement').

The following is a summary of the Wilson Prospect Letter Agreement.

The total purchase price to be paid by the Company to Metro Energy under the Wilson Prospect Letter Agreement is US\$3,000,000 to be paid as follows:

• The sum of US\$300,000 which was paid upon execution of the Wilson Prospect Letter $(a)$ Agreement.
• A further sum of US\$1,200,000 to be paid within 30 days of the execution of the Wilson $(b)$ Prospect Letter Agreement.
• $(c)$ A further sum of US\$1,500,000 to be paid in instalments:
• $(i)$ The first instalment of US\$500,000 to be paid on 31 December 2005.
• The second instalment of US\$500,000 to be paid on 31 March 2005. $(ii)$
• The final instalment of US\$500,000 to be paid on 30 June 2006. $(iii)$

In the event that Metro Energy cannot deliver the assignments and Leases contemplated to be conveyed under the agreement within 45 days of the execution of the Wilson Prospect Letter Agreement or some such time as the parties mutually agree ('WPLA Closing Date'), Metro Energy will immediately refund the initial payment of US\$300,000 to the Company.

In the event that the Company does not or cannot perform its obligations to pay the purchase consideration, the sum of US\$300,000 shall be retained by Metro Energy and considered as liquidated damages and shall be deemed by both Metro Energy and the Company as full and complete payment by the Company for all damages that have been sustained by Metro Energy.

Metro Energy will undertake and fund the drilling, reworking, infrastructure installation, and upgrade program, including the following:

Drill, complete and tie-in the Wilson #1-10 well to spud into the top of the Wilcox $(a)$ sandstone oil column to facilitate potential oil and gas production.

• $(b)$ Clean out, treat, and properly equip the existing Wilson #1 well, to enable potential resumption of production from the Gilcrease sandstone.
• Permit, clean out, and properly equip the existing Wilson #2 well, for conversion to a $(c)$ saltwater disposal well for the prospect.
• $(d)$ Install the appropriate infrastructure to produce, store, and market hydrocarbons and facilitate the disposal of saltwater and install a natural gas gathering system to transfer natural gas from the tank battery system to the nearest natural gas sales point.

If a transfer or assignment of the Sale Interest is not recordable at the WPLA Closing Date. Metro Energy will hold the Sale Interest and rights attaching on trust for the benefit of the Company absolutely and will deal with the trust property only as from time to time directed in writing by the Company.

The parties acknowledge the lands and minerals are owned by Restricted Creek Indians and require state District Court approval before the Leases can be fully vested in Metro Energy. It is contemplated by the parties to the Wilson Prospect Letter Agreement that certain of the lands and minerals cannot be conveyed and transferred to the Company by Metro Energy by the WPLA Closing Date, and in such an event the lands and leases shall be held in trust by Metro Energy for the benefit of the Company.

The parties acknowledge a portion of the lands, leases and mineral interests will require applying to the Oklahoma Corporation Commission-Oil and Gas Conservation Division to space and force pool an area of approximately 40 acres. It is agreed that the lands and leases will be conveyed and transferred to the Company by Metro Energy subject to the Pooling Orders issued by the Oklahoma Corporation Commission. The lands and leases shall be held in trust by Metro Energy for the benefit of the Company.

The Company is to execute a promissory note and mortgage of the oil and gas leases in favour of Metro Energy to secure payment of the consideration detailed above. The Company has not, at the date of this Prospectus, executed the aforementioned promissory note and mortgage of the oil and gas leases.

Metro Energy is to be the operator of the leases and will prepare a Joint Operating Agreement (AAPL Model Form 610) after closing to be executed by Metro Energy and the Company.

Both parties agree that they may prepare a more detailed final contract and agreement of sale containing the general terms and conditions set out in the Wilson Prospect Letter Agreement and including further terms and conditions usually found in agreements of this type.

The Wilson Prospect Letter Agreement is to be interpreted under the laws of the State of Oklahoma and venue of any actions or suit shall be in the Twenty-Fourth Judicial District Court of Oklahoma.

$7.3$ Share Placement Agreement

By a letter dated 7 October 2007 Delta Securities has agreed to place up to 7,500,000 of the New Shares, with one free New Option for every two New Shares subscribed for to clients of Delta Securities and agreed third parties on a best endeavours basis ('Share Placement Agreement').

Delta Securities is entitled to receive a 6% fee on all funds raised from the placement some of which may be to agreed third parties. In addition the Company has agreed to issue 3,750,000 New Options to Delta Securities.

$7.4$ Rights attaching to New Shares

The New Shares offered under this Prospectus are fully paid Shares. Upon issue, the New Shares will rank equally with all existing Shares in the capital of the Company.

The rights attaching to Shares are set out in the constitution of the Company, and in certain circumstances, regulated by the Corporations Act, the ASX Listing Rules, the ASTC Business Rules and the general law.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders that can involve complex questions of law. To obtain a definitive assessment of the rights and liabilities that attach to the Shares of the Company, investors should seek their own advice.

$(a)$ Voting Rights

Subject to any restrictions on voting imposed due to a breach of the ASX Listing Rules relating to restricted shares or any escrow agreement entered into by the Company and a member, every holder of Shares present in person or by proxy, attorney or representative at a meeting of Shareholders has one vote on a vote taken by a show of hands, and on a poll every holder of Shares who is present in person or by proxy, attorney or representative has one vote for every Share held by him or her, but, in respect of partly paid Shares, shall have a fraction of a vote for each partly paid share.

A poll may be demanded before a vote is taken, or before or immediately after the declaration of the result of the show of hands by the chairperson of the meeting, by at least five Shareholders present in person or by proxy, attorney, or representative, or by any one or more Shareholders who are together entitled to not less than five percent of the total voting rights of all those Shareholders having the right to vote on the resolution.

$(b)$ Dividend Rights

Dividends are payable out of the Company's profits and are declared by the Directors. Dividends declared will (subject to the rights of any preference Shareholders and to the right of the holders of any shares created or raised under any special arrangement as to dividend) be payable on the Shares in accordance with the Corporations Act, including payment of cash, issue of shares, the grant of options and the transfer of assets.

Transfer of Shares $(c)$

A Shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or recognised by the ASX or the Corporations Act for the purpose of facilitating transfers in shares or by an instrument in writing in a form approved by the ASX or in any other usual form or in any form approved by the Directors.

The Directors may refuse to register any transfer of Shares, other than a market transfer, where permitted by the ASX Listing Rules or the ASTC settlement rules. The Company must comply with such obligations as may be imposed on it by the ASX Listing Rules and where appropriate the ASTC settlement rules in connection with any market transfer and may not prevent, delay or in any way interfere with the registration of a market transfer where to do so would be contrary to the provisions of any of the ASX Listing Rules or the ASTC settlement rules.

$(d)$ Meetings and Notice

Each Shareholder is entitled to receive notice of and to attend general meetings of the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the constitution of the Company, the Corporations Act or the ASX Listing Rules.

$(e)$ Rights on Winding Up

The Company has only issued one class of shares, which all rank equally in the event of liquidation. A liquidator may, with the authority of a special resolution of Shareholders divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders. The liquidator can with the sanction of a special resolution of the Company's Shareholders vest the whole or any part of the assets in trust for the benefit of Shareholders as the liquidator thinks fit, but no Shareholder of the Company can be compelled to accept any Shares or other shares in respect of which there is any liability.

$(f)$ Shareholder Liability

As the Shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

$(g)$ Alteration to the Constitution

The constitution of the Company can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. At least 28 days' written notice specifying the intention to propose the resolution as a special resolution must be given.

$7.5$ Terms and Conditions Attaching to New Options

• 1. Each New Option entitles the holder to subscribe for 1 Share at an exercise price of 20 cents.
• 1. The New Options are exercisable at any time in whole or in part on or prior to 31 July 2008 ('Expiry Date') by notice in writing to the Company, accompanied by payment of the exercise price.
• 1. The New Options are transferable and will be listed for Official Quotation.
• 1. The New Options have no voting rights.
• 1. Shares issued upon the exercise of the New Options will be allotted within 5 days of receipt of a properly executed notice and of payment in full of the exercise price. All Shares issued upon the exercise of the New Option will rank pari-passu in all respects with the Company's then existing Shares. If the Shares are listed on the ASX, the Company will apply for listing of the new Shares within 5 days of allotment.
• 1. The New Options carry no entitlement to participate in dividends or rights to participate in new issues of capital offered to Shareholders during the currency of the New Options. The Company will give the holder 10 days' notice of the closing date for applications for new issued Shares so that the holder may exercise his/her New Options and participate in the issues.
• 1. In the event of a reorganisation of the issued capital of the Company, the New Options will be organised in accordance with the ASX Listing Rules.
• 1. An exercise of only some New Options shall not affect the rights of the holder to the balance of the New Options held by him/her.

7.6 Market Prices of Shares

Official Quotation of the Company's Shares commenced on 22 April 2005 and consequently, the trading history on the ASX as at the date of this Prospectus is limited to that period.

The highest and lowest recorded market sale prices of the Company's Shares guoted on ASX during the period from commencement of Official Quotation to the date of this Prospectus were 25 cents and 18 cents respectively.

The last market sale price of the Company's Shares on ASX on the last day that trading took place in the Company's Shares prior to the date of this Prospectus was 20 cents on 1 November 2005.

$7.7$ Taxation

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the New Shares and New Options. Taxation consequences will depend on particular Neither the Company nor any of its officers accept any liability or circumstances. responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences with an investment in the New Shares and New Options under the Offers.

7.8 Legal Proceedings

There is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

$7.9$ Disclosure of Interests

A full disclosure of the interests of Directors is included in Note 5: Directors' and Executives' Disclosures in the Financial Report. Other than as set out below or elsewhere in this Prospectus that information and disclosure remains current.

As at the date of this Prospectus the interests of the Directors in securities of the Company are as follows:

Director	Shares	30 cent Option expiring 31 July 2008
Trevor Matthews	1,211,681	500,000
Kenneth Allen	250,000	$\overline{\phantom{a}}$
David Prentice	350,000	$\overline{\phantom{0}}$

In addition to the interests of Directors disclosed in Note 5: Directors' and Executives' Disclosures in the Financial Report and elsewhere in this Prospectus, approval is being sought to grant each of the Directors 500,000 A Options and 500,000 B Options. Details of the proposed grants of the A Options and the B Options, and the terms and conditions of the

A Options and the B Options, are contained the Explanatory Memorandum which accompanies the Notice of AGM.

Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to Note 5: Directors' and Executives' Disclosures in the Financial Report, the Explanatory Memorandum and section 8 of this Prospectus for a summary of the information contained in the Financial Report and the Explanatory Memorandum deemed to be incorporated in this Prospectus.

7.10 Remuneration

A full disclosure of the remuneration of Directors is included in Note 5: Directors' and Executives' Disclosures in the Financial Report. That information remains current at the date of this Prospectus. Persons considering subscribing for New Shares and New Options pursuant to this Prospectus should refer to Note 5: Directors' and Executives' Disclosures in the Financial Report, and section 8 of this Prospectus for a summary of the information contained in the Financial Report deemed to be incorporated in this Prospectus.

$7.11$ Fees and Benefits

Other than as set out below or elsewhere in this Prospectus, no:

• $(a)$ Director;
• $(b)$ person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus; or
• $(c)$ promoter of the Company,

has, or had within 2 years before lodgement of this Prospectus with ASIC, any interest in:

• (d) the formation or promotion of the Company:
• any property acquired or proposed to be acquired by the Company in connection with $(e)$ its formation or promotion or in connection with the offer of New Shares and New Options under this Prospectus; or
• $(f)$ the Offer of New Share and New Options under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons as an inducement to become, or to qualify as, a Director of the Company or for services rendered in connection with the formation or promotion of the Company or the offer of New Shares and New Options under this Prospectus.

Ord Partners has acted as the Company's Auditor and will not receive any fees in relation to this Prospectus. Since the incorporation of the Company. Ord Partners has received fees of approximately \$21,000 plus GST for other audit services and services relating to the IPO Prospectus provided to the Company.

Gadens Lawyers has acted as the solicitor to the Company in relation to the Offer. The Company will pay approximately \$6,000 for these services. Since incorporation of the Company, Gadens Lawyers has received approximately \$75,000 plus GST for services rendered to the Company including services relating to the IPO Prospectus.

Delta Securities has agreed to provide services in relation to the Offer under the Share Placement Agreement (which is summarised in section 7.3). Delta Securities will receive a commission of 6% on funds raised in respect of the placement of up to 7,500,000 New Shares pursuant to the Offer, and will be issued 3.750,000 New Options for no consideration for these services. Since incorporation of the Company Delta Securities has received \$145,200 plus GST for services rendered including services relating to the IPO Prospectus.

A full disclosure of the interests of experts, advisers and promoters of and to the Company for the period up to and including the IPO Prospectus is set out in section 14 Additional Information in the IPO Prospectus. Except as disclosed above, and elsewhere in this Prospectus, this information remains current at the date of this Prospectus. Persons considering subscribing to the Offer should refer to section 14 Additional Information of the IPO Prospectus, and section 8 of this Prospectus for a summary of the information contained in the IPO Prospectus which is deemed to be incorporated into this Prospectus.

$7.12$ Expenses of the Offer

The total expenses of the Offer are estimated to be \$140,000 comprising legal costs, commissions to Delta Securities under the Share Placement Agreement (which is summarised in section 7.3), printing, ASX quotation fee, and other administrative expenses.

$7.13$ Consents

Each of the parties referred to in this section:

• does not make, or purport to make, any statement in this Prospectus other than those (a) referred to in this section; and
• $(b)$ to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

Ord Partners have given their written consent to being named as Auditor to the Company in this Prospectus, to the inclusion by reference of the Independent Audit Report dated 29 September 2005 forming part of the Company's annual report for the year ended 30 June 2005. Ord Partners has not withdrawn their consent prior to lodgement of this Prospectus with ASIC.

Gadens Lawyers have given their written consent to being named as solicitors to the Company and to the incorporation by reference in this Prospectus of the Solicitors' Report on Tenements in this Prospectus included in the IPO Prospectus and has not withdrawn their consent prior to lodgement of this Prospectus with ASIC.

Ravensgate Pty Ltd has given its written consent to being named in the Prospectus in the form and context in which its name appears, and to the incorporation by reference in this Prospectus of the Independent Consulting Geologist's Report dated 15 January 2005 included in the IPO Prospectus and has not withdrawn its consent prior to lodgement of this prospectus with ASIC.

Delta Securities have given their written consent to being named in this Prospectus in respect of the services to be provided by Delta Securities in relation to the Offer and have not withdrawn their consent prior to lodgement of this Prospectus with ASIC.

8. INCORPORATION OF DOCUMENTS BY REFERENCE

$8.1$ Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that the Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. Rather, the Prospectus incorporates by reference information contained in a document that has been lodged with ASIC.

Set out below is a summary of the information contained in the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum and the ASX Announcements which is deemed to be incorporated in this Prospectus to assist investors and their professional advisers to determine whether, for the purposes of making an informed investment decision in relation to the issue of the New Shares and New Options pursuant to this Prospectus, they should obtain a copy of the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum, and the ASX Announcements of the Company.

The Company informs investors and their professional advisers that they are able to obtain a copy of the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum and ASX Announcements, free of charge, by contacting the Company at its registered office during the currency of this Prospectus, by downloading it from the Company website at www.kalgoorlieboulderres.com.au or by searching ASX's or ASIC's records in relation to the Company.

The sections referred to below are a reference to sections in the IPO Prospectus, the Financial Report, the Notice of AGM and Explanatory Memorandum, and ASX Announcements (as the case may be) of the Company.

$8.2$ IPO Prospectus

The IPO Prospectus provides information in relation to the Company's initial public offering of 16,000,000 Shares at 20 cents each, including information on the rights and liabilities attaching to the Shares, and the assets and liabilities, financial position and performance. profits and losses, and prospects of the Company.

$(a)$ Section 8 - Project Overview

This section provides background information on the Company and its exploration and development objectives on the tenements held by the Company in Western Australia. This section also provides a summary of the Company's Jackpot, Broad Arrow, Dunnsville, Clinker Hill, Lake Johnston and Siberia projects.

$(b)$ Section 9 - Directors' Profiles

This section contains a biography of the Directors of the Company.

Section 10 - Independent Consulting Geologist's Report $(c)$

This section contains a report prepared by Ravensgate Pty Ltd in respect of the Company's Jackpot, Broad Arrow, Dunnsville, Clinker Hill, Lake Johnston and Siberia projects.

$(d)$ Section 12 - Solicitors' Reports on Tenements

This section contains a report prepared by Gadens Lawyers in relation to the mining tenements acquired or applied for by the Company, the Company's title to those tenements, third party interests in the tenements (including native title claims). relevant legislation, and material contracts entered into by the Company.

$(e)$ Section 13 - Risk Factors

This section notes that an investment in the Company carries certain risks and describes a number of factors that may impact on the success and future profitability of the Company. The factors referred to include general investment risks as well as specific mining industry risks including, risks associated with the tenements, environmental risks, operating risks, payment obligations, ability to exploit successful discoveries, volatility of prices of minerals, environmental regulations, additional requirements of capital, native title, and competition.

$(f)$ Section 14 - Additional Information

This section sets out additional information required to be disclosed in the IPO Prospectus including:

• $(i)$ Incorporation date of the Company;
• $(ii)$ Company tax status and financial year end date;
• $(iii)$ Legal proceedings involving the Company;
• $(iv)$ Rights attaching to Shares:
• $(v)$ Terms and conditions of the Options;
• $(v)$ ASX Listing Rules:
• $(vii)$ CHESS;
• $(viii)$ Dividend policy:
• $(ix)$ Corporate governance:
• Shareholding qualifications of Directors; $(x)$
• Remuneration of Directors: $(x)$
• $(xii)$ Directors' shareholdings;
• $(xiii)$ Other interests of Directors:
• Other interests, fees and benefits $(xiv)$
• $(xv)$ Consents to be named in the IPO Prospectus;
• Expenses of the IPO Prospectus; $(xvi)$
• $(xvii)$ Taxation:

• (xviii) Placement fee;

• $(xix)$ Electronic prospectus; and

• $(xx)$ Privacy disclosure.

$(q)$ Section 16 - Glossary

The glossary defines and explains various terms and abbreviations used in the IPO Prospectus.

$8.3$ Financial Report

$(a)$ Corporate Governance Statement (page 3)

This section of the Financial Report outlines information in accordance with the ASX Corporate Governance Council's Principals of Good Corporate Governance and Best Practice Recommendations.

$(b)$ Directors' Reports (page 9)

This section of the Financial Report contains brief biographies of the Company's Directors, review of operations, outlines Shares and Options held by Directors, Director's attendance at Directors' meeting and Directors' and executives' remuneration

$(c)$ Statement of Financial Performance (page 16)

This section sets out the consolidated statement of financial performance of the Company for the financial year ended 30 June 2005.

$(d)$ Statement of Financial Position (page 17)

This section sets out the statement of financial position for the Company as at 30 June 2005.

$(e)$ Statement of Cash Flows (page 18)

This section sets out the statement of cash flows for the Company for the financial vear ended 30 June 2005.

$(f)$ Notes to the Financial Statements (page 19)

This section sets out the notes to the financial statements for the financial year ended 30 June 2005. This section includes the Company's summary of accounting policies, revenue/loss from activities, income tax. Directors' and executives' remuneration, remuneration of auditors, receivables, exploration expenditure, current payables, contributed equity, accumulated losses, earnings/loss per Share, notes of statement of cash flows, expenditure commitments, events subsequent to reporting, financial investments, contingencies, impact of adopting Australian equivalents to International Financial Reporting Standards.

$(g)$ Independent Audit Report (page 34)

This section contains an Independent Audit Report to the members of the Company and includes an audit opinion in relation to the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements and the Directors declaration for the Company included in the Financial Report.

$(h)$ Additional Information for Listed Companies (page 36)

This section includes information regarding distribution to Shareholders, substantial Shareholders, voting rights of Shares, amounts of unquoted Options, amounts of restricted securities, and the 20 largest Shareholders and Optionholders of the Company.

8.4 Notice of AGM and Explanatory Memorandum

The Notice of AGM and accompanying Explanatory Memorandum were lodged with ASIC on 24 October 2005 and relate to the Annual General Meeting of the Company to be held on 30 November 2005.

Resolutions 5 through to 10 of the Notice of AGM seek the approval of the Shareholders to the issue of 2,250,000 A Options and 2,250,000 B Options to the Directors and senior executives of the Company. The Explanatory Memorandum includes a discussion concerning resolutions 5 though to 10. Annexure B and Annexure C of the Explanatory Memorandum set out the terms of the A Options and the B Options respectively.

$8.5$ ASX Announcements

The Company is a disclosing entity under the Corporations Act and, as such, is subject to regular reporting and disclosure requirements. As a listed company, the Company is subject to the ASX Listing Rules that require it to immediately notify ASX of any information concerning the Company of which it is or becomes aware and which a reasonable person would expect to have a material effect on the price of Shares.

The following documents have been lodged with ASX since the Company was admitted to the Official List on 15 April 2005:

Date	Description
24/10/2005	Change in substantial holding
14/10/2005	Oklahoma Oil & Gas Acquisition
12/10/2005	Trading Halt
2/10/2005	Joint Venture with Redport on Kintyre East Uranium Project
30/09/2005	Annual Report
30/09/2005	Appendix 3B
30/09/2005	Change of Director's Interest Notice
12/08/2005	Acquisition of Uranium Tenements in WA & SA
29/07/2005	Fourth Quarter Cashflow Report
29/07/2005	Fourth Quarter Activities Report
20/07/2005	Voluntary Escrow Release
15/07/2005	Gascoyne Uranium Alliance
20/06/2005	Jackpot Project Infill Drilling
10/06/2005	Lyndon Uranium Project
10/06/2005	Acquisition of Uranium Projects
07/06/2005	Change in substantial holding
17/05/2005	Commencement of Drilling at Jackpot
22/04/2005	Initial Director's Interest Notice
22/04/2005	Initial Director's Interest Notice

Date	Description
22/04/2005	Initial Director's Interest Notice
18/04/2005	Appendix 1A - ASX Listing application & agreement
18/04/2005	Constitution
15/04/2005	Corporate Governance Statement
15/04/2005	Update on IFRS
15/04/2005	Number of securities subject to escrow & escrow period
15/04/2005	Full Terms & Conditions of Options - Exercisable at 30 cents
15/04/2005	Alien Option Agreement
15/04/2005	Full Terms & Conditions of Options - Exercisable at 20 cents
15/04/2005	Completion of acquisition of all initial interests
15/04/2005	Distribution Schedule
15/04/2005	Top 20 shareholders
15/04/2005	Pre-Quotation Disclosure
15/04/2005	Admission to Official List
15/04/2005	Disclosure Document

$\frac{1}{2}$

DIRECTORS CONSENT 9.

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons having given their consent to the statements being include in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with ASIC, or to the Directors knowledge, before any issue of New Shares or New Options pursuant to this Prospectus.

This Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each Director has consented to the lodgement of this Prospectus with ASIC and has not withdrawn their consent.

Dated 2 November 2005

Signed/for and on behalf of Kalgoorlie-Boulder Resources Ltd by Trevor Matthews Managing Director

10. DEFINITIONS

20 cent Option expiring 31 July 2008	An Option having an exercise price of 20 cents and expiring on 31 July 2008 currently on issue
30 cent Option expiring 31 July 2008	An Option having an exercise price of 30 cents and expiring on 31 July 2008 currently on issue
AS or \$	Australian dollar
AIFRS	Australian Equivalents International Financial to Reporting Standards
A Option	An Option having an exercise price of 30 cents and expiring on 31 July 2008 to be issued to the Directors and senior executives of the Company subject to Shareholder approval
Applicant	Applicant for New Shares and New Options pursuant to this Prospectus
Application	A valid application made to subscribe for New Shares and New Options pursuant to this Prospectus
Application Form	The which application form this accompanies Prospectus
Application Money	Money received by the Company from Applicants
ASIC	Australian Securities and Investments Commission
ASX	Australian Stock Exchange Limited (ACN 008 624 691)
ASX Announcements	ASX announcements referred to in section 8.5 of this Prospectus
ASX Listing Rules	Official Listing Rules of ASX
B Option	An Option having an exercise price of 40 cents and expiring on 31 July 2008 to be issued to the Directors and senior executives of the Company subject to Shareholder approval
Board	Board of Directors as constituted from time to time
CHESS	ASX Clearing House Electronic Subregistry System
Closing Date	The last date for receipt of completed Application Forms, being 5.00pm WST 30 November 2005 or such other date as the Directors determine
Company	Kalgoorlie-Boulder Resources Ltd (ACN 106 732 487)
Constitution	Constitution of the Company as amended from time to time
Corporations Act	Corporations Act 2001 (Cth)
Directors	The directors of the Company as shown in the corporate directory at the front of this Prospectus
Explanatory Memorandum	Explanatory Memorandum to Shareholders which accompanies the Notice of AGM
Financial Report	Audited Annual Report of the Company for the year ended 30 June 2005

	Prospect Letter Agreement
IPO Prospectus	The prospectus issued by the Company dated 22 February 2005
Kalgoorlie-Boulder Resources	Kalgoorlie-Boulder Resources Ltd (ACN 106 732 487)
Leases	Has the meaning in section 3.3 of this Prospectus
Metro Energy	Metro Energy Group Inc of 2156 Barksdale Boulevard, Bossier City, Louisiana, 71112, United Stated of America
New Options	The Options to be issued under this Prospectus
New Shares	The Shares to be issued under this Prospectus
Notice of AGM	The notice of annual general meeting of the Company dated 21 October 2005 in relation to the annual general meeting of the Company to be held on 30 November 2005
Offer	Offer of New Shares and New Options pursuant to this Prospectus
Official List	Official List of ASX
Official Quotation	Official quotation by ASX in accordance with the ASX Listing Rules
Opening Date	9.00am WST, 9 November 2005, or such other date determined by the Board without prior notice
Options	Options to subscribe for Shares
Optionholders	Holders of Options
Prospectus	This prospectus
Share	A fully paid ordinary share in the Company
Share Placement Agreement	Has the meaning in section 7.3 of this Prospectus
Shareholder	Holder of Shares in the Company
US or USA	United States of America
US\$	US dollars
Wilson Prospect Letter Agreement	Has the meaning in section 7.2 of this Prospectus
WPLA Closing Date	Has the meaning in section 7.2 of this Prospectus
WST	Western Standard Time, Perth, Western Australia

KALGOORLIE-BOULDER RESOURCES LTD

APPLICATION FORM

for the ISSUE of Up to 10,000,000 ordinary shares (Wew Shares) at an ISSUE price of 20 cents per new share and one free attached
Option (New Option) for every two new shares applied for and ISSUED.

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT THIS APPLICATION FORM MUST NOT BE HANDED ON (WHETHER IN PAPER OR ELECTRONIC
FORM) UNLESS ATTACHED TO THE SHORT FORM PROSPECTUS OF THE COMPANY DATED 1 NOVEMBER 2005 (PROSPECT Please read all instructions on the reverse of this form

WRITE THE NUMBER OF SHARES YOU ARE APPLYING FOR HERE

Minimum 19,000 and then multiples of 5,000 New Shares (with one free New		$X 20$ cents	B	\$ .00 PLEASE MAKE SURE THAT THE
Option for every two New Shares)	ABOVE OR A LESSER NUMBER	YOU MAY BE ALLOCATED ALL OF THE NEW SHARES		AMOUNT OF YOUR CHEQUE(S) EQUALS THIS AMOUNT
WRITE YOUR NAME HERE			Ð.	ENTER YOUR TFN HERE
TITLE GIVEN NAME(S) (NO INITIALS) AND SURNAME OR COMPANY NAME				ENTER YOUR TAX FILE NUMBER(S)
				(OR EXEMPTION CATEGORY)
JOINT APPLICANT 2 OR
WRITE YOUR POSTAL ADDRESS HERE NUMBER/STREET/BOX NUMBER DETAILS
SUBURB/FOWN				STATE/POSTCODE
CONTACT NUMBER (WORK)		CONTACT NUMBER (HOME)		CONTACT NAME (PRINT)
EMAIL ADDRESS
HOLDER IDENTIFICATION NUMBER (HIN)
IF YOU ARE A SPONSORED PARTICIPANT WITHIN CHESS PLEASE ENTER YOUR HOLDER INDENTIFICATION NUMBER (HIN)
				TOTAL AMOUNT OF
DRAWER	BANK	BRANCH	BSB NO.	CHEQUE ENCLOSED
				A\$
				A\$
PLEASE MAKE CHEQUE(S) PAYABLE TO 'KALGOORLIE-BOULDER RESOURCES LTD - APPLICATION ACCOUNT'

SHARE REGISTRARS USE ONLY

$\mathbf{I}$

ADVISER CODE

BROKER CODE

BROKER REFERENCE

You should read the Prospectus carefully before completing this Application Form. No New Shares or New Options will be issued or sold on the basis of this Prospectus later than 13
months after the date of this Prospectus.

NO SIGNATURE REQUIRED

HOW TO COMPLETE THE APPLICATION FORM

Apply as soon as possible. The Offer may close early.

Please use this Application Form - photocopies will not be accepted. Please complete all relevant sections of the Application Form USING BLOCK LETTERS. These instructions refer to relevant sections of the Application Form.

• Insert the Number of New Shares for which you wish to A. apply. The Application must be for a minimum of 10,000 New Shares and thereafter in multiples of 5,000 New Shares (with one free New Option for every two New Shares applied for).
• B. Insert the Total Amount of Application Money payable. To calculate your Application Money multiply the number of shares applied for by the amount per share payable.
• C. Write the Full Name(s) and Titles(s) of all legal entities that are to be recorded as the registered holder(s). Refer to the Name Standards below for guidance on valid registration.
• D. Enter the tax file number(s) of the Applicant(s). With a joint holding, only the tax file numbers of two holders are required.
• E. Enter your Postal Address for all communications from the Company. Only one address can be recorded. You may also enter your email address as the Company may choose to communication with you via your email address.
• F. Enter your telephone numbers and contact person the Share Registry can speak to if they have any queries regarding this Application.

• G. If you are sponsored in CHESS by a stockbroker or other CHESS participants enter your Holder Identification Number (HIN).

• H. Payment must be made in Australian Currency and cheques must be drawn on an Australian Bank. Cheques or bank drafts must be payable to Kalgoorlie-Boulder Resources Limited - Application Account and crossed Not Negotiable. Cheques not properly drawn will be rejected. Cheques will generally be deposited on the day of receipt. If cheques are dishonoured the Application may be rejected.

• Before completing the Application Form the Applicant(s) $\frac{1}{2}$ state(s) they have read the Prospectus to which the Application relates. The Applicant(s) agree(s) that this Application is for New Shares (with one free New Option for every two New Shares applied for) in Kalgoorlie-Boulder Resources Limited upon and subject to the terms of the Prospectus, agree(s) to take any number of New Shares (with one free New Option for every two New Shares issued) equal to or less than the number of New Shares indicated in Box A that may be allotted to the Applicants(s) pursuant to the Prospectus and declare(s) that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.

Forward by post or deliver your completed Application Form together with the Application Money to:

Kalgoorlie-Boulder Resources Ltd PO Box 312 OR Northbridge WA 6003

Kalgoorlie-Boulder Resources Ltd 48 Lake Street Northbridge WA 6003

E OLEORIO COLLEGIO	Cordination of Robinsident	hearm Comor Gristalon
Individual Use given names in full, not initials	Mr John Alfred Smith	J A Smith
Company Use company title, not abbreviation	ABC Pty Ltd	ABC P/L ABC Co.
Joint Holdings Use full and complete names	Mr Peter Robert Williams & Ms Louise Susan Williams	Peter Robert & Louise S Williams
Trusts Use trustee(s) personal name(s), do not use the name of the trust	Mrs Sue Smith	Sue Smith Family Trust
Deceased Estates Use executor(s) personal name(s), do not use the name of the deceased	Ms Jane Smith ≺Est John Smith A/C>	Estate of late John Smith or John Smith deceased
Minor (a person under the age of 18) Use the name of a responsible adult, do not use the name of the minor	John Alfred Smith	Master Peter Smith
Partnerships Use partners personal names, do not use the name of the partnership	Mr John Smith and Mr Michael Smith	John Smith and Son
Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s), do not use the name of the club etc.	Mr Michael Smith	ABC Tennis Association
Superannuation Funds Use name of trustee of the fund	Jane Smith Pty Ltd	Jane Smith Pty Ltd Superannuation Fund