Stirling Products signs agreement

Perth-based animal health company Stirling Products Limited has signed an agreement with African based AFGRI Operations Limited whereby AFGRI will help fund trials and registration of Stirling's patented animal growth promoter ST810 in South Africa.

Regulatory trials will commence in early 2006 and will be controlled by Stirling and
funded by AFGRI's research and development division "Scinetic". Registration is
planned to be complete by 3rd quarter 2006, with potential products on the market in
2007.

Stirling Products has been developing its ST810 products internationally across a number of regulated markets estimated to be in order of US$3 billion.

Another Perth-based animal health company Chemeq has been distributing its products in the South African market , however Chemeq has made slow progress in achieving sales and obtaining regulatory approval in other markets.

The current share price of Stirling Products Limited is 25 cents.

The full announcement is below:

Stirling Products Limited (ASX: STI) has signed a Heads of Agreement with South
African based AFGRI Operations Limited ("AFGRI"), a wholly owned subsidiary of
AFGRI Limited, a JSE listed diversified Agri-services company with revenue in excess of
AUD1.2 billion. Under the Agreement, AFGRI will fund all regulatory trials and
registrations required to commercialise Stirling's patented animal growth promoter ¬
ST810 in South Africa.

The terms of the agreement also provide (subject to shareholder approval) for a grant to
AFGRI of an option to subscribe for up to 51% of the ordinary shares in Stirling. The
options are priced at AUD 0.50 per share exercisable on or before 31st
December 2006 or at AUD 1.00 per share on or before 31st December 2007. Upon exercising the options
and reaching 25% of Stirling's issued capital AFGRI will be offered a position on the
Stirling Board.

Stirling's Managing Director, Dr Calvin London said "The board is pleased to have
reached agreement with AFGRI on a range of technical, commercial and corporate
matters that will put in place the first part of Stirling's global commercialisation strategy."

ST810 offers the potential to reduce the global use of antibiotics and steroids in animal
growth promotion. Positive trial results in swine and poultry (in the US and New
Zealand, respectively) have shown ST810 to provide a significant reduction in feed
consumption and fat content and an increased meat yield, providing producers with an
increased economic benefit and consumers with a healthier product.

Through the agreement, AFGRI will fund Stirling to conduct trials and complete the
registration process for ST810 in South Africa. To protect Stirling's intellectual property
rights, Stirling will hold the registration in South Africa and retain full control over the
design and implementation of the trials, with AFGRI assisting in logistic and technical
matters for the South African markets, valued in excess of AUD 60 million. AFGRI
already has 40% of the South African feedlot market, including 21% of the broiler
market.

"Stirling Products views this agreement as an important source of early revenue for its
growth promotion technology platform and the commencement of a partnership with one
of South Africa's largest agricultural services companies", commented Dr London.

Stirling will appoint AFGRI as sole agent for the marketing and distribution of ST810 in
Africa, for five years renewable for a further five years. It is envisaged AFGRI, through
its comprehensive animal feed manufacturing and distribution business, will provide
Stirling with a substantial market share in South Africa across the range of growth
promotion products for poultry, cattle, sheep and swine.

Regulatory trials will commence in early 2006 and will be controlled by Stirling and
funded by AFGRI's research and development division "Scinetic". Registration is
planned to be complete by 3rd quarter 2006, with potential products on the market in
2007.