10:05     MORNING STAR<00542> - Announcement (1)                              

    The Stock Exchange of Hong Kong Limited takes no                          
    responsibility for the contents of this announcement,                     
    makes no representation as to its accuracy or                             
    completeness and expressly disclaims any liability                        
    whatsoever for any loss howsoever arising from or in                      
    reliance upon the whole or any part of the contents                       
    of this announcement.                                                     
                                                                              
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    Morning Star Resources Limited                                            
    (Incorporated in the Cayman Islands with limited                          
    liability)                                                                
    (Stock Code: 542)                                                         
                                                                              
    ANNOUNCEMENT                                                              
                                                                              
    Further to the announcement dated 1st December, 2004,                     
    the public float portion of the shares in the Company                     
    remains at approximately 23.90% which continues to                        
    be in breach of the minimum public float requirement                      
    of 25%. The Company requires a longer period to fulfil                    
    the public float requirement under Rule 8.08 of the                       
    Listing Rules.                                                            
                                                                              
    The Stock Exchange has stated that it will closely                        
    monitor the trading in the Company's shares to ensure                     
    a false market does not develop and may suspend the                       
    shares of the Company if there is any unusual price                       
    movement.                                                                 
                                                                              
    Shareholders and investors are advised to exercise                        
    extreme caution when dealing in the shares of the                         
    Company.                                                                  
                                                                              
    Reference is made to the announcements issued by                          
    Morning Star Resources Limited (the "Company") dated                      
    3rd June, 30th June, 2nd August, 5th October, 1st                         
    November and 1st December, 2004 (the "Announcements").                    
    Terms defined in the Announcements shall have the same                    
    meanings when used herein unless the context required                     
    otherwise.                                                                
                                                                              
    The Board of Directors of the Company advises that                        
    the public float portion of the shares in the Company                     
    remains at approximately 23.90%, which continues to                       
    be in breach of the minimum public float of 25% as                        
    required by Rule 8.08 of the Listing Rules.                               
                                                                              
    Subsequent to our announcement on 1st December, 2004,                     
    the Company's substantial shareholders namely                             
    Firstway International Investment Limited                                 
    ("Firstway") and Bonham Industries Limited ("Bonham")                     
    had continued to approach potential investors                             
    directly and through agents with the objective of                         
    placing down the Company's shares to meet the public                      
    float requirement in compliance with the Listing                          
    Rules of the Stock Exchange but there is no firm                          
    interest from any party as of today's date.                               
                                                                              
    For the period from 1st December, 2004 to 31st                            
    December, 2004 the market was not active due to the                       
    Christmas festive season and the aggregate trading                        
    volume of the Company's shares amounted to 10,109,382                     
    shares. Firstway and Bonham were unable to place down                     
    any shares to restore the public float of the Company                     
    in December 2004 due to the low and depressed prices                      
    of the Company's shares during December 2004.                             
                                                                              
    The Company and the substantial shareholders of the                       
    Company namely Firstway and Bonham are unable to state                    
    at this juncture when the public float portion of the                     
    Company's shares can be restored but have undertaken                      
    to the Stock Exchange that they will