Troy Completes a Year of Transition as It Positions Itself for Future Growth

PERTH, WESTERN AUSTRALIA--(Marketwire - Aug. 29, 2008) - Troy Resources NL ("Troy or the "Company") (TSX: TRY.TO)(ASX: TRY.AX) -

Highlights

- Announcement of the Company's 9th consecutive cash dividend set at a rate of 3 cents per share fully franked representing a yield of 2% based on closing price on August 27, 2008.

- A loss after tax and minorities of $17.6 million (FY2007: Profit of $20.1 million)

- Cash reserves at the end of July 2008 of A$60 million which represents $0.80 per fully diluted Troy share or over 50% of Troy's current market capitalisation

- Annual gold production of 40,318oz (FY 2007: 105,723 oz)

- Ramping up of Andorinhas Gold Mine to full production.

- Aggressive investment in future growth through exploration and iron ore feasibility study being undertaken

- Post the close of the 2008 financial year, Troy announced the sale of its stake in Comaplex Minerals Corp. for net proceeds of $48 million representing a gain of 77% on its initial investment of $27 million. Troy will book a profit of $21 million in FY2009.

- Troy also retains a "top up" exposure should Agnico Eagle increase its interest in Comaplex above 50% within 18 months of the deal being signed.

- The Andorinhas colluvial iron ore resource statement nearing completion.

- Commencement of a process for the sale of the Sandstone assets

Troy Resources NL ("Troy") today announced a loss of $17.6m for the financial year ended 30 June 2008. This result compares to a profit of $20.1m in FY 2007.

In recognition of the fact the Board sees 2008 as an anomaly and expects the Company to return to profitability in FY 2009, the Company has announced that it will continue to pay a dividend this year - its 9th consecutive cash dividend payment. The Company has declared a fully franked dividend of 3.0 cents per share (FY2007: 7.5 cents). The record date for entitlement to the dividend is 19 September and will be paid on 10 October 2008. This represents a yield of 2% based on the share price on August 21 2008.

The loss for the year came from gold production of 40,318 oz and gold sales revenue of $39.7m (FY2007: 105,723 oz and $91.8m). The year represents a transition as the Company's Sertao mine in Brazil closed and the Sandstone operation in Australia moved to low grade stockpiles while Troy's new gold mine in Brazil, Andorinhas, continued to ramp up towards full production.

The result was achieved after allowing $11.0 million for exploration expenditure (FY2007: $7.4m) and $5.1 million for depreciation and amortization (FY2007: $7.8m). It is important to note that Troy has an aggressive exploration program aimed at increasing reserves and resources and nearly all of this expenditure is expensed.

In July, after the close of the financial year, Troy announced the sale of its investment in Comaplex Minerals Corp, a TSX listed explorer, to Agnico Eagle. On closing Troy received net proceeds of $48 million. This represented a gain of 77% on its initial investment of $27 million only 18 months earlier. Troy will book a profit of $21 million in the 2009 financial year from this transaction. Troy also retains a "top up" exposure should Agnico Eagle increase its interest in Comaplex above 50% within 18 months of the deal being signed.

Troy is making good progress with its objective of commercialising the iron ore deposit on the Andorinhas leases. Troy expects to publish a resource statement within the next two weeks. Discussions with potential customers are going well and first production is anticipated in the first half of calendar 2009. Once production commences, Troy would look to extend the iron ore exploration to quickly add to the resource base.

The Sandstone operation in Western Australia, which has been the backbone of the Company over the last 9 years, is nearing the end of its life. Mining ceased in December 2007 and the operation has maintained production by treating low grade stockpiles. It is expected that production will cease around the end of this calendar year although the exact timing is dependent on a number of factors including gold and fuel prices and stockpile grades.

The Sandstone leases, which cover over 1800 square kilometres remain highly prospective for gold, nickel, iron ore and other metals. With the Company's focus on its Brazilian operations, Troy cannot allocate adequate resources to further explore the Sandstone area. As such, Troy will commence a process where it seeks expressions of interest for the sale of the Sandstone assets. It is expected that a decision to proceed to sale will be made early in calendar 2009.

At the end of July 2008, Troy had cash reserves of $60 million, with no debt and no hedging in place. Troy is excellently placed to participate in and lead the eventual consolidation of the junior gold industry.

Commenting on the result, Troy CEO Paul Benson said; "Obviously any financial loss is disappointing, but this needs to be considered in the context of the evolution of the Company and positioning it for the future. 2008 was a period of transition as production from our two older operations, Sertao and Sandstone, drew to a close while our new mine, Andorinhas, was gearing up to budget capacity.

Gold production has dropped back to around 50,000 oz per annum which is where it will remain in the short term. We remain on track with our iron ore project and anticipate first production in the first half of calendar 2009. Once up and running at full capacity, we estimate the iron ore should be of a similar magnitude in terms of revenue and margin as the gold operation at Andorinhas. Essentially it would be "equivalent" to another 50,000 oz of gold or, if considered a by product, make the gold production at negligible cash cost.

It is important to keep in mind that of the $17.6 million loss, $11 million reflects the expensing of exploration. We are exploring aggressively, particularly around Andorinhas, with the aim of extending resources and mine life. Part of the reason for this is the time constraints on some of the joint venture leases we are exploring. We need to work quickly to make a decision on whether to hold the ground. This will continue in FY2009 and then we see the exploration spend falling back to lower levels.

We will book the profit on the sale of the Comaplex stake in the first half of FY 2009 and we expect to be profitable at the operations level in the second half of the financial year as Andorinhas starts to treat the high grade underground ore.

Troy does stand out from its peers in a number of metrics. Firstly we continue to pay a dividend. This is our 9th consecutive dividend which is impressive for any gold producer, let alone a junior. We have reduced the fully franked dividend to 3 cents per share in line with the reduction in profit, but investors should see this as a sign that we see the business returning to profit during FY2009. In one way, this is a reward for the shareholders who have stood by us and represents a 2% yield on Troy's closing price of 27 August 2008. This compares to a dividend yield of 3% in 2007.

Second, there is no big capital spend in front of Troy and thus at no risk of a project capital blowout. We have invested funds over the last year bringing the Andorinhas gold mine into production and it will hit full production at the start of calendar 2009 when treatment of the high grade underground ore commences. We also expect to commence iron ore production in the first half of calendar 2009. As this is adjacent to our gold mine and through the use of contract mining, processing and haulage, the capital outlay for this project will be minimal.

Third is Troy's cash position. At the end of July we had around $60 million in the bank. Today, cash is the scarcest asset, and companies forced into the equity markets at the moment are being forced to dilute their existing share holders. We have this cash position because we divested our interest in Comaplex delivering a 77% return on our investment. We have sufficient cash to meet all our needs into the foreseeable future and still enable us to pursue new growth opportunities.

In conclusion, Troy is continuing to make excellent progress with its growth plans with Andorinhas nearing full output, the iron ore moving closer to production and $60 million in the bank, Troy is exceptionally well placed to capture opportunities as they arise."

Caution Regarding Forward Looking Statements: This report contains forward-looking statements. These forward-looking statements reflect management's current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. A number of factors could cause actual results, performance, or achievements to differ materially from the results expressed or implied in the forward looking statements. Such factors include, among others, future prices of gold and iron ore, the actual results of current production, development and/or exploration activities, changes in project parameters as plans continue to be refined, variations in ore grade or recovery rates, plant and/or equipment failure, delays in obtaining governmental approvals or in the commencement of operations. There can be no assurance that Troy will obtain a new project or be able to profitably make use of its Cobar gold processing plant.

ABN 33 006 243 750

Contacts

Mr. Paul Benson
Troy Resources NL
Chief Executive Officer
(618) 9481 1277
(618) 9321 8237 (FAX)
Email: troy@troyres.com.au

John Jones
Troy Resources NL
Chairman
Website: www.try.com.au