REACH RESOURCES LIMITED — Capital/Financing Update 2003

Oct 7, 2003

CLARIFICATION OF WORKING CAPITAL POSITION

ANNOUNCEMENT

8 OCTOBER 2003

The Board of Cervantes Seafood Limited (the "Company") wish to clarify its working capital position leading up to the commencement of the 2003/04 Rock Lobster season.

The completion of the merger of the Company's rock lobster business with INF Pty Ltd ("INF") is scheduled to take place shortly after the Company's General Meeting to be held on 16 October 2003 to approve the merger under ASX Listing Rules and the Corporations Act. Under the terms of the merger agreement, INF will add approximately $2.0 million of working capital plus substantial other assets to the combined operations. The Directors are in the process of negotiating financing facilities with the Company's bankers to fund the peak period's working capital needs. The key management staff of INF will also join the existing Cervantes Seafood management to implement the merger and develop the expanded company into the future.

The shareholders of the Company have also been asked to approve a resolution at the General Meeting of 16 October 2003 authorising Directors to make a placement of up to 15 million shares to augment working capital. Discussions are being carried out with a number of interested parties on this placement.

AUTHORISED BY:

Chen Hao Managing Director Cervantes Seafood Limited