STRIKE RESOURCES LIMITED — Capital/Financing Update 2006

Jul 16, 2006

Monday, 17 July 2006

MARKET ANNOUNCEMENT

Kalimantan Coal Project

The Company refers to its announcement dated 20 March 2006 relating to the Kalimantan Coal Project which confirmed the date for completion of due diligence on such project to be 15 July 2006.

Since that update, the Company has conducted a further 2,040 metres of core and open-hole drilling and has completed a review of the results of laboratory core sample analysis from this and earlier drilling.

Whilst the drilling work has confirmed the potential for a resource in line with previous estimations as to deposit size and calorific value, a review of the laboratory analysis has revealed a higher than expected total moisture content in the coal samples.

This total moisture content effects the marketability, stockpiling and handling of such coal and can have a significant impact on bottom line mine profitability.

The Company believes that it therefore needs further time to conduct due diligence investigations into handling and stockpiling and their impact on the profitability of mining the coal.

The Company believes resolution of these matters is particularly important given:

• the significance of its other mining projects (in particular its Peruvian iron-ore projects) $(a)$
• $(b)$ the amount of management time and capital involved in advancing the coal project; and
• $(c)$ the quantum of payments required to be made to the coal concession holders and to Sinarco Resources Pte Ltd (if due diligence is confirmed) amounting to approximately $1 million (in cash and shares) which can otherwise be applied towards its other mining projects.

The Company has therefore sought an extension of the due diligence period for a further 3.5 months to 30 November 2006.

The concession holders have verbally agreed to extend the due diligence period but as at the date of this announcement written confirmation granting this extension has not yet been received by the Company. The Company expects to receive this within the next few days and will advise the market accordingly.

Should written confirmation of the extension to the due diligence period not be received, the Company will not proceed with this coal project and there will be no further payments required to be made under the agreement.

For further information:

Shanker Madan Managing Director T | (08) 9214 9700 E | smadan@strikeresources.com.au Victor Ho Company Secretary T | (08) 9214 9700 E | vho@strikeresources.com.au

www.strikeresources.com.au

STRIKE RESOURCES LIMITED

A.B.N. 94 088 488 724

ASX Code: SRK

Level 14, 221 St Georges Terrace, Perth WA 6000 T | (08) 9214 9700 F | (08) 9322 1515