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Intrepid also has an option to purchase the Paulsens plant and infrastructure for A$1 in the event that gold production of 62,500 ounces is not achieved or the top­up cash payments are not made. In either circumstance, Northern Star assumes liability for closure and rehabilitation costs estimated at approximately A$5 million, which Intrepid would otherwise have incurred.

Conditions precedent

A number of the conditions stipulated under the 5 May 2010 Letter Agreement have been fulfilled. The remaining conditions precedent to be fulfilled include:

• Northern Star shareholder approval. Northern Star shareholders will consider the resolution to approve the Proposed Transaction at a meeting to be held in Perth, Australia on or about 26 July 2010. Depending on the date of the postponed Northern Star general meeting, the results of the Northern Star shareholders' meeting may not be known prior to the postponed General Meeting of Intrepid Shareholders.
• Formal agreement. The parties must use their best endeavours and act reasonably and in good faith to enter into a formal agreement restating the terms of the Proposed Transaction and including warranties and representations usual to contracts of this nature, by 9 July 2010.
• Right of first refusal. Intrepid's joint venture partner, Cullen Resources Limited (Cullen) holds first right of refusal in respect of the sale of the tenements that relate to the Hardey Junction Joint Venture and Cullen is still to advise whether it will elect to exercise this right of first refusal.
• Third party consents. Intrepid must obtain all third party consents to the assignment of all rights under the existing Paulsens contracts which reasonably and properly apply to the Proposed Transaction.
• Encumbrances. Northern Star must assume liability for agreed encumbrances and for all mine closure and environmental obligations associated with Paulsens.

In addition to the conditions stipulated under the 5 May 2010 Letter Agreement, the following conditions precedent must be fulfilled:

• Finance Northern Star must enter into formal financing agreements with its financier, with terms including the priority of payments agreed with Intrepid.

As at the New Notice Date the Directors have no reason to believe that the conditions precedent that remain outstanding will not be satisfied.

Break Fee

If the Intrepid shareholders do not approve the Proposed Transaction, Intrepid will be required to pay Northern Star a break fee of $400,000 plus GST. Similarly if Northern Star's shareholders reject the sale, Northern Star will pay Intrepid a break fee of $400,000 plus GST (less the $250,000 deposit already paid).

4.2 Directors' recommendation

Your Directors have carefully considered the potential benefits, and the potential disadvantages and risks, of the revised terms of the Proposed Transaction and believe that they address the valuation concerns previously raised while preserving the sale transaction.

Accordingly the Directors unanimously recommend that Shareholders vote in favour of the Proposed Transaction. In making this recommendation, the Directors note that the price offered is considered by the Board to be a fair price for Paulsens representing approximately A$310 per resource ounce.

In making this recommendation, Shareholders should note that no Director of the Company will receive any payment or benefit of any kind as a consequence of the Proposed Transaction, other than as a Shareholder of the Company.

4.3 Implications if the Proposed Transaction does not proceed

If Intrepid and/or Northern Star Shareholders do not approve the Proposed Transaction, the sale will not proceed. Further, the Proposed Transaction will not proceed if any of the other conditions precedent to the sale of Paulsens are not satisfied or otherwise waived by the relevant cut­off date. If the Proposed Transaction does not successfully complete, Intrepid will be subject to a higher degree of operational risk. Intrepid would continue to operate Paulsens until completion of the current mine plan. It is likely that Paulsens would then be closed and Intrepid would commence rehabilitation work at the Mine.

As detailed above, the parties have agreed that if their respective shareholders do not approve the Proposed Transaction, a break fee will be paid to the other party.

4.4 Other material information

Intrepid is a "disclosing entity" for the purposes of Section 111AC of the Corporations Act 2001 (Cth). As such, it is subject to regular reporting and disclosure obligations. These disclosure obligations require Intrepid to disclose to the ASX any information that a reasonable person would expect to have a material effect on the price or value of the securities of Intrepid.

Information can be found at [ www.intrepidmines.com ] or from the ASX under ASX code – IAU or on SEDAR. There is no other information material to the making of a decision by Shareholders whether or not to vote in favour of the Proposed Transaction (being information that is known to Directors of the Company which has not previously been disclosed to holders of Shares in the Company) other than as set out in this document.

5 ACTION REQUIRED BY SHAREHOLDERS

Step 1 – Read the Notice and the Explanatory Memorandum Addendum

The Explanatory Memorandum Addendum sets out a detailed explanation of the reasoning behind the postponed meeting and the details of the Proposed Transaction which Shareholders are being asked to approve. This information is important. You should read these documents carefully and, if necessary, seek your own independent advice on any aspects about which you are uncertain.

Step 2 – Consider your Vote on the Resolution

Your vote is important. The postponed General Meeting is scheduled for 10:00 am (AEST) on 21 July 2010. If you are unable to attend the Postponed General Meeting, we still encourage you to cast your vote by completing and returning the enclosed Proxy Form. The table below outlines what you should do in particular situations:

Contributing Sources

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