STRIKE RESOURCES LIMITED — Capital/Financing Update 2008

Jan 9, 2008

10th January 2008

MARKET ANNOUNCEMENT

Peruvian Projects Update

The Company is pleased to provide the following update on its Apurimac and Cuzco iron ore projects in Peru:

• The Company continues to drill at its Apurimac deposit and has recently mobilised 4 additional diamond core drilling rigs to operate at the Apurimac and the Cuzco deposits.
• Drilling at Opaban I has indicated the continued presence of high grade mineralisation which include thickness of up to 34.5m of mineralisation at 61.94% Fe.
• The focus of the expanded drilling campaign is to target a JORC Compliant Fe Resource of 600Mt across both deposits by the end of the third quarter 2008.
• Test work results on Apurimac samples to date indicate the potential for a high grade product at better than 68% Fe at coarse particle sizes of 125 and 250 micron, suggesting low energy requirements for beneficiation resulting in reduced operating costs.
• Preferred pipeline route is shorter than expected, with minimal pumping required.
• Short-listed port locations offer favourable environmental and access conditions.
• Pre-feasibility progress to date is very encouraging. The completion of the Pre-feasibility studies is due by the end of March 2008.

1. DRILLING

As previously announced, the Company has already defined a substantial JORC Inferred Resource of 172Mt at 62.28% Fe at two of its concessions in the Apurimac region, Opaban I and Opaban III.

The Company has now received the results of further drilling conducted to the north of the currently defined mineralisation at Opaban I. The Company is pleased to advise that this drilling has indicated the continued presence of high grade mineralisation.

Annexure "A" outlines these drilling results, which include thicknesses of up to 34.5m of mineralisation at 61.94% Fe.

Significant targets with high grade surface mineralisation however remain untested and accordingly 60,000 meters of further drilling is planned at Apurimac during 2008, with a target of increasing the JORC Inferred Resource base in Apurimac to at least 300Mt by the end of the third quarter 2008.

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STRIKE RESOURCES LIMITED A.B.N. 94 088 488 724

To this end, 2 additional diamond core rigs are now being mobilised to continue drilling at Apurimac.

In addition 2 diamond core drilling are commencing drilling at Cuzco. Here too, the Company is targeting a 300Mt of JORC Inferred resource base by the end of the third quarter of 2008.

2. BENEFICIATION TEST WORK

Laboratory scale beneficiation test work has been completed on representative diamond core samples from the Opaban I deposit at Apurimac. The results of this test work show that the material will upgrade by up to 3.18% Fe with simple crushing at 1mm and de-sliming.

In addition, Davis Tube test work on reverse circulation chip samples from Opaban I shows that the mineralised material at assay head grades of 51.17% Fe to 61.22% Fe would return product grades at coarse crushing with particle sizes of 80% passing 125 and 250 microns as follows:

Fe	68.02% to 68.28%
Al2O3	0.30% to 0.35%
SiO2	1.51% to 1.77%
P	0.01% to 0.02%

Table 1.

These are excellent results and suggest low energy consumption for the beneficiation process, which means lower operating costs. The Company is now targeting further test work on bulk samples of around 400 kilograms each at average grades from 56% Fe to 62% Fe.

3. PORT LOCATIONS

Applications have been lodged for land and sea access to 3 alternative port locations at the coast, suitable for shipping 20 – 40 Mt of iron ore per annum. Preliminary site studies show that none of these sites will require any dredging and all 3 offer deep water access at 20m draft to load cape size vessels of larger than 150,000 tonne capacity.

The length of the access bridges from the coast to the deep water points are likely to be of the order of 250 metres to 1,900 metres (depending upon location). All 3 potential sites are located in bay areas protected from the southern currents.

These factors suggest relatively lower capital cost for building a port than previously envisaged.

4. PIPELINE ROUTES

International pipeline consultants PSI have identified 6 alternative pipeline routes to transport iron ore from the mine to the coast, of which the shortest is 356 kilometers. The favoured pipeline route allows for a mostly flat to gentle downhill gradient, allowing gravity to do most of the work thereby minimising the need for pumping.

PSI estimates that such a slurry pipeline route transporting 20 million tonnes a year will require only 2 pumping stations, indicating relatively low energy requirements which in turn leads to reduced operating costs. This reflects the relatively benign nature of the topography of the likely pipeline route, where a large portion of the pipeline will traverse the relatively flat (albeit high) Peruvian alti-plano before descending to the coastal plain.

5. PRE-FEASIBILITY PROGRESS

The Pre-feasibility studies which commenced in September 2007 under the Project Management of international engineering firms SKM and PSI are due for completion in March 2008. The studies cover all aspect of mine design, ore processing and transport and are expected to give the Company sufficient confidence in the Apurimac and Cuzco projects to commence a Bankable Feasibility Study in the second or third quarter of 2008.

SUMMARY

Deployment of additional drilling rigs will speed up progress in building a resource inventory across the Apurimac and Cuzco deposits.

Pre-feasibility progress to date is encouraging, with the studies showing a favourable impact on expected capital and operating costs in several areas.

The Company continues to make progress to meet its target of becoming a significant international iron ore producer at the rate of 20 to 40 million tonnes per annum.

In addition, as previously announced, the Cuzco Project area presents the potential for an early cash flow with a small-scale mining operation to be operational by 2009, producing up to two million tonnes per annum to support the Company's larger mining aspirations.

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.

ANNEXURE A

				From	To	Intercept	Fe	P	Al2O3	SiO2	S	LOI1000
Drillhole	Depth	Azimuth	Dip	(m)	(m)	(m)	%	%	%	%	%	%
OPI 72	100	0	-90	0	6.35	6.35	59.41	0.038	2.98	8.43	0.051	0.87
				25.7	33.2	7.5	64.56	0.02	1.35	5.28	0.06	-0.59
				62.9	68.9	6	58.85	0.03	1.17	4.08	2.25	0.85
Cumulative Thickness			0	68.9	19.85	61.19	0.03	1.82	5.92	0.72	0.31
OPI 73	57.3	0	-90	5.4	11.7	6.3	60.31	0.02	1.76	8.29	0.01	0.43
				14.2	17.8	3.6	63.35	0.01	1.62	6.89	0.02	-1.33
Cumulative Thickness			5.4	17.8	9.9	61.42	0.02	1.71	7.78	0.01	-0.21
OPI 74	82.2	120	-75	16.5	21	4.5	61.93	0.03	1.45	8.21	0.01	-1.19
				30	46.5	16.5	58.03	0.03	2.21	10.25	0.57	-0.85
Cumulative Thickness				16.5	46.5	21	58.86	0.03	2.05	9.82	0.45	-0.93
OPI 75	85.8	300	-60	22.5	57	34.5	61.94	0.02	1.52	6.86	0.48	-1.8

RESULTS FROM RECENT DRILLING IN OPABAN I CONCESSION