THORNEY TECHNOLOGIES LTD — Capital/Financing Update 2005

Jun 30, 2005

and the concentration of the concentration of the concentration of the concentration of the concentration of the

AUSTRALIAN RENEWA FUELS LUMTER

AUSTRALIAN RENEWABLE FUELS LIMITED

ABN 66 096 782 188

SUITE 1B.LEVEL 5 SOUTH SHORE PIAZZA 85 SOUTH PERTH ESPLANADE SOUTH PERTH WAS 5151

P.O. BOX 837 SOUTH PERTH WA 6951

$T\mathbb{Z}I$ +61893633500 SAX 161893633511 E-MAIL Info@arfuels.com.au MEER www.arbeis.com.au

30 June 2005

Company Announcements Office Australian Stock Exchange Limited 10^th Floor, 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam

RE: RECEIPT OF GRANT FUNDING AND ISSUE OF EMPLOYEE OPTIONS

The Directors of Australian Renewable Fuels Limited (ARF) are pleased to announce receipt of the first payment (25%) of the Grant awarded to the Company under the Federal Government's Biofuels Capital Grants Program. The amount received is \$1,786,680 (GST exclusive) and is for the development of ARF's Adelaide biodiesel plant.

The Directors are also pleased to announce receipt of the first instalment (30%) of the Grant awarded to the Company under the Federal Government's Dairy Regional Assistance Programme. The amount received is \$144,480 (GST exclusive) and relates to the Company's Picton (WA) biodiesel facility.

The Board believes that receipt of these Grants by the Company represents a significant endorsement of its biodiesel development model and executive team by the Federal Government.

Payment of the first instalments was received after the achievement of a number of development milestones at each project.

The Directors are also pleased to advise that pursuant to a Directors resolution and, in accordance with the Company's Employee Share Option Plan, ARF has granted a total of 1.26 million share options to Executives and Employees of the Company.

The exercise price, the date the relevant options become exercisable and the expiry date of the 1.26 million options are summarised in the table below:

Total number of options	Exercise price	Expiry date	Date options become exercisable
420,000	\$1.13	30 June 2010	30 June 2006
420,000	\$1.50	30 June 2010	30 June 2007
420,000	\$2.00	30 June 2010	30 June 2008

Shareholder approval has not been sought in relation to the issue of the options pursuant to ARF's Employee Share Option Plan, as none of the optionholders are related parties of ARF.

Yours faithfully

$\frac{1}{\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac{1}{2}}\sqrt{1-\frac$

M. L. Ger Company Secretary/Chief Financial Officer

ENDS