AUSQUEST LIMITED — Capital/Financing Update 2008

Aug 19, 2008

August 20, 2008 ASX Release

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TABLE HILL – MANGANESE PICTURE EMERGING

• Initial drilling along two sections completed at the MN1 manganese prospect.

• Manganese mineralisation appears continuous over 300m strike length and open to the north and south, with a potential strike length of up to 2km.

• Drilling to commence at selected regional targets together with additional ground EM over the MN1 prospect prior to further drilling.

Further to the recent releases on its manganese (Mn) drilling programme at the Table Hill Project in the Pilbara region, AusQuest Limited (ASX: AQD) advises that initial drilling comprising eight holes along two sections, approximately 300 metres apart, has now been completed at the southern end of the MN1 manganese prospect .

The two sections were drilled using a drill-hole spacing of 100 to 200 metres and vertical to steeply inclined drill-holes. Results indicate that the manganese mineralisation is continuous over the 300 metres of strike that has so far been tested, and is proximal (within 300 metres) to a steep NNE trending fault which is thought to be a possible feeder structure for the mineralisation (see figure 1).

Assay results vary from 3.9 metres @ 47.5% Mn in drill-hole THD01 to 4.5 metres grading 13.3% Mn for the disseminated manganese mineralisation intersected in drill-hole THD010, located on the southernmost section.

A combination of drill results and electromagnetic (EM) data, whilst incomplete at this stage, indicates that the manganese mineralisation is open to the north and south on this prospect, and could have a strike length of up to 2km. Additional ground EM will be completed prior to further drilling at this prospect.

The strong relationship between high grade manganese mineralisation, intense clay alteration, favourable stratigraphy (calcareous sediments and dolomite), and proximity to steep faults which has emerged following the initial drill programme, is being used to prioritise future drill targets.

The Company plans to commence drilling selected regional manganese targets ahead of further drilling at the MN1 prospect, pending completion of detailed ground EM surveys. It is expected that 3-4 regional targets will be tested in the latter part of 2008.

The regional reconnaissance drilling programme is planned to commence along the northern extensions of the MN1 fault system, and subsequently, north of Savory Creek at the MN2 prospect, where a number of shallower EM targets have been outlined.

AusQuest Limited 6 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au

A ground geophysical crew has been mobilised to site to complete EM coverage of the MN1 prospect, as well as to obtain initial EM coverage over selected airborne EM targets. Site clearances and access preparation are underway to facilitate drilling of the regional targets.

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Graeme Drew Managing Director

COMPETENT PERSON’S STATEMENT

The details contained in this report that pertain to exploration results are based upon information compiled by Mr Graeme Drew, a full-time employee of AusQuest Limited. Mr Drew is a Fellow of the Australasian Institute of Mining and Metallurgy (AUSIMM) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Drew consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

AusQuest Limited 6 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au

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Figure 1: showing the potential outline of the manganese target zone(s) as inferred from available ground EM data and drilling results.

AusQuest Limited 6 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au