RAREX LIMITED — Capital/Financing Update 2008

May 12, 2008

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Clancy Exploration Limited

ABN

65 105 578 756

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of +securities issued or to be issued

Incentive options to acquire ordinary shares

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

100,000 Incentive options to acquire ordinary shares

Incentive options are exercisable at 20 cents on or before 30 April 2010

+ See chapter 19 for defined terms.

4	Do the +securities rank equally in allrespects from the date of allotmentwith an existing +class of quoted+securities?	No, however shares issued upon the exercise of theoptions will rank equally with ordinary shares.
	If the additional securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipate for the next dividend,(inthecaseofatrust,distribution) or interest payment•the extent to which they do notrankequally,otherthaninrelation to the next dividend,distribution or interest payment	Options have no dividend participation entitlement
5	Issue price or consideration	Nil
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	Employee option package for Senior ExplorationGeologist, J Vassallo
7	Dates of entering +securities intouncertificated holdings or despatchof certificates	13 May 2008
			+Class
8	+classNumberandofall+securitiesquotedonASX(including the securities in clause2 if applicable)	Number26,450,000	ORD
		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(including the securities in clause2 if applicable)	21,355,5062,000,000	Ordinary sharesIncentive Options (20c,30 April 2010)
		500,000	Series 1 PerformanceOptions (30c, 30 April2010)
		500,000	Series 2 PerformanceOptions (40c, 30 April2010)
		2,000,000	Broker Options (20c, 10July 2011)
10	Dividend policy (in the case of atrust, distribution policy) on theincreased capital (interests)	N/A

Part 2 - Bonus issue or pro rata issue – N/A

Part 3 - Quotation of securities – N/A

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

Quotation agreement

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

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

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

Sign here: Date: 13 May 2008

(Company Secretary)

Print name: Rowan Caren

== == == == =

+ See chapter 19 for defined terms.

NOTICE GIVEN UNDER SECTION 708A(5) OF THE CORPORATIONS ACT

This notice is given by the Company under section 708A(5)(e) of the Corporations Act in relation to an issue of 100,000 incentive options to acquire fully paid ordinary shares by the Company without disclosure to investors under Part 6D.2 of the Corporations Act.

As at the date of this notice, the Company has complied with:

• (a) the provisions of Chapter 2M of the Corporations Act as they apply to the Company; and
• (b) section 674 of the Corporations Act.

The Company confirms that, as at the date of this notice, there is no information that:

• (a) has been excluded from a continuous disclosure notice given to ASX in accordance with the ASX Listing Rules; and
• (b) investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:
• (i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; and
• (ii) the rights and liabilities attaching to fully paid ordinary shares,

to the extent to which it would be reasonable for investors and their professional advisers to expect to find such information in a disclosure document.

Dated: 13 May 2008

R Caren Company Secretary Clancy Exploration Limited