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MANAGING DIRECTOR’S REPORT Western Desert Resources have had a very exciting and productive first year. We are very happy with both exploration progress on our existing projects, and the addition of a number of new projects to our portfolio which provide our shareholders with opportunities in a broader product range. Our exploration team, headed by Exploration Manager John Fabray, has completed a large volume of work which has enabled us to make a detailed assessment of a large number of our original projects, as well as some very good new acquisitions. We have had technical success with our drilling programs to date and we are confident that a range of projects to be tested this year will deliver the impetus to transform Western Desert Resources into a self funding small mining house. We are very aware and appreciative of the loyalty that has been shown by shareholders during what has been a very tough year in the stock market. We believe that a shift in focus due to some opportunities presented to the company during the year will reap benefits and create wealth for our shareholders into the future. During tough times we have been very fortunate to secure three very good projects which will all receive a great deal of attention over the coming 12 months. The first of these is the Roper Bar Iron Ore project. As at the time of printing your company has entered into a Memorandum of Understanding (MOU) with ITOCHU Minerals and Energy Australia Pty Ltd (IMEA), a subsidiary of Japanese conglomerate ITOCHU Corporation. Subject to internal and regulatory approvals, the terms of this agreement will see IMEA spend up to $15,000,000 on exploration funding to earn 51% of the project. We have been working over the last 4 months to get all regulatory processes finalised and will be drilling at this site from early October 2008. IMEA have been involved in the iron ore industry in Australia since 1962, and have world class experience in iron ore mining and marketing. The ability of Roper Bar to attract a joint venture partner of the stature of ITOCHU is testimony to the quality of the project. The first round of drilling will help to confirm our belief that there is a significant medium grade deposit that will have commercial viability. This project will be ongoing for three years during the exploration stage. The second project that is becoming increasingly exciting as we get through the geological and geophysical work programs is the Gladstone Manganese project. This project is a joint venture with unlisted company Genesis Resources Limited, with WDR having the opportunity to earn a 45% interest in the project. A drilling campaign is proposed for the Mount Miller area, site of substantial historical mine workings. Geological mapping and a subsequent IP survey of this area has identified significant potential for mineralised zones. We look forward to some exciting drilling early next year in the hope of delineating a commercially viable operation that is within 15 kms of the Gladstone port. Pricing for manganese, like that of iron ore, has been strong during some turbulent times in the market. Based on historic production grades from Mount Miller, there is significant potential for delineating a high grade deposit with access to first rate infrastructure and port facilities. Another exciting project is Rover Project near Tennant Creek in the NT. This area has been recently opened up for exploration after a long moratorium due to native title issues. Our joint venture agreement with TNG Limited gives WDR the opportunity to earn up to an 80% interest in the Rover Field tenements by spending $1,350,000 on exploration. There has been some very successful recent drilling by companies on tenements adjacent to those included in the TNG joint venture. Of particular note are recent intersections by Westgold Resources Limited at the Rover 1 project. These included intersections of 21 metres at 33.5 g/t gold and 65 metres at 11 g/t gold. 2
WESTERN DESERT RESOURCES LIMITED ABN 48 122 301 848 The Rover Field is emerging as a duplication of the very rich Tennant Creek Ironstones where orebodies such as Warrego and White Devil were discovered. In respect to exploration, we will also continue with follow up work on our Tenements in the Alice Springs area, with particular emphasis on the Winnecke/Sliding Rock Well and Limbla areas. We hope to have defined drill targets at Winnecke/Sliding Rock Well in the near future, with a view to a first pass drilling program commencing in early 2009. In April 2008, WDR acquired a 16.7% interest in Thor Mining PLC. This interest provides WDR shareholders with a significant investment in Thor Mining’s Molyhil molybdenum/tungsten project, some 220 kms north east of Alice Springs. Three WDR directors, Mick Billing, Mick Ashton and myself, were elected to the Board of Thor Mining, and we hope to add substantial value to the project by reviewing the capital expenditure requirements and strategies, as well as adding to mine life by further exploration in the Molyhil area. Norm Gardner Managing Director In summary, we are very well placed with an exciting portfolio of projects. With the prospect of Thor Mining commencing construction at Molyhil, and our agreement with IMEA providing funding for our flagship Roper Bar Iron Ore project, we expect a challenging but rewarding year ahead. I would like to take this opportunity to thank all shareholders for their support, and the Western Desert Resources team for their efforts, over the course of the past year. We look forward to a mutually successful year ahead. I look forward to providing you with updates in respect to our activities over the course of what I feel will be a defining 12 months for our company. Norm Garner Managing Director 3
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