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XRF SCIENTIFIC LIMITED Capital/Financing Update 2007

Aug 2, 2007

66104_rns_2007-08-02_e3a53222-1dc2-48bb-b2d3-6cea38fd88f6.pdf

Capital/Financing Update

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XRF Scientific Limited

ABN: 80 107 908 314

Tel: 61 8 9274 9100. Fax: 61 8 9274 9144 e-mail: [email protected]. www.xrfscientific.com

The Australian Stock Exchange Ltd Exchange Plaza 2 The Esplanade PERTH WA 6000

3 August 2007

Company Announcement

The Company is pleased to announce that it has reached agreement with Socachim of Brussels, whereby Socachim will act as The Company's European sales agent.

It was advised in a Prospectus lodged by the Company in August 2006 that a contract to purchase the business of Socachim had been entered into, and 3 million shares were subsequently issued to consummate the purchase.

For operational and financial reasons it has been determined that XRF Scientifics' interests are best served by Socachim operating autonomously, as a commission agent rather than as a wholly-owned subsidiary. The vendors of Socachim have agreed to the cancellation of the shares issued to them, on the basis that they retain the right to sell the Companies' products in Europe.

Consequently, at the next meeting of shareholders your directors will propose a reduction of capital of the Socachim vendor's 3 million shares, which will have the positive effect of being EPS-accretive.

Please direct any inquiries to:

Terry Sweet Managing Director XRF Scientific Limited

$(08)$ 9274 9100 (Phone) $(08)$ 9274 9166 (Fax) [email protected]

Regd. Office: 1 / 12 Farrall Road, Midvale, Western Australia 6056