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Troy Resources NL ("Troy") (TSX:TRY)(ASX:TRY) -

Dear Shareholders

Volatility in the equity markets has negatively impacted most junior gold equities in 2008. For most of this year Troy's share price movement have been similar to that of its peers. Yesterday's fall however was significant and I wanted to take this opportunity to update shareholders on Troy's various activities.

At Andorinhas, our new gold mine in Brazil, the processing plant is performing well with full throughput achieved in August. At the underground mine, development accessing the Mamao and Melechete ore bodies, continues in line with forecasts. The first horizontal access from the decline accessed the Mamao structure last week and development along the ore to set up production areas has commenced. We remain on track for the high grade underground ore to commence feeding the plant in the first quarter of calendar 2009.

At Andorinhas we are also continuing our work to commercialise the iron ore resources. We are still on track to complete permitting and sign off-take agreements before the end of this calendar year and expect to be able to commence production in early calendar 2009.

At Sandstone in Australia we continue to treat low grade stockpiles. The September quarter was actually significantly ahead of plan due to very high throughputs. At this stage we remain on track to close the mine early in calendar 2009.

Many junior gold explorers and producers have suffered due to a need, or a perception that they need to access capital markets to maintain business as usual. Troy is in the unusual and attractive position with approximately $60m in cash. This represents approximately A80 cents per share.

Thus at yesterday's the closing price of A$1.02, the market was valuing the remaining assets - the Andorinhas gold mine, the iron ore potential at Andorinhas, the Sandstone operation, the processing plant we have in storage at Cobar and the exploration ground we hold in Australia, Brazil and Mongolia at just over A20 cents per share, or less than A$20m.

By any measure I believe that the market is significantly undervaluing Troy. In these turbulent times the flight to liquidity and cash is impacting most markets but it is important for all shareholders to realize Troy is almost uniquely well positioned to continue business as usual and is superbly positioned to take advantage of opportunities that no doubt will surface over the coming months.

Yours sincerely

Paul Benson

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, 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.

For purposes of Clause 3.4(e) in Canadian Instrument 43-101, the company warrants that Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

ABN 33 006 243 750

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