MGX RESOURCES LIMITED — Capital/Financing Update 2006

Feb 6, 2006

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 issued

A: Options B: Shares

• $\overline{2}$ 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 for conversion)

A: 10,250,000 B: 40,000

A: Exercisable at 25 cents on or before 31 December 2006 B: Fully Paid Ordinary

Do the *securities rank equally in $\Delta$ 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
• 5 Issue price or consideration
• Purpose of the issue 6 (If issued as consideration for the acquisition of assets, clearly identify those assets)
• Dates of entering *securities $\tau$ into uncertificated holdings or despatch of certificates
• Number and ⁺class of all 8 *securities quoted on ASX (including the securities in clause 2 if applicable)
• $\overline{Q}$ Number and ⁺class of all *securities not quoted on ASX (including the securities in clause 2 if applicable)
• $10^°$ Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

$\overline{\text{SN1}}$

A: Employee Options Issued pursuant to the Mount Gibson Iron Limited Option Plan (5,375,000 issued on 6 Feb 2006, 4,875,000 issued previously) B: Payment pursuant to Variation of

Agreement with the Badimia People Trust

6 February 2006

Number	*Class
399,065,639	Ordinary Shares
10,250,000	Options exercisable at 25
	cents exp 31/12/06

Number	*Class
5,000,000	Unlisted options Exp 31/12/07
5,000,000	Unlisted options Exp 31/12/08
2,000,000	Unlisted options Exp 30/06/10
3,000,000	Unlisted options Exp 24/10/10
2,000,000	Unlisted options Exp 24/10/12

$N/A$

Part 2 - Bonus issue or pro rata issue - Not Applicable

Part 3 - Quotation of securities

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

34	(tick one)	Type of securities
		(a) $\left[\sqrt{\phantom{a}}\right]$ Shares 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

• 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

35

A copy of any trust deed for the additional *securities

Entities that have ticked box 34(b) - Not Applicable

All entities

Fees 43 Payment method (tick one) Cheque attached Electronic payment made Periodic payment as agreed with the home branch has been arranged

Ouotation agreement

• *Quotation of our additional *securities is in ASX's absolute discretion. ASX may $\mathbf{1}$ 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 for an illegal purpose.
• There is no reason why those *securities should not be granted *quotation.
• An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

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

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

Sign here:

manufactured and Date: 6 February 2006 (Director/Company Secretary)

Print name: Angela Dent

CRP/COMPUTERSHARE INVESTOR SERVICES PTY LTD ***					$ * $
					06/02/2006					PAGE :
	1001	5001	10001	100001
to	to	to.	to	to.
1000	5000	10000	100000	(MAX)
	6	6	24	17
	6	6	24	17
	21500	60000	1558000	8610500
	21500	60000	1558000	8610500
			53
$\blacksquare$ In the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of the case of th	$\mathbf{h}$
											$74 + x + x$
		MOUNT GIBSON IRON LIMITED/MGX OPL/OPTIONS EXP 31/12/06 @ \$0.25 TOTAL HOLDERS FOR CLASSES SELECTED **** NUMBER OF PAGES WRITTEN =		10250000	RUN NUMBER 1231	Range Of Units Summary				A.C.N. 008 670 817 1 ** END OF REPORT ** NUMBER OF LINES WRITTEN =	(RSP510:16.54:060206) $$ TOTAL $$ 53 53 10250000 10250000 ****** ******

CRP/COMPUTERSHARE INVESTOR SERVICES PTY LTD *** MOUNT GIBSON IRON LIMITED/MGX		TOP 20 HOLDERS *** (RSP520:16.53:060206) RUN NUMBER 1231 06/02/2006 A.C.N. 008 670 817 PAGE: 1
CLASS: OPL/OPTIONS EXP 31/12/06 @ \$0.25 HOLDER NO MAME AND ADDRESS		UNITS & T/C RANK
OTR PROPERTIES PTY LTD PO BOX 889 BOWRAL NSW 2576		2,460,000 24.00 1
MR WILLIAM BRAND WILLIS & M/S RHODA MARLENE WILLIS 31 BRANDON STREET SOUTH PERTH WA 6151		1,000,000 9.76		$\overline{2}$
MR JAMES TYERS 271 CURTIN AVENUE COTTESLOE WA 6011		$790,000$ $7.71$ 3
KENNY INVESTMENTS $\langle K \rangle$ & G MALAXOS FAMILY A/C> 105 BATEMAN ROAD MOUNT PLEASANT WA 6153		$748,000$ 7.30		$\frac{4}{2}$
MR SHELDON COATES 78 CHARDONNAY DRIVE THE VINES WA 6069		650,000 6.34		5
CORNELA PTY LTD 8 ALEXANDRA AVENUE CLAREMONT WA 6010		500,000 4.88		-6
HENGOLO PTY LTD <cl A/C> 25 KEANE STREET PEPPERMINT GROVE WA 6011		500,000 4.88		- 7
CLAIRE ELIZABETH ARBUCKLE 19 KARIONG CIRCUIT DUNCRAIG WA 6023		375,000 3.66		$\sim$ 8
MS JOSEPHINE HORNE PO BOX 1315 WEST PERTH WA 6872		250,000 2.44 9
MR LAURIE KEITH WILLS 13 CLEMARTIS CRESCENT GERALDTON WA 6530		247,500 2.41		10
MS KATHERINE TAYLOR 271 CURTIN AVENUE COTTESLOE WA 6011		200,000	1.95	11
MS CELIA LEE 160 PASSAT LANE GERALDTON WA 6530		175,000 1.71		-12

MOUNT GIBSON IRON LIMITED/MGX	CRP/COMPUTERSHARE INVESTOR SERVICES PTY LTD ***	TO P 2 0 RUN NUMBER 1231 06/02/2006 A.C.N. 008 670 817	$H$ O L D E R S $***$			(RSP520:16.53:060206) PAGE : $\sim$ 2
HOLDER NO	CLASS: OPL/OPTIONS EXP 31/12/06 @ \$0.25 NAME AND ADDRESS			UNITS & I/C	RANK
	MR TODD AXFORD 5 FRY STREET MULLEWA WA 6630		150,000	1.46	13
	MS NICOLE CHRISTINE CURTIN 12 YARRAMAN ROAD GERALDTON WA 6530		150,000 1.46		14
	MS KYLIE RAE MURPHY 3 HOLLAND STREET FREMANTLE WA 6160		150,000 1.46		15
	MS PENELOPE JANE STEVENS PO BOX 223 MULLEWA WA 6630		140,000	1.37	16
	MS PAMELA MAY SWEENEY 1 LOGUE COURT WALKAWAY WA 6528		125,000	1.22	-17
	MR SHELDON PHILIP COATES 78 CHARDONNAY DRIVE THE VINES WA 6069		100,000	0.98	18
	MS JULIE ANNE ABBOTT 3 PIPING LANE GERALDTON WA 6530		90,000	0.88	19
	MR GREGORY ROY BARNES 16 BROADFIELD CLOSE GERALDTON WA 6530		75,000 -	0.73	20
	*** REPORT TOTAL REMAINDER ***		8,875,500 86.59 1, 374, 500 13.41 -----------------
	*** GRAND TOTAL ***		10,250,000	100.00
			The the the the the the the the the the t

---------------------------------------TOTAL CURRENT HOLDERS MEETING CRITERIA FOR THIS REPORT: 53 ---------------------------------------