MGX RESOURCES LIMITED — Capital/Financing Update 2002

Dec 16, 2002

TO ASX ANNOUNCEMNT

Mount Gibson Iron Limited

ABN 87008670817

First Floor, 7 Havelock Street West Perth 6005, Western Australia

PO Box 55, West Perth WA 6872

Telephone: 61-8-9485 2355 Facsimile: 61-8-9485 2305 E-mail: admin@mtgibsoniron.com.au

16 December 2002

Mount Gibson Iron

VIA FACSIMILE: 1300 300 021

The Manager Company Announcements Australian Stock Exchange Limited Level 10, 20 Bond Street SYDNEY NSW 2000

APPENDIX 3B SUBJECT:

Please find attached an Appendix 3B, New Issue Announcement for Rights Issue Shares to be issued under a Prospectus dated 16 December 2002, and for Options which may be issued pursuant to that Rights Issue.

Yours sincerely, MOUNT GIBSON IRON LIMITED

Angela Dent Company Secretary

No. Pages $=$ 7

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

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

Name of entity

MOUNT GIBSON IRON LIMITED

ABN

87 008 670 817

We (the entity) give ASX the following information.

Part 1 - All issues

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

$\mathbf{1}$ ⁺Class of ⁺securities issued or to be A: Shares issued

B: Options

• $\overline{2}$ Number of ⁺securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the "securities (eg, if options, exercise price and expiry date; if partly paid *securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates f or conversion)

A. 126,281,008 Shares B. $51,334,948$ Options (maximum)

A. Ordinary Fully Paid B. Exercise price: 25 cents Expiry date: 31 December 2003

4	Do the + securities rank equally in all respects from the date of allotment with an existing + class of quoted + securities? If the additional securities do not rank equally, please state: the date from which they do the extent to. which they participate for the next dividend, (in the σf case $\mathbf{a}$ trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend,	A. Yes B. Yes
	distribution or interest payment
5	Issue price or consideration	A. \$.09 \$nil В.
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)		\$2.125m required.	A. Project costs Tallering Peak \$3.0m Repayment of loans \$2.3m Redemption of Convertible Notes Pre-development Mt Gibson \$0.5m Other costs & working capital B. Potential payment to sub-underwriters dependant on level of sub-underwriting
7	Dates of entering *securities into uncertificated holdings or despatch of certificates	A. 14 February 2003 14 February 2003 (unless shareholder В. approval required)
		Number		+ Class
8	and + class Number ٥f all +securities quoted ASX OR ( including the securities in clause 2 if applicable)	236,282,516 Ordinary Shares 68,748,835 (max) Options
		Number	+Class
9	of Number class all and *securities not quoted on ASX (including the securities in clause 2 if applicable)	16,279,500 12,760,000 525,000 5,500,000 2,083,332 14,333,334		Shares escrowed Options escrowed to 16/1/04 Options escrowed to 16/1/03 Directors options Unlisted options Convertible notes
10	Dividend policy (in the case of a $N/A$ trust, distribution policy) on the increased capital (interests)

TO ASX ANNOUNCEMNT

Part 2 - Bonus issue or pro rata issue

11	holder security Is approval required?	No
12.	Is the issue renounceable or non- renounceable?	Non-renounceable
13	Ratio in which the + securities will be offered	1:1
14	+ Class of + securities to which the l offer relates	Ordinary fully paid shares
15	determine +Record date to entitlements	2 January 2003
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	N/A
17	Policy for deciding entitlements in relation to fractions	N/A
18	Names of countries in which the entity has "security holders who will not be sent issue new documents.	United Kingdom, Hong Kong, Indonesia, Japan, Liechtenstein, Malaysia, Singapore, United States of America, Vanuatu (will be sent for information only)
19	of l Closing date for receipt acceptances or renunciations	23 January 2003
20	Names of any underwriters	Paterson Ord Minnett
21	Amount of any underwriting fee or commission	4.25% underwriting commission 1.85% management fee
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of *security holders	N/A
25	is contingent on If the issue *security holders' approval, the date of the meeting	N/A

26	Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled	7 January 2003
27	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	17 December 2002
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if applicable)	N/A
30	How do + security holders sell their entitlements in full through a broker?	N/A
31	How do + security holders sell part of their entitlements through a broker and accept for the balance?	N/A
32	How do + security holders dispose of their entitlements (except by sale through a broker)?	N/A
33	+Despatch date	14 February 2003

Part 3 - Quotation of securities

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

• $_{\rm 34}$ Type of securities $(tick one)$
• $(a)$

Securities described in Part 1

$(b)$

All other securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

(If the additional securities do not form a new class, go to 43) Tick to indicate you are providing the information or documents

35

If the "securities are "equity securities, the names of the 20 largest holders of the additional ⁺securities, and the number and percentage of additional ⁺securities held by

those holders

36 If the 'securities are 'equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1.000$ $1,001 - 5,000$ 5,001 - 10,000 10.001 - 100.000 100,001 and over

37

A copy of any trust deed for the additional "securities

Entities that have ticked box 34(b)

38 Number of securities for which ⁺quotation is sought Class of ⁺securities for which 39 quotation is sought 40 Do the ⁺securities rank equally in all respects from the date of allotment with an existing ⁺class of quoted ⁺securities? If the additional securities do not rank equally, please state: • the date from which they do the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation TIOW Number ⁺Class 42 Number and ⁺class of all ⁺securities quoted on ASX (including the securities in clause 38) All entities

Fees Payment method (tick one) Cheque attached

Electronic payment made

Periodic payment as agreed with the home branch has been arranged

43

Ouotation agreement

• $\mathbf{1}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not $\bullet$ for an illegal purpose.
• There is no reason why those 'securities should not be granted 'quotation. $\bullet$
• An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

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

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any *securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the 'securities be quoted.
• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the *securities to be quoted, it has been provided at the time that we request that the 'securities be quoted.
• If we are a trust, we warrant that no person has the right to return the ٠ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the 'securities be quoted.
• We will indemnify ASX to the fullest extent permitted by law in respect of any 3 claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any 4 information or document not available now, will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

(Director/Company secretary)	$T_{\ldots}$ Date: 16 December 2002

Sign here:

Print name: Angela M Dent

$\begin{tabular}{llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll$