AUSQUEST LIMITED — Proxy Solicitation & Information Statement 2007

Dec 13, 2007

ABN 35 091 542 451

14 December 2007

6 Kearns Crescent, Ardross WA 6153 Telephone: 08 9364 3866 Facsimile: 08 9364 4892 Email: graeme@ausquest.com.au Web: www.ausquest.com.au

The Manager Company Announcements Office Australian Stock Exchange

By Electronic Lodgement

Dear Sir/Madam

NOTICE OF MEETING

Please find attached a Notice of Meeting which will be despatched to shareholders today.

Yours sincerely AUSQUEST LIMITED

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Darren Crawte

Company Secretary

AUSQUEST LIMITED

(ACN: 091 542 451)

NOTICE OF GENERAL MEETING

incorporating Explanatory Statement and Proxy Form

Date of Meeting: 17 January 2008 Time: 11.00am (WST) Location: The Heritage Room South of Perth Yacht Club

This is an important document and should be read in its entirety. If you are in any doubt as to the course you should follow, please consult your financial or other professional adviser.

AUSQUEST LIMITED

ABN 35 091 542 451

NOTICE OF GENERAL MEETING

Notice is hereby given that a General Meeting of shareholders of AusQuest Limited (Company) (Shareholders) will be held at The Heritage Room, South of Perth Yacht Club at 11.00am (WST) on 17[th] January 2008 (General Meeting).The Explanatory Statement which accompanies, and forms part of, this Notice of General Meeting describes the various matters to be considered.

1. Resolution 1 - Ratification of Issue of Shares and Options

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 7.4 and all other purposes, Shareholders ratify the issue of 7,535,714 fully paid ordinary shares in the capital of the Company (Shares) at 28 cents per Share, together with 3,767,857 free attaching options on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.

Voting Exclusion Statement: The Company will disregard any votes cast on this resolution by any person who participated in the issue and any of their associates.

However, the entity need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2. Resolution 2 – Issue of Securities to Mr Graeme Drew

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

“That subject to Shareholder approval of Resolution 1, and for the purposes of ASX Listing Rule 10.11 and all other purposes, approval is given for the Directors to allot and issue up to 115,000 Shares at an issue price of 28 cents per Share, together with up to 57,500 free attaching options, to Mr Graeme Drew (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion: In relation to Resolution 2, the Company will disregard any votes cast on this resolution by Mr Drew (or his nominee) or any of their associates.

However, the entity need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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AUSQUEST LIMITED

ABN 35 091 542 451

3. Resolution 3 – Issue of Securities to Mr John Ashley

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

“That subject to Shareholder approval of Resolution 1, and for the purposes of ASX Listing Rule 10.11 and all other purposes, approval is given for the Directors to allot and issue up to 200,000 Shares at an issue price of 28 cents per Share, together with up to 100,000 free attaching options, to Mr John Ashley (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion: In relation to Resolution 3, the Company will disregard any votes cast on this resolution by Mr Ashley (or his nominee) or any of their associates.

However, the entity need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

4. Resolution 4 – Issue of Securities to Mr Greg Hancock

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

“That subject to Shareholder approval of Resolution 1, and for the purposes of ASX Listing Rule 10.11 and all other purposes, approval is given for the Directors to allot and issue up to 200,000 Shares at an issue price of 28 cents per Share, together with up to 100,000 free attaching options, to Mr Greg Hancock (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion: In relation to Resolution 4, the Company will disregard any votes cast on this resolution by Mr Hancock (or his nominee) or any of their associates.

However, the entity need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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AUSQUEST LIMITED

ABN 35 091 542 451

5. Resolution 5 – Issue of Securities to Mr Christopher Ellis

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

“That subject to Shareholder approval of Resolution 1, and for the purposes of ASX Listing Rule 10.11 and all other purposes, approval is given for the Directors to allot and issue up to 1,824,286 Shares at an issue price of 28 cents per Share, together with up to 912,143 free attaching options, to Mr Christopher Ellis (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion: In relation to Resolution 5, the Company will disregard any votes cast on this resolution by Mr Ellis (or his nominee) or any of their associates.

However, the entity need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Point at which Voting Rights are Determined

The Company is permitted to specify a time, not more than 48 hours before the meeting, at which a “snap shot” of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the General Meeting.

On this basis all Shares of the Company that are quoted on ASX at 5pm WST on Tuesday 15[th] January 2008 shall, for the purposes of determining voting entitlements at the General Meeting, be taken to be held by the persons registered as holding the Shares at that time.

Proxies

Please note that:

• (a) a member of the Company entitled to attend and vote at the General Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company; and

• (c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion is not specified each proxy is entitled to cast half of the number of votes.

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AUSQUEST LIMITED

ABN 35 091 542 451

The enclosed Proxy Form provides further details on appointing proxies and lodging proxy forms. To vote by proxy, completed Proxy Forms must be returned to the Company’s office in accordance with the instructions on the form by no later than 15[th] January 2008.

By Order of the Board

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Darren Crawte Company Secretary

DATED this 14[th] day of December 2007

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AUSQUEST LIMITED

ABN 35 091 542 451

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of Shareholders in connection with the business to be conducted at the General Meeting of Shareholders to be held at The Heritage Room, South of Perth Yacht Club at 11.00am (WST) on 17[th] January 2008 (General Meeting).

This Explanatory Statement should be read in conjunction with the accompanying Notice of General Meeting.

RESOLUTION 1 – RATIFICATION OF ISSUE OF SHARES AND OPTIONS

On 29[th] November 2007, the Company announced a placement of 9,875,000 Shares at 28 cents per Share and 4,937,500 free attaching options on the same terms and conditions as existing AQDOA listed options (Options) (Placement). The Placement will raise $2,765,000 before costs of the issue.

On 10[th] December 2007, the Company issued 7,535,714 Shares and 3,767,857 Options under the Placement to institutional investors and consultants to the Company.

Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares and Options.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

The balance of the Placement securities will, subject to Shareholder approval being obtained pursuant to Resolutions 2 to 5, be issued to Directors of the Company.

Information Required by ASX Listing Rule 7.5:

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 1:

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AUSQUEST LIMITED

ABN 35 091 542 451

• (a) 7,535,714 Shares and 3,767,857 Options were allotted and issued on 10 December 2007;

• (b) the issue price of the Shares was $0.28 per Share;

• (c) the Options were issued for nil consideration on the basis of one free Option for every two Shares subscribed for and allotted;

• (d) the Shares and Options were allotted and issued to institutional clients of Hartleys Limited and consultants of the Company, none of whom are or were a related party of the Company for the purposes of Section 228 of the Corporations Act;

• (e) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (f) the Options issued were all issued on the same terms as the Company’s existing AQDOA Options which are set out in Annexure 1 to this Explanatory Statement; and

• (g) funds raised from the Placement will be primarily applied to drilling at the Company’s Table Hill Project to target further manganese intersections and test additional manganese targets identified by the airborne EM survey.

RESOLUTIONS 2 TO 5 - ISSUE OF SHARES AND OPTIONS TO DIRECTORS

Shareholder approval is sought under Resolutions 2 to 5 to allow the following Directors of the Company (Participating Directors) and their associates to participate in the Placement up to an aggregate total of 2,339,286 Shares and 1,169,643 free attaching Options as follows:

Director	Number of Shares	Number of Options
Mr Graeme Drew – ManagingDirector	115,000	57,500
MrJohn Ashley– Executive Director	200,000	100,000
Mr GregHancock – Non Executive Director	200,000	100,000
Mr Chris Ellis – Non Executive Director	1,824,286	912,143

Resolutions 2 to 5 will only be voted upon if Resolution 1 is approved by Shareholders.

ASX Listing Rule 10.11 requires a listed company to obtain shareholder approval by ordinary resolution prior to the issue of securities (including an option) to a related party. The Participating Directors are considered related parties of the Company by virtue of the fact that they are Directors of the Company.

Approval pursuant to Listing Rule 7.1 is not required in order to grant the Shares and Options to the Participating Directors as approval is being obtained under ASX Listing Rule 10.11. The grant of the Shares and Options will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

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AUSQUEST LIMITED

ABN 35 091 542 451

Information Required by ASX Listing Rule 10.13

ASX Listing Rule 10.13 sets out a number of matters which must be included in a notice of meeting proposing an approval under ASX Listing Rule 10.11. The following information is provided to Shareholders in relation to Resolutions 2 to 5 for the purposes of Listing Rule 10.13:

• (a) the maximum number of securities to be granted is 2,339,286 Shares and 1,169,643 Options and the allottees will be Mr Graeme Drew, Mr John Ashley, Mr Greg Hancock and Mr Christopher Ellis. The apportionment of the Shares and Options between the Participating Directors is set out in the table on page 5 of this Explanatory Statement;

• (b) the Shares and Options will be issued no later than one (1) month from the date of approval of Resolutions 2 to 5 (or such later date as approved by ASX) and it is anticipated that the Shares and Options will be issued on one date;

• (c) the issue price of the Shares will be $0.28 per Share;

• (d) the Options will be issued for nil consideration on the basis of one Option for every two Shares subscribed for and allotted;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (f) the Options issued will be issued on the same terms as the Company’s existing AQDOA Options which are set out in Annexure 1 to this Explanatory Statement; and

• (g) funds raised from the issue of the Shares and Options is as disclosed under Resolution 1.

Shareholders should note that it is wholly within the Directors’ discretion whether to participate in the Placement and that Resolutions 2 to 5 do not bind the Directors to taking up their maximum entitlement as outlined above.

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AUSQUEST LIMITED

ABN 35 091 542 451

ANNEXURE 1 – TERMS OF OPTIONS

The following is a summary of the terms of the Options to be issued pursuant to Resolutions

• 1 – 5.:

• a) each Option entitles the holder, when exercised, to one Share;

• b) the Options expire 30 November 2009 (Expiry Date);

• c) the exercise price of each Option is 20 cents each;

• d) an Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised if there is a pro-rata issue or bonus issue to the holders of ordinary shares;

• e) the Company will apply for quotation of the Options on ASX;

• f) all Shares issued upon exercise of the Options will rank pari passu in all respects with the Company’s then issued Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of the Options;

• g) there are no participating rights or entitlements inherent in the Options and optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of the proposed issue notice of the new issue will be given to optionholders at least five (5) business days before the record date. This will give optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue; and

• h) in the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Expiry Date, all rights of the optionholders will be varied in accordance with the ASX Listing Rules applying to the reconstruction of capital at the time of the reconstruction.

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AUSQUEST LIMITED ACN 091 542 451 PROXY FORM

The Secretary AusQuest Limited 6 Kearns Crescent Ardross WA 6153

I/We

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of

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being a shareholder/(s) of Ausquest Limited ( Company ) hereby appoint as proxy to vote in accordance with the following directions (or if no directions have been given, as the proxy or Chairman sees fit) at the General Meeting to be held at The Heritage Room, South of Perth Yacht Club at 11.00am (WST) on 17[th] January 2008 (and at any adjournment thereof) ( Meeting ).

OR the Chairman

Name of person you are appointing (if not the Chairman)

If the Chair of the General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of the Resolutions please place a mark in this box

By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest. The Chairman intends to vote in favour of all Resolutions if no directions are given.

If you do not mark this box, and you have not directed your proxy how to vote, the Chairman will not cast your votes on the Resolutions and your votes will not be counted in calculating the required majority if a poll is called on the Resolutions.

Resolution

For Against Abstain**

1. Ratification of issue of Shares and Options

2. Approval for the issue of securities to Mr Graeme Drew

3. Approval for the issue of securities to Mr John Ashley

4. Approval for the issue of securities to Mr Greg Hancock

5. Approval for the issue of securities to Mr Christopher Ellis

**If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item.

Appointing a Second Proxy (if applicable)

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or % Contact Telephone
Number
The number of Shares applicable The percentage of your Area Code Telephone Number
to this proxy form voting rights
Signature(s)
Shareholder 1 Shareholder 2 Shareholder 3
Director Director/Secretary Sole Director and Secretary
Proxies may be lodged either by facsimile on (08) 9364 4892 , or by mail to 6 Kearns
Crescent ARDROSS WA 6153 or delivery to the Company’s Share Registry at 110
Stirling Highway, Nedlands WA 6009. To be valid, a proxy form (and any authority
under which the proxy form is signed or a certified copy of the authority) must be received
by the Company not less than 48 hours before the time scheduled for commencement of
the General Meeting. For further instructions on voting, please refer to the rear of this
Company Seal (if required) form.
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INSTRUCTIONS ON VOTING

1. How to Vote

Shareholders may vote by attending the Meeting in person, by proxy or authorised representative.

2. Voting in Person

To vote in person, attend the Meeting on the date and at the time and place specified in this Notice of General Meeting.

3. Voting by Proxy

Shareholders are entitled to appoint up to 2 individuals to act as proxies to attend the Meeting and vote on their behalf. Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the shareholder’s voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes.

The proxy form must be signed by the shareholder or his/her attorney duly authorised in writing or, if the shareholder is a corporation, in a manner permitted by the Corporations Act 2001. In the case of Shares jointly held by 2 or more persons, all joint holders must sign the proxy form.

Completion of a proxy form will not prevent individual shareholders from attending the Meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the Meeting.

The proxy may, but need not, be a shareholder of the Company.

4.

Voting Entitlements

For the purposes of determining voting entitlements at the Meeting, Shares will be taken to be held by the persons who are registered as holding the Shares 48 hours before the time scheduled for commencement of the Meeting. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

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