Seems we now have some more of the answer to why the bid side of...

Seems we now have some more of the answer to why the bid side of PCE has been building, including a couple of reasonable bids thirty per cent above recent sells.

Dear Sir:

PLACEMENTS

9 Million Share Placement

The Board of Pinnacle VRB Ltd ("Pinnacle" or "the Company") wishes to advise that it will make a placement by the issue of 9,000,000 ordinary fully paid shares in the Company ("9 Million Share Placement") at an issue price of 2.0 cents each to raise $180,000 (before costs of the issue). The placement will be made under the Company's 15% capacity (under Listing
Rule 7.1) and will be underwritten by, and made to, clients of RM Capital Pty Ltd ("RM Capital") (AFSL 221938) pursuant to s708 of the Corporations Act.

The shares from the 9 Million Share Placement will be issued immediately.

Shareholder Approved Placements

The Board also wishes to announce the placements of the following securities, which are subject to shareholder approval at a General Meeting intended to be convened in late October 2005
(collectively, "Shareholder Approved Placements"). The Shareholder Approved Placements will be underwritten by, and made to, clients of RM Capital pursuant to a
disclosure document and will comprise the issue of:

• 9,000,000 options to acquire fully paid ordinary shares in the Company (exercisable at 5.0 cents each on or before 31 December 2008) which are to be issued as free attaching options on a pro rata basis to participants in the 9 Million Share Placement;

• 10,000,00 options to acquire fully paid ordinary shares in the Company (exercisable at 5.0 cents on or before 31 December 2008) at an issue price of 0.1 cent each to raise $10,000 (before costs of the issue);

• 60,000,000 fully paid ordinary shares in the Company at an issue price of 2.0 cents each to raise $1,200,000 (before costs of the issue);

60,000,000 options to acquire fully paid ordinary shares in the Company (exercisable at 5.0 cents on or before 31 December 2008) at an issue price of 0.1 cent each to raise $60,000 (before costs of the issue); and

• 40,000,000 partly paid shares at an issue price of 0.1 cents each and convertible to fully paid ordinary shares in the Company on payment of a further 1.9 cents per share to raise $40,000 (before costs of the issue).

In relation to the partly paid shares, the Company will agree not to make any calls on the partly paid shares for two years from the date of issue. However, a holder of the partly paid shares can make calls on the partly paid shares at their discretion from time to time.

If the shareholders approve the Shareholder Approved Placements, it would, together with the 9 Million Share Placement, expand the issued capital of the Company to 147,931,249 fully paid ordinary shares, 79,000,000 options to acquire fully paid ordinary shares (exercisable at 5.0 cents on or before 31 December 2008) and 40,000,000 partly paid shares.

Proceeds from the 9 Million Share Placement will be used to partly retire debts. Proceeds from the Shareholder Approved Placements will be used to progress the Company's working capital
requirement and for the identification of any potential project acquisitions.

An Appendix 3B in relation to the 9 Million Share Placement will follow.


Yours Faithfully,

Stephen Prior
Company Secretary