STRIKE RESOURCES LIMITED — Capital/Financing Update 2008

Feb 19, 2008

ASX ANNOUNCEMENT 20 February 2008

UPDATE ON CUZCO LUMP IRON ORE PROJECT

The Company is pleased to announce significant progress made in advancement of its Cuzco Lump Iron Ore Project:

• MOU signed with Peru Rail regarding` the transportation of up to 2 million tonnes of iron ore per annum to Matarani Port.
• Three drilling rigs currently operating in the Cuzco concessions.
• Drilling is underway to build a shallow resource base around previously encountered intersections of near surface high grade mineralisation.
• Focus of activity centered on outcropping mineralisation extending for approximately 1.5 kilometres and up to 200 metres wide around drill holes CQ1 and CQ12.
• Drill holes CQ1 and CQ12 previously encountered high grade hematitic mineralisation as follows:

	From (m)	To (m)	Fe (%)	Al2O3 (%)	SiO2 (%)	P (%)	S (%)
CQ1	0	11.5	63.53	1.53	3.79	0.039	0.037
CQ12	0	32.0	63.91	2.29	3.30	0.058	0.007

• Current drilling steps out from CQ1 and CQ12, to build a shallow hematitic resource of up to 30 metres in depth.

MOU with Peru Rail

The Company is pleased to confirm that a Memorandum of Understanding (MOU) has been executed between Peru Rail S.A (Peru Rail) and Apurimac Ferrum S.A. (AF) pursuant to which the parties have jointly commenced a feasibility study for the transport of up to 2 million tonnes of iron ore per annum from AF's Cuzco concessions to the Matarani Port utilising Peru Rail's existing infrastructure.

The MOU sets out a framework for the parties settling the terms of a binding Transportation Agreement and contemplates Peru Rail expanding its existing infrastructure to accommodate the proposed tonnages of the project and AF agreeing to supply a minimum quantity of iron ore to support such expansion.

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It has also been agreed that the responsibility of delivery of iron ore to an agreed point of loading at the mine and the offloading of iron ore into ships at the port of Matarani will be assumed by AF.

After completion of further studies by both parties it is contemplated that a Transportation Agreement will be reached with respect to the supply of a minimum quantity of iron ore for transport over such infrastructure at an agreed price.

Peru Rail is a privately owned rail operator between the port of Matarani on the Peruvian coast and the city of Cuzco. Peru Rail is presently transporting copper concentrate by rail to Matarani and has experience in the transportation of bulk commodities.

AF is the Strike-controlled Peruvian company which owns the Apurimac and Cuzco Projects in Peru.

Whilst the Company's primary aim is to develop a large scale mining operation at its Apurimac and Cuzco Projects of 20 increasing to 40 million tonnes per annum, there is the potential to develop a 2 million tonne per annum operation from Cuzco to generate significant early cash flow for the Company.

The Cuzco Project concessions contain large quantities of surface and near-surface outcropping high grade iron ore, which can be easily and cheaply mined. The deposit is approximately 503 kilometres from the shipping port of Matarani.

Current Cuzco Drilling Campaign

Drilling to support Cuzco Lump Project

The Company has previously outlined the objective of delineating a resource of 20 to 30 million tonnes of high grade near surface hematite mineralisation to support the Cuzco Lump Project. The Company is targeting sales of high grade and high value lump iron ore utilising low cost near surface mining.

In this regard the Company has examined previous drilling and mapping data and as a result has determined that the areas surrounding drill holes CQ1 and CQ12 offer the best opportunity for delineating a high grade near surface resource.

Mineralisation surrounding holes CQ1 and CQ12 occurs as largely hematitic sheets of high grade iron ore skarn at the edge of long ridges. The mineralisation presents as surface outcrops extending along strike for more than one kilometre and with widths of up to 200 metres. Surface topography within and surrounding the mineralisation lends itself to easy access for surface mining and a low to negligible waste to ore ratio.

Drilling intercepts in these two holes are summarised as follows:

	From (m)	To (m)	Fe (%)	Al2O3 (%)	SiO2 (%)	P (%)	S (%)
CQ1	0	11.5	63.53	1.53	3.79	0.039	0.037
CQ12	0	32.0	63.91	2.29	3.30	0.058	0.007

Three drilling rigs have been mobilised to this area to delineate the near surface resource for the Cuzco Lump Project and to test deeper mineralisation to support the Company's objective of developing a larger 20 million tonne per annum mining operation at Cuzco.

The MOU with Peru Rail together with the current drilling programme at Cuzco continues to advance the Company's prospects of becoming an early iron ore producer capitalising on current high iron ore prices whilst laying the foundations for the development of its proposed 20 million tonne per annum mining operation.

For further information:

John Stephenson Shanker Madan Chairman Managing Director T | (08) 9214 9700 T | (08) 9214 9700 E | jstephenson@strikeresources.com.au E | smadan@strikeresources.com.au

The information in this market announcement that relates to exploration results has been compiled by Mr Hem Shanker Madan who is a Member of The Australian Institute of Mining and Metallurgy. Mr Madan is the Managing Director of the Company. Mr Madan has in excess of 5 years experience which is relevant to the style of mineralisation under consideration and qualifies as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code)." Mr Madan consents to the inclusion in this market announcement of the matters based on his information in the form and context in which it appears.