STOCK EXCHANGE ANNOUNCEMENT

Pima Mining to sell non-magnesium exploration assets to Star Mining Corporation NL

14 March 2002

The Directors of Pima Mining NL ("Pima") are pleased to announce that agreement has been reached, subject to due diligence, final documentation, and appropriate shareholder approval, with Star Mining Corporation NL ("Star") for Star to acquire Kelaray Pty Ltd ("Kelaray"), a wholly-owned subsidiary of Pima.

Kelaray holds all Pima’s exploration interests other than those associated with the SAMAG project and includes:

• EL2503 – joint venture with Redport Limited.
  
  
• EL2533 (Torrens Project) – joint venture with BHP Billiton Exploration and Minotaur Resources.
  
  
• A 33% interest in Coombedown Resources Pty Ltd, which holds a 10% free carried interest in ELs 2644 and 2884 joint ventured to Dominion Resources NL who are developing the adjacent Challenger gold deposit. Coombedown also holds EL2856, which contains large deposits of palygorskite (absorbent clay).
  
  
• EL2889 held in joint venture with Havilah Resources, Aurelius Resources and Allender Exploration.
  
  
• ELs 2523 and 2663 which cover the Mt Torrens and Wheal Ellen basemetal prospects and the Kanmantoo copper mine, and adjoin the Angas lead-zinc-silver project being developed by Terramin Australia Limited.
  
  
• An agreement between Kelaray and Magnesium Developments Limited which allows Kelaray to explore for all minerals except magnesite and dolomite within Els 2565, 2570 and 2765, extending north from Leigh Creek and adjoining the recent Perilya Mines zinc discovery at Leigh Creek, in addition to tenements being explored by Tasman Resources at the Clara St Dora copper deposit.
  
  
• Four exploration licence applications in the highly prospective and under-explored Musgrave Block, where WMC recently discovered high-grade nickel/copper/cobalt deposits.

Pima had previously announced its intention to dispose of its non-magnesium exploration assets, so that all the Company’s efforts can be directed towards the SAMAG Project.

The proposed consideration to Pima for the sale of Kelaray is 5 million Star shares (following a 1:100 share consolidation by Star) and 15 million, 5-year options to acquire shares in Star at an exercise price of 30 cents per share. The sale price is effectively at current book value. Following the sale, Pima’s Directors intend to seek shareholder approval to distribute the Star shares and options, on a pro rata basis to all Pima shareholders. This distribution will be by means of a capital reduction.

Following the proposed transactions above, Star intends to offer its shareholders, subject to their approval, the opportunity of supporting the future growth of the Company by participating in a Share Scheme under which shareholders will be entitled to up to $3,000 worth of additional shares each.

Star is currently undertaking due diligence and concluding documentation on the above proposals and expects to be in a position to call a general meeting to approve the transactions in the near future.

For further information

In accordance with Australian Stock Exchange listing requirements, the geological information in this report has been based on information provided by geologists who are corporate members of the Australian Institute of Mining and Metallurgy or Australian Institute of Geoscientists and who have had in excess of 5 years experience in their field of activity.