Aztec Resources Announces OFF-TAKE Support of A$20M from Marubeni

Sydney, Jan 10, 2006 (ABN Newswire) - Aztec Resources Limited (ASX: AZR)(AIM: AZR), owner of the high grade Koolan Island Iron Ore Project, has received a significant boost to its funding and off-take prospects with one of Japan's largest trading companies, Marubeni Corporation ("Marubeni"), today signing a Letter of Intent for development funding and purchase of haematite iron ore.

The Letter of Intent provides for Aztec and Marubeni to move towards off-take agreement and the provision of financial assistance for the Koolan Island Iron Ore Project located 130 kilometres north of Derby off the West Australian Kimberley coast.

The Letter of Intent represents progress of agreements set out in the Memorandum of Understanding signed in December, 2004 by Aztec and Marubeni.

Under the terms of the Letter of Intent, Marubeni and Aztec have expressed:

- intent for Aztec to supply 1.0 to 1.5 tonnes per annum of high grade Koolan Island iron ore, over the life of the project to Marubeni. The ore will be consumed primarily by integrated steel mills in Japan and Asia. Formal supply agreement terms will be based on, mutual agreement on the detailed conditions of the purchase of Koolan Island iron ore and approval by the purchasers' Board; and

- intent by Marubeni to extend financial assistance for the timely development and construction of the Koolan Island Project of up to A$20 million (subject to mutual agreement by Marubeni and its board approval).

Aztec Executive Chairman Mr Ian Burston said Aztec is pleased to move to the next level of negotiations with one of the world's most respected trading houses.

"Aztec's partnership with Marubeni Corporation has been formed over the last few years and is testament to the high quality of Australian iron ore consistently supplied to the world," Mr Burston said.

"The recent underwriting of a non renounceable entitlement issue to raise A$42.3 million, fully underwritten by LCS Capital and Grange Securities, and the support of Marubeni will enable Aztec to complete a majority of the required funding for the Koolan Island Project.

"We're now in a fortunate position of having buyers committed to take all iron ore produced from Aztec's anticipated four million tonne per annum iron ore mine at Koolan Island for the life of the Project."

"With strong commitment for the iron ore tonnages and continuing buyer interest in Koolan Iron Ore, Aztec is on track to be the next producer of high grade iron ore, with first shipments anticipated in late 2006.

Commercial details will be provided on the completion of formal contract negotiations.

Aztec Rights Issue - UPDATE

On 8 December 2005, Aztec announced a fully underwritten one (1) for two (2) pro rata non-renounceable entitlement issue of new shares and attaching options to all shareholders to raise approximately A$42.3 million. The new shares will be issued at a price of A$0.17 per share. The entitlement issue closes on Thursday, 12 January 2006.

A copy of the Prospectus is available on the Company's website at www.aztecresources.com.au

About Marubeni

Founded in 1858, Marubeni Corporation (TSE: 8002) is one of the largest Japanese trading companies. The company's operations encompass domestic, import/export, offshore trade and investment activities ranging from the development of natural resources to the retail marketing of finished products. The company conducts these operations through a worldwide business network of 124 offices in 74 countries. For the year ended 31 March 2005, Marubeni's consolidated gross sales were US$74.2 billion with net profit of US$385 million.

About AZTEC RESOURCES LIMITED

Aztec is the owner of the Koolan Island high quality iron ore project which has a resource of 53 million tonnes. In August 2005, Aztec announced the successful completion of a Bankable Feasibility Study. Capital costs of A$108 million, inclusive of mine development costs support a forecast annual production of approximately 4.0 million tonnes per annum and signed MOUs/LOI account for total sales of 4.0 million tonnes per annum, on average. The project has an initial nine year life with ongoing drilling exploration providing potential upside for the project.

In 2000, Aztec was granted an exploration lease of the previously BHP-owned and operated Koolan Island project, located 130 kilometres north of Derby off the West Australian Kimberley coast. Koolan Island has remnant resources and previously produced 68 million tonnes of high grade (Fe @ 67%) and low impurity iron ore.