STRIKE RESOURCES LIMITED — Capital/Financing Update 2012

Dec 30, 2012

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Monday, 31 December 2012

Strike moves to 100% ownership of AF

Announcement Highlights

• Strike acquires remaining 50% in AF from D&C and moves to full ownership of the Apurimac and Cusco Iron Ore Projects

• Consideration payable to D&C: o 2,800,000 Strike shares (issued 28 December) o Deferred payments when resource definition, approvals and construction milestones are met

• o A royalty on sales of iron ore and base and precious metals

• Strike has loaned AF US$3.5 million, which it has used to repay all loans and interest owed to D&C

• Strike has secured complete operating control of AF to progress the Apurimac and Cusco Iron Ore Projects

Settlement summary

Strike Resources Limited ( Strike or the Company ) is pleased to announce that it has signed and completed a settlement agreement ( Shootout Settlement Agreement ) with its Peruvian joint venture partner D&C, to acquire the remaining 50% equity interest in Apurimac Ferrum S.A. ( AF ). Under the Shootout Settlement Agreement Strike has moved to 100% ownership of AF. D&C has received the following consideration:

• 2,800,000 Strike shares have been issued to D&C.

• AF has repaid D&C the loans it owes it, of approximately US$3.5 million. Strike advanced AF the funds to repay these loans.

D&C will receive the following deferred payments if certain milestones are achieved:

• US$2 million on AF defining a JORC Resource at the Apurimac project of 500Mt of iron ore with an average grade of at least 55% iron ( Fe ) or 275Mt of contained iron at an average grade of 52.5% Fe or above.

• US$3 million on AF achieving environmental and community approvals for the construction of an iron ore mine and associated infrastructure with a design capacity of at least 10Mtpa of iron ore product.

• US$5 million on formal AF Board approval to commence construction of an iron ore project, or the commencement of bulk earthworks for an iron ore processing plant, with a design capacity of at least 10Mtpa of iron ore product ( Construction Milestone ).

D&C will receive the following royalties:

• 1.5% of the net profits from sales of iron ore.

• 2% of the proceeds of sales of base and precious metals (on a net smelter return basis).

Strike Resources Limited (ABN 94 088 488 724) Level 2, 160 St Georges Terrace Perth Western Australia 6000 Tel: +61 8 9324 7100 Fax: +61 8 9324 7199

Web: www.strikeresources.com.au Email: info@strikeresources.com.au

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ASX Announcement: Strike moves to 100% of AF

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AF may extinguish the royalties by paying D&C any one of the following amounts ( Extinguishment Payment ):

• US$13 million, if paid within 2 years from 20 December 2012 (the Commencement Date ),

• US$15 million, if paid between 2 and 3 years from the Commencement Date,

• US$20 million, if paid between 3 and 4 years from the Commencement Date, or

• US$30 million[1] if paid more than 4 years from the Commencement Date but before the Construction Milestone occurs or the 15th anniversary of the agreement (whichever is sooner).

(Any royalty that is being paid on sales of base and precious metals at the date the Extinguishment Payment is made remains in place, up to a cap of US$500,000 per annum.)

Commenting on the acquisition, Strike Chairman, Malcolm Richmond, said:

“Strike is pleased to achieve its long-held objective of moving to 100% ownership of AF. The settlement agreement gives all parties an equitable outcome; Strike secures the flexibility of operational control of AF and D&C retains continued exposure through deferred payments, royalties and its shares in Strike. Importantly, the acquisition has been negotiated to preserve Strike’s cash. Moving to full control of AF enables Strike to focus on driving exploration efforts and progressing key project milestones at Apurimac. This will allow the Company to realise the value inherent in what is recognised as one of the highest-quality, undeveloped magnetite iron ore projects globally.”

AF business strategy – next steps

With 100% ownership of AF, Strike is now well positioned to progress the key Apurimac iron ore project, with the primary near-term goal of securing access for drilling at the Opaban concessions through continued community engagement. In addition, further enhancement of the Cusco project will be achieved through progressing both AF’s concessions and Cuervo’s adjacent Cerro Ccopane iron ore project.

As previously announced, Strike appointed Rothschild to assist the Company in the AF Shoot-out process. Rothschild will now work to introduce a strategic partner into AF to assist in the funding and development of the Apurimac project.

Cash position

Following the repayment of the D&C loans and interest, Strike’s total cash position is approximately A$15 million. Strike expects to receive US$4.3m from the Berau Coal Project settlement in approximately six months.

For further information:

Malcolm Richmond Ken Hellsten Chairman Managing Director T | +61 8 9324 7100 T | +61 8 9324 7100

1 This amount is indexed to changes in the US CPI, commencing on the second anniversary of the execution of the Shootout Settlement Agreement.

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ASX Announcement: Strike moves to 100% of AF

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About Strike Resources Limited

Strike Resources is an Australian-listed resources company with two principal projects in the attractive bulk commodities market.

Strike’s Apurimac and Cusco Iron Ore Projects in Perú are large-scale iron ore projects, with Apurimac in the pre-feasibility study stage. Strike also holds warrants in Canadian-listed Peruvian explorer Cuervo Resources Inc. (Cuervo) which, if exercised, would allow it to acquire up to 31.5% of Cuervo.

The Company is seeking to establish a 15 - 20 million tonne per annum (Mtpa) operation in Perú based on current iron ore mineral resources totalling 374Mt[2] and potential access to additional resources of 178.6Mt[3] held by Cuervo in Cusco, all with significant exploration upside.

JORC Code competent person statement

The information in this document that relates to exploration results and mineral resources has been compiled by Mr Ken Hellsten, B.Sc. (Geology), who is an employee of Strike Resources Ltd and is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Hellsten has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify 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 Hellsten consents to the inclusion in this document of the matters based on this information in the form and context in which it appears.

1. Comprised of an indicated resource of 142.2 Mt at 57.84% Fe and an inferred resource of 127 Mt at 56.7% Fe at Apurimac and an inferred resource of 104 Mt at 32.6% Fe at Cusco. 3. Comprised of a measured resource of 19.7 Mt at 48.3% Fe, an indicated resource of 35.9 Mt at 45.9% Fe and an inferred resource of 50.8 Mt at 43.7% Fe at the Orcopura prospect and an inferred resource of 72Mt at 52.6% Fe at the Huillque and Aurora prospects.

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