STRIKE RESOURCES LIMITED — Capital/Financing Update 2012

Aug 28, 2012

Wednesday, 29 August 2012

Market Announcement

Cuervo Resources Inc. – Further Bob 1 Drilling Results from Holes 3 and 4

Announcement Highlights

• Further drilling at Bob 1 intersects magnetite-rich zones along strike from BDH12-02 which recorded 182 metres at 39.6% Fe
• 156 metres at 40.9%Fe in BDH12-03 and 188.9 metres at 32.6%Fe in BDH12-04
• Assays from two further holes expected shortly

Summary

Strike Resources (Strike or the Company) is pleased to announce the results of the next two holes completed by Cuervo Resources Inc. (Cuervo) on the "Bob 1" target zone of its Cerro Ccopane iron ore project in southern Perú. Hole BDH-03, drilled adjacent to the initial hole BDH12-02 but angled at 60° to the south east intersected 156.0 metres (m) of iron mineralisation (from 19.2m to 175.2m) at an average grade of 40.9% Iron (Fe), 23.3% Silica (SiO2), 2.92% Sulphur (S), 0.06% Phosphorous (P), 0.19% Manganese (Mn) and 0.12% Copper (Cu) with higher grade zones of 43.35m of 50.4% Fe and 24.00m of 49.0% Fe.

Hole BDH12-04 drilled vertically 100 metres south of BDH-02 and 03 intersected 188.9m of iron mineralisation (from 66.1m to 255.0m) at an average grade of 32.6% Fe, 28.5% SiO2, 1.8% S, 0.08% P, 0.23% Mn and 0.06% Cu including 22.50m of 55.9% Fe and 47.35m of 42.5% Fe. These results complement the initial drill hole BDH12-02 which intersected 182.15m at 39.6%Fe, 23.2% SiO2, 2.3% S, 0.08% P, 0.16% Mn and 0.10% Cu.

Seven drill holes have been completed to date and results of samples for two further holes are awaited from the laboratory and will be released once available.

Drilling Program Objectives and Results

The current drilling program is designed to provide an initial test of the Bob 1 target which comprises magnetite mineralisation mapped on surface over more than 3 kilometres of strike, coincident with strong magnetic and gravity anomalies (refer Figure 1, below). The program comprises a total of 4,500 metres of planned drilling on 16 to 20 drill sites targeted for completion in mid-October this year.

Access to the Bob 1 area is relatively challenging due to steep topography, which slowed completion of the main access road and requires on-going care during the preparation of drilling pads. For this reason the initial 7 holes completed to date cover a strike length of approximately

400 metres within the central portion of the Bob 1 target. Cuervo management is exploring a range of options to enable larger "step-outs" in the drilling to the north and south of the main access road.

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The results from the two most recent holes (BDH12-03 and 04) are provided in the table below.

Hole #	From	To	Length	Fe	Si02	S	P	Mn	Cu
	(m)	(m)	(m)	(%)	(%)	(%)	(%)	ppm	ppm
BDH12-03	19.20	175.20	156	40.9	23.3	2.92	0.06	1884	1194
BDH12-03	122.70	146.70	24	49.9	16.7	2.79	0.07	1847	1143
BDH12-03	36.00	62.70	26.70	41.4	23.8	2.40	0.02	1938	1179
BDH12-03	77.05	90.90	13.85	61.6	6.5	2.99	0.07	1205	1104
BDH12-03	107.15	150.50	43.35	50.3	15.1	3.48	0.06	1699	1379
BDH12-04	66.10	255.00	188.90	32.6	28.5	1.80	0.08	2337	564
BDH12-04	66.10	88.60	22.50	55.9	9.8	3.78	0.02	1267	1441
BDH12-04	113.90	125.25	11.35	34.8	24.2	3.38	0.09	1866	1271
BDH12-04	207.65	255.00	47.35	42.5	19.9	1.18	0.10	3548	248

Table 1: Hole 12-03 and 12-04 drilling results

The results from the latest two holes are similar to those encountered in the initial completed hole on the Bob 1 zone (BDH12-02), which also intersected zones of massive magnetite within 182.1 metres of iron mineralisation at an average grade of 39.6%Fe. In all three holes the massive magnetite zones are interspersed with intervals of strong magnetite alteration and narrow (generally less than 10 metre) zones of intermediate intrusives and occasional sulphiderich zones (mainly pyrite).

The iron mineralisation has now been demonstrated to contain broad intervals of attractive magnetite iron ore grades over a strike length of 100 metres and approximately 100 metres width. Similar styles of iron mineralisation have also been intersected in the remaining 4 completed drill holes for which assay results are not yet available. These holes test the target zone to the north and south of holes BDH12-02, 03 and 04.

Preliminary low-intensity magnetic separation (Davis Tube) carried out previously on selected samples of sulphide-rich mineralisation from the Orcopura zone showed that both pyrite and chalcopyrite (Cu-bearing sulphide) could be removed to produce a high-grade iron ore concentrate. Cuervo plans to carry out Davis Tube processing on samples of the Bob 1 mineralisation when more drill holes have been completed. The Bob 1 David Tube results are expected to be similar to those from Orcopura, given the similarity in magnetite mineralisation at these prospects.

A nominal sampling interval of 2.0m is currently being used within the sections of typical iron mineralisation. Analysis was performed by the SGS del Perú S.A.C. laboratory in Lima, Perú, which is a member of the S.G.S. International group of laboratories and is ISO 9001-certified. The iron (Fe) analyses were conducted by titration methods and the sulphur analyses (S) were carried out with a LECO furnace. All other analyses, which include phosphorous (P), manganese (Mn) and copper (Cu), were performed by ICP-AES after a multi–acid ("total") digestion. Laboratory check analyses were performed on approximately 10% of the samples

submitted while field duplicate samples were performed on an average of 1 in 36 samples submitted. Field standard samples were performed on an average of 1 in 40 samples sent to the laboratory. All drill cores were logged and sampled at a new logging/cutting facility in Cusco.

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Background Information

The Bob 1 zone is considered highly prospective for iron ore. It contains strong magnetic and gravity anomalies (refer Figure 2, below) coincident with a broad band of magnetite outcrops extending over 3 kilometres in strike length, the largest yet identified on the Cerro Ccopane property. Rock chip samples from these outcrops averaged >63% Fe and the prospect is geologically similar to the Orcopura, Huillque and Aurora areas where previous drilling has outlined iron ore resources totalling 179 million tonnes at an average grade of 48.2% Fe (refer Table 2, below, for a full breakdown of JORC Code categories and grades).

Funding of the drilling program on the Bob 1 zone has been provided by Strike Resources as part of a staged exploration program by Cuervo at its Cerro Ccopane project. Strike has advanced Cuervo CAD\$5.25 million for the current (Stage 1) program and in return holds warrants which can be converted to 32.5% of Cuervo's shares on an undiluted basis. Strike has the option to fund the Stage 2 program of CAD\$9.75 million under warrants which can be converted to a further 16.7% of Cuervo's shares.

The Cerro Ccopane project lies within 20 kilometres of Apurimac Ferrum's Santo Tomas (Cusco) iron ore project (refer Figure 3, below). Cuervo and Strike believe that a cooperative exploration effort between them will be strategic to the development of Perú's large-scale iron ore potential.

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.

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Concession not held by Cuervo.

ASX Announcement: Cuervo Resources Inc. – Further Bob 1 Drilling Results from Holes 3 and 4

Prospect	Classification	Tonnes (Mt)	Head Fe (%)	Cut-off Fe (%)
	Measured	19.7	48.26	20
Orcopura	Indicated	35.9	45.91	20
	(Measured plus Indicated)	55.6	46.75	20
Orcopura	Inferred	51	43.7	20
or
Prospect	Classification	Tonnes (Mt)	Head Fe (%)	Cut-off Fe (%)
Orcopura	Inferred*	46	45.8	30
Huillque and Aurora	Inferred	72	52.6	30
Total	Inferred	118	50.4	30

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Table 2 - Global Resources for Cerro Ccopane Project

*Showing the inferred resource at Orcopura (previously modelled using a 20 % lower cut) now using a 30% lower cut, to enable a comparison between that resource and the inferred resource now defined at Huillque and the Aurora prospects.

For further information:

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