ORBMINCO LIMITED — Merger & Acquisition 2008

May 11, 2008

URANIUM KING LIMITED ACN 119 187 816

SCHEME BOOKLET

for the proposed merger with

MONARO MINING NL ACN 073 155 781

by way of a scheme of arrangement between Uranium King Limited and the holders of ordinary shares of Uranium King Limited which will result in Monaro Mining NL holding all of the ordinary shares in Uranium King Limited.

Your directors unanimously recommend, in the absence of a superior proposal, that you vote in favour of the scheme of arrangement. All directors intend to vote shares held by or on behalf of them in favour of the scheme..

The Independent Expert has concluded that the scheme of arrangement is fair and reasonable and in the best interests of shareholders.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

You should read this document in its entirety. If you are unsure as to what you should do, please consult your legal, investment or other professional adviser.

Table of contents

Clause Page

1.	Overview of the Merger	8
2.	The Merger – Your Questions Answered	11
3.	Important considerations for UKL Shareholders	16
	3.1. UKL Directors' recommendation and Independent Expert's Report 3.2. Potential advantages of the Merger 3.3. Potential disadvantages of the Merger 3.4. Other relevant considerations	16 16 16 17
4.	Implementation of the Scheme	18
	4.1. Overview of the Merger 4.2. Structure of the Merger 4.3. Conditions Precedent 4.4. Status of Conditions Precedent 4.5. Scheme Consideration 4.6. Determination of persons entitled to Scheme Consideration 4.7. Foreign Shareholders 4.8. US Shareholders 4.9. Summary of Merger Implementation Agreement 4.10. Steps for implementing the Merger	18 18 18 20 20 21 21 22 22 23
5.	Profile of UKL	26
6.	Profile of MRO	42
7.	Profile of the Merged Entity	57
8.	Pro forma financial information of the Merged Entity	59
9.	Risk factors	69
10.	Australian tax implications	73
11.	Additional information	74
12.	Glossary of terms	80
	Appendix A – Independent Expert's Report	83
	Appendix B – Merger Implementation Agreement
	Appendix C – Deed Poll in favour of UKL Shareholders
	Appendix D – Scheme of Arrangement

Appendix E – Notice of Scheme Meeting

IMPORTANT DATES

Date	Event
10.00am on 10 June 2008	Latest date and time for lodgement of completed proxy forms for the Scheme Meeting. of
10.00pm on 10 June 2008	Date and time for determining eligibility to vote at the Scheme Meeting Scheme
10.00am on 12 June 2008	Uranium King Shareholders Scheme Meeting
16 June 2008	Court hearing for approval of the Scheme (Second Court Date)
17 June 2008	Effective Date of the Scheme (lodge Court orders with ASIC) Court with
17 June 2008 (end of trading)	Suspension of trading in Uranium King Shares on ASX
18 June 2008	Commencement of trading on ASX of New Monaro Shares issued under the Scheme on a deferred settlement basis
10.00pm on 24 June 2008	Date for determining entitlements under the Scheme (Record Date)
1 July 2008	Implementation of the Scheme (including issue of New Monaro Shares to Uranium King Shareholders) (Implementation Date)
1 July 2008	Last day for dispatch of holding statements for New Monaro Shares
2 July 2008	Trading of New Monaro Shares to commence on a normal settlement basis
2 July 2008	Issue of Option Consideration to UKL Option holders and simultaneous relinquishment by UKL Option holders of all rights to Uranium King Options

All times stated in this Scheme Booklet are references to the time in Perth, Western Australia.

All dates and times after the Scheme Meeting are indicative only. The actual times and dates will depend on many factors outside the control of Uranium King Limited, including the Court approval process and the satisfaction or, where appropriate, waiver of the Conditions Precedent to the parties' obligations to complete the Merger.

The Conditions Precedent to the Merger are summarised in Section 4.3 of this Scheme Booklet.

Any changes to the above timetable will be notified on Uranium King Limited's website, www.uraniumking.com and announced to ASX, www.asx.com.au.

IMPORTANT NOTICE

Date

This Scheme Booklet is dated 7 May 2008 and was registered by ASIC on 8 May 2008.

Please read this document in full

You should read the information in this Scheme Booklet in its entirety before making a decision as to how to vote on the Resolution to be considered at the Scheme Meeting. If you are in doubt as to what you should do, you should consult your legal, investment and/or other professional adviser.

Purpose of this Scheme Booklet

This Scheme Booklet is required under Part 5.1 of the Corporations Act and is provided pursuant to Section 412(1) of the Corporations Act to explain the effect of the Scheme and disclose such other information in relation to the Scheme as is required by the Corporations Act and Corporations Regulations.

The purpose of this document is to explain the terms of the proposed merger between Uranium King Limited (UKL) and Monaro Mining NL (MRO), the manner in which it will be considered and implemented (if approved) and to provide such information as is prescribed or otherwise material to your decision whether to approve the Scheme.

Responsibility statement

The information concerning MRO and the intentions, views and opinions of MRO Directors contained in Sections 4.4, 4.8, 7, 8, 9, 11.9, 11.12, 11.17 and 11.20, limited to that part of those Sections which are expressed to relate to Monaro information or statements, and the entirety of Sections 6, 11.7, 11.8, 11.10, 11.11 and 11.15 of this Scheme Booklet have been prepared by MRO and its directors and is the responsibility of MRO (MRO Information). UKL and its directors, officers, employees and advisers do not assume any responsibility for the accuracy or completeness of the MRO Information.

The information concerning UKL and its intentions, views and opinions of UKL and its directors contained in the Letter from the Chairman of UKL and Section 5 of this Scheme Booklet (UKL Information) and the balance of the Scheme Booklet other than the MRO Information and the Independent Expert's Report contained in Appendix A, has been provided by UKL and is the responsibility of UKL. MRO and its directors, officers, employees and advisers do not assume any responsibility for the accuracy or completeness of the UKL Information.

RSM Bird Cameron Corporate Pty Ltd has prepared the Independent Expert's Report in relation to the Scheme contained in Appendix A of this Scheme Booklet, and takes responsibility for that report. Neither UKL nor MRO, nor any of their respective officers, employees, representatives or advisers assumes any responsibility for the accuracy and completeness of the information contained in Appendix A or the methodology adopted by RSM Bird Cameron Corporate Pty Ltd in such report. It is noted however that UKL and MRO have provided certain factual information to RSM Bird Cameron Corporate Pty Ltd which RSM Bird Cameron Corporate Pty Ltd has relied on in preparing the Independent Expert's Report.

RSM Bird Cameron Corporate Pty Ltd does not assume any responsibility for the accuracy or completeness of the information contained in this Scheme Booklet other than contained in Appendix A.

Interests of UKL Directors

All UKL Directors have interests in UKL Shares other than Dr Bernhard Free. One director of UKL also has an interest in UKL Options. UKL Shareholders should take those interests into account in assessing the recommendations of UKL Directors. The interests of UKL Directors are set out in Section 11.2 of this Scheme Booklet.

Having given careful consideration to those interests, the UKL Directors nevertheless believe that the Scheme is in the best interests of UKL Shareholders, for the reasons set out in Section 1.4 of this Scheme Booklet and wish to make, and consider themselves justified in making, a recommendation to UKL Shareholders.

In the absence of a superior proposal, the UKL Directors unanimously recommend that UKL Shareholders vote in favour of the Scheme. All UKL Directors intend to vote UKL Shares which are held by or on behalf of them in favour of the Scheme.

To assist UKL Shareholders to consider the Scheme, the UKL Directors commissioned the Independent Expert, RSM Bird Cameron Corporate Pty Ltd, to evaluate the Scheme and prepare a report as to whether, in their opinion, the Scheme is in the best interests of UKL Shareholders.

The Independent Expert's Report is set out in Appendix A.

Role of ASIC and ASX

A copy of this document has been provided to ASIC for the purpose of section 411(2) of the Corporations Act and registered by ASIC as required by section 412(6) of the Corporations Act.

A copy of this document has been lodged with ASIC in order for ASIC to examine the terms of the Scheme and make submissions to the Court. ASIC has been requested to provide a statement, in accordance with section 411(17)(b) of the Corporations Act, that ASIC has no objection to the Scheme. If ASIC provides that statement, then it will be produced to the Court prior to or on the Second Court Date for the Court hearing to approve the Scheme.

Neither ASIC nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

A copy of this Scheme Booklet has been lodged with ASX. Neither ASX nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

Investment decisions

This document does not take into account your individual investment objectives, financial situation and needs. The information in this document should not be relied upon as the sole basis for any investment decision in relation to your UKL Shares or any other securities. You should seek independent financial and tax advice before making any investment decision in relation to your Shares or any other securities.

Defined terms

A number of defined words and expressions are used in this Scheme Booklet. Defined words and expressions are capitalised. Please refer to the Glossary in Section 12 of this Scheme Booklet for the meaning of these words and expressions.

Unless otherwise stated, all data contained in charts, graphs and tables is based on information available as at the date of this Scheme Booklet. All numbers are rounded unless otherwise indicated. All references to time in this Scheme Booklet are references to Perth, Western Australia time.

Notice to Foreign Shareholders

This Scheme Booklet has been prepared in compliance with the disclosure requirements of Australia which may be different to those in other countries. This Scheme Booklet and the Scheme do not in any way constitute an offer of securities in any place in which, or to any person whom, it would not be lawful to make such an offer. Financial statements included in this Scheme Booklet have been prepared in accordance with Australian accounting standards and may differ from those in other countries.

Shareholders who are subject to taxation outside Australia should consult their tax adviser as to the applicable tax consequences of the Scheme.

The Scheme makes special provision for Scheme Consideration in relation to Shares held by Ineligible Overseas Shareholders. Ineligible Overseas Shareholders will not be eligible to receive New MRO Shares pursuant to the Scheme. Ineligible Overseas Shareholders should refer to 4.7 of this Scheme Booklet.

Tax implications of the Scheme

Section 10 of this Scheme Booklet provides a guide to the general Australian tax position of certain UKL Shareholders in relation to the Scheme based on income tax legislation enacted as at the date of this Scheme Booklet. It does not purport to be a complete analysis nor to identify all potential tax consequences nor is it intended to replace the need for specialist tax advice in respect of the particular circumstances of individual shareholders.

Shareholders should seek their own advice in respect of the tax implications of the Scheme.

Privacy and personal information

The collection of certain personal information is required or authorised by the Corporations Act.

UKL, MRO and their respective share registries may collect personal information in the process of implementing the Scheme. The personal information may include the names, addresses, other contact details and details of the shareholdings of shareholders and the names of individuals appointed by shareholders as proxies, corporate representatives or attorneys at the Scheme Meeting.

UKL Shareholders who are individuals and the other individuals in respect of whom personal information is collected as outlined above have certain rights to access the personal information collected in relation to them. Such individuals should contact the company secretary of UKL on (618) 9277 9782 in the first instance if they wish to request access to that personal information.

The personal information is collected for the primary purpose of effecting the Scheme.

The personal information may be disclosed to UKL's or MRO's respective share registries, to securities brokers and to print and mail service providers, and to their respective advisers to the extent necessary to effect the Scheme.

The main consequence of not collecting the personal information outlined above would be that UKL may be hindered in, or prevented from, conducting the Scheme Meeting and implementing the Scheme.

UKL Shareholders who appoint an individual as their proxy, corporate representative or attorney to vote at the Scheme Meeting should inform that individual of the matters outlined above.

Forward looking statements

This Scheme Booklet includes forward looking statements, including in respect of UKL's and MRO's business strategy, plans and objectives of management for future operations, which have been based on UKL's and MRO's current expectations about future events. These forward looking statements reflect views held as of the date of this Scheme Booklet.

These forward looking statements are, however, subject to risks (both known and unknown), uncertainties, assumptions and other important factors that could cause the actual conduct, results, performance or achievements to differ materially from the future conduct, results, performance or achievements expressed or implied by such forward looking statements. For discussion of important risk factors, refer to Section 9 of this Scheme Booklet.

None of UKL and MRO, their respective directors, officers, employees and advisers, and any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this Scheme Booklet will actually occur. Accordingly, you are cautioned not to place undue reliance on these forward looking statements.

LETTER FROM THE CHAIRMAN

7 May 2008

Dear Uranium King Shareholder,

On 11 October 2007, the boards of Uranium King Limited and Monaro Mining NL announced their intention to merge via a Scheme of Arrangement.

Your board believes the proposed merger will create a uranium exploration and intended development company with a strong mix of new management, projects and project skills, which will benefit all shareholders accordingly.

Your board has a very positive view of the long-term prospects for the merged company and recognise that it will create and enhance the opportunities available to the current Uranium King Shareholders, particularly with regard to geographical diversification and access to new and larger capital markets.

In a crowded uranium market these attributes are important considerations for Uranium King in moving forward.

Details of the Merger

The Merger Implementation Agreement dated 10 October 2007, as varied by deeds dated 19 March 2008 and 9 April 2008 (MIA), will govern the terms under how the proposed merger will be effected. A copy of the MIA (conformed and restated to include the variations effected by the two deeds of variation) is attached to this Scheme Booklet as Appendix B.

Under the terms of the MIA, Monaro Mining are offering five (5) of its shares for every seven (7) shares held by a Uranium King Shareholder.

In order to assist you in your decision-making, your board appointed RSM Bird Cameron Corporate Pty Ltd as an Independent Expert to assess the merit of the Scheme. RSM Bird Cameron Corporate Pty Ltd has concluded that the proposed merger is both fair and reasonable and in the best interests of Uranium King Shareholders.

As a result, the board of Uranium King unanimously recommend that, in the absence of a superior proposal, shareholders vote in favour of the proposed Scheme of Arrangement.

Please read this Scheme Booklet carefully as it contains important information in relation to the proposed merger. It is important that you cast your vote, either by attending the Scheme Meeting scheduled for 10.00am on 12 June 2008 or by completing and returning the relevant proxy form accompanying this Scheme Booklet by no later than 10.00am on 10 June 2008. If you have any questions about the Scheme or this Scheme Booklet please contact your financial, legal, taxation or other professional adviser.

On behalf of the board of Uranium King I would like to thank you for your support of Uranium King and we look forward to your continuing support as a shareholder of the merged company. I am personally looking forward to working with the Monaro Mining team to collectively enhance the wealth of both groups of shareholders.

Yours sincerely

Dr Bernhard Free

Chairman, Uranium King Limited

VOTING INFORMATION

The Scheme Meeting Resolution

The Scheme Meeting will be held on 12 June 2008 at 103 Abernethy Road, Belmont, Western Australia commencing at 10.00 am.

At the Scheme Meeting, UKL Shareholders will be asked to approve the following resolution in relation to the Scheme:

"That pursuant to, and in accordance with, section 411 of the Corporations Act 2001 (Cth), the scheme of arrangement proposed to be made between Uranium King Limited and the holders of fully paid ordinary shares in Uranium King Limited as set out in the Scheme Booklet accompanying this notice of meeting is approved (with or without modification as approved by the Federal Court)."

Your vote is important

For the Scheme to be approved:

• (a) a majority (i.e. greater than 50%) in number of UKL Shareholders voting at the Scheme Meeting (in person or by proxy) must vote in favour of the Scheme; and
• (b) those UKL Shareholders who vote in favour of the Scheme must hold at least 75% of the total number of UKL Shares voted at the Scheme Meeting (in person or by proxy),

and the Scheme must be approved by the Court. The Merger is also conditional upon, amongst other things (refer Section 4.3 of the Scheme Booklet), Monaro obtaining the Monaro Shareholder Approval.

Voting eligibility

You will be eligible to vote at the Scheme Meeting if you are registered as an UKL Shareholder as at 10.00 pm on 10 June 2008.

What should you do?

You should:

• (a) read this Scheme Booklet (including the Notice of Scheme Meeting in Appendix E) carefully;
• (b) if you have any queries please consult your professional advisers; and
• (c) exercise your right to vote on the Scheme.

The UKL Directors believe the Scheme is a matter of importance for all UKL Shareholders and therefore urge you to vote on the Scheme.

Voting in person

If you hold UKL Shares and wish to vote in person, you must attend the Scheme Meeting on 12 June 2008 at 103 Abernethy Road, Belmont, Western Australia at 10.00 am.

Alternatively, you may appoint an attorney to attend and vote at the Scheme Meeting on your behalf. Attorneys who plan to attend the Scheme Meeting must bring with them the original or certified copy of the power of attorney under which they have been authorised to attend and vote at the Scheme Meeting.

Corporate shareholders may attend the Scheme Meeting by appointing a corporate representative. Corporate shareholders which do this must ensure that the corporate representative can provide appropriate evidence of their appointment.

Voting at the Scheme Meeting will be by poll.

Voting by Proxy

You can vote by completing and returning the personalised proxy form that accompanies this Scheme Booklet.

Proxy forms must be delivered to and received by the UKL Share Registry not later than 10.00 am on 10 June 2008.

You may return your proxy form to the Share Registry by posting it in the reply paid envelope provided, or delivering it to the address below or faxing it to:

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Facsimile (+61 8) 9315 2233

By mail:

PO Box 566 BELMONT WA 6984

By hand delivery:

103 Abernethy Road BELMONT WA 6104

The sending or lodgement of any proxy form will not preclude any UKL Shareholder from attending in person and voting at the Scheme Meeting at which that Shareholder is entitled to attend and vote.

However, voting in person by a UKL Shareholder will preclude any proxy of the UKL Shareholder being counted.

Voting Queries

Further information relating to these voting procedures, the resolutions to be proposed at the Scheme Meeting, and what constitutes sufficient evidence of the appointment of an attorney or corporate representative, are contained in the Notice of Meeting included with this Scheme Booklet.

If you have any further questions in relation to the meetings, please call Security Transfer Registrars Pty Ltd on +61 8 9315 2333 or consult your financial or other professional adviser.

EXPLANATORY STATEMENT

1. Overview of the Merger

1.1. Background to the Merger

On 11 October 2007, UKL and MRO announced their intention to merge by way of a Scheme of Arrangement.

The announcement followed the finalisation of the Merger Implementation Agreement by UKL and MRO under which UKL agreed to propose the Scheme to the UKL Shareholders and implement the Scheme under the terms of the MIA and MRO agreed to issue the New MRO Shares to UKL Shareholders on completion of the Scheme.

Under the MIA, UKL and MRO have agreed that the Scheme Consideration for UKL Shareholders is five (5) new MRO Shares for every seven (7) UKL Shares held as at the Record Date.

The full terms of the Merger are set out in the MIA (conformed and restated to show all variations effected by deeds of variation dated 19 March 2008 and 9 April 2008), which is contained in Appendix B.

Under the Proposed Merger, MRO will acquire all of the issued UKL Shares in exchange for New MRO Shares. Completion of the proposal is conditional on, amongst other things, obtaining the necessary approval from UKL Shareholders for the Share Scheme, obtaining the Monaro Shareholder Approval and also obtaining the approval of the Court for the Scheme.

Further information on the Conditions Precedent to the Merger is set out in Sections 4.3 and 4.4 of this Scheme Booklet.

The UKL Directors are well informed about the MRO assets and hence the UKL Directors believe they are able to make well informed judgements about the Proposed Merger and recommend actions which are in the best interests of UKL Shareholders.

1.2. The Proposed Merger

If the Scheme is approved by UKL Shareholders and becomes Effective, the Merger will result in:

• (a) UKL Shareholders receiving MRO Shares representing approximately 67.6% of the Merged Entity's expanded issued capital on an entirely non diluted basis, or 64% of the Merged Entity's expanded issued capital after allowance for the paying up of the existing MRO Partly Paid Shares, or 61% of the Merged Entity's expanded issued capital on a fully diluted basis, that is, after allowance for the paying up of the existing MRO Partly Paid Shares and the exercise of the MRO Options (see Section 7.6 of this Scheme Booklet for further detail of the pro forma issued capital of the Merged Entity);
• (b) the transfer of all UKL Shares to MRO;
• (c) the acquisition by Monaro (or otherwise cancellation) of all UKL Options; and
• (d) UKL becoming a wholly owned subsidiary of MRO and being de-listed from the ASX.

The Scheme is conditional on various matters as described in Section 4.3 of this Scheme Booklet.

1.3. What you will receive under the Scheme

If the Scheme is approved by UKL Shareholders and the other conditions to the Scheme are satisfied (including obtaining the Monaro Shareholder Approval and the approval of the Scheme by the Court) or waived and the Scheme becomes Effective, UKL Shareholders will receive five (5) MRO Shares for every seven (7) UKL Shares they hold on the Record Date.

For example, if 7,000 UKL Shares are held on the Record Date, the holder will receive 5,000 New MRO Shares.

If the Scheme becomes Effective it is intended that the New MRO Shares will be issued to UKL Shareholders on the Implementation Date.

1.4. UKL Directors' recommendation and Independent Expert's opinion

The UKL Directors believe that the Scheme is in the best interests of UKL Shareholders for the reasons, including an

evaluation of the potential advantages and disadvantages of the Merger, set out in Section 3 of this Scheme Booklet and wish to make the following recommendation to UKL Shareholders:

"In the absence of a superior proposal, the UKL Directors unanimously recommend that UKL Shareholders vote in favour of the Scheme"

All UKL Directors intend to vote UKL Shares which are held by or on behalf of them in favour of the Scheme. To assist UKL Shareholders to consider the Scheme, the UKL Directors commissioned an independent expert, RSM Bird Cameron Corporate Pty Ltd, to evaluate the Scheme and prepare a report as to whether, in their opinion, the Scheme is fair and reasonable and in the best interests of UKL Shareholders.

The Independent Expert's Report is set out in Appendix A to this Scheme Booklet. For the reasons set out in their report, RSM Bird Cameron Corporate Pty Ltd considers that the Scheme is fair and reasonable and in the best interests of UKL Shareholders.

1.5. Conditions Precedent to implementation of the Merger

The implementation of the Merger remains subject to various Conditions Precedent. A summary of the Conditions Precedent is set out in Section 4.3 of this Scheme Booklet and the Conditions Precedent are set out in full in clause 2.1 of the Merger Implementation Agreement which is contained in Appendix B.

1.6. UKL Options

As at the date of this Scheme Booklet, UKL has 2,150,000 UKL Options on issue to subscribe for UKL Shares. Each of the UKL Options are exercisable at \$0.25 and have an expiry date of 31 December 2009. Details regarding existing holders of UKL Options are set out in Section 11.3 of this Scheme Booklet. UKL and MRO have entered into Optionholder Agreements with the holders of the UKL Options, as contemplated by clause 6(f) of the MIA, pursuant to which the UKL Options will be acquired by MRO or cancelled with effect from the Effective Date and MRO will issue to each UKL Optionholder five (5) MRO Options for every seven (7) UKL Options held. The exercise price of these MRO Options will be \$0.35 and the expiry date will be the same as the existing UKL Options.

1.7. Timing and implementation

UKL will hold the Scheme Meeting at 10.00 am on 12 June 2008 at 103 Abernethy Road, Belmont, Western Australia.

At the Scheme Meeting, UKL Shareholders will be asked to approve the Resolution to implement the Scheme.

The Merger will proceed only if UKL Shareholders approve the Merger by the requisite majorities, the Conditions Precedent are satisfied or waived and the Court approves the Scheme. Information relating to the resolution and how to vote is set out in the section entitled "Voting Information" on pages 6 & 7 of this Scheme Booklet.

An indicative timetable for implementation of the Merger is set out in the section entitled "Important Dates" on page 1 of this Scheme Booklet.

1.8. Effective Date

The Scheme will become Effective on the date that an office copy of the Court order approving the Scheme is lodged with ASIC. If the Court approves the Scheme at the Second Court Date, UKL intends to lodge an office copy of the Court order with ASIC on 17 June 2008, which is expected to be the Effective Date.

When the Scheme becomes Effective UKL will be required to take certain steps to ensure that MRO becomes the registered holder of all the UKL Shares and MRO will be required to issue the Scheme Consideration to the holders of UKL Shares on the Record Date.

1.9. Trading on ASX

If the Scheme becomes Effective, it is expected that suspension of trading on ASX in UKL Shares will occur from the close of trading on the Effective Date, being the day on which UKL lodges the office copy of order of the Court approving the Scheme with ASIC. This date is expected to be 17 June 2008. Once the Scheme has been fully implemented, UKL will apply for termination of quotation of UKL Shares on ASX. It is intended that Monaro will remain listed on ASX.

1.10. Taxation considerations

Section 10.1 of this Scheme Booklet provides a guide to the general Australian tax position of certain UKL

Shareholders in relation to the Scheme based on income tax legislation enacted as at the date of this Scheme Booklet. It does not purport to be a complete analysis nor to identify all potential tax consequences nor is it intended to replace the need for specialist tax advice in respect of the particular circumstances of individual shareholders.

Shareholders should seek their own advice in respect of the tax implications of the Scheme.

1.11. This Scheme Booklet

The UKL Directors urge you to read this document in its entirety and carefully. If you have any further queries in relation to the Merger you should consult your legal, financial and/or other professional adviser.

2. The Merger – Your Questions Answered

This Section answers some commonly asked questions about the Scheme and the Merger. It is not intended to address all relevant issues for UKL Shareholders and should be read together with the whole Scheme Booklet.

2.1. What will be the name of the Merged Entity?

On completion of the Scheme "Monaro Mining NL" will be the single listed company. Uranium King Limited will be a wholly owned subsidiary of Monaro and will not be listed on ASX. Therefore, listed holding company for the Merged Entity will be known as "Monaro Mining NL".

2.2. What are the benefits of the Merger?

Potential advantages of the Merger for UKL Shareholders include:

• (a) the Merger will create a larger and more geographically diversified group;
• (b) the Merger will create a group with a pipeline of assets ranging from greenfields exploration to advanced exploration thereby exposing shareholders to a range of different exploration assets that will enable strong organic growth;
• (c) the Merger is expected, through Monaro's current listing on the Frankfurt Stock Exchange, the ASX and its proposed ADR listing (if its proposed American Depositary Receipts (or ADR) listing in the United States is successful, which cannot be guaranteed), provide the Merged Entity with greater capacity to raise exploration and development funds from European investors/institutions and North American investors/institutions (the latter assuming that Monaro's proposed ADR listing is successful, which cannot be guaranteed. Refer to Section 11.10 for further details of the proposed ADR listing);
• (d) the Merger will assist in addressing the relative lack of liquidity of UKL Shares;
• (e) the Merger provides the opportunity to streamline management and reduce costs;
• (f) the Merger will expand the technical team available to advance the existing UKL and MRO projects; and
• (g) the Merger will create a company with a much greater market profile which will assist in general corporate and project acquisition opportunities.

In addition, a more detailed overview of the risks associated with the Merger, is set out in Section 9 of this Scheme Booklet.

2.3. What businesses will the Merged Entity comprise?

The Merged Entity will own all of UKL's projects (which are in the USA) and all of MRO's projects (which are in Australia, the Kyrgyz Republic and Estonia).

2.4. Who will be on the Board of Directors?

The Board of Directors of the Merged Entity will be made up of three existing UKL Directors and three existing MRO Directors.

These directors of the Merged Entity will be:

• Warwick Grigor (Chairman)
• Mart Rampe (Managing Director)
• Malcolm James

• Jim Malone

• Michael Duncan

• Greg Barns

In addition a Technical Advisory Panel will be created to oversee and provide guidance to the Board of Directors of the Merged Entity in the management of the existing and future projects. It is planned that this panel will comprise up to five individuals. Immediately on completion of the Merger the panel will comprise:

• Dr Bernhard Free (Chairman)
• Mr Samuel Sapper
• Mr Mart Rampe

2.5. Who will be the Managing Director of the Merged Entity?

Mart Rampe is the current managing director of MRO and he will continue in this role in the Merged Entity.

2.6. What are the intentions in relation to the business assets and employees of the Merged Entity?

The Merged Entity will focus on the growth of its existing assets and will also seek out new opportunities. Upon implementation of the Merger, all existing projects and employees of both groups will be retained.

Further information in relation to the business assets and employees of the Merged Entity are set out in Section 7 of this Scheme Booklet.

2.7. Can I sell my UKL Shares on the ASX?

You can sell your UKL Shares on the ASX. If the Merger is approved you will only be able to do so on or before the Effective Date, in which case:

• (a) you will pay brokerage on the sale;
• (b) you will not receive any potential benefits of owning MRO Shares; and
• (c) there may be different tax consequences from those that arise under the Merger.

2.8. What will I receive if the Merger is implemented?

All UKL Shareholders will receive five (5) MRO Shares for every seven (7) UKL Shares they own on the Record Date (subject to rounding and also the provisions for Ineligible Overseas Shareholders).

For example, if you hold 7,000 UKL Shares on the Record Date, you will receive 5,000 New MRO Shares.

2.9. What are the Australian tax implications for UKL Shareholders?

Australian CGT roll-over relief should be available to UKL Shareholders if they would otherwise make a capital gain as a result of the Scheme.

An overview of the Australian tax consequences of the Scheme for UKL Shareholders is set out in Section 10 of this Scheme Booklet. However, UKL Shareholders are advised to consult their own tax advisers.

2.10. When will I receive my New MRO Shares?

MRO will issue the New MRO Shares to UKL Shareholders on the Implementation Date. Holding statements detailing your MRO shareholding will be dispatched shortly thereafter. At this stage the Implementation Date is expected to be 1 July 2008 but this date is subject to change.

Deferred settlement trading of MRO Shares to be issued under the Scheme is expected to commence at the start of trading on the ASX on the Business Day after the Effective Date.

2.11. How will I be notified of my new shareholding in MRO? Uncertificated holding statements in relation to new shareholdings in MRO will be sent to UKL Shareholders shortly

Uncertificated holding statements in relation to new shareholdings in MRO will be sent to UKL Shareholders shortly after the Implementation Date. The holding statements will be sent to each UKL Shareholder's address recorded in the UKL Share Register on the Record Date. UKL Share Register on the Record Date. In the case of joint holders of UKL Shares, the holding statement for the new MRO Shares will be forwarded to the

In the case of joint holders of UKL Shares, the holding statement for the new MRO Shares will be forwarded to the holder whose name appears first in the UKL Share Register on the Record Date. 2.12. Will I have to pay brokerage fees or stamp duty?

2.12. Will I have to pay brokerage fees or stamp duty? No brokerage or stampduty will be payable by UKL Shareholders through the receipt of MRO Shares as a result of the

No brokerage or stamp duty will be payable by UKL Shareholders through the receipt of MRO Shares as a result of the Merger. 2.13. Will I be able to trade MRO Shares on the ASX?

2.13. Will I be able to trade MRO Shares on the ASX? Yes, MRO Shares trade on the ASX. It is a condition of the Merger that MRO applies for quotation of the New MRO

Yes, MRO Shares trade on the ASX. It is a condition of the Merger that MRO applies for quotation of the New MRO Shares to be issued under the Merger. It is expected that you will be able to trade MRO Shares on a deferred settlement basis from the Business Day after the Effective Date. basis from the Business Day after the Effective Date. 2.14. What if I am a Foreign Shareholder?

2.14. What if I am a Foreign Shareholder? MRO is not obliged to issue MRO Shares to any UKL Shareholders who are residents of a jurisdiction outside

MRO is not obliged to issue MRO Shares to any UKL Shareholders who are residents of a jurisdiction outside Australia or whose addresses in the UKL Share Register are outside Australia and its external territories and New Zealand, unless MRO is satisfied before the Effective Date that it is not precluded from lawfully issuing and allotting MRO Shares to those UKL Shareholders, either unconditionally or after compliance with conditions which MRO in its sole discretion regards as acceptable and not unduly onerous. Zealand, unless MRO is satisfied before the Effective Date that it is not precluded from lawfully issuing and allotting MRO Shares to those UKL Shareholders, either unconditionally or after compliance with conditions which MRO in its sole discretion regards as acceptable and not unduly onerous. As at the date of this Scheme Booklet, and having reviewed the UKL Share Register at the same date, Uranium King

As at the date of this Scheme Booklet, and having reviewed the UKL Share Register at the same date, Uranium King and Monaro are satisfied that all holders of UKL Shares whose egistered address is in the United States of America can be offered and issued with New MRO Shares and such holders should refer to Section 4.7 of this Scheme Booklet. be offered and issued with New MRO Shares and such holders should refer to Section 4.7 of this Scheme Booklet.

In the event that MRO are unable to issue shares to a UKL Shareholder because they are, as at the Record Date, an Ineligible Overseas Shareholder then the New MRO Shares that would have normally been issued to the Ineligible In the event that MRO are unable to issue shares to a UKL Shareholder because they are, as at the Record Date, an Ineligible Overseas Shareholder then the New MRO Shares that would have normally been issued to the Ineligible Overseas Shareholder will be issued to a Nominee selected by UKL at the same time as New MRO Shares are issued to UKL Shareholders who are not Ineligible Overseas Shareholders.

UKL Shareholders who are not Ineligible Overseas Shareholders. The Nominee will sell the New MRO Shares issued to it, pursuant to a share sale facility agreement to be entered into if The Nominee will sell the New MRO Shares issued to it, pursuant to a share sale facility agreement to be entered into if required, as soon as is reasonably practicable and account to the Ineligible Overseas Shareholder (s) for the net proceeds of the sale calculated in accordance with Section 4.7 of this Scheme Booklet.

proceeds of the sale calculated in accordance with Section 4.7 of this Scheme Booklet. 2.15. What are UKL Shareholders voting on?

2.15. What are UKL Shareholders voting on? UKL Shareholders will be asked to vote, at the Scheme Meeting, on the Resolution pursuant to which UKL will merge UKL Shareholders will be asked to vote, at the Scheme Meeting, on the Resolution pursuant to which UKL will merge with MRO, on the basis that all UKL Shares will be transferred to MRO and UKL will become a wholly owned subsidiary of MRO.

subsidiary of MRO. 2.16. When and where will the Scheme Meeting be held?

2.16. When and where will the Scheme Meeting be held? The SchemeMeeting will be held on 12 June 2008 at 103 Abernethy Road, Belmont, Western Australia, commencing at 10.00 am.

at 10.00 am. 2.17. Who can vote?

2.17. Who can vote? If you are registered as a UKL Shareholder as at 10.00 pm on 10 June 2008 then you are entitled to vote in person or by proxy at the Scheme Meeting.

proxy at the Scheme Meeting. 2.18. How can I vote?

2.18. How can I vote? Details of how to vote are contained in the section entitled "Voting Information" on pages 6 & 7 of this Scheme Booklet. The Notice of the Scheme Meeting is set out at Appendix E at the back of this Scheme Booklet.

2.19. What date do I have to lodge proxies by?

If you are voting by proxy and not attending the Scheme Meeting, your proxy must be received by the UKL Share Registry by no later than 10.00 am on 10 June 2008.

2.20. Should I vote?

Yes. The UKL Directors urge all UKL Shareholders to vote at the Scheme Meeting.

2.21. What voting majority is required to approve the Scheme?

For the Scheme to be approved:

• (a) a majority (i.e. greater than 50%) in number of UKL Shareholders voting at the Scheme Meeting (in person or by proxy) must vote in favour of the Scheme; and
• (b) those who vote in favour of the Scheme must hold at least 75% of the total number of UKL Shares voted at the Scheme Meeting (in person or by proxy),

and the Scheme must be approved by the Court.

2.22. How will the UKL Directors be voting?

In the absence of a superior proposal, the UKL Directors intend to vote in favour of the Scheme in respect of all of those UKL Shares held by or on behalf of them.

2.23. What is the opinion of the Independent Expert?

The Independent Expert has provided an opinion in respect of the terms of the Merger. The Independent Expert has concluded that the MRO offer is fair and reasonable and the Merger is in the best interests of UKL Shareholders. The Independent Expert's Report is set out in full in Appendix A to this Scheme Booklet.

2.24. What happens if I do not vote, or if I vote against the Scheme?

If the Scheme is implemented and you are a UKL Shareholder as at the Record Date, all of your UKL Shares will be transferred to MRO in accordance with the Scheme notwithstanding the fact that you did not vote or voted against the Scheme.

2.25. When will the voting result be known?

The results of the Scheme Meeting vote will be available shortly after the conclusion of the Scheme Meeting and will be announced to the ASX as soon as possible after they are available. The results of the vote will also be published on the UKL website on the Business Day following the Scheme Meeting.

2.26. What happens if the Scheme is not approved?

If the Scheme is not approved by UKL Shareholders the Merger will not proceed, UKL will continue as a stand-alone entity and UKL Shareholders will retain their UKL shareholdings and will not receive any MRO Shares.

Under these circumstances, UKL would remain listed on the ASX.

The UKL Directors believe that if the Merger does not proceed it is possible that UKL's share price will fall (see Section 3.2 of this Scheme Booklet) and the ability of UKL to raise exploration and development capital will be significantly limited, so much so that any subsequent capital raisings may be very dilutionary to existing UKL Shareholders.

2.27. Why would trading in UKL Shares be suspended?

If the Merger proceeds, trading in UKL Shares will be suspended with effect from the close of trading on the Effective Date. This is so that trades in UKL Shares on ASX can be registered on or before the Record Date, after which time no further transfers may be registered (other than registrable transfers or transmission applications or transfers in registrable form received at the UKL Share Registry at or before the Record Date). When the Scheme is implemented, UKL will become a wholly owned subsidiary of MRO and UKL will cease to be quoted on the ASX.

2.28. What are the conditions to be satisfied to allow the Merger to proceed?

Implementation of the Merger is conditional upon (among other things):

• (a) UKL Shareholders approving the Resolution at the Scheme Meeting;
• (b) Monaro Shareholder Approval being obtained;
• (c) the Court approving the Scheme on the Second Court Date;
• (d) all relevant regulatory approvals being obtained;
• (e) no material adverse change occurring in relation to either UKL or MRO; and
• (f) no prescribed occurrences (as defined in the MIA) occurring in relation to either UKL or MRO.

The Conditions Precedent to the Merger proceeding are summarised in Section 4.3 of this Scheme Booklet and are set out in full in clause 2.1 of the MIA which is included as Appendix B of this Scheme Booklet. The current status of the Conditions Precedent is also discussed in Section 4.4 of this Scheme Booklet.

The majority of the Conditions Precedent set out in the MIA may be waived by the party with the benefit of such condition in accordance with the MIA (although the conditions set out in (a), (b), (c) and (d) immediately above cannot be waived by either party). If any of the Conditions Precedent are not satisfied or waived in accordance with the MIA, the MIA may be terminated.

If the MIA is terminated, the Merger will not proceed.

2.29. Who to contact if you have a query

If you have a query or require further information about the Scheme, the Merger or the related documentation, please contact:

Mr Jim Malone Uranium King Limited 103 Abernethy Road BELMONT WA 6104 Telephone (61 8) 9277 9782

OR

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Telephone (61 8) 9315 2333

3. Important considerations for UKL Shareholders

3.1. UKL Directors' recommendation and Independent Expert's Report

The recommendation of UKL Directors and the conclusions of the Independent Expert appointed to evaluate the Scheme are described in Section 1.4 of this Scheme Booklet.

3.2. Potential advantages of the Merger

The UKL Directors consider that the Merger effected by the Scheme offers the following advantages:

• The Merged Entity will be an internationally diversified mining company that will offer shareholders a financially strong and dynamic, well balanced uranium company with a pipeline of global greenfields to advanced exploration projects.
• The Merged Entity will be a significantly larger company than UKL is at present with a number of projects diversified across countries that include the USA, Central Asia and Australia
• The increased market capitalisation of the Merged Entity is expected to provide improved share market liquidity and access to new capital markets.
• The Merged Entity will have the increased capacity to identify and target project and corporate acquisition opportunities. In addition, if MRO's proposed American Depositary Receipt (or ADR) listing in the United States (which cannot be guaranteed) is successful and via its current listing in Europe on the Frankfurt Stock Exchange, the Merged Entity will have increased ability to raise capital in the North American (only if the proposed ADR listing is successful) and European markets. Refer to Section 11.10 for further details of the proposed ADR listing.
• The merging of UKL and MRO will enhance management and technical capabilities. The Merger will eliminate the current duplication of ASX fees, audits and corporate management and reporting and simplify the administrative structure.
• The Merged Entity will have strong, experienced and competent management and technical personnel with extensive uranium experience, including Dr Bernhard Free, Sam Sapper, John Petersen, Dr Alexander Avrashov, Gerhard Michael Free, Lee Spencer, Mart Rampe, Jerome Randabel, Mohan Varkey and David Bennet.
• The Merger will increase the working capital available to UKL Shareholders by approximately \$A7 million and the Merged Entity will therefore be in a position to meet the increased costs of exploration and the potential development of uranium projects and to employ and retain competent staff.
• The Merger is expected, through Monaro's current listing on the Frankfurt Stock Exchange, the ASX and its proposed ADR listing (if its proposed American Depositary Receipts (or ADR) listing in the United States is successful, which cannot be guaranteed), to provide the Merged Entity with far greater capacity to raise exploration and development funds from European investors/institutions and North American investors/institutions (the latter assuming that Monaro's proposed ADR listing is successful, which cannot be guaranteed. Refer to Section 11.10 for further details of the proposed ADR listing);
• The Merger will have already been implemented, when funds are sought for the potential development of the existing United States uranium assets of Uranium King.
• Even before the down turn in world markets and in particular, uranium stocks, the UKL Board and MRO Board realised that the bull market conditions of late 2006/early 2007 would not last forever and the cost of exploration and developing uranium projects and the difficulties in finding competent staff would be a serious challenge to all uranium juniors. As a result of this similar mindset and understanding that the two companies had a good mix of complementary assets, the two boards agreed to a consolidation that will be a critical step in the development of both companies and is expected to propel the Merged Entity into a new league of resource companies in the quickest timeframe.

3.3. Potential disadvantages of the Merger

The UKL Directors consider that the Merger effected by the Scheme may result in the following disadvantages:

• A shareholding in MRO will result in UKL Shareholders being exposed to projects in some countries which

potentially have less political stability than the United States.

• Post Merger, UKL Shareholders, in aggregate, will only hold 67.6% (non diluted), 64% (diluted as to the MRO Partly Paid Shares only) or 61% (fully diluted) of the USA projects via their shareholding in MRO. They currently own 100% of these projects via their holding of UKL Shares.

3.4. Other relevant considerations

Since the announcement of the Merger on 11 October 2007:

• (a) no better proposal or higher offer has been forthcoming for UKL Shares; and
• (b) the UKL Directors are not aware of any existing circumstances which would cause the Conditions Precedent of the Scheme (summarized in Section 4.3 of this Scheme Booklet) not to be satisfied or waived. UKL will advise shareholders of the status of the various Conditions Precedent at the Scheme Meeting.

Persons who wish to be informed of the status of the Conditions Precedent at that time are encouraged to attend the Scheme Meeting. UKL will announce to ASX any relevant matter which affects the likelihood of a Condition Precedent being satisfied, waived or not being satisfied in accordance with its continuous disclosure obligations.

4. Implementation of the Scheme

4.1. Overview of the Merger

On 11 October 2007, UKL and MRO announced that they had signed a Merger Implementation Agreement under which the two companies agreed to merge by way of a scheme of arrangement under the Corporations Act. A copy of the MIA, as varied by deeds dated 19 March 2008 and 9 April 2008, is set out in Appendix B.

The Merger is conditional on (amongst other things) UKL Shareholders and the Court approving the Scheme. Other Conditions Precedent are described in Section 4.3 of this Scheme Booklet.

4.2. Structure of the Merger

The Merger will be effected through a scheme of arrangement under the Corporations Act between UKL and UKL Shareholders. This Scheme Booklet has been prepared pursuant to section 412(1) of the Corporations Act to explain the effect of the Scheme between UKL and UKL Shareholders to be considered at the Scheme Meeting. The Scheme of Arrangement is set out in Appendix D.

Below is a corporate structure showing the Merged Entity, including its subsidiaries, following implementation of the Merger.

MRO will remain listed on the ASX following the Merger and MRO is obliged to seek quotation on the official list of the ASX of the MRO Shares issued to UKL Shareholders under the Scheme. After the Merger has been implemented, all UKL Shares will be held by Monaro and the UKL Shares will be removed from official quotation on the ASX.

4.3. Conditions Precedent

The Scheme will not be implemented unless all Conditions Precedent have been satisfied or, where applicable, waived by the party entitled to the benefit of the same, in accordance with the MIA.

In summary, the Conditions Precedent are:

(a) Conditions for the benefit of both parties

• UKL Shareholders approve the Scheme at the Scheme Meeting by the requisite majorities required by the Corporations Act;
• the Court approves the Scheme in accordance with section 411(4)(b) of the Corporations Act;
• ASIC and ASX and any other regulatory body or governmental agency issues or provides any consents or approvals or does other acts necessary or desirable to implement the Merger;
• the Scheme becomes Effective on or before the Quit Date (currently agreed to be 31 July 2008) or such other date as UKL and MRO agree;
• all necessary approvals are obtained from MRO Shareholders in relation to MRO's participation in the Scheme, being approval for the purposes of section 611, item 7 of the Corporations Act on the basis that METCO will obtain approximately 36% of the Merged Entity, on a non-diluted basis (Monaro Shareholder Approval);
• no Court or regulatory authority order or decree is in existence which as at 8.00 am on Second Court Date the Court makes orders pursuant to section 411(4)(b) of the Corporations Act, restrains or prohibits the implementation of the Scheme or any transaction contemplated by the Scheme or the MIA; and
• FIRB Approval, if required, is obtained and any approval required under US foreign investment laws or policies is obtained.

Save for the conditions mentioned in Section 4.3(d) of this Scheme Booklet which cannot be waived, waiver of any breach or non-fulfilment of the conditions in this sub-section requires the approval of both UKL and MRO. A waiver of these conditions may require that the Second Court Date be deferred until the required approval is obtained or the restraint or prohibition is removed.

(b) Conditions for the benefit of UKL only

• UKL conducting due diligence investigations into Monaro that do not reveal any information which, in the sole discretion of the UKL Board, result in the UKL Board concluding that the Scheme is not in the best interests of the UKL Shareholders;
• no Monaro Material Adverse Change occurs or Monaro Material Adverse Matter becomes known (as those terms are defined in the MIA) before 8.00am on the day of the Scheme Meeting;
• no Monaro Prescribed Occurrence occurs and no Takeover Proposal for Monaro (as those terms are defined in the MIA) is made or announced as a result of which the Independent Expert is no longer able to conclude that the Scheme is in the best interests of the Uranium King Shareholders; and
• MRO is not in breach, in any material aspect, of its obligations under the MIA and the representations and warranties of MRO set out in the MIA are true and correct as of 10 October 2007 and at 8.00am on the day of the Scheme Meeting and any other date to which the representation and warranty applies.

Only UKL can waive any breach or non-fulfilment of these conditions.

(c) Conditions for the benefit of MRO only

• Monaro conducting due diligence investigations into Uranium King that do not reveal any information which, in the sole discretion of the Monaro Board, result in the Monaro Board concluding that the Scheme is not in the best interests of the Monaro Shareholders;
• the Optionholder Agreements are executed by each holder of UKL Options and MRO with respect to the UKL Options (in this regard, refer to Section 1.6 of this Scheme Booklet for more information regarding the UKL Options);
• no Uranium King Material Adverse Change occurs or Uranium King Material Adverse Matter becomes known (as those terms are defined in the MIA) before 8.00am on the day of the Scheme Meeting;
• no Uranium King Prescribed Occurrence occurs and no Takeover Proposal for Uranium King (as

those terms are defined in the MIA) is made or announced;

• UKL is not in breach, in any material aspect, of its obligations under the MIA and the representations and warranties of UKL set out in the MIA are true and correct as of 10 October 2007 and as at 8.00am on the date of the Scheme Meeting and any other date to which the representation and warranty applies;
• Between 10 October 2007 and the Scheme Meeting, UKL Directors do not change or withdraw their recommendation to UKL Shareholders to vote in favour of the Scheme.
• no amount is or becomes payable to any UKL Director or employee of Uranium King as a consequence of the Scheme, other than as a Uranium King Shareholder and as referred to in clause 3(h) of the MIA.
• Monaro has acquired or agreed to acquire all of the Uranium King Options or all such Uranium King Options have been exercised or cancelled by agreement with the holders and no other convertible securities are or will on the Scheme Effective Date be on issue in Uranium King.

Only MRO can waive any breach or non-fulfilment of these conditions.

(d) Conditions that cannot be waived

The following Conditions Precedent cannot be waived:

• (i) UKL Shareholders approve the Scheme at the Scheme Meeting by the requisite majorities required by the Corporations Act; and
• (ii) the Court approves the Scheme in accordance with section 411(4)(b) of the Corporations Act.

4.4. Status of Conditions Precedent

Save as to the reservation noted below in this Section 4.4, UKL does not have any reason to believe that the Conditions Precedent will not be fulfilled.

UKL will advise the Court on the Second Court Date of the nature and effect of any Conditions Precedent that have not been fulfilled and have been waived, so that the Court may have regard to the implications of the unfulfilled Condition Precedent in determining whether to approve the Scheme. As at the date of this Scheme Booklet, the Conditions Precedent concerning due diligence investigations into UKL and MRO by the MRO Board and the UKL Board respectively have been satisfied. In addition, the Condition Precedent concerning the entering into of the Option Agreements for the acquisition by Monaro of all of the UKL Options, has also been satisfied. Further, the Monaro Directors have resolved to seek Monaro Shareholder Approval (for the purposes of section 611, item 7 of the Corporations Act on the basis that METCO will obtain approximately 36% of the Merged Entity, on a non-diluted basis) for the purposes of the Merger. The Monaro Shareholder Approval is expected to be sought at a general meeting of Monaro on or about 10 June 2008. The Monaro Directors have informed the UKL Board that no FIRB approval or any approval required under US foreign investment laws or policies is required in connection with the Merger. The UKL Board are of the view that, as at the date of this Scheme Booklet, no Uranium King Material Adverse Change has occurred nor Uranium King Material Adverse Matter has become known (save to note that Monaro has reserved its rights to monitor the impact of the litigation referred to in Section 5.12 of this Scheme Booklet) and the MRO Board has confirmed to UKL that, as at the date of this Scheme Booklet, no Monaro Material Adverse Change has occurred nor Monaro Material Adverse Matter has become known.

4.5. Scheme Consideration

Save in the case of Ineligible Overseas Shareholders (see Section 4.7 of this Scheme Booklet), UKL Shareholders will receive, as consideration for their UKL Shares transferred to MRO under the Scheme, five (5) New MRO Shares for every seven (7) UKL Shares held by them as at the Record Date.

In accordance with the terms of the Scheme, fractional entitlements to MRO Shares will be rounded up or down to the nearest whole number of MRO Shares, with fractions of 0.5 being rounded up.

In accordance with the terms of the Scheme, if the total number of Monaro Shares a Scheme Participant is entitled to receive is an Odd Lot (less than a marketable parcel as that term is defined in the Listing Rules), Monaro may elect (in its sole and unfettered discretion) to provide cash consideration, which is equal to the Market Price of the Monaro Shares, instead of the Monaro Shares.

If MRO reasonably forms the opinion that two or more UKL Shareholders have been involved in shareholding splitting

in an attempt to gain an advantage in the rounding process, MRO may send a notice to those UKL Shareholders stating that opinion and advising that their holdings of UKL Shares will be aggregated for the purposes of rounding.

The Scheme Consideration will be issued to UKL Shareholders on the Implementation Date.

No later than 7 Business Days after the Implementation Date, MRO will dispatch or procure the dispatch to each UKL Shareholder by pre-paid post to his or her address recorded in the UKL Share Register at the Record Date, an uncertificated holding statement for the Scheme Consideration issued to that UKL Shareholder in accordance with the Scheme. In the case of joint holders of UKL Shares, the holding statement will be forwarded to the holder whose name appears first in the UKL Share Register on the Record Date.

As at the date of this Scheme Booklet the Record Date is expected to be 24 June 2008 and the Implementation Date is expected to be 1 July 2008. These dates may change and will be finalised only after the Court has considered and approved the Scheme. UKL will keep UKL Shareholders updated on relevant dates by making announcements on the ASX.

4.6. Determination of persons entitled to Scheme Consideration

(a) Determining entitlements

For the purpose of determining who is a holder of UKL Shares on the Record Date and for the purpose of calculating entitlements under the Scheme, any dealings in UKL Shares will be recognised only if:

• (i) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the UKL Share Register as a holder of the relevant UKL Shares by the Record Date; and
• (ii) in all other cases, if registrable transmission applications or transfers in respect of those dealings are received on or before the Record Date, at the place where the UKL Share Register is kept (770 Canning Highway, Applecross, WA, 6153).

UKL will register transmission applications or transfers of the kind referred to in paragraph (a)(ii) immediately above provided they are received by the Record Date. UKL will not accept for registration or recognise for any purpose any transfer or transmission application in respect of UKL Shares received after the Record Date (other than the transfer of UKL Shares to MRO pursuant to the Scheme).

For the purpose of determining entitlements to consideration under the Scheme, UKL will, until issue of the Scheme Consideration has been effected by MRO, maintain the UKL Share Register as set out in this paragraph and the UKL Share Register in this form will solely determine entitlements to Scheme Consideration.

(b) After the Record Date

As from the Record Date:

• (i) all share certificates and holding statements for UKL Shares (other than statements of holding in favour of MRO) will cease to have effect as documents of title in respect of UKL Shares other than for the purpose of registering dealings in UKL Shares on the Record Date; and
• (ii) each entry on the UKL Share Register as at that date relating to UKL Shares will cease to have any effect other than as evidence of entitlement to the Scheme Consideration.

4.7. Foreign Shareholders

MRO is not obliged to issue Scheme Consideration to any Foreign Shareholders unless MRO is satisfied before the Effective Date that the laws of the Foreign Shareholder's country of residence permit the issue and allotment of MRO Shares to the Foreign Shareholders, either unconditionally or after compliance with conditions which MRO, in its sole discretion regards as acceptable and not unduly onerous.

If MRO does not issue the Scheme Consideration to a UKL Shareholder because they are an Ineligible Overseas Shareholder, then the Scheme Consideration that would have been issued to the Ineligible Overseas Shareholder will be issued to the Nominee on the Implementation Date. UKL will procure that the Nominee, as soon as practical thereafter:

(a) sells for the benefit of the Ineligible Overseas Shareholder of the Scheme Consideration issued to the Nominee;

• (b) accounts to the Ineligible Overseas Shareholders for the net proceeds of sale (on an averaged basis so that each Ineligible Overseas Shareholder receives the same price per New MRO Share, subject to rounding down to the nearest whole cent) and any income referable to those New MRO Shares, after deduction of any applicable brokerage, taxes and charges; and
• (c) remits the net proceeds of each Ineligible Overseas Shareholders entitlement, such proceeds to be dispatched by mail to the Ineligible Overseas Shareholder's address as shown in the UKL Share Register on the Record Date by cheque in Australian currency drawn on an Australian bank. In the case of joint holders of UKL Shares, the cheque will be made payable to and forwarded to the holder whose name appears first in the UKL Share Register on the Record Date.

4.8. US Shareholders

Based on preliminary US legal advice received by Monaro as at the date of this Scheme Booklet, Uranium King and Monaro have determined that all holders of UKL Shares whose registered address is in the United States of America can be offered and issued with New MRO Shares.

Notice is hereby given that the issuance of MRO Shares pursuant to the Scheme in the United States of America will be made in reliance upon the exemption from the registration requirements of the Securities Act of 1933 of the United States, as amended (defined in this Section 4.8 as the "Act"), pursuant to Section 3(a)(10) of the Act. Pursuant to Rule 145 promulgated under the Act, MRO Shares distributed pursuant to the Merger in the United States of America may be resold as follows:

• (a) persons who are not affiliates of UKL before the Scheme becomes operative or affiliates of MRO after the Scheme becomes operative may sell any MRO Shares they receive pursuant to the Scheme without regard to Rules 144 or 145(c) and (d);
• (b) persons who are affiliates of UKL before the Scheme becomes operative, but who are not affiliates of MRO after the Scheme becomes operative, are persons described in Rule 145(c) and may resell in the manner Rule 145(d) permits. Such persons may resell MRO Shares received under the Scheme pursuant to Rule 145(d)(1) without regard to the holding period Rule 144(d) requires. In computing the holding period of the MRO Shares for purposes of Rule 145(d)(2) or (3), however, such persons may not "tack" the holding period of their UKL Shares surrendered in the Scheme; and
• (c) persons who are affiliates of MRO after the Scheme becomes operative may resell MRO Shares received under the Scheme in the manner permitted by Rule 145(d)(1) without regard to the holding period requirement of Rule 144(d).

Shareholders in the United States should take their own advice as to any US laws applicable to them.

4.9. Summary of Merger Implementation Agreement

A summary of the material terms of the MIA is set out in this Section. Capitalised terms used in this summary are defined in the MIA. A full copy of the MIA is attached as Appendix B to this Scheme Booklet.

The Conditions Precedent to implementation of the Merger, as agreed in the MIA, are set out in Section 4.4 of this Scheme Booklet. The terms of the Scheme Consideration proposed to be issued to UKL Shareholders, as agreed in the MIA, is set out in Sections 4.5 and 4.6.

UKL and MRO have each agreed that at any time from 10 October 2008 until the earlier of the date that the MIA is terminated in accordance with its terms, the Effective Date or 31 July 2008 (Exclusivity Period) neither of them nor any of their employees, officers, advisers or agents will directly or indirectly solicit, invite, facilitate any discussions or negotiations (or encourage, or communicate any intention to do any of those things) with a view to obtaining any offer or proposal from any person for, or in respect of, a transaction in competition with the Merger (being a Takeover Proposal for MRO or Takeover Proposal for UKL as the case may be).

During the Exclusivity Period, each of UKL and MRO must notify the other party promptly if it becomes aware of:

• (a) any approach, enquiry or proposal made to and any attempt to initiate or continue negotiations or discussions with it or any of its representatives with respect to any Takeover Proposal, whether unsolicited or otherwise;
• (b) subject to certain confidentiality restrictions, any request for or provision by it or any of its representatives of any information relating to it or any of its Related Bodies Corporate or any of their businesses or operations to any person in connection with or for the purposes of a Takeover Proposal.

The restriction on UKL and MRO as regards to cessation of negotiations and non-solicitation during the Exclusivity Period does not restrict a party otherwise bound from responding to a bona fide offer or proposal which was not solicited or initiated by the party if and to the extent necessary to discharge his or her fiduciary duties as a director of UKL or MRO.

Under the MIA the parties agreed that break fees would be payable in the following circumstances:

• (a) UKL will pay to MRO the sum of \$100,000 (being a total amount comprising a contribution towards the reasonable internal and third party advisory, legal, accounting, due diligence and management costs and expenses and opportunity and other costs and expenses foregone) in immediately available funds within one Business Day after the first to occur of any of the following events: a Takeover Proposal has been publicly announced, proposed, offered or made to the UKL Shareholders or to UKL, and such Takeover Proposal has been accepted or has not expired or been withdrawn at the time of the Scheme Meeting and the UKL Board withdraws, qualifies or changes any of its recommendations in a manner adverse to MRO or resolves to do so prior to the Effective Date.
• (b) MRO will pay to UKL the sum of \$100,000 (being a total amount comprising a contribution towards the reasonable internal and third party advisory, legal, accounting, due diligence and management costs and expenses and opportunity and other costs and expenses foregone) in immediately available funds within one Business Day after the MRO Board withdraws, qualifies or changes any of its recommendations to MRO Shareholders (if applicable) or determinations to proceed with the Proposed Merger in a manner adverse to UKL or resolves to do so prior to the Scheme Effective Date (as a result of a Takeover Proposal for MRO having been publicly announced or otherwise).

The MIA may be terminated in certain circumstances as set out in that agreement. If this occurs, the Merger will not proceed. In summary, the MIA may be terminated:

• (a) by either party if a Condition Precedent has not been, or cannot be, satisfied and has not been waived by the date specified in the MIA or 31 July 2008 or such later date as the parties may agree (Quit Date), or if the Scheme has not become Effective by the Quit Date, and having negotiated in good faith the parties have not been able to agree on an alternate means to effect a merger or to extend the Quit Date or change the date of an application to the Court; and
• (b) by either party by written notice to the other party at any time before the Effective Date if the other is in material breach of the MIA.

4.10. Steps for implementing the Merger

(a) Overview of the Scheme and the Scheme Meeting

• (i) UKL and MRO entered into the merger implementation agreement on 10 October 2007 pursuant to which they agreed to implement the Merger. MRO has executed the Deed Poll in favour of all UKL Shareholders, covenanting to perform its obligations under the Scheme.
• (ii) The Court has ordered the convening of the Scheme Meeting be held at 103 Abernethy Road, Belmont, Western Australia on 12 June 2008 at 10.00 am.

A copy of the Notice of Scheme Meeting is set out at Appendix E of this Scheme Booklet.

(iii) At the Scheme Meeting, UKL Shareholders will be asked to approve the following resolution in relation to the Scheme:

"That pursuant to, and in accordance with, section 411 of the Corporations Act 2001 (Cth), the scheme of arrangement proposed to be made between Uranium King Limited and the holders of fully paid ordinary shares in Uranium King Limited, as set out in the Scheme Booklet accompanying this notice of meeting, is approved (with or without modification as approved by the Court)."

(iv) Each UKL Shareholder who is listed on the UKL Share Registry at 10.00 pm on 10 June 2008 is entitled to attend and vote at the Scheme Meeting, either in person or by proxy or attorney or, in the case of a corporation that is a shareholder, by its corporate representative appointed in accordance with the Corporations Act.

• (v) Refer to the section entitled "Voting Information" on pages 6 & 7 of this Scheme Booklet for an explanation of how to vote at the Scheme Meeting.
• (vi) Voting at the Scheme Meeting will be by poll.
• (vii) For the Scheme to be approved:
• (A) a majority in number (i.e. more than 50%) of UKL Shareholders voting at the Scheme Meeting (in person or by proxy) must vote in favour of the Scheme; and
• (B) those UKL Shareholders who vote in favour of the Scheme must hold at least 75% of the total number of UKL Shares voted at the Scheme Meeting (in person or by proxy).
• (viii) If the Scheme is approved by the requisite majorities at the Scheme Meeting, and all of the Conditions Precedent have been satisfied or waived where applicable, UKL will apply to the Court for orders approving the Scheme.
• (ix) Each UKL Shareholder has the right to appear and be heard, in person or by Counsel, in support of or by way of opposition to the approval of the Scheme at the Court hearing on the Second Court Date in respect of the application by UKL for orders approving the Scheme. At this stage it is expected that the Second Court Date will be 16 June 2008. If there is any change to this expected date an announcement will be made by UKL to the ASX.
• (x) The Court may refuse to grant orders approving the Scheme even if the Scheme is approved by the requisite majorities of UKL Shareholders.
• (xi) MRO has executed the Deed Poll in favour of all UKL Shareholders covenanting to perform its obligation to issue the New MRO Shares to UKL Shareholders as consideration for the transfer of UKL Shares in accordance with the Scheme.

(b) Implementation of the Merger

If all of the Conditions Precedent have been satisfied or waived where applicable and Court orders approving the Scheme are obtained, the directors of UKL and MRO will take or procure the taking of the steps required for the Merger to proceed, namely:

• (i) UKL will lodge with ASIC an office copy of the Court orders given under section 411(4)(b) of the Corporations Act approving the Scheme;
• (ii) MRO will issue to each UKL Shareholder (or in the case of Ineligible Overseas Shareholders, the Nominee) the Scheme Consideration in accordance with the provisions of the Scheme and the Deed Poll; and
• (iii) MRO and UKL will execute transfer form(s) (or a master share transfer form) in relation to the transfer of Scheme Shares to MRO in accordance with the Scheme and UKL will register the transfer of Scheme Shares in the UKL Share Register and will enter the name of MRO in the UKL Share Register in respect of the Scheme Shares.

The event mentioned in paragraph (b)(i) immediately above is expected to take place on the Business Day following the day on which the Court orders are made. The Scheme will become Effective upon the office copy of the Court orders in respect of the Scheme being filed with ASIC, expected to be on 17 June 2008 and is referred to in this Scheme Booklet as the Effective Date. UKL will notify ASX when the Scheme has become Effective.

Once the Scheme becomes Effective, UKL and the UKL Shareholders will become bound by the Scheme and to implement the Scheme in accordance with its terms.

The matters mentioned in paragraphs (b)(ii) and (b)(iii) immediately above will occur on the Implementation Date. At this stage this is expected to be on 1 July 2008.

Uncertificated holding statements for the New MRO Shares will be dispatched by pre-paid post to each UKL Shareholder shortly after the Implementation Date. The holding statements will be sent to each UKL Shareholder's address recorded in the UKL Share Register at the Record Date. In the case of joint holders of UKL Shares, the MRO holdings statement will be forwarded to the holder whose name appears first in the UKL Share Register on the Record Date.

(c) Suspension of trading in UKL Shares and removal from official quotation

If the Court approves the Scheme, UKL will notify ASX of the Court approval on the Second Court Date. It is expected that suspension of trading on the ASX in UKL Shares will occur from the close of trading on the day on which UKL lodges the office copy of the Court order with ASIC.

Following final implementation of the Scheme, UKL will request ASX to remove UKL Shares from official quotation on the ASX.

5. Profile of UKL

5.1. Background and history

Uranium King Limited was incorporated on 7 April 2006 with the corporate objectives of the acquisition, exploration and development of uranium projects within the United States.

On 21 July 2006, UKL exercised an option to acquire a 100% equity in a suite of advanced uranium projects including Rio Puerco (situated in New Mexico) and Apex/Lowboy (situated in Nevada) where combined JORC Inferred Mineral Resources totalled 6.1 million pounds of uranium oxide (refer to Sections 5.2.1 and 5.2.2 for further details).

On 2 September 2006 Uranium King listed on the ASX after raising \$6,500,000 through the issue of 26,000,000 fully paid ordinary shares at \$0.25 each.

Subsequent to listing on ASX, UKL has undertaken an active exploration programme within the United States for additional uranium projects, completed a scoping study over the Apex/Lowboy project and carried out a preliminary drilling programme over the Lily project, situated to the south east of Rio Puerco.

A key to the growth of UKL is the exploration and acquisition of uranium projects with robust grades and in jurisdictions where the development of uranium projects is both encouraged and supported by the relevant authorities.

5.2. Project Summary

5.2.1. Rio Puerco Project

The Rio Puerco project is located approximately 60 kilometres to the northwest of Albuquerque in the state of New Mexico, United States.

The project area is covered by 54 claims totalling around 1070 acres and is situated within the Grants Mineral Belt, also colloquially known as the Grants Uranium District.

The Grants Mineral belt has been a significant source of uranium in the United States with production estimated to be approximately 340 million pounds. The belt was of major importance during 1950-1968 when annual production was around 38% of the total output from the United States.

Geologically, uranium mineralisation in the Grants Mineral Belt is hosted within the Morrison Formation which is an intercalated mudstone, shale and sandstone of Jurassic age ranging between 120 metres and 150 metres in thickness.

At Rio Puerco, uranium mineralisation is contained within four sandstone units of the Morrison Formation and the primary uranium mineral is coffinite. The resource was discovered in 1968 and the then operators of the project, Kerr McGee spent approximately \$US17 million exploring and developing the discovery with extensive drilling, shaft development, bulk sampling and general resource definition completed.

The resource was mined for a brief period until a significant fall in uranium prices to below \$10 per lb forced its closure.

Rio Puerco contains the following JORC Inferred Mineral Resource of uranium based on a mining cutoff of 0.05% U3O8.

Tonnes	Grade	Content in Kilograms	Content in Pounds
1,710,000	0.12% U3O8	2,052,000	4,514,000

The above JORC Inferred Mineral Resource was determined at a time when the uranium price was approximately US\$40 per lb.

During 2007 the primary work undertaken at Rio Puerco has been case study modelling to better understand the geophysical response to the distribution of the ore. These studies have developed a model for the remote sensing exploration of similar targets with the Grants Mineral Belt.

In addition, digitising of the extensive data base over Rio Puerco was commenced.

In early 2007 Uranium King purchased the Smith claims. These claims are located adjacent to the Rio

Puerco resource and cover an area of 1,138 acres.

Most of the claims contained within the Smith claims were part of the original Rio Puerco leases developed by Kerr McGee in the late 1970's.

The acquisition of the Smith claims provided to Uranium King a number of readily accessible exploration targets and it is planned that a selection of these will be drill tested during the 2008 year. Based on the historic exploration results and a review of the project area by our in-house staff the opportunity to increase the quantum of potential resources within the project area is considered significant.

Most recently Uranium King announced it had staked an additional 9,000 acres surrounding Rio Puerco in the Grants Mineral Belt which brings the company's acreage in this area to approximately 12,000 acres.

5.2.2. Apex-Lowboy Project

The Apex and Lowboy properties are located near Austin, which is situated in Lander County, Nevada.

Austin in turn is located approximately 270 kilometres east of Reno.

Apex and Lowboy, which both contain historic workings, are around 7 kilometres apart.

Both projects are located on the same mineralised trend which is a contact zone between a Jurassic granitic pluton and meta-sedimentary units of a Palaeozoic thrust sheet.

The uranium mineralisation at both Apex and Lowboy is located mainly within the metasediments and consists of the uranium phosphates autunite, torbernite and meta-torbernite. Although only limited data is available, uraninite and coffinite have been reported at depth.

Apex was an underground mine between 1954 and 1966 and a reported 105,926 pounds of uranium oxide were produced during that period. This production averaged a grade of 0.25% U3O8.

Lowboy was developed briefly in 1959 with minimal production but with a reported average grade of 0.26% U3O8. It is understood that only limited production was undertaken as a result of the significant transport distances to milling facilities.

The combined JORC Inferred Mineral Resources of Apex and Lowboy are:

Tonnes	Grade	Content in Kilograms	Content in Pounds
1,005,200	0.07% U3O8	703,700	1,548,100

The above JORC Inferred Mineral Resource was determined at a time when the uranium price was approximately US\$40 per lb.

Scoping Study of Apex-Lowboy

A scoping study to evaluate the economics of the development of Apex-Lowboy as a surface leach operation commenced in late 2006 and was completed in July 2007.

This study utilised data obtained from extensive studies completed over the deposit during the previous decade, including all of the historic drilling results and metallurgical testing.

As part of this study, the historic data was digitised and additional leach tests undertaken by Hazen Research, Inc of Colorado.

Additional sampling of the existing underground workings was also completed.

The study was co-ordinated by an Australian based consultant utilising technical input from a range of United States based consultants, as well as our in-house technical executives.

The scoping study evaluated a number of development scenarios, all heap leach based but with variable mining rates and hence life of mine.

In addition, the scoping study reviewed other important technical and financial issues such as metallurgy, pit design, rehabilitation, permitting and sale of product.

A review and analysis of the exploration potential of the Apex-Lowboy area to host additional resources was also completed.

A requisite of the scoping study was to evaluate the commerciality of a 2-3 year mining campaign in order to maximise the net present value of the cash flow and also limit the risk of the project to fluctuations in the uranium price.

The study focused on the potential of the operation to be an open cut, with mining and processing by a combination of contractor and company owned equipment and personnel.

The scoping study highlighted that the Apex-Lowboy trend has been under-explored. At Lowboy, in particular, the scoping study identified a high exploration probability for a continuation of the uranium mineralisation at depth.

Further studies will refine the resource base and determine more precise mining parameters.

The potential development of Apex and Lowboy would be the first open cut uranium mine commissioned in the United States since 1973. Given the lengthy period since such a mine was last commissioned, it should be noted that there is no established template for Nevada agencies to assess their procedures for a surface uranium mine.

5.3. Exploration Summary

5.3.1. Apex/Lowboy

Despite a history of mine production and localised exploration over both projects by various companies, mostly during the 1960's and 1970's, the Apex and Lowboy projects contain a significant number of highly prospective, but under explored uranium targets.

In particular, the area lying along the contact zone between both projects requires exploration for mineralised repetitions as historic reports have recorded anomalous surface uranium values along this target horizon. In addition the potential for repetitions at depth for both projects is a compelling exploration target, especially in light of the attractive historic mining grades.

During 2008 the exploration programme at Apex/Lowboy will therefore be initially focused on testing these already defined targets, mostly through drilling.

5.3.2. Lily –Sam

The Lilly and Sam exploration projects adjoin the Rio Puerco resource.

Within the Rio Puerco area the mineralisation consists of multiple stacked blankets of uranium bearing humate, which appear to be localised in areas of the thicker and more laterally continuous Jurassic sandstones.

Geological and geophysical studies suggest that these uranium bearing sands trend in a south easterly direction from Rio Puerco across the Lilly and Sam project areas.

These project areas therefore effectively lie "downstream" from the palaeo water flow that deposited the Rio Puerco mineralisation.

In-house geophysical studies over the Lily project have demonstrated that the radiometric anomaly shows consistency across each survey line and exhibits similar dimensions and intensity to the radiometric anomaly which lies over the Rio Puerco ore body.

In late 2007 a 5 hole drilling programme was conducted over a number of the targets at Lily. Although no ore grade uranium mineralisation was detected, all the holes were successful in intersecting urainiferous humate bands within the Jurassic sandstones and further exploration and drill testing has been recommended.

5.3.3. Regional Exploration

Approximately 340,000 acres of airborne radiometric surveying was completed by UKL during 2007. The majority of these surveys were conducted over regional targets generated from both geological studies as well as information based on historic exploration.

In addition a number of the surveys were carried out over areas currently held under claim by Uranium King. These surveys were flown to provide radiometric information to assist in drill site selection.

The surveys have been carried out by company personnel utilising a leased helicopter and a company owned spectrometer unit. By undertaking these surveys in-house Uranium King has significantly accelerated the regional exploration programme as well as saving considerable expenditure.

A number of targets identified from these surveys as well as other regional studies are in the process of being secured by claims.

5.4. Organisational and management structure

UKL's Australian corporate office is located at 103 Abernethy Road, Belmont, in Perth, Western Australia. Operations at the corporate office and within Australia are overseen by Directors Jim Malone and Greg Barns, as well as joint company secretaries, Martin Stein and Mike Higginson.

The exploration office is located in Tucson, Arizona in the USA. The operations at this office are overseen by the company Chairman, Dr Bernhard Free and Executive Directors Mike Duncan (Finance and Admin.) and Sam Sapper (Exploration). In addition, a number of technical consultants are employed.

As shown in the chart below, all of the United States exploration assets of Uranium King are held in United States registered subsidiaries.

5.5. Financial overview

Uranium King operates on a 30 June financial year end.

The financial performance, statement of financial position and statement of cash flows for the twelve months ending 30 June 2007 (audited) and the six months ending 31 December 2007 (audit reviewed) are provided in this Section 5.5.

5.5.1. Financial Statements of Uranium King Limited and its controlled entities for Year Ending 30 June 2007

BALANCE SHEET OF Uranium King Limited and its controlled entities As at 30 June 2007

	Group			Company
	2007	2006	2007	2006
	\$	\$	\$	\$
Current Assets
Cash and cash equivalents	6,276,532	320,598	6,227,413	320,598
Trade and other receivables	56,565	3,468	8,970	3,468
Other current assets	-	12,133	-	12,133
Total Current Assets	6,333,097	336,199	6,236,383	336,199
Non-Current Assets
Other financial assets	-	-	334,225	-
Property, plant and equipment	151,810	-	-	-
Exploration and evaluation expenditure	1,560,415	169,368	465,533	169,368
Receivables	-	-	911,898	-
Total Non-Current Assets	1,712,225	169,368	1,711,656	169,368
TOTAL ASSETS	8,045,322	505,567	7,948,039	505,567
Current Liabilities
Trade and other payables	169,432	512,448	72,149	512,448
TOTAL LIABILITIES	169,432	512,448	72,149	512,448
	7,875,890	(6,881)	7,875,890	(6,881)
NET ASSETS/ (LIABILITIES)
Equity
Contributed equity	8,665,920	7,675	8,665,920	7,675
Foreign currency translation reserve	(155,306)	-	-	-
Option reserve	93,244	13,320	93,244	13,320
Accumulated losses	(727,968)	(27,876)	(883,274)	(27,876)
	7,875,890	(6,881)	7,875,890	(6,881)
TOTAL EQUITY/ (DEFICIENCY)

INCOME STATEMENT OF Uranium King Limited and its controlled entities For the Year Ended 30 June 2007

	Group		Company
	2007	2006	2007	2006
	\$	\$	\$	\$
Revenue	253,676	6,501	246,503	6,501
Occupancy costs	(42,736)	(738)	(15,833)	(738)
Employee benefits expense	(225,327)	(13,320)	(225,327)	(13,320)
Professional fees	(71,931)	(9,152)	(71,931)	(9,152)
Travel	(87,774)	(9,606)	(79,830)	(9,606)
Administration costs	(86,474)	(1,561)	(39,820)	(1,561)
Insurance	(43,950)	-	(1,208)	-
Impairment of loan to controlled entity	-	-	(272,376)	-
Foreign exchange loss	(395,576)	-	(395,576)	-
Loss before income tax expense	(700,092)	(27,876)	(855,398)	(27,876)
Income tax expense	-	-	-	-
Net loss attributable to members of the company	(700,092)	(27,876)	(855,398)	(27,876)
Basic loss per share (cents per share)	(0.9 cents)	(2.1 cents)
Diluted loss per share (cents per share)	(0.9 cents)	(2.1 cents)

CASH FLOW STATEMENT OF Uranium King Limited and its controlled entities For the Year Ended 30 June 2007

	Group		Company
	2007	2006	2007	2006
	\$	\$	\$	\$
Cash Flows from Operating Activities
Payments to suppliers, contractors and employees Interest received	(368,879) 242,229	(18,611) 2,259	(294,324) 241,001	(18,611) 2,259
Net cash flows used in operating activities	(126,650)	(16,352)	(53,323)	(16,352)
Cash Flows from Investing Activities
Payments for exploration activities	(1,363,024)	(168,680)	(296,165)	(168,680)
Payments for property, plant and equipment	(213,158)	-	-	-
Loans made to controlled entities	-	-	(1,184,274)	-
Payment for purchase of subsidiary, net of cash acquired	-	-	(334,225)	-
Proceeds from sale of property, plant and equipment	39,270	-	-	-
Net cash flows used in investing activities	(1,536,912)	(168,680)	(1,814,664)	(168,680)
Cash Flows from Financing Activities
Proceeds from issue of shares and options	8,646,400	7,675	8,646,400	7,675
Share issue expenses	(476,022)	(6,287)	(476,022)	(6,287)
Proceeds from shareholder applications	-	500,000	-	500,000
Net cash flows from financing activities	8,170,378	501,388	8,170,378	501,388
Net increase cash and cash equivalents	6,506,816	316,356	6,302,391	316,356
Cash and cash equivalents at the beginning of the financial period	320,598	-	320,598	-
Effects of exchange rate changes on cash and cash equivalents	(550,882)	4,242	(395,576)	4,242
Cash and cash equivalents at the end of the financial period	6,276,532	320,598	6,227,413	320,598

5.5.2. Half Year Financial Statements of Uranium King Limited and its controlled entities for the Half Year Ending 31 December 2007

BALANCE SHEET OF Uranium King Limited and its controlled entities As at 31 December 2007

	31 December	30 June
	2007 \$	2007 \$
Current Assets
Cash and cash equivalents	4,432,164	6,276,532
Trade and other receivables	110,229	56,565
Other current assets	12,048	-
Total Current Assets	4,554,441	6,333,097
Non-Current Assets
Property, plant & equipment	123,600	151,810
Exploration and evaluation expenditure	2,682,202	1,560,415
Total Non-Current Assets	2,805,802	1,712,225
TOTAL ASSETS	7,360,243	8,045,322
Current Liabilities
Trade and other payables	168,328	169,432
TOTAL LIABILITIES	168,328	169,432
NET ASSETS	7,191,915	7,875,890
Equity
Contributed equity	8,665,920	8,665,920
Accumulated losses	(1,443,136)	(727,968)
Option reserve	230,713	93,244
Foreign currency translation reserve	(261,582)	(155,306)
TOTAL EQUITY	7,191,915	7,875,890

	31 December 2007 \$	31 December 2006 \$
Revenue	151,697	102,830
Occupancy costs	(17,321)	(3,651)
Employee benefits expense	(203,046)	(147,692)
Professional fees	(392,620)	(71,799)
Travel	(60,479)	(26,857)
Administration costs	(69,958)	(6,474)
Foreign exchange loss	(123,441)	(112,897)
Loss before income tax expense	(715,167)	(266,540)
Income tax expense	-	-
Net loss attributable to members of the company	(715,167)	(266,540)
Basic loss per share (cents per share)	(0.8 cents)	(0.4 cents)
Diluted loss per share (cents per share)	(0.8 cents)	(0.4 cents)

CASH FLOW STATEMENT OF Uranium King Limited and its controlled entities

For the Half-year ended 31 December 2007

	31 December 2007	31 December 2006
	\$	\$
Cash Flows from Operating Activities
Payments to suppliers, contractors and employees	(647,664)	(220,162)
Interest received	126,590	90,897
Net cash flows used in operating activities	(521,074)	(129,265)
Cash Flows from Investing Activities
Payments for property, plant and equipment	(5,322)	(187,205)
Proceeds from sale of property, plant and equipment	27,911	-
Payments for exploration activities	(1,222,442)	(598,547)
Net cash flows used in investing activities	(1,199,853)	(785,752)
Cash Flows from Financing Activities
Proceeds from issue of shares and options	-	6,500,000
Pre-paid share issue expenses	-	(362,570)
Net cash flows from financing activities	-	6,137,430
Net increase / (decrease) in cash and cash equivalents	(1,720,927)	5,222,413
Cash and cash equivalents at the beginning of the financial period	6,276,532	320,598
Effects of exchange rate changes on cash and cash equivalents	(123,441)	(101,883)
Cash and cash equivalents at the end of the financial period	4,432,164	5,441,128

5.6. Corporate Governance

The UKL Board is responsible for corporate governance of UKL (and its consolidated entities). The UKL Board guides and monitors the business and affairs of UKL on behalf of the shareholders by whom they are elected and to whom they are accountable. As a listed company on the ASX, UKL's objective is to achieve the best practice in corporate governance commensurate with UKL's size, its operations and the industry within which it participates. UKL reports on its main corporate governance practices by reference to the best practice recommendations of the ASX Corporate Governance Council, which were revised in August 2007. UKL's latest reporting with reference to such recommendations was in UKL's 2007 Annual Report.

5.6.1. Board Objectives and Responsibilities

The UKL Board is responsible for developing strategies for UKL, reviewing strategic objectives, and monitoring the performance against those objectives. The overall goals of the corporate governance process are to:

• drive shareholders value;

• assure a prudential and ethical base to UKL's conduct and activities; and
• ensure compliance with UKL's legal and regulatory obligations.

Consistent with these goals, the UKL Board assumes the following responsibilities;

• developing initiatives for profit and asset growth;
• reviewing the corporate, commercial and financial performance of UKL on a regular basis;
• acting on behalf of, and being accountable to, the UKL Shareholders;
• identifying business risks and implementing actions to manage those risks; and
• developing and effecting management and corporate systems to assure quality.

UKL is committed to the circulation of relevant materials to UKL Directors in a timely manner to facilitate UKL Directors' participation in UKL Board discussions on a fully informed basis.

Election of UKL Board members is substantially the province of the UKL Shareholders in general meeting. However, UKL commits to the following principles:

• the UKL Board to comprise of directors with a blend of skills, experience and attributes appropriate for UKL and its business;
• the principal criterion for the appointment of new directors is their ability to add value to UKL and its business.

The UKL Board has accepted the ASX Corporate Governance Councils definition of an Independent Director contained in their report titled "The Principles of Good Corporate Governance and Best Practice Recommendations – March 2003". The current Board structure is considered to best serve the Company in meeting its objectives, given its blend of established uranium resources and extensive exploration programmes. The composition of the Board is reviewed on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. There are procedures in place, as agreed by the UKL Board, to enable directors to seek independent professional advice on issues arising in the course of their duties at the company's expense.

5.6.2. Audit Committee

The UKL Board established an audit committee in August 2006, which operates under a charter of the UKL Board. It is the UKL Board's responsibility to ensure that an effective internal control framework exists within UKL and its consolidated entities. This includes both internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial and non information. The UKL Board has delegated the responsibility for the establishment and maintenance of a framework of internal control of the UKL group to the audit committee.

5.6.3. Securities Trading

UKL has established a policy regarding trading in its securities by directors, officers and employees. UKL Directors, officers and employees must not, directly or indirectly, buy or sell shares or other securities in the company when in possession of unpublished price sensitive information which could materially affect the value of those securities. Any trading in the company's securities by those persons must first be notified to the chairman of UKL. UKL has developed and continually reviews a formal code of conduct as part of its UKL Board charter which requires all business affairs to be conducted legally, ethically and with integrity, and which allows breaches of the code to be reported by third parties.

Further information on corporate governance policies adopted by UKL is available on the Company website www.uraniumking.com.

5.7. Financing

UKL does not have any financing or debt facilities in place.

5.8. Key contractual arrangements

UKL have executive employment contracts with Michael Duncan and Samuel Sapper, who are UKL's United States based Executive Directors. These contracts provide for Mr Duncan and Mr Sapper to be each paid \$US10,000 per month for undertaking full time executive responsibilities for UKL. Both of the contracts expire on 30 September 2008.

5.9. Share price performance

The following chart shows the closing price of UKL Shares on the ASX over recent times:

The closing price of UKL Shares on the ASX shortly before the date of this Scheme Booklet was A\$0.30 on 7 May 2008. During the three months ended 7 May 2008:

• ! the highest recorded daily closing price for UKL Shares on ASX was A\$0.37 on 11 February 2008; and
• ! the lowest recorded daily closing price for UKL Shares on ASX was A\$0.23 on 18 April 2008.

The last recorded sale price for UKL Shares on the ASX before the public announcement of the Proposed Merger was A\$0.80 on 9 October 2007.

5.10. UKL capital structure and substantial shareholders

(a) UKL Shares:

86,100,000 fully paid ordinary shares

(b) UKL Options:

1,075,000 Class A options expiring 31 December 2009 exercisable at 25 cents each; and 1,075,000 Class B options expiring 31 December 2009 exercisable at 25 cents each.

(c) Substantial Shareholders:

As at the date of this Scheme Booklet the only substantial shareholder in UKL is Mineral Energy and Technology Corporation: 46,400,000 UKL Shares (53.89%).

5.11. Board of directors

The UKL Board is comprised of:

Dr Bernhard Free, Non Executive Chairman (Appointed 25 July 2007)

German born with Canadian/German citizenship and US Alien Resident status since January 1987, Dr Free holds a

Doctorate degree in both Geology and Palaeontology from University of Graz, Austria in 1962. Dr Free has had lengthy employment periods with Eternit (Schmidheiny of Switzerland) in South Africa, Cominco, Canada (domestic and international) and Uranerzbergbau, UEM Canada and Uranerz United States. In the latter part of his career he began to focus on the junior mining sector of Canada, the US and Europe with focus on project development, production management, and corporate administration including investor relations and fund raising.

Dr Free has had considerable experience across a diverse range of commodities including uranium and achievements include participation in mineral resource discoveries and successful project management. He is a former member of the boards of Gerber Energy, Gerber Minerals, Royal Star Resources, German American Chamber of Commerce, Los Angeles, Colorado Mining Association and the author of a number of scientific publications.

Mr Michael Duncan, Executive Director (Appointed 9 August 2006)

Mr Duncan earned his Bachelor of Science in Mechanical Engineering in 1967 and as a young engineer represented the Boeing Aircraft Company and McDonald Douglas Aircraft Corporation on such projects as the 757 Airbus, the Saturn V missile, and the Manned Orbital Space Laboratory. In 1970, he returned to the University of Arizona to attend the MBA program and in 1971 he became a principal in a Tucson based real estate investment syndication firm. In 1973 he became Acquisition Director for a public company, MultiVest, Inc, which was, at the time, the largest blind-pool limited partnership in the United States. In 1979, he became the co-founder and president of the U.S. Equity Corporation, an Indianapolis based investment and development Company. In addition to major properties in Pennsylvania, Ohio, Florida, Colorado, and other areas of Indiana, the firm has developed approximately 2 million square feet of office and industrial space in the Indianapolis area alone. Mr. Duncan remains a major share holder and director, but is no longer involved in the day to day activity of the firm.

Mr. Duncan is a director and shareholder of METCO and has been active with METCO since 1992, and is president of INEXCO, a global investment firm. Mr Duncan is responsible for the daily management of the United States financial activities of UKL including management of exploration budgets and co-ordination of reports to the board. Mr Duncan has a Bachelor of Science (Mechanical Engineering) from the University of Arizona.

Mr Sam Sapper, Executive Director (Appointed 9 August 2006)

Mr Sapper has been involved in major mineral exploration projects worldwide. He commenced his career with Inco based in Canada before Falconbridge and working on projects throughout Australia, South America, Africa, Canada and the United States with duties including geophysical orientation and analysis of geological environments and the selection of the most effective exploration techniques. He then accepted a position as international vice president of Soil Test Inc. of Chicago, Illinois and was responsible for the creation of Geneva-Pacific, which became the mineral exploration arm of Belden Corporation, a major producer of electric cable and electronic equipment for the electrical industry world wide.

Whilst at Soil Test Mr Sapper was also a member of the technical team that pioneered the development of fibre optic cable for Belden Corporation. He also managed the selection of 2.5 million acres from 9 million acres that the U.S. government allocated to the combined Alaskan Indian Nations. This area contained the Red Dog Mine and other mines which Mr. Sapper's Geneva Pacific group discovered in the five years they were involved under Mr. Sapper's direction.

More recently Mr Sapper was also involved with Phoenix (McPharr) Geophysics of Denver, Colorado and O'Hara Resources, an exploration and mining company based in Reno, Nevada. Whilst at O'Hara Mr Sapper was involved in the development of projects in Montana, U.S. and Ghana, West Africa.

Mr Sapper has a B.Sc (Geology) University of Baghdad, MS (Geology) Royal School of Mines, MS (Earth Science) North Eastern Illinois University. At UKL Mr Sapper is responsible for geophysical exploration and reporting of results to the board of directors. Mr Sapper is a director and shareholder of METCO.

Mr Greg Barns, Non-executive Director (Appointed 3 August 2007)

Mr Barns was a political adviser to a number of state and federal ministers and premiers, including being Chief of Staff to former federal Finance Minister John Fahey. He was the inaugural CEO of the Australian Gold Council from 2000- 02. He is a non executive director of Republic Gold Ltd which has tungsten and gold projects in Australia and South America. Mr Barns also writes regularly for Australian mining magazine, Gold and Minerals Gazette and for the Canadian publication Resourceworld.

Mr Barns has BA/LLB from Monash University.

Mr Jim Malone, Non Executive Director (Appointed 7 April 2006)

Mr Malone is a founding director of UKL. Mr Malone has worked successfully as an accountant, stockbroker, business analyst and CEO of a medium sized business for the past 18 years. Mr. Malone has worked for Arthur Anderson accountants, Hartley Poynton stockbrokers, CSFB and Lehman Brothers merchant banks in London and for the West

Coast Eagles and Richmond Football Clubs, the latter as CEO from 1994 to 2000. Mr Malone has a Bachelor of Commerce degree from the University of Western Australia and is an Associate of the Australian Society of CPAs.

Mr Malone is the managing director of Latin Gold Limited and is also a non-executive director of Richmond Mining Limited, Nuenco NL and Atlantic Limited.

The direct and indirect interests of the UKL Directors in UKL are set out in Section 11.2 of this Scheme Booklet. Each UKL Director intends to vote in favour of the Scheme in respect of UKL Shares held by or on behalf of them.

5.12. Legal disputes

The UKL Directors note that there is currently a law suit that has been brought by a minority shareholder of METCO (UKL's major shareholder) against METCO, and that UKL is joined as a co-defendant in that law suit. This law suit has been initiated in the State of Mexico in the United States of America in connection with the US mining properties purchased by UKL from METCO in or about September 2006.

As identified in the Uranium King prospectus issued in August 2006, METCO (an unlisted public corporation incorporated in New Mexico, in the United States of America) was the vendor of the uranium assets to Uranium King. Messrs. Meyers, Duncan and Sapper who were directors of METCO became Directors of Uranium King after the transaction was finalised. All three of these individuals held an interest in approximately 26% each of the issued shares in METCO, 78% in all, and any two of these individuals' holdings when combined would constitute a majority of the shares in METCO.

As identified in the Uranium King prospectus issued in August 2006, all three of these individuals as individuals and as the Directors and the majority shareholders of METCO signed the sale agreement that governed the transaction whereby METCO transferred its uranium assets and all of the data relating to the assets to Uranium King in consideration for 46,400,000 shares in Uranium King. All three individuals, as Directors of Uranium King, approved the Company's prospectus as a true, fair and complete document prior to the Initial Public Offering in August 2006.

On or around 17 January 2008 a minority shareholder of METCO, Mr. Dean Coleman, issued proceedings in the 13th Judicial District of New Mexico against METCO and Uranium King alleging negligence against the directors of METCO in the manner in which they entered into the sale agreement with Uranium King and further alleging that neither METCO nor Uranium King complied with New Mexico securities legislation in approving the agreement. Mr Coleman is asking that the transaction therefore be rescinded.

This claim by Mr. Coleman is being vigorously defended by both METCO and Uranium King and both the majority of the directors of METCO and all of the directors of Uranium King believe the claim will fail.

In late February 2008, Mr. Coleman was granted, via a ruling by Judge Sanchez of the 13th Judicial District of the State of New Mexico, injunctive relief preventing METCO from holding further director or shareholder meetings pending clarification of orders granted by Judge Huling (who had on 6 March 2008, in a separate matter, ruled on amongst other things the composition of the board of directors of METCO – such board being Mr Karl Meyers, Mr Michael Duncan and Mr Sam Sapper). The granting of this injunction does not extend to Uranium King, was not based on a complaint against Uranium King and has no effect on Uranium King's ability to progress with the Proposed Merger.

In mid March 2008, Uranium King, through its US attorneys, filed a Motion to Dismiss Mr. Coleman's claims against Uranium King. As at the date of this Scheme Booklet, the hearing of this motion is pending.

The Directors of Uranium King will continue to take whatever actions are necessary to protect the rights of all UKL Shareholders. UKL is also providing assistance to METCO in vigorously defending Mr. Coleman's claims with a view to seeking its early dismissal.

The UKL Board consider that the claim lodged by Mr Coleman (a minority shareholder in METCO) does not have any realistic chance of success and is not supported by the facts or the law.

Other than as disclosed in this Section 5.12, UKL is not involved in any litigation or legal disputes which the UKL Directors consider to be material.

5.13. ASX and ASIC lodgement and disclosures

UKL is a disclosing entity for the purposes of the Corporations Act and is subject to periodic reporting and continuous disclosure obligations. UKL is also listed on the ASX and as such, is also subject to the continuous disclosure requirements of the ASX. These require UKL to disclose information that a reasonable person would expect to have a material effect on the price or value of UKL Shares (subject to specific exceptions). The disclosures made to the ASX are available for inspection on www.asx.com.au and the disclosures and lodgements made to ASIC are available for inspection at an ASIC office during business hours. Copies of the UKL 30 June 2007 annual report and the UKL 31 December 2007 half yearly report are available from UKL, free of charge, by contacting Mr Jim Malone on telephone 08 9277 9782 or email jim.malone@iinet.net.au.

A summary of UKL's lodgements with the ASX and ASIC since lodgement of its last annual report (lodged with ASIC and given to ASX on 25 September 2007) and up to the date of this Scheme Booklet is as follows:

ASX Announcements

29/04/2008	Quarterly Cashflow Report
29/04/2008	Quarterly Activities Report
02/04/2008	Company Update to Shareholders
01/04/2008	Merger Update - Monaro Mining NL
01/04/2008	MRO: Update on Merger of Monaro and Uranium King
12/03/2008	Half Year Accounts
12/03/2008	Prospective Claims Controlled in Apache Basin - Arizona
31/01/2008	Quarterly Activities Report
31/01/2008	Quarterly Cashflow Report
02/01/2008	CAP Cancel.: App. 3B for LAT released under incorrect code
13/12/2007	Appendix 3B
12/12/2007	Proposed Merger and Operations Update
07/11/2007	Results of Meeting
07/11/2007	Details of Company Address
31/10/2007	Quarterly Cashflow Report
31/10/2007	Quarterly Activities Report
11/10/2007	Merger of Monaro Mining
11/10/2007	Proposed Merger with Monaro Mining NL
11/10/2007	Proposed Merger of MRO and UKL by Scheme of Arrangement
11/10/2007	Notice of Annual General Meeting/Proxy Form
09/10/2007	Trading Halt
03/10/2007	Drilling Commences at Lily and Sam Projects
25/09/2007	Annual Report to shareholders

6. Profile of MRO

6.1. Background and History

Monaro Mining NL is an ASX listed mineral exploration and development company, focused on uranium. It is also listed on the Frankfurt Exchange and is currently in the process of seeking to list its shares in the USA by way of sponsored American Depositary Receipts (or ADR's). Refer to Section 11.10 for further details of the proposed ADR listing. Although Monaro expect this to occur during late April / early May, the ADR listing or its timing is not able to be guaranteed on the basis that the regulatory process and listing regime is beyond the control of Monaro.

Monaro listed on ASX on 15 September 2005 and in 2006 acquired a 100% interest in eight exploration projects in the Kyrgyz Republic. These projects are a focus of the current exploration effort although additional uranium properties have been secured in Estonia and Australia.

MRO's principal objective is to enhance shareholder value by becoming a uranium producer in the near future. It plans to achieve this objective by enhancing the existing projects as well as acquiring new opportunities as they present themselves. MRO has strong financial and technical capabilities and has ready access to the financial markets. MRO is thus in a strong position to achieve its objectives.

6.2. Project Summary

MRO's strategy is to focus on advanced exploration and development opportunities – particularly where a review of past exploration efforts might lend themselves to re-interpretation and hence an upgrade of the project. At the same time, MRO is prepared to look at conceptual "plays" where the geological modelling suggests the potential for giant ore deposits.

6.2.1. Kyrgyz Republic

During 2007 the exploration effort has focused on generating and advancing MRO's uranium prospects and targets in the Kyrgyz Republic. However, MRO's large landholdings are also prospective for a range of other minerals, including gold, copper, lead, zinc, tin, tungsten, niobium and tantalum. In addition, because the Kyrgyz titles host multiple prospects in varying stages of evaluation, exploration has varied from "grassroots" through to drilling with the emphasis on the more advanced prospects and those with the best potential to generate additional mineralisation quickly. As required under Kyrgyz law, a number of the tenements were reduced in area.

A drilling program was completed on the Sogul uranium prospect to assess its potential. This is a prospect extensively tested by Russian geologists and widespread uranium mineralisation was confirmed by the MRO's drilling program. The results from the drilling as well as extensive regional data are still subject to on-going evaluation. Drilling has also been completed at the Aramsu uranium and Djal-Kokildal gold prospects. In both cases, drilling has confirmed the presence of mineralised zones.

Whilst the MRO exploration team is headquartered in the capital, Bishkek, regional offices have also been established to accommodate our various exploration programs. The exploration team is being assisted by a number of expatriate geologists and contractors and their efforts are supplemented by teams of local geological and geophysical contractors.

On 29 January 2008, a Memorandum of Understanding (MOU) was executed with Sinosteel Corporation from China. The MOU will enable Sinosteel to earn an interest in one or more of the Kyrgyz uranium properties, subject to meeting certain expenditure and other requirements.

6.2.2. Australian Projects

In Australia, uranium and gold projects which were acquired through the Hapsburg Joint Venture are now being evaluated. A reconnaissance field program was completed on the Northern Territory and Western Australian tenements and results will be evaluated over the coming months. A number of the Queensland tenements have also now been granted and exploration programs for these are being developed.

Gold and base metal projects located in NSW are also subject to assessment and data enhancement programs. In the case of the Captains Flat base metals project, MRO's joint venture partner, Ironbark Gold Limited is continuing its efforts to generate a mineable project. The Mt Paynter and Wymah molybdenum, tungsten and tin projects have also been farmed out to Noah Resources NL and an exploration program is due to commence on these tenements early in 2008. In addition, the Mayfield project has been farmed out to Richmond Mining Limited. The Michelago project is also being enhanced with the view to farming it out in due course.

6.2.3. Estonia

In late 2007 MRO through its locally established entity in the Republic of Estonia, applied for exploration title in the northern part of Estonia. The area sought for exploration is prospective for uranium, vanadium and molybdenum.

6.3. Exploration

Other projects both in Australia and overseas are being evaluated on an on-going basis and it is anticipated that one or more new projects will be added to MRO's portfolio during 2008.

Looking forward, the company will continue to focus on exploration and development activities in Australia, the Kyrgyz Republic, Estonia and the USA. The entity's objectives are to establish a mineable resource while at the same time expose shareholders to a number of high impact exploration opportunities with a strong bias toward uranium.

In NSW Australia, advancement of its gold and base metals projects is being assisted by joint venture partners. In addition, MRO is also assessing corporate and mineral opportunities globally on an on-going basis.

6.4. Organisational and Management structure

MRO is headquartered in Sydney, Australia with offices also in Bishkek, the capital of the Kyrgyz Republic.

All exploration operations are managed by Mart Rampe, Managing Director of MRO.

6.5. Financial Overview

Monaro Mining NL operates on a 30 June financial year. The financial performance, statement of financial position and statement of cash flows for the twelve months ending 30 June 2007 (audited) and the six months ending 31 December 2007 are provided under this Section 6.5.

6.5.1. Financial Statements of Monaro Mining NL Year Ending 30 June 2007

(a) Monaro Mining NL and Controlled Entities Income statement for the financial year ended 30 June 2007

		Consolidated	Company
	2007	2006	2007	2006
	\$	\$	\$	\$
Continuing operations
Other income	299 535	112 287	299 535	109 931
Accounting and audit	(55 789)	(17 880)	(51 136)	(17 880)
Depreciation and amortisation	(31 483)	(6 528)	(3 200)	(3 246)
Employee benefits expense	-	(192 080)	-	(192 080)
Foreign exchange loss	(5 240)	(541)	(151 988)	-
Insurance	(33 114)	(5 087)	(4 383)	(4 599)
Occupancy & administration expenses	(315 510)	(81 384)	(189 140)	(49 519)
Project expenditure	(1 890 513)	(253 198)	(518 448)	(233 544)
Promotion	(311 376)	(48 178)	(305 371)	(46 855)
Salary, wages, professional fees	(664 389)	(357 775)	(355 732)	(191 022)
Travel	(180 830)	(70 973)	(134795)	(54 162)
Impairment of non current assets	-	-	(1 722 474)	(367 611)
Other expenses	(2 131)	-	(1 381)	-
(Loss) before income tax expense	(3 190 840)	(921 337)	(3 138 513)	(1 050 587)
Income tax expense	-	-	-	-
(Loss) from continuing operations	(3 190 840)	(921 337)	(3 138 513)	(1 050 587)
(Loss) for the period	(3 190 840)	(921 337)	(3 138 513)	(1 050 587)
(Loss) attributable to members of Monaro Mining NL	(3 190 840)	(921 337)	(3 138 513)	(1 050 587)
Earnings per share:
Basic profit (loss) cents per share Diluted profit (loss) cents per share	(11.7) (11.7)	(4.8) (4.8)

		Consolidated	Company
	2007	2006	2007	2006
	\$	\$	\$	\$
CURRENT ASSETS
Cash and cash equivalents	4 828 294	3 015 374	4 786 064	2 909 961
Trade and other receivables	31 930	18 995	31 930	18 995
Other assets	15 816	3 633	15 770	-
Total Current Assets	4 876 040	3 038 002	4 833 764	2 928 956
NON CURRENT ASSETS
Other financial assets Intangibles	54 324 12 498	50 000 -	3 681 518 5 916	3 677 194 -
Property, plant and equipment	176 835	44 561	10 376	8 806
Mineral properties	3 739 084	3 639 084	100 000	-
Total Non-Current Assets	3 982 741	3 733 645	3 797 810	3 686 000
TOTAL ASSETS	8 858 781	6 771 647	8 631 574	6 614 956
CURRENT LIABILITIES
Trade and other payables	206 310	130 027	82 785	103 898
Provisions	6 308	-	2 704	-
Total Current Liabilities	212 618	130 027	85 489	103 898
TOTAL LIABILITIES	212 618	130 027	85 489	103 898
NET ASSETS	8 646 163	6 641 620	8 546 085	6 511 058
EQUITY Issued Capital	11 217 416	5 673 722	11 217 416	5 673 722
Reserves	1 547 575	1 895 886	1 524 420	1 894 574
Accumulated losses	(4 118 828)	(927 988)	(4 195 751)	(1 057 238)
TOTAL EQUITY	8 646 163	6 641 620	8 546 085	6 511 058

(c) Monaro Mining NL and Controlled Entities Cash Flow Statement for the financial year ended 30 June 2007

	Consolidated		Company
	2007	2006	2007	2006
	\$	\$	\$	\$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers Payments to suppliers	- (3 151 392)	- (733 548)	- (1 357 621)	- (510 737)
Net cash provided by/(used in) operating activities	( 3 151 392)	(733 548)	(1 357 621)	(510 737)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received Payments for mineral properties Payments for property, plant, equipment	243945 (100 000)	103 583 (10 000)	243 945 (100 000)	103 583 (10 000)
and intangibles Amounts advanced to related parties Other	(199 562) - 45 675	(51 987) - 7 677	(18 570) (1 874 461) 45 675	(12 052) (361 806) -
Net cash from (used in) investing activities	(9 942)	49 273	(1 703 411)	(280 275)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares
and other equity securities Repayment of borrowings	5 105 795 -	4 077 503 (77 933)	5 105 795 -	4 077 503 (77 933)
Payment for share issue costs	(168 660)	(319 678)	(168 660)	(319 678)
Net cash provided by financing activities	4 937 135	3 679 892	4 937 135	3 679 892
NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning	1 775 801	2 995 617	1 876 103	2 888 880
of the year Effects of exchange rate changes on	3 015 374	21 081	2 909 961	21 081
cash and cash equivalents	37 119	(1 324)	-	-
Cash and cash equivalents at the end of the period	4 828 294	3 015 374	4 786 064	2 909 961

6.5.2. Financial Statements of Monaro Mining NL for the Half Year Ending 31 December 2007

(a) Monaro Mining NL and Controlled Entities Consolidated income statement for the half-year ended 31 December 2007

	CONSOLIDATED GROUP
	31 DECEMBER 2007 \$	31 DECEMBER 2006 \$
Other income	232,108	136,245
Direct operating costs
Depreciation and amortisation expenses	(29,542)	(12,953)
Exploration and evaluation expenses	(1,252,581)	(400,260)
General and administrative expenses	(1,840,066)	(785,562)
Finance costs	(360)	-
Other expenses	-	(36,516)
Loss before income tax	(2,890,441)	(1,099,046)
Income tax expense	-	-
Loss from continuing operations	(2,890,441)	(1,099,046)
Loss for the period	(2,890,441)	(1,099,046)
Loss attributable to members of the parent entity	(2,890,441)	(1,099,046)
Earnings per share:
Basic earnings per share (cents per share)	(8.6)	(5.4)
Diluted earnings per share (cents per share)	(8.6)	(5.4)

(b) Monaro Mining NL and Controlled Entities Consolidated balance sheet as at 31 December 2007

	31 DECEMBER 2007 \$	30 JUNE 2007 \$
Current assets
Cash and cash equivalents	6,664,094	4,828,294
Trade and other receivables	93,233	31,930
Other	47,584	15,816
Total current assets	6,804,911	4,876,040
Non-current assets
Other financial assets	97,650	54,324
Intangibles	10,662	12,498
Property, plant and equipment	294,446	176,835
Mineral properties	3,739,084	3,739,084
Total non-current assets	4,141,842	3,982,741
Total assets	10,946,753	8,858,781
Current liabilities
Trade and other payables	314,770	206,310
Provisions	19,438	6,308
Short-term financial liabilities	10,611	-
Total current liabilities	344,819	212,618
Non-current liabilities
Long-term financial liabilities	44,401	-
Total non-current liabilities	44,401	-
Total liabilities	389,220	212,618
Net assets	10,557,533	8,646,163
Equity
Issued capital	16,443,240	11,217,416
Reserves	1,123,562	1,547,575
Accumulated losses	(7,009,269)	(4,118,828)
Total equity	10,557,533	8,646,163

(c) Monaro Mining NL and Controlled Entities Consolidated cash flow statement for half–year ended 31 December 2007

	31 DECEMBER 2007	31 DECEMBER 2006
Cash flows from operating activities
Payments to suppliers and employees	(3,085,543)	(1,076,350)
Net cash used in operating activities	(3,085,543)	(1,076,350)
Cash flows from investing activities
Payments for mineral leases	-	(10,000)
Payments for property, plant and equipment	(93,863)	(37,555)
Interest received	194,289	78,338
Proceeds from sale of property, plant and equipment	-	50,000
Other	-	(6,000)
Net cash provided by investing activities	100,426	74,783
Cash flows from financing activities
Proceeds from issues of shares and other equity securities	5,044,035	3,600,000
Payment for share issue costs	(157,545)	(129,882)
Net cash provided by financing activities	4,886,490	3,470,118
Net increase in cash and cash equivalents	1,901,373	2,468,551
Cash and cash equivalents at beginning of period	4,828,294	3,015,374
Effects of exchange rate changes on cash and cash equivalents held in foreign currency	(65,573)	(3,904)
Cash and cash equivalents at end of period	6,664,094	5,480,021

6.6. Corporate Governance

As a listed company on the ASX, MRO's objective is to achieve the best practice in corporate governance commensurate with MRO's size, its operations and the industry within which it participates. MRO reports on its main corporate governance practices by reference to the best practice recommendations of the ASX Corporate Governance Council, which were revised in August 2007. MRO's latest reporting with reference to such recommendations was in the Annual Report 2007 released to ASX on 26 October 2007.

Complete details of MRO's Corporate Governance Policies are posted on its website www.monaromining.com.au. In summary (not intended to be exhaustive) the following key corporate governance practices are adopted by the Board of Directors of MRO:

• The Board is responsible for corporate strategy, implementation of business plans, allocation of resources, approval of budgets and capital expenditure, and the adherence to MRO policies. The MRO Board is also responsible for compliance with the Code of Conduct, overseeing risk management and internal controls, and the assessment, appointment and removal of the Executive Directors and Company Secretary.
• The MRO Board has appointed an audit committee in accordance with best practice recommendations (having appointed two non executive directors to the audit committee, the chairman of which is an independent member and experienced chartered accountant). However, the MRO Board does not have separately established committees dealing with nomination, remuneration risk management and disclosure functions. This constitutes a departure from the ASX Best Practice Recommendations.
• MRO has established a policy regarding trading in its securities by directors, officers and employees.

Directors, officers and employees must not, directly or indirectly, buy or sell shares or other securities in the company when in possession of unpublished price sensitive information which could materially affect the value of those securities. Any trading in the company's securities by those persons must first be notified to the chairman of the company. The company has developed and continually reviews a formal code of conduct as part of its Board charter which requires all business affairs to be conducted legally, ethically and with integrity, and which allows breaches of the code to be reported by third parties. The code and the securities trading policy are available for review on Monaro's website.

• MRO is developing a risk management programme aimed at ensuring the company conducts its operations in a manner that enables risks to be identified, assessed and appropriately managed. The Managing Director and Company Secretary, by joint reporting to the full MRO Board, manage MRO's internal controls and risk management and the audit committee oversees risk management and internal compliance.

6.7. Financing

MRO does not have any financing or debt facilities in place.

6.8. Key contractual arrangements and material agreements

Sections 6.8.2 to 6.8.6 and Section 6.8.8 provide summaries of material agreements entered into by Monaro the key terms of which include agreements with third parties to explore for mineralisation and where viable develop mines. Shareholders should note that, as with any exploration activity there is a risk that exploration will not be successful or viable and no development and/or mine will result (refer to Section 9.3 for risks associated with exploration and mining activities).

6.8.1. Service Contracts

Mr Mart Rampe, Managing Director, MRO and Mr Steve McRobbie, General Manager, CIS/ Europe have service contracts with MRO. In the event that service contracts with senior executive are terminated early then MRO may become liable for payments in lieu of notice. In relation to the McRobbie contract this comprises two months or approximately \$32,300. In the case of the Rampe contract this amount is not presently quantifiable. There are no other contingent liabilities arising from service contracts with executives.

6.8.2. Hapsburg Heads of Agreement

By a Heads of Agreement dated 20 September 2006 MRO have entered into a Heads of Agreement (HOA) with Hapsburg Exploration Pty Ltd (Hapsburg) to explore an initial group of 9 tenements located within Australia. MRO has agreed to provide exploration funding on these licences once granted and will complete feasibility studies on resources discovered subject to a number of conditions outlined in the HOA. Under the HOA, MRO will fund 100% of the expenditure on exploration on granted licences to a minimum of \$1.5 million over 2 years. The minimum was to be reduced by \$125,000 for every one of the original applications not granted – however, this condition is no longer relevant as all of the original tenements have now been granted. At the completion of the minimum expenditure of \$1.5 million, the respective interests in the exploration joint venture (EJVA) will be MRO 35% and Hapsburg 65%.

MRO has the right to continuously review all of the tenements and reject or request a reduction in any of the tenements subject to results as they are generated. MRO will be able to increase its interest to 51% by the definition of a JORC Inferred Mineral Resource totalling 5000 tonnes of contained U308 and to 75% by the completion of a feasibility study on one of the licence areas (with the intention that MRO will eventually attain 75% interest). Hapsburg will give MRO first right of refusal for any additional uranium exploration licences and applications lodged in Australia in accordance with certain conditions, including minimum expenditure and financial support. Each party must offer first right of refusal if either party wishes to dispose of its interest in the EJVA.

On successful grant of at least 4 applications, MRO will make a further payment of \$90,000 and on successful grant of all the original applications, MRO will issue fully paid shares to the value of \$100,000 and 500,000 share purchase options in MRO at an exercise price of \$1.20 with a term of 4 years. If one application is not granted, the number of shares and options to be issued will be reduced by \$10,000 and 50,000 share purchase options. The above actions have now all been completed successfully. Following MRO reaching 75% equity, each party will then be responsible for funding its participating interest under the EJVA in the event the JV decides to proceed to mine.

6.8.3. Sinosteel Heads of Agreement

On the 29 January 2008 Sinosteel Corporation ("Sinosteel") and Monaro entered into a Memorandum of Understanding ("MOU"). The MOU sets out a framework for the negotiation of one or more legally binding definitive agreements. The negotiation of such definitive agreements is subject to Sinosteel being satisfied with its due diligence investigations. Sinosteel are currently undertaking due diligence investigations. Key terms which the parties have identified as forming the basis for negotiating any such definitive agreements are annexed to the MOU. It is contemplated by these key terms that any definitive agreements will provide for Sinosteel to select two specific projects out of Monaro's seven Kyrgyz projects in which to acquire an interest through conducting work on the projects in three stages which are identified in the key terms as being:

• Stage 1 involving agreed exploration activities including drilling to earn an interest of 40% in each selected project. The actual expenditure incurred by Sinosteel in Stage 1 will be determined by the actual cost of the work but is expected to be in the range of US3-5 million.
• Stage 2 involving agreed exploration and assessment work to enable to completion of a feasibility study to earn a further 20% in each selected project. The actual expenditure incurred by Sinosteel in Stage 2 will be determined by the actual cost of the work but is expected to be in the range of US4-8 million.
• Stage 3 involving mining and, processing and production work in relation to a selected project.

Sinosteel is also to have rights to invest in Monaro's other Kyrgyz projects to earn an interest of 60% therein by funding expenditures.

The MOU also provides for Sinosteel and Monaro to enter into a stock option purchase agreement under which Sinosteel will acquire from Monaro options to acquire up to 1.9 million Monaro Shares at a price of \$1.00 per share which options will be exercisable within three years subject to the satisfaction of certain conditions precedent which require the Monaro share price to trade at \$1.40 or more for a specified number of days.

6.8.4. Captain's Flat Farm-in Agreement

This agreement, which is dated 21 August 2006 provided for Ironbark Gold Limited to enter into a Farm-in Agreement for the purpose of exploring, developing, and if warranted, mining mineral prospects found and developed within the MRO owned tenement, EL 6381. Under the terms of the Agreement MRO will transfer a 51% interest in the licence to Ironbark Gold upon Ironbark Gold spending the minimum expenditure amount in respect of EL 6381 for two years. Thereafter, Ironbark Gold must sole fund a feasibility study within 2 years after attaining 51%. If the feasibility study shows that the mining operations will yield a 20% rate of return then Ironbark Gold will earn an additional 24% JV interest from MRO (total JV interest 75%). Ironbark Gold is responsible for the administration of the licence and must comply with the minimum expenditure requirements. Each party must contribute to expenditure made on behalf of the JV interest after completion of stage two unless it opts to contribute less which will reduce its interest in the JV by 5% for every \$300,000.

6.8.5. Mount Paynter and Wymah Projects Joint Venture

On 31 May 2007 Noah Resources Limited (Noah) entered into an Agreement with MRO to earn a 50% interest in the MRO owned exploration licences EL 6694 and EL 6356 subject to Noah spending \$200,000 on both tenements over 2 years. Thereafter, MRO may elect to commence spending at a pro rata rate on its 50% interest or allow Noah to continue to sole fund another \$200,000 over the following 2 years and earn a further 20%. Should Noah elect not to sole fund after earning its 50% or 70% interest respectively, it may be diluted in accordance with a defined dilution formula. This agreement was subject to Noah successfully listing its shares on the ASX and included an agreement to allocate up to \$500,000 worth of shares in the initial public offering to MRO shareholders. Noah was listed in December 2007, therefore fulfilling its initial obligations. The Noah shares were allocated to subscribing MRO shareholders at the discretion of the Noah directors.

6.8.6. Mayfield Project

On 15 April 2005 MRO, Michelago and Roberts Consulting entered into a Shortform Agreement to explore and develop mineral prospects on EL 6358. The Shortform Agreement allowed MRO to earn an 80% interest in the licence by the completion of a bankable feasibility study ("BFS"). Michelago and RobertsConsulting held 15% and 5% in the licence respectively. MRO also retained the right to farm out an interest in EL 6358 provided the proportionality of each party's interests are maintained. To this end, a Joint Venture Agreement dated 14 February 2008, has been entered into with Richmond Mining Limited, whereby Richmond has the right to earn a 50% interest in MRO's interest in both tenements after completing \$300,000 worth of exploration expenditures within 2 years of the agreement. Thereafter, MRO has the election of contributing pro-rata to future expenditures or allowing Richmond to continue to earn a further 20% by the exploration expenditure of a further \$300,000 within 2 years. Immediately prior to the execution of the Richmond Joint Venture, MRO, by letter dated 11 February 2008 purchased the Michelago Limited interest for \$15,000. Robertsconsulting retains its minority interest of 5% at this time.

6.8.7. Contract for Sale- Carbeck Pty Ltd

This Agreement dated 20 January 2006, provided for the acquisition by MRO of all the issued shares and options in Carbeck. Carbeck owns all of the issued capital in Zona Noblus LLC ("Zona"), a company duly incorporated under the laws of Kyrgyz, which owns eight uranium and copper/gold exploration licences granted and existing under the laws of the Kyrgyz Republic including a licence to mine covering part or all of the area of the uranium licences. The vendors are the following individuals and entities: Perseus Mining Limited, Alexander Becker, Vetan Investments Limited, Sergei Shestaev and Yaroslav Bandurak (collectively "the Vendors", each "a Vendor"). In consideration for this transfer of shares the Vendors were to receive 3,500,000 MRO Shares at settlement; 2,000,000 MRO Shares within 14 days of the granting of a mining licence and all mining, environmental and export approvals required for uranium mining operations covering part of any of the uranium licence areas; 3,000,000 unlisted options to acquire MRO Shares, exercisable at 60 cents each on or before 31 December 2008; and 3,000,000 unlisted options to acquire MRO Shares, exercisable at 40 cents each on or before 30 June 2007.

In addition, the Vendors agree to transfer a loan in the amount of A\$5,806 in consideration for a royalty payment of one percent of gross revenue from any mines developed within the area of the uranium licences. MRO is under an obligation to provide the Vendors on a monthly basis with full details of production and sales of material subject to the royalty payment. The royalty payment lasts for the duration of the tenements or their replacements.

The Agreement contains warranties of the Vendors as to the Carbeck shares being free of all encumbrances and being all the shares and options issued with respect to Carbeck. The Vendors further warrant that Zona is duly incorporated under the laws of Kyrgyz. The Vendors agree to indemnify and keep indemnified MRO from and against all loss or damage MRO may suffer or incur as a result of any of its warranties being untrue or incorrect.

If MRO at any time should relinquish or not renew one of the uranium licences, the Vendors have a right to step in and procure the renewal. In such case the Vendors must agree on an appropriate vehicle owned equally by each of the interested Vendors and apply for a licence through such vehicle. Each of the Vendors has the right to assign its rights under the Agreement to receive MRO shares or to receive royalties to a third party. If a Vendor decides to sell its royalty interest, MRO has a pre-emptive right to acquire such interest by accepting a conditional offer given by the relevant Vendor. MRO may assign its rights pursuant to the Agreement to a reputable, financially capable party provided that such proposed assignee agrees to be bound by the Agreement and to ensure that the royalty provisions are complied with. If Zona assigns an interest in the uranium license to a third party which is financially sound and agrees to be bound by the terms of the Agreement, then to the extent that such third party assumes the obligation to pay the royalty, MRO is released from its obligation to pay the royalty. If MRO or Zona assign the entire interest in the uranium licences before satisfying the requirement to issue the additional 2,000,000 shares, MRO is liable to issue these shares immediately.

6.8.8. Intellectual Property Licence and Joint Venture Agreement

Under this Agreement dated 20 December 2006 between MRO and Kentor Gold, Kentor Gold granted an exclusive licence to MRO for the Kentor Kyrgyzstan GIS Database for the purpose of assisting MRO in the search for uranium deposits. The database is a result of four years data compilation and acquisition. The Agreement also establishes the possibility for a joint venture between the parties. Where a discrete base metal and/ or gold project has been identified by MRO to Kentor Gold, Kentor Gold has 30 days to advise if it is of interest to it and if so, a Closed Joint Stock Company ("CJSC") would be incorporated to apply for an exploration licence over the relevant area or if it is within the licensee's licence area, acquire the interest in the area at cost. The shareholding over each CJSC will be Kentor Gold with 51% and sole expenditure of \$400,000 over three years. MRO will have 60 days to notify Kentor Gold that it wishes to contribute from the completion of the \$400,000 expenditure to 49% of all future CJSC expenditure. Failing this, Kentor Gold may elect to take another 29% shareholding which will allow MRO to sell its CJSC shares to Kentor Gold for 2% net smelter royalty. If Kentor Gold does not elect to take another 29%, MRO will take 49%, with the right to dilute. A one-off licence fee of \$50,000 was paid to Kentor Gold at the commencement of the Agreement. As at the date of this Scheme Booklet, no specific opportunities relevant to this agreement have been identified.

6.9. Share price performance

The following chart shows the closing price of MRO Shares on the ASX over recent times:

The closing price of MRO Shares on the ASX shortly before the date of this Scheme Booklet was A\$0.46 on 7 May 2008. During the three months ended 7 May 2008:

! the highest recorded daily closing price for MRO Shares on ASX was A\$0.63 on 22 Februray 2008; and

! the lowest recorded daily closing price for MRO Shares on ASX was A\$0.36 on 30 April 2008.

The last recorded sale price for MRO Shares on the ASX before the public announcement of the Proposed Merger was A\$1.05 on 9 October 2007.

6.10. MRO capital structure and substantial shareholders

(a) MRO Shares:

29,431,508 fully paid ordinary shares

(b) MRO Partly Paid Shares:

5,000,000 partly paid shares

(c) Options:

Issuing entity	Number of shares under option	Class of shares	Exercise price of option	Expiry date of options
Monaro Mining NL	1 800 000	Ordinary	\$0.60	31 Dec 2008
Monaro Mining NL	750 000	Ordinary	\$1.75	31 Dec 2008
Monaro Mining NL	350 000	Ordinary	\$1.07	19 Apr 2011
Monaro Mining NL	500,000	Ordinary	\$1.20	18 Feb 2012

In the event of any reorganization of the issued capital of MRO on or prior to the expiry date, the rights of a MRO Option holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the time of the reorganization.

(d) MRO Largest Shareholders:

As at the date of this Scheme Bookelt and based on notices provided by MRO Shareholders, Mr. Warwick Grigor is the only substantial shareholder in MRO, holding an interest in 6.3% of MRO Shares.

As at the date of this Scheme Booklet, the largest registered shareholders in MRO (holding greater than 5% of MRO Shares) were:

Ordinary shareholders	Number of MRO
	Shares	Percentage
ANZ Nominees Limited	7 298 974	25.06
Ordinary shareholders Fortis Clearing Nominees P/L	Number of MRO 1 849 690 Shares	6.35 Percentage
Nikam Investments Pty Ltd ANZ Nominees Limited	1 597 087 7 298 974	5.48 25.06

6.11. MRO Directors and key management As at the date of this Scheme Booklet and based on notices provided by MRO Shareholders, Mr Warwick Grigor is the only substantial shareholder in MRO, holding an interest in 6.3% of MRO Shares. Fortis Clearing Nominees P/L 1 849 690 6.35 Nikam Investments Pty Ltd 1 597 087 5.48

6.11. MRO Directors and key management

economics. He has spent a number of years in the stock broking sector as a senior mining analyst prior to establishing Warwick Grigor – Chairman

currently a Director of Peninsula Resources Limited, First Australian Resources Limited and Heritage Gold NZ Limited. Mart Rampe – Managing Director Mr Grigor, aged 48, is a graduate of the Australian National University having completed degrees in law and economics. He has spent a number of years in the stock broking sector as a senior mining analyst prior to establishing Far East Capital Limited, a specialist research and advisory company focusing on the junior resources sector. He is currently a Director of Peninsula Resources Limited, First Australian Resources Limited and Heritage Gold NZ Limited.

Mr Rampe, aged 56, is a geologist with over thirty years experience in minerals exploration and development from grass roots exploration through to pre-mine development. He has worked with a number of commodities including Mart Rampe – Managing Director

gold, base metals, uranium and industrial minerals. Country experience includes Australia, Papua New Guinea, Solomon Islands, New Zealand and USA (Alaska) and more recently Central Asia. Since 1985 he has been the principal of Harvest Exploration Pty Ltd, a successful consultancy in the minerals and environmental industry. He has held senior exploration management positions in public listed and private exploration companies. Mr Rampe is a nonexecutive director of Noah Resources NL. Malcolm James – Non-Executive Director Mr Rampe, aged 56, is a geologist with over thirty years experience in minerals exploration and development from grass roots exploration through to pre-mine development. He has worked with a number of commodities including gold, base metals, uranium and industrial minerals. Country experience includes Australia, Papua New Guinea, Solomon Islands, New Zealand and USA (Alaska) and more recently Central Asia. Since 1985 he has been the principal of Harvest Exploration Pty Ltd, a successful consultancy in the minerals and environmental industry. He has held senior exploration management positions in public listed and private exploration companies. Mr Rampe is a nonexecutive director of Noah Resources NL.

Mr James is a business graduate of RMIT in Melbourne, Australia with over 25 years experience in merchant banking, engineering, manufacturing and financing. Over the last 15 years he has played an active role in identifying, exploring, Malcolm James – Non-Executive Director

financing and developing a number of significant natural resource projects in Australia, the former Soviet Union, the middle East, Africa and Asia. To date he has been involved in raising in excess of AUD \$3 billion in debt and equity capital. Mr James is the Chairman of Resource & Capital Management, is Chairman of Lefory Resources Limited and is a Director of Peninsula Resources. Anne Adaley - Company Secretary Mr James is a business graduate of RMIT in Melbourne, Australia with over 25 years experience in merchant banking, engineering, manufacturing and financing. Over the last 15 years he has played an active role in identifying, exploring, financing and developing a number of significant natural resource projects in Australia, the former Soviet Union, the middle East, Africa and Asia. To date he has been involved in raising in excess of AUD \$3 billion in debt and equity capital. Mr James is the Chairman of Resource & Capital Management, is Chairman of Lefory Resources Limited and is a Director of Peninsula Resources.

a number of publicly listed Australian Exploration companies in the past 25 years. Anne Adaley - Company Secretary

6.12. Rights attaching to MRO Shares Ms Adaley is a member of the National Institute of Accountants and has held a series of senior management roles with a number of publicly listed Australian Exploration companies in the past 25 years.

ordinary shares and will rank equally with issued MRO Shares from the date of their allotment. 6.12. Rights attaching to MRO Shares

A summary of the rights attaching to MRO Shares is set out below. The summary below is neither exhaustive, nor a definitive statement of the rights and liabilities of MRO Shareholders. Rights and liabilities attaching to MRO Shares The New MRO Shares issued as consideration to UKL Shareholders under the Scheme will be issued as fully paidordinary shares and will rank equallywith issued MRO Shares from the date of their allotment.

(a) General Meetings A summary of the rights attaching to MRO Shares is set out below. The summary below is neither exhaustive, nor a definitive statement of the rights and liabilities of MRO Shareholders. Rights and liabilities attaching to MRO Shares arise from a combination of the Corporations Act, MRO's Constitution, common law and the Listing Rules.

restrictions being attached to any class or classes of shares) in person, by proxy or by attorney. (a) General Meetings

The MRO Directors must convene a general meeting of MRO Shareholders when requisitioned by MRO Shareholders in accordance with the Corporations Act. Every MRO Shareholder is entitledto attend and vote at general meetings (subject to any rights or restrictions being attached to any class or classes of shares) in person, by proxy or by attorney.

(b) Voting The MRO Directors must convene a general meeting of MRO Shareholders when requisitioned by MRO Shareholders in accordance with the Corporations Act.

shareholder, proxy, attorney or representative) has one vote for each fully paid ordinary share (MRO Shares) (b) Voting

54 On a show of hands, every person present has one vote. On a poll, every person present (whether present as a shareholder, proxy, attorney or representative) has one vote for each fully paid ordinary share (MRO Shares) that the person holds or represents but in respect of partly paid shares (MRO Partly Paid Shares), shall have a fraction of a vote for each partly paid share. The fraction must be equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) excluding amounts paid in advance of a call.

(c) Dividends

MRO Directors may declare a final or interim dividend to MRO Shareholders. The MRO Directors may carry forward so much of the profits as they consider ought not to be distributed as dividends (without transferring those profits to a reserve).

No dividend, bonus or payment by way of bonus is payable to shareholders otherwise than out of profits of the company.

(d) Transfer of MRO Shares

The MRO constitution provides that MRO Shareholders may transfer their shares by instrument in writing and that the MRO Directors have the ability to refuse to register the transfer of shares in very limited circumstances. The Constitution requires that MRO comply with the ASX Listing Rules. The ASX Listing Rules contain detailed provision aimed at limiting the circumstances in which a listed company may prevent, delay or interfere with the registration of a transfer document relating to quoted securities.

(e) Issue of further MRO Shares

Subject to the MRO constitution, the Corporations Act and the Listing Rules, the MRO Directors may issue, allot or grant options for shares in the company.

(f) Variation of Rights

MRO may only modify or vary the rights attaching to any class of shares with either the:

• (i) prior approval, by special resolution, of the holders of the shares in that class at a meeting of those holders; or
• (ii) written consent of holders of three quarters of the issued shares of that class.

(g) Variation of the MRO Constitution

The Corporations Act provides that the constitution of MRO can be modified or repealed by a special resolution of MRO Shareholders.

(h) Winding Up

If MRO is wound up, the property of MRO is available for distribution pro rata among the MRO Shareholders after the debts and liabilities of MRO and the costs and charges of the winding up are paid.

6.13. Rights attaching to MRO Partly Paid Shares

The MRO Partly Paid Shares are paid to \$0.001 per share. These shares can be converted to fully paid up status by the holders at anytime up to 31 May 2010 by the payment of \$0.199. Upon conversion the MRO Partly Paid Shares become MRO Shares (fully paid ordinary shares) with all of the rights of a fully paid ordinary share of MRO. Any MRO Partly Paid Shares which remain unpaid will be subject to forfeiture.

6.14. Legal disputes

MRO is not involved in any material legal disputes and is not a party to any litigation.

6.15. ASX and ASIC lodgement and disclosures

MRO is a disclosing entity for the purposes of the Corporations Act and is subject to periodic reporting and continuous disclosure obligations. MRO is also listed on the ASX and as such, is also subject to the continuous disclosure requirements of the ASX. These require MRO to disclose information that a reasonable person would expect to have a material effect on the price or value of MRO Shares (subject to specific exceptions). The disclosures made to the ASX are available for inspection on www.asx.com.au and the disclosures and lodgements made to ASIC are available for inspection at an ASIC office during business hours. Copies of the MRO 30 June 2007 annual report and the MRO 31 December 2007 half yearly report are available, free of charge, from MRO by contacting Mr Mart Rampe on telephone 02 4647 9566 or email info@monaromining.com.au. December 2007 half yearly report are available, free of charge, from MRO by contacting Mr Mart Rampe on telephone 02 4647 9566 or email info@monaromining.com.au.

A summary of MRO's lodgements with the ASX and ASIC since lodgement of its last annual report (lodged with ASIC and given to ASX on 26 October 2007) and up to the date of this Scheme Booklet is as follows: A summary of MRO's lodgements with the ASX and ASIC since lodgement of its last annual report (lodged with ASIC and given to ASX on 26 October 2007) and up to the date of this Scheme Booklet is as follows:

ASX Announcements ASX Announcements

05/05/2008	Uranium Initiative in Bulgaria
28/04/2008	Quarterly Activities and Cashflow Report
28/04/2008	Quarterly Activities and CashFlow Report
15/04/2008	Change of Director's Interest Notice
28/04/2008	Quarterly Activities and Cashflow Report
07/04/2008	Change in substantial holding
15/04/2008	Change of Director's Interest Notice
07/04/2008	Change of Director's Interest Notice
07/04/2008	Change in substantial holding
15/04/2008	Change of Director`s Interest Notice
07/04/2008	Change of Director's Interest Notice
07/04/2008	Change in substantial holding
15/04/2008	Change of Director`s Interest Notice
07/04/2008	Change of Director`s Interest Notice
07/04/2008	Change in substantial holding
03/04/2008	Merger Update - Audio Broadcast
07/04/2008	Change of Director`s Interest Notice
03/04/2008	Change of Director`s Interest Notice
03/04/2008	Merger Update - Audio Broadcast
02/04/2008	UKL: Company Update to Shareholders
03/04/2008	Change of Director`s Interest Notice
01/04/2008	UKL: Merger Update - Monaro Mining NL
02/04/2008	UKL: Company Update to Shareholders
01/04/2008	Update on Merger of Monaro and Uranium King
01/04/2008	UKL: Merger Update - Monaro Mining NL
25/03/08	Update on Shekafter Uranium Mines and Audio Broadcast
01/04/2008	Update on Merger of Monaro and Uranium King
18/03/2008	Positive Results from Shekafter
25/03/08	Update on Shekafter Uranium Mines and Audio Broadcast
06/03/2008	Joint Venture with Richmond Mining Limited
18/03/2008	Positive Results from Shekafter
29/02/2008	Half Yearly Report and Accounts
06/03/2008	Joint Venture with Richmond Mining Limited
27/02/2008	Details of Company Address
29/02/2008	Half Yearly Report and Accounts
21/02/2008	Appendix 3B
27/02/2008	Details of Company Address
30/01/2008	Monaro signs MoU with Sinosteel
21/02/2008	Appendix 3B
25/01/2008	Quarterly Activities Report
30/01/2008	Monaro signs MoU with Sinosteel
09/01/2008	Chief Geologist Appointed
25/01/2008	Quarterly Activities Report
12/12/2007	UKL: Proposed Merger and Operations Update
09/01/2008	Chief Geologist Appointed
03/12/2007	Appendix 3B
12/12/2007	UKL: Proposed Merger and Operations Update
30/11/2007	MRO Audio Broadcast
03/12/2007	Appendix 3B
28/11/2007	Results of AGM
30/11/2007	MRO Audio Broadcast
28/11/2007	Presentation 2007 AGM
28/11/2007	Results of AGM
28/11/2007	Chairman's Address 2007 AGM
28/11/2007	Presentation 2007 AGM
14/11/2007	Noah – IPO Notice
28/11/2007	Chairman's Address 2007 AGM
09/11/2007	Monaro to Explore for Minerals in Estonia
14/11/2007	Noah – IPO Notice
01/11/2007	Investor Presentation
09/11/2007	Monaro to Explore for Minerals in Estonia
26/10/2007	Notice of General Meeting / Proxy Form
01/11/2007	Investor Presentation
26/10/2007	Quarterly Activities and Cashflow Report
26/10/2007	Notice of General Meeting / Proxy Form
26/10/2007	Annual Report 2007
26/10/2007	Quarterly Activities and Cashflow Report
26/10/2007	Annual Report 2007

7. Profile of the Merged Entity

7.1. Background for the Merger

The Merger will create a mining group with an enhanced ability to advance existing projects through exploration and development, but also to acquire new projects with the ability to make acquisitions across commodities. The increased critical mass of the merged group will also provide enhanced access to human and financial capital than presently exists with MRO and UKL on a stand alone basis.

The opportunity for UKL Shareholders to be part of a larger combined group together with the enhanced balance sheet, geographical diversity, strengthened financial and technical expertise and enlarged profile are all attributes that UKL sought to achieve.

The proposed Merger accelerates this process by many years for the UKL Shareholders.

There are shareholders that hold significant shareholdings in either one of the companies as described in Section 5.10(c) of this Scheme Booklet for UKL and Section 6.10(d) of this Scheme Booklet for MRO and for the Merged Entity in Section 7.6(c). Sections 11.2, 11.3 and 11.6(a) of this Scheme Booklet detail the UKL Directors' shareholdings in UKL and MRO and interests in UKL Options.

7.2. Future intentions

If the Proposed Merger is approved by the UKL Shareholders and the Court, and the Conditions Precedent are satisfied or waived, it is proposed that MRO will become the holder of 100% of the UKL Shares.

If the Proposed Merger becomes Effective, the MRO Directors advise that it is their current intention to continue the business of UKL and MRO, including:

• The fast track exploration of all existing projects including the Apex/Lowboy, Rio Pureco, and Lily projects located within the United States, the various Kyrgyz projects located in the Kyrgyz Republic, the Hapsburg projects located within Australia and the projects resulting from the regional studies within Estonia;
• Continue exploration efforts in and around Apex/Lowboy and Rio Puerco to better understand and seek to expand the confidence level of the existing JORC Inferred Mineral Resources at both projects;
• Fast track the review of the new projects generated within Arizona in the United States;
• Use the combined technical resources of the Merged Entity to advance a global review of uranium opportunities;
• Not redeploying any major fixed assets of UKL or MRO;
• Maintain the existing management team and the employment of UKL's and MRO's existing employees; and.
• Establish a Technical Advisory Panel to report to the Board of Directors. This Technical Advisory Panel will comprise a range of technical experts drawn from within both companies and consulting groups and will be chaired by Dr Bernhard Free and will also include Mr Sam Sapper and Mr Mart Rampe.

7.3. Proposed board of directors of the Merged Entity

Upon implementation of the Merger the board of directors of the Merged Entity is proposed to comprise;

• Warwick Grigor (Chairman)
• Mart Rampe (Managing Director)
• Malcolm James
• Jim Malone
• Michael Duncan
• Greg Barns

Details of the above UKL Directors who will be appointed to the MRO Board are provided in Section 5.11 of this Scheme Booklet and details of the MRO Directors are provided in Section 6.11 of this Scheme Booklet.

7.4. Dividends and dividend policy

MRO has not formulated a dividend policy with respect to the Merged Entity at this time. Whether dividends are able to be paid in the future will depend upon profitability and the need to fund capital investment internally.

7.5. Plans for the Merged Entity and Merger benefits

Set out in Sections 2.6 and 7.2 of this Scheme Booklet is information on the plans for the existing assets of the Merged Entity. The directors also intend to seek out additional resource investment opportunities, including in metals other than uranium and believe that the Merged Entity will be in a stronger position than either UKL or MRO on a stand alone basis to complete acquisitions.

7.6. Merged Entity capital structure and substantial shareholders

Assuming that the MRO Partly Paid Shares are paid up and that MRO Options are issued to the UKL Optionholders as proposed, following the Merger the Merged Entity will have the following capital structure:

(a) Shares:

Monaro			Post Scheme Share Structure
	Undiluted No. of Ordinary Shares	%	Fully Diluted No. of Ordinary Shares	%
Previous Uranium King Shareholders	61,500,000	64%	61,500,000	61%
Previous Uranium King Option Holders	-	-	1,535,714	1.5%
Existing Monaro Shareholders*	34,431,508	36%	34,431,508	34%
Existing Monaro Option Holders	-	-	3,400,000	3.5%
	95,931,508	100%	100,867,222	100%

*Assumes 5,000,000 MRO Partly Paid Shares are paid up

(b) Options:

Issuing entity	Number of shares under option	Class of shares	Exercise price of option	Expiry date of options
Monaro Mining NL	1 800 000	Ordinary	\$0.60	31 Dec 2008
Monaro Mining NL	750 000	Ordinary	\$1.75	31 Dec 2008
Monaro Mining NL	350 000	Ordinary	\$1.07	19 Apr 2011
Monaro Mining NL	1,535,714	Ordinary	\$0.35	31 Dec 2009
Monaro Mining NL	500,000	Ordinary	\$1.20	18 Feb 2012

(c) Largest Shareholders

Based on information available as at the date of this Scheme Booklet the largest shareholders (holding greater than 5% of the Merged Entity) in the Merged Entity (on an undiluted basis, assuming total issued share capital of the Merged Entity upon implementation of the Merger is 90,931,508 MRO Shares) will be:

Ordinary shareholders	Number of MRO
	Shares	Percentage
Mineral Energy and Technology Company	33,142,857	36.4%
ANZ Nominees Limited	7,210,000	7.9%

8. Pro forma financial information of the Merged Entity

8.1. Basis of Preparation

The financial information set out in this Section 8 comprises historical financial information of UKL and MRO, and the pro forma historical financial information of the Merged Entity as if the proposed merger had occurred at 31 December 2007 in accordance with the recognition and measurement principles prescribed under AIFRS and other mandatory professional reporting requirements in Australia.

The historical financial information included in this Section comprises:

• ! the balance sheet for UKL as at 31 December 2007 extracted from reviewed financial statements; and
• ! the balance sheet for MRO as at 31 December 2007 extracted from reviewed financial statements.

The pro forma historical financial information included in this Section comprises:

! the balance sheet for the Merged Entity as at 31 December 2007 based on the reviewed balance sheet of UKL, reviewed balance sheet of MRO and pro forma adjustments (see section 8.3 for pro forma adjustments).

The historical and pro forma historical financial information is presented in an abbreviated form insofar as it does not include all the disclosures and notes required by AIFRS applicable to annual financial reports and notes prepared in accordance with the Corporations Act.

The historical and pro forma historical financial information is supplemented by the significant accounting policies set out in Section 8.4.

8.2. Proforma Merged Entity Balance She et as at 31 December 2007

			Pro-forma
	UKL	MRO	Adjustments	Consolidation
Current Assets
Cash and cash equivalents	4,432,164	6,664,094	-500,000	10,596,258
Trade and other receivables	110,229	93,233	-	203,462
Other current assets	12,048	47,584	-	59,632
Total Current Assets	4,554,441	6,804,911	-500,000	10,859,352
Non-Current Assets
Other financial assets	-	97,650	-	97,650
Property, plant and equipment	123,600	294,446	-	418,046
Exploration and evaluation expenditure	2,682,202	3,739,084	59,197,109	65,618,395
Intangibles	-	10,662	-	10,662
Total Non-Current Assets	2,805,802	4,141,842	59,197,109	66,144,753
TOTAL ASSETS	7,360,243	10,946,753	58,697,109	77,004,105
Current liabilities
Trade and other payables	168,328	314,770	-	483,098
Provisions	-	19,438	-	19,438
Short term financial liabilities	-	10,611	-	10,611
Total Current Liabilities	168,328	344,819	-	513,147
Non Current liabilities
Long term financial liabilities	-	44,401	-	44,401
Deferred tax liability	-	-	17,759,133	17,759,133
Total Non Current Liabilities	-	44,401	17,759,133	17,803,534
TOTAL LIABILITIES	168,328	389,220	17,759,133	18,316,681

NET ASSETS	7,191,915	10,557,533	40,937,976	58,687,424
Equity
Contributed equity	8,665,920	16,443,240	38,689,080	63,798,240
Foreign currency translation reserve	-261,582	-61,523	261,582	-61,523
Option reserve	230,713	1,185,085	544,178	1,959,976
Accumulated losses	-1,443,136	-7,009,269		-7,009,269
TOTAL EQUITY	7,191,915	10,557,533	40,937,976	58,687,424

8.3. Pro forma adjustments

The consolidated pro-forma balance sheet incorporates the assets and liabilities of Uranium King Limited its controlled entities (UKL) and Monaro Mining NL its controlled entities (MRO) and as at 31 December 2007. UKL and MRO together are referred to in this report as the Group or the consolidated entity or the merged entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. For the purpose of the pro-forma balance sheet, UKL is consolidated with MRO as if the Merger occurred on 31 December 2007.

The purchase method of accounting is used to account for the acquisition of the Subsidiaries by the Group. The following adjustments have been made to the balance sheets of UKL and MRO as at 31 December 2007 to reflect the impact of the transactions outlined below had they taken place as at that date:

Impact of Proposed Merger

The pro forma information has been prepared assuming the proposed merger had occurred at 31 December 2007 with UKL Shareholders receiving five (5) New MRO Shares for every seven (7) UKL Shares held and UKL Optionholders receiving five (5) MRO Options for every seven (7) UKL Options held.

The MRO Options to be issued under the Option Consideration will be exercisable at \$0.35 per option with an expiry date of 31 December 2009, and are exercisable as of the grant date. The fair value of the MRO Options to be issued under the Option Consideration was determined using the Black-Scholes model, applying a risk-free rate of 6.33% and an MRO share price volatility of 70%. Based on these assumptions, each MRO Option to be issued was valued at \$0.5046.

Based on information available at the date of this Scheme Booklet and the requirements of accounting standards, MRO is assumed to be the acquirer for accounting purposes. The fair value of consideration will be determined by reference to the MRO Share price at the date of acquisition. For the purposes of the pro forma balance sheet, the consideration is assumed to be A\$48.6 million comprising New MRO Shares valued at A\$47.3 million based on a MRO Share price of A\$0.77 per MRO Share at 31 December 2007, the new MRO Options valued at A\$0.8 million and estimated costs attributable to the acquisition of A\$0.5 million.

The MRO Directors are not in a position as at the date of this Scheme Booklet to assess the fair value of the assets of UKL being acquired or identify separately identifiable intangible assets. The fair value assessment of UKL assets will be performed post the acquisition (including identification of any intangible assets acquired) and it is possible that this amount will be allocated to other assets and goodwill of UKL.

Other adjustments

Other pro forma adjustments have been made as follows:

• ! On consolidation, the assets and liabilities of UKL were recorded at their fair value. This resulted in the Exploration and Evaluation assets increasing by A\$59.2 million, and a Deferred Tax Liability related to the increase in fair value of the Exploration and Evaluation assets being recorded of A\$17.8 million;
• ! Expected transaction costs to be incurred by MRO in respect of the Proposed Merger in the order of A\$0.5 million have been adjusted against cash.

! The Total Equity of UKL as at 31 December 2007 of A\$7.2 million, comprising Contributed Equity of A\$8.7 million, Option Reserve of A\$0.2 million, Accumulated Losses of (A\$1.4) million and Foreign Currency Translation Reserve of (A\$0.3) million has been eliminated upon consolidating UKL into MRO, against the value of the MRO investment.

8.4. Significant accounting policies

The significant accounting policies which have been adopted in the preparation of the historical and pro forma historical financial information in Section 8.2 are based on the accounting policies of UKL and MRO where applicable. There are no significant differences between the accounting policies of MRO and UKL which would materially impact the historical or pro forma historical financial information presented in Section 8.2.

The following is a summary of the significant accounting policies practised by UKL and MRO and their controlled entities in the preparation of the pro forma balance sheet

(a) Basis of preparation of Pro forma balance sheet

The pro-forma balance sheet has been prepared on the accruals basis and is based in historical cost basis, except for available for sale financial assets that have been measured at fair value, and assets and liabilities that have been recorded at their fair value on consolidation. The presentation currency used in the pro-forma balance sheet is Australian Dollars.

(b) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the borrowing using the effective interest rate method.

Borrowings are classified as current liabilities unless the Entity has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(c) Borrowing costs

Borrowing costs are expensed.

(d) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other shortterm, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes on value, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

Cash flows have been allocated among operating, investing and financing activities which appropriately classify the Entity's activities.

(e) Derivative financial instruments

The Entity does not presently hold derivatives.

(f) Employee benefits

General

Employee benefit expenses arising in respect of wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave, other leave entitlements and other types of employee benefits are charged to the income statement in the period in which they are incurred. Contributions to superannuation funds are charged to the income statement when due. A superannuation scheme is not maintained on behalf of employees.

Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(g) Investments and other financial assets

Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset as such if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Entity's management has the positive intention and ability to hold to maturity.

Bills of exchange are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on trade-date – the date on which the Entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs.

Securities held by the Entity are classified as being available-for-sale and are stated at fair value less impairment. Realised and unrealised gains and losses arising from changes in fair value are recognised directly in equity in the available-for-sale revaluation reserve, until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in the availablefor-sale revaluation reserve is included in profit or loss for the period.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Entity establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.

The Entity assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

Loans and receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loan and receivables are included in receivables in the balance sheet. Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.

(h) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

Techniques, such as estimated discounted cash flows, are used to determine fair value for certain financial instruments. The fair value of forward exchange contracts, where applicable, is determined using forward exchange market rates at the balance sheet date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Entity for similar financial instruments.

(i) Financial instruments issued by the company

Debt and equity instruments

Debt and equity instruments including ordinary shares and options are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments, including new shares and options, are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the related debt or equity instruments or component parts of compound instruments. The Entity does not presently pay dividends.

(j) Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each Entity are measured using the currency of the primary economic environment in which the Entity operates ("the functional currency").

The financial statements are presented in Australian dollars, which is the Group's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Group companies and foreign operations

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
• Income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
• All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders' equity. When a foreign operation is sold or borrowings repaid a proportionate share of such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign Entity on or after the date of transition to A-IFRS are treated as assets and liabilities of the foreign Entity and translated at exchange rates prevailing at the reporting date.

(k) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

• (i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
• (ii) for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(l) Acquisition of assets and goodwill

The purchase method of accounting is used to account for all acquisitions of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Entity's share of the identifiable net assets acquired is recorded as goodwill and not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in profit or loss and is not subsequently reversed. If the cost of acquisition is less than the fair value of the business combination, the difference is recognised directly in the income statement.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the Entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(m) Exploration and evaluation costs

Exploration and evaluation costs are accumulated in respect of each "area of interest" or geographical segment in accordance with AASB 6 'Exploration for and Evaluation of Mineral Resources' and are disclosed as a separate class of assets. Costs are either expensed as incurred or partially or fully capitalised as an exploration and evaluation asset provided exploration titles are current and at least one of the following conditions are satisfied:

• (i) the exploration and evaluation expenditures are expected to be recouped through development and exploitation of the area of interest or by future sale; and
• (ii) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are classified between tangible and intangible and are assessed for impairment when facts and circumstances suggest the carrying amount may exceed recoverable amount. Impairment losses are recognised in the income statement.

(n) Impairment of assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Impairment losses are recognised in the income statement.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(o) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, and joint ventures except where the Entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the company/ Entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

(p) Joint ventures

Jointly controlled assets and operations

Interests in jointly controlled assets and operations are reported in the financial statements by including the Entity's share of assets employed in the joint ventures, the share of liabilities incurred in relation to the joint ventures and the share of any expenses incurred in relation to the joint ventures in their respective classification categories.

Jointly controlled entities

The interest in a joint venture partnership is accounted for in the financial statements using the equity method and is carried at cost by the parent Entity. Under the equity method, the share of the profits or losses of the partnership is recognised in the income statement, and the share of movements in reserves is recognised in reserves in the balance sheet.

Profits or losses on transactions establishing a joint venture partnership and transactions with the joint venture are eliminated to the extent of the Entity's ownership interest until such time as they are realised by the joint venture partnership on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of an asset transferred.

(q) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Entity as lessee

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income in accordance with the Entity's general policy on borrowing costs. Refer to note (b) in this Section.

Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Lease incentives

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straightline basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(r) Non-current assets held for sale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. The sale of the asset (or disposal group) is expected to be completed within one year from the date of classification.

(s) Payables

Trade payables and other accounts payable are recognised when the Entity becomes obliged to make future payments resulting from the purchase of goods and services. The amounts are unsecured and usually paid within 30 days of recognition.

(t) Principles of consolidation

The pro forma balance sheet is prepared by combining the balance sheets of all the entities that comprise the Group, being MRO (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 'Consolidated and Separate Financial Statements'. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

The consolidated pro forma balance sheet incorporates the assets and liabilities of all subsidiaries of Uranium King Limited and Monaro Mining NL as at 31 December 2007.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another Entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. For the purpose of the pro-forma balance sheet, UKL is consolidated with MRO as if the Merger occurred on 31 December 2007

The purchase method of accounting is used to account for the acquisition of subsidiaries which are business combinations by the Group (refer to note (l) in this Section).

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(u) Property, plant and equipment

Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

All tangible assets have limited useful lives and are depreciated/amortised using the diminishing balance method over their estimated useful lives, taking into account estimated residual values, with the exception of carried forward development expenditure in the production phase which is amortised on a units of production method based on the ratio of actual production to remaining proved reserves as estimated by independent experts, and finance lease assets which are amortised over the term of the relevant lease, or where it is likely the Entity will obtain ownership of the asset, the life of the asset.

The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period and adjusted if appropriate.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When revalued assets are sold, it is Entity policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(v) Share based payments

The fair value determined at the grant date of the equity-settled share-based payments is expensed at the date of issue.

For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each reporting date.

(w) Provisions

Provisions are recognised when the Entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. Provisions are not recognised for future operating losses.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

An onerous contract is considered to exist where the Entity has a contract under which the unavoidable cost of meeting the contractual obligations exceed the economic benefits estimated to be received. Present obligations arising under onerous contracts are recognised as a provision to the extent that the present obligation exceeds the economic benefits estimated to be received.

The Entity recognises any obligations for removal and restoration that are incurred during a particular period as a consequence of having undertaken exploration and evaluation activity. Restoration and abandonment obligations are reviewed annually taking into account estimates by independent consultants.

(x) Revenue recognition

Sale of mineral products.

Revenue from the sale of minerals is recognised when the Entity has transferred to the buyer the significant risks and rewards of ownership and can be measured reliably.

Dividend and interest revenue

Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(y) Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(z) Trade receivables

Trade receivables are recognised initially at fair value. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance for doubtful receivables is established when there is objective evidence that the Entity will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The movement of the allowance is recognised in the income statement.

(aa) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

9. Risk factors

9.1. Introduction

There are a number of risk factors, both specific to the Merger and the Merged Entity and of a general nature, which may affect the value of the Merged Entity's shares and the future operating and financial performance of the Merged Entity.

UKL and its shareholders are already subject to some of the risks set out in the following sections, but in proceeding with the Merger, UKL Shareholders as shareholders in the Merged Entity after the Merger will be exposed to those existing risks on a greater scale and they will also become subject to new risks that they are not currently subject to.

Before deciding on how to vote on the Scheme, UKL Shareholders should carefully consider the risk factors described in the following sections, as well as the other information contained in this Scheme Booklet or of which they may be aware.

The following sections of this Section 9 describe some of the risk factors but are not exhaustive.

If UKL Shareholders are in doubt about how to vote in relation to the Merger, they are advised to consult their professional advisers.

9.2. General risks

(a) Limited history

Both UKL and MRO have only a limited history of operations or earnings and the overall success of the Merged Entity will be affected by its future successful business activities.

(b) General market conditions

The performance of the Merged Entity will depend to a large extent on macro-economic factors such as commodity prices, supply and demand fluctuations for uranium, economic growth, interest rates, inflation, employment levels, consumer and business sentiment, the price of competing energy sources, levels of energy demand, technological advances and market volatility. As such, the share price of the Merged Entity, along with prospective dividend returns, is likely to be impacted, both favourably and unfavourably, by these factors.

International prices of most commodities are denominated in United States dollars whereas much of the equity and operations of the Merged Entity is located in other jurisdictions, therefore exposing the Merged Entity to the fluctuations and volatility of the rate of exchange between the US dollar and other currencies as determined in the international markets.

(c) Share market conditions

If the Merger is implemented, 5 MRO Shares will be issued to UKL Shareholders (or, in the case of Foreign Shareholders, to the Nominee), in consideration for the transfer of every 7 UKL Shares held of the Record Date to MRO. Accordingly, the value of the entitlements which UKL Shareholders receive under the Scheme will be dependent on the value of MRO Shares.

The value of the Merged Entity's shares (and in some cases the financial performance of the Merged Entity) could fluctuate in response to actual or anticipated variations in the Merged Entity's operating results, government or public actions impacting the mining industries, changes in key personnel and general share market sentiment.

(d) General regulatory risks

The Merged Entity will be exposed to changes in the regulatory conditions in which it operates. The risks include changes in:

• (i) taxation laws and policies;
• (ii) accounting laws, policies, standards and practices; and
• (iii) fiscal, monetary and regulatory policies.

The government approval processes for uranium projects are more rigorous than other commodities and compliance with the necessary laws and regulations may increase the costs of exploring, drilling, developing, constructing, operating and closing mines and other production facilities.

In Australia the exploration, mining and export of uranium is heavily regulated by Commonwealth legislation including the Atomic Energy Act 1953, the Environmental Protection and Biodiversity Conservation Act 1999, the Nuclear Non-Proliferation (Safeguards) Act 1987, the Australian Radiation Protection and Nuclear Safety Act 1998 and the Customs (Prohibited Export) Regulations 1958 under the Customs Act 1901. A number of States and Territories in Australia have policies which prohibit the establishment of new uranium mines. Accordingly, the ability of the Merged Entity to conduct uranium mining in Australia, should its exploration activities result in the delineation of a mineable deposit, is likely to be contingent on a change of government policy.

The US Government currently permits the exploration and mining of uranium, but any export or uranium and nuclear materials is governed by the Atomic Energy Act 1954 and the Nuclear Non-proliferation Act 1978 which provides for strict requirements for approvals of licences to export nuclear source material.

There is currently no legislation that expressly prohibits uranium mining in Nevada or New Mexico but the respective government agencies charged with administration of mining companies review from time to time the environmental bonds that are placed on claims which may, in the future, negatively impact on the Merged Entity's operations.

(e) Title Risks

The Merged Entity will have interests in tenements within the United States, Australia and the Kyrgyz Republic. Land and title rights within each jurisdiction are governed by the various governmental regulatory bodies and may be subject to competing rights claims which could in turn affect the profitability and viability of the Merged Entity's operations:

(i) United States

Tenements within the United States are governed by the respective State legislation including annual expenditure and reporting requirements and other conditions requiring compliance. In addition, on 6 October 1982 the US Government granted surface control over certain public lands to the Navajo Tribe of Indians. The United States Bureau of Land Management retains the mineral rights but any surface activity must be approved by the Navajo Tribal Council. In 2005 the Navajo nation banned uranium mining of all Navajo land.

In addition, an adverse ruling in the litigation against Uranium King referred to in Section 5.12 of this Scheme Booklet could result in the title to the Merged Entity's assets in the United States being ruled invalid, which could in turn affect the profitability and viability of the Merged Entity's operations in the United States.

(ii) Australia

Tenements within Australia are governed by the respective State or Territory legislation and each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments. In addition, persons claiming to hold native title may lodge an application with the Federal Court. Processes under the Native Title Act 1993 (Cth) need to be followed in relation to the grant of tenements over land where native title may exist. As a result of such processes, conditions may be imposed on grants of tenements to protect native title, or, at the most extreme, grants not allowed. In practice, agreements with native title holders or claimants are often negotiated in order to secure the grant of production tenements. The commercial terms of such agreements generally operate to increase the costs of conducting mining operations.

(iii) Kyrgyz Republic

The current political and economic climate within the Kyrgyz Republic concerning the economy, foreign ownership and the operation and regulation of facilities such as mines is favourable. However it is difficult to determine how the current regulations would be affected by future social or political upheaval or a change of leadership of the country. Any development or interest within the Kyrgyz Republic is subject to risks including adverse political developments, war and civil conflict, changes and uncertainty associated with government policy, lack of law enforcement, labour unrest and changes in the ability to enforce legal rights.

9.3. Risks relating to mining and exploration

(a) Exploration and Development Risks

Income from any of the Merged Entity's projects will depend on the performance of existing operations, establishment of mining projects or the sale of the projects. Exploration and development activities of the company may be affected by factors beyond the company's control, including geological conditions, mineralisation, consistency and reliability of ore grades and commodity prices.

Risks normally associated with mineral exploration and the economic recovery and treatment of ore, unexpected geological or mining conditions, equipment or services failures, weather and environmental conditions, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment are relevant to these investments. Furthermore, any discovery of a mineral deposit does not guarantee that the mining of that deposit would be commercially viable and that the size of the deposit, extraction costs and recovery rates are key factors in determining commercial viability.

(b) Resource Estimates

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that are valid when first calculated may differ when new information or technology becomes available and as further information becomes available through additional fieldwork and analysis. Any changes to resource estimates may result in alterations to mine development and planning and this may impact the Merged Entity's operations.

(c) Commodity Prices

Commodity prices, including the market price of nickel, tin and other minerals, may substantially impact on the economics of mineral production and on exploration and development of mining projects and consequently on the value of the company's share price. Commodity prices react to the economic climate, market forces of supply and demand, and other factors beyond the company's control.

(d) Production and Marketing

No assurance can be given that production of uranium or other minerals will be achieved or maintained by the Merged Entity. No guarantee can be given that the production and marketing (if any) of uranium or other minerals will prove to be economic.

(e) Personnel

The success of the Merged Entity's operations depends to some extent on the ability of the company to attract and retain qualified and capable staff and consultants to perform geological, exploration, analytical, geotechnical, engineering, metallurgical and mining work. In the current economic climate there is considerable demand for experienced personnel which is putting upward pressure on remuneration and resulting in significant turnover of employees.

The operation of UKL in the United States was very dependant on the experience of key operational personnel including Mike Duncan and Sam Snapper.

(f) Environmental Risks

The Merged Entity's resource project assets are subject to environmental laws and regulations which impose significant obligations to ensure that activities do not cause significant environmental harm, Non-compliance with environmental obligations could result in substantial liabilities being incurred, penalties being imposed and the cessation of mineral production.

9.4. Risks relating to the Merged Entity

The Merger will result in UKL Shareholders being exposed to the uranium market in countries that are perceived to have greater sovereign risk than the United States. Some of the exploration properties in which MRO has an interest are located in countries in Central Asia which are likely to be subject to higher levels of sovereign or political risk than countries such as Australia or the United States of America. These risks might adversely affect the security of tenure offered by MRO's exploration titles in those countries. Political instability, should it arise, might adversely affect MRO's ability to operate and changes in laws could adversely affect MRO's commercial interests.

9.5. Implications if the Merger does not proceed

If the Merger does not proceed, UKL Shareholders will not receive the MRO Shares they would have received under the Scheme had it been implemented and will instead retain their holding of UKL Shares. UKL will continue to operate as a stand- alone uranium company and UKL will remain listed on ASX. Should the Merger not proceed the UKL Directors consider that the capital raising opportunities to UKL will be significantly limited which in turn would significantly restrict the timely exploration and advancement of UKL's existing projects.

10. Australian tax implications

In this section, references to 'Australian residents' are references to persons or entities that are Australian residents for Australian tax purposes.

10.1. General

The intention of the following information is to provide a guide to the general Australian income tax implications of the Merger for UKL Shareholders based only on income tax legislation in effect at the date of this Scheme Booklet. It does not purport to be a complete analysis of all the potential taxation consequences nor is it intended to replace the need for specialist taxation advice in respect of the particular circumstances of individual UKL Shareholders. It does not contain any consideration of the possible taxation implications in jurisdictions other than Australia.

This summary is not applicable to all UKL Shareholders and, in particular, does not apply to:

• UKL Shareholders who do not hold their UKL Shares on capital account (eg UKL Shareholders who hold their UKL Shares as trading stock or revenue assets);
• UKL Shareholders who are not the beneficial owners of their UKL Shares;
• UKL Shareholders (if any) who acquired, or are deemed to have acquired, their UKL Shares before 20 September 1985; and
• UKL Shareholders who received their UKL Shares under an employee share plan or option scheme.

All UKL Shareholders should seek separate taxation advice as to the taxation implications of the Merger.

10.2. Merger – Australian tax implications

Merger - Australian resident shareholders

UKL Shareholders, who would otherwise derive a capital gain as a result of the Merger, will be eligible for full CGT scrip-for-scrip rollover relief in relation to the disposal of their UKL Shares in consideration for MRO Shares.

UKL Shareholders whose CGT cost base in their UKL Shares exceeds the value of the MRO Shares received will crystallise a capital loss to this extent at the time the shares are exchanged. A capital loss can only be used to reduce a capital gain derived by the UKL Shareholder in the current year or carried forward to reduce a capital gain in a future year. The cost base of the UKL Shares will generally include their cost of acquisition and any incidental costs of acquisition and disposal that are not deductible to the shareholder.

Where scrip-for-scrip rollover is chosen by a UKL Shareholder, there will not be any immediate tax liability arising as a result of a capital gain being made on the disposal of the UKL Shares. The CGT cost base that each UKL Shareholder has in their UKL Shares will become the CGT cost base at which the UKL Shareholder will be taken to have acquired the MRO Shares received under the Merger. For CGT purposes, UKL Shareholders who choose rollover relief will be deemed to have acquired their MRO Shares on the date that they originally acquired their UKL Shares.

UKL Shareholders who have held their UKL Shares for at least 12 months and who do not elect for the scrip-for-scrip rollover provisions to apply may be eligible for up to a 50% discount on their capital gain or an indexation adjustment depending on whether the UKL Shareholder is an individual, company, trust or complying superannuation fund. Such UKL Shareholders should seek advice relevant to their own personal circumstances in considering the different outcomes under the discount and indexation alternatives.

11. Additional information

11.1. UKL Directors' recommendation and intentions

The UKL Board is comprised of:

Bernhard Free (Chairman) Michael Duncan Sam Sapper Jim Malone Greg Barns

All UKL Directors have interests in UKL Shares, other than Dr Bernhard Free and Mr Greg Barns who do not have any interest in UKL Shares. One director of UKL, Mr Jim Malone, also has an interest in UKL Options. UKL Shareholders should take those interests into account in assessing the recommendations of UKL Directors. The interests of UKL Directors are set out in Section 11.2 of this Scheme Booklet.

Having given careful consideration to those interests, the UKL Directors nevertheless believe that the Scheme is in the best interests of UKL Shareholders, for the reasons set out in Section 1.4 of this Scheme Booklet and wish to make, and consider themselves justified in making, a recommendation to UKL Shareholders.

In the absence of a superior proposal, the UKL Directors unanimously recommend that UKL Shareholders vote in favour of the Scheme. All UKL Directors intend to vote UKL Shares held by or on behalf of them in favour of the Scheme.

11.2. Interests of UKL Directors

The number and description of securities in UKL held by or on behalf of each UKL Director as at the date of this Scheme Booklet is as follows:

Director	UKL Shares	UKL Options
Bernhard Free Free	Nil	Nil
Michael Duncan	Nil*	Nil
Samuel Sapper	Nil*	Nil
Jim Malone	1,862,500 1,862,500	1,075,000**
Greg Barns	Nil	Nil

* Michael Duncan and Samuel Sapper are directors and shareholders (each holding an interest in approximately 26% of the issued shares) of Mineral Energy Technology Company, a United States based company, which company has a legal and beneficial interest in 46,400,000 UKL Shares.

** Jim Malone holds a beneficial interest in these 1,075,000 UKL Options

11.3. UKL Options

As at the date of this Scheme Booklet the following UKL Options are on issue:

Options Holder	Number of Options Held
Kilkenny Enterprises Pty Limited	1,075,000
Howard & Leigth Dawson Discretionary A/C	575,000
Howard & Leigth Dawson	500,000
Total	2,150,000

In accordance with the Merger Implementation Deed, Option Agreements have been entered into with each UKL Optionholder pursuant to which, and provided the Scheme becomes Effective, UKL Optionholders will receive from MRO, in consideration of the acquisition or cancellation of the UKL Options, the Option Consideration, being a total of 1,534,000 MRO Options in with an exercise price of \$0.35 and an expiry date of 31 December 2009. The Option Consideration was derived by adopting the same exchange ratio (5 for 7) as was determined for UKL Shareholders under the Scheme Consideration and is considered by Monaro and UKL to represent fair consideration for the UKL Options.

11.4. Agreements or arrangements with UKL Directors

Apart from agreements regarding receipt of Scheme Consideration as UKL Shareholders under the terms of the Scheme, the acquisition (or otherwise cancellation) by Monaro of UKL Options (referred to in Sections 1.6 and 11.3 of this Scheme Booklet), there are no agreements or arrangements between UKL Directors and any other person in connection with or conditional on the outcome of the Scheme except that it is the intention of the MRO Board that Mr Michael Duncan, Mr Jim Malone and Mr Greg Barns will be appointed as directors of the Merged Entity.

11.5. Payments and benefits to UKL Directors and officers of UKL or related bodies corporate

Except as disclosed in this Scheme Booklet, no one has paid or agreed to pay any fees, or provided or agreed to provide any benefit to:

• (a) A director or proposed director of UKL to induce them to become or to qualify as a director of MRO;
• (b) Any director of UKL for services provided by that person in connection with the offer of MRO Shares under the Scheme.

11.6. Dealings in securities by UKL, UKL Directors and associates of UKL

(a) Dealings in UKL and MRO Securities

Except as set out in this Scheme Booklet none of UKL, a UKL Director or any associate of UKL has provided or agreed to provide, or has received, or agreed to receive, consideration for UKL Shares or MRO Shares under a sale, purchase or agreement for sale or purchase of UKL Shares or MRO Shares in the 4 months ending on the day immediately before the date of lodgement of this Scheme Booklet with ASIC.

(b) UKL's relevant interest and voting power in MRO Shares

No UKL Director has any interest or holding in any MRO Shares.

Immediately before the date of this Scheme Booklet, UKL's relevant interest and voting power in MRO Shares was nil.

11.7. Dealings in securities by MRO, MRO Directors and associates of MRO

(a) Dealings in UKL and MRO Securities

Except as set out in this Scheme Booklet none of MRO, a MRO Director or any associate of MRO has provided or agreed to provide, or has received, or agreed to receive, consideration for UKL Shares under a sale, purchase or agreement for sale or purchase of UKL Shares in the 4 months ending on the day immediately before the date of this Scheme Booklet with ASIC.

In the period from 20 December 2007 and ending on the day immediately before the date of this Scheme Booklet, an entity associated with Mr Warwick Grigor, Chairman of MRO, purchased 30,000 Shares in UKL for a total consideration of \$15,329.85. In the period from 20 December 2007 and ending on the day immediately before the date of this Scheme Booklet, an entity associated with Mr Warwick Grigor, Chairman of MRO, has purchased 30,000 UKL Shares in UKL for a total consideration of \$15,329.85.

Entity	Number of UKL Shares	Consideration	Date of Acquisition
Gregorach Pty Ltd	4,000	\$2,139.95	20 December 2007
Gregorach Pty Ltd	6,000	\$3,169.95	20 December 2007
Gregorach Pty Ltd	20,000	\$10,019.95	24 December 2007

Mr Grigor is a director of the entity which has purchased these UKL Shares, which shares are held on behalf of a Trust that Mr Grigor is not a beneficiary of.

(b) MRO's relevant interest and voting power in UKL Shares

Immediately before the date of this Scheme Booklet, MRO's relevant interest and voting power in UKL Shares was nil.

Save as set out in this Section of the Scheme Booklet, no MRO Director has any interest or holding in any

UKL Shares. The following entities are associated with Mr Warwick Grigor, Chairman of MRO and such entities are, as at the date of this Scheme Booklet, the registered holders of the UKL Shares set out in the table below:

Entity	UKL Shares held
Exponential Equities Ltd	72,000
Gregorach Pty Ltd	190,200
Far East Capital Ltd	215,050

None of the abovementioned entities (which are entities associated with Mr Grigor) are associates of MRO.

11.8. Rights attaching to MRO Shares and MRO Partly Paid Shares

The rights attaching to the MRO Shares that UKL Shareholders will receive under the Scheme are summarised in Section 6.12 of this Scheme Booklet. Rights attaching to the MRO Partly Paid Shares are contained in Section 6.13 of this Scheme Booklet.

11.9. Differences in rights attaching to UKL Shares from rights attaching to MRO Shares

There are no material differences between the material provisions in the MRO Constitution and the UKL Constitution regarding the respective rights attaching to UKL Shares and MRO Shares, save to note that MRO is a no liability company (NL).

11.10. Quotation of New MRO Shares on ASX and Frankfurt Stock Exchange and possible ADR listing

MRO Shares are quoted on ASX and Frankfurt Stock Exchange. Application will be made by MRO to ASX and Frankfurt Stock Exchange for official quotation of the New MRO Shares on ASX and to the listing or unconditional reservation for listing of the New MRO Shares on Frankfurt Stock Exchange.

The New MRO Shares will initially trade on ASX on a deferred settlement basis. This is expected to be from about 18 June 2008. Normal trading of the New MRO Shares is expected to commence on ASX and the Frankfurt Stock Exchange on the first business day after the Implementation Date, on or about 2 July 2008.

It is the responsibility of UKL Shareholders to ensure they do not trade more securities than they are certain of receiving. UKL Shareholders who trade in New MRO Shares on a deferred settlement basis after implementation of the Merger but before being advised of their final entitlements do so at their own risk.

UKL Shareholders should also be aware that as at the date of this Scheme Booklet, Monaro is undertaking a proposed American Depositary Receipts (or ADR) listing in the United States. The requisite regulatory filings for such listing are expected to be made to the Securities and Exchange Commission (Washington, United States) and the necessary listing application will be delivered to the American Stock Exchange in the second quarter of 2008. If and when this ADR listing is completed (which cannot be guaranteed), some of the MRO Shares will be listed for trading on the American Stock Exchange in the form of ADR's.. At the time of the proposed listing it is expected that, each ten (10) MRO Shares will constitute (or be the equivalent of) one (1) ADR and the depositary bank for the ADR's will be JP Morgan Chase. There will be no new MRO Shares issued (and therefore no funds raised) by Monaro in connection with the initial ADR listing. Investors wishing to receive ADR's will need to deposit the appropriate number of MRO Shares with the depositary bank's custodian in Australia prior to receiving delivery of certified ADR's from the depositary bank, subject to the terms and conditions, including without limitation, payment of certain fees, costs and expenses set forth in the applicable deposit agreement among MRO, JP Morgan Chase and the holders of the ADR's thereunder.

Initially, MRO will seek to have the ADRs quoted on the OTC Bulletin Board in New York. The OTC Bulletin Board is not a public stock exchange under US Securities laws but is a privately run quotations service which tends to be accessed primarily by brokers/institutions. Quotation on the OTC Bulletin Board will therefore provide limited exposure for the ADRs. As a second stage MRO proposes, as mentioned above, to make in the second quarter of 2008 further regulatory filings with the Securities and Exchange Commission and an application to the American Stock Exchange to have the ADRs listed for trading on the American Stock Exchange. The American Stock Exchange is a public stock exchange under US securities laws.

11.11. Benefits given by MRO outside the Scheme

Apart from the Option Agreements regarding the acquisition (or otherwise cancellation) by Monaro of UKL Options

(referred to in Sections 1.6 and 11.3 of this Scheme Booklet), no benefits have been given by MRO to any person in relation to or in connection with the Scheme other than the acquisition of UKL Shares as provided by the Scheme.

11.12. Expert's reports and consents

(a) Consents

This Scheme Booklet contains statements made by, or statements said to be based on made statements by MRO, more particularly described as the MRO Information. MRO has consented to the inclusion of each statement made by MRO in the form and context in which the statements appear and has not withdrawn that consent as at the date of this Scheme Booklet.

The following persons have given and have not, before the date of issue of this Scheme Booklet, withdrawn their consent to be named in this Scheme Booklet in the form and context in which they are named:

• RSM Bird Cameron Corporate Pty Ltd as the Independent Expert and for the inclusion of the Independent Expert's Report in Appendix A;
• David Holden of Ravensgate Mineral Industry Consultants Pty Ltd and Mart Rampe in the context referred to in Section 11.17;
• Security Transfers Registrars Ltd as the share registry for UKL;
• RM Capital who provided the Independent Technical Report for the Independent Expert's Report; and
• Q Legal, as Australian legal advisers to UKL.

Each person referred to in this section has not authorised or caused the issue of this Scheme Booklet and does not make, or purport to make any statement in this Scheme Booklet other than those statements referred to above next to that person's name as consented to by that person, and to the maximum extent permitted by law expressly disclaims and takes no responsibility for any part of this Scheme Booklet other than as described in this section with that person's consent.

(b) Independent Expert's Report

UKL Directors recommend that UKL Shareholders read the Independent Expert's Report in Appendix A carefully before voting at the Scheme Meeting. In the opinion of the Independent Expert, the Merger is fair and reasonable and is in the best interests of UKL Shareholders.

The Independent Expert, RSM Bird Cameron Corporate Pty Ltd, has given and not withdrawn its consent to the inclusion of the Independent Expert's Report in the form and context in which it appears in Appendix A and the references to that report in the form and context in which they are included in this Scheme Booklet. The Independent Expert has not caused or authorised the issue of this Scheme Booklet and takes no responsibility for any part of it other than the Independent Expert's Report and the references to its name.

(c) Interests of Advisers

Other than as set out in this Section 11 of this Scheme Booklet or elsewhere in this Scheme Booklet, no person named in this Scheme Booklet as performing a function in a professional, advisory or other capacity in connection with the preparation of this Scheme Booklet holds, or held at any time during the last two years before the date of this Scheme Booklet, any interest in:

• (i) the formation or promotion of UKL;
• (ii) any property acquired or proposed to be acquired by UKL in connection with its formation or promotion or in connection with the Schemes; or
• (iii) the issue of UKL or MRO securities.

Other than as set out in this Section 11 of this Scheme Booklet or elsewhere in this Scheme Booklet, no amounts have been paid or agreed to be paid and no other value or benefit has been given or agreed to be given to any of these persons for services rendered by them in connection with the preparation of this Scheme Booklet or in connection with the formation or promotion of UKL or in connection with the Scheme.

The persons performing a function in a professional or advisory capacity in connection with the Scheme and the preparation of this Scheme Booklet on behalf of UKL are Q Legal as Australian legal advisors, RSM Bird Cameron Corporate Pty Ltd as Independent Expert and RM Capital Pty Ltd as independent technical experts for the Independent Technical Report.

Each of them will be entitled to receive professional fees charged in accordance with their normal basis of charging. The fee paid to the Independent Expert is approximately \$40,000. The Independent Expert's Report includes a report by RM Capital Pty Ltd which is entitled to receive professional fees (RM Capital being charged on an hourly basis and estimated at \$15,000 in total).

11.13. Effect on UKL Creditors

UKL has paid and is paying its creditors within normal terms of trade and is solvent and trading in an ordinary commercial manner. The Scheme will not adversely affect the interests of UKL's creditors.

11.14. Material changes in the financial position of UKL

Except as set out in this Scheme Booklet, and other than a decrease in cash reserves as a result of normal day to day trading operations, the financial position of UKL has not, so far as is known by the UKL Directors, materially changed since the date of the last financial statements which were presented to UKL Shareholders in general meeting or sent to UKL Shareholders, being the financial statements for the year ended 30 June 2007 which were included as part of UKL's 2007 annual report and the financial statements for the half year ended 31 December 2007.

11.15. Material changes in the financial position of MRO

Except as set out in this Scheme Booklet, and other than a decrease in cash reserves as a result of normal day to day trading operations, the financial position of MRO has not, so far as is known by the directors of MRO, materially changed since the date of the last financial statements which were presented to MRO Shareholders in general meeting or sent to MRO Shareholders, being the financial statements for the year ended 30 June 2007 which were included as part of MRO's 2007 annual report and the financial statements for the half year ended 31 December 2007.

11.16. Financial Year

The financial year end for the Merged Entity will be 30 June.

11.17. Competent Persons

The estimates of ore reserves and mineral resources in this Scheme Booklet were prepared in accordance with the standards set out in the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code" (December 2004) as published by the Joint Ore Reserve Committee of the Australian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC). The JORC Code is the accepted reporting standard for the ASX.

The information in this Scheme Booklet that relates to mineral resources or ore reserves of UKL is based on information compiled by David Holden of Ravensgate Mineral Industry Consultants Pty Ltd who is a member of the Australian Institute of Mining and Metallurgy and who has relevant experience as a "competent person" as defined by the code for reporting of mineral resources and ore reserves in relation to the mineralisation being reported on.

The information in this Scheme Booklet that relates to mineral resources or ore reserves of MRO is based on information compiled by Mart Rampe who is a member of the Australian Institute of Mining and Metallurgy and who has relevant experience as a "competent person" as defined by the code for reporting of mineral resources and ore reserves in relation to the mineralisation being reported on. As of the date of this Scheme Booklet, Mart Rampe was the Managing Director of MRO.

11.18. Regulatory Approvals

Other than the approval of the Court and ASIC to the Scheme and relevant documentation, no other approval is required. On 16 January 2008, ASX gave written consent to UKL for the purposes of Listing Rule 9.18.4 to permit the restricted status of the current UKL restricted securities to be lifted in order for the Merger to be effected on the condition that the Merger proceed by way of a scheme of arrangement under Part 5.1 of the Corporations Act and that in the event the Merger does not take effect, the current restricted securities of UKL be returned to their status as restricted. In April 2008, ASX informed UKLthat it had granted a waiver from ASX Listing Rule 6.23.2 to permit the cancellation of the UKL Options under the terms of the Option Agreements and such waiver was formalised on 2 May 2008. On 4 March 2008, Monaro made application to the Securities Exchange Commission in the United States to confirm that the issuance of MRO Shares pursuant to the Scheme in the United States of America can be made in reliance upon the exemption from the registration requirements of the Securities Act of 1933 of the United States, as Other than the approval of the Court and ASIC to the Scheme and relevant documentation, no other approval is required. On 16 January 2008, ASX gave written consent to UKL for the purposes of Listing Rule 9.18.4 to permit the restricted status of the current UKL restricted securities to be lifted in order for the Merger to be effected on the condition that the Merger proceed by way of a scheme of arrangement under Part 5.1 of the Corporations Act and that in the event the Merger does not take effect, the current restricted securities of UKL be returned to their status as restricted. On 4 April 2008, ASX granted a waiver from ASX Listing Rule 6.23.2 to permit the cancellation of the UKL Options under the terms of the Options Agreements. On 4 March 2008 Monaro made application to the Securities Exchange Commission in the United States to confirm that the issuance of MRO Shares pursuant to the Scheme in the Securities Act of 1933 of the United States, as amended, pursuant to Section 3(a)(10) of the Act (refer to Section 4.8 for further details). As at the date of this Scheme Booklet, Monaro expect such confirmation to be forthcoming prior to the Second Court Date.

11.19. Other material information

Other than as set out in this Scheme Booklet, there is no other information material to the making of a decision on how to vote in relation to the Scheme, being information that is within the knowledge of any director of UKL or a director of a related company of UKL, that has not previously been disclosed to UKL Shareholders.

11.20. Supplementary Information

If, between the date of this Scheme Booklet and the Second Court Date, UKL becomes aware that:

• (a) a material statement in this Scheme Booklet is false, misleading or deceptive;
• (b) there is a material omission from this Scheme Booklet;
• (c) a material change affecting a matter included in this Scheme Booklet has occurred; or
• (d) a new circumstance has arisen which would have been required to be included in this Scheme Booklet if it had arisen before the date of lodgement of this Scheme Booklet with ASIC,

that is materially adverse from the point of view of a UKL Shareholder, UKL will prepare a supplementary document to this Scheme Booklet that remedies the relevant defect or provides information about the new circumstances.

The form which the supplementary document may take, which may include an announcement to ASX, will depend on the nature and timing of the new or changed circumstances.

MRO will provide to UKL all such further or new information which arises after the date of this Scheme Booklet and until the Second Court Date which may be necessary to ensure that the MRO Information:

• (e) does not contain any material statement that is false or misleading;
• (f) does not omit any material information about MRO, MRO Shares or the Merged Entity;
• (g) incorporates any material change in any information about MRO, MRO Shares or the Merged Entity; or
• (h) reflects any new circumstance concerning MRO which if it had arisen prior to the date of this Scheme Booklet would have been required to be included in it.

11.21. UKL Directors consent to lodgement

Each UKL Director has given, and has not withdrawn, their consent to:

• (a) the lodgement of this Scheme Booklet with ASIC; and
• (b) the issue and dispatch of this Scheme Booklet to UKL Shareholders.

By Order of the Board of Directors of Uranium King Limited

Mr Jim Malone Director

12. Glossary of terms

ASIC means Australian Securities and Investment Commission

ASX means Australian Securities Exchange operated by ASX Limited

Business Day has the meaning given in the Listing Rules

Conditions Precedent means the conditions precedent to the implementation of the Merger summarised in Section 4.3 of this Scheme Booklet and set out in full in clause 2.1 of the Merger Implementation Agreement

Corporations Act means the Corporations Act 2001 (Cth)

Court means the Perth Registry of the Federal Court of Australia

Deed Poll means a deed poll dated 19 March 2008 executed by MRO in favour of UKL Shareholders, a copy of which is included in Appendix C

EBIT means earnings before interest and tax

EBITA means earnings before interest, tax and amortisation

EBITDA means earnings before interest, tax, depreciation and amortisation

Effective means the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the Scheme

Effective Date means the date on which the Scheme becomes Effective

Exploration Results means the data made available by exploration over a project

Foreign Shareholder means a holder of UKL Shares whose registered address is outside Australia (and its external territories) and New Zealand

Ineligible Overseas Shareholders means Uranium King Shareholders with a registered address in a jurisdiction other than Australia (and its external territories) and New Zealand, but does not include Uranium King Shareholders with a registered address in certain other jurisdictions where Uranium King and Monaro have determined that such persons can be offered and issued with New MRO Shares without Monaro or Uranium King having to comply with any conditions or additional disclosure or legal requirements which in Monaro and Uranium King's sole joint discretion are considered overly onerous

Implementation Date means the third Business Day after the Record Date

Independent Expert means RSM Bird Cameron Corporate Pty Ltd

Independent Expert's Report means the report prepared by the Independent Expert set out in Appendix A

Independent Technical Report means the independent technical report prepared by RM Capital Pty Ltd which forms Annexure D to the Independent Expert's Report

Indicated Mineral Resource means that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed

Inferred Mineral Resource means that part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability

JORC Code means The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

Listing Rules means the official listing rules of the ASX

Market Price means the volume weighted average price of a Monaro Share trading on ASX over the five trading days on ASX immediately preceding the Effective Date.

Measured Mineral Resources means that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity

Merged Entity means Monaro after completion of the Scheme of Arrangement whereby UKL would become a wholly owned subsidiary of Monaro

Merger means the merger of UKL and MRO through the implementation of the Scheme in accordance with the terms of the Merger Implementation Agreement

METCO means Mineral Energy and Technology Company, a US incorporated company, which as at the date of this Scheme Booklet holds 46,400,000 UKL Shares

MIA or Merger Implementation Agreement means the merger implementation agreement between UKL and MRO dated 10 October 2007, as varied by a deed dated 19 March 2008 and a deed dated 9 April 2008, a conformed and restated version of which is set out in Appendix B to this Scheme Booklet

Mineral Resource means a concentration or occurrence of material of intrinsic economic interest in or at the earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories

Monaro Shareholder Approval has the meaning ascribed in Section 4.3(a) of this Scheme Booklet

MRO or Monaro means Monaro Mining NL ACN 073 155 781

MRO Board means the board of directors of MRO

MRO Directors means the directors of MRO as of the date of this Scheme Booklet

MRO Options means the options to acquire MRO Shares at varying exercise prices and expiry dates as set out in Section 6.10(c) of this Scheme Booklet

MRO Partly Paid Shares means 5,000,000 \$0.20 partly paid shares in Monaro which are paid up to \$0.001 and are subject to a call for the remaining \$0.199 payable on 31 May 2010

MRO Shareholders means the holders of MRO Shares

MRO Share Register means the share register of MRO

MRO Shares means fully paid ordinary shares of MRO

New MRO Shares means the new MRO Shares to be issued by MRO to UKL Shareholders pursuant to the Deed Poll and the Merger Implementation Agreement

Nominee means a nominee appointed by UKL prior to the Implementation Date

Notice of Scheme Meeting means the Court ordered notice of Scheme Meeting included at the Appendix E of this Scheme Booklet

Odd Lot means a parcel of New Monaro Shares which if issued would not comprise a marketable parcel within the meaning of the ASX Listing Rules

Optionholder Agreements means an agreement between MRO and each UKL Optionholder pursuant to which each holder of UKL Options agrees, subject to the Scheme becoming Effective, to the cancellation or transfer to MRO of all UKL Options held in return for the payment by MRO of the Option Consideration

Option Consideration means the consideration, in the form of new MRO Options with an exercise price of \$0.35 and an expiry

date of 31 December 2009, to be issued by Monaro to holders of UKL Options pursuant to the Optionholder Agreements, in consideration for the acquisition or cancellation of the UKL Options

Quit Date means 31 July 2008

Record Date means the third Business Day after the Effective Date

Resolution means the resolution set out in the Notice of Scheme Meeting at Appendix E

Scheme or Scheme of Arrangement means the scheme of arrangement under Part 5.1 of the Corporations Act between UKL and UKL Shareholders substantially in the form of Appendix D, together with any alterations made or conditions imposed by the Court pursuant to section 411(6) of the Corporations Act

Scheme Booklet means this scheme booklet dated 7 May 2008

Scheme Consideration means the consideration in the form of New MRO Shares to be provided by MRO to UKL Shareholders under the Scheme as provided for in the Merger Implementation Agreement and the Deed Poll, being five (5) New MRO Shares for every seven (7) UKL Shares held at the Record Date

Scheme Meeting means the meeting convened by UKL pursuant to order of the Court under section 411(1) of the Corporations Act in relation to the implementation of the Scheme

Scheme Shares means the UKL Shares to be transferred to MRO pursuant to the Scheme as contemplated by the Merger Implementation Agreement

Second Court Date means the first day on which an application is made to and heard by the Court for an order under section 411(4)(b) of the Corporations Act approving the Scheme is heard

UKL means Uranium King Limited ACN 119 187 816

UKL Board means the board of directors of UKL

UKL Directors means the directors of UKL as at the date of this Scheme Booklet

UKL Options means 2,150,000 options to acquire UKL Shares at a price of 25 cents expiring 30 June 2009

UKL Optionholders means the holders of UKL Options

UKL Shareholders means each person who is registered in the UKL Share Register as the holder of a UKL Share as at the Record Date

UKL Share Register The share register of UKL maintained by the UKL Share Registry

UKL Share Registry means the registry which maintains the share register of UKL, being Security Transfer Registrars Pty Ltd

UKL Shares means fully paid ordinary shares in UKL

U3O8 means uranium oxide

VWAP means volume weighted average price

APPENDIX A

Independent Expert's Report

8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9111 www.rsmi.com.au

E-mail: andy.gilmour@rsmi.com.au Direct line: 9261 9447 AJG:NEB

2 April 2008

The Directors Uranium King Limited 103 Abernethy Road Belmont WA 6104

Dear Sirs,

Independent Experts Report and Financial Services Guide

1. Introduction

• 1.1 This Independent Experts Report ("Report") has been prepared by RSM Bird Cameron Corporate Pty Ltd ("RSMBCC") at your request in respect to the proposed merger of Uranium King Limited ("Uranium King" or "the Company") and Monaro Mining NL ("Monaro"). The merger is to be effected by way of a scheme of arrangement ("the Scheme") under Section 411 of the Corporations Act ("the Act").
• 1.2 Under the terms of the Scheme Monaro is offering to issue five (5) Monaro ordinary shares for every seven (7) Uranium King shares held.
• 1.3 The purpose of this Report is to provide our opinion as to whether or not the Scheme is in the best interests of the Uranium King Shareholders. The Report is to be included in the Scheme Booklet to be sent to all Uranium King Shareholders to assist them in deciding whether to accept or reject the Scheme.

L:\CLIENTS\ACTIVE\Uranium King\IER - March 2008\Final Report IER and FSG 020408.doc

Liability limited by a scheme approved under Professional Standards Legislation

RSM Bird Cameron Corporate Pty Ltd ABN 82 050 508 024 Licensed Investment Adviser No 255847

Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra

Page 1 of 45 RSM Bird Cameron Corporate Pty Ltd is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.

2. Summary and Opinion

2.1 In our opinion and for reasons set out in Section 13 of this report, the Proposed Scheme is fair and reasonable and in the best interests of the Shareholders.

Fair

2.2 In Section 13 we determined that the Scheme consideration is fair for the Shareholders of Uranium King as detailed below.

		Value Per Share
	Low \$	High \$
Value of a Uranium King share	0.25	0.35
Value of Consideration	0.26	0.37

Table 1: Comparison of Consideration with Current Assessed Value

Reasonable

• 2.3 In Section 13 we determined that the Scheme is reasonable for Shareholders of Uranium King by considering:-
• advantages and disadvantages of the Scheme; and
• alternatives, including the position of Shareholders if the Scheme does not proceed.
• 2.4 The key advantages are:-
• the scheme is fair;
• the merger of Uranium King and Monaro would create a global uranium exploration and pre-development company, with a significantly enhanced pro-forma market capitalisation;
• the merged group would hold a diversified portfolio of projects ranging from grass roots to pre-development in geographically diverse countries;
• Monaro provides greater access to capital through its planned (but not guaranteed) ADR listing in the USA, along with its existing contacts and Australian Financial Services Licence. This ADR, if the listing is granted, will provide important support towards raising the estimated US\$20-\$25 million in additional funding that is required to advance the Apex/Lowboy project ( refer to page 34 of RM Capital Independent Valuation Report attached to this report as Appendix D) ; and
• the merged group will have strong management expertise drawn from the two companies.
• 2.5 A disadvantage is that Shareholders will be diluted from owning 100% of Uranium King to approximately 68% of the merged group.
• 2.6 We are unaware of any alternative proposal which would offer the Shareholders of Uranium King a premium over the value ascribed to that resulting from the Scheme.
• 2.7 Should the Scheme not be approved then Uranium King will continue to explore potential acquisitions and develop its own projects, but this would be significantly limited by Uranium King's size and access to capital.

3. Report Structure

4.	Background to the Proposed Scheme 4
5.	Basis of Assessment5
6.	Profile of the Uranium Industry6
7.	Profile of Uranium King 10
8.	Profile of Monaro16
9.	Valuation Approach24
10.	Valuation of Uranium King 27
11.	Valuation of Monaro31
12.	Profile of Monaro following the Proposed Merger33
13.	Evaluation 35
	Appendix A – Declarations and Disclosure39
	Appendix B – Sources of Information41
	Appendix C – Financial Services Guide42
	Appendix D – Independent Technical Valuation Report45

3.1 Our Report is set out in the following main sections:-

4. Background to the Proposed Scheme

• 4.1 On 11 October 2007 Uranium King and Monaro jointly announced that they had entered into a Merger Implementation Agreement under which the companies agreed to merge by way of a Scheme of Arrangement to create a globally diversified uranium exploration and development company.
• 4.2 Under the terms of the proposed merger, Shareholders of Uranium King will receive five (5) Monaro shares for every seven (7) shares they hold in Uranium King. Monaro does not currently hold any shares in Uranium King.
• 4.3 Holders of Uranium King unlisted share options will receive five (5) unlisted Monaro share options for every seven (7) Uranium King options they hold.
• 4.4 After implementation of the proposed Scheme, Uranium King will become a wholly owned subsidiary of Monaro and current Uranium King Shareholders will hold 67.6% of the expanded issued share capital of Monaro (61.0% on a fully diluted basis).
• 4.5 An illustration of the pre and post Scheme share structure is shown below, assuming the respective shareholdings remain unchanged from 31 March 2008:

Uranium King	Pre Scheme Share Structure No. of Ordinary	%
Uranium King Shareholders	Shares 86,100,000	100%

Monaro	Post Scheme Share Structure
	Undiluted		Fully Diluted
	No. of		No. of
	Ordinary	%	Ordinary	%
	Shares		Shares
Previous Uranium King Shareholders	61,500,000	67.6%	61,500,000	61.0%
Previous Uranium King Option Holders	-	-	1,535,714	1.5%
Existing Monaro Fully Paid Shareholders	29,431,508	32.4%	29,431,508	29.2%
Existing Monaro Partly Paid Shareholders	-	-	5,000,000	4.9%
Existing Monaro Option Holders	-	-	3,400,000	3.4%
	90,931,508	100%	100,867,222	100%

Table 2: Illustration of Pre Scheme Share Structure of Uranium King

Table 3: Illustration of Post Scheme Share Structure of Monaro

• 4.6 The Scheme remains subject to a range of conditions including, inter alia:
• Uranium King shareholder approval and court approval under Section 411 of the Corporations Act being received;
• all necessary regulatory approvals being obtained; and
• no material adverse change or prescribed occurrences occurring in either party.
• 4.7 In the event any of the conditions precedent are failed the parties are required to consult in good faith to determine the alternatives available to implement the proposed Scheme. If no agreement is reached then, unless any unfulfilled condition precedent is waived, either party may terminate the agreement.

5. Basis of Assessment

• 5.1 In assessing whether or not the Scheme is in the best interests of the Uranium King Shareholders it is relevant to note that the expression "in the best interests" is not defined within the Act.
• 5.2 Where a scheme of arrangement would achieve substantially the same outcome as a takeover bid, the Australian Securities and Investments Commission ("ASIC") Regulatory Guide 111 Content of Expert Reports ("RG 111") aligns "in the best interests" with the "fair and reasonable" test.
• 5.3 RG 111 applies the "fair and reasonable" test as two distinct criteria in the circumstance of a takeover bid, stating:
• A takeover offer is considered "fair" if the value of the offer price or consideration is equal to or greater than the value of the securities that are the subject of the offer; and
• A takeover is considered "reasonable" if it is fair or, where the offer is "not fair", it may still be "reasonable" if the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid before the close of the offer.
• 5.4 Consistent with the guidelines in RG 111, in determining whether the Scheme is in the best interests of the Uranium King Shareholders, the analysis undertaken is as follows:
• A comparison between the Scheme consideration for each Uranium King share and the value of each Uranium King share - fairness;
• A review of other significant factors which Shareholders might consider prior to approving the Scheme - reasonableness; and
• Consideration of the likely position of Shareholders if the Scheme is rejected best interests.
• 5.5 Accordingly, part of our assessment will be the determination of the fair value of Uranium King, the fair value of Monaro and the fair value of the merged Uranium King/Monaro ("the Merged Group"). "Fair value" in this context is considered to be "the amount at which an asset could be exchanged between a knowledgeable and willing but not anxious seller and a knowledgeable and willing but not anxious buyer, both acting at arm's length".
• 5.6 Our valuation assessment of the fair value of Uranium King is detailed in Section 10. Our valuation assessment of Monaro is detailed in Section 11 and a profile of the Merged Group is shown at Section 12.
• 5.7 A comparison of the fair value of the Consideration offered by Monaro under the Scheme and the fair value of the Uranium King shares that are subject to the Scheme is contained in Section 13. Other considerations are also discussed at Section 13.
• 5.8 Our assessment of the Scheme is based on economic, market and other conditions prevailing at the date of this report.

6. Profile of the Uranium Industry

Uranium

• 6.1 Uranium was discovered in 1789 by Martin Klaproth, a professor of chemistry in Berlin, whilst analysing pitchblende from the Saxion Ore Mountains. It is relatively abundant, occurring in most rocks as well as the oceans; however, it is seldom sufficiently concentrated to be economically recoverable. Uraninite or pitchblende is the most common uranium mineral.
• 6.2 When mined, it yields a mixed uranium oxide product (U3O8) which is primarily used for nuclear power electricity generation.

Mining

• 6.3 Uranium ore can be mined by underground or open-cut methods; after mining the ore is crushed and ground up, it is treated with acid to dissolve the uranium which is then recovered from the solution. Uranium may also be mined by in situ leaching (ISL), where it is dissolved from the orebody in situ and pumped to the surface.
• 6.4 Historically, the majority of world production has come from underground mines; in 2006 the split of production was as follows:

	% of World
	Production
Underground	41%
Open Pit	24%
In Situ Leach (ISL)	26%
By-Product	9%
	100%

Table 4: Mining Methods in 2006

Exploration

• 6.5 Although nuclear power was discovered in the 1930's, uranium exploration only grew to significance in the 1940's as the invention of nuclear weapons drove demand. The advancement of civil nuclear power stimulated a second wave of exploration activity in the late 1960's.
• 6.6 Large stockpiles of uranium oxide, amounting to about four times the annual production, were built up by electricity utilities worldwide during the 1980's. In response to these high stock levels, uranium oxide prices dropped, mine production fell and exploration spending on uranium plummeted.
• 6.7 Stocks were gradually run down and by the early 2000's, concerns over the adequacy of mine production to meet future demand started to fuel price rises and subsequent investment in exploration activity.

World Production

6.8 Canada produces the largest share of uranium from mines (25% of world supply from mines in 2006), followed by Australia (19%) and Kazakhstan (13%). Niger, Russia, Namibia, Uzbekistan and the USA complete the top eight.

6.9 There are relatively few uranium producer companies with the top eight companies accounting for over 85% of total world production in 2006:

	% of World
	Production
Cameco	20.9%
Rio Tinto	18.0%
Areva	13.4%
KazAtomProm	9.4%
TVEL	8.3%
BHP Billiton	7.3%
Navoi	5.7%
Uranium One	2.5%
Total Top 8	85.5%

Table 5: Top 8 Worldwide Uranium Producers in 2006

• 6.10 The growing volume of "Potential Producer" companies, those with uranium resources which may be exploitable over the next 2, 5 or 10 years, have no guarantee of progression to production.
• 6.11 Despite the recent significant price rises, world uranium production can only respond slowly, reflecting the long lead-time required to either expand existing operations or bring new developments on stream.
• 6.12 However, world uranium output is expected to expand solidly from 2008 onwards, easing concerns over the adequacy of supplies and pulling back spot prices.

Uses

• 6.13 Whilst historically uranium has been used in nuclear weapons, to colour glass and to extract radium for medical and luminous paint, today the only substantial use for uranium is as fuel in nuclear reactors, mostly for electricity generation.
• 6.14 When used for electricity generation uranium produces no greenhouse gases, but its other wastes are significant (some are chemically and radiologically hazardous); however, these wastes are able to be contained and managed.

Demand

• 6.15 The demand for nuclear fuel in power stations depends not only upon the overall demand for electricity, but also upon the share of electric power generated by nuclear means.
• 6.16 Currently over 16% of the world's electricity is generated from uranium in nuclear reactors, in approximately 450 operating power stations.
• 6.17 Renewed interest in nuclear power in the context of high oil prices and concern over greenhouse gas emissions from fossil fuels is likely to increase this proportion.
• 6.18 In early 2007, the World Nuclear Association reported that 48 new nuclear power reactors are expected to be commissioned in the next six years, 13 of which are expected to be in China and 8 planned in India.
• 6.19 The predicted supply and demand equation for uranium suggests a favourable climate for the uranium sector for at least 10 years.

Supply

• 6.20 In 2006, world uranium oxide consumption amounted to about 80,000 tonnes. Mine production supplied about 51,000 tonnes, with the balance coming from stockpiles and recycled military uranium.
• 6.21 The graph below illustrates historic uranium mine production and demand:

Figure 1: Western World Uranium Mine Production and Demand, 1945-2004 (Source: World Nuclear Association)

• 6.22 Australia's reserves are the world's largest, with 24% of the total, but political restrictions have historically limited production to only three mines. These are Ranger in the Northern Territory, Olympic Dam and Beverley in South Australia; with a fourth cleared to start construction, Honeymoon in South Australia.
• 6.23 The primary countries with known recoverable resources of uranium are:

	% of World
	Resources
Australia	24%
Kazakhstan	17%
Canada	9%
USA	7%
South Africa	7%
Namibia	6%
Total Top 6	70%

Table 6: Top 6 Countries with Known Recoverable Uranium Resources in 2005, as defined by the OECD "Uranium 2005" Report

Prices

6.24 Recent shifts in uranium prices reflect long-term movements in world supply and demand. The graph below shows the last 2 years:

(Source: The UX Consulting Company)

• 6.25 The huge increases in uranium spot prices seen in 2006 and the first half of 2007 were driven by falling uranium stocks, increased concern over future uranium supplies and growing speculative demand for uranium.
• 6.26 In the first 8 months of 2007, the uranium spot price more than doubled year on year to average around US\$105/lb and the spot price rose to a peak of US\$138/lb in June 2007, the highest since 1978.
• 6.27 However, an increased presence of sellers around that time resulted in an easing of the tight supply-demand balance and the uranium spot price fell for the first time in two years. Prices fell from the mid-year peak to US\$75/lb by the end of September 2007, recovering temporarily in the last few months of 2007 following negative news from several producers regarding future supplies.
• 6.28 The UX Consulting Group's spot price closed at US\$71.00/lb on 31 March 2008.

7. Profile of Uranium King

Corporate Background

• 7.1 Uranium King was incorporated on 7 April 2006 for the acquisition, exploration and development of uranium projects within the United States of America.
• 7.2 In July 2006, the Company acquired 100% ownership of three exploration projects in the USA known as Rio Puerco, Church Rock and Apex / Lowboy through the issue of 46,400,000 ordinary shares. These projects were acquired from Mineral Energy and Technology Limited ("METCO").
• 7.3 Uranium King commenced trading on the Australian Stock Exchange ("ASX") on 4 September 2006 after raising \$A6.5 million through an initial public offer of 26 million shares.

Company Structure

• 7.4 The Company had 7 employees as at 30 June 2007.
• 7.5 Uranium King has 100% equity holdings in the following companies, which are all incorporated in the USA:
• Uranium King Corporation
• Uranium Company of Nevada LLC
• Uranium Company of New Mexico LLC

Operations

• 7.6 The Company has advanced projects at Rio Puerco and Apex-Lowboy which together contain approximately 6.1 million pounds of JORC inferred uranium resources.
• 7.7 The table below (which is a summary of Tables 4 and Tables 5 contained in the RM Capital Independent Valuation Report attached to this report as Appendix D, and are based on 1,710,000 tonnes grading 0.12% U3O8 at a cut-off of 0.05% U3O8 at Rio Puerco, and 1,005,200 tonnes grading 0.07% U3O8 at a cut-off of 0.02% U3O8 at Apex-Lowboy) summarises the estimated uranium oxide resources at these projects, based on exploration completed during the 1970's and 1980's:

Project	JORC Inferred Resource	Grade
Rio Puerco	4,514,400 lbs	0.12% U3O8
Apex-Lowboy	1,548,100 lbs	0.07% U3O8

Table 7: Summary of Estimated Project Resources

7.8 The ongoing focus of Uranium King will be the exploration and potential development of uranium projects in the USA. The United States has a long history of successful uranium exploration and mine production, and current government initiatives support further development of uranium assets.

Rio Puerco Project

• 7.9 The Rio Puerco project is located in the state of New Mexico, approximately 60 kilometres to the northwest of Albuquerque.
• 7.10 The project area is covered by 54 claims and is situated within the Grants Mineral Belt. The belt has been a significant source of uranium in the United States with production estimated to be approximately 340 million pounds.
• 7.11 At Rio Puerco, uranium mineralisation is contained within four sandstone units of the Morrison Formation and the primary uranium mineral is coffinite. The resource was discovered in 1968 and mined for a brief period until a significant fall in uranium prices forced its closure.
• 7.12 During 2007 the primary work undertaken by Uranium King at Rio Puerco was case study modelling to understand the geophysical response to the distribution of the ore.
• 7.13 In February 2007, Uranium King purchased the Smith claims which adjoin Rio Puerco and contain previously drilled uranium mineralisation.
• 7.14 Most recently, Uranium King announced it had staked an additional 9,000 acres surrounding Rio Puerco in the Grants Mineral Belt, which brings the Company's total acreage in this area to approximately 12,000 acres.

Apex-Lowboy Project

• 7.15 The Apex and Lowboy properties are located near Austin, Nevada and are around 7 kilometres apart.
• 7.16 Both projects are located on the same mineralised trend with the uranium mineralisation consisting of the uranium phosphates autunite, torbernite and meta-torbernite. Uraninite and coffinite have been reported at depth, although this is based on limited data.
• 7.17 Apex was an underground mine between 1954 and 1966, while Lowboy was developed briefly in 1959 with minimal production. It is understood that both mines had limited lives as a result of long distances from operating mill facilities.
• 7.18 A scoping study to evaluate the economics of the development of Apex-Lowboy as a surface leach operation was completed in July 2007.
• 7.19 At Lowboy in particular, the scoping study identified a high exploration probability for a continuation of the uranium mineralisation at depth.

Project Exploration

• 7.20 During the financial year ended 30 June 2007, Uranium King completed approximately 340,000 acres of airborne radiometric surveying over regional targets. The Company intends to secure claims for a number of targets identified from these surveys.
• 7.21 In addition, a ten hole drilling programme was scheduled to commence in the Lily and Sam exploration projects, which adjoin the Rio Puerco resource.
• 7.22 A five hole drilling programme was subsequently carried out over the Lily claim area in October and November 2007 with encouraging results, although no ore grade intercepts were recorded.

Capital Structure

7.23 The capital structure of Uranium King as at 31 March 2008 was as follows:

Ref.	No. of Ordinary Shares
	11,600,000
	46,400,000
	26,000,000
	2,100,000
	86,100,000
	7.24 7.25

Table 8: Capital Structure of Uranium King at 31 March 2008

• 7.24 A total of 6,600,000 promoter shares are held under escrow until 5 September 2008 and are not tradeable until that date.
• 7.25 The 46,400,000 vendor shares are held under escrow until 5 September 2008 and are not tradeable until that date.
• 7.26 The number of shares held by the substantial shareholders as at 10 September 2007, being the latest published analysis, is detailed below:

	Ordinary Shares	% of Shares Held
Mineral Energy and Technology Corporation (METCO)	46,400,000	53.89%
Kilkenny Enterprises Pty Ltd	1,862,500	2.16%
Howard & Leigth Dawson	1,000,000	1.16%
ANZ Nom Ltd	983,900	1.14%
Howard & Leigth Dawson	817,500	0.95%
Total ordinary shares listed on ASX	86,100,000

Table 9: Significant Uranium King Shareholders at 10 September 2007

• 7.27 The twenty largest shareholders held 67.65% of the listed ordinary shares as at 10 September 2007, with all remaining shareholders holding less than 1% each.
• 7.28 There have been no share issues since 10 September 2007.
• 7.29 The spread of Uranium King shareholders as at 10 September 2007 was as follows:

		Fully Paid Ordinary Shares
	No. of	No. of	% of Issued
	Holders	Shares	Capital
1 - 1,000	132	103,381	0.12%
1,001 - 5,000	507	1,615,041	1.88%
5,001 – 10,000	320	2,706,992	3.14%
10,001 – 100,000	517	16,439,933	19.09%
100,001 and over	59	65,234,653	75.77%
	1,535	86,100,000	100%

Table 10: Distribution of Uranium King Shareholders at 10 September 2007

Consolidated Historical Balance Sheets

7.31 The Uranium King consolidated balance sheet is shown below as at 30 June 2007 and 31 December 2007:

	Ref.	Reviewed 31 Dec 2007 \$	Audited 30 June 2007 \$
Cash and cash equivalents		4,432,164	6,276,532
Trade and other receivables		110,229	56,565
Other current assets		12,048	-
Total current assets		4,554,441	6,333,097
Property, plant and equipment		123,600	151,810
Exploration and evaluation expenditure	7.32	2,682,202	1,560,415
Total non-current assets		2,805,802	1,712,225
Total assets		7,360,243	8,045,322
Trade and other payables		168,328	169,432
Provisions		-	-
Total liabilities		168,328	169,432
Net Assets		7,191,915	7,875,890
Equity
Contributed equity	7.33	8,665,920	8,665,920
Reserves	7.34	(30,869)	(62,062)
Accumulated losses		(1,443,136)	(727,968)
Total Equity		7,191,915	7,875,890

Table 11: Uranium King consolidated Balance Sheets from 2007 audited annual report and 2007 reviewed interim report

• 7.32 The accounting policy for exploration and evaluation expenditure states that it is comprised of net direct costs and an appropriate portion of related overhead expenditure. The recoupment of costs carried forward is dependant on the discovery of commercially viable mineral or other nature resource deposits and their successful development and commercial exploitation, or alternatively, sale of respective exploration and evaluation areas of interest.
• 7.33 Uranium King raised over \$9.1 million of capital, before costs, through five share issues between April 2006 and March 2007.
• 7.34 Reserves comprise an option reserve and a foreign currency translation reserve.

Consolidated Historical Income Statements

7.35 The consolidated income statement of Uranium King is shown below for the year ended 30 June 2007 and the six months ended 31 December 2007:

	Ref.	Reviewed 31 Dec 2007 \$	Audited 30 June 2007 \$
Revenue	7.36	151,697	253,676
Occupancy costs Employee benefits expense Professional fees Travel Administration costs Insurance Foreign exchange loss		(17,321) (203,046) (392,620) (60,479) (69,958) - (123,441)	(42,736) (225,327) (71,931) (87,774) (86,474) (43,950) (395,576)
Loss before income tax expense		(715,168)	(700,092)
Income tax expense		-	-
Net loss attributable to members of the company		(715,168)	(700,092)
Loss per share (cents per share)		(0.8)	(0.9)

Table 12: Uranium King consolidated income statements from 2007 audited annual report and 2007 reviewed interim report

7.36 Revenue is predominantly comprised of interest received on cash deposits.

Share Price Movements

• 7.37 In recent months the conditions in the Australian share market have changed significantly as fears of a US economic recession have fuelled stock sell-offs and falling prices.
• 7.38 The chart below details the daily ASX closing share price and volume history for Uranium King for the year to 31 March 2008:

• 7.39 Over the last year, the Uranium King closing share price has ranged from \$0.25 to \$1.54, with the peak reached in late May 2007. The closing price at 31 March 2008 was \$0.25.
• 7.40 Uranium King's share price rose sharply over the first half of 2007, reflecting both the announcements of new claims staked by the Company and the strengthening uranium spot market.
• 7.41 The mid-year peak mirrors the uranium spot market profile, with a decline commencing in June 2007 as delays in the Apex scoping study and a falling uranium spot price resulted in weakened market confidence. The price rallied slightly in September, stabilising at around \$0.60 over the next quarter.
• 7.42 The Uranium King traded share price has fallen steadily over the last three months reaching a 52-week low of \$0.25 on 25 March 2008, driven in part by the overall market downturn.
• 7.43 Significant announcements released to the ASX include:
• 15 February 2007 acquisition of 1,138 acre Smith claims adjacent to Rio Puerco;
• 14 June 2007 delays in metallurgical testing of Apex samples led to revised scoping study completion date of July;
• 25 July 2007 Apex scoping study confirms economically robust mining operation at Apex-Lowboy, production estimated to commence in 2009;
• 3 August 2007 Board changes including the retirement of Howard Dawson as Chairman;
• 11 September 2007 additional 9,000 acres of exploration land staked in Rio Puerco, taking total land held by Uranium King in the area to 12,000 acres;
• 3 October 2007 drilling commenced at Lily-Sam projects;
• 11 October 2007 merger agreement signed with Monaro;
• 7 November 2007 results of AGM;
• 12 December 2007 proposed merger and operations update; and
• 12 March 2008 prospective claim areas secured in Apache Basin of Central Arizona.
• 7.44 The proposed merger and operations update issued on 12 December 2007 outlined documentation delays to the merger due diligence process and a legal action instigated by a former director, Mr Karl Meyers, which the Company believe is without merit.

Share Options

• 7.45 On 18 April 2006, Uranium King issued 2,150,000 incentive options to Directors at \$0.0005 per option. The exercise price of each option is \$0.25 with expiry on 31 December 2009.
• 7.46 The options are non-transferable and can only be exercised upon the earlier of three specified conditions, one of which is a takeover bid becoming unconditional or the Company entering into and the Court approving a solvent scheme of arrangement or reconstruction which has the effect of changing control of the Company.
• 7.47 The Merger Implementation Agreement between Uranium King and Monaro proposes that the Uranium King option holders will receive five (5) Monaro options in exchange for every seven (7) Uranium King options held. The Monaro share options will be exercisable at \$0.35 with expiry on 31 December 2009.

8. Profile of Monaro

Corporate Background

• 8.1 Monaro Mining NL ("Monaro") was incorporated as South Pacific Nickel NL on 16 March 1996 and remained dormant until 2004.
• 8.2 The Company was reactivated as Monaro, initially focusing on the exploration and development of prospective gold and base metal exploration licences located in the Lachlan Fold Belt of NSW.
• 8.3 Following the acquisition of strategic interests in a number of uranium prospects in the Kyrgyz Republic in early 2006, Monaro realigned itself as a mineral exploration and development company focused on uranium.
• 8.4 In September 2006, the Company strengthened its uranium portfolio with the signing of a Joint Venture agreement with Hapsburg Exploration Pty Ltd ("Hapsburg"), which provided exposure to domestic uranium projects in Western Australia, Queensland and the Northern Territory.
• 8.5 Monaro listed on the Australian Stock Exchange on 13 September 2005 and is also traded on the Frankfurt Exchange.
• 8.6 The Company announced plans in September 2007 to list its shares for trading in the United States of America, via a sponsored American Depository Receipts ("ADR") listing, although this listing cannot be guaranteed.

Company Structure

• 8.7 The following companies are 100% subsidiaries of Monaro:
• Carbeck Pty Ltd, incorporated in Australia
• Zona Noblus LLC, incorporated in the Kyrgyz Republic
• Ou Balti Kaevandusedja Uuringud, incorporated in Estonia
• 8.8 Monaro also has an interest in joint venture operations with the following companies, whose principal activities are mineral exploration and development:
• Hapsburg Exploration Pty Ltd;
• Ironbark Gold Ltd;
• Noah Resources NL; and
• Richmond Mining Ltd.

Operations

• 8.9 The principal activities of Monaro are:
• Exploration for minerals including uranium, gold and base metals; and
• The acquisition and sale of mineral tenements.
• 8.10 The Company is actively exploring and developing its portfolio of uranium prospects in the Kyrgyz Republic and Australia.
• 8.11 Monaro's gold and base metals projects in NSW Australia are primarily being progressed with joint venture partners.

Kyrgyz Uranium and Gold Projects

• 8.12 Monaro has a 100% interest in eight exploration licences in the Kyrgyz Republic, covering a total area of almost 4,000 km2 . The projects are listed below along with their primary mineral focus:
• Aramsu uranium
• Sogul uranium
• Naryn uranium
• Sumsar uranium, and copper, gold and silver
• Utor uranium
• Djurasay uranium
• Hodjaakan uranium
• Gavasai gold and copper
• 8.13 Monaro has not yet completed sufficient exploration to define a mineral resource in their tenements and it is uncertain if further exploration will result in such a determination.
• 8.14 However, various Russian geological surveys which assessed the mineral deposits (particularly uranium) of the country during the 1950's and 1960's provide confidence of the presence of substantial uranium and/or gold mineralisation in many of the Monaro projects.
• 8.15 The Company is now actively exploring these projects and initial drilling has commenced on some; however, there is no guarantee that this work will result in the reporting of mineral resources to JORC Code standards.
• 8.16 Restrictions on uranium mining are less stringent in the Kyrgyz Republic than Australia, providing the opportunity for Monaro to progress to potential producer in the short to medium term should viable resources be determined.
• 8.17 In January 2008, Monaro signed a Memorandum of Understanding ("MoU") with Sinosteel Corporation ("Sinosteel"), a Chinese state-owned enterprise engaged in developing, mining and marketing natural resources worldwide.
• 8.18 Under the terms of the MoU, Sinosteel will work with Monaro to assess and potentially develop each of the Kyrgyz projects. The initial agreement is subject to the results of Sinosteel's due diligence investigation and would allow Sinosteel to earn up to 60% interest in selected projects by completing feasibility studies.
• 8.19 Monaro may issue 1.9 million unlisted options to Sinosteel exercisable at \$1.00 with a 3 year term, subject to completion of a binding agreement and other conditions precedent.

Uranium Projects in Australia – Hapsburg Joint Venture

• 8.20 Monaro and the private exploration company Hapsburg established a joint venture in late 2006, securing for Monaro a range of uranium prospective licences and access to an experienced technical team at Hapsburg.

• 8.21 The terms require Monaro to fund all exploration expenditure on granted exploration licences in exchange for earning an interest in the projects of up to 75%, dependant on the achievement of specific milestones.

• 8.22 The focus of this joint venture has been on identifying and acquiring large, undiscovered and concealed ore deposits of uranium and gold mineralisation, away from the established mining camps in Australia.

• 8.23 Exploration licence applications for 4,000 km2 of prospective ground in three states have been granted. In accordance with the Heads of Agreement, Monaro issued ordinary shares valued at \$100,000 and 500,000 unlisted options to Hapsburg in February 2008, upon the successful granting of the initial exploration applications.
• 8.24 The licences and applications cover ground considered to be prospective for uranium mineralisation including Olympic Dam type Iron Oxide Copper Gold (IOCG) mineralisation and are also prospective for a range of other mineral environments including Ernest Henry style base metal mineralisation.
• 8.25 Key projects are summarised in the table below:

			Tenement
State	Resource	Project	Granted
Queensland	IOCG, uranium and gold targets	Red Bull and Red Bull Extended	2008
as above	as above	Mt Brown & Mt Fort Bowen	2008
Northern Territory	Unconformity targets	Fog Bay	2007
as above	as above	Compass Creek	2007
		Collins Spring, Coor-de-Wandy,
Western Australia	Unconformity targets	Yalbra Hill and Granite Hills	2007

Table 13: Uranium Projects in Australia

• 8.26 Initial data compilation, assessment of satellite imagery and logistical preparations have commenced for the above projects. High resolution airborne surveys of the Northern Territory tenements are planned for the March 2008 quarter.
• 8.27 Aster image analysis and base production has been finalised for the Western Australian licence areas, with follow-up site investigations to be conducted.

NSW Gold and Base Metal Projects

• 8.28 The NSW projects are all located in the Lachlan Fold Belt. Mineral deposits found in this belt historically include gold, polymetallic, tin and zinc-lead deposits.
• 8.29 Monaro projects are listed in the table below:

Project	Monaro Holding	Ref.	Joint Venture Partner
Captains Flat	Reducing to 25%	8.30	Ironbark Gold Ltd (Aug-06)
Mayfield	80%	8.32	Richmond Mining Ltd (Mar-08)
Mayfield North	100%	8.32	Richmond Mining Ltd (Mar-08)
Michelago	100%		n/a
Mount Paynter	Reducing to 30%	8.31	Noah Resources NL (Jul-07)
Wymah	Reducing to 30%	8.31	Noah Resources NL (Jul-07)

Table 14: Gold and Base Metal Projects in Australia

8.30 Ironbark is managing all exploration activities for Captains Flat; the agreement enables Ironbark to earn a 75% interest subject to meeting all expenditure for the next 2 years and the completion of a positive feasibility study.

• 8.31 An agreement has been signed with Noah Resources for the Mount Paynter and Wymah projects; the terms allow Noah to earn up to a 70% interest by spending a minimum \$400,000 of exploration costs.
• 8.32 In March 2008 Monaro announced a joint venture agreement with Richmond Mining Limited for the Mayfield tenements, subject to its successful listing on the ASX. The terms allow Richmond to earn an initial 50% interest by spending \$300,000 of exploration costs. Monaro is also seeking a joint venture partner for the exploration and development of the remaining project.

Capital Structure

8.33 The capital structure of Monaro as at 31 March 2008 was as follows:

	Ref.	No. of Ordinary Shares
Fully paid ordinary shares Total listed ordinary shares		29,431,508 29,431,508
Partly paid ordinary shares (not quoted)	8.34	5,000,000

Table 15: Capital Structure of Monaro at 31 March 2008

• 8.34 The partly paid ordinary shares are paid to 0.01 cents each; the balance of 19.9 cents has been called and is payable on or before 31 May 2010.
• 8.35 The number of shares held by the top twenty shareholders as at 24 September 2007, being the latest published analysis, is detailed below:

ANZ Nominees Ltd 7,298,974 Fortis Clearing Nominees P/L 1,849,690 Nikam Investments Pty Ltd 1,597,087 Gregorach Pty Ltd 1,250,000 Citicorp Nominees Pty Ltd 672,778 Sergei Shestaev 571,000 Obi-Wan Investments Pty Ltd 560,000 UBS Wealth Management Australia Nominees Pty Ltd 528,800 Manfree Nominees Pty Ltd 516,500 Mr George Panagakis & Mrs Anastasia Panagakis 435,000 Uuro Pty Ltd 335,500 Yatesbury Pty Ltd 334,500 NEFCO Nominees Pty Ltd 327,955 National Nominees Ltd 325,660 Nikam Investments Pty Ltd 306,250 Jenmah Pty Ltd & Grundy-Reid Pty Ltd 250,000 Walpett Engineering Pty Ltd 250,000 Blackmort Nominees Pty Ltd 237,500 Douglass Financial Consultants Pty Ltd 195,198 HSBC Custody Nominees (Australia) Ltd 194,000 0.67%	Ordinary Shareholder	No. of Shares	% of Total Issued
			25.06%
			6.35%
			5.48%
			4.29%
			2.31%
			1.96%
			1.92%
			1.82%
			1.77%
			1.49%
			1.15%
			1.15%
			1.13%
			1.12%
			1.05%
			0.86%
			0.86%
			0.82%
			0.67%
	Top Twenty Shareholders (total)	18,036,392	61.93%

Table 16: Top Twenty Monaro Shareholders at 24 September 2007

8.36 The spread of Monaro shareholders as at 24 September 2007 is shown in the table below.

	No. of Holders
1 - 1,000	143
1,001 - 5,000	276
5,001 – 10,000	136
10,001 – 100,000	249
100,001 and over	34
	838

Table 17: Distribution of Monaro Shareholders at 24 September 2007

• 8.37 Since 24 September 2007, the following share issues occurred:
• 6 December 2007 200,000 ordinary shares were issued as a result of the balance due of 19.9 cents per ordinary share on unquoted partly paid shares being fully paid; and
• 21 February 2008 106,383 ordinary fully paid shares were issued to Hapsburg Exploration Pty Ltd at a value of \$100,000, in accordance with the exploration joint venture agreement.

Consolidated Historical Balance Sheets

8.38 The Monaro consolidated balance sheet is shown below as at 30 June 2007 and 31 December 2007:

	Ref.	Reviewed	Audited
		31 Dec 2007	30 June 2007
		\$	\$
Cash and cash equivalents		6,664,094	4,828,294
Trade and other receivables		93,233	31,930
Other current assets		47,584	15,816
Total current assets		6,804,911	4,876,040
Other financial assets		97,650	54,324
Intangibles	8.39	10,662	12,498
Property, plant and equipment		294,446	176,835
Mineral properties	8.40	3,739,084	3,739,084
Total non-current assets		4,141,842	3,982,741
Total assets		10,946,753	8,858,781
Trade and other payables		314,770	206,310
Provisions	8.41	19,438	6,308
Short-term financial liabilities		10,611	-
Total current liabilities		344,819	212,618
Long-term financial liabilities		44,401	-
Total non-current liabilities		44,401	-
Total liabilities		389,220	212,618
Net Assets		10,557,533	8,646,163
Equity
Issued capital	8.42	16,443,240	11,217,416
Reserves	8.43	1,123,562	1,547,575
Accumulated losses		(7,009,269)	(4,118,828)
Total Equity		10,557,533	8,646,163

Table 18: Monaro consolidated Balance Sheets from 2007 audited annual report and 2007 reviewed interim report

• 8.39 Intangible assets consist of computer software.
• 8.40 Monaro's accounting policies state that exploration and evaluation costs are accumulated in accordance with AASB 6 "Exploration for and Evaluation of Mineral Resources". They are either expensed as incurred or partially or fully capitalised if they meet specific conditions listed in the accounting policy. The recoupment of balances carried forward is dependant on successful development, and commercial exploitation, or alternatively sale of the respective area.
• 8.41 The provision relates to employee benefits.
• 8.42 One share allotment and three conversions of options occurred in the year ended 30 June 2007, raising \$5.1 million before costs. Subsequent to the financial year end, a further conversion of options raised \$5 million of capital before issue costs.
• 8.43 Reserves are comprised of an option reserve and a foreign currency translation reserve.

Consolidated Historical Income Statements

8.44 The consolidated income statement of Monaro is shown below for the year ended 30 June 2006 and the six months ended 31 December 2007:

	Ref.	Reviewed 31 Dec 2007 \$	Audited 30 June 2007 \$
Other income	8.45	232,108	299,535
Accounting and audit		-	(55,789)
Depreciation and amortisation		(29,542)	(31,483)
Employee benefits expense		-	-
Foreign exchange loss		-	(5,240)
Insurance		-	(33,114)
Occupancy & administration expenses		-	(315,510)
Project expenditure	8.46	(1,252,581)	(1,890,513)
Promotion		-	(311,376)
Salary, wages and professional fees	8.47	-	(664,389)
Travel		-	(180,830)
General and admin expenses*		(1,840,426)	(2,131)
Loss before income tax expense		(2,890,441)	(3,190,840)
Income tax expense		-	-
Net loss attributable to members
of the company		(2,890,441)	(3,190,840)
Loss per share (cents per share)		(8.6)	(11.7)
* 2007 interim report expenses not categorised

Table 19: Monaro consolidated income statements from 2007 audited annual report and 2007 reviewed interim report

• 8.45 Revenue relates to interest received on bank deposits held in Australia.
• 8.46 Project expenditure consists of expensed exploration costs.
• 8.47 Salary, wages and professional costs in the year ended 30 June 2007 include \$236,405 of share-based payments to consultants.

Share Price Movements

• 8.48 In the year to 31 March 2008, the Monaro closing share price peaked at \$2.65 in mid-April 2007 before falling to a low of \$0.38 at 31 March 2008.
• 8.49 Following a similar market pattern as Uranium King and in line with the uranium spot market profile, Monaro's share price rose over the first half of 2007, before falling steadily until reaching a stable position around \$1.00 through the last quarter of 2007.
• 8.50 Over the last three months, Monaro's traded share price fell to a 52-week low of \$0.37 on 25 March 2008 as overall market conditions deteriorated.
• 8.51 The chart below details the daily ASX closing share price and volume history for Monaro Mining for the year to 31 March 2008:

• 8.52 Significant announcements released to the ASX include:
• 3 April 2007 drilling at Sogul project indicates presence of a number of uranium bearing zones;
• 29 May 2007 Northern Territory and Western Australia exploration licences granted for Australian uranium operations;
• 13 August 2007 Executive management changes and the granting of three Queensland licences;
• 18 September 2007 Monaro to seek ADR listing on the North American exchange;
• 11 October 2007 merger agreement signed with Uranium King;
• 9 November 2007 establishment of a wholly owned subsidiary in Estonia and initial application for exploration title;
• 14 November 2007 priority allocation in Noah Resources NL IPO;
• 28 November 2007 results of AGM and Chairman's Address;
• 9 January 2008 appointment of Chief Geologist;

• 30 January 2008 Memorandum of Understanding signed with Sinosteel Corporation for the strategic assessment and development of Kyrgyz uranium projects;

• 21 February 2008 issue of 106,383 ordinary shares and 500,000 unlisted options to Hapsburg on successful grant of domestic exploration applications; and

• 6 March 2008 joint venture executed with Richmond Mining over the Mayfield and Mayfield North tenements.

Share Options

• 8.53 At 31 March 2008 Monaro had the following share options available to be exercised:
• 1,800,000 unlisted options to subscribe for ordinary shares at 60 cents per share on or before 31 December 2008;
• 750,000 unlisted options to subscribe for ordinary shares at \$1.75 on or before 31 December 2008;
• 350,000 Employee Incentive Options exercisable at \$1.07 per share expiring on 19 April 2011; and
• 500,000 unlisted options to subscribe for ordinary shares at \$1.20 per share expiring on 18 February 2012.
• 8.54 Each option converts to one share; options do not carry the right to vote.

9. Valuation Approach

Valuation Methodologies

• 9.1 In assessing the value of Uranium King and Monaro we have considered a range of valuation methods. ASIC Regulatory Guide 111 Content of Expert Reports states that in valuing a company the expert should consider the following commonly used valuation methodologies:
• the discounted cash flow method plus the estimated realisable value of any surplus assets;
• the value of trading operations based on the capitalisation of future maintainable earnings, added to the estimated realisable value of any surplus assets;
• the amount that would be available for distribution to security holders on an orderly realisation of assets;
• the quoted price for listed securities, when there is a liquid and active market and allowing for the fact that the quoted price may not reflect their value, should 100% of the securities be available for sale; and
• any recent genuine offers received by the company for any business units or assets as a basis for valuation of those business units or assets.
• 9.2 We consider each of these valuation methodologies below:-

Discounted Cash Flows

• 9.3 The discounted cash flow method ("DCF") has a strong theoretical basis, valuing a business on the net present value of its future cash flows. It requires an analysis of future cash flows, the capital structure and costs of capital and an assessment of the residual value of the business remaining at the end of the forecast period.
• 9.4 Cash flow forecasts are not available for Uranium King or Monaro as neither company has a producing asset. Therefore this valuation methodology is not appropriate.

Capitalisation of Future Maintainable Earnings

• 9.5 The capitalisation of future maintainable earnings is a commonly used method for valuing companies or businesses with a long operating history and an identifiable earnings trend. A valuation based on this methodology requires the determination of three key features: future maintainable earnings, an appropriate capitalisation rate and the value of surplus assets.
• 9.6 Capitalisation of earnings is an appropriate valuation method where the entity being valued has ongoing trading operations that generate a fair return. This method is not as suitable for start-up businesses or businesses with an erratic earnings pattern or which have lump capital expenditure requirements.
• 9.7 Uranium King and Monaro are both in the early exploration and development stage of their businesses and have been making operating losses; therefore this valuation method is not appropriate.

Realisation of Net Assets

• 9.8 Asset based methods estimate the market value of an entity's securities based on the realisable value of its identifiable net assets. The three main asset based methods are:
• Orderly realisation of assets method;
• Liquidation of assets method; and
• Net assets on a going concern method.
• 9.9 The first two methods estimate the fair market value of an entity by determining the amount that would be distributed to security holders after payment of all liabilities including realisation costs. They are most appropriate in situations where the entity may be wound up or liquidated.
• 9.10 The net assets on a going concern basis is usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this method, with no account taken of realisation costs.
• 9.11 The net assets method of valuation is also appropriate where the business operations incur losses or generates an insufficient return on investment, or when the entity being valued does not carry on any commercial trading activities.
• 9.12 This method is particularly applicable for exploration and mining companies where investments are in prospective exploration areas and earnings have not yet been generated. Therefore we have adopted this method as our secondary basis of valuation.
• 9.13 ASIC Regulatory Guide 111 envisages the use by an independent expert of specialists when valuing specific assets.
• 9.14 To assist in the valuation of the exploration assets, RSMBCC has engaged RM Capital Pty Ltd ("RM Capital") to prepare an independent technical report providing a valuation of Uranium King's and the Merged Group's mineral assets. A copy of RM Capital's report, dated 31 March 2008, is attached to this report as Appendix D.
• 9.15 We have satisfied ourselves as to RM Capital's qualifications and independence from Uranium King and Monaro and have placed reliance on their report.

Recent Quoted Prices of Listed Securities

• 9.16 Prices at which a company's shares have traded on the ASX can, in the absence of low liquidity or unusual circumstances, provide an objective measure of the value of the company, excluding a premium for control.
• 9.17 The application of the price that a company's shares trade on the ASX is an appropriate basis for valuation where:
• The shares trade in an efficient market place where 'willing' buyers and sellers readily trade the company's shares; and
• The market for the company's shares is active and liquid.
• 9.18 Both Uranium King and Monaro shares are traded on the ASX. Given that there has been reasonable liquidity in the shares in recent months, we consider that this methodology provides a reasonable indication of the value of the company and has therefore been used

as the primary basis of our valuation, relying on information and calculations generated by RSM Bird Cameron Corporate Pty Ltd.

Alternative Acquirer

• 9.19 This valuation method considers the premium which an alternative acquirer (as a result of potential economies of scale, reductions in competition, synergy with existing operations or other factors) would be prepared to pay for an entity.
• 9.20 We are not aware of any alternative offers for the acquisition of the shares in Uranium King, or of any offers for Monaro.

10. Valuation of Uranium King

Valuation Methodology

• 10.1 A consideration of valuation methodologies is provided at Section 9.
• 10.2 The principal assets of Uranium King are its interest in mineral exploration tenements which are still at pre-feasibility stages and are yet to record any earnings. Such assets have limited lives and future profitability and mine life depends on a number of factors which are not predictable, including securing mining titles, obtaining environmental approvals, capital and operating costs, metal prices and exchange rates.
• 10.3 Due to Uranium King's lack of profit history and future cash flows from a current business activity, we are unable to use the DCF or capitalisation of future maintainable earnings methods of valuation.
• 10.4 As Uranium King is an ASX listed company and regularly traded, the Quoted Market Price basis is an applicable approach to value the Company's shares.
• 10.5 This represents the market's view of the value of Uranium King and is likely to differ from the net asset value of the Company due to the observable gap between the market perception of the exploration assets of the Company and their book value.
• 10.6 We have also considered the net tangible asset value on a going concern basis as a secondary valuation methodology as a large proportion of Uranium King's book assets are made up of liquid assets, being cash and cash equivalents; the mineral exploration assets have been valued by an independent specialist.

Quoted Market Price for Uranium King Securities

• 10.7 We have assessed the value of a Uranium King share based on market prices.
• 10.8 Uranium King announced the proposed merger with Monaro on 11 October 2007. Over the 6 months between the merger announcement and the date of this report, prevailing conditions in the Australian stock market have deteriorated significantly.
• 10.9 In reaction to fears of a US economic recession, the ASX 200 Index has been falling since December 2007 with the index recording its lowest close in 18 months on 18 March 2008.
• 10.10 In order to reflect this recent movement in the economic environment, our assessment of the Quoted Market Price for a Uranium King share is based on its share price both pre and post announcement.
• 10.11 The following chart provides a summary of the share price movement and trading volumes over the year to 31 March 2008.

Figure 5: Uranium King Daily ASX Closing Share Price and Calendar Month Volumes Traded to 31 March 2008

• 10.12 The daily closing price of a Uranium King share from 1 April 2007 to 31 March 2008 has ranged from a low of \$0.25 recorded in the last week of March 2008 to a high of \$1.54 on 22 May 2007. The highest traded price was \$1.60 on 22 May 2007.
• 10.13 To provide further analysis of the market prices for a Uranium King share, we have also considered the weighted average market price for 1 week, 1 month and 3 month periods to 31 March 2008:

	31 Mar 08	1 week	1 month	3 months
Closing price (\$)	0.25
Weighted average price (\$)		0.264	0.291	0.354

Table 20: Analysis of Weighted Average Share Price

10.14 An analysis of the volume of trading in Uranium King shares for the twelve months to 31 March 2008 is set out in the table below.

	Traded Share Price		Cumulative	As a % of
	Low \$	High \$	Volume Traded	Issued Capital
1 day	0.25	0.25	105,000	0.12%
1 week	0.25	0.30	350,100	0.41%
1 month	0.25	0.33	892,900	1.04%
3 months	0.25	0.52	3,842,900	4.46%
6 months	0.25	0.83	9,913,300	11.51%
12 months	0.25	1.60	30,988,000	36.89%

Table 21: Analysis of Volume Traded for the Year to 31 March 2008

10.15 The table indicates that Uranium King shares are reasonably liquid given that 61.5% of the issued capital is held in escrow until September 2008 and cannot therefore be traded (refer to paragraphs 7.24 and 7.25).

10.16 Based on the information set out above, our assessment is that a range of values for a Uranium King share based on market pricing is between \$0.25 and \$0.35.

Net Asset Valuation

10.17 Our assessment of the value of Uranium King's net assets is shown below. The value of Uranium King's exploration assets have been provided by an independent technical expert, RM Capital, whose report is attached in Appendix D.

	Ref.	Reviewed 31 Dec 2007	Value Low	Value High
		\$	\$	\$
Cash and cash equivalents		4,432,164	4,432,164	4,432,164
Trade and other receivables		110,229	110,229	110,229
Other current assets		12,048	12,048	12,048
Total current assets		4,554,441	4,554,441	4,554,441
Property, plant and equipment		123,600	123,600	123,600
Exploration and evaluation expenditure	10.18	2,682,202	23,250,000	97,290,000
Total non-current assets		2,805,802	23,373,600	97,413,600
Total assets		7,360,243	27,928,041	101,968,041
Trade and other payables		168,328	168,328	168,328
Total current liabilities		168,328	168,328	168,328
Deferred tax liability	10.20	-	6,170,339	28,382,339
Total non-current liabilities		168,328	6,170,339	28,382,339
Total liabilities		168,328	6,338,667	28,550,667
Net Assets		7,191,915	21,589,374	73,417,374
Total Ordinary shares on issue as at 31 December 2007		86,100,000	86,100,000	86,100,000
Net Asset Value per share (cents)			0.25	0.85

Table 22: Uranium King Net Asset Valuation as at 31 December 2007

• 10.18 The book value of exploration and evaluation expenditure has been replaced with the range of values ascribed to the underlying exploration licences by RM Capital as set out in their specialist valuation report included at Appendix D. The report values the exploration licences at between \$23.25 million and \$97.29 million, with a mid-point of \$60.27 million.
• 10.19 The report assesses the value based on a combination of methodologies used for valuing mineral assets in the exploration stage, including the asset-based 'Yardstick Method', Discounted Future Cash Flows and adjusted quoted market price.
• 10.20 A deferred tax liability has been recognised at 30% of the uplift in value attributed to the exploration licences.
• 10.21 Our analysis concludes that the range of values for a Uranium King share based on net tangible assets is between \$0.25 and \$0.85.

Uranium King Valuation Summary

10.22		The results of the valuations performed are summarised in the table below:
-------	--	----------------------------------------------------------------------------	--	--

	Ref.	Value per Uranium King Share
		Low \$	High \$
Quoted market price	10.16	0.25	0.35
Net tangible assets	10.21	0.25	0.85

Table 23: Summary of Uranium King Valuation

Preferred Valuation

• 10.23 We believe that the quoted market price is the most relevant in assessing the value of the shares held by the Uranium King Shareholders and therefore adopt the valuation range of \$0.25 to \$0.35 per share.
• 10.24 This falls within the broader range of values derived from the net tangible asset valuation, supporting the assessed quoted market price valuation.

11. Valuation of Monaro

• 11.1 The consideration being offered to Uranium King Shareholders is five (5) Monaro shares for every seven (7) Uranium King shares held.
• 11.2 Therefore, in order to assess if the Scheme is fair for Uranium King Shareholders we have to examine the value of a Monaro share.

Valuation Methodology

• 11.3 A consideration of valuation methodologies is provided at Section 9.
• 11.4 It is common market practice to value scrip included as part of a bid by reference to the market price of that share. Therefore we consider the Quoted Market Price basis to be the most appropriate valuation methodology to value the Monaro shares to be issued to Uranium King Shareholders.

Quoted Market Price for Monaro Securities

11.5 The following chart provides a summary of the share price movement and trading volumes over the year to 31 March 2008. We have used both pre and post announcement pricing for Monaro shares to reflect the time lapse between announcement and issue of the Scheme Booklet, and to take account of the fluctuations in the stock market over that time.

Figure 6: Monaro Daily ASX Closing Share Price and Calendar Month Volumes Traded to 31 March 2008

11.6 The daily closing price of Monaro shares from 1 April 2007 to 31 March 2008 has ranged from a low of \$0.38 recorded on 31 March 2008 to a high of \$2.65 on 11 April 2007. The highest traded price was \$2.75 on 10 April 2007.

11.7 An analysis of the volume of trading in Monaro shares for the twelve months to 31 March 2008 is set out in the table below.

	Traded Share Price		Cumulative	As a % of
	Low \$	High \$	Volume Traded	Issued Capital
1 day	0.38	0.41	31,100	0.11%
1 week	0.37	0.42	224,300	0.76%
1 month	0.37	0.60	901,900	3.06%
3 months	0.37	0.89	2,586,000	8.88%
6 months	0.37	1.10	5,085,500	17.46%
12 months	0.37	2.75	15,293,500	62.96%

Table 24: Analysis of Volume Traded for the Year to 31 March 2008

• 11.8 The table indicates that Monaro shares display a reasonable level of liquidity, with 63% of the company's issued capital being traded in a twelve month period. Given this, we do not consider it necessary to apply a discount for lack of marketability.
• 11.9 To provide further analysis of the market prices for a Monaro share, we have also considered the weighted average market price for 1 week, 1 month and 3 month periods to 31 March 2008:

	31 Mar 08	1 week	1 month	3 months
Closing price (\$)	0.38
Weighted average price (\$)		0.403	0.445	0.574

Table 25: Analysis of Weighted Average Share Price

11.10 Based on the information set out above, our assessment is that a range of values for a Monaro share based on market pricing is between \$0.38 and \$0.57.

12. Profile of Monaro following the Proposed Merger

Pro-forma Consolidated Balance Sheet as at 31 December 2007

• 12.1 A pro-forma consolidated balance sheet, assuming the transaction proposed in the Merger Implementation Agreement had occurred at 31 December 2007, is shown at section 8 of the Scheme Booklet and in the table below.
• 12.2 The table also shows the net asset value of the Merged Group using the range of values attributed to the aggregated mineral assets by the independent specialist in his valuation report (see Appendix D).

	Ref.	Pro-forma	Value Low	Value High High
		31 Dec 2007
		\$	\$	\$
Cash and cash equivalents	12.3	10,596,258	10,596,258	10,596,258
Trade and other receivables		203,462	203,462	203,462
Other current assets		59,632	59,632	59,632
Total current assets		10,859,352	10,859,352	10,859,352
Other financial assets		97,650	97,650	97,650
Intangibles		10,662	10,662	10,662
Property, plant and equipment Property, plant and equipment		418,046 418,046	418,046 418,046	418,046 418,046
Mineral properties	12.7 - 12.9	65,618,395	54,350,000	143,850,000
Total non-current assets		66,144,753	54,876,358	144,376,358
Total assets		77,004,105	65,735,710	155,235,710
Trade and other payables		483,098	483,098	483,098
Provisions		19,438	19,438	19,438
Short-term financial liabilities		10,611	10,611	10,611
Total current liabilities		513,147	513,147	513,147
Long-term financial liabilities		44,401	44,401	44,401
Deferred tax liability	12.7	17,759,133	14,378,614	41,228,614
Total non-current liabilities		17,803,534	14,423,015	41,273,015
Total liabilities		18,316,681	14,936,162	41,786,162
Net Assets		58,687,424	50,799,548	113,449,548
Equity
Issued capital	12.4	63,798,240
Reserves	12.5	1,898,453
Accumulated losses		(7,009,269)
Total Equity		58,687,424
Total fully paid ordinary shares in issue post Transaction			90,931,508	90,931,508
Net Asset Value per Share	12.10		0.56	1.25

Table 26: Monaro Pro-forma Consolidated Balance Sheet as at 31 December 2007

• 12.3 The cash balance is shown after estimated transaction costs of \$500,000.

• 12.4 Based on Monaro's closing share price of \$0.77 on 31 December 2007, and using the amount of 86,100,000 Uranium King fully paid ordinary shares on issue at the same date, Monaro would have issued 61,500,000 ordinary shares valued at \$47,355,000 to Uranium King Shareholders.

• 12.5 In addition, Monaro will issue 1,535,714 share options in exchange for the 2,150,000 Uranium King share options held. The Monaro share options have been valued at \$0.5046 each as at 31 December 2007, using the Black-Scholes valuation methodology with key assumptions of 70% volatility and a 6.33% risk-free rate.

• 12.6 The acquisition has been accounted for using the purchase method of accounting and is summarised in the table below:

	\$
Issue of 61,500,000 Monaro shares @ \$0.77	47,355,000
Issue of 1,535,714 Monaro share options @ \$0.5046	774,891
Transaction costs (estimated)	500,000
Total purchase price	48,629,891
Allocation of purchase price to the fair value of net assets acquired:
Current assets	4,554,441
Property, plant & equipment	123,600
Mineral properties	61,879,311
	66,557,352
Less: Current liabilities	(168,328)
Less: Deferred tax liability	(17,759,133)
Fair value of net assets acquired	48,629,891

Table 27: Illustration of Transaction if Effected at 31 December 2007

• 12.7 This preliminary allocation of the purchase price to the fair value of net assets acquired shows the mineral property assets being adjusted from book value, with an increase of \$59.20 million, and the recognition of a deferred tax liability at 30% of this uplift, being \$17.76 million.
• 12.8 The pro-forma allocation of the purchase price results in a total attributed value of \$61.88 million to Uranium King's mineral properties; the independent valuation by RM Capital attached at Appendix D provides a mid-point valuation of Uranium King's mineral assets of \$60.27 million.

Net Asset Value of Merged Group

• 12.9 RM Capital provided an independent valuation of the Merged Group's aggregated mineral assets in the range of \$54.35 million to \$143.85 million. This valuation was assessed using a combination of mineral valuation methodologies, including the Kilburn Method, 'Yardstick Method', DCF and adjusted quoted market price.
• 12.10 Table 26 shows that the net asset value of the pro-forma Merged Group using the independent valuation of mineral assets is in the range of \$0.56 to \$1.25 per share.

13. Evaluation

IS THE SCHEME FAIR?

13.1 The following table summarises our assessment of the value of a Uranium King share and the value of the consideration to be paid by Monaro. We have considered the pro-forma market capitalisation of both companies using our assessed share values to determine the value of a Monaro share following the Scheme.

	Low \$	High \$
No. of Uranium King shares on issue at 31 March 2008	86,100,000	86,100,000
Value per Uranium King share as set out in Section 10	0.25	0.35
No. of Monaro fully paid shares on issue at 31 March 2008	29,431,508	29,431,508
Value per Monaro share as set out in Section 11	0.38	0.57
Pro-forma Market Capitalisation of Uranium King	21,525,000	30,135,000
Pro-forma Market Capitalisation of Monaro	11,183,973	16,775,960
Pro-forma Market Capitalisation of Merged Group	32,708,973	46,910,960
Total Monaro fully paid shares post Scheme	90,931,508	90,931,508
Notional value per Monaro share post Scheme	0.36	0.52
Value received by Uranium King Shareholders per Uranium King share	0.26	0.37

Table 28: Assessment of Consideration Paid by Monaro

• 13.2 Uranium King Shareholders are receiving five Monaro shares for every seven Uranium King shares held.
• 13.3 The table below illustrates the value of an Uranium King share and the value received:

	Ref.	Low \$	High \$
Value of a Uranium King share	10	0.25	0.35
Value of consideration		0.26	0.37

Table 29: Comparison of Consideration with Current Assessed Value

• 13.4 The assessed value of the consideration which the Uranium King Shareholders will receive is greater than the value of their existing shares in Uranium King.
• 13.5 As outlined at 12.10, the pro-forma Net Asset Value of a share in the Merged Group, based on the independent valuation of the underlying mineral assets, is between \$0.56 and \$1.25. This equates to a range of \$0.40 to \$0.89 per Uranium King share which is greater than the assessed current value of a Uranium King share on both the quoted market price and net tangible asset basis.
• 13.6 The graph below shows the historic trend of the Monaro and Uranium King share price over the 7 months to 31 March 2008, as adjusted for the terms of the proposed merger, i.e. 5 times the Monaro price against 7 times the Uranium King price. The graph shows that the value of 5 Monaro shares has consistently outperformed the value of 7 Uranium King shares, indicating that the deal is beneficial to Uranium King Shareholders.

PTIC & D5 5 5 .3 (5 . D5 !5 \$5 !! 5 5 "25 !5 .!5 5 *.!\$25 0!5 ". -I5

3 , 3

-'("/ ('/

• PTIE 45 .5 \$.,.5 5 .5 .- . !(5 .-5 ,!5 , \$-5 5 5 ". -5 5 *.!\$250!5.52!\$25 (5 5(.-\$5.!35 5 . 5\$- !5 25 5"2I55
• PTIH -- \$5*.!\$250!5.(535. .535 5. !D5 5 2.-5 .-5.(5 35 I5

!, '( / //,/ /-/( "

• PTIPN '5 5"25!5 5. (5 5 525,! 5 . 5. 5 5..I55*.!\$25 0!5". -5,!--5 !\$5 5 -5.5!5*.!\$250!5.5,!--5 5!(5.5 . 5.I5
• PTIPP *.!\$25 0!5 ,!--5 !\$5 5 \$\$5 5 1-. ! 5 .5 (-2 5 5 ! 5 ,5 % D53\$ 5! 5.3!-! 5 51-5 !.-5.\$!! ! 5 5,5 % 5.5 5 , 5 \$! !5, \$-535-!2! 535! 5! 5.5.5 5.! .-I555
• PTIPQ .5 5 5.-5 .5 51-. ! 5 5*.!\$250!:5 ,5 % D5! 5!5-!)-5 . 5 \$ 5 \$.!!5 , \$-5 35 \$!5 5 \$5 (-2 5 .5 \$ ! 5 . !(! !5!5 \$5 \$I555

13.13 If further funds were raised via a share issue then the existing Uranium King Shareholders would be further diluted. Were it not possible to raise further funds the Company would have to consider the viability of going into production. If a decision was made to discontinue operations, it would result in a significant reduction in shareholder value.

Premium for Control

• 13.14 It is generally acknowledged that in order to acquire a 100% controlling interest in a listed company, the acquirer must pay a premium over and above the price at which the target shares are trading on ASX prior to the announcement of the takeover bid; this is referred to as a premium for control.
• 13.15 We have estimated the amount of any premium for control being paid by Monaro as the amount by which the Scheme consideration exceeds the value of the assets to be acquired.
• 13.16 We have assessed that the value of the shares to be acquired is between \$0.25 and \$0.35 and that the value of the consideration for the acquisition to be \$0.26 and \$0.37. Accordingly, Monaro will be paying a premium of between \$0.01 and \$0.02 per share to acquire its 100% interest in Uranium King.

Trading Stock Exchanges

13.17 Shareholders will now own shares also trading on the Frankfurt Stock Exchange

Taxation implications for shareholders

13.18 Shareholders are advised to seek their own independent tax advice in relation to the implications for their shareholding. A consideration of the tax implications is set out in section 10 of the Scheme booklet.

IS THE SCHEME REASONABLE?

• 13.19 We considered the position of the shareholders if the Scheme is accepted and have taken into account the following advantages and disadvantages in this assessment.
• 13.20 We have assessed that in all cases the advantages and disadvantages of rejecting the Scheme are the inverse of accepting the Scheme. Therefore for ease of evaluation, we have set out the significant factors only in the context of approving the Scheme.

Advantages of Approving the Scheme

The Scheme is Fair

13.21 As set out in paragraphs 13.1 to 13.7, the Scheme is fair.

Global Uranium Company

• 13.22 The merger of Uranium King and Monaro would create a global uranium exploration and development company, with a pro-forma market capitalisation of approximately \$40 million based on the current assessed values of a Uranium King and Monaro share.
• 13.23 The increased market capitalisation will provide improved share market liquidity, making the combined entity more attractive to international investors and increasing general market recognition.

Diversified Project Base

• 13.24 The merged group would hold a diversified portfolio of projects ranging from grass roots to pre-development in geographically diverse countries, including the USA, Australia and Central Asia.
• 13.25 The effect for shareholders on having a diversified project base is that their overall risk is reduced.

Access to Capital

• 13.26 The Directors estimate that Uranium King would need US\$20-25 million additional funding to develop some of the existing projects to feasibility stages; it is their opinion that this amount of capital would be difficult to raise in the company's current structure and in Australia alone.
• 13.27 Monaro provides greater access to capital through its proposed ADR listing in the USA, along with its existing contacts and Australian Financial Services License.
• 13.28 The increased capital base will provide for the future development of existing projects and also gives an increased capacity to identify and target new project and corporate acquisition opportunities.

Management and Technical Expertise

13.29 The merged group will have strong management expertise drawn from the two companies. Uranium King will benefit from the depth of resources and technical skills held by Monaro and its key staff.

Disadvantages of Approving the Scheme

Dilution of Control

13.30 The Shareholders of Uranium King currently hold 100% of the Company, if the Scheme is approved they will hold approximately 68% of the enlarged Monaro or 61.0% on a fully diluted basis.

Yours faithfully RSM BIRD CAMERON CORPORATE PTY LTD

A J GILMOUR Director

Appendix A – Declarations and Disclosure

Qualifications

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron (RSMBC) a large national firm of chartered accountants and business advisors. RSM Bird Cameron Corporate Pty Ltd holds Australian Financial Services Licence 255847 issued by ASIC pursuant to which they are licensed to prepare reports for the purpose of advising clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate reconstructions or share issues.

Mr Andrew Gilmour is a director and authorised representative of RSM Bird Cameron Corporate Pty Ltd. He is a Chartered Accountant with extensive experience in the field of corporate valuations and the provision of Independent Experts' Reports for transactions involving publicly listed and unlisted companies in Australia.

In preparing this repost RSM Bird Cameron Corporate Pty Ltd engaged the services of RM Capital Pty Ltd. RM Capital is an Australian Financial Services Licensee (221938) engaged in corporate finance, research, share trading, portfolio management and investment banking. Principals associated with RM Capital have been engaged in mining, exploration, valuations, experts' reports and research for approximately 20 years. The person who is responsible for preparing and reviewing this report is Guy Touzeau Le Page who holds a Bachelor of Arts, Bachelor of Science and Master of Business Administration (University of Adelaide), a Bachelor of Applied Science (Hons) (Curtin University of Technology) and a Graduate Diploma in Applied Finance and Investment (Financial Securities Institute of Australia). Mr Le Page is also a Member of the Australasian Institute of Mining and Metallurgy and Fellow of the Financial Securities Institute of Australia.

Reliance on this Report

This report has been prepared solely for the purpose of assisting the Shareholders of Uranium King in considering the proposed Scheme. We do not assume any responsibility or liability to any party as a result of reliance on this report for any other purpose, including but not limited to investment or lending decisions in relation to Uranium King.

Reliance on Information

Statements and opinions contained in this report are given in good faith. In the preparation of this report, we have relied upon information provided by management and directors of Uranium King and we have no reason to believe that this information was inaccurate, misleading or incomplete. However, we have not endeavoured to seek any independent confirmation in relation to its accuracy, reliability or completeness. RSM Bird Cameron Corporate Pty Ltd does not imply, nor should it be construed that it has carried out any form of audit or verification on the information and records supplied to us.

The opinion of RSM Bird Cameron Corporate Pty Ltd is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

In addition, we have considered publicly available information which we believe to be reliable. We have not, however, sought to independently verify any of the publicly available information which we have utilised for the purposes of this report.

We assume no responsibility or liability for any loss suffered by any party as a result of our reliance on information supplied to us.

Independence and Disclosure of Interest

At the date of this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron, RSM Bird Cameron Partners, nor any other member, director, partner or employee of RSM Bird Cameron Corporate Pty Ltd and RSM Bird Cameron has any interest in the outcome of the proposed Scheme, except that RSM Bird Cameron Corporate Pty Ltd are expected to receive a fee of approximately \$40,000 plus GST based on time occupied at normal professional rates for the preparation of this report. The fees are payable regardless of whether Uranium King receives Shareholder approval for the proposed Scheme, or otherwise.

RSM Bird Cameron Partners are the auditors of Uranium King.

Neither the signatory of this report nor RSM Bird Cameron Corporate Pty Ltd holds shares or options in Uranium King. Neither the signatory of this report nor RSM Bird Cameron Corporate Pty Ltd has had within the past two years any business relationship material to an assessment of RSM Bird Cameron Corporate Pty Ltd's impartiality with Uranium King or their associates.

Consents

RSM Bird Cameron Corporate Pty Ltd consents to the inclusion of this report in the form and context in which it is included with the Scheme Booklet to be issued to Shareholders. Other than this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners or RSMBC has been involved in the preparation of the Scheme Booklet. Accordingly, we take no responsibility for the content of the Scheme Booklet as a whole.

Appendix B – Sources of Information

In preparing this report we have relied upon the following principal sources of information:

• Uranium King Limited audited Annual report and Financial Statements for Year Ended 30 June 2007
• Uranium King Limited reviewed Interim Report for Half-Year Ended 31 December 2007
• Monaro Mining NL audited Financial Reports for the Financial Year Ended 30 June 2006 and 30 June 2007
• Monaro Mining NL reviewed Interim Report for Half-Year Ended 31 December 2007
• Various announcements by Uranium King to the ASX
• Various announcements by Monaro Mining to the ASX
• The Uranium King website (www.uraniumking.com)
• The Monaro Mining website (www.monaromining.com)
• The UX Consulting Group website (www.uxc.com)
• The Australian Uranium Association website and various Briefing papers (www.uic.com.au)
• IBIS World "Uranium Mining in Australia", 5 September 2007
• Various databases, including Reuters, IBIS and Factiva.

Overview

RSM Bird Cameron Corporate Pty Ltd, ABN 82 050 508 024 ("RSM Bird Cameron Corporate Pty Ltd" or "we" or "us" or "ours" as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide ("FSG"). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

• who we are and how we can be contacted;
• the services we are authorised to provide under our Australian Financial Services Licence, Licence No 255847;
• remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
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We hold an Australian Financial Services Licence, which authorises us to provide financial product advice in relation to:

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We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

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We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither RSM Bird Cameron Corporate Pty Ltd, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Associations and relationships

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron, a large national firm of chartered accountants and business advisers. Our directors are partners of RSM Bird Cameron Partners.

From time to time, RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners, RSM Bird Cameron and / or RSM Bird Cameron related entities may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

Complaints Resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, RSM Bird Cameron Corporate Pty Ltd, P O Box R1253, Perth, WA, 6844.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Industry Complaints Service Limited ("FICS"). FICS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FICS are available at the FICS website www.fics.asn.au or by contacting them directly via the details set out below.

Financial Industry Complaints Service Limited P O Box 579 Collins Street West Melbourne VIC 8007

Toll Free:	1300 78 08 08
Facsimile:	(03) 9621 2291

Contact Details

You may contact us using the details set out at the top of our letterhead on page 1 of this report.

Independent Technical Valuation Report

31 March 2008

The Directors

RSM Bird Cameron Corporate Pty Ltd

8 St Georges Terrace

PERTH WA 6000

Dear Sirs,

Independent Valuation

1.0 BACKGROUND

At the request of RSM Bird Cameron Corporate Pty Ltd ("Bird Cameron") RM Capital Pty Ltd ("RM Capital") (AFSL 221938) has been engaged to complete an Independent Technical Valuation (where exploration is sufficiently advanced) and an independent technical assessment (where exploration is not sufficiently advanced) of the mining assets of Uranium King Limited ("Uranium King") and Monaro Mining NL ("Monaro Mining") in relation to the proposed Scheme of Arrangement ("Scheme") between Monaro Mining and Uranium King.

The proposed scheme involves the merger of the two companies to create a larger uranium mining and exploration group and will require both shareholder approval and court approval. Under the proposed Scheme Uranium King shareholders will receive five Monaro Mining shares for every seven Uranium King shares held.

The key assets of both companies are uranium exploration projects that are located in Australia, USA and Central Asia.

For the specific purpose of this valuation, site visits were not carried out to any of Uranium King or Monaro Mining's mineral properties. However, RM Capital has relied on various experts' reports, ASX releases and technical information provided by Uranium King and Monaro Mining in formulating its opinion.

Uranium King and Monaro Mining has advised RM Capital that there have been no material developments on its projects on which to form an opinion over and above that presented in the technical information provided. On this basis, a field visit was not considered warranted. RM Capital has satisfied itself that Uranium King and Monaro Mining has disclosed all material information pertaining to its mineral assets. A draft version of this report was provided to the directors of Uranium King and Monaro Mining for comment in respect of omission and factual accuracy.

RM Capital has not independently verified the ownership and legal standing of the mineral tenements of either Uranium King or Monaro Mining that are the subject of this valuation and is not qualified to make legal representations in this regard.

Rather we have relied upon documents and information provided by Uranium King and Monaro Mining. RM Capital understands that all of Uranium King and Monaro Mining tenements are in good standing and that there is no cause to doubt the eventual granting of any tenement applications.

Furthermore, RM Capital has not attempted to establish the legal status of the tenements within each project with respect to Joint Venture agreements, Native Title or potential environmental and land access restrictions.

RM Capital's opinion of the valuation of the assets of Uranium King and Monaro Mining are relevant as at 31 March 2008 using the methodologies described in this report.

RM Capital is an independent firm providing securities trading, corporate finance, wealth management, financial planning, research and consulting with an emphasis on mining and energy related transactions. The company has offices in Perth, Melbourne and Sydney and has prepared independent expert's reports and mineral asset valuations on a variety of mineral commodities in a number of countries.

This report was prepared by Mr Guy T. Le Page (Director and Head of Resources-RM Capital) and was reviewed by Mr Michael Mech (Mining Engineer, Resources Analyst) of RM Capital's Perth office in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Experts Reports ("the VALMIN Code") and Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("the JORC Code").

Neither RM Capital nor those involved in the preparation of this report have any material interest in any of the companies or mineral assets considered in this report that could be reasonably regarded as being capable of affecting their independence. RM Capital is remunerated for this report by way of a professional fee determined according to a standard schedule of rates that is not contingent on the outcome of this report.

Yours faithfully

Guy T. Le Page, FFin. MAusIMM DIRECTOR

2.0	CONTENTS
1.0	BACKGROUND1
2.0	CONTENTS3
3.0	SUMMARY4
4.0	TRANSACTION BACKGROUND4
5.0	MONARO MINING5
5.1	BACKGROUND5
5.2	EXPLORATION PROJECT OVERVIEW6
	5.2.1 Kyrgyzstan Project Overview6
	5.2.2 Australian Project Overview12
5.3 5.4	HISTORICAL BALANCE SHEET16 HISTORICAL INCOME STATEMENTS17
6.0	URANIUM KING17
6.1	BACKGROUND17 6.1.1 RIO PUERCO PROJECT 17
	6.1.2 APEX-LOWBOY PROJECT 18
6.2	HISTORICAL BALANCE SHEETS 20
6.3	HISTORICAL INCOME STATEMENTS22
7.0	BASIS OF EVALUATION22
8.0	VALUATION METHODOLOGIES22
8.1	FAIR MARKET VALUE OF MINERAL ASSETS 22
8.2	METHODS OF VALUING MINERAL ASSETS IN THE EXPLORATION STAGE 23
8.3	METHODS OF VALUING MINERAL RESOURCES AND ORE RESERVES26
9.0	VALUATION 26
9.1	MONARO MINING VALUATION METHODOLOGY 26
	9.1.1 Kilburn Method 26
	9.1.2 Quoted Market Price of Securities 29
	9.1.3 Valuation Summary of Monaro Mining30
9.2	URANIUM KING VALUATION METHODOLOGY 31 9.2.1 Quoted Market Price of Securities 31
	9.2.2 Asset Based – Yardstick Method32
	9.2.3 Discounted Future Cash Flows34
9.3	VALUATION SUMMARY37
	9.3.1 Monaro Mining and Uranium King Valuation pre and post-transaction37
10.0	INDEPENDENCE AND DISCLOSURE OF INTERESTS 37
11.0	QUALIFICATIONS38
12.0	DISCLAIMERS AND CONSENTS 38
	SOURCES OF INFORMATION 40

3.0 SUMMARY

The valuation of Uranium King and Monaro Mining mining assets post the proposed merger are set out as follows:

TABLE 1: Uranium King & Monaro Mining Pre and Post Transaction Valuations
	Uranium King (A\$m)	A\$/Sh	Monaro Mining	A\$/Sh	Merged Entity	A\$/Sh
Lower Case	\$23.25	\$0.27	\$29.33	\$0.79	\$52.58	\$0.57
Mid Case	\$60.27	\$0.70	\$37.95	\$1.02	\$98.22	\$1.07
Upper Case	\$97.29	\$1.13	\$46.56	\$1.25	\$143.85	\$1.57

4.0 TRANSACTION BACKGROUND

Under the terms of the proposed merger, shareholders of Uranium King will receive five Monaro shares for each seven shares they hold in Uranium King and Uranium King will become a wholly owned subsidiary of Monaro Mining. Monaro Mining will also make private offers to exchange Uranium King's unlisted options at the ratio of 5 Monaro \$0.35 cent options for every 7 Uranium King \$0.25 options.

On completion of the transaction the merged company is expected to have a market capitalisation of approximately \$55 million (lower case scenario).

The Scheme of Arrangement will be subject to a range of conditions including:

• ♦ Uranium King shareholder approval and court approval under s.411 of the Corporations Act (Cwth) 2001;
• ♦ Monaro shareholder approval if required;
• ♦ Satisfactory completion of due diligence by the boards of both companies;
• ♦ All necessary regulatory approvals.

Both companies have also entered into no solicitation and no talk provisions customary for this type of transaction, including break fee arrangements.

It is anticipated that the Scheme of Arrangement documentation will be forwarded to Uranium King shareholders in late April/early May 2008. Shareholders of Uranium King will then be asked to approve the Scheme of Arrangement in general meeting to be held in late May/early June 2008. On the basis of this and other approvals being received, the expected Implementation Date will be in late June 2008.

The directors of Monaro Mining and Uranium King have resolved to support the proposed merger. In addition, the board of directors of Uranium King has recommended to Uranium King Shareholders that, in the absence of a superior offer and subject to the Independent Expert confirming the view of the Board of directors of Uranium King that the Scheme is in the best interests of Uranium King Shareholders, that the merger be approved.

5.0 MONARO MINING

5.1 Background

Monaro Mining is a Sydney-based junior uranium company that was listed on ASX in September 2005. It was among the first Australian-listed companies to acquire uranium exploration licences in the Kyrgyz Republic (Figure 1) which included several historical uranium mines and Soviet-defined mineralisation. A number of styles of uranium mineralisation have been identified on seven licences, including uranium in sandstone, in limestone, in cherts and black shales and in volcanogenic environments. Monaro Mining has been working towards the verification of this work with a view to bring the mineralisation in line with JORC requirements. Furthermore, Monaro Mining may earn up to 75% of a number of exploration licences in the Northern Territory, Queensland and Western Australia that are being managed by an experienced uranium exploration team. The Company is continuing to assess other uranium exploration opportunities in proven uranium provinces elsewhere.

The key Kyrgyz properties are summarised as follows:

• ♦ Aramsu (uranium only)
• ♦ Utor (uranium only)
• ♦ Naryn (uranium only)
• ♦ Sumsar (uranium, base and precious metals)
• ♦ Sogul (uranium, base and precious metals)
• ♦ Djurasay (uranium, base and precious metals)
• ♦ Hodjaakan (uranium, base and precious metals)
• ♦ Gavasai (uranium, base and precious metals)

FIGURE 1: Monaro Mining's Kyrgz Republic Projects

A Heads of Agreement was signed with Hapsburg Exploration Pty Ltd (Hapsburg) in late 2006 securing for Monaro Mining a range of uranium prospective licences. The agreement gives Monaro Mining the right to earn a 35% interest in the tenements after the expenditure of \$1.5 million, 51% upon the determination of an inferred resource of 5,000 tonnes of contained uranium (U3O8) and 75% upon the completion of a feasibility study on any one project.

The key Queensland (Australian) IOCGU¹ properties are summarised as follows:

• ♦ Red Bull and Red Bull Extended
• ♦ Mt Brown and Mt Fort Bowen

¹ IOCGU - Iron Oxide Copper Gold Uranium

The key Northern Territory Unconformity style properties are summarised as follows:

• ♦ Fog Bay
• ♦ Compass Creek

Key Western Australian Unconformity-style includes:

♦ Collins Springs, Coor-de-Wandy Hill, Yalbra Hill and Granite Hills.

The key Australian Gold and Base Metal properties are summarised as follows:

• ♦ Captains Flat (reducing to 25%)
• ♦ Mt Paynter and Wymah Projects (reducing to 30%)
• ♦ Mayfield (80%) and Mayfield North (100%)
• ♦ Michelago and Michelago South (100%)

5.2 Exploration Project Overview

5.2.1 Kyrgyzstan Project Overview

Aramasu Project

Aramasu (Figure 3) covers around 579km² and is situated close to the main Bishkek-Osh trunk road, three hours drive from Bishkek. The Kyrgyz Republic's central uranium processing facility is located 40km to the north at Kara Balta. Exploration at Aramasu commenced in the early 1950's by the Russians and included radiometric surveying, trenching, drilling and underground development on 3 levels. By the 1960's drilling successfully outlined a tabular body (Figure 2) with a true width of 2.6- 3.7 metres, dipping 40-60 o degrees with an average grade of 0.2% U3O8 (cut-off grade of 0.03% U3O8) containing a high grade core of 0.22% U3O8. Metallurgical testing during this period returned recoveries of 93% with oxide leaching and 91% recovery with carbonate leaching.

Despite these results, the analysis of previous Russian data and recent geophysical surveys, Monaro Mining consider that Uranium mineralisation is associated with late stage magmatic epithermal fluids and sulphide mineralisation along a granitesediment contact. Uranium is found to be disseminated throughout the contact zone and consists of pitchblende and curite. Further geophysical studies are considered important for the delineation of further controlling structures including the granitoidporphyry and shale contact zone. To date this structure has been identified for about 150m downdip which represents the lowest level of workings (Figures 2 and 3).

Sumsar Project (Monaro Mining 100%; uranium, copper, gold and silver)

Uranium Prospects

Field work near the old Shekaftar mine has outlined a 3 kilometre long prospective zone incorporating a series of adits that were driven into an escarpment. Nearby Mine dumps were also observed to contain oxidized uranium mineralisation similar to that found at the Maily-Su mine. Mineralisation is similar to that found at the Naryn Project with follow-up exploration likely to focus along strike from the roll front mined at Shekaftar together with further channels along strike. The company is also planning to gain access to the underground workings ahead of a follow-up drilling program in 2008.

Copper, gold, silver prospects

Recent exploration by Monaro Mining has identified copper, gold and silver mineralisation with previous trenching returning anomalous grades of gold. Recent drilling by the company tested a 6km² prospective horizon that also hosts the Djal– Kokildak gold-silver-copper prospect. Further exploration may involve drill testing of the Djal-Kokildak deposit where gold mineralisation is interpreted to be associated with shear hosted quartz veins. There also appears potential for copper-gold porphyry style mineralisation of mid to late Palaeozoic age as well as small, high grade leadzinc skarns.

Three drill holes were completed at the Kokildak South prospect following on from high-grade gold rock chip results, and confirmed the presence of broad zones of quartz-potassium-feldspar-carbonate-hematite-sulphide veining within a porphyry host. To date anomalous gold hosted within quartz veins together with malachite, chalcopyrite and molybdenum mineralisation has been outlined over an apparent strike of 700 metres.

Geochemical results are awaited from surveys undertaken in the vicinity of the Sumsar Pb-Zn-Cu-Ag-Cd Mine (previous production 72,000 tonnes lead, 16,000 tonnes zinc) where mineralisation is associated with tightly folded and intensely carbonitised rocks. In addition, it has been estimated that up to 4.5 million tonnes of tailings is located within three dams adjacent to the mine.

Utor Project (Monaro Mining 100%; uranium)

The project covers an area of 710km2 in the North Kyrgyz Mountains south east of Bishkek. Assays in excess of 1% U3O8 have been reported from previous explorers with project geology similar to that found on the Aramsu licence. The primary uranium ore type is pitchblende. No significant uranium assays were reported and the project is currently under review.

Djurasay and Hodjaachkan Projects (Monaro Mining 100%; uranium)

These projects, prospective for Carlin style gold-uranium mineralisation, are situated on the southern border of Kyrgyzstan and cover approximately 1164km2 . Furthermore, the projects are prospective for hydrothermal intrusive-related uranium mineralisation.

Reconnaissance exploration has commenced and over 1000 samples have been lodged for analysis. Follow up exploration is likely subject to these results.

Gavasai Project (Monaro Mining 100%; gold, copper)

The Gavasai licence covers 349km2 and is situated in the south west of the Kyrgyz Republic. The project lies adjacent to the Bozymchack gold deposit which is believed to contain 35 tonnes of gold.

Gold mineralisation appears to be associated with alkaline hydrothermal systems controlled by andesite-dacite dyke sheets and structural lineaments. At Gava, reconnaissance exploration by the company has returned rock chip samples with gold values >1g/t together with anomalous lead and zinc mineralisation. Similarly, anomalous rock chip samples were found at Namansai.

Several mineralisation models are being targeted by Monaro Mining including:

• ♦ Shear zones and pull-apart structures known to host gold mineralisation (margins of Chatkal Valley region);
• ♦ Intrusive related Cu-Mo-Pb-Fe-Zn deposits and;
• ♦ Alaskite-type intrusives that potentially host large tonnage but low grade uranium deposits.

Further geochemical sampling has been planned and will target ground adjacent to/ along strike of similar structures that are believed to control the Bozymchak mineralisation.

Mt Paynter and Wymah Projects (reducing to 30%)

Noah Resources NL have agreed (subject to a successful IPO) to spend A\$200,000 (and a further A\$200,000 to earn a further 20%) to earn 50% interest in the Mt Paynter and Wymah Projects. The projects are prospective for tin, tungsten and molybdenum. Following an assessment by Noah Resources, a JORC compliant Inferred Resource of 245,000 tonnes @ 0.45% W and 0.27% Sn has been outlined. The resource was based on previous diamond, percussion drilling and underground mapping and sampling undertaken between 1969 and 1982. At Wymah, a 2,400m x 600m molybdenum ridge-soil anomaly was outlined by North Broken Hill in the early 1970's.

Mayfield (80%) and Mayfield North (100%)

Both Mayfield and Mayfield North are prospective for base metals and copper/gold deposits. Skarn style mineralisation is the predominant target and the province is well endowed with mines such as Woodlawn (18 million tonnes of base metal ore production).

Monaro Mining is planning to follow up the Mayfield Prospect where previous drilling has outlined a small gold-copper mineral deposit that remains open at depth and along strike. A number of other prospects are also earmarked for follow up including the Limekilns Prospect (EL 6358) where intercepts of up to 3.2% lead and 7.3% zinc and 3m @ 3.9g/t gold remain to be followed up.

Mayfield North consists of a 4km x 3km circular magnetic anomaly coincident with elevated Cu, Pb and Zn draining the magnetic 'high'. Monaro Mining considers that the 'Loaded Dog' anomaly is a sub-outcropping rhyodacitic dome, prospective for large porphyry copper-gold type deposits. Furthermore at the Greendale Prospect previous drilling intersected up to 10m at 7.3% Pb. This target remains open along strike and down dip.

A joint venture partner is presently being sought.

Michelago and Michelago South (100%)

These prospects are situated in the Lachlan Fold Belt which hosts deposits such as Cadia-Ridgeway. A recent airborne geophysical survey conducted over 2006 together with analysis of previous geochemical surveys highlighted six areas of interest with coincident aeromagnetic and geochemical anomalies. Follow up of these targets is planned in the near term with the view to attracting joint venture partners.

5.3 Historical Balance Sheet

TABLE 2: Monaro Mining Balance Sheet	CONSOLIDATED		COMPANY
Year Ending 30th June	2007	2006	2007	2006
CURRENT ASSETS
Cash and Equivalents	\$4,828,294	\$3,015,274	\$4,786,064	\$2,909,961
Trade & Other Receivables	\$31,930	\$18,995	\$31,930	\$18,995
Other Assets	\$15,816	\$3,633	\$15,770	\$0
Total Current Assets	\$4,876,040	\$3,037,902	\$4,833,764	\$2,928,956
NON CURRENT ASSETS
Other Financial Assets	\$54,324	\$50,000	\$2,681,518	\$3,677,194
Intangibles	\$12,498	\$0	\$5,916	\$0
Property, plant & equipment	\$176,835	\$44,561	\$10,376	\$8,806
Mineral Properties	\$3,739,084	\$3,639,064	\$100,000	\$0
Total Non-Current Assets	\$3,982,741	\$3,733,625	\$2,797,810	\$3,686,000
TOTAL ASSETS	\$8,858,781	\$6,771,527	\$7,631,574	\$6,614,956
CURRENT LIABILITIES
Trade & Other Payables	\$206,310	\$130,027	\$82,785	\$103,898
Provisions	\$6,308	\$0	\$2,704	\$0
Total Current Liabilities	\$212,618	\$130,027	\$85,489	\$103,898
TOTAL LIABILITIES	\$212,618	\$130,027	\$85,489	\$103,898
NET ASSETS	\$8,646,163	\$6,641,500	\$7,546,085	\$6,511,058
EQUITY
Issued Capital	\$11,217,416	\$5,673,722	\$11,217,416	\$5,673,722
Reserves	\$1,547,575	\$1,895,886	\$1,524,420	\$1,894,574
Accumulated Losses	-\$4,118,828	-\$927,988	-\$4,195,751	\$1,057,238
TOTAL EQUITY	\$8,646,163	\$6,641,500	\$7,546,085	\$6,511,058

5.4 Historical Income Statements

TABLE 3: Historical Income Statements	CONSOLIDATED		COMPANY
Year Ending 30th June	2007	2006	2007	2006
Translation of Foreign operations:
Exchange Differences taken to equity	\$21,843	\$1,312	\$0	\$0
Option reserve increments	-\$370,154	\$1,894,574	-\$370,154	\$1,894,574
Share Issue costs	-\$280,260	-\$270,898	-\$280,260	-\$270,898
Income tax on items taken directly to or transferred from equity	\$0	\$0	\$0	\$0
Net income recognised directly in equity	-\$628,571	\$1,624,988	-\$650,414	\$1,623,676
Loss for the period	-\$3,190,840	-\$921,337	-\$3,788,927	-\$573,089
Total recognised income and expense for the period	-\$3,819,411	-\$703,651	-\$3,788,927	-\$573,089
Attributable to:
Equity holders of the parent	-\$3,189,411	-\$703,651	-\$3,788,927	-\$573,089
Effects of changes in accounting policy:	\$0	\$0	\$0	\$0
Equity holders of the parent	\$0	\$0	\$0	\$0

6.0 URANIUM KING

6.1 Background

Uranium King listed on ASX in August 2006 and is focused on the exploration and development of uranium projects within the United States. Current JORC inferred resources at Rio Puerco and Apex/Lowboy total 6.1 million pounds (refer table 4) and the company has identified considerable exploration potential to expand these assets.. Uranium King is actively exploring sandstone and unconformity type uranium targets, managed by an experienced technical team and boosted by access to extensive data packages and local knowledge.

6.1.1 Rio Puerco Project

The Rio Puerco project is located around 60 km northwest of Albuquerque (New Mexico), United States with the project area covering around 12,000 acres. More recently Uranium King purchased the adjacent Smith claims covering approximately 1,138 acres. The project is situated within the Grants Mineral Belt, often referred to as the Grants Uranium District (previous production approximately 340 million pounds of uranium). This region was believed to have accounted for around 38% of the USA's uranium output over the period 1950-1968.

Mineralisation is associated with four sandstone units of the Morrison Formation with the primary uranium mineral being coffinite. Sandstone and mudstones in the district are known to range from 120-150m in thickness. A body of U3O8 mineralisation was outlined by Kerr McGee in the late 1960's following expenditure of around US\$17 million. Work undertaken included drilling, shaft development, and bulk sampling. A brief period of mining followed however low uranium prices led to a cessation of mining.

TABLE 4: Rio Puerco Resources (cut-off grade 0.05% U3O8)

Tonnes	Grade	Content in Kgs	Content in Pounds
1,710,000	0.12% U3O8	2,052,000	4,514,000

Further reviews of the database together with geophysical modelling during the year by Uranium King has enhanced the company's knowledge of not only the local geology but also provided a platform to look for similar styles of mineralisation in the district.

At the nearby Smith claims drilling by Kerr McGee outlined U3O8 substantial mineralisation. Further drilling is planned by Uranium King in the near term with good potential to expand on this resource base.

6.1.2 Apex-Lowboy Project

The Apex and Lowboy properties comprise old workings located near Austin, Lander County, Nevada. These projects are situated on a contact between a Jurassic granitic pluton and meta-sedimentary units of a Palaeozoic thrust sheet. Uranium mineralisation is located mostly within metasediments consisting of uranium phosphates autunite, torbernite and meta-torbernite, with some reports of uraninite and coffinite at depth.

Underground mining took place at Lowboy from 1954 and 1966 with total production of 105,926 pounds of uranium oxide @ 0.25% U3O8. Development at Lowboy commenced in 1959 with low levels of production @ 0.26% U3O8 which RM Capital understands ceased due to high transport costs associated with ore haulage.

	JORC inferred resources of Apex and Lowboy are:
--	-------------------------------------------------

TABLE 5: Apex-Lowboy Resources (Cut-off grade 0.02% U3O8)
Tonnes	Grade	Content in Kg	Content in Pounds
1,005,200	0.07% U3O8	703,700	1,548,100

Scoping Study

A Scoping Study based on the extensive historical database of Apex-Lowboy was completed in mid 2007 by Uranium King and contemplated a 1.4 million pound U3O8 heap leach operation with variable mining rates including a relatively short 2-3 year mine life option. As part of this study, further underground sampling and data processing was undertaken together with further leach tests by Hazen Research, Inc of Colorado.

In addition, Uranium King undertook a detailed review of the exploration potential of the tenements and the potential to host further U3O8 mineralisation.

Metallurgical testwork by Uranium King together with previous work has demonstrated that the Apex mineralisation has good leach characteristics. As part of the scoping study, additional test work was carried out using three sized fractions which were each bottle rolled tested using sulphuric acid and ferric oxidant.

TABLE 6: Apex-Lowboy leach characteristics

Fraction	Leach time	Uranium Recovery
-9.5mm +0.6mm	96 Hours	76%
-0.6 mm +0.075mm	48 Hours	82%
-0.075 mm	24 hours	83%

6.2 Historical Balance Sheets

TABLE 7: Uranium King Historical Balance Sheet	Group		Company
Year Ending 30th June	2007	2006	2007	2006
	\$	\$	\$	\$
Current Assets
Cash and cash equivalents	\$6,276,532.00	\$320,598.00	\$6,227,413.00	\$320,598.00
Trade and other receivables	\$56,565.00	\$3,468.00	\$8,970.00	\$3,468.00
Other current assets	-	\$12,133.00	-	\$12,133.00
Total Current Assets	\$6,333,097.00	\$336,199.00	\$6,236,383.00	\$336,199.00
Non-Current Assets
Other financial assets	-	-	\$334,225.00	-
Property, plant and equipment	\$151,810.00	-	-	-
Exploration and evaluation expenditure	\$1,560,415.00	\$169,368.00	\$465,533.00	\$169,368.00
Receivables	-	-	\$911,898.00	-
Total Non-Current Assets	\$1,712,225.00	\$169,368.00	\$1,711,656.00	\$169,368.00
TOTAL ASSETS	\$8,045,322.00	\$505,567.00	\$7,948,039.00	\$505,567.00
Current Liabilities
Trade and other payables	\$169,432.00	\$512,448.00	\$72,149.00	\$512,448.00
TOTAL LIABILITIES	\$169,432.00	\$512,448.00	\$72,149.00	\$512,448.00
NET ASSETS	\$7,875,890.00	-\$6,881.00	\$7,875,890.00	-\$6,881.00
Equity
Contributed equity	\$8,665,920.00	\$7,675.00	\$8,665,920.00	\$7,675.00
Foreign currency translation reserve	-\$155,306.00	-	-	-
Option reserve	\$93,244.00	\$13,320.00	\$93,244.00	\$13,320.00
Accumulated losses	-\$727,968.00	-\$27,876.00	-\$883,274.00	-\$27,876.00
TOTAL EQUITY	\$7,875,890.00	-\$6,881.00	\$7,875,890.00	-\$6,881.00

6.3 Historical Income Statements

TABLE 8: Uranium King Historical Income Statement	Group		Company
Year Ending 30th June	2007	2006	2007	2006
Revenue	\$ \$253,676	\$ \$6,501	\$ \$246,503	\$ \$6,501
Occupancy costs	-\$42,736	-\$738	-\$15,833	-\$738
Employee benefits expense	-\$225,327	-\$13,320	-\$225,327	-\$13,320
Professional fees	-\$71,931	-\$9,152	-\$71,931	-\$9,152
Travel	-\$87,774	-\$9,606	-\$79,830	-\$9,606
Administration costs	-\$86,474	-\$1,561	-\$39,820	-\$1,561
Insurance	-\$43,950	-	-\$1,208	-
Impairment of loan to controlled entity	-	-	-\$272,376	-
Foreign exchange loss	-\$395,576	-	-\$395,576	-
Loss before income tax expense	-\$700,092	-\$27,876	-\$855,398	-\$27,876
Income tax expense	-	-	-	-
Net loss attributable to members of the company	-\$700,092	-\$27,876	-\$855,398	-\$27,876
Basic loss per share (cents per share)	(0.9 cents)	(2.1 cents)
Diluted loss per share (cents per share)	(0.9 cents)	(2.1 cents)

7.0 BASIS OF EVALUATION

In preparing this report, RM Capital has considered the relevant ASIC regulatory guidelines in particular RG 111 which relates to the content of experts reports.

8.0 VALUATION METHODOLOGIES

8.1 Fair Market Value of Mineral Assets

Mineral assets are defined in the VALMIN Code as all property including, but not limited to real property, mining and exploration tenements held or acquired in connection with the exploration, the development of and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements. The VALMIN Code defines the value, that is fair market value, of a mineral asset as the estimated amount of money or the cash equivalent of some other consideration for which, in the opinion of the Expert or Specialist reached in accordance with the provisions of the VALMIN Code, the mineral asset should change hands on the valuation date between a willing buyer and a willing seller in an arms length transaction, wherein each party has acted knowledgeably, prudently and without compulsion.

In effect, therefore, the valuation expert is assumed to have the knowledge and experience necessary to establish a realistic value for a mineral asset. The real value of a tenement can only be established in an open market situation, where an informed public is able to bid for an asset. The most open and public valuation of mineral assets occur when they are sold to the public through a public share offering by a company wishing to become a public listed resource company, or by a company raising additional finance. In this instance, the public is given a free hand to make the decision, whether to buy or not buy shares at the issue price, and once the shares of the company are listed, the market sets a price.

It is well known to most valuation experts that where mineral tenement valuation is concerned there really are two quite distinct markets operating in Australia. Almost without exception, the values achieved for mineral assets sold through public flotation are higher than where values are established through, say, the cash sale by a liquidator, or the sale by a small prospector to a large company neighbour, or through joint venture arrangements.

It is our opinion, that in all these circumstances the terms of sale generally do not meet the criteria laid out in the VALMIN Code for fair market value (ie. transaction between a willing buyer, willing seller in an arms length transaction, wherein each party had acted knowledgeably, prudently and without compulsion). Invariably one of the parties is a less than enthusiastic participant and it can't be said that the purchase or sale is without an element of compulsion.

It is RM Capital's opinion that the fair market value of mineral assets should be valued by the Expert on the assumption that they are traded by vending them into a public float. Generally this will mean that the vendor is issued escrow shares (escrow period is usually two years). Importantly, this is a true cash sale situation, since the purchaser of the tenements (the public) is always expected to pay cash.

The VALMIN Code notes that the value of a mineral asset usually consists of two components, the underlying or Technical Value and the Market component which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or zero. When the Technical and Market components of value are added together the resulting value is referred to as the Market Value.

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change. Other factors that can influence the valuation of a specific asset include the size of the company's interest, whether it has sound management and the professional competence of the asset's management. All these issues can influence the market's perception of a mineral asset over and above its technical value.

8.2 Methods of Valuing Mineral Assets in the Exploration Stage

When valuing an exploration or mining property the Expert is really attempting to arrive at a value that reflects the potential of the property to yield a mineable ore reserve and which is, at the same time, in line with what the property will be judged to be worth when assessed by the market. Arriving at the value estimate by way of a desktop study is notoriously difficult because there are no hard and fast rules and no single industry-accepted approach.

It is obvious that on such a matter, based entirely on professional judgement, where the judgement reflects the valuation Expert's previous geological experience, local knowledge of the area, knowledge of the market and so on, that no two valuers are likely to have identical opinions on the merits of a particular property and therefore, their assessments of value are likely to differ - sometimes markedly.

The most commonly employed methods of exploration asset valuation are:

• Multiple of exploration expenditure method (exploration based) also known as the premium or discount on costs method or the appraised value method;
• Joint venture terms method (expenditure based);
• Yardstick Method (asset based), for example using rule of thumb for JORC resources;
• Geoscience rating methods such as the Kilburn method (potential based); and
• Comparable market value method (real estate based).

It is possible to identify positive and negative aspects of each of these methods. It is notable that most valuers have a single favoured method of valuation for which they are prepared to provide a spirited defence and, at the same time present arguments for why other methods should be disregarded. The reality is that it is easy to find fault with all methods since there is a large element of subjectivity involved in arriving at a value of a tenement no matter which method is selected. It is obvious that the Expert valuer must be cognisant of actual transactions taking place in the industry in general to ensure that the value estimates are realistic.

In RM Capital's opinion a geologist charged with the preparation of a tenement valuation must give consideration to a range of technical issues as well as make a judgement about the "market". Key technical issues that need to be taken into account include:

• geological setting of the property;
• results of exploration activities on the tenement;
• evidence of mineralisation on adjacent properties; and
• proximity to existing production facilities of the property.

In addition to these technical issues the valuation Expert has to take particular note of the market's demand for the type of property being valued. Obviously this depends upon professional judgement. As a rule, adjustment of the technical value by a market factor must be applied most judiciously. It is RM Capital's view that an adjustment of the technical value of a mineral tenement should only be made if the technical and market values are obviously out of phase with each other.

It is RM Capital's opinion that the current market in Australia may pay a premium over the technical value for high quality mineral assets (ie. assets that hold defined resources that are likely to be mined profitably in the short-term or projects that are believed to have the potential to develop into mining operations in the short term even though no resources have been defined). On the other hand exploration tenements that have no defined attributes apart from interesting geology or a "good address" may well trade at a discount to technical value. Deciding upon the level of discount or premium is entirely a matter of the Experts professional judgement. This judgement must of course take account of the commodity potential of the tenement. Currently in Australia for example, a tenement may have an elevated value for its gold, base metals, uranium and iron ore potential. There are of course numerous factors that affect the value such as proximity to an established processing facility and the size of the land holding.

Kilburn Method

RM Capital is of the view that the Kilburn method provides one appropriate technical valuation method of the exploration potential of mineral properties on which there are no JORC compliant resources.

Kilburn was a Canadian mining engineer who was concerned about the haphazard way in which exploration tenements were valued and proposed an approach which essentially requires the valuer to justify the key aspects of the valuation process. The valuer must specify the key aspects of the valuation process and must specify and rank aspects which enhance or downgrade the intrinsic value of each property. The intrinsic value is the base acquisition cost ("BAC") which is the average cost incurred to acquire a base unit area of mineral tenement and to meet all statutory expenditure commitments for a period of 12 months. Different practitioners use slightly differing approaches to calculate the BAC.

The successful application of this method depends on the selection of appropriate multipliers that reflect the tenement prospectivity. There is, furthermore, the expectation that the outcome reflects the market's perception of value. RM Capital is philosophically attracted to the Kilburn type of approach because it at least makes an attempt to implement a system that is systematic and defendable. It endeavours to take account of the key factors that can be reasonably considered to impact on the exploration potential. The keystone of the method is the BAC which provides a standard base from which to commence a valuation. The acquisition and holding costs of a tenement for 1 year provides a reasonable, and importantly, consistent starting point. Presumably when a tenement (EL, MLN or MCN) is pegged for the first time by an explorer the tenement has been judged to be worth at least the acquisition and holding cost.

Some argue that on occasions it is expedient to convert say an EL to a MLN or MCN for strategic rather than exploration success reasons and hence it is unreasonable to value such a MLN or MCN starting at a relatively high BAC compared to that of an EL. In our opinion the multiplier factors will take care of this issue and will value the tenement appropriately.

	TABLE 9: Kilburn Rating Criteria
Rating	Off Property Factor	On property factor	Anomaly factor	Geological factor
0.1				Generally Unfavourable lithology
0.2				Generally Unfavourable lithology & structures
0.3 0.4				Generally favourable lithology & structures (10-20%)
0.5			Extensive previous exploration with	Alluvium covered
			poor results	generally favourable lithology (50%)
0.6
0.7
0.8				Generally favourable lithology (50%)
0.9
1	No known mineralisation	No known mineralisation	No targets outlined	Generally favourable lithology (70%)
1.5	Minor workings	minor workings		Generally favourable lithology
2	Several old workings	Several old workings		Generally favourable lithology with structures
2.5	Abundant workings	Abundant workings	Several well defined targets	Generally favourable lithology with structures
3			Several significant subeconomic intersections	along strike of a major mine
	Abundant workings/mines, significant historical		Abundant workings/mines with significant historical
3.5	production		production
4 4.5
3.5	Abundant workings/mines with significant	Major mine with significant	Several significant ore grade correlatable
10	historical production Along strike from world class mine (s)	historical production	intersections

It has also been argued that the Kilburn method is a valuation-by-numbers approach. In our opinion the strength of the method is that it reveals to the public, in the most open way possible, just how a tenement's value was arrived at. It is anything but misleading for the public and is indeed the only approach that lays out, for all to see, the subjective judgements made by the valuation Expert.

The successful application of this method depends on the selection of appropriate multipliers that reflect the tenement prospectivity. There is, furthermore, the expectation that the outcome reflects the market's perception of value. RM Capital is philosophically attracted to the Kilburn type of approach because it at least makes an attempt to implement a system that is systematic and defendable. It endeavours to take account of the key factors that can be reasonably considered to impact on the exploration potential. The keystone of the method is the BAC which provides a standard base from which to commence a valuation. The acquisition and holding costs of a tenement for 1 year provides a reasonable, and importantly, consistent starting point. Presumably when a tenement (EL, MLN or MCN) is pegged for the first time by an explorer the tenement has been judged to be worth at least the acquisition and holding cost.

8.3 Methods of Valuing Mineral Resources and Ore Reserves

Where resources and/or ore reserves have been defined our approach is to excise them from the mineral property and to value them separately on a value per resource tonne basis or on the basis of a discounted cashflow ("DCF"). The value of the exploration potential of the remainder of the property can then be assessed. Where appropriate, discounts are applied to the estimated contained metal to represent uncertainty in the information.

Once a resource has been assessed for mining by considering revenues and operating costs the economically viable component of the resource becomes the ore reserve. When this is scheduled for mining and all capital costs are considered, the net present value ("NPV") of the project is established by discounting future annual cashflows using an appropriate discount rate. The resulting "classical" NPV has numerous deficiencies which are linked to the fact that the method assumes a static approach to investment decision making which is obviously not the case. Nevertheless the NPV represents the only practical approach to valuing a proposed or on-going mining operation.

When only a resource has been outlined and its economic viability has still to be established (ie. There is no ore reserve) then typically a "rule of thumb" approach is usually applied. This means allocating a dollar value to the resource tonnes in the ground.

The quality of the resource tonnes and therefore value is a factor of:

• the grade of the resource;
• the proximity to infrastructure such as an existing mill, roads, power, water, skilled work force, equipment, etc;
• likely operating and capital costs;
• the amount of pre strip (for open pits) or development (for underground mines) necessary;
• the likely ore to waste ratio (for open pits); and
• the overall confidence in the resource.

9.0 VALUATION

9.1 Monaro Mining Valuation Methodology

Given the current status of Monaro Mining's tenements which remain in the exploration stage, our view is that the Kilburn Method and Quoted Market Price are the two applicable valuation methodologies.

9.1.1 Kilburn Method

In determining the BAC for Monaro Mining's tenements, RM Capital has considered the following:

• Zona Noblus LCC is a wholly owned subsidiary of Monaro Mining NL
• All licences were approved for an initial 2 year period. Thereafter, renewal of each licence, whether in whole or part, is dependent on whether the Company wishes to further explore and develop the licence, subject to it meeting minimum statutory requirements. In the case of the Zona Noblus tenements, other relevant issues include:
• o Expenditure commitments are approximately \$50US/km2 for basic exploration works and \$1,000/km² for detailed works;
• o The maximum size of any exploration licence is 1000km² ;
• o Exploration licences are transferable;
• o Licences are automatically renewed for a further 2 years, provided the initial licence conditions are fulfilled;
• Expenditures for Kyrgyz properties are in US dollars and for all other tenements, in Australian dollars.

• All expenditures are annual unless otherwise stated.

• Includes all precious and base metals.

• RM Capital recognises that there are extra costs associated with exploration and mining tenements in the Northern Territory including sacred site clearances, negotiations with traditional landowners and the Northern Land Council and compensation payments to conduct mining and exploration activities.

The multipliers or ratings and the criteria for rating selection are summarised in Tables 10 and 11.

	TABLE 10: Monaro Mining Tenement Summary
Tenement	Name	Area	Registered Holder	BAC	Share	Application	Expiry
						Date	Date
KYRGY Uranium
MP33	Aramasu	576	Zona Noblus	\$263,000	100%	24/02/2005	31/12/2008
MP32	Utor Zona	710	Zona Noblus	\$316,210	100%	24/02/2005	31/12/2008
MP29	Naryn	366	Zona Noblus	\$158,000	100%	27/02/2005	31/12/2008
MP30	Sumsar	270	Zona Noblus	\$210,000	100%	24/02/2005	31/12/2008
AP357	Gavasai	331	Zona Noblus	\$26,000	100%	12/01/2008	12/01/2008
MP31	Sogul	555	Zona Noblus	\$1,840,000	100%	24/02/2005	21/12/2008
MP285	Djurasay	386	Zona Noblus	\$59,000	100%	21/10/2005	21/10/2007
MP286	Hodjaakan	776	Zona Noblus	\$74,000	100%	21/10/2005	21/10/2007
AUSTRALIA: NSW
EL6356	Mt Paynter	81	Monaro Mining	\$44,000	30%	10/12/2004	9/12/2008
EL6358	Mayfield	97	Monaro Mining	\$66,000	30%	24/12/2004	23/12/2008
EL6376	Michelago	267	Monaro Mining	\$129,000	100%	10/02/2005	9/12/2009
EL6550	Michelago South	14	Monaro Mining	\$14,000	100%	5/04/2006	4/04/2008
EL6381	Captains Flat	246	Monaro Mining	\$121,000	25%	22/02/2005	21/02/2009
EL6691	Mayfield North	302	Monaro Mining	\$76,000	100%	22/12/2006	21/12/2008
EL6694	Wymah	140	Monaro Mining	\$46,000	30%	5/01/2007	4/01/2009
AUSTRALIA: QUEENSLAND
EPM 16184 EPM 15711	Red Bull Red Bull extended	102 225
EPM 15710	Mt Fort Bowen	285
EPM 15712	Mt Brown	300
EPM 16475	Mt Brown Extended	285
EPM 16471	Mt Brown Extended	285
EPM 16473	Mt Brown Extended	279
EPM 16469	Mt Brown Extended	300
AUSTRALIA: NT
EL25399	Compass Creek	53	Hapsburg Exploration	\$110,000	100%
EL25406	Fog Bay	77	Hapsburg Exploration	\$90,000	100%
AUSTRALIA: WA
E 09/1331	Collins Springs	512	Hapsburg Exploration	\$165,000	100%
E 09/1333	Coor-de-Wandy Hill	586	Hapsburg Exploration	\$190,000	100%
E 09/1336	Yalbra Hill	413	Hapsburg Exploration	\$134,000	100%
E 09/1345	Granite Hills	351	Hapsburg Exploration	\$114,000	100%

	TABLE 11: Monaro Mining Kilburn Valuation
Tenement	Name		*Off		**On		Anomaly	Geology		Application	Expiry	Low	High	Preferred
			Property		Property					Date	Date
KYRGY Uranium
MP33	Aramasu	1.5	2	2	2.5	5	5.5	2.5	3	24/02/2005	31/12/2008	\$3,616,250	\$4,273,750	\$3,945,000
MP32	Utor Zona	1.5	2	2	2.5	5	5.5	2	2.5	24/02/2005	31/12/2008	\$4,150,256	\$4,940,781	\$4,545,519
MP29	Naryn	1.5	2	2	2.5	5	5.5	2.5	3	27/02/2005	31/12/2008	\$2,172,500	\$2,567,500	\$2,370,000
MP30	Sumsar	1.5	2	2	2.5	5	5.5	2.5	3	24/02/2005	31/12/2008	\$2,887,500	\$3,412,500	\$3,150,000
AP357	Gavasai	1.5	2	2	2.5	5	5.5	2.5	3	12/01/2008	12/01/2008	\$357,500	\$422,500	\$390,000
MP31	Sogul	1	1.5	1.5	2	2	2.5	2	2.5	24/02/2005	21/12/2008	\$14,950,000	\$19,550,000	\$17,250,000
MP285	Djurasay	1	1.5	1	1.5	1	1.5	1	1.5	21/10/2005	21/10/2007	\$295,000	\$442,500	\$368,750
MP286	Hodjaakan	1	1.5	1	1.5	1	1.5	1.5	2	21/10/2005	21/10/2007	\$416,250	\$601,250	\$508,750
AUSTRALIA: NSW
EL6356	Mt Paynter	1.5	2	2	2.5	5	5.5	2.5	3	10/12/2004	9/12/2008	\$181,500	\$214,500	\$198,000
EL6358	Mayfield	1	1.5	1	1.5	1	1.5	1	1.5	24/12/2004	23/12/2008	\$99,000	\$148,500	\$123,750
EL6376	Michelago	1	1.5	1	1.5	1	1.5	1	1.5	10/02/2005	9/12/2009	\$645,000	\$967,500	\$806,250
EL6550	Michelago Sth	1	1.5	1	1.5	1	1.5	1	1.5	5/04/2006	4/04/2008	\$70,000	\$105,000	\$87,500
EL6381	Captains Flat	1.5	2	2	2.5	5	5.5	2.5	3	22/02/2005	21/02/2009	\$415,938	\$491,563	\$453,750
EL6691	Mayfield North	1	1.5	1	1.5	1	1.5	1	1.5	22/12/2006	21/12/2008	\$380,000	\$570,000	\$475,000
EL6694	Wymah	1.5	2	2	2.5	5	5.5	2.5	3	5/01/2007	4/01/2009	\$189,750	\$224,250	\$207,000
	AUSTRALIA: QUEENSLAND
EPM 16184	Red Bull
EPM 15711	Red Bull Ext
EPM 15710	Mt Fort Bowen
EPM 15712	Mt Brown
EPM 16475	Mt Brown Ext
EPM 16471	Mt Brown Ext
EPM 16473	Mt Brown Ext
EPM 16469	Mt Brown Ext
AUSTRALIA: NT
EL25399	Compass Ck	1	1.5	1	1.5	1	1.5	1	1.5			\$550,000	\$825,000	\$687,500
EL25406	Fog Bay	1	1.5	1	1.5	1	1.5	1	1.5			\$450,000	\$675,000	\$562,500
AUSTRALIA: WA
E 09/1331	Collins Springs	1	1.5	1	1.5	1	1.5	1	1.5			\$825,000	\$1,237,500	\$1,031,250
E 09/1333	Coor-de-Wandy Hill	1	1.5	1	1.5	1	1.5	1	1.5			\$950,000	\$1,425,000	\$1,187,500
E 09/1336	Yalbra Hill	1	1.5	1	1.5	1	1.5	1	1.5			\$670,000	\$1,005,000	\$837,500
E 09/1345	Granite Hills	1	1.5	1	1.5	1	1.5	1	1.5			\$570,000	\$855,000	\$712,500
	Monaro Mining Kilburn Valuation											\$34,841,444	\$44,954,594	\$39,898,019
Add Premium (25%)												\$43,551,805	\$56,193,243	\$49,872,524
	Subtract Non-Mineral Assets + listed shell value											\$9,578,785	\$9,578,785	\$9,578,785
	Monaro Mining Kilburn Valuation/Sh											\$0.86	\$1.18	\$1.02

**Off Property – This refers to exploration that was conducted outside of the project area in question (but outside the current tenements) that would either improve, decrease or make no difference to the prospectivity of the project area.

*On Property – This refers to exploration that was conducted on the property in question that would either improve, decrease or make no difference to the prospectivity of the project area.

In arriving at a technical value for Monaro Mining's tenements, RM Capital has taken into consideration the company's equity position if the tenements are subject to a farm-in, joint venture or option to purchase arrangement. RM Capital has placed no value on tenement applications.

In arriving at a fair market value for Monaro Mining's tenements, RM Capital has considered the current market for uranium exploration properties in Australia. RM Capital is of the opinion that it is appropriate to apply a market premium of 25% to the technical value of the exploration potential of Monaro Mining's tenements given the

strength of uranium prices relative to the recent highs recorded (see Uranium Price Chart – Other Key Factors, page 36) and therefore the market for these types of exploration properties to Australia public listed companies.

9.1.2 Quoted Market Price of Securities

RM Capital has assessed ASX market price for Monaro Mining's securities to determine the value of Monaro Mining before the Transaction. The following chart (figure 18) provides a summary of the high-low-close open share price and volumes of Monaro Mining Shares over the last 12 months including the day prior to the announcement of the Transaction (11th October 2007).

FIGURE 18: Monaro Mining Share Price History

Notes:

1 Volume is daily volume traded on market.

2 Share price is weighted average on market price for the same period.

3 On 11th October 2007 Uranium King announced the proposed merger with Monaro Mining.

The daily price of Monaro Mining Shares from 31st March 2007 to 31st March 2008 has varied from a high of A\$2.75 on 10th April 2007 to a low of A\$0.385 on 25th March 2008.

In order to quarantine the implied share price of the underlying mineral assets the market capitalisation has been adjusted for other assets giving an adjusted high of A\$2.50 on 10th April 2007 and a low of A\$0.135 on 25th March 2008.

Weighted Average Market Price

RM Capital has also considered the weighted average market price for 10, 30 and 60 day periods leading up to the merger announcement on 11th October 2007.

TABLE 12: Monaro Mining Shares	11-Oct-07	10 days	30 days	60 days
Closing Price (cents per share)	81.9
Weighted Average Price (cents per share)		79.4	78.8	92.6

Analysis of the Monaro Mining share price history indicates that there was comparatively little movement in the share price that can be specifically related to any announcements or significant company events leading up to the merger announcement with Uranium King.

Valuation Based on Market Price

Based on the weighted average market prices in section 9.1.2 RM Capital's assessment is that a range of values for Monaro Mining securities based on market prices is as follows:

	High
ASX Market Price (cents per share) 78.8	92.6

9.1.3 Valuation Summary of Monaro Mining

The results are summarized in table 14:

TABLE 14: Monaro Mining Pre-Transaction valuation	Section	Low	High
Kilburn Valuation Method (cents per share)	9.1.1	86	118
ASX Valuation (cents per share)	9.1.2	79	93
RM Capital Valuation (cents per share)		83	1.06

9.2 Uranium King Valuation Methodology

Given the more advanced status of Uranium King's tenements which comprise predominantly JORC Resources together with Scoping Studies suggests that Discounted Cash Flow Methods and Asset Based valuation methods, in addition to quoted market price, can be applied to determine the valuation of Uranium King.

9.2.1 Quoted Market Price of Securities

RM Capital has assessed ASX market price for Uranium King's securities to determine the value of Uranium King before the Transaction. The following chart (figure 19) provides a summary of the high-low-close open share price and volumes of Uranium King Shares over the last 12 months including the day prior to the announcement of the Transaction (10 th October 2007).

FIGURE 19: Uranium King Share Price History

Notes:

1 Volume is daily volume traded on market.

2 Share price is weighted average on market price for the same period.

3 On 11th October 2007 Uranium King announced the proposed merger with Monaro Mining.

The daily price of Uranium King Shares from 31 March 2007 to 31 March 2008 has varied from a high of A\$1.47 on 22nd May 2007 to a low of A\$0.25 on 31st March 2008 or following the adjustment for the value of the listed shell and other Non-Mineral assets, a high of A\$1.36 on 22nd May 2007 and a low of A\$0.14 on 31 March 2008.

Weighted Average Market Price

RM Capital has also considered the weighted average market price for 10, 30 and 60 day periods leading up to the merger announcement on 11th October 2007.

11-Oct-07	10 days	30 days	60 days
63.9
	59.6	56.4	64.3

Valuation Based on Market Price

Based on the weighted average market prices in section 9.2.1 RM Capital's assessment is that a range of values for Uranium King's securities is as follows:

TABLE 16: Uranium King's Valuation per Share	Low	High
ASX Market Price (cents per share)	56.4	64.3

9.2.2 Asset Based – Yardstick Method

One of the valuation approaches applied to Advanced Exploration Areas and Predevelopment Projects is the so-called 'in situ Mineralization Method' or the 'Yardstick Method'. This method is based on the concept of a known undeveloped Mineral Resource being worth a certain fraction (the 'Yardstick') of the contained commodity value ('metal in ground'), using commodity prices ruling at the date of valuation.

The Yardstick value can derived from an average market-based figure obtained from an analysis of recent transactions and is expressed as a monetary value per unit of commodity, for example per tonne or per pound of contained metal. It may be modified to accommodate the quality (e.g. grade) and category (e.g. confidence level) of the Mineral Resource/Reserve involved and the time, effort and expenditure expected to be involved in bringing the project to fruition. Given the relatively limited number of transaction involving uranium resources, it was considered more appropriate to examine ASX listed uranium explorers that had JORC resources.

The methodology involved subtracting net cash (current assets less debt) and dividing this adjusted market capitalisation by the total resources (inclusive of reserves) to calculate an adjusted Enterprise Value per pound of JORC compliant U3O8 (Equivalent). Some adjustment was necessary in the case of explorers that contained other economic or potentially economic minerals/metals.

Some twenty five ASX listed companies were analysed and are set out in figure 20. It should be noted that all of these companies listed in figure 20 have reported JORC resources and not reserves.

In this case, given the JORC compliant resources, it is possible to value the resources at both Lowboy and Apex to other ASX listed companies with JORC compliant resources. Figure 20, summarises the known JORC resources measured by market capitalisation divided by total resources.

This analysis implies that the Apex-Lowboy resources are trading at a modest premium on an adjusted Enterprise Value per pound of JORC compliant U3O8 (Equivalent) of A\$14.20 per pound which is above average compared to comparable ASX listed companies. Notably, a Scoping Study has been completed (section 6.1.2) that indicates there is good potential for converting resources to reserves sufficient to sustain an economically viable operation. On the other hand the mine life appears relatively short however this is compensated by the exploration upside on the project area.

This analysis suggests that it would not be unreasonable to value the Apex-Lowboy resources at an average adjusted Enterprise Value per pound of JORC compliant U3O8 (Equivalent) at an upper quartile valuation of A\$16.0/per pound.

The results of the pre Transaction valuations are summarized in table 17:

TABLE 17: Uranium King Yardstick valuation summary	EV Val / lb U308	Value/Sh
Lower Case	A\$11.1	A\$0.80
Mid Case	A\$14.2	A\$1.00
Upper Case	A\$16.0	A\$1.13
RM Capital Preferred Valuation (cents per share)	A\$14.2	A\$1.00

Based on the closing price of A\$0.746 prior to the announcement of the proposed Merger with Monaro Mining, Uranium King is trading at a discount of 25.4% to its valuation based on Yardstick method of valuation.

9.2.3 Discounted Future Cash Flows

The Discounted future cash flows ("DCF") methodology is based on the generally accepted theory that the value of an asset or business depends on the future net cash flows discounted to their present value at an appropriate discount rate. This discount rate reflects an opportunity cost of capital reflecting the expected rate of return, which investors can obtain from investments having equivalent risks.

The DCF valuation method requires the determination of future cash flows and then discounting those cash flows to present values using a discount rate. For the purposes of RM Capital's valuation, the cash flow forecasts prepared by Uranium King were reviewed by RM Capital.

RM Capital has reviewed these forecasts and checked the arithmetical accuracy of this financial model.

On the basis of RM Capital's review of the forecasts, it can be concluded that:

• i. Nothing has come to the attention of RM Capital that causes us to believe that Uranium King's' estimates do not provide a reasonable basis for the preparation of the forecasts;
• ii. The forecasts have been properly prepared on the basis of the best estimates, and
• iii. Actual results are likely to differ from the forecasts used in this valuation, as anticipated events frequently do not occur as expected and the variation may be material, in particular with the forecast of results from evolving businesses.

The DCF approach requires the determination of an appropriate discount rate. This is usually calculated as the weighted average cost of capital ("WACC") that reflects the company's cost of debt and equity weighted by the company's debt and equity structure. RM Capital have adopted an estimate of WACC through an intuitive process, on the basis that in the context of Uranium King, the adoption of the formal capital asset pricing model to derive an estimate of WACC would have been difficult to apply.

RM Capital has considered the inherent risks and circumstances surrounding Uranium King's business, specific market risks and degree of uncertainty.

TABLE 18: APEX-LOWBOY Scoping Study	Base Case
REVENUE (USD\$/m)	\$142.90
CAPEX (USD\$/m)	\$25.83
OPEX (USD\$/m)	\$55.45
ROYALTIES (5%)	\$7.15
EBIT (USD\$)	\$80.30
NET PRESENT VALUE (10% Discount Rate)	\$34.63
U3O8 Recoveries (%)	95%
Uranium Price (US\$)	90.00
IRR (%)	96.6%
MINE LIFE (yrs)	3
PAYBACK PERIOD (yrs)	0.9

The results of this Scoping Study together with a sensitivity analysis are summarised as follows:

A Sensitivity Analysis was also undertaken and took into consideration variations in the Uranium Price, Capital Costs and Operating Costs.

TABLE 19: APEX-LOWBOY Sensitivity Analysis
Uranium Sensitivity	-10%	0%	10%
NET PRESENT VALUE (A\$m)	\$29.06	\$34.63	\$47.70
NET PRESENT VALUE (A\$/Sh)	\$0.34	\$0.40	\$0.55
CAPEX Sensitivity	-10%	0%	10%
NET PRESENT VALUE (A\$m)	\$36.74	\$34.63	\$32.53
NET PRESENT VALUE (A\$/Sh)	\$0.43	\$0.40	\$0.38
OPEX Sensitivity	-10%	0%	10%
NET PRESENT VALUE (A\$m)	\$38.39	\$34.63	\$30.87
NET PRESENT VALUE (A\$/Sh)	\$0.45	\$0.40	\$0.36

RM Capital's DCF valuation of Apex-Lowboy has been discounted by a further 20% due to the following factors:

• i. Technical Risks associated with the uranium mining operations;
• ii. Scoping Studies are preliminary studies that have a level of certainty in the range of around +/- 20%;
• iii. Commodity Price Fluctuations-Adverse movements in the price of uranium may affect the commercial viability of uranium mining and hence the longevity of mining contracts;
• iv. Exchange Rate Risk-Adverse movements in the A\$:US\$ may have a negative impact on the cost of capital items;
• v. Limited Operating History-Uranium King has a limited operating history and there are risks associated with operating and managing mining companies;
• vi. Permitting Risks-No new uranium mines have been commissioned in Nevada in recent times and there is a risk that such permits required to progress the project into production may not be forthcoming.

The following table (table 20) summarises the DCF valuation outcomes for the Apex-Lowboy project.

TABLE 20: Uranium King Yardstick valuation summary	A\$m	Value/Sh
Lower Case	\$23.25	\$0.27
Base Case	\$27.71	\$0.32
Upper Case	\$38.16	\$0.44
RM Capital Preferred Valuation	\$38.16	\$0.44

It is notable that this DCF valuation appears undervalued compared to the Market Valuation (section 9.2.1) and the Yardstick Valuation (section 9.2.2) which is possibly a reflection on the markets view that there is further exploration upside at Apex-Lowboy and therefore a good chance of extending the mine life beyond the current two to three year scenario.

OTHER KEY FACTORS Exploration Potential

This Scoping Study takes no account of the exploration upside on the project area. It is notable that this project is based on total production of 2.0m lbs of U3O8 however Uranium King is targeting a global resource of in excess of 10.0 million of U3O8. This is highly speculative however the author considers there is excellent exploration upside on the project area.

Uranium Price Outlook

The spot uranium price is currently around USD\$71/lb which is up similar to the price recorded 12 months previously but down from its high of USD\$138/lb recorded in mid 2007. Forward indicators suggest a relatively flat short-term outlook for uranium ranging from USD\$90/lb to around USD\$100/lb. Forward indicators currently suggest uranium prices are expected to move towards USD\$120/lb by mid- late 2008.

The September 2008 indicator reached a high in 2Q07 of around USD\$210/lb and a low in 3Q07 of around US\$70/lb however the industry average long term uranium price has remained at around US\$95/lb.

Funds exposed to uranium are believed to hold approximately 20-25 million pounds of U3O8, compared to the annual spot market volume of 18-28 million pounds.

The drivers of the recent spot market pull back have been:

• ♦ Utilities near term demand needs covered.
• ♦ Primary producers near term demand needs covered.
• ♦ Uranium investment funds started to sell inventory.
• ♦ Traditional slow period during the northern hemisphere summer.

Overall, fundamentals remain strong with strong and increasing demand for new nuclear power reactors, especially from China, USA, Russia, Ukraine and India.

World nuclear power reactors continue to expand Planned and proposed new nuclear power reactors worldwide continue to increase. From January 2007 to October 2007 there was an increase of 94 reactors from 222 reactors (Jan. '07) to 316 reactors (Oct. '07), an increase of 42% in 10 months and an increase of 107% from 153 reactors 18 months ago (May '06). This compares with 439 nuclear power reactors currently in operation.

Important events of the previous three months include:

Industry

• ♦ Australian Labor Party won the federal election in Nov. 2007 –concern about climate change was a high profile issue.
• ♦ The EU's director general of Transport and Energy affirmed the strategic potential for nuclear power to help meet the EU's 2020 carbon emissions reduction targets. The EU parliament endorsed nuclear power as indispensable.
• ♦ The IAEA forecasts global nuclear generation to increase to between 447GWe (+25%) and 679GWe (+93%) by 2030, up from 370G3 .

9.3 Valuation Summary

9.3.1 Monaro Mining and Uranium King Valuation pre and post-transaction

The results of the pre-transaction valuations for Monaro Mining are summarized in table 21:

TABLE 21: Uranium King & Monaro Mining Pre and Post Transaction Valuations Transaction
	Uranium King (A\$m)	A\$/Sh	Monaro Mining	A\$/Sh	Merged Entity	A\$/Sh
Lower Case	\$23.25	\$0.27	\$29.33	\$0.79	\$52.58	\$0.57
Mid Case	\$60.27	\$0.70	\$37.95	\$1.02	\$98.22	\$1.07
Upper Case	\$97.29	\$1.13	\$46.56	\$1.25	\$143.85	\$1.57

10.0 INDEPENDENCE AND DISCLOSURE OF INTERESTS

Prior to accepting this engagement RM Capital considered its independence with regard to ASIC RG 111 and RG 112. RM Capital determined that it is independent of Uranium King.

RM Capital is entitled to receive a fee of approximately \$18,000 (plus GST) for the preparation of this Report, based on time costs and disbursements. The fee is payable to RM Capital regardless of the outcome of the Transaction. Except for this fee, RM Capital has not received and will not receive any pecuniary or other benefit, whether direct or indirect in connection with the preparation of this Report.

Neither the signatory to this Report nor RM Capital holds shares or options in Uranium King. No such shares or options have been held at any time over the last two years. Neither the signatory to this Report nor RM Capital has had within the past two years any business relationship material to an assessment of RM Capital's impartiality with Uranium King, or their associates.

A draft of this Report was provided to Uranium King and its advisors for their confirmation of the factual accuracy of its contents. No changes were made to the methodologies or conclusions reached in this Report as a result of this review.

³ Source: Resource Capital Research, Uranium Sector Review, December Quarter 2007

Uranium King has indemnified RM Capital in respect of any claim arising or in connection with RM Capital's reliance on information provided by Uranium King.

11.0 QUALIFICATIONS

RM Capital is an Australian Financial Services Licensee (221938) engaged in corporate finance, research, share trading, portfolio management and investment banking. Principals associated with RM Capital have been engaged in mining, exploration, valuations, experts' reports and research for approximately 20 years. The person responsible for preparing and reviewing this report is Guy Touzeau Le Page who holds a Bachelor of Arts, Bachelor of Science and Master of Business Administration (University of Adelaide), a Bachelor of Applied Science (Hons) (Curtin University of Technology) and a Graduate Diploma in Applied Finance and Investment (Financial Securities Institute of Australia). Mr Le Page is also a Member of the Australasian Institute of Mining and Metallurgy and Fellow of the Financial Securities Institute of Australia.

12.0 DISCLAIMERS AND CONSENTS

This Report has been prepared at the request of Uranium King for inclusion in the Explanatory Memorandum, which will be enclosed with the Notice of Meeting. Uranium King has engaged RM Capital to prepare this Report to consider the Transaction on behalf of Uranium King Shareholders.

RM Capital hereby consents to this Report being included in the above Explanatory Memorandum or being made available to Uranium King Shareholders at their request. Apart from such use, neither the whole nor any part of this Report, nor any reference thereto may be included in or with, or attached to any document, circular, resolution, statement or letter without the prior written consent of RM Capital.

RM Capital takes no responsibility for the contents of the Explanatory Memorandum other than this Report.

RM Capital has not independently verified the information and explanations supplied to us, nor has it conducted anything in the nature of an audit of Uranium King. RM Capital does not warrant that our enquiries have revealed all of the matters which an audit or extensive examination might disclose. However, RM Capital has no reason to believe that any of the information or explanations so supplied is false or that material information has been withheld.

The statements and opinions included in this Report are given in good faith and in the belief that they are not false, misleading or incomplete.

The terms of this engagement are such that RM Capital has no obligation to update this Report for events occurring subsequent to the date of this Report.

Yours sincerely

Guy T. Le Page. FFin, MAusIMM

DIRECTOR

RM CAPITAL PTY LTD

SOURCES OF INFORMATION

In making our assessment, RM Capital has reviewed relevant published and unpublished information on Uranium King and Monaro Mining and the relevant associated entities. In addition RM Capital has held discussions with the directors and management of Uranium King and Monaro Mining. Information received and reviewed by RM Capital includes, but is not limited to the following:

• 1. Fitch D.C> 1980) Exploration for Uranium Deposits, Grants Mineral Belt in Rautman CA (Ed) Geology and mineralogy of the Grants Uranium region, 1979: New Mexico Bureau of Mines and Mineral Resources, Memoir 38;
• 1. Hilpert LS, 1963. Regional and local stratigraphy of uranium bearing rocks in Kelley VC (ed) Geology and technology of the Grants Uranium region : New Mexico Bureau of Mines and Mineral Resources Memoir 15;
• 1. Long, B.G. (1996) Uranium in New Mexico and Nevada USA, the history, geology and technology of the grants Uranium region: New Mexico and Apex Mine Nevada (unpublished).
• 1. McDougald W.D> (1975) Economic Evaluation of Total Indicated Pounds of Uranium Oxide on the Rio Pueroco Kerr McGee leases in Sandoval Country New Mexico (unpublished);
• 1. Madiesky H.E., Chervaska A., (1996) Report on the Apex and Lowboy Uranium Properties situated in the Reese River and Birch Creek Mining Districts, Lander County Nevada USA (unpublished).
• 1. Melvin JW, 1979 Text for the geological map of Grants Uranium region: New Mexico Bureau of Mines and Minerals Resources Geological Map 31.
• 1. Nye T.S>, 1958. Geology of the Apex Uranium Mine, Lander County Nevada, MS Thesis University of California at Berkeley
• 1. Monaro Mining NL, ASX Announcement, Managing Director's Presentation AGM 2007, 28 November 2007.
• 1. Monaro Mining NL, ASX Announcement, Quarterly Activities and Cash Flow Report September 2007, 26 October 2007.
• 1. Monaro Mining NL, ASX Announcement, Annual Report 2007.
• 1. Monaro Mining NL, ASX Announcement, Proposed Merger of MRO and UKL by Scheme of Arrangement 11 October 2007
• 1. Monaro Mining NL, ASX Announcement, Full Year Statutory Accounts.
• 1. Monaro Mining NL, ASX Announcement, Operations Update 13 August 2007.
• 1. Monaro Mining NL, ASX Announcement, Fourth Quarter Activities and Cashflow Report.
• 1. Monaro Mining NL, ASX Announcement, Operations Update 19 July 2007.
• 1. Monaro Mining NL, ASX Announcement Operations Update 3 July 2007.
• 1. Monaro Mining NL, ASX Announcement Operations Update 12 July 2007.
• 1. Monaro Mining NL, ASX Announcement Farm in by Noah Resources NL 5 June 2007.
• 1. Monaro Mining NL, ASX Announcement Australian uranium operations update 29 May 2007.
• 1. Monaro Mining NL, ASX Announcement Presentation RIU Conference May 2007 8 May 2007.
• 1. Monaro Mining NL, ASX Announcement Third Quarter Cashflow Report 30 April 2007.
• 1. Monaro Mining NL, ASX Announcement Third Quarter Activities Report 27 April 2007.
• 1. Monaro Mining NL, ASX Announcement Operations Update 3 April 2007.
• 1. Monaro Mining NL, ASX Announcement Second Quarter Activities & Cashflow 31 January 2007.
• 1. Monaro Mining NL, ASX Announcement Drilling to commence on uranium prospect Kyrgyz Republic 12 January 2007.
• 1. Monaro Mining NL, ASX Announcement Drilling to commence at Jerangle NSW 11 January 2007.
• 1. Monaro Mining NL, ASX Announcement IBG: Commences drilling at Captains Flat Jerangle Prospect 11 January 2007.
• 1. Monaro Mining NL, ASX Announcement Strategic Alliance with Kentor Gold in Kyrgyz Republic 10 January 2007.
• 1. Monaro Mining NL Annual Report 9 October 2006.
• 1. Monaro Mining NL, ASX Announcement, Monaro secures exposure to uranium licences in Australia 20 September 2006.
• 1. Monaro Mining NL, ASX Announcement, Farm in Agreement with Ironbark Gold Limited Captains Flat 21 August 2006.
• 1. Monaro Mining NL, ASX Announcement, IBG: Ironbark Acquires Further Zinc/Copper Projects 21 August 2006
• 1. Resource Capital Research, Uranium Sector Review, December Quarter 2007
• 1. Uranium King, ASX Announcement, Annual Report 25 September 2007
• 1. Uranium King, ASX Announcement, Progress Report 12 September 2007
• 1. Uranium King, ASX Announcement, Annual Report 17 August 2007
• 1. Uranium King, ASX Announcement, Quarterly Activities Report 31 July 2007
• 1. Uranium King, ASX Announcement, Quarterly Cash Flow Report 31 July 2007
• 1. Uranium King, ASX Announcement, Significant Uranium Oxide Grades from Apex Sampling,14 June 2007
• 1. Uranium King, ASX Announcement, Third Quarter Activity and Cash Flow Report 30 April 2007
• 1. Uranium King, ASX Announcement, Investor Relations Presentation 09 February 2007
• 1. Uranium King, ASX Announcement, Second Quarter Activities Cash Flow Report 31 January 2007
• 1. Uranium King, ASX Announcement, Second Quarter Activities Report 31 January 2007
• 1. Uranium King, ASX Announcement, Exciting New Uranium Targets Defined at Lily Sam Project 30 January 2007
• 1. Uranium King, ASX Announcement, Completes staking at Highly Prospective Claims 28 November 2006
• 1. Uranium King, ASX Announcement, First Quarter Cash Flow Report 31 October 2006
• 1. Uranium King, ASX Announcement, Annual Report 31 October 2006
• 1. Uranium King, Prospectus, 11 August 2006

APPENDIX B

Merger Implementation Agreement

Merger Implementation Agreement

(Restated to include variations effected by deeds dated 19 March 2008 and 9 April 2008)

Uranium King Limited ABN 34 119 187 816

Monaro Mining NL ABN 99 073 155 781

LAWYERS

Level 4, 105 St George's Terrace, Perth, Western Australia 6000 | Phone +61 8 9486 8111 | Facsimile +61 8 9226 1696 PO Box Z 5312, St George's Terrace, Perth, Western Australia 6831

Contact: Kevin Dundo | kdundo@qlegal.com.au | URA1001 | © Reserved by QLegal

1.	Definitions and interpretation 1
	1.1 1.2 1.3	Definitions1 Rules for interpreting this document7 Business Days8
2.		Conditions precedent 8
	2.1 2.2 2.3 2.4 2.5 2.6 2.7	Conditions Precedent 8 Benefit of Conditions Precedent9 Fulfilment of Conditions Precedent10 Waiver of Conditions Precedent10 Best endeavours10 Notification10 Non-fulfilment 10
3.		Conduct of Business prior to Merger11
4.		Mutual obligations12
5.		Specific Uranium King obligations12
6.		Specific Monaro obligations13
7.		Uranium King Scheme 13
	7.1 7.2	Proposed Scheme structure13 Alternative Scheme structure 14
8.		Appointment of directors and Creation of Advisory Panel 14
9.		Cessation of negotiations and no solicitation15
	9.1 9.2 9.3 9.4	Cessation of negotiations 15 No solicitation - Uranium King 15 No solicitation - Monaro15 Notification of takeover proposal 15
10.		Directors' duties 16
	10.1 10.2	General16 Response to Takeover Proposal 16
11.		Release16
12.	Break fees 16
	12.1	Undertaking to reimburse fees, costs, losses and expenses of Monaro 16
	12.2	Undertaking to reimburse fees, costs, losses and expenses of Uranium King17
	12.3 12.4	Limits on compensation17 Compliance with law17
13.		Due Diligence17
	13.1 13.2 13.3	Due diligence by Monaro17 Due diligence by Uranium King 17 Assistance 17

14.	Appointment of Observer 18
15.		Public statements19
	15.1 15.2	Restriction on Announcements19 Giving of notice and draft Announcement 19
16.		Access to information by Monaro19
17.		Access to information by Uranium King20
18.		Termination20
	18.1 18.2	Right to terminate 20 Consequence of termination20
19.		Representations and warranties21
	19.1 19.2 19.3	Mutual representations and warranties 21 Uranium King representations and warranties 22 Monaro representations and warranties22
20.		Costs and stamp duty23
	20.1 20.2	Each party's responsibility 23 Monaro's responsibility 23
21.		Amendment and assignment 23
	21.1 21.2	Amendment 23 Assignment23
22.		Notices 23
	22.1 22.2 22.3	How to give a notice 23 When a notice is given 23 Address for notices24
23.		General 24
	23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 23.9 23.10	Governing Law 24 Giving effect to this document 24 Waiver of rights24 Operation of this document 25 Operation of indemnities25 Consents 25 No merger25 Inconsistency with other documents25 Counterparts25 Attorneys 26
		Schedule 1 27

Merger Implementation Agreement

(Restated to include variations effected by deeds dated 19 March 2008 and 9 April 2008)

Date

Parties Uranium King Limited ABN 34 119 187 816 Level 1, 89 St Georges Terrace, Perth, Western Australia (Uranium King) Monaro Mining NL ABN 99 073 155 781 1st Floor, 87 Colin Street, West Perth, Western Australia (Monaro)

Background

Uranium King and Monaro have agreed to implement a merger of Uranium King and Monaro by proposing a scheme of arrangement under Part 5.1 of the Corporations Act in accordance with the terms and conditions of this document.

Operative provisions

1. Definitions and interpretation

1.1 Definitions

The following definitions apply in this document:

Announcement means a press release, announcement or other public statement.

ASIC means the Australian Securities and Investments Commission.

ASX means Australian Stock Exchange Limited.

Authorisation means:

• (a) an authorisation, consent, declaration, exemption, notarisation or waiver, however it is described; and
• (b) in relation to anything that could be prohibited or restricted by law if a Government Agency acts in any way within a specified period, the expiry of that period without that action being taken,

including any renewal or amendment.

Business Day means a day that is not a Saturday, Sunday or public holiday in Perth.

Condition Precedent means a condition precedent in clause 2.1.

Controller means, in relation to a person's property:

• (a) a receiver or receiver and manager of that property; or
• (b) anyone else who (whether or not as agent for the person) is in possession, or has control, of that property to enforce an encumbrance.

Court means a court of competent jurisdiction under the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Court Approval Date means the first day on which the Court hears the application for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.

Deed Poll, means a document of that name in, or substantially in, the form set out as Error! Reference source not found. to this document.

FATA means the Foreign Acquisitions and Takeovers Act 1975 (Cth).

FIRB Approval means the occurrence of any of the following events:

• (a) Monaro receives advice from the Treasurer or his agent that there are no objections in terms of the Commonwealth Government's foreign investment policy to the acquisition of the Uranium King Shares by Monaro in accordance with this document, such advice being unconditional;
• (b) the period during which the Treasurer is empowered by FATA to make an order prohibiting the acquisition of the Uranium King Shares by Monaro in accordance with this document (other than an interim order having been made) has expired; or
• (c) if an interim order prohibiting the acquisition of the Uranium King Shares by Monaro in accordance with this document is made, the subsequent period for making a final order has expired, without such final order being made.

Government Agency means:

• (a) a government or government department or other body;
• (b) a governmental, semi-governmental or judicial person; or
• (c) a person (whether autonomous or not) who is charged with the administration of a law.

Hapsburg Heads of Agreement means the heads of agreement between Hapsburg Exploration Pty Ltd and Monaro dated 20 September 2006;

Independent Expert means the independent expert appointed by Uranium King for the purposes of preparing the Independent Expert's Report to be included in the Scheme Booklet.

Independent Expert's Report means the report to be prepared by the Independent Expert on whether the Scheme is in the best interests of Uranium King Shareholders, for inclusion in the Scheme Booklet.

Listing Rule means a Listing Rule of ASX.

Market Price means the weighted average share price for one month ending on and including the day immediately preceding the Record Date.

Meeting Date means the date on which Uranium King Shareholders vote on a resolution to approve the Scheme pursuant to section 411(4)(a)(ii) of the Corporations Act.

Merger means the implementation of the Scheme.

Monaro Board means the board of directors of Monaro.

Monaro Material means such information regarding Monaro and Monaro Shares as is required under the Corporations Act and applicable ASIC Policy Statements to be included in the Scheme Booklet.

Monaro Material Adverse Change means, in relation to Monaro, one or more occurrences or matters individually or in aggregate that:

• (a) have or could reasonably be expected to have a material adverse effect on the business, assets, financial condition, prospects or results of operations of Monaro and its subsidiaries, taken as a whole;
• (b) result, or could reasonably be expected to result, in a diminution in the value of Monaro's net assets which in aggregate exceeds \$1.0 million; or
• (c) prevent Monaro from performing its obligations under this document.

Monaro Material Adverse Matter means any matter which has occurred but is not in the public domain at the date of this document and has not been disclosed to Uranium King prior to the date of this document which:

• (a) had it occurred after the date of this document would have been a Monaro Material Adverse Change; and
• (b) had it been known prior to the date of this document the Uranium King Board would not have resolved to execute this document (acting reasonably).

Monaro Options means 2,900,000 options (subject to any adjustment as a result of the issue of options permitted by subclause 1.1(d) of the definition of Monaro Prescribed Occurrence) granted by Monaro to subscribe for Monaro Shares with expiry dates of 31 December 2008 and 19 April 2011.

Monaro Partly Paid Shares means 5,200,000 partly paid shares on issue in Monaro as at the date of this document.

Monaro Prescribed Occurrence in relation to Monaro means any of the following taking place without the prior written consent of Uranium King which shall not be unreasonably withheld:

• (a) Monaro converts all or any of its shares into a larger or smaller number of shares;
• (b) Monaro or a subsidiary of Monaro resolves to reduce its share capital in any way other than in accordance with the Scheme;
• (c) Monaro or a subsidiary of Monaro:
• (i) enters into a buy-back agreement; or

• (ii) resolves to approve the terms of a buy-back agreement under section 257C(1) or 2571)(1) of the Corporations Act;

• (d) Monaro or a subsidiary of Monaro issues shares (other than pursuant to the exercise of any Monaro Options or under a grant made under the terms of the Hapsburg Heads of Agreement or pursuant to the terms of the Monaro Partly Paid Shares) or grants an option over its shares (other than a grant made under the Hapsburg Heads of Agreement), or agrees to make such an issue or grant such an option;

• (e) Monaro or a subsidiary of Monaro issues, or agrees to issue, convertible notes;
• (f) Monaro or a subsidiary of Monaro disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;
• (g) Monaro or a subsidiary of Monaro charges, or agrees to charge, the whole, or a substantial part, of its business or property;
• (h) Monaro or a subsidiary of Monaro resolves to be wound up;
• (i) the appointment of a liquidator or provisional liquidator of Monaro or of a subsidiary of Monaro;
• (j) a court makes an order for the winding up of Monaro or of a subsidiary of Monaro;
• (k) an administrator of Monaro of a subsidiary of Monaro is appointed under section 436A, 436B or 436C of the Corporations Act,
• (l) Monaro or a subsidiary of Monaro executes a deed of company arrangement; or
• (m) a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of Monaro or of a subsidiary of Monaro.

Monaro Share means a fully paid ordinary share in Monaro.

Mutual Non-Disclosure Agreement means the Mutual Non-Disclosure Agreement between the parties dated 9 October 2007.

Observer is the person nominated by Monaro under clause 14(a).

Observation Period means the period commencing on the date of the Uranium King Shareholder Approval and ending on the Scheme Effective Date.

Odd Lot means a number of Monaro Shares which is less than a marketable parcel under the business rules of the ASX.

Proposed Merger means the proposed merger referred to in the recital.

Quit Date means 31 July 2008 or such other date as is agreed in writing between the parties.

Record Date means 5.OOpm Perth time on the day which is 5 Business Days after the Scheme Effective Date or any other date agreed with ASX to be the record date to determine entitlements to receive Scheme Consideration pursuant to the Scheme.

Relevant Date means, in relation to a Condition Precedent, the date specified in this document for its fulfilment or, if no date is specified, the Scheme Effective Date.

Regulatory Approvals means such consents, approvals or other acts by a Regulatory Authority as are necessary to implement the Merger (if any), in each case, on terms acceptable to Monaro and Uranium King.

Regulatory Authority includes:

• (a) a Government Agency;
• (b) any regulatory organisation established under statute; and
• (c) ASX.

Replacement Monaro Options means the options to be granted by Monaro which will entitle the holder to subscribe for one Monaro Share for every one option held at an exercise price of \$0.35 per share on or before 31 December 2009 and which will otherwise be subject to such terms and conditions as Monaro may reasonably stipulate in order to comply with the Listing Rules and usual practice in relation to options granted by listed public companies.

Scheme means a scheme of arrangement between Uranium King and Uranium King Shareholders under Section 411 of the Corporations Act to give effect to the terms of this document and includes any alterations or conditions made with the approval or at the discretion of the Court which are consented to by Uranium King and which are acceptable to Monaro acting reasonably.

Scheme Booklet means, in respect of the Scheme, information to be dispatched to Uranium King Shareholders, and includes the Scheme, an explanatory statement pursuant to section 412 of the Corporations Act, an independent expert's report and relevant notices of meeting and proxy forms.

Scheme Consideration means the consideration Monaro is required to provide under clause 7.1(b).

Scheme Effective Date means the date on which an office copy of the order of the Court approving the Scheme is lodged with ASIC.

Takeover Proposal means either a Takeover Proposal for Monaro or a Takeover Proposal for Uranium King.

Takeover Proposal for Uranium King means, in relation to Uranium King and excluding the Merger:

• (a) any proposal for a takeover bid, scheme of arrangement, capital reconstruction, buyback, merger, amalgamation, consolidation or other business combination involving Uranium King or any of its subsidiaries; or
• (b) any proposal which could result in a person having voting power of more than 20% in Uranium King.

Takeover Proposal for Monaro means, in relation to Monaro and excluding the Merger:

• (a) any proposal for a takeover bid, scheme of arrangement, capital reconstruction, buyback, merger, amalgamation, consolidation or other business combination involving Monaro or any of its subsidiaries; or
• (b) any proposal which could result in a person having voting power of more than 20% in Monaro.

Treasurer means the Treasurer of the Commonwealth of Australia.

Uranium King Board means the board of directors of Uranium King.

Uranium King Material Adverse Change means, in relation to Uranium King, one or more occurrences or matters individually or in aggregate that:

• (a) have or could reasonably be expected to have a material adverse effect on the business, assets, financial condition, prospects or results of operations of Uranium King and its subsidiaries, taken as a whole;
• (b) result, or could reasonably be expected to result, in a diminution in the value of Uranium King's net assets which in aggregate exceeds \$1.0 million; or
• (c) prevent Uranium King from performing its obligations under this document.

Uranium King Material Adverse Matter means any matter which has occurred but is not in the public domain at the date of this document and has not been disclosed to Monaro prior to the date of this document and which:

• (a) had it occurred after the date of this document would have been a Uranium King Material Adverse Change; and
• (b) had it been known prior to the date of this document the Monaro Board would not have resolved to execute this document (acting reasonably).

Uranium King Options means 2,150,000 options (being 1,075,000 Class A Promoter Options and 1,075,000 Class B Promoter Options) granted by Uranium King to subscribe for Uranium King Shares, subject to certain performance hurdles, terms and conditions but exercisable upon the Merger being implemented, at an exercise price of \$0.25 and an expiry date of 31 December 2009.

Uranium King Share means a fully paid ordinary share in Uranium King.

Uranium King Shareholder means a holder of Uranium King Shares.

Uranium King Shareholder Approval means a resolution in favour of the Scheme passed by Uranium King Shareholders pursuant to section 411(4)(a)(ii) of the Corporations Act.

Uranium King Prescribed Occurrence in relation to Uranium King means any of the following taking place without the prior written consent of Monaro which shall not be unreasonably withheld:

• (a) Uranium King converts all or any of its shares into a larger or smaller number of shares;
• (b) Uranium King or a subsidiary of Uranium King resolves to reduce its share capital in any way other than in accordance with the Scheme;
• (c) Uranium King or a subsidiary of Uranium King:
• (i) enters into a buy-back agreement; or
• (ii) resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;

• (d) Uranium King or a subsidiary of Uranium King issues shares or grants an option over its shares, or agrees to make such an issue or grant such an option;

• (e) Uranium King or a subsidiary of Uranium King issues, or agrees to issue, convertible notes or any other security or right which is convertible to Uranium King Shares;

• (f) Uranium King or a subsidiary of Uranium King disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;
• (g) Uranium King or a subsidiary of Uranium King charges, or agrees to charge, the whole, or a substantial part, of its business or property;
• (h) Uranium King or a subsidiary of Uranium King resolves to be wound up;
• (i) the appointment of a liquidator or provisional liquidator of Uranium King or of a subsidiary of Uranium King;
• (j) a court makes an order for the winding up of Uranium King or of a subsidiary of Uranium King;
• (k) an administrator of Uranium King, or of a subsidiary of Uranium King, is appointed under section 436A, 436B or 436C of the Corporations Act;
• (l) Uranium King or a subsidiary of Uranium King executes a deed of company arrangement; or
• (m) a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of Uranium King or of a subsidiary of Uranium King.

1.2 Rules for interpreting this document

Headings are for convenience only, and do not affect interpretation. The following rules also apply in interpreting this document, except where the context makes it clear that a rule is not intended to apply.

• (a) A reference to:
• (i) legislation (including subordinate legislation) is to that legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;
• (ii) a document or agreement, or a provision of a document or agreement, is to that document, agreement or provision as amended, supplemented, replaced or novated;
• (iii) a party to this document or to any other document or agreement includes a permitted substitute or a permitted assign of that party;
• (iv) a person includes any type of entity or body of persons, whether or not it is incorporated or has a separate legal identity, and any executor, administrator or successor in law of the person; and
• (v) anything (including a right, obligation or concept) includes each part of it.
• (b) A singular word includes the plural, and vice versa.

• (c) A word which suggests one gender includes the other genders.

• (d) If a word is defined, another part of speech has a corresponding meaning.

• (e) A reference to "\$" or "dollar" is to Australian currency.
• (f) If an example is given of anything (including a right, obligation or concept), such as by saying it includes something else, the example does not limit the scope of that thing.
• (g) The words "subsidiary", "holding company" and "related body corporate" have the same meanings as in the Corporations Act.
• (h) If a word is defined in the Corporations Act, it has the same meaning in this document, unless the context requires otherwise.

1.3 Business Days

If the day on or by which a person must do something under this document is not a Business Day:

• (a) if the act involves a payment that is due on demand, the person must do it on or by the next Business Day; and
• (b) in any other case, the person must do it on or by the previous Business Day.

2. Conditions precedent

2.1 Conditions Precedent

The obligations of the parties under clause 7 and to proceed with the implementation of the Merger hereunder are subject to the fulfilment or waiver in accordance with this clause of each of the following Conditions Precedent:

• (a) Uranium King conducting due diligence investigations into Monaro in accordance with clause 13 that do not reveal any information which, in the sole discretion of the Uranium King Board, result in the Uranium King Board concluding that the Scheme is not in the best interests of the Uranium King Shareholders;
• (b) Monaro conducting due diligence investigations into Uranium King in accordance with clause 13 that do not reveal any information which, in the sole discretion of the Monaro Board, result in the Monaro Board concluding that the Scheme is not in the best interests of the Monaro Shareholders;
• (c) the Regulatory Approvals are obtained (including any consent or approval required from ASX in order for the Merger to be implemented) and the requisite approval of shareholders of Monaro is obtained in relation to Monaro's participation in the Merger (including any approval required for the purposes of item 7 of section 611 of the Corporations Act);
• (d) FIRB Approval, if required, is obtained and any approval required under US foreign investment laws or policies is obtained;
• (e) an Independent Expert's Report is obtained which concludes that the Scheme is in the best interests of Uranium King Shareholders;

• (f) Uranium King Shareholder Approval is obtained;

• (g) the Court makes orders pursuant to section 411(4)(b) of the Corporations Act approving the Scheme subject to any alterations or conditions made with the approval or at the discretion of the Court which are consented to by Uranium King and which are acceptable to Monaro acting reasonably;

• (h) from the date of this document until 8am on the Meeting Date, no Uranium King Material Adverse Change occurs and no Uranium King Material Adverse Matter becomes known;
• (i) no Takeover Proposal for Uranium King is made or announced;
• (j) between the date of this document and the date on which Uranium King Shareholder Approval is obtained, the directors of Uranium King do not change or withdraw their recommendation to Uranium King Shareholders to vote in favour of the Scheme and all resolutions (if any) incidental to the Scheme;
• (k) no Uranium King Prescribed Occurrence occurs;
• (l) no Court or Regulatory Authority order or decree which as at 8.00 am on the date the Court makes orders pursuant to section 411(4)(b) of the Corporations Act, restrains or prohibits the implementation of the Scheme or any transaction contemplated by the Scheme or this document;
• (m) representations and warranties given by the parties and set out in this document being true and correct in all material respects, as at the date of this document, and as at 8 am on the Meeting Date;
• (n) no amount is or becomes payable to any director or employee of Uranium King as a consequence of the Scheme, other than as a Uranium King Shareholder and as referred to in clause 3(h);
• (o) from the date of this document until 8 am on the Meeting Date, no Monaro Material Adverse Change occurs and no Monaro Material Adverse Matter becomes known;
• (p) no Takeover Proposal for Monaro is made or announced as a result of which the Independent Expert is no longer able to conclude that the Scheme is in the best interests of the Uranium King Shareholders;
• (q) no Monaro Prescribed Occurrence occurs; and
• (r) Monaro has acquired or agreed to acquire all of the Uranium King Options or all such Uranium King Options have been exercised or cancelled by agreement with the holders or exercised or cancelled in accordance with clause 6(f) or clause 7.2 (and, if required, all necessary approvals to the issue of Monaro Shares to the holders of Uranium King Options is obtained) and no other convertible securities are or will on the Scheme Effective Date be on issue in Uranium King.

2.2 Benefit of Conditions Precedent

The following Conditions Precedent are included for the benefit of the following party or parties:

(a) the Conditions Precedent in paragraphs 2.1(c), (d), (e), (f), (g), (l) and (m) for the benefit of each of Uranium King and Monaro (provided that the condition in paragraph (m) is for the benefit of the party to which the representation or warranty is given);

• (b) the Conditions Precedent in paragraphs 2.1(b), (h), (j), (k), (n) and (r) for the benefit of Monaro alone; and
• (c) the Conditions Precedent in paragraphs 2.1(a), (i), (o),(p) and (q)for the benefit of Uranium King alone.

2.3 Fulfilment of Conditions Precedent

Each of the Conditions Precedent in clause 2.1 will be deemed to be fulfilled on the Relevant Date unless the party for whose benefit the relevant condition has been included (or in the case of a condition included for the benefit of both parties, either party) gives notice to the other party prior to the Relevant Date of the non-fulfilment of the condition.

2.4 Waiver of Conditions Precedent

• (a) If a Condition Precedent has been included for the benefit of one party alone, that party alone may, in its sole and absolute discretion, waive the breach or non-fulfilment of that Condition Precedent.
• (b) If a Condition Precedent has been included for the benefit of both parties, the breach or non-fulfilment of that Condition Precedent may be waived only by the written consent of both parties.
• (c) If a party waives the breach or non-fulfilment of a Condition Precedent, that waiver shall not preclude that party from suing the other for any breach of this document that resulted in the breach or non-fulfilment of that Condition Precedent.

2.5 Best endeavours

Each party must use its best endeavours to procure that each of the Conditions Precedent is satisfied by the Relevant Date and that there is no occurrence which would prevent the Conditions Precedent being satisfied.

2.6 Notification

Each party must promptly notify the other of the fulfilment of a Condition Precedent and must keep the other informed of any material developments of which it becomes aware in relation to a Condition Precedent.

2.7 Non-fulfilment

• (a) If a Condition Precedent has not been fulfilled by the Relevant Date, or the Scheme Effective Date has not occurred by the Quit Date, Uranium King and Monaro will consult in good faith to:
• (i) determine whether the Scheme may proceed by way of alternative means or methods; and
• (ii) extend the Relevant Date or the Quit Date.
• (b) If the parties are unable to reach agreement under clause 2.7(a) within 5 Business Days after the Relevant Date or the Quit Date (as the case maybe) then, unless any unfulfilled Condition Precedent has been waived pursuant to clause 2.4, either party may terminate this document without any liability to the other party by reason of that termination apart from liability arising from an antecedent breach of this document.

3. Conduct of Business prior to Merger

Between the time of signing this document and the Scheme Effective Date, each party will conduct its business in the ordinary and normal course and, except as required by this document, will not, and will procure that its subsidiaries do not, without the prior written consent of the other party (which shall not be unreasonably withheld, save in the case of paragraph (a) where consent can be withheld in the sole and absolute discretion of the relevant party):

• (a) declare any dividend or pay, make or incur any liability to pay or make any distribution whether by way of dividend, capital distribution or reduction of capital;
• (b) dispose of or acquire any asset having a book value, or for a consideration, of more than \$0.5 million;
• (c) not dispose of any right or interest in any mining tenement or mineral concession (other than in the ordinary course of ordinary business or any relinquishment required by the Mining Act 1978 or other applicable mining legislation or the conditions of the mining tenement);
• (d) undertake, or commit to undertake, exploration, development or capital investment activities, other than those activities conducted in the ordinary course of ordinary business;
• (e) enter into any joint venture, partnership or similar arrangement with a first year expenditure commitment in excess of \$1.0 million (other than in the case of Monaro entering into a detailed exploration joint venture agreement, on terms satisfactory to Uranium King acting reasonably, to replace the Hapsburg Heads of Agreement);
• (f) other than in the course of complying with a contractual or statutory obligation existing as at the date of this document, incur any non-budgeted capital expenditure in respect of any single item which exceeds \$0.1 million, provided that any additional capital expenditure which in the reasonable assessment of the party is urgently required and critical for safety, environmental or other reasons, may be incurred by that party;
• (g) in the case of Uranium King, do anything that would constitute a Uranium King Prescribed Occurrence and in the case of Monaro, do anything that would constitute a Monaro Prescribed Occurrence (other than to comply with a contractual obligation existing as at the date of this document);
• (h) in the case of Uranium King, except pursuant to existing employment agreements, as required by applicable laws or in accordance with salary and remuneration reviews conducted in accordance with usual Uranium King policy and after prior consultation with Monaro, increase the compensation payable to its officers or employees or grant any severance or termination pay to such persons (not including existing agreements for payments to be made to non-executive directors of Uranium King as notified to Monaro in writing prior to the date of this document nor any salary increases for nondirector employees of up to 10 % of existing salary of the relevant employees as part of its annual salary review, which Uranium King can award without consultation with Monaro); and
• (i) enter into or incur any borrowing or debt financing arrangement in excess of \$0.1 million.

4. Mutual obligations

Each party must co-operate with the other party, and provide all assistance, including the provision and collection of information, and attending any meetings, which the other party reasonably requires in connection with the preparation of all documents, and obtaining all regulatory and other approvals, required in connection with the Merger.

5. Specific Uranium King obligations

Uranium King must, as expeditiously as practicable:

• (a) prepare a Scheme Booklet in relation to the Scheme in accordance with the Corporations Act, ASX Listing Rules and all applicable ASIC policy statements including a report from the Independent Expert to be selected by Uranium King;
• (b) consult with Monaro about the form of the Scheme Booklet prepared pursuant to paragraph (a) and take into account any material concerns raised by Monaro provided that the final form of the Scheme Booklet will be determined by Uranium King, acting reasonably;
• (c) include in the Scheme Booklet the Monaro Material supplied by Monaro subject to any variations reasonably required by Uranium King, which variations will not be made without consultation with Monaro but on the basis that the final form of the Scheme Booklet will be determined by Uranium King;
• (d) give a copy of any draft Scheme Booklet to Monaro before it is given to ASIC pursuant to section 411(2) of the Corporations Act;
• (e) state in a joint announcement in a form reasonably acceptable to both parties and made immediately following the execution of this document that the Uranium King Board recommends to Uranium King Shareholders that, in the absence of a superior offer and subject to the Independent Expert confirming the view of the Uranium King Board that the Scheme is in the best interests of Uranium King Shareholders, the Scheme be approved;
• (f) apply to the Court under section 411(1) of the Corporations Act for an order to convene a meeting of members to consider the Scheme;
• (g) convene a meeting of its shareholders to consider the Scheme, in accordance with any order made by the Court pursuant to section 411(1) of the Corporations Act;
• (h) lodge and register the explanatory statement relating to the Scheme with ASIC and send a copy of the Scheme Booklet to each shareholder and to all other persons who are entitled to receive notice of the relevant meeting;
• (i) use its best endeavours to obtain Uranium King Shareholder Approval required for the Scheme;
• (j) lodge with ASIC any application or other document necessary to enable Uranium King Shareholder Approval to take effect;
• (k) if Uranium King Shareholder Approval is obtained in relation to the Scheme, apply to ASIC for the production of a statement pursuant to section 411(17)(b) of the Corporations Act in relation to that Scheme stating that ASIC has no objection to that Scheme and, subject to satisfaction of all Conditions Precedent other than the

Conditions Precedent in clause 2.1(g), apply to Court for its approval of that Scheme under section 411(4) of the Corporations Act; and

(l) if the Court makes an order under section 411(4) of the Corporations Act approving a Scheme, lodge with ASIC an office copy of the order of the Court under section 411(10) of the Corporations Act.

6. Specific Monaro obligations

Monaro must:

• (a) supply Monaro Material to Uranium King for inclusion in the Scheme Booklet in reasonable time to allow Uranium King to prepare the Scheme Booklet in accordance with this document;
• (b) provide any assistance or information reasonably requested by Uranium King or by the Independent Expert for the purpose of preparing the Scheme Booklet and the Independent Expert's Report;
• (c) confirm to Uranium King the accuracy of the Monaro Material as set out in the draft Scheme Booklet provided to Monaro in accordance with clause 5(d);
• (d) provide any further or new information required prior to the Meeting Date in a reasonable time to allow Uranium King to prepare the Scheme Booklet in accordance with this document to ensure that the Monaro Material is not misleading or deceptive and contains no material omissions;
• (e) prior to despatch of the Scheme Booklet, execute the Deed Poll; and
• (f) no later than 31 March 2008 make an offer to each holder of a Uranium King Option, to acquire (or alternatively, the holder to agree to cancel) on the Scheme Effective Date (such offer to be unconditional, save that it may be made subject to the Merger becoming effective) all of the Uranium King Options held by that person to the extent that they have not lapsed or been exercised prior to the Scheme Effective Date, with the consideration for the offer being 5 Replacement Monaro Options for every 7 Uranium King Options (or as otherwise agreed) on the basis that the new Replacement Monaro Options are issued within 10 Business Days after the Scheme Effective Date.

7. Uranium King Scheme

7.1 Proposed Scheme structure

• (a) Uranium King agrees to propose a scheme in accordance with Part 5.1 of the Corporations Act under which all of the Uranium King Shares other than those held by or on behalf of Monaro or any of its subsidiaries will be transferred to Monaro and Uranium King Shareholders will be entitled to receive, for each Uranium King Share held at the Record Date, consideration calculated in accordance with clause 7.1(b).
• (b) Subject to clause 7.1(c), Monaro covenants in favour of Uranium King (in its own right and separately as trustee for each Uranium King Shareholder) that in consideration for the transfer of a Uranium King Share held by a Uranium King Shareholder, within 10 Business Days after the Scheme Effective Date, Monaro will issue to such Uranium King Shareholder 5 Monaro Shares for every 7 Uranium King Shares (with any fractional entitlement to a Monaro Share equal to or greater than 0.5

to be rounded up and any fractional entitlement to a Monaro Share which is less than 0.5 to be rounded down).

(c) If the total number of Monaro Shares a Uranium King Shareholder is entitled to receive under paragraph (b) above is an Odd Lot, Monaro may elect (in its sole and unfettered discretion) to provide cash consideration, which is equal to the Market Price of the Monaro Shares, instead of the Monaro Shares.

7.2 Alternative Scheme structure

• (a) Instead of the structure disclosed in clause 7.1, Monaro may if it receives advice that it is preferable to do so require Uranium King to propose a scheme under which the relevant Uranium King Shares other than a number of Uranium King Shares to be held by Monaro are cancelled pursuant to a resolution of Uranium King Shareholders. In that event, the parties will negotiate in good faith to make all necessary consequential amendments to this document provided that neither party will suffer a material adverse consequence as a result of the change. This alternate structure will not affect the consideration to be provided in accordance with clause 7.1 of this document.
• (b) Instead of the proposed offer for Uranium King Options contemplated by clause 6(f) of this document, Monaro or Uranium King may if advice is received that it is preferable to do so require or cause Uranium King to propose a scheme of arrangement between the holders of Uranium King Options and Uranium King under which the relevant Uranium King Options are cancelled pursuant to a resolution under Section 411(4) of the Corporations Act of holders of Uranium King Options. In that event, the parties will negotiate in good faith to make all necessary consequential amendments to this document provided that neither party will suffer a material adverse consequence as a result of the change. This alternate structure will not affect the consideration to be provided by Monaro to holders of Uranium King Options in accordance with clause 6(f) of this document and such scheme of arrangement would provide that:
• (i) all Uranium King Options are cancelled and the holders of Uranium King Options would be entitled to the same consideration from Monaro as contemplated by clause 6(f) of this document;
• (ii) the option scheme would be conditional on the Scheme (for Uranium King Shares) becoming effective.
• (c) In the event that the alternate structure in clause 7.2(b) is adopted, then the Condition Precedent in clause 2.1(r) will also be consequentially amended to provide that this document and the Scheme is conditional on the option scheme becoming effective.

8. Appointment of directors and Creation of Advisory Panel

On the Scheme Effective Date or such other date as agreed by the parties:

• (a) Uranium King will ensure that all directors on the Uranium King Board other than three nominees of Uranium King resign.
• (b) Uranium King will take all actions necessary to cause the appointment of three nominees of Monaro to the Uranium King Board.
• (c) Monaro will take all actions necessary to cause the appointment of three nominees of Uranium King to the Monaro Board and warrant that the number of directors on the

Monaro Board who are nominees of Monaro as at the Scheme Effective Date or such other date as agreed by all parties does not exceed three.

(d) Monaro will take all actions to establish an advisory panel to the Monaro Board (Advisory Panel) that will consist of two nominees from each of Uranium King and Monaro and that Monaro agrees to the appointment of Dr Bernhard Free as Chairman of the Advisory Panel. For the avoidance of doubt the Advisory Panel shall have no role other than that of providing non binding technical advice to the Monaro Board and executive officers.

9. Cessation of negotiations and no solicitation

9.1 Cessation of negotiations

Subject to clause 10, immediately following execution of this document, Uranium King must ensure that it and its employees, officers and, to the extent that it is reasonably able to influence them, its associates and its advisers, cease any negotiations or discussions with any person other than Monaro with respect to a Takeover Proposal for Uranium King or an offer to acquire any of Uranium King's assets.

9.2 No solicitation - Uranium King

Subject to clause 10, from the date of this document until the earlier of termination of this document or the Court Approval Date, Uranium King must ensure that it and its employees, officers and, to the extent it is reasonably able to influence them, its associates and its advisers:

• (a) do not, except with the prior written consent of Monaro, directly or indirectly solicit or initiate any negotiations or discussions or communicate any intention to do any of these things with any person other than Monaro with respect to a Takeover Proposal for Uranium King or an offer to acquire any of Uranium King's assets; and
• (b) do not provide information to facilitate consideration by any person, other than Monaro, whether to submit a Takeover Proposal for Uranium King or an offer to acquire any of Uranium King's assets.

9.3 No solicitation - Monaro

Subject to clause 10, from the date of this document until the earlier of termination of this document or the Court Approval Date, Monaro must ensure that it and its employees, officers and, to the extent it is reasonably able to influence them, its associates and its advisers:

• (a) do not, except with the prior written consent of Uranium King, directly or indirectly solicit or initiate any negotiations or discussions or communicate any intention to do any of these things with any person with respect to a Takeover Proposal for Monaro; and
• (b) do not provide information to facilitate consideration by any person, whether to submit a Takeover Proposal for Monaro.

9.4 Notification of takeover proposal

Uranium King must notify Monaro immediately if it receives or becomes aware of a Takeover Proposal for Uranium King and Monaro must notify Uranium King immediately if it receives or becomes aware of a Takeover Proposal for Monaro.

10. Directors' duties

10.1 General

Clause 9 does not impose obligations on either party to the extent that compliance with that clause would involve a breach of fiduciary or statutory duties or other legal obligations by directors of that party or be otherwise unlawful, provided that the party must give prior written notice to the other party before taking any action (or failing to take any action) in respect of which it relies on this clause and must, to the extent permitted by law and as expeditiously as practicable, provide full particulars to the other party, and consult with the other party in good faith, with respect to the relevant action (or failure to take action).

10.2 Response to Takeover Proposal

Clause 9 does not restrict or prevent:

• (a) the directors of Uranium King from responding to an unsolicited Takeover Proposal for Uranium King; or
• (b) the directors of Monaro from responding to an unsolicited Takeover Proposal for Monaro,

in each case in accordance with their respective fiduciary or statutory duties or other legal obligations.

11. Release

Subject to section 199A of the Corporations Act, no party, and no officer or director of a party, shall be liable for anything done or purported to be done in connection with the Merger in good faith, but nothing in this clause shall exclude any liability which may arise from a grossly negligent act or omission on the part of such a person. Each party receives and holds the benefit of this release, to the extent that it relates to its officers or directors, as agent for them.

12. Break fees

12.1 Undertaking to reimburse fees, costs, losses and expenses of Monaro

Subject to this agreement and to the extent permitted by any applicable law, Uranium King will pay to Monaro the sum of \$100,000 (being a total amount comprising a contribution towards the reasonable internal and third party advisory, legal, accounting, due diligence and management costs and expenses and opportunity and other costs and expenses foregone) in immediately available funds within one Business Day after the first to occur of any of the events described below:

• (a) a Takeover Proposal has been publicly announced, proposed, offered or made to the Uranium King Shareholders or to Uranium King, and such Takeover Proposal:
• (i) has been accepted; or
• (ii) has not expired or been withdrawn at the time of the Scheme Meeting; and
• (b) the Uranium King Board withdraws, qualifies or changes any of its recommendations or determinations referred to in clause 5(e) hereof in a manner adverse to Monaro or resolves to do so prior to the Scheme Effective Date.

12.2 Undertaking to reimburse fees, costs, losses and expenses of Uranium King

Subject to this agreement and to the extent permitted by any applicable law, Monaro will pay to Uranium King the sum of \$100,000 (being a total amount comprising a contribution towards the reasonable internal and third party advisory, legal, accounting, due diligence and management costs and expenses and opportunity and other costs and expenses foregone) in immediately available funds within one Business Day after the Monaro Board withdraws, qualifies or changes any of its recommendations to Monaro shareholders (if applicable) or determinations to proceed with the Proposed Merger in a manner adverse to Uranium King or resolves to do so prior to the Scheme Effective Date (as a result of a Takeover Proposal for Monaro having been publicly announced or otherwise).

12.3 Limits on compensation

For the avoidance of doubt, no amount is payable under clauses 12.1 or 12.2 if the Scheme becomes effective despite the occurrence of any event referred to in clauses 12.1 or 12.2.

12.4 Compliance with law

This clause 12 only imposes obligations on a Party or the directors of a Party to the extent that to cause the Party to undertake or fulfil such obligations would not involve a breach of the duties of the directors of that Party or be unlawful on any other basis.

13. Due Diligence

13.1 Due diligence by Monaro

The due diligence to be conducted by Monaro referred to in clause 2.1(b):

• (a) will comprise reasonable and customary due diligence enquiries including review of board minutes, papers and other documents, ASX and ASIC correspondence files, litigation and title searches and financial information and records and geological information and material contracts and details of issued shares and options or other convertible securities as may reasonably be expected to be undertaken by a prudent person considering the acquisition of a business of the type conducted by Uranium King or the acquisition of the issued shares in Uranium King; and
• (b) must be completed by 31 October 2007 or at such date as agreed by the parties.

13.2 Due diligence by Uranium King

The due diligence to be conducted by Uranium King referred to in clause 2.1(a)

• (a) will comprise reasonable and customary due diligence enquiries including review of board minutes, papers and other documents, ASX and ASIC correspondence files, litigation and title searches and financial information and records and geological information and material contracts and details of issued shares and options or other convertible securities as may reasonably be expected to be undertaken by a prudent person considering the acquisition of a business of the type conducted by Monaro; and
• (b) must be completed by 31 October 2007 or at such date as agreed by the parties.

13.3 Assistance

A Party the subject of due diligence enquiries under clause 13.1 or 13.2 (Subject Party) must, during the period of any due diligence and in respect of any further enquiries made:

• (a) make available promptly to the party conducting the due diligence enquiries (Enquiring Party) all assistance and information reasonably requested by the Enquiring Party in order that the Enquiring Party can conduct the due diligence and those further enquiries;
• (b) provide access to the Enquiring Party and its advisors who reasonably require access to that information for the purposes of the due diligence and those further enquiries and the implementation of the Scheme; and
• (c) permit the Enquiring Party to interview any director, executive officer, or external auditor or adviser of the Subject Party during the due diligence and any further enquiries made.

14. Appointment of Observer

At any time after the date on which Uranium King Shareholder Approval is obtained:

• (a) Monaro may nominate, by written notice to Uranium King, a person to be an Observer, subject to approval by Uranium King of the person so nominated, such approval not to be unreasonably withheld.
• (b) The role of the Observer is to satisfy Monaro and Monaro's financiers that Monaro is kept up to date with all material issues arising in relation to Uranium King and its subsidiaries and includes:
• (i) maintaining a review of any material obligations undertaken by Uranium King or its subsidiaries during the Observation Period;
• (ii) ensuring that Monaro is kept aware of any material risk exposures which Uranium King or any of its subsidiaries has or encounters up to the end of the Observation Period; and
• (iii) checking that the obligations of Uranium King under Listing Rule 3.1 are complied with during the Observation Period.
• (c) Uranium King will ensure that the Observer has reasonable access to all books and records of Uranium King necessary for the Observer to carry out their role set out in clause 14(b), subject to the execution by the Observer of a confidentiality undertaking agreed between Uranium King and Monaro and which will not restrict disclosures by the Observer to Monaro or its financiers.
• (d) Without limiting clause 14(c), and subject to clause 14(e), the Observer will have the right to:
• (i) attend all meetings of the Uranium King Board;
• (ii) express an opinion on matters considered by the Uranium King Board;
• (iii) receive all papers and other materials circulated to members of the Uranium King Board; and
• (iv) receive a copy of the monthly management accounts of Uranium King.
• (e) Notwithstanding clause 14(d), the Observer will not have the right to attend any meeting of the Uranium King Board, or to be in attendance at any part of a meeting of the Uranium King Board, or to receive any papers or other material circulated to

members of the Uranium King Board, regarding matters which do not relate to the conduct of Uranium King's business or relate to the performance by Monaro of its obligations under this document or Uranium King's rights under this document. The Observer must, upon the request of any member of the Uranium King Board, leave any meeting of the Uranium King Board where matters which do not relate to the conduct of Uranium King's business are to be considered.

• (f) The parties acknowledge, and the parties intend, that the Observer does not have any right or obligation to direct, instruct or advise Uranium King, and Uranium King will release the Observer from any duties, claims, actions, suits, proceedings, liabilities or obligations whatever except as expressly provided in the confidentiality undertaking agreed under clause 14(c).
• (g) The parties acknowledge, and the parties intend, that Monaro will not be entitled to rely upon any observation, review or report of the Observer to terminate this document, other than in relation to the satisfaction of the Conditions Precedent or a material breach by Uranium King of any clause of this document.

15. Public statements

15.1 Restriction on Announcements

Each party must not make an Announcement relating to the subject matter of this document unless the Announcement:

• (a) has the prior approval of the other party; or
• (b) is required to be made by law or the Listing Rules of ASX.

15.2 Giving of notice and draft Announcement

If a party is required to make an Announcement pursuant to clause 15.1(b), it must give to the other party:

• (a) such notice as is reasonable in the circumstances of its intention to make the Announcement; and
• (b) a draft of the Announcement and an opportunity, which is reasonable in the circumstances, to comment on the contents of the draft Announcement.

16. Access to information by Monaro

Between the date of this document and the Scheme Effective Date, Uranium King must, and must cause each of its subsidiaries to:

• (a) afford to Monaro and its advisers, reasonable access during normal business hours to its properties, books and records (subject to any confidentiality obligations of Uranium King to third parties) and personnel;
• (b) promptly provide to Monaro:

• (i) a copy of any written communication made by it to, or received by it from, a Government Agency or ASX in connection with the Proposed Merger; and

• (ii) all information concerning its business and properties (subject to any confidentiality obligations of Uranium King to third parties) and personnel as Monaro may reasonably request; and

• (c) direct its share registrar to promptly provide any information requested by Monaro provided that such request is made to Uranium King's company secretary in relation to:
• (i) Uranium King's share register including any CHESS sub-register and any other sub-register, whether electronic or otherwise; and
• (ii) any indications of the voting intentions of Uranium King's shareholders which it has received including information about proxies.

Disclosure of information made available pursuant to this clause 16 is subject to the provisions of the Mutual Non-Disclosure Agreement.

17. Access to information by Uranium King

Between the date of this document and the Scheme Effective Date, Monaro must, and must cause each of its subsidiaries to:

• (a) afford to Uranium King and its advisers, reasonable access during normal business hours to its properties, books and records (subject to any confidentiality obligations of Monaro to third parties) and personnel; and
• (b) promptly provide to Uranium King:
• (i) a copy of any written communication made by it to, or received by it from, a Government Agency or ASX in connection with the Proposed Merger; and
• (ii) all information concerning its business and properties (subject to any confidentiality obligations of Monaro to third parties) and personnel as Uranium King may reasonably request.

Disclosure of information made available pursuant to this clause 17 is subject to the provisions of the Mutual Non-Disclosure Agreement.

18. Termination

18.1 Right to terminate

A party may terminate this document by giving notice in writing to the other party:

• (a) prior to the Scheme Effective Date, if the other party is in material breach of this document;
• (b) in accordance with clause 2.7(b); or
• (c) subject to clause 2.7, at any time after the Quit Date, if the Scheme Effective Date has not occurred by the Quit Date.

18.2 Consequence of termination

If a party terminates this document, all obligations of the parties under this document, other than this clause and clauses 1, 15, 20, 21, 22 and 23, shall immediately cease to be of further force or

effect, but nothing in this clause releases any party from any pre-termination breach of this document.

19. Representations and warranties

19.1 Mutual representations and warranties

• (a) Each party represents and warrants to the other that (subject to obtaining any relevant Regulatory Approvals):
• (i) (status) it is a company limited by shares under the Corporations Act;
• (ii) (powers) it has full legal capacity and power:
  • A. to own its own property and assets and to carry on its business; and
  • B. to enter into this document and subject to the Corporations Act to carry out the transactions that it contemplates;
• (iii) (Authorisations) it holds each Authorisation that is necessary or desirable to:
  • A. enable it to properly execute this document and to carry out the transactions that it contemplates;
  • B. ensure that this document is legal, valid, binding and admissible in evidence; or
  • C. enable it to properly carry on its business,

and it is complying with any conditions to which any of those Authorisations is subject;

• (iv) (agreement effective) this document constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms, subject to any necessary stamping;
• (v) (no contravention) neither its execution of this document nor the carrying out by it of the transactions that it contemplates, does or will:
• A. contravene any law to which it or any of its property is subject or any order of any Government Agency that is binding on it or any of its properties;
• B. contravene any Authorisation;
• C. contravene any undertaking or instrument binding on it or any of its property;
• D. contravene its constitution;
• (vi) (no Controller) no Controller is currently appointed in relation to any of its property;
• (vii) (no litigation) except as disclosed or as may be determined by conducting searches of public records, no litigation, arbitration, mediation, conciliation

or administrative proceedings are taking place, pending, or to its knowledge after due inquiry, threatened which, if adversely decided, would have a Material Adverse Effect on it; and

• (viii) (no trust) it is not entering into this document as trustee of any trust or settlement.
• (b) Each party acknowledges that the other party has executed this document and agreed to take part in the transactions that it contemplates in reliance on the representations and warranties that are made in this clause 19.1.

19.2 Uranium King representations and warranties

Uranium King represents and warrants to Monaro that:

• (a) (issue or conversion of securities) it is not subject to any actual or contingent obligation to issue or convert securities other than pursuant to the terms of the Uranium King Options;
• (b) (loans) except as disclosed to Monaro prior to the date of this document, Uranium King has not made or advanced any loan or credit;
• (c) (no Takeover Proposal) neither Uranium King nor any of its directors is aware of or considering any Takeover Proposal made by any third party;
• (d) (disclosure) Uranium King has complied with its obligations under Listing Rules 3.1 and there is no information to which Listing Rules 3.1.1, 3.1.2 or 3.1.3 apply (save in relation to the Proposed Merger); and
• (e) (no material adverse change) there has been no material adverse change to the financial position of Uranium King as disclosed in its audited financial statements for the period ended 30 June 2007.

19.3 Monaro representations and warranties

Monaro represents and warrants to Uranium King that:

• (a) (issue or conversion of securities) it is not subject to any actual or contingent obligation to issue or convert securities except as required or contemplated by this document or in accordance with the terms of any Monaro Partly Paid Shares, Monaro Options or under the terms of the Hapsburg Heads of Agreement (or certain employment or consultancy agreements disclosed to Uranium King prior to the date of this document);
• (b) (loans) except as disclosed to Uranium King prior to the date of this document, Monaro has not made or advanced any loan or credit;
• (c) (no Takeover Proposal) neither Monaro nor any of its directors is aware of or considering any Takeover Proposal made by any third party;

• (d) (disclosure) Monaro has complied with its obligations under Listing Rules 3.1 and there is no information to which Listing Rules 3.1.1, 3.1.2 or 3.1.3 apply (save in relation to the Proposed Merger);

• (e) (no material adverse change) there has been no material adverse change to the financial position of Monaro as disclosed in its audited financial statements for the period ended 30 June 2007.

• (f) (issue of Monaro Shares) it is not aware of any fetter on its ability to issue Monaro Shares as part of the Scheme Consideration.

20. Costs and stamp duty

20.1 Each party's responsibility

Each party will bear and be responsible for their own costs and expenses, including legal, accounting and advisory costs and expenses, in connection with the negotiation, preparation, completion and carrying into effect of this document and any instrument or transaction contemplated in or necessary to give effect to this document, the Scheme Booklet and the Scheme.

20.2 Monaro's responsibility

Monaro will bear and be responsible for all stamp duty payable on this document or any instrument or transaction contemplated in or necessary to give effect to this document.

21. Amendment and assignment

21.1 Amendment

This document can only be amended, supplemented, replaced or novated by another agreement signed by the parties.

21.2 Assignment

A party may only dispose of, declare a trust over or otherwise create an interest in its rights under this document with the consent of the other party.

22. Notices

22.1 How to give a notice

A notice, consent or other communication under this document is only effective if it is:

• (a) in writing, signed by or on behalf of the person giving it;
• (b) addressed to the person to whom it is to be given; and
• (c) either:
• (i) delivered or sent by pre-paid mail to that person's address; or
• (ii) sent by fax to that person's fax number and the machine from which it is sent produces a report that states that it was sent in full.

22.2 When a notice is given

A notice, consent or other communication that complies with this clause is regarded as given and received:

• (a) if it is delivered or sent by fax:
• (i) by 5.00 pm (local time in the place of receipt) on a Business Day on that day; or
• (ii) after 5.00 pm (local time in the place of receipt) on a Business Day, or on a day that is not a Business Day - on the next Business Day; and
• (b) if it is sent by mail:
• (i) within Australia 3 Business Days after posting; or
• (ii) to or from a place outside Australia 7 Business Days after posting.

22.3 Address for notices

A person's address and fax number are those set out below, or as the person notifies the sender:

Uranium King:

Address:	Level 1, 89 St Georges Terrace, Perth WA 6000
Fax Number:	+61 8 9 481 2200
Attention:	Jim Malone
Monaro:
Address:	1st Floor , 87 Colin Street , West Perth WA 6005
Fax Number:	+61 8 9322 5116
Attention:	Warwick Grigor

23. General

23.1 Governing Law

• (a) This document is governed by the law in force in Western Australia.
• (b) Each party submits to the non-exclusive jurisdiction of the courts exercising jurisdiction in Western Australia, and any court that may hear appeals from any of those courts, for any proceedings in connection with this document, and waives any right it might have to claim that those courts are an inconvenient forum.

23.2 Giving effect to this document

Each party must do anything (including execute any document), and must ensure that its employees and agents do anything (including execute any document), that the other party may reasonably require to give full effect to this document.

23.3 Waiver of rights

A right may only be waived in writing, signed by the party giving the waiver, and:

• (a) no other conduct of a party (including a failure to exercise, or delay in exercising, the right) operates as a waiver of the right or otherwise prevents the exercise of the right;
• (b) a waiver of a right on one or more occasions does not operate as a waiver of that right if it arises again; and
• (c) the exercise of a right does not prevent any further exercise of that right or of any other right.

23.4 Operation of this document

• (a) This document and the Mutual Non-Disclosure Agreement contain the entire agreement between the parties about its subject matter. Any previous understanding, agreement, representation or warranty relating to that subject matter is replaced by this document and has no further effect. For the avoidance of doubt, the Mutual Non-Disclosure Agreement remains in full force and effect.
• (b) Any right that a person may have under this document is in addition to, and does not replace or limit, any other right that the person may have.
• (c) Any provision of this document which is unenforceable or partly unenforceable is, where possible, to be severed to the extent necessary to make this document enforceable, unless this would materially change the intended effect of this document.

23.5 Operation of indemnities

• (a) Each indemnity in this document survives the expiry or termination of this document.
• (b) A party may recover a payment under an indemnity in this document before it makes the payment.

23.6 Consents

Where this document contemplates that a party may agree or consent to something (however it is described), the party may:

• (a) agree or consent, or not agree or consent, in its absolute discretion; and
• (b) agree or consent subject to conditions,

unless this document expressly contemplates otherwise.

23.7 No merger

Clauses of this document do not merge on implementation of the Scheme.

23.8 Inconsistency with other documents

If this document is inconsistent with any other document or agreement between the parties, this document prevails to the extent of the inconsistency.

23.9 Counterparts

This document may be executed in counterparts.

23.10 Attorneys

Each person who executes this document on behalf of a party under a power of attorney declares that he or she is not aware of any fact or circumstance that might affect his or her authority to do so under that power of attorney.

Executed by Uranium King Limited ABN 34 119 187 816 by or in the presence of:

Signature of Director Signature of Secretary/Director

Name of Director in full Name of Secretary/Director

Executed by Monaro Mining NL ABN 99 073 155 781 by or in the presence of:

Signature of Director Signature of Secretary/Director

Name of Director in full Name of Secretary/Director

APPENDIX C

Deed Poll in favour of UKL Shareholders

Date 19 March 2008

By

Monaro Mining NL ABN 99 073 155 781 (Monaro) in favour of each holder of ordinary shares in Uranium King Limited ABN 34 119 187 816 (Uranium King) who qualifies as a Scheme Participant on the Record Date (Scheme Participants).

Background

• A. On 10 October 2007 Monaro and Uranium King entered into a merger implementation agreement, as varied by a deed dated 19 March 2008 (MIA), which sets out the steps and arrangements necessary to implement the Scheme.
• B. Under the Scheme, all of the Uranium King Shares will be transferred to Monaro and in exchange Scheme Participants who are not Ineligible Overseas Shareholders will receive from Monaro 5 Monaro Shares for every 7 Uranium King Shares.
• C. Monaro enters into this deed poll for the purposes of covenanting in favour of each Scheme Participant to perform certain obligations.

1. Definitions and interpretation

1.1 Definitions

In this deed poll, unless the context requires otherwise,

• (a) expressions which are defined in the Explanatory Statement or the Scheme of Arrangement which is part of the Explanatory Statements have the same meaning in this deed poll.
• (b) Explanatory Statement means the explanatory statement relating to the proposed scheme of arrangement between Uranium King and its members to be sent to Uranium King Shareholders in accordance with section 412(1)(a) of the Corporations Act.

1.2 Interpretation

In this deed poll, unless the context requires otherwise:

• (a) the singular includes the plural and vice versa;
• (b) the headings are used for convenience only and do not affect the interpretation of this document;
• (c) a reference to a document includes the document as modified from time to time and any document replacing it;

• (d) if something is to be done on a day which is not a Business Day then that thing must be done on the next or following Business Day;

• (e) money amounts are stated in Australian currency unless otherwise specified; and

• (f) if a word is defined, another part of speech has a corresponding meaning.

1.3 Nature of Deed Poll

Monaro acknowledges that this deed poll may be relied on and enforced by any Scheme Participant in accordance with its terms even though the Scheme Participant is not party to it.

2. Commencement

Monaro's obligations under clause 3 commence when all of the conditions set out in paragraph 2.1 of the Scheme of Arrangement which forms Appendix D to the Explanatory Statement have been satisfied or waived such that the effect of the Scheme of Arrangement will be that Uranium King will become a wholly owned subsidiary of Monaro on the basis that no person, company or entity other than Monaro will have any actual or contingent rights to be issued any Uranium King Shares.

3. Monaro's obligations

In accordance with clause 6(e) of the MIA, Monaro covenants in favour of each Scheme Participant to:

• (a) acquire all of the Uranium King Shares on issue at the Record Date;
• (b) issue to each Scheme Participant (other than Ineligible Overseas Shareholders) 5 Monaro Shares for every 7 Uranium King Shares held at the Record Date (with any fractional entitlement to a Monaro Share equal to or greater than 0.5 to be rounded up and any fractional entitlement to a Monaro Share which is less than 0.5 to be rounded down as more particularly provided for in the Scheme of Arrangement); and
• (c) issue the Monaro Shares which would otherwise have been issued to an Ineligible Overseas Shareholder to the Nominee to be dealt with in accordance with clause 4.3 of the Scheme of Arrangement; and
• (d) if the total number of Monaro Shares a Scheme Participant is entitled to receive under paragraph (b) above is an Odd Lot, Monaro may elect (in its sole and unfettered discretion) to provide cash consideration, which is equal to the Market Price of the Monaro Shares, instead of the Monaro Shares; and
• (e) otherwise do all things reasonably necessary or expedient on its part to implement the Scheme.

4. Representations and warranties

Monaro represents and warrants that:

• (a) (status) it is a company limited by shares, validly incorporated under the Corporations Act 2001 (Cth);

• (b) (power) it has full legal capacity and power to enter into this deed poll and to carry out the transactions that this deed poll contemplates;

• (c) (corporate authority) all corporate action has been taken that is necessary or desirable to authorise its entry into this deed poll and its carrying out of the transactions that this deed poll contemplates; and

• (d) (document effective) this deed poll constitutes legal, valid and binding obligations, enforceable against it in accordance with its terms (except to the extent limited by equitable principles and laws affecting creditors' rights generally), subject to any necessary stamping or registration.

5. General

5.1 Continuing obligations

This deed poll is irrevocable and remains in full force and effect until Monaro has completely performed its obligations under this deed poll.

5.2 No assignment

A party cannot assign or otherwise transfer the benefit of this deed poll.

5.3 No variation

This deed poll cannot be waived or varied except in writing signed by the person granting the waiver and unless the variation is agreed to by Uranium King, in which event Monaro will enter into a further deed poll in favour of each Scheme Participant giving effect to the amendment provided that Monaro will not be required to provide a further deed poll where the effect would be to materially increase Monaro's obligations.

5.4 Notices

Any notice or other communication to Monaro under this deed poll:

• (a) may be given by personal service, post or facsimile;
• (b) must be in writing, legible and in English addressed as shown below:

Address:	Suite 705 Level 7, St Martins Tower, 31 Market Street, Sydney NSW 2000
Attention:	Anne Adaley
Fax number:	+ 61 2 9264 8933

or to any other address the addressee requests in writing;

• (c) is deemed to be given by the sender and received by the addressee:
• (i) if delivered in person, when delivered to the addressee;
• (ii) if posted, 2 Business Days (or 6, if addressed outside Australia) after the date of posting to the addressee whether delivered or not; or
• (iii) if sent by facsimile transmission, on the date shown on the transmission report by the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety and in legible form to the facsimile number of the addressee notified for the purposes of this clause,

APPENDIX D

Scheme of Agreement

Scheme of Arrangement

pursuant to section 411 of the Corporations Act

between

Uranium King Limited ABN 34 119 187 816 (Uranium King)

and

the holders of fully paid ordinary shares in Uranium King as at the Record Date

1. Preliminary

1.1 Uranium King

Uranium King is a public company incorporated in Australia. It is registered in Western Australia and is a company limited by shares. It has its registered office at 103 Abernethy Rd, Belmont, Western Australia. Uranium King Shares are quoted on the official list of ASX. As at the date of this Scheme, 86,100,000 Uranium King Shares were on issue.

1.2 Monaro

Monaro is a public company incorporated in Australia. It is registered in New South Wales and is a no liability company.. It has its registered office at Level 1, 87 Colin Street, West Perth, Western Australia. Monaro Shares are quoted on the official list of ASX. As at the date of this Scheme, 29,431,508 Monaro Shares were on issue and 5,000,000 unlisted partly paid Monaro shares were on issue.

1.3 What happens if Scheme becomes effective

If the Scheme becomes Effective then:

• (a) in consideration of the transfer of each Uranium King Share to Monaro, Monaro will provide, or procure the provision of, the Scheme Consideration to Scheme Participants in accordance with the terms of this Scheme;
• (b) Uranium King will enter the name of Monaro in the Register in respect of all of the Uranium King Shares transferred to Monaro in accordance with the terms of the Scheme; and
• (c) all of the Uranium King Shares held by the Scheme Participants will be transferred to Monaro and Uranium King will become a wholly owned subsidiary of Monaro.

1.4 Merger Implementation Agreement

Monaro and Uranium King have agreed, by entering into the Merger Implementation Agreement, to implement the terms of the Scheme and to perform their respective obligations under the Scheme.

1.5 Deed Poll

Monaro has executed the Deed Poll in favour of the Scheme Participants pursuant to which it has covenanted to carry out its obligations under the Scheme, including to pay the Scheme Consideration to the Scheme Participants in accordance with the terms of this Scheme.

2. Conditions precedent

2.1 Conditions precedent to the Scheme

The Scheme is conditional on all of the conditions precedent in clause 2.1 of the Merger Implementation Agreement having been satisfied or waived in accordance with the terms of the Merger Implementation Agreement, which conditions precedent include the Court approving the Scheme in accordance with section 411(4)(b) of the Corporations Act, and any other conditions made or required by the Court under section 411(6) of the Corporations Act being satisfied.

2.2 Satisfaction of conditions

The satisfaction or waiver of each condition in clause 2.1 is a condition precedent to the binding effect of the provisions of clause 3, 4, and 6.

2.3 Certificate

Uranium King and Monaro will each provide to the Court before or at the Second Court Hearing, a certificate or such other evidence as the Court requests, confirming whether or not all the conditions precedent in the Merger Implementation Agreement (other than in relation to the Scheme being approved by the Court pursuant to section 411(4)(b) of the Corporations Act) have been satisfied or waived.

2.4 Conclusive evidence

The giving of a certificate by each of Uranium King and Monaro in accordance with clause 2.3 will, in the absence of a manifest error, be conclusive evidence of the satisfaction or waiver of the conditions precedent referred to in the certificate.

2.5 End Date

The Scheme will lapse and be of no further effect if the Effective Date has not occurred on or before the End Date.

3. The Scheme

3.1 Uranium King to lodge Court order with ASIC

Following the approval of the Scheme by the Court in accordance with section 411(4)(b) of the Corporations Act, Uranium King will, as soon as possible, lodge with ASIC under section 411(10) of the Corporations Act an office copy of the Court order approving the Scheme.

3.2 Scheme effective on Effective Date

The Court order referred to in clause 3.1 is taken to have effect, and the Scheme comes into effect, on the Effective Date.

3.3 Transfer of Uranium King Shares held by Scheme Participants

On the Implementation Date:

(a) the Uranium King Shares held by Scheme Participants, together with all rights and entitlements attaching to them as at that date, will be transferred to Monaro without the need for any further acts by Scheme Participants;

• (b) to transfer all of the Uranium King Shares held by Scheme Participants to Monaro, Uranium King will either effect a valid transfer or transfers of the Uranium King Shares under section 1074D of the Corporations Act or deliver to Monaro duly completed and executed share transfer forms (or a master transfer form) in accordance with section 1071B of the Corporations Act and Monaro will execute and deliver those share transfer form(s) to Uranium King; and
• (c) Uranium King will enter the name of Monaro in the Register in respect of all the Uranium King Shares transferred to Monaro in accordance with the terms of the Scheme.

3.4 Agreement by Scheme Participants

The Scheme Participants agree to the transfer of all of their Uranium King Shares to Monaro in accordance with the terms of the Scheme. The Scheme Participants will accept the New Monaro Shares issued by way of Scheme Consideration subject to the Monaro Constitution and agree to be bound by the Monaro Constitution.

3.5 Uranium King Shares transferred free from encumbrance

The Uranium King Shares transferred to Monaro under the Scheme will be transferred free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise.

3.6 Appointment of Monaro as sole proxy

From the Effective Date until Uranium King registers Monaro as the holder of all the Uranium King Shares in the Register, each Scheme Participant:

• (a) is deemed to have appointed Uranium King as attorney and agent (and directed Uranium King in such capacity) to appoint the Chairman of Monaro as its sole proxy and where applicable, corporate representative, to attend shareholders meetings, exercise the votes attaching to Uranium King Shares registered in its name and sign any shareholders resolution, and no Scheme Participant may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 3.6(a)); and
• (b) will hold his or her Uranium King Shares in trust for Monaro absolutely and must take all other actions in the capacity of the registered holder of Uranium King Shares as Monaro directs.

Uranium King undertakes in favour of each Scheme Participant that it will appoint the Chairman of Monaro as that Scheme Participant's proxy or, where applicable, corporate representative in accordance with clause 3.6(a).

3.7 Appointment of Uranium King as sole attorney and agent

Each Scheme Participant without the need for any further act, irrevocably appoints Uranium King and each of the directors and officers of Uranium King, jointly and severally, as the Scheme Participant's attorney and agent for the purpose of:

• (a) in the case of Uranium King Shares in a CHESS holding:
• (i) causing a message to be transmitted to ASTC in accordance with ASTC Settlement Rules so as to transfer the Uranium King Shares held by the Scheme Participant from the CHESS subregister of Uranium King to the issuer sponsored subregister operated by Uranium King notwithstanding that, at the time of such transfer, Monaro has not provided the Scheme

Consideration which is due under this Scheme to the Scheme Participants; and

• (ii) completing and signing on behalf of Scheme Participants any required form of transfer of Uranium King Shares;
• (b) in the case of Uranium King Shares registered in the issuer sponsored subregister operated by the Registry, completing and signing on behalf of Scheme Participants any required form of transfer; and
• (c) in all cases, executing any document (including any other instrument of transfer necessary to give effect to the registration of Monaro as the holder of all the Uranium King Shares held by the Scheme Participants) or doing any other act necessary or desirable to give full effect to the Scheme and the transactions contemplated by it (including enforcement of the Deed Poll against Monaro).

4. Scheme Consideration

4.1 Scheme Consideration

On the Implementation Date and subject to clause 4.5, in consideration of the transfer of the Uranium King Shares to Monaro, Monaro must allot and issue to each Scheme Participant which is not an Ineligible Overseas Shareholder five (5) New Monaro Shares for every seven (7) Uranium King Shares held by the Scheme Participant at the Record Date subject to the provisions dealing with fractional entitlements set out in clause 4.5 and Odd Lots in clause 4.6.

4.2 Provision of New Monaro Shares as Scheme Consideration

Subject to clause 4.5, the obligation of Monaro to procure the allotment and issue of the New Monaro Shares pursuant to clause 4.1 will be satisfied by Monaro, on the Implementation Date:

• (a) entering the name of each Scheme Participant in the Monaro share register in respect of the New Monaro Shares which that Scheme Participant is entitled to receive under the Scheme; and
• (b) sending or procuring the despatch by pre-paid ordinary post (or, if the address of the Scheme Participant in the Register is outside Australia, by pre-paid airmail post) to each Scheme Participant to their address recorded in the Register at the Record Date, a holding statement for the New Monaro Shares issued to that Scheme Participant in accordance with the Scheme.

4.3 Ineligible Overseas Shareholders

Monaro's obligations to provide New Monaro Shares to a Scheme Participant who is an Ineligible Overseas Shareholder will be satisfied by Monaro issuing the New Monaro Shares to which the Scheme Participant would have been entitled (were they not an Ineligible Overseas Shareholder) to a person nominated by Uranium King (Nominee), and Uranium King procuring that the Nominee:

• (a) in the ordinary course of trading on ASX, sells for the benefit of the Ineligible Overseas Shareholder those New Monaro Shares issued to the Nominee under this clause 4.3; and
• (b) as soon as reasonably practicable, accounts to the Ineligible Overseas Shareholder for the net proceeds of sale (on an averaged basis so that all Ineligible Overseas Shareholders receive the same price per New Monaro Share, subject to rounding down to the nearest whole cent) and any income referable to those New Monaro Shares,

after deduction of any applicable costs and expenses, including brokerage, taxes and charges; and

(c) as soon as reasonably practicable, remits the net proceeds of the Ineligible Overseas Shareholder's entitlement under this clause 4.3 in full satisfaction of the Ineligible Overseas Shareholder's rights to receive New Monaro Shares under clause 4.1. These proceeds are to be despatched in the form of a bank cheque drawn on an Australian bank in Australian currency.

The Nominee will be an authorised representative of a holder of an Australian financial services licence.

4.4 Joint holders

In the case of Uranium King Shares held in joint names, holding statements for New Monaro Shares issued to Scheme Participants must be issued in the names of the joint holders and sent to the holder whose name appears first in the Register as at the Record Date.

4.5 Fractional entitlements

• (a) If the number of Uranium King Shares held by a Scheme Participant is such that the aggregate entitlement of that Scheme Participant to New Monaro Shares is not a whole number, then the entitlement in each case must be rounded up or down to the nearest whole number, with fractions of 0.5 or greater being rounded up.
• (b) If Monaro and Uranium King are of the opinion that several Scheme Participants, each of which holds a holding of Uranium King Shares which results in a fractional entitlement to New Monaro Shares, have, before the Record Date, been party to a shareholding splitting or division in an attempt to obtain an advantage by reference to the rounding provided for in the calculation of each Scheme Participant's entitlement to the Scheme Consideration, Monaro and Uranium King may give notice to those Scheme Participants:
• (i) setting out the names and registered addresses of all of them;
• (ii) stating that opinion; and
• (iii) attributing to one of them specifically identified in the notice the Uranium King Shares held by all of them,

and, after the notice has been so given, the Scheme Participant specifically identified in the notice shall, for the purposes of the Scheme, be taken to hold all those Uranium King Shares and each of the other Scheme Participants whose names are set out in the notice shall, for the purposes of the Scheme, be taken to hold no Uranium King Shares.

4.6 Odd Lots

If the total number of New Monaro Shares a Scheme Participant is entitled to receive is an Odd Lot, Monaro may elect (in its sole and unfettered discretion) to provide cash consideration, which is equal to the Market Price of the Monaro Shares, instead of issuing the New Monaro Shares.

4.7 New Monaro Shares to rank equally

(a) New Monaro Shares issued to Scheme Participants will be validly issued and will rank equally in all respects with all existing Monaro Shares.

(b) On issue, each New Monaro Share issued to Scheme Participants will be fully paid and free from any mortgage, charge, lien, encumbrance or other security interest.

5. Dealings in Uranium King Shares

5.1 Determination of Scheme Participants

To establish the persons who are Scheme Participants, dealings in Uranium King Shares will only be recognised if:

• (a) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Register as the holder of the Uranium King Shares at or before the Record Date; and
• (b) in all other cases, registrable transfers or transmission applications or transfers in registrable form in respect of those dealings are received at the Registry at or before the Record Date.

5.2 Uranium King to register transfer and transmission applications

Uranium King will register registrable transfers or transmission applications of the kind referred to in clause 5.1(b) by, or as soon as practicable after, the Record Date.

5.3 Transfers received after Record Date not recognised

Uranium King will not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of Scheme Shares received after the Record Date.

5.4 Uranium King to maintain Register to determine entitlements

In order to determine entitlements to the Scheme Consideration, Uranium King will maintain, or procure the maintenance of, the Register in accordance with this clause 5 until the Scheme Consideration has been paid to Scheme Participants and the Register in this form will solely determine entitlements to the Scheme Consideration.

5.5 Effects of the Record Date

All holding statements for Uranium King Shares (other than statements of holding in favour of Monaro) and share certificates issued in relation to any certificated holdings of Uranium King Shares (if any) will cease to have any effect from the Record Date as documents of title in respect of those Uranium King Shares. As from the Record Date, each entry current at that date on the Register relating to Uranium King Shares will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration in respect of the Uranium King Shares relating to that entry.

5.6 Scheme Participants details

Uranium King must procure that by 9:00am on the Implementation Date, details of the names, registered addresses and holdings of Uranium King Shares of every Scheme Participant as shown in the Register at the Record Date are available to Monaro in such form as Monaro may reasonably require.

6. Quotation of Shares

6.1 Suspension of trading in Uranium King Shares

It is expected that the suspension of trading in Uranium King Shares on ASX will occur from the close of trading in marketable securities on ASX on the Effective Date.

6.2 Termination from official quotation of Uranium King Shares

Uranium King will apply for termination of the official quotation of Uranium King Shares on ASX and the removal of Uranium King from the official list of ASX with effect from the Business Day after the date on which all transfers of the Scheme Shares to Monaro have been duly registered by Uranium King in accordance with this Scheme.

6.3 Monaro beneficially entitled to Scheme Shares

Monaro will be beneficially entitled to the Scheme Shares transferred to it under the Scheme pending registration by Uranium King of the name and address of Monaro in the Register as the holder of the Scheme Shares.

6.4 Quotation of New Monaro Shares

Monaro will apply for official quotation of the New Monaro Shares on ASX and will request that those shares be quoted on a deferred settlement basis as soon as practicable after the Effective Date in accordance with ASX requirements and on a normal settlement basis as from the first Business Day after the Implementation Date.

7. General provisions

7.1 Uranium King and Scheme Participants bound

The Scheme binds Uranium King and all Scheme Participants and will, for all purposes, have effect notwithstanding any provision of the Uranium King Constitution.

7.2 Uranium King giving effect to the Scheme

Uranium King will execute all documents and do all things that are necessary, expedient or incidental to give full effect to the Scheme and the transactions contemplated by it.

7.3 Appointment of attorney

Each Scheme Participant, without the need for any further act, irrevocably appoints Uranium King and all of its directors and officers (jointly and severally) as its attorney and agent for the purpose of completing and executing any document necessary to give effect to the Scheme including a proper instrument of transfer of Uranium King Shares held by Scheme Participants for the purposes of section 1071B of the Corporations Act (which may be a master transfer of all the Uranium King Shares held by Scheme Participants) and any instrument appointing the Chairman of Monaro as sole proxy for or, where applicable, corporate representative of each Scheme Participant as contemplated by clause 3.6.

7.4 Authority

Each of the Scheme Participants consent to Uranium King doing all things necessary or incidental to the implementation of the Scheme.

7.5 Alteration and conditions to the Scheme

Uranium King may, with the consent of Monaro (which consent will not be unreasonably withheld or delayed), by its counsel consent on behalf of all Scheme Participants to any modifications or conditions which the Court thinks fit to impose.

7.6 Notices

Where a notice, transfer, transmission application, direction or other communication referred to in the Scheme is sent by post to Uranium King, it will not be deemed to have been received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at Uranium King's registered office or at the Registry.

7.7 Costs and stamp duty

Monaro will pay all stamp duty and any related fines, penalties and other costs in respect of the Scheme (including in connection with the transfer of the Scheme Shares to Monaro) in accordance with the terms of the Scheme.

7.8 Governing law

This Scheme is governed by the law of Western Australia.. The parties submit to the nonexclusive jurisdiction of the courts in Western Australia..

8. Definitions and interpretation

8.1 Definitions

The following definitions apply in this document:

ASIC means the Australian Securities and Investments Commission.

ASTC means the ASX Settlement and Transfer Corporation Pty Limited ABN 49 008 504 532.

ASTC Settlement Rules means the operating rules of the ASTC.

ASX means the Australian Securities Exchange or ASX Limited ABN 98 008 624 691, as the context requires.

ASX Listing Rules means the listing rules of ASX.

Business Day means a business day as defined in the ASX Listing Rules.

CHESS means the clearing house electronic subregister system, which facilitates electronic security transfer in Australia.

Corporations Act means the Corporations Act 2001 (Cth).

Court means the Supreme Court of Western Australia or the Perth Registry of the Federal Court of Australia, as nominated by Uranium King.

Deed Poll means the deed poll executed by Monaro in favour of Scheme Participants dated 19 March 2008.

Effective Date means the date on which the Scheme comes into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under sections 411(4)(b) and 411(6) of the Corporations Act in relation to the Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC.

End Date means 31 July 2008, or such other date agreed in writing between Uranium King and Monaro.

Explanatory Statement means the explanatory statement of Uranium King in relation to the Scheme issued pursuant to section 412 of the Corporations Act which has been registered with ASIC.

Implementation means the implementation of the Scheme, on it becoming effective under section 411(10).

Implementation Date means the date which is 3 Business Days after the Record Date, or such other date as is ordered by the Court.

Ineligible Overseas Shareholders means Uranium King Shareholders with a registered address in a jurisdiction other than Australia (and its external territories) and New Zealand, but does not include Uranium King Shareholders with a registered address in jurisdictions where Uranium King and Monaro is satisfied that such persons can be offered and issued with New Monaro Shares without Uranium King or Monaro having to comply with any conditions or additional disclosure, registration or other securities law requirements applicable in that jurisdiction which Uranium King and Monaro in their sole joint discretion consider overly onerous.

Market Price means the volume weighted average price of a Monaro Share trading on ASX over the five trading days on ASX immediately preceding the Effective Date.

Merger Implementation Agreement means the deed between Uranium King and Monaro dated 10 October 2007, relating to the implementation of the Scheme, as varied by deeds dated 19 March 2008 and 9 April 2008.

Monaro means Monaro Mining NL ABN 99 073 155 781.

Monaro Constitution means the Monaro Constitution as amended from time to time.

Monaro Shares means fully paid ordinary shares in the capital of Monaro.

New Monaro Shares means the means fully paid ordinary shares in the capital of Monaro to be issued in accordance with clause 4.1.

Nominee has the meaning given to that term in clause 4.3.

Odd Lot means a parcel of New Monaro Shares which if issued would not comprise a marketable parcel within the meaning of the ASX Listing Rules.

Record Date means 10.00pm on the date which is 5 Business Days after the Effective Date or such other date as Uranium King and Monaro agree.

Register means the register of Uranium King Shareholders maintained in accordance with the Corporations Act and Registry has a corresponding meaning.

Scheme means this scheme of arrangement subject to any modifications or conditions made or required by the Court pursuant to section 411(6) Corporations Act and agreed or consented to by Uranium King and Monaro.

Scheme Consideration means the New Monaro Shares to be issued by Monaro to each Scheme Participant in accordance with clause 4.1.

Scheme Participant means each Uranium King Shareholder as at the Record Date (other than Monaro to the extent that it already holds Uranium King Shares), taking into account

registration of all registrable transfers and transmission applications in accordance with clause 5.1.

Scheme Share means each Uranium King Share on issue as at the Record Date.

Second Court Date means the first day on which the Court hears the application for an order under section 411(4)(b) approving the Scheme or, if the application is adjourned or subject to appeal for any reason, the first day on which the adjourned or appealed application is heard.

Second Court Hearing means the hearing of the application to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.

Uranium King Constitution means the Uranium King Constitution as amended from time to time.

Uranium King Share means each fully paid ordinary share in the capital of Uranium King.

Uranium King Shareholder means each person who is registered in the Register as a holder of Uranium King Shares.

8.2 Interpretation

In this Scheme, headings and bolding are for convenience only and do not affect its interpretation and unless the context requires otherwise:

• (a) words importing the singular include the plural and vice versa;
• (b) a reference to any document is to that document as varied, novated, ratified or replaced;
• (c) a reference to a clause, party, annexure, exhibit or schedule is a reference to a clause of, and a party, annexure, exhibit and schedule to, the Scheme and a reference to the Scheme includes any annexure, exhibit and schedule;
• (d) a reference to a party includes that party's executors, administrators, successors, substitutes and permitted assigns;
• (e) a reference to a holder includes a joint holder;
• (f) a person includes any type of entity or body of persons, whether or not it is incorporated or has a separate legal identity, and any executor, administrator or successor in law of the person;
• (g) references to any legislation or regulation is to that provision or legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;
• (h) words and phrases have the same meaning (if any) given to them in the Corporations Act;
• (i) the words "including" in any form is not a word of limitation;
• (j) a reference to "\$" or "dollar" is to Australian currency; and
• (k) a reference to time is a reference to Perth Time.

APPENDIX E

Notice of Scheme Meeting

URANIUM KING LIMITED ACN 119 187 816

NOTICE OF SCHEME MEETING

Notice is given that by an order of the Perth Registry of the Federal Court of Australia (Court) made on 8 May 2008 pursuant to section 411(1) of the Corporations Act 2001 (Corporations Act) a meeting of the holders of ordinary shares in Uranium King Limited ACN 119 187 816 (Company) will be held on 12 June 2008 at the 103 Abernethy Road, Belmont, Western Australia at 10.00 am (Perth time).

BUSINESS OF THE SCHEME MEETING

Resolution

To consider, and if thought fit, to pass the following resolution in accordance with section 411(4)(a)(ii) of the Corporations Act:

"That pursuant to, and in accordance with, section 411 of the Corporations Act 2001 (Cth), the scheme of arrangement proposed to be made between Uranium King Limited and the holders of fully paid ordinary shares in Uranium King Limited as set out in the Scheme Booklet accompanying this notice of meeting is approved (with or without modification as approved by the Federal Court)."

By Order of the Board

Martin Stein Company Secretary 7 May 2008

EXPLANATORY NOTES

These notes should be read in conjunction with this Notice of Scheme Meeting

Terminology

Capitalised terms which are defined in the glossary in section 12 of the Scheme Booklet which accompanies this Notice of Scheme Meeting have the same meaning when used in this notice (including these notes) unless the context requires otherwise.

Chairman

The Court has directed that Mr Kevin Dundo act a s Chairman of the Scheme Meeting or, failing him, Mr Jim Malone. The Court has directed that Mr Kevin Dundo act as Chairman of the Scheme Meeting or, failing him, Mr Jim Malone.

Majority required

In accordance with section 411(4)(a)(ii) of the Corporations Act, the Resolution (which is contained in this Notice of Scheme Meeting) must be passed by:

• a majority in number of the Uranium King Shareholders present and voting (either in person or by proxy) as the Scheme Meeting; and
• at least 75% of the votes cast on the Resolution.

Entitlement to vote

The Court has ordered that, for the purposes of the Scheme Meeting, UKL Shares will be taken to be held by the persons who are registered as Uranium King Shareholders at 10.00pm on 10 June 2008. Accordingly, transfers registered after this time will be disregarded in determining entitlements to vote at the Scheme Meeting.

Proxies

• Votes at the Scheme Meeting may be given personally or by proxy, attorney or representative.
• A proxy form accompanies this notice.
• A member entitled to attend and vote at the Scheme Meeting has the right to appoint no more than two proxies.
• A member who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise.
• If the member appoints two proxies and the appointment does not specify the proportion or the number of the member's votes each proxy may exercise, each proxy may exercise one half of the member's votes. If the member appoints two proxies, neither proxy may vote on a show of hands.
• A proxy need not be a member of the Company.
• The member or his or her power of attorney who has not received any notice of revocation of the authority must sign a Proxy Form. • Proxies given by corporations must be signed by a director, company secretary, sole director and sole company secretary or under the hand of a duly authorised officer or attorney. The Proxy Form (and any power of attorney under which it is signed) must be received by the Company by facsimile on (61 8) 9315 2233, or by delivering it to the following addresses: (1) Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 or (2) 103 Abernethy Road BELMONT WA 6104 or by mail to PO Box 566 BELMONT WA 6984 no later than 10.00am on 10 June 2008, being 48 hours before the commencement of the Scheme Meeting. Any Proxy Form received after that time will not be valid for the Scheme Meeting.

Voting by attorney

A UKL Shareholder entitled to attend and vote at the Scheme Meeting may appoint an attorney to vote at the Scheme Meeting. Attorneys should bring an original or certified copy of the power of attorney to the Scheme Meeting.

Corporate representatives

To vote at the Scheme Meeting a corporation who is a UKL Shareholder, or who has been appointed as a proxy by a UKL Shareholder, may appoint a person to act as its representative. The appointment of a representative must comply with section 250D of the Corporations Act. Evidence of the appointment must be brought to the Scheme Meeting together with any authority under which it is signed. A pro forma "Certificate of Appointment of Corporate Representative" may be obtained from the Registry.

Jointly held Uranium King Limited Shares

If UKL Shares are jointly held, only one of the joint UKL Shareholders is entitled to vote. If more than one joint UKL Shareholder votes, only the vote of the UKL Shareholder whose name appears first on the Register will be counted.

Court approval

If the Resolution is passed at the Scheme Meeting by the requisite majorities, the implementation of the Scheme (with or without modification) will be subject to among other things, the subsequent approval of the Court.

SCHEME BOOKLET

for the proposed merger with

MONARO MINING NL