MATSA RESOURCES LIMITED — Capital/Financing Update 2006

Dec 12, 2006

KALGOORLIE-BOULDER RESOURCES LTD ACN 106 732 487

A 1 for 1 Non-renounceable Entitlement Issue

Closing 5pm WDST on 12 January 2007

PROSPECTUS

For a non-renounceable entitlement issue to Shareholders of up to 48,645,694 New Shares and up to 24,322,847 New Options, on the basis of 1 New Share for every 1 Share held at 5pm WDST on the Record Date of 27 December 2006, at an issue price of 10 cents per New Share, payable in full on Application, together with one free attaching New Option for every 2 New Shares subscribed for, exercisable at 20 cents on or before 31 July 2008.

This document is important and requires your immediate attention. It should be read in its entirety. Due to the nature of the Company's activities, the New Shares and New Options offered by this Prospectus should be considered speculative. Accordingly, investors should consult their professional advisers before making an application for New Shares and New Options offered by this Prospectus.

IMPORTANT NOTES

This Prospectus is dated 13 December 2006 and was lodged with ASIC and the ASX on that date.

The ASIC and the ASX and their respective officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisers before deciding whether to apply for the New Shares and New Options. There are risks associated with an investment in Kalgoorlie-Boulder Resources Limited 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 person is authorised to give any information or to make any representation in connection with the Issue described in this Prospectus. Any information which is not contained in this Prospectus or disclosed by the Company pursuant to its continuous disclosure obligations may not be relied upon as having been authorised by the Company in connection with the Issue or this Prospectus.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons who come into possession of this document should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are residents in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed to enable them to subscribe for New Shares and New Options.

Certain terms used in this Prospectus are defined in the Glossary of this Prospectus. Defined terms are usually identifiable by the use of an upper case first letter.

Electronic Prospectus

An electronic version of this Prospectus is available online at www.kalgoorlieboulderres.com.au. The Offer of New Shares and New Options constituted by the electronic version of this Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia. Applications for New Shares and New Options may only be made on the Application Forms 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 an 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 Shareholder 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,

Privacy Disclosure

The Company collects information in relation to each Applicant as provided on an Application Form for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicant's security holding in the Company (Purposes).

By submitting an Application Form, each Applicant agrees that the Company may use the information for the Purposes and the Company may disclose the Information for the Purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and third party service providers, and to the ASX, ASIC and other regulatory authorities.

CONTENTS

SECTION	DESCRIPTION	PAGE
1.	Corporate Directory	1
$\mathbf{2}$	Details of the Offer	$\overline{c}$
3.	Effect of the Issue	7
4.	Statement of Financial Position	8
5.	Risks Associated with the Investment	10
6.	Terms of New Shares and New Options	16
7.	Material Contracts	19
8.	Additional Information	24
9.	Glossary	29

Application Form Enclosure:

SECTION 1 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 6865

Solicitors

DLA Phillips Fox Level 32 St Martins Tower 44 St Georges Terrace Perth WA 6000

Stock Exchange Listing

Australian Stock Exchange Code: KAL and KALO

Share Registry

Advanced Share Registry Services* 110 Stirling Highway Nedlands WA 6009

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

SECTION 2 DETAILS OF THE OFFER

$2.1$ The Offer

By this Prospectus, the Company is inviting Shareholders to participate in a pro-rata nonrenounceable entitlement issue of up to 48,645,694 fully paid ordinary New Shares and up to 24,322,847 New Options on the basis of 1 New Share for every 1 Share held at 5,00pm WDST on the Record Date of 27 December 2006 to raise approximately \$4,864,569 before the costs of the issue. For every 2 New Shares subscribed for, you will receive at no cost a New Option to subscribe for a further Share at 20 cents each on or before 31 July 2008.

The New Shares will have an issue price of 10 cents each, payable in full on Application. Fractional Entitlements will be rounded up to the nearest whole number of New Shares.

The Company currently has 24,132,625 options to acquire Shares on issue (see section 3.1 for details of options). This Offer extends to the holders of any Shares issued pursuant to the exercise of any of the Existing Options prior to the Record Date. If none of the Existing Options are exercised prior to the Record Date the number of New Shares offered pursuant to this Prospectus will be 48,645,694. The maximum amount this Offer can raise on this basis is \$4,864,569 (before the costs of the Issue are deducted). Given that, as at the date of this Prospectus, the market price of the Company's Shares is below the exercise price of all of the existing options, it is considered unlikely that any of the existing options will be exercised. If all existing options are exercised prior to the Record Date up to 72,778,319 New Shares could be offered pursuant to this Prospectus.

The purpose of the Offer and use of funds raised are set out in section 2.3. The rights and liabilities attaching to the New Shares and New Options are set out in section 6.

Event	Date
Prospectus lodged with the ASIC & ASX and Appendix 3B lodged with ASX	13 December 2006
Notice of rights issue sent to security holders	13 December 2006
"Ex date"	19 December 2006
Record Date for Entitlements (5pm WDST)	27 December 2006
Opening Date and Despatch of Prospectus	28 December 2006
Closing Date	12 January 2007
Shares quoted on a deferred settlement basis	15 January 2007
Notice of under subscriptions given to ASX	17 January 2007
Despatch Date for Securities & Deferred Settlement Quotation ends	22 January 2007

Indicative Timetable $2.2$

These indicative dates are determined based upon the current expectations of the Directors and may, subject to the Listing Rules, be changed without notice. The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. As such, the date the Shares are expected to commence trading on ASX may vary.

$2.3$ Purpose of the Offer and Use of Funds

As announced to the ASX on 8 December 2006 the Company has entered into conditional agreements to acquire 100% of the issued share capital of Australian Gold Investments Pty Ltd (AGI), which is the sole registered and beneficial owner of the Norseman Project. Summaries of these agreements are included in section 7.

The Norseman Project is located in the Norseman region of the Goldfields of Western Australia. Access to the area is excellent from Perth via the Great Eastern Highway to Kalgoorlie (600km) then 200 km south via the Coolgardie-Esperance Highway to the town of Norseman, which is a well-serviced regional centre.

The Norseman Project consists of a series of granted mining leases, prospecting licences, exploration licence applications and mining lease applications. The total area of the licences is more than 124 square kilometres. The Project tenement package is located from 6 to 25 kilometres south of the Norseman town site.

Funds raised under the Offer will be applied to finance the acquisition of AGI in the event the agreements to acquire AGI become unconditional, to working capital and to meeting the expenses of the Offer. In the event the agreements to acquire AGI do not become unconditional, do not complete or are terminated, the Company will use the funds raised under the Offer to finance the assessment of new project opportunities (and, if warranted, their acquisition), for working capital and for meeting the expenses of the Offer,

The following table illustrates the Company's proposed use of funds raised under the Offer if the estimated full subscription is achieved (based on the assumption that none of the Existing Options are exercised prior to the Record Date) and the agreements to acquire AGI become unconditional and complete:

Use of Funds	Estimated Full Subscription
Raising under Offer	4,864,569
Estimated expenses of the Offer	356,000
Acquisition costs for the Norseman Project (including estimated stamp duty) and associated costs	3,693,000
Unallocated working capital	815,569

The maximum amount which could be raised pursuant to the Offer if all of the existing options are exercised prior to the Record Date is \$7,277,832.

$2.4$ The Offer Period

The Record Date for the Offer is 27 December 2006. The Opening Date for Applications in respect of the Offer is anticipated to be 28 December 2006. The Closing Date for the Offer is anticipated to be 12 January 2007. The Offer Period may be varied by the Directors without prior notice subject to the Listing Rules.

$2.5$ Acceptance

This Offer may be accepted in whole or in part. Your Application Form and payment in full of 10 cents per Share must be received before 5.00pm WDST on 12 January 2007.

2.6 Applying for Shares and Options

Full Entitlement

If you wish to take up all of your Entitlement, complete the enclosed Application Form in accordance with the instructions set out on the reverse side of the Application Form and provide it and the application money to the Company's share registry as set out below. An Application must not exceed your Entitlement as shown on the Application Form. An application exceeding your Entitlement will be deemed to be for your maximum Entitlement and any surplus funds will be returned to you without interest.

Part Entitlement

If you wish to take up part of your Entitlement, complete the Application Form in accordance with the instructions set out on the on reverse side of the Application Form and insert the number of New Shares which you wish to accept under this Issue. You must then provide the Application Form and application money to the Company's share registry as set out below.

You do not wish to participate

If you do not wish to take up any part of your Entitlement under this Issue you are not required to take any action. Any Shortfall will be allocated in accordance with section 2.7. If you do nothing, although you will continue to own the same number of Shares, your percentage shareholding will be diluted.

Applications

In order to participate in the Issue the completed Application Forms together with the application money 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 6865

The completed Application Form and application money must be received by no later than 5.00pm on 12 January 2007.

Cheques for the application money must be in Australian currency drawn on an Australian bank, made payable to "Kalgoorlie-Boulder Resources Ltd - Application Account" and crossed "Not Negotiable". Cash will not be accepted and receipts will not be issued.

Pending the issue and allotment of New Shares and New Options or payment of refunds pursuant to this Prospectus, all application money will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim any interest.

New Shares issued pursuant to the Offer will rank pari passu in all respects with all other Shares.

$2.7$ Shortfall

There is no minimum subscription amount and the Offer is not underwritten. The Directors reserve the right to place any Shortfall at their discretion in accordance with the Listing Rules. The Directors intend to place any Shortfall with investors to ensure that the maximum amount under the Offer is raised. The placement price of any Shortfall will be the same price at which New Shares are offered under the Offer. The Company has entered into letters of commitment with various parties who have agreed to take up all of the Shortfall in the event the Directors exercise their discretion to place the Shortfall with them (letter agreements summarised in section $7.4$ ).

$2.8$ Allotment

No Applications will be processed by the Company unless and until permission is granted (whether conditional or otherwise) by the ASX for the New Shares and the New Options the subject of the Offer to be granted Quotation. Once this matter is satisfied, New Shares and New Options will be allotted to successful Applicants as soon as practicable.

2.9 ASX Listing

The Company is presently admitted to the official list of the ASX, and the Shares and Options of the Company are quoted on the ASX (ASX code: KAL and KALO).

An application for admission of the New Shares and New Options for Ouotation will be made to the ASX within 7 days after the date of this Prospectus. If permission for Quotation of the New Shares and New Options is not granted within 3 months of the date of this Prospectus then the New Shares and New Options will not be issued or allotted and the Company will repay any application money received pursuant to this Prospectus within the time prescribed under the Corporations Act, without interest. The ASX takes no responsibility for the contents of this Prospectus. The fact that the ASX may grant Ouotation of the New Shares and New Options is not to be taken in any way as an indication of the merits of the Company or the New Shares and New Options now offered.

2.10 Overseas Shareholders

This Prospectus and Application Forms do not constitute an offer in any jurisdiction outside of Australia or New Zealand, or to any person to whom (or in any place where) it would be illegal to make such an offer. The Directors consider that it is unreasonable to extend the Offer to other jurisdictions having regard to the small number of Shareholders in other jurisdictions, the small number of New Shares and New Options which could be offered to them and the cost of complying with the legal requirements and other requirements of the regulatory authorities in the overseas jurisdictions.

$2.11$ Rights and liabilities attaching to New Shares and New Options

The Corporations Act and the Company's constitution set out the rights and liabilities attaching to New Shares. A summary of the rights and liabilities attaching to New Shares and New Options is included in section 6.

The New Shares will not carry the entitlement to an in-specie distribution by the Company of shares in Burey Gold Ltd (ACN 113 517 203) as announced to the ASX on 2 May 2006. 7 November 2006, and 14 November 2006.

$2.12$ Allotments after 13 months

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

2.13 Risk Factors

Prospective investors in the Company should be aware that subscribing for New Shares and New Options the subject of this Prospectus involves a number of risks. These risks are set out in section 5 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 5, 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.

2.14 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.

Enquiries $2.15$

Any enquiries about the Offer can be made to the Company on (08) 9228 9742.

SECTION 3 EFFECT OF THE ISSUE

$3.1$ Capital Structure

Kalgoorlie-Boulder Resources Limited currently has 48,645,694 Shares and 24,132,625 options on issue.

The following tables show the Company's capital structure both before and after the Issue (assuming that none of the existing options are exercised prior to completion of the Offer).

	Ordinary Shares	Options
Currently Issued	48.645.694	24,132,625
Securities offered under the )ffer	48,645,694	24,322,847
Revised Capital Structure	97,291,388	48,455,472

If the Company successfully raises funds through the placement of 10,000,000 Shares at 10 cents per Share (Placement Shares) with a free attaching Option exercisable at 20 cents expiring on 31 July 2008 for each Share subscribed (as announced to the ASX on 8 December 2006), the capital structure of the Company will be 58,645,694 Shares and 34,132,625 Options after the Issue. The Placement Shares will not participate in this Offer.

The following options are currently on issue (Existing Options):

Code	Expiry Date	Exercise Price	No. of Options
Listed	31 July 2008	20 cents	8,632,625
Unlisted	31 July 2008	20 cents	5,000,000
Unlisted	31 July 2008	30 cents	8,250,000
Unlisted	31 July 2008	40 cents	2,250,000
		TOTAL	24,132,625

$3.2$ Effect of the Offer

Assuming all the New Shares and New Options under this Prospectus are issued (and none of the existing options are exercised prior to the Record Date), the principal effect of the Issue will be to:

• $(a)$ increase Company cash reserves by approximately \$4,508,569 (after the estimated costs of the Issue are deducted);
• $(b)$ increase the number of Shares on issue from 48,645,694 as at the date of this Prospectus up to 97,291,388; and
• $(c)$ increase the number of Options on issue from 24,132,625 as at the date of this Prospectus up to 48,455,472.

SECTION 4 STATEMENT OF FINANCIAL POSITION

$4.1$ Pro Forma Statement Balance Sheet

The Balance Sheet as at 30 June 2006 (audited), Balance Sheet as at 30 September 2006 (unaudited), and unaudited Pro Forma Balance Sheet shown in the table below have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. The Pro Forma Balance Sheet is for illustration purposes only and assumes full subscription under this Offer.

	Audited	Unaudited	Unaudited
	30 June 2006	30 Sept 2006	Proforma
	Ś,	S	S
ASSETS
CURRENT ASSETS
Cash and cash equivalents	887,329	87,198	4,595,767
Trade and other receivables	85,654	166,914	166,914
Other current assets	122,262	123,695	123,695
Total current assets	1,095,245	377,807	4,886,376
NON-CURRENT ASSETS
Exploration and evaluation costs	7,389,395	7,131,624	7,131,624
Plant and equipment	56,734	50,052	50,052
Financial assets	15,000
Total non-current assets	7,461,129	7,181,676	7,181,676
TOTAL ASSETS	8,556,374	7,559,483	12,068,052
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	2,332,140	1,064,782	1,064,782
Interest bearing liabilities	750,000	750,000	750,000
Provision	47,000	49,772	49,772
Total current liabilities	3,129,140	1,864,554	1,864,554
NON-CURRENT LIABILITIES
Deferred tax liabilities	24,297	24,297	24,297
Total non-current liabilities	24,297	24,297	24,297
TOTAL LIABILITIES	3,153,437	1,888,851	1,888,851
NET ASSETS	5,402,937	5,670,632	10,179,201
EQUITY
Issued Capital	5,497,843	6,492,843	11,001,412
Reserves	1,090,905	1,085,625	1,085,625
Accumulated losses	(1,185,811)	(1,907,836)	(1,907,836)
TOTAL EOUITY	5,402,937	5,670,632	10,179,201

Assumptions for Unaudited Pro Forma Consolidated Balance Sheet

The unaudited pro forma consolidated Balance Sheet above has been prepared on the basis of full subscription under the Issue and that there has been no material movements in the assets and liabilities of the consolidated entity between 30 September 2006 and the close of the Issue other than:

• $\mathbf{1}$ . the Company issues 48,645,694 New Shares at 10 cents per New Share and 24,322,847 New Options for nil consideration pursuant to this Prospectus, raising proceeds of \$4,864,569; and
• $\overline{2}$ . the payment of the estimated costs of the Offer of \$356,000 which are deducted from the proceeds of the Issue.

SECTION 5 RISKS ASSOCIATED WITH THE INVESTMENT

This section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company involves many risks that may be higher than the risks associated with an investment in other companies.

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

Therefore, the New Shares and New Options to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital, or market value.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to accept their Entitlement.

$5.1$ General investment risks

The general risks discussed below are outside the control of the Company and the Directors and cannot be mitigated. There is a risk that the price of New Shares and New Options and returns to Shareholders may be affected by changes in:

• $\bullet$ local and world economic conditions;
• the gold price and the price of other minerals; ò
• oil and gas prices:
• interest rates:
• levels of tax, changes in taxation law and accounting practice;
• government actions or intervention;
• legislative changes:
• native title claims;
• government royalties;
• production royalties;
• inflation or inflationary expectations:
• commodity supply and demand;
• industrial disruption;
• claims by third parties: $\bullet$
• share market conditions; ٠
• natural disasters, social upheaval or war in Australia or overseas; and
• terrorism in Australia or overseas.

as well as other factors beyond the control of the Company.

$5.2$ Specific Risks associated with the Company

There are also a number of specific risks associated with the Company which may adversely affect the Company's financial position, prospects and the price of its Shares and Options.

The Company currently operates in the mineral exploration and extraction industry within Australia and the oil and gas exploration industry within the United States of America. Set out below are risks that relate to the specific circumstances of the Company which may adversely affect the Company:

$(a)$ Contractual

The Company has entered into conditional agreements (which are summarised in section 7) to acquire 100% of the shares in AGI, which is the owner of the Norseman Project. The ability of the Company to become the owner of AGI will depend on the performance by RASL of its obligations under the AGI Purchase Agreement. If there is a default by RASL in the performance of its obligations then it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly and there can be no guarantee that a legal remedy will ultimately be granted on appropriate terms. There is a risk that, if successful, damages may be the remedy rather than an order compelling performance of the contracts to acquire 100% of AGI.

There is also a risk that the conditional agreements to acquire 100% of AGI may not become unconditional due to a failure to meet any one or more of the conditions precedent. In that event, the funds raised under the Offer will be used as set out in section 2.3.

$(b)$ Exploration and Evaluation

Mineral exploration is a high-risk undertaking that even a combination of experience, knowledge and careful evaluation may not be able to overcome. There can be no assurance that minerals will discovered or, even if they are, that commercial quantities of minerals can be recovered from the Company's areas of interest. Even if an apparently viable resource is identified, there is no guarantee that it can be economically exploited. Unless the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

$(c)$ Development

The possible future development of a mining operation on any of the tenements in which the Company has an interest is dependent on a number of factors, including, but not limited to, the acquisition and/or delineation of economically recoverable mineral resources, favourable geological conditions, obtaining the necessary approvals from all relevant authorities and parties, and the acquisition of funding. In the event that the Company commences production its operations may be disrupted by a variety or risks and hazards, including the operating risks set out below. No assurance can be given that the Company will achieve financial viability through the development and/or mining of projects on its tenements.

$(d)$ Operating

Operating activities are subject to numerous risks, many of which are beyond the Company's control. The Company's operations may be curtailed, delayed or cancelled as a result of factors such as adverse weather conditions, mechanical difficulties, shortages in or increases in the costs of consumables, spare parts, plant and equipment, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, and compliance with governmental requirements. Hazards incident to the exploration and development of mineral properties such as unusual or unexpected geological formations may be encountered by the Company. Industrial and environmental accidents could lead to substantial claims against the Company for injury or loss of life, and damage or destruction to property, as well as regulatory investigations, clean up responsibilities, penalties and the suspension of operations.

$(e)$ Title risk

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments unless a total or partial exemption is granted.

Further, there is no guarantee that current or future applications, extensions or renewals of the tenements in which the Company has an interest will be granted.

Under certain contractual agreements to which the Company is or may in the future become a party, the Company is or may become subject to payment and other obligations. Failure to meet these obligations could lead to forfeiture of the tenements.

$(f)$ Native Title

The effect of the present laws in respect of native title that apply in Australia is that mining tenement applications and existing tenements may be affected by native title claims and procedures. This may preclude or delay the granting of exploration and mining tenements and considerable expenses may be incurred negotiating and resolving issues. The presence of Aboriginal heritage and sacred sites on tenements held by the Company may limit or preclude exploration or mining activity within the sphere of influence of those sites and delays and expenses may be experience in obtaining clearances or agreements.

$\left( \mathbf{g} \right)$ Environmental

The Company's operations are subject to the environmental risks which are inherent in the mineral exploration and development industry, including the risk of significant claims as a result of environmental damage. The Company is subject to environmental laws and regulations in connection with all its operations. Further the Company may require approval from relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals could prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

$(h)$ Potential resource and reserve figures

Reserve and resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which are valid when originally calculated may alter significantly when new information and techniques become available. In addition, by their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretations which may prove to be inaccurate. As further information becomes available through additional drilling and analysis, estimates are likely to change. This may result in alteration to development and production plans which may adversely affect the Company's operations.

$(i)$ Commodity and currency price fluctuations

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes it to commodity price and exchange rate risks. Commodity prices fluctuate, are difficult to forecast and are affected by a number

of factors beyond the control of the Company, including world demand, forward selling by producers and production costs of major commodity producing regions. International prices for commodities are denominated in United States dollars, whereas the Company's cost base is in Australian dollars. As a result the Company is exposed to the risk of adverse fluctuations in commodity prices and exchange rates, which could have a materially adverse effect on the Company's operations, financial position, and performance.

Oil and Gas in the United States of America

$(a)$ 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.

$(b)$ Exploration and Production

The Company is subject to risks relating to the exploration, drilling and production of oil and gas which are not generally associated with other businesses. The business of oil and gas exploration and project development is a high risk undertaking which by its very nature contains elements of inherent risk. 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.

$(c)$ 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.

$(d)$ 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. Other operational risks include industrial disputes, other geological and geophysical investigations and other unanticipated operational and technical difficulties.

$(e)$ Environmental Risks

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

$(f)$ Commercialisation

Even if the Company recovers potentially commercial activities of oil or gas, there is no guarantee 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.

$(g)$ 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.

$(h)$ Metro Energy - Key Contractor

The Company's success in relation to the exploration and development of the oil and gas leaseholds located in Okmulgee County, Oklahoma in the USA which the Company has a 75% working interest in, is largely dependent on the core competencies and services of Metro Energy Group, Inc. (Metro Energy), an experienced US based oil and gas explorer. The loss or non-performance of Metro Energy as a contractor could have a material adverse effect on the Company.

$(i)$ 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.

$(i)$ 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.

$(k)$ Exchange Rate

The exploration and development operations of the Company will take place in the USA and payment obligations will be in US dollars. 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.

$(1)$ 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.

$(m)$ Legal Title

Although the Company has entered into agreements to acquire a 75% working interest in certain oil and gas leaseholds located in Okmulgee County, Oklahoma, USA, it is not currently the legal owner of the leases. The process of confirming the Company's legal title to the leases is a continuous process. Regulatory approval is required to the transfer of the Leases to the Company. In the event that approval is not provided to the transfer

of the leases, the Company will be materially adversely affected. This is because it may not be able to engage in its proposed exploration and development activities in relation to the leases and will not be able to acquire the legal title to the leases for which it has paid.

In the event that Metro Energy 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 Energy of its obligations under the agreement between Metro Energy and the Company 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.

General

$(a)$ Requirements for additional capital

The Company's capital requirements depend on numerous factors. Depending on the Company's ability to generate income from its existing projects, the Company may require further financing in addition to amounts raised in the Offer. Any additional equity financing may dilute the holdings of shareholders, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may not be able to further develop its projects and there may be an impact on the Company's ability to continue as a going concern.

$(b)$ Insurance

The Company ensures that insurance is maintained within ranges of coverage the Company believes to be consistent with industry practice and having regard to the nature of activities being conducted. No assurance, however, can be given that the Company will be able to obtain such insurance coverage at reasonable rates or that any coverage it arranges will be adequate and available to cover any such claims.

SECTION 6 TERMS OF NEW SHARES AND NEW OPTIONS

$6.1$ Rights and liabilities 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, 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.

$(c)$ Transfer of Shares

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.

Alteration to the Constitution $(g)$

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.

$6.2$ Terms and conditions attaching to New Options

• $(a)$ Each New Option entitles the holder to subscribe for 1 Share at an exercise price of 20 cents.
• $(b)$ 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.
• $(c)$ The New Options are transferable and will be listed for Official Ouotation.
• $(d)$ The New Options have no voting rights.
• $(e)$ 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.

• $(f)$ 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.

• 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. $(g)$

• 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. $(h)$

SECTION 7 MATERIAL CONTRACTS

$7.1$ AGI Purchase Agreement

By a share sale agreement dated 7 December 2006 between the Company and RASL, the Company agreed to purchase from RASL, and RASL agreed to convey to the Company, 35.5% of the issued share capital (35,500,000 fully paid ordinary shares) (Current Interest) of Australian Gold Investments Pty Ltd ACN 089 489 645 (AGI), the owner of the mining tenements that comprise the Norseman Project (AGI Purchase Agreement). Under a conditional share sale and purchase agreement with various vendors of AGI shares (AGI SSA). RASL has agreed to purchase 64.5% (64,500,000 fully paid ordinary shares) of the issued share capital in AGI, being the balance of the entire issued share capital of AGI (Remaining Interest). RASL will hold the Remaining Interest as bare trustee for the Company under the terms of the AGI Trust Deed (see section 7.2).

The AGI Purchase Agreement is conditional upon the:

• $(a)$ completion by RASL of the AGI SSA, in relation to which it has entered into the AGI Trust Deed (summarised at section 7.2):
• $(b)$ completion by the Company of due diligence enquiries in relation AGI, to the AGI shares and the Norseman Project within 30 days of the date of the AGI Purchase Agreement;
• $(c)$ RASL being satisfied that the Company has at least \$2,000,000 available at settlement for use by AGI to meet expenditure commitments on the tenements held by AGI;
• $(d)$ Company receiving a copy of the AGI SSA subject to it providing confidentiality undertakings;
• $(e)$ Company obtaining any necessary shareholder approvals and other consents pursuant to the ASX Listing Rules and the Corporations Act 2001 (Cth) in respect of the transactions contemplated by the AGI Acquisition Agreement; and
• $(f)$ Company raising not less than \$5,000,000 through the Offer and placement of new shares.

Subject to satisfaction of the Conditions Precedent within 90 days of execution or such further period as the parties agree in writing:

• $(a)$ the Company agrees to ensure RASL meets all of its payment obligations under the AGI SSA insofar as they relate to the acquisition of the Remaining Interest;
• RASL agrees to endorse in the Company's favour a Promissory Note dated 1 August $(b)$ 2005 as extended, under which AGI owes RASL \$3,000,000 and to transfer and assign to the Company its rights, title and interests in, and obligations under, each security given by AGI to RASL as security for the Promissory Note.

The consideration paid by the Company to RASL for the acquisition of the Current Interest comprises the:

• $(a)$ issue of 48,500,000 fully paid ordinary Shares in the Company, in relation to which RASL agrees to enter into a restriction agreement for a period of 24 months;
• (b) issue of 1,500,000 fully paid ordinary Shares in the Company which shall not be subject to any restrictions on their trading and in relation to which the Company shall make a

submission to the ASX supporting the absence of any escrow restriction or, if one is to be applied, seeking the minimum period of restriction:

• $(c)$ payment of the purchase price paid or payable under the AGI SSA, being a sum of \$2,650,000 less a working capital adjustment which the parties agree to cap at \$265,000 plus any tax payable by AGI arising out of transactions entered into by AGI prior to the completion date under the AGI SSA: :
• $(d)$ issue of convertible notes to a face value of \$3,000,000 with an 8% attaching coupon (payable quarterly) redeemable 36 months after settlement or convertible into 30,000,000 fully paid ordinary shares in the Company at any time between 12 and 36 months after settlement. If the Company sells the assets vended to it under the AGI Purchase Agreement, RASL will have the right to redeem the convertible note irrespective of whether the time periods have elapsed The convertible notes are to be fully secured in favour of RASL by a first ranking charge over the Company's shares in AGI:
• $(e)$ payment to RASL of:
• $(i)$ \$500,000 upon finance being approved on terms satisfactory to the Company following the successful completion of a bankable feasibility study of the Norseman Project; and
• \$1,000,000 within 180 days of gold first being commercially produced from the $(ii)$ Norseman Project.
• $(f)$ provision of a fixed and floating charge over the Company's shares in AGI to secure to payments outlined in (e).

The Company also agrees to:

• pay to Delta Capital Pty Ltd the sum of \$330,000 and issue it 1,500,000 ordinary shares; $(a)$
• reimburse RASL \$20,000 of its costs and expenses associated with the AGI Purchase $(b)$ Agreement; and
• $(c)$ pay to RASL a working capital adjustment on an accruals basis in relation to outgoings paid (limited to prepayments, rental, royalty, insurance, bonds, rates and taxes only) less any outstanding tenement rentals or similar outgoings and for any cash at bank as agreed.

The Purchaser must, upon completion of the AGI Purchase Agreement, either (at RASL's election) establish a bank facility in lieu of the bank facility that RASL has funded or pay to RASL \$162,000 in relation to the environmental bonds for the Norseman Project.

RASL agrees that it will, to the extent it is able to do so, endeavour to ensure the warranties it receives pursuant to the AGI SSA extend to the benefit of the Company, at the expense of the Company.

The Company agrees, subject to its constitution, any applicable laws and the ASX Listing Rules, to appoint non-executive directors nominated by RASL in proportion to RASL's shareholding in the Company. At the date of the AGI Purchase Agreement, the Company is required to appoint two persons nominated by RASL to the Board.

In the event that the Company or AGI wish to secure project finance for the development of a mine within the Norseman Project, RASL agrees that it shall in good faith consider postponing the priority of its security over the AGI shares to any security interest or encumbrance reasonably required by a financier.

In the absence of any agreement to the contrary, settlement of the AGI Purchase Agreement, giving the Company effective control of AGI and ensuring payment of the consideration and any other payments required under the AGI Purchase Agreement to RASL, shall take place within 5 Business Days of the date upon which all of the conditions precedent are satisfied.

The AGI Purchase Agreement may be terminated by a party if there is a breach of a material nature by the other party and that breach is not remedied within a reasonable time. Each party to the AGI Purchase Agreement is responsible for its own costs and expenses in respect of the AGI Purchase Agreement, with the exception that:

• $(a)$ RASL is to pay any New South Wales stamp duty arising from the sale of the Current Interest;
• $(b)$ the Company is to pay any New South Wales stamp duty arising from the agreements to acquire 100% of the issued share capital in AGI;
• AGI will be liable for any land rich duty payable pursuant to Part IIIBA of the Stamp $(c)$ Act 1921 (WA);
• $(d)$ the parties agree to prepare joint submissions to the New South Wales Office of State Revenue in relation to the duty payable as outlined in paragraphs (a) and (b) above; and
• $(e)$ the Company shall be responsible for preparing submissions in relation to the stamp duty outlined in paragraph (c) above. RASL shall be entitled to review the submission prior to its lodgement at the Western Australian Office of State Revenue.

Warranties have been given by RASL (as vendor) and the Company (as purchaser) which are of the type commonly found in agreements for the sale and purchase of shares.

In the event that completion under the AGI SSA occurs prior to the satisfaction or waiver of the conditions precedent, the parties agree that RASL shall pay the purchase price under the AGI SSA and that completion shall not alter the parties' obligations to meet the conditions precedent and effect settlement. The AGI Purchase Agreement shall then be modified such that the Company shall reimburse RASL for any payment of the purchase price. If settlement of the AGI Purchase Agreement fails to occur within 30 days of completion of the AGI SSA, RASL may terminate the AGI Purchase Agreement by providing notice to the Company, which shall result in the termination of the AGI Trust Deed (Termination Event).

$7.2$ AGI Trust Deed

By an agreement dated 4 December 2006 between the Company and RASL, RASL is to hold the shares it legally acquires under the AGI SSA and all distributions, profits and benefits accrued in respect of these shares on trust for the Company. The Company is to pay the price payable under the AGI SSA to RASL on or before completion of the agreement in accordance with the AGI Purchase Agreement, pay all stamp duty payable on the acquisition of the shares in accordance with the AGI Purchase Agreement and indemnify RASL for any liability incurred as trustee of the trust after the AGI Purchase Agreement is unconditional and RASL holds the shares on trust under the AGI Trust Deed. The consideration to be paid by RASL pursuant to the AGI SSA upon completion will be \$2,650,000 less a working capital adjustment which the parties agree to cap at \$265,000 plus any tax payable by AGI arising out of transactions entered into by AGI prior to the completion date.

RASL must nominate the Company as transferee of the Remaining Interest and must not raise finance in relation to the Remaining Interest. In the event that the AGI Purchase Agreement is

validly terminated for failure to satisfy the conditions precedent, or the Termination Event occurs, the AGI Purchase Agreement, the AGI Trust Deed and any trusts created by it shall cease to be of any force or effect.

$7.3$ Manager of the Offer- Delta Capital Pty Ltd

By a letter dated 6 November 2006 the Company has entered into an agreement with Delta Capital Pty Ltd (Delta) whereby Delta will act as manager to the Company's capital raising of \$6,000,000 including the Offer (Delta Agreement). Under the Delta Agreement the Company agrees to pay to Delta a management fee of \$100,000 plus GST, payable on the Company successfully raising all or part of the proposed \$6,000,000 (including the Offer), within 7 days of receipt of funds. In addition, the Company agrees to pay Delta a fee of 6% (including GST) of any placement raised in addition to the Offer. This includes any distribution fee payable to a sponsoring or participating broker.

The Delta Agreement may be terminated by either party at any time by written notice however termination shall not release either party from any obligations existing prior to the termination. The Company agrees that it shall indemnify Delta and hold Delta harmless from and against all claims, actions, demands or proceedings instituted against Delta and all liabilities, losses, damages, costs and expenses (which shall include reasonable legal costs and expenses) incurred by Delta, connected to or arising out of the Delta Agreement unless they result from the wilful default, negligence, breach of law or contract by Delta.

$7.4$ Letters of Commitment

The Company has entered into separate agreements with each of Montagu Corporate Pty Ltd, ACNS Capital Markets Pty Ltd and Chess Capital Partners Pty Ltd (the Firms) pursuant to which the Firms have agreed to take up any Shortfall (Letters of Commitment) if the Directors decide to place any part of the Shortfall with the Firms. The Company will pay to each of the firms a fee of 4% of the maximum amount committed to by each firm (which in aggregate equals the maximum amount that can be raised under the Offer), irrespective of the actual amount of the Shortfall, within 7 days of allotment,

Except where required by law, the Company does not accept liability or responsibility in relation to the offer of any Shortfall. The Firms are each to indemnify and hold harmless the Company against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, fees, expenses or disbursements of any kind arising out of a breach by the Firms of their obligations under the Letters of Commitment.

$7.5$ Convertible Note

The Company has entered into a convertible note deed, dated 7 December 2006, with RASL, pursuant to which the Company agreed to create and issue the convertible notes to RASL as partial consideration for the benefits received under the AGI Purchase Agreement between the companies (Convertible Note Deed).

At settlement under the AGI Purchase Agreement, the Company has agreed to issue to RASL 12 notes each with a value of \$250,000 (Face Value) (Notes). RASL may convert a Note into 2,500,000 fully paid ordinary shares in the Company between 12 and 36 months after settlement of the AGI Purchase Agreement. In the event that the Company sells substantially all of its shares in AGI, RASL is entitled to convert a Note into 2,500,000 fully paid ordinary shares irrespective of the time that has elapsed since Settlement. The Company is required to pay interest on the Face Value at a rate of 8% per annum on a quarterly basis in arrears until such time as the Note is converted or repaid and on the date a relevant Note is converted or repaid.

In the event that the Company sells or agrees to sell substantially all of the business or undertaking of AGI, or the Company becomes a subsidiary of another corporation or an

insolvency event occurs, less than 36 months after Settlement (Early Redemption Event), and a sponsor does not issue a redemption notice in the prescribed form to the Company within 10 Business Days after the sponsor receives written notice from the Company of the occurrence of an Early Redemption Event, a compulsory conversion event (Compulsory Conversion Event) shall be deemed to have occurred. The Company must, as soon as reasonably practicable, give written notice to RASL that a Compulsory Conversion Event has occurred and must within 5 Business Days of the Compulsory Conversion Event convert RASL's Notes into Shares. The Company must, within 10 Business Days of the date upon which the Notes are converted to Shares, despatch to RASL free of charge a share certificate or holding statement. The conversion of a Note shall constitute full and final payment of any outstanding amounts payable on the Note.

The Company must, as soon as reasonably practicable, given written notice to the sponsors that an Early Redemption Event has occurred, pursuant to which RASL may require the Company to redeem any or all of the Notes by repaying the Face Value and any accrued and unpaid interest.

SECTION 8 ADDITIONAL INFORMATION

8.1 Market Price of Shares

Shares have traded between 10 cents and 17 cents over the 3 months preceding the date of this Prospectus. The last traded price for Shares was 15 cents on 8 December 2006 before this Prospectus was lodged with ASIC and the ASX.

The Company currently has 8,632,625 options quoted on the ASX. Options have traded between 2.2 cents and 4.3 cents over the 3 months preceding the date of this Prospectus. The last traded price for Options was 3.2 cents on 28 November 2006 before this Prospectus was lodged with ASIC and the ASX.

8.2 Continuous Disclosure Obligations and Documents Available for Inspection

This Prospectus is issued pursuant to section 713 of the Corporations Act using the special prospectus content rules for continuously quoted securities. This Prospectus is a "transaction specific prospectus" and is required to contain information in relation to the effect of the issue of the Offer on the Company and the rights and liabilities attaching to the New Shares and New Options. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the Company. Accordingly, information that is already in the public domain as a result of the periodic reporting and continuous disclosure obligations of the Company has not been included in this Prospectus other than that which is considered necessary to make the Prospectus complete.

The Company is a "disclosing entity" under the Corporations Act and, as such, is subject to regular reporting and disclosure requirements. As an ASX listed company, the Company is subject to continuous disclosure obligations under the Listing Rules which require it to immediately notify the 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 or value of the Securities of the Company. The New Shares offered pursuant to this Prospectus are in a class of securities that have been continuously quoted on the ASX for at least 12 months prior to the date of this Prospectus.

Copies of all documents lodged with ASIC in relation to the Company may be obtained from, or inspected at, an office of ASIC.

The Company will provide free of charge to any person on request during the Application Period in relation to this Prospectus, a copy of each of the following documents:

• $(a)$ the 2006 Annual Report for the financial year ending 30 June 2006; and
• $(b)$ any documents used to notify the ASX of information relating to the Company in accordance with its continuous disclosure obligations after the lodgement of the 2006 Annual Report and before the date of this Prospectus.

Copies of all documents lodged with ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

The following is a list of documents lodged with the ASX since the 2006 Annual Report:

Date A TANK A REAL AND CONTINUES OF THE ABOVE ASSESSED FOR THE ABOVE ASSESSED.	Jetails
$\parallel$ 30 October 2006	-------------------------------------- (Notice of Annual General Meeting) فترا والمستنب سنتبرأ والمتناقر والمتاريخ والمتاريخ والمتوارد والمتاريخ والمتاريخ والمتاريخ والمحارب والمحاربين
$31$ October 2006	-------- First Ouarter Activities Report ________

31 October 2006	First Quarter Cashflow Report
17 November 2006	In-Specie distribution-Burey Gold Ltd shares
14 November 2006	Proposed In-Specie Distribution- Burey Gold Ltd Shares
14 November 2006	Exploration Update
14 November 2006	Notice of General Meeting
129 November 2006	IAGM Results
11 December 2006	Trading Halt
5 December 2006	Suspension from Official Quotation
8 December 2006	Reinstatement of Official Quotation
8 December 2006	Acquisition of Significant Goldfields Project

None of the information referred to in this section is incorporated by reference into this Prospectus or is issued with this Prospectus.

8.3 Interests and benefits of Directors

Other than as set out below or elsewhere in this Prospectus:

• $(a)$ no Director or proposed Director or any firm in which the Director or proposed Director is a partner has, or during the last two years before the date of this Prospectus has had, any interest in:
• $(i)$ the formation or promotion of the Company; or
• $(ii)$ property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
• $(iii)$ the Offer: and
• $(b)$ no amounts (whether in cash or shares or otherwise) have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person to a Director or proposed Director or any firm which the Director or proposed Director is a partner to induce him to become, or to qualify him as, a Director of the Company, or otherwise for services provided by him in connection with the formation or promotion of the Company or the Offer.

Directors' interests in Securities

No Director or proposed Director as at the date of this Prospectus has any direct or indirect interest in securities in the Company other than as set out below:

	Shares	Options exercisable at 30 cents on or before 31 July 2008	Options exercisable at 40 cents on or before 31 July 2008
Trevor Matthews	1,211,681	1,000,000	500,000
Kenneth Allen	250,000	500,000	500,000
David Prentice	350,000	500,000	500,000

Remuneration of Directors

The Constitution of the Company provides as follows in relation to remuneration and expenses of Directors:

• $(a)$ Remuneration: as remuneration for services, each Director may be paid out of the funds of the Company an amount determined by the Board payable at the time and in the manner determined by the Board. The aggregate remuneration paid to all the Directors in any 1 year must not exceed an amount fixed by the Company in general meeting from time to time.
• $(b)$ Expenses: the Directors are entitled to be paid reasonable travelling, hotel and other expenses properly incurred by them in attending meetings of the Company or of the Board or of any committee of the Board, or in connection with the Company's business.
• $(c)$ Remuneration for extra services: any Director who serves on any committee, or who devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the Board are outside the scope of the ordinary duties of a Director, may be paid extra remuneration as determined by the Board.

None of the Directors has received any fees or other remuneration (including superannuation) from the Company during the 2 years prior to the date of this Prospectus other than as follows:

The Directors are entitled to director's fees and other emoluments from the Company which are disclosed in the Company's Annual Report for the year ended 30 June 2006.

8.4 Interests and fees of experts, advisers and other named persons

Other than as set out in this Prospectus:

• no person named in this Prospectus as performing a function in a professional, advisory $(a)$ or other capacity in connection with the preparation or distribution of this Prospectus, nor any firm in which any of those persons is or was a partner has, or had, in the two years period ending on the date of this Prospectus, an interest in:
• $(i)$ the formation or promotion of the Company; or
• $(ii)$ any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
• $(iii)$ the Offer; and
• $(b)$ no amounts (whether in cash or shares or otherwise) have been paid or agreed to be paid by any 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, nor any firm in which any of those persons is or was a partner, in the two year period ending on the date of this Prospectus, and no benefits have been given or agreed to be given to any such person for services rendered in connection with the formation or promotion of the Company or the Offer.

DLA Phillips Fox has acted as the solicitor to the Company in relation to the Offer. The Company will pay approximately \$25,000 for these services. Since incorporation of the Company, DLA Phillips Fox have received approximately \$2,700 plus GST for services rendered to the Company.

Delta has agreed to provide services in relation to the Offer under the Delta Agreement (summarised in section 7.3). Delta will be paid \$100,000 plus GST for managing the Offer. Since incorporation of the Company Delta has received \$117,568 including GST for services rendered to the Company.

8.5 Consents and Disclaimers

Each of the parties referred to in this section:

• $(a)$ does not make, or purport to make, any statement in this Prospectus other than those 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.

DLA Phillips Fox has given its written consent to being named as solicitors to the Company and has not withdrawn its consent prior to lodgement of this Prospectus with ASIC.

Delta has given its written consent to being named in this Prospectus as Manager to the Offer and has not withdrawn its consent prior to lodgement of this Prospectus with ASIC.

8.6 Taxation

You should be aware that there might be taxation implications in acquiring New Shares and New Options and on the exercise of those New Options. Each taxpayer's position is different and taxation consequences will depend on each person's particular circumstances. You should consult your professional tax adviser to obtain taxation advice relevant to your circumstances and rely on that advice in relation to an investment under this Prospectus.

All potential investors are urged to take independent financial advice about the consequences of acquiring New Shares and New Options pursuant to this Prospectus from a taxation point of view and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisers accept no liability or responsibility with respect to the consequences of subscribing for New Shares and New Options under this Prospectus.

$8.7$ Cash Expenses of the Offer

The total costs of the Issue payable by the Company are estimated at approximately \$356,000 (exclusive of GST). These costs include ASIC fees, ASX fees, management fees, legal fees, printing and distribution and other administrative expenses.

8.8 Dividend Policy

The Directors cannot give any assurance concerning the extent and timing of future dividends (if any) as this will depend on the future profitability and financial position of the Company as well as other economic factors. There is no current proposal to pay dividends.

8.9 Litigation

The Company is not involved in any legal or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company other than proceedings undertaken in the ordinary course of business.

8.10 Privacy Act

If you complete an application for Shares, you will be providing personal information to the Company (directly or by the Company's share registry). The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company's share registry.

You can access, correct and update the personal information we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASTC Settlement Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

8.11 Directors' Consent

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors. In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with ASIC.

Signed for and on behalf of Kalgoorlie-Boulder Resources Ltd by David Prentice Director

SECTION 9 GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

AGI means Australian Gold Investments Pty Ltd (ACN 089 489 645).

AGI Purchase Agreement means the agreement dated 7 December 2006 between the Company and RASL for the acquisition by the Company of AGL the owner of the Norseman Project.

Annual Report 2006 means the annual report of the Company for the 2006 financial year lodged with the ASX.

Applicant means a person who submits an Application Form.

Application or Applications means a valid application for a specified number of New Shares and New Options under this Prospectus.

Application Form means the entitlement application form attached to or accompanying this Prospectus.

Application Period means the period commencing on the Opening Date and ending on the Closing Date.

ASIC means the Australian Securities & Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Pty Limited (ACN 008 504 532)

ASTC Business Rules means the business rules of ASTC.

ASX means Australian Stock Exchange Limited (ACN 008 624 691).

ASX Listing Rules or Listing Rules means listing rules of the ASX.

Board means the board of Directors.

Business Day has the same meaning as that expressed in the ASX Listing Rules.

Closing Date means the date on which the Offer closes as determined by the Directors.

Company means Kalgoorlie-Boulder Resources Limited (ACN 106 732 487).

Corporations Act means the Corporations Act 2001 (Commonwealth) as enacted and amended from time to time.

Delta means Delta Capital Pty Ltd (ACN 109 059 181).

Directors means the current directors of the Company.

Dollar or \$ means Australian dollars unless otherwise stated.

Entitlement means the number of New Shares and New Options which Shareholders are entitled to at the Record Date.

Existing Options has the meaning given in section 3.1.

Issue means the issue of New Shares and New Options pursuant to this Prospectus.

New Option or New Options means the Options to be issued free to successful Applicants under the Offer on the basis of 1 free attaching Option for every 2 New Shares issued, the terms and conditions of which are set out in section 6.2.

New Share or New Shares means fully paid ordinary share(s) in the Company to be issued under this Prospectus.

Norseman Project means the mineral development and exploration project referred to in the Company's announcement to the ASX dated 8 December 2006.

Offer means the offer to participate in the Issue.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Opening Date means the date on which the Offer opens as determined by the Directors.

Option means an option to acquire a Share.

Prospectus means this prospectus dated 13 December 2006.

Quotation has the same meaning as that expressed in the ASX Listing Rules.

RASL means RASL AU LLC of 7061 Columbia Gateway Drive, Columbia, Maryland 2106, United States of America.

Record Date has the same meaning as that expressed in the ASX Listing Rules which is specified by the Company for this Issue as 27 December 2006.

Securities means the New Shares and the New Options.

Share means a fully paid ordinary shares in the Company.

Shareholder means a holder of Shares.

Shortfall means the Entitlements that are not accepted by Shareholders in accordance with the provisions of this Prospectus.

USA or US means the United States of America.

US Dollars means United States of America dollars.

WDST Western Daylight Savings Time, Perth, Western Australia.

Unless the context otherwise requires, all references to sections are references to sections of this Prospectus.

ENTITLEMENT AND ACCEPTANCE FORM

A personalised Entitlement and Acceptance Form will be set to eligible Shareholders with a copy of the prospectus.