Mount Gibson Iron Limited ABN 87 008 670 817

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

PO Box 55, West Perth WA 6872

Telephone: 61-8-9426-7500 Facsimile: 61-8-9485 2305 E-mail: [email protected]

24 July 2006

The Board of Directors Aztec Resources Limited Suite 4. Level 5 South Shore Piazza 85 The Esplanade SOUTH PERTH WA 6151

By facsimile: 9423 0801

Dear Sirs

Notice of Initial Substantial Holder

As required by section 671B(1)(c) of the Corporations Act 2001 (Cth), we attach a notice of Initial Substantial Holder in respect of Aztec Resources Limited.

Yours faithfully

Mount Gibson Iron Limited

Alan Rule Director

Form 603

Corporations Act 2001 Section 671B

Notice of initial substantial holder

To Company Name/Scheme	Aztec Resources Limited
ACN/ARSN	078 548 562
1. Details of substantial holder (1) Name ACN/ARSN (if applicable)	Mount Gibson Iron Limited ("MGI") and each of its controlled bodies corporate ("MGI Subsidiaries") detailed in Annexure A 008 670 817

The holder became a substantial holder on

23/07/2006

2. Details of voting power

The total number of votes attached to all the voting shares in the company or voting interests in the scheme that the substantial holder or an associate (2) had a relevant interest (3) in on the date the substantial holder became a substantial holder are as follows:

Tines სЮა .	$\sim$ ecurities IATILIDE! . -------- ----------------------------	--- mes ______ --------- -----------	-------- ,,,,,,,,,,,,,,,,,,,,,,,,,, $\overline{a}$ DOWER (F 'ound
ares	--- .	.vcc -------------- _________	. . Go $\sim$ 1.0 $\sim$ --------------------------------------

3. Details of relevant interests

The nature of the relevant interest the substantial holder or an associate had in the following voting securities on the date the substantial holder became a substantial holder are as follows:

Holder of relevant interest	Nature of relevant interest (7)	Class and number of securities
MGI	Relevant interest under s608(8) of the Corporations Act 2001 (Cth), being a relevant interest arising through a call option agreement between MGI and Cambrian Mining plc ("Cambrian") dated 23 July 2006 under which MGI has an option to acquire the ordinary shares from Cambrian. See annexure B. The power of MGI to vote or dispose of the ordinary shares that are the subject of the call option agreement is qualified sinceMGI is not presently registered as the holder of these shares.	159,031,922 ordinary shares

4. Details of present registered holders

The persons registered as holders of the securities referred to in paragraph 3 above are as follows:

Holder of relevant interest	Registered holder of securities	Person entitled to be registered as holder (8)	Class and number of securities
MGI	Cambrian	Cambrian	159,031,922 ordinary shares -------
	----------- ---------------------------------

603 15 July 2001 page 2/2

Consideration

The consideration paid for each relevant interest referred to in paragraph 3 above, and acquired in the four months prior to the day that the substantial holder became a substantial holder is as follows:

Holder of relevant interest	Date of acquisition	Consideration (9)		Class and number of securities
		Cash	Non-cash
MG1	23/07/06	Nil	One ordinary share in the capital of MGI for every 3 ordinary shares in the capital of Aztec Resources Limited	159,031,922 ordinary shares

6. Associates

The reasons the persons named in paragraph 3 above are associates of the substantial holder are as follows:

Name and ACN/ARSN (if applicable)	Nature of association
MGI Subsidiaries	Body corporate controlled by the substantial holder MGI

7. Addresses

The addresses of persons named in this form are as follows:

Name
Mount Gibson Iron Limited	l, 7 Havelock Street, West Perth, Western Australia, 6005 .evel 1.
Each MGI	See annexure A

Signature

print name Alan Rule

capacity Director - Mount Gibson Iron Limited

date 24/07/2006

sign here

DIRECTIONS

$(1)$ If there are a number of substantial holders with similar or related relevant interests (eg. a corporation and its related corporations, or the manager and trustee of an equity trust), the names could be included in an annexure to the form. If the relevant interests of a group of persons are essentially similar, they may be referred to throughout the form as a specifically named group if the membership of each group, with the names and addresses of members is clearly set out in paragraph 7 of the form.
$(2)$ See the definition of "associate" in section 9 of the Corporations Act 2001.
$(3)$ See the definition of "relevant interest" in sections 608 and 671B(7) of the Corporations Act 2001.
$(4)$ The voting shares of a company constitute one class unless divided into separate classes.
$(5)$ The total number of votes attached to all the voting shares in the company or voting interests in the scheme (if any) that the person or an associate has a relevant interest in.
$(6)$ The person's votes divided by the total votes in the body corporate or scheme multiplied by 100.
$(7)$ Include details of:
$(a)$ any relevant agreement or other circumstances by which the relevant interest was acquired. If subsection 671B(4) applies, a copy of any document setting out the terms of any relevant agreement, and a statement by the person giving full and accurate details of any contract, scheme or arrangement, must accompany this form, together with a written statement certifying this contract, scheme or arrangement; and
$(b)$ any qualification of the power of a person to exercise, control the exercise of, or influence the exercise of, the voting powers or disposal of the securities to which the relevant interest relates (indicating clearly the particular securities to which the qualification applies).

See the definition of "relevant agreement" in section 9 of the Corporations Act 2001.

$(8)$ If the substantial holder is unable to determine the identity of the person (eg. if the relevant interest arises because of an option) write "unknown".
$(9)$ Details of the consideration must include any and all benefits, money and other, that any person from whom a relevant interest was acquired has, or may, become entitled to receive in relation to that acquisition. Details must be included even if the benefit is conditional on the happening or not of a contingency. Details must be included of any benefit paid on behalf of the substantial holder or its associate in relation to the acquisitions, even if they are not paid directly to the person from whom the relevant interest was acquired.

Annexure "A" to Form 603

This is Annexure "A" of 1 page referred to in the Form 603 (Notice of Initial Substantial Holder). signed by me and dated 24 July 2006

$24 - 7 - 06$

Date

$\mathbb{Z}_4$

Director

MGI Subsidiaries

Address

Mount Gibson Mining Limited ACN 074 575 885 Geraldton Bulk Handling Pty Ltd ACN 100 105 388 WHTK Pty Ltd ACN 098 602 343 Asia fron Holdings Limited HKCN: 879068 MGM Pipelines Pty Ltd ACN 112 872 349 Austral Iron Pty Ltd ACN 100 180 952 Jiangsu Investment Pty Ltd ACN 111 143 223 Asia Iron (Nanjing) Co., Ltd Asia Iron Limited HKCN: 866763 AP Mining Pty Ltd ACN 104 984 545 Westralian Iron Pty Ltd ACN 106 448 695 Extension Hill Ptv Ltd ACN 067 128 938

Level 1, 7 Havelock Street, West Perth, Western Australia, 6005 Level 1, 7 Havelock Street, West Perth, Western Australia, 6005 Level 1, 7 Havelock Street, West Perth, Western Australia, 6005 Unit 1301, 13/F Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong Level 2, 7 Havelock Street, West Perth, Western Australia, 6005 Level 2, 7 Havelock Street, West Perth, Western Australia, 6005 Level 2, 7 Havelock Street, West Perth, Western Australia, 6005 9th Floor, Huangpu Hotel, No.2-2 Huangpu Road, Nanjing, P.R.China 210016 Unit 1301, 13/F Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong Level 2, 7 Havelock Street, West Perth, Western Australia, 6005 Level 2, 7 Havelock Street, West Perth, Western Australia, 6005 Level 2, 7 Havelock Street, West Perth, Western Australia, 6005

Annexure "B" to Form 603

This is Annexure "B" of 8 pages referred to in the Form 603 (Notice of Initial Substantial Holder), signed by me and dated 24 July 2006

$24 - 7 - 06$

Date

Mrs.

Director

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

PO Box 55, West Perth, WA, 6872

Telephone: 61-8-9426-7500 Facsimile: 61-8-9485 2305 E-mail: [email protected]

23 July 2006

Mr John Byrne Cambrian Mining plc 27 Albermarle Street LONDON, UK, W1S4DW

Dear Mr Byrne

Call Option Agreement

We record our agreement as follows:

1. In consideration for the payment of the sum of \$10, receipt of which is hereby acknowledged by Cambrian Mining plc (Shareholder), the Shareholder agrees to grant to Mount Gibson fron Limited (MGI) an irrevocable option for MGI (or its nominee as MGI may direct) to acquire 159,031,922 fully paid ordinary shares (Option Shares) in Aztec Resources Limited (Aztec) including any dividends or entitlements declared, paid or arising after the date of exercise of the option in relation to the Option Shares, at an exercise price of one fully paid ordinary share in MGI for every three Option Shares (Scrip Consideration).
1. The Option may be exercised at any time within the period:
of 14 days commencing on the date that is 14 days after the commencement of $(a)$ the offer period under a takeover bid by MGI (or an associate of MGI) for Aztec; Ωr
if before the close of the offer period under the takeover bid by MGI (or its $(b)$ associate), another party announces an offer or proposal to acquire or cancel all or the majority of Aztec shares or to acquire the main business or assets of Aztec on terms which are more favourable to Aztec shareholders than those of the bid by MGI or its associate, within a period of 14 days after the date of the announcement by the third party.
1. The Option may be exercised by notice in writing (Exercise Notice) sent by facsimile to the Shareholder and marked to the attention of Mr John Byrne. The Option automatically lapses, and this agreement terminates, if no Exercise Notice is sent during the period referred to in paragraph 2 above.
1. The Option can only be exercised once by MGI (or its nominee as MGI may direct) in respect of all of the Option Shares.
1. Following exercise of the Option, completion of the sale and purchase of the Option Shares will occur at 2.00pm at the offices of Freehills, Level 36 QV1 Building, 250 St George's Terrace, Perth on the date which is 2 business days after the date of the Exercise Notice.
1. On completion, in exchange for MGI providing evidence that the Scrip Consideration will be immediately issued to Shareholder, Shareholder will provide to MGI duly executed transfers of the Option Shares and any other document reasonably required by MGI to effect or secure to MGI the transfer of the Option Shares.
1. Shareholder warrants that it is the legal and beneficial owner of the Option Shares and that the Option Shares will at completion be free of encumbrances, and Shareholder will at completion have full power and authority to complete this agreement without the consent of any person.
1. MGI warrants that at completion:
${a}$ Shareholder will acquire the full legal and beneficial ownership of the Scrip Consideration free and clear of all encumbrances, subject to registration of Shareholder in the register of shareholders, and free of competing rights. including pre-emptive rights or rights of first refusal, and which is fully paid and has no money owing in respect of it; and
$(b)$ there is no restriction under the ASX Listing Rules, Corporations Act 2001 (Cth) or any other Australian law which would prevent Shareholder transferring or dealing with the Scrip Consideration in any way.
1. This agreement also terminates if:
$(a)$ MGI (or an associate of MGI) fails to make an announcement of a takeover bid for Aztec on the conditions set out in Annexure A within 2 days of this letter; or
having made an announcement in accordance with paragraph 9(a), MGI (or its $(b)$ associate) fails to lodge a bidder's statement (having an offer period commencing not more than 45 days after the date of the announcement) with Aztec within 28 days of the date of the announcement, unless ASIC indicates that it does not require MGI to proceed with the bid because of the occurrence of one of the events specified in clause 2(b); or
$(c)$ before completion. Shareholder accepts a takeover bid by MGI (or an associate) for all of the Option Shares. In that case, Shareholder also undertakes not to exercise any withdrawal rights that may become available to accepting Aztec shareholders.
1. For as long as this agreement remains in force, Shareholder will not dispose of or otherwise encumber any of the Option Shares, except pursuant to an acceptance of a takeover bid made by MGI (or an associate) or pursuant to the Option.
1. Nothing in this agreement affects Shareholder's right to dispose of or exercise voting rights in respect of any other Aztec shares which are not Option Shares and which are held by Shareholder from time to time, and there is no agreement, arrangement or understanding express or implied, enforceable or otherwise, between the parties to that effect.
1. MGI must pay any stamp duty in respect of this agreement and the transfer of the Option Shares.
1. Shareholder represents and warrants that it has power to enter into and comply with all the terms of this agreement applicable to it and all necessary actions and authorisations to permit it to enter into this agreement and to observe all of its terms have been taken and obtained.
1. Shareholder must keep the existence of this letter and the circumstances described in this letter confidential until MGI (or an associate) announces a takeover bid for Aztec except where disclosure is required by law or a regulatory body.
1. This letter is governed by the laws of Western Australia and the Shareholder and MGI irrevocably submit to the non-exclusive jurisdiction of the courts of Western Australia.
1. All times specified in this agreement are Perth times.
1. This agreement may be executed in any number of counterparts which together will constitute one instrument. A party may execute this agreement by signing any counterpart.

$\overline{2}$

Yours failtyfully For and on behalf of Mount Gibson fron Limited

Cambrian Mining plc
agrees to the terms set out above.

For and on behalf of Cambrian Mining pic

$231 \int Q$ 2006.

Annexure A - Bid conditions

The Offer may be subject only to conditions substantially on the terms set out below.

$(a)$ Minimum acceptance

At the end of the Offer Period. Bidder has relevant interests in at least 90% of the Target Shares (on a fully diluted basis).

Ò. Other regulatory approvals

Before the end of the Offer Period, all approvals or consents that are required by law, or by any Public Authority, as are necessary to permit:

$(1)$ the Offer to be lawfully made to and accepted by Target shareholders: and
$(2)$ the transactions contemplated by the Bidder's Statement to be completed (including, without limitation, full, lawful and effectual implementation of the intentions set out in the Bidder's Statement).

are granted, given, made or obtained on an unconditional basis, remain in full force and effect in all respects, and do not become subject to any notice, intimation or indication of intention to revoke, suspend, restrict, modify or not renew the same.

$\langle c \rangle$ Foreign Investment Review Board approval

One of the following occurring:

$(1)$ the Treasurer of the Commonwealth of Australia (Treasurer) advising Bidder before the end of the Offer Period to the effect that there are no objections to the Takeover Bid constituted by the dispatch of the Offer in terms of the Federal Government's foreign investment policy: or
$(2)$ no order being made in relation to the Takeover Bid constituted by the dispatch of the Offer under section 22 of the Foreign Acquisitions and Takeovers Act 1975 (Cth) within a period of 40 days after Bidder has notified the Treasurer that it proposes to acquire the Target Shares under that Takeover Bid, and no notice being given by the Treasurer to Bidder during that period to the effect that there are any such objections; or
$(3)$ where an order is made under section 22 of the Foreian Acquisitions and Takeovers Act 1975 (Cth), a period of 90 days having expired after the order comes into operation and no notice having been given by the Treasurer to Bidder during that period to the effect that there are any such objections.

$(d)$ No prescribed occurrences

Between the Announcement Date and the date 3 Business Days after the end of the Offer Period (each inclusive), none of the following prescribed occurrences (being the occurrences listed in section 652C of the Corporations Act) happen:

$(1)$ Target converting all or any of the Target Shares into a larger or smaller number of shares under section 254H of the Corporations Act;
$(2)$ Target or a subsidiary of Target resolving to reduce its share capital in any way:
$(3)$ Target or a subsidiary of Target entering into a buyback agreement or resolving to approve the terms of a buyback agreement under section 257C(1) or 257D(1) of the Corporations Act:
$(4)$ Target or a subsidiary of Target making an issue of Target Shares (other than Target Shares issued as a result of the exercise of options into Target Shares) or granting an option over the Target Shares or agreeing to make such an issue or grant such an option;
$(5)$ Target or a subsidiary of Target issuing, or agreeing to issue, convertible notes;
$(6)$ Target or a subsidiary of Target disposing or agreeing to dispose, of the whole, or a substantial part, of its business or property;
$(7)$ Target or a subsidiary of Target charging, or agreeing to charge, the whole, or a substantial part, of its business or property;
$(8)$ Target or a subsidiary of Target resolving that it be wound up:
$(9)$ the appointment of a liquidator or provisional liquidator of Target or of a subsidiary of Target:
the making of an order by a court for the winding up of Target or of a subsidiary $(10)$ of Target:
an administrator of Target or of a subsidiary of Target being appointed under $(11)$ section 436A, 436B or 436C of the Corporations Act:
$(12)$ Target or a subsidiary of Target executing a deed of company arrangement:
$(13)$ the appointment of a receiver, receiver and manager, other controller (as defined in the Corporations Act) or similar official in relation to the whole, or a substantial part, of the property of Target or of a subsidiary of Target.

$(e)$ No regulatory action

Between the Announcement Date and the end of the Offer Period (each inclusive):

$(1)$ there is not in effect any preliminary or final decision, order or decree issued by any Public Authority;
$(2)$ no action or investigation is announced, commenced or threatened by any Public Authority; and
no application is made to any Public Authority (other than by Bidder or any $(3)$ associate of Bidder),

in consequence of or in connection with the Offer (other than an application to, or a decision or order of, ASIC or the Takeovers Panel in exercise of the powers and discretions conferred by the Corporations Act) which restrains, prohibits or impedes, or threatens to restrain, prohibit or impede, or materially impact upon, the making of the Offers or which requires the divestiture by Bidder of any Target Shares or any material assets of Target or any subsidiary of Target.

$(f)$ Acquisitions and disposals

Between the Announcement Date and the end of the Offer Period (each inclusive). neither Target nor any of its subsidiaries, acquires or disposes of, or enters into or announces any agreement for the acquisition or disposal of, any asset or business, or enters into any corporate transaction, which would or would be likely to involve a material change in:

$(1)$ the manner in which Target conducts its business:
$(2)$ the nature (including balance sheet classification), extent or value of the assets of Target: or
$(3)$ the nature (including balance sheet classification), extent or value of the liabilities of Target.

including, without limitation, any transaction which would or (subject to one or more conditions) may involve:

$(4)$ Target or any subsidiary of Target entering into, offering to enter into or announcing that it proposes to enter into any partnership or joint venture involving a commitment of greater than \$5,000,000 or making an announcement in relation to such a commitment:
$(5)$ Target or any subsidiary of Target acquiring, or agreeing to acquire, one or more companies, businesses or assets for an amount in aggregate greater than \$5,000,000; or
$(6)$ Target or any subsidiary of Target disposing, or agreeing to dispose of, one or more companies, businesses or assets (or any interest therein) for an amount in aggregate greater than \$5,000,000;

No persons entitled to exercise or exercising rights under certain agreements or $(q)$ instruments

Between the Announcement Date and the end of the Offer Period (each inclusive), there is no person entitled to exercise, exercising or purporting to exercise, stating an intention to exercise (whether or not that intention is stated to be a final or determined decision of that person), or asserting a right to exercise, any rights under any provision of any agreement or other instrument to which Target or any Target subsidiary is a party, or by or to which Target or any Target subsidiary or any of its assets or businesses may be bound or be subject, which results, or could result, to an extent to which is material in the context of Target Group taken as a whole, in:

$(1)$ any moneys borrowed by Target or any Target subsidiary being or becoming repayable or being capable of being declared repayable immediately or earlier than the repayment date stated in such agreement or other instrument; or
$(2)$ any such agreement or other such instrument being terminated or modified or any action being taken or arising thereunder:
$(3)$ the interest of Target or any Target subsidiary in any firm, joint venture, trust corporation or other entity (or any arrangements relating to such interest) being terminated or modified:
$(4)$ the assets of Target or any Target subsidiary being sold transferred or offered for sale or transfer, including under any pre-emptive rights or similar provisions; or

the business of Target or any Target subsidiary with any other person being $(5)$ adversely affected.

$(h)$ No material adverse change

Between the Announcement Date and the end of the Offer Period (each inclusive), no material adverse change occurs to, is announced, or is made known to Bidder (whether or not becoming public), in the business, financial or trading position, assets or liabilities, profitability or prospects of Target and its subsidiaries taken as a whole, from that as at the Announcement Date.

${i}$ No litigation on foot or pending

Between the Announcement Date and the end of the Offer Period (each inclusive), no litigation against Target which may reasonably result in a judgement of \$5,000,000 or more is commenced, is threatened to be commenced, is announced, or is made known to Bidder (whether or not becoming public) or Target, other than that which is in the public domain as at the Announcement Date.

${i}$ Index out

Between the Announcement Date and the end of the Offer Period (each inclusive), the S&P ASX 200 does not close below 4500 for 5 or more consecutive trading days.

$(k)$ Share price decline

Between the Announcement Date and the date of the Offer (each inclusive), the Shares of Bidder do not trade below \$0.71 on ASX at any time on any trading day.

AI assistant

MGX RESOURCES LIMITED Major Shareholding Notification 2006

65331_rns_2006-07-23_4f91fbf1-9001-46df-b7c2-9f68baeff727.pdf

Notice of Initial Substantial Holder