here is the announcement

Planned Sales Contracts Completed for First Year Production

Murchison Metals Ltd (“the Company”) advises that interest remains strong for the
Company’s Iron Ore product in the North Asian Steel Market and is pleased to
announce a further fixed price contract under the Jack Hills Stage 1 Project. This
contract adds to the previously announced fixed price sales contracts and
completes the planned amount of contracted sales for the first year of production for
the Jack Hills Stage 1 Project.

The purchaser, Tangshan Danyang (Group) Co Ltd has agreed to purchase up to
540,000 tonnes per year of iron ore for the first three years and continuing
thereafter until increased production becomes available. Tangshan Danyang Co Ltd
will purchase up to 2 million tonnes per annum when the Company’s Stage 2
expansion of the Jack Hills project is implemented.

Tangshan Danyang (Group) Co Ltd is a mining and smelting group dealing in the
production and sales of iron, steel and coke and is one of the largest importers of
iron ore in Tangshan, Hebei Province in China.

The company’s main business is importing iron ore fines, lump and coke from
Australia, India, Thailand, Iran, Brazil and other countries to their iron smelter as
well as the other steel plants in the Tangshan district.

The company consists of two domestic enterprises, Qian’an Longtai Industry &
Trading Ltd (Mineral Company) and Qianxi Xintai Enterprise Ltd (Iron Smelting
Company).

On the basis of this iron ore purchase program Tangshan Danyang have further
strengthened the development of the Tangshan steel industry. It will provide
Tangshan Danyang with a stable high quality raw material and make a firm
foundation for the future long-term cooperation between Tangshan Danyang and
Murchison.

This contract in conjunction with the previously announced contracts, puts in place
total first year sales of almost 1,190,000 tonnes. This represents gross revenue of
approximately US$71million in the first year of operation.

Payment will be a 90 day irrevocable Letter of Credit arranged by the buyer and
acceptable to Murchison. Both parties accept payment as defined under
international standard “UCP 500”.

Robert Vagnoni

Managing Director
Murchison Metals Ltd