asx announcement

Not for distribution in the United States or dissemination
through any U.S. newswire service.


ASX ANNOUNCEMENT

29 AUGUST 2007

ASX: DIO



Harmony acquisition on-track with proposal for

Toronto Stock Exchange listing and a substantial capital raising





Highlights:



• Dioro appoints leading advisory team for proposed capital raising and TSX
listing;
• Funds from listing to be used to acquire Harmony’s South Kal assets and
improve working capital;
• Prospectus to be issued for new spin off nickel company Lodestar Minerals
Limited; and,
• Aggressive exploration program planned to upgrade resources at the Penfolds,
Frog’s Leg and South Kal gold projects.






Australian gold company Dioro Exploration NL ("Dioro" or “the company”) has appointed
leading Canadian broking firm Cormark Securities Inc to manage a proposed capital raising
of up to A$70,000,000 and listing on the Toronto Stock Exchange (TSX).



The TSX listing and associated capital raising are intended to provide the company with the
necessary funds to complete the recent acquisition of the South Kal assets from Harmony
Gold Limited, to meet working capital and development requirements at Frog’s Leg and
South Kal, to fund future exploration and general working capital, and to provide an
opportunity to increase its investor base in a key North American market.



Cormark Securities is one of Canada’s foremost investment houses in the international
mining sector that has advised on more than $3.2 billion of M&A activity. Cormark has
assisted with the TSX-listing of Australian resources companies, the most recent being
Mirabela Nickel Ltd.



As part of its TSX listing plans, the company has also appointed Lawson Lundell LLP as the
company’s Canadian lawyers. For more than ten years, Lawson Lundell has been providing
legal advice to Perth-based ASX listed companies active in the Canadian capital markets.



Dioro Exploration’s Managing Director Rhod Grivas said the planned capital raising program
is intended to ensure the company remained hedge free and debt free to ensure the rapid
growth of the company’s gold production and exploration projects.







“We are looking forward to working with Cormark Securities to raise the necessary funds to
complete the acquisition of Harmony’s South Kal operations, upgrade our working capital
and ensure the ongoing exploration of our projects, which will see Dioro producing a
projected 100,000 ounces of gold per year,” Mr Grivas said.



“Importantly, access to the Canadian market via a TSX-listing will give Dioro significant
access to North American markets.”



The $45m acquisition of Harmony’s South Kal assets would create significant synergies with
a number of gold projects in the area requiring milling capacity. These include the ability to
process ore from Dioro’s 49 per cent of the Frog’s Leg mine and from resources at the
nearby Penfold Gold Project, 100 per cent owned by Dioro, through South Kal’s efficient mill.



Mr Grivas said “The new injection of funds will ensure that Dioro will supplement current
reserves by undertaking aggressive exploration programs on the plus 1500 sq km highly
prospective land package which we will own at the combined Penfold and South Kal
projects.”



Funds from the Capital Raising are to be used:



• To complete the acquisition of Harmony’s South Kal operations, which include the
operating Jubilee 1.2mtpa mill, three years of reserves and a resource inventory of
approximately 1.878 million ounces and working capital requirements.
• To meet Dioro’s contribution to the development of the Frog’s Leg underground.
• To fund a planned aggressive exploration program at the company’s South Kal and
Penfolds 1,500 km2 gold projects.
• Capital raising, stamp duty, cash reserves and contingency costs.




Completion of acquisition – Harmony’s South Kal operations



Dioro is on track to complete the 100 per cent acquisition of Harmony’s South Kal operations
(as announced to the ASX on 31 July 2007). As part of this transaction Dioro will issue
Harmony Gold 160 million Dioro shares for a deemed value of A$20 million.

Harmony now has Board and South African Reserve Bank approval to complete the
divestment of the South Kalgoorlie assets to Dioro under the agreed terms.



On completion of the capital raising, the company will finalise the transaction through the
cash payment of A$25 million.



Planned IPO – Lodestar Resources Limited

Dioro will assign the nickel rights over its recently acquired Penfolds tenements to a new
wholly-owned subsidiary, Lodestar Resources Limited, which is expected to list on the ASX
around November this year. The consideration for the assignment of the nickel rights will be
the issue by Lodestar Resources of 25,000,000 shares at an issue price of 20 cents each.
Subject to shareholder approval, these shares will be distributed to Dioro shareholders pro
rata by way of an in specie distribution.



Lodestar will then issue 25,000,000 shares at 20 cents each to raise $ 5 million, with Dioro
shareholders to be offered a pro rata priority entitlement under the placement.




Update on Dioro’s exploration program

Colnago

The company has completed a 3000 metre RC drilling program at Colnago to follow up
successful regional RAB and Aircore drilling which included a 1m @ 106 g/t bottom of hole
intercept. RC drilling intersected a shear zone with associated quartz veining and brecciation
over a strike length of 700 metres. Laboratory results are expected in September 2007.



Frog’s Leg gold project (49% Dioro)

Since the portal opening of the Frog’s Leg gold project in July, JV partners La Mancha
Resources and Dioro have made good progress, with the decline now at 100 metres with
good rock conditions. The Frog’s Leg deposit is located 50kms from the South Kal Mine
Operations, and has a total resource of 933,000 ounces of gold, of which Dioro’s share is
457,000 ounces. Further drilling results from the project will be released shortly, which
remains on target for gold production in 2008.



Kunderong and Kennedy uranium projects

Dioro and JV partner, Brazilian mining company CVRD, will shortly commence an airborne
electromagnetic (“airborne EM”) survey over the Kunderong uranium project, located near
Newman in Western Australia. The survey will provide the JV with invaluable geophysical
information that will focus future uranium exploration. The airborne EM will locate electrical
conductors, linear structures and map rock types.



Shareholder meeting

A shareholder meeting to approve the Harmony Gold transaction and Lodestar Minerals
Limited nickel spin-off will be held in early October. Shareholders will be notified by mail of
the meeting and, subject to shareholder approval, investors who hold shares at the ex Date
will be issued shares in Lodestar Minerals Limited.



Dioro shareholders will also receive a priority entitlement to subscribe for shares in the
capital raising undertaken by Lodestar.



For further information please contact:

Rhod Grivas, Managing Director John Williams

Dioro Exploration Professional Public Relations

Ph: +61 8 9389 8799 Ph: + 61 8 93880944



David McArthur, Executive Director

Dioro Exploration

Ph: + 61 8 93898799


Editors Notes:

Dioro Exploration



Dioro is a gold company that has exposure to uranium, nickel and copper through projects in
located in Western Australia.



Dioro is finalising the $45m acquisition of Harmony’s South Kal operations, located near
Kalgoorlie in Western Australia, which has a current production of approximately 80,000
ounces of gold per year. The South Kal Project includes the operating Jubilee 1.2mtpa mill,
three years of reserves at current production rates, and a JORC compliant Measured and
Indicated resource inventory of approximately 1.398 million ounces (excludes 0.332 million
ounces of Inferred Resources). In addition, a large highly prospective tenement package
covering an area of in excess of 1100 km2 is being acquired.



Harmony’s low cost 1.2Mtpa processing mill will provide Dioro with a major competitive
advantage, considering the very high toll milling costs currently prevailing in the region, and
the inhibitive construction costs and long lead times needed to create milling capacity in the
current resource climate.



The Company’s other principal asset is the 49 per cent interest in the Frog’s Leg project,
located 25km west of Kalgoorlie. La Mancha Resources holds 51 per cent of the project.

After incorporating recent excellent drilling results the Frog’s Leg, JORC compliant Measured
and Indicated resource is now 723,000 ounces of gold (excludes 209,000 ounces of Inferred
resources). Gold production is scheduled for early 2008.



Dioro recently signed a farm-out deal with CVRD to explore the Kunderong and Kennedy
uranium projects (combined area approximately 1800km2) which are pegged over 50km
length of the Breshnahan unconformity, that is prospective for unconformity style uranium
mineralization. The Projects are located 200km SW of Newman in Western Australia.



Caution Regarding Forward Looking Statements: The forward-looking statements made
in this news release are based on management's assumptions and judgments regarding
future events and results. Such forward-looking statements, including but not limited to those
with respect to the Company’s plans for the acquisition of Harmony’s South Kal operations,
the company’s anticipated capital raising and TSX-listing and future production by the Frog’s
Leg joint venture, involve known and unknown risks, uncertainties and other factors which
may cause the Company's actual results, performance or achievements to be materially
different from any anticipated future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others, the actual
market prices of gold and other minerals, changes in project parameters as plans continue to
be evaluated, as well as those factors disclosed in the company's other publicly filed
documents. There can be no assurance that the developments affecting the company will be
those anticipated by management.



“This news release does not constitute an offer to sell or a solicitation of an offer to buy
any of the securities in the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”) or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such registration is available.”