Austral Gold Limited

AUSTRAL GOLD LIMITED ABN 30 075 860 472

28 April 2008

Company Announcement Office Australian Stock Exchange Limited

Terrace Tower Suite 605 Level 6, 80 William Street Sydney NSW 2011 Telephone: +61 2 9380 7233 Facsimile: +61 2 9380 7972 E-mail: [email protected] Web: www.australgold.com.au

Austral Gold Limited wishes to advise that a General Meeting for shareholders will be held on 28 May 2008.

The Notice of Meeting is attached and will be despatched to shareholders on Tuesday 29 April 2008.

By order of the Board Catherine Lloyd Company Secretary

AUSTRAL GOLD LIMITED ABN 30 075 860 472 NOTICE OF GENERAL MEETING

TIME : 3:00 PM (AEST) DATE : 28 May 2008 PLACE : PKF Chartered Accountants & Business Advisers Geoff Harris Room Level 10, 1 Margaret Street SYDNEY

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (61 2) 9380 7233.

THIS PAGE INTENTIONALLY LEFT BLANK

CONTENTS P AGE

Notice of General Meeting (setting out the proposed resolutions)	4-5
Explanatory Statement (explaining the proposed resolutions)	6-7
Glossary	20
Proxy Form	53-54

T IM E AND PL ACE OF M EETING AND HOW T O VOT E

VENUE

The General Meeting of the Shareholders of Austral Gold Limited to which this Notice of Meeting relates will be held at the offices of PKF Chartered Accountants & Business Advisers, Geoff Harris Room Level 10, 1 Margaret Street SYDNEY on Wednesday, 28 May 2008 commencing at 3.00pm (AEST).

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed and send the proxy form:

(a) by post to Terrace Tower, Suite 605, 80 William Street, Sydney, New South Wales 2011; or
(b) by facsimile to AGD on facsimile number (02) 9380 7972,

so that it is received no later than 3.00pm AEST on 26 May 2008.

Proxy forms received later than this time will be invalid.

NOT ICE OF GENERAL M E ETIN G

Notice is given that a General Meeting of Shareholders of Austral Gold Limited ( AGD ) will be held at the offices of PKF Chartered Accountants & Business Advisers, Geoff Harris Room Level 10, 1 Margaret Street Sydney, NSW commencing at 3:00pm (AEST) on Wednesday 28 May 2008.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of AGD on Monday, 26 May 2008, at 3:00pm (AEST).

Terms and abbreviations used in this Notice of Meeting are defined in the Glossary.

AGENDA

1. RESOLUTION 1 – ACQUISITION OF A SUBSTANTIAL ASSET

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

“That, subject to Guanaco Capital Holding Company ( GCH ) delivering an enforceable undertaking to AGD in the terms as set out in the Explanatory Statement accompanying this Notice of Meeting, for the purposes of ASX Listing Rules 10.1, 10.11 and 11.1.2, sections 208 and 611 (item 7) of the Corporations Act, and for all other purposes, shareholders approve the acquisition by AGD of all fully paid shares in Guanaco Mining Company ( GMC ) that it does not now own in consideration for the issue of 101,500,000 fully paid ordinary shares in AGD to GCH and the distribution by GCH of its fully paid shares in AGD to its shareholders on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: AGD will disregard any votes cast on this resolution by GCH and any associates of GCH. However, AGD need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if 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.

Expert’s Report: Shareholders should carefully consider the independent expert’s report prepared by Interfinancial Limited (AFS Licence No. 238136) for the purposes of shareholder approval for each of Resolution 1 required under ASX Listing Rule 10.1 and section 611 (item 7) of the Corporations Act (as the case may be). The independent expert’s report comments on the fairness and reasonableness of the transaction to the non-associated shareholders in the Company.

2. RESOLUTION 2 – APPROVAL FOR RE-ELECTION OF MS NATALIA ZANG

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

“That Ms Natalia Zang, having been appointed by the Board as a director of the Company on 19 of March 2008 and, being eligible for re-election, be re-elected as a director of the Company."

DATED: 25 April 2008

BY ORDER OF THE BOARD

Catherine Lloyd, Company Secretary

EXPL AN AT OR Y STAT EM EN T

This Explanatory Statement has been prepared for the information of the Shareholders of Austral Gold Limited ( AGD ) in connection with the business to be conducted at a General Meeting.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass Resolution 1 in the Notice of Meeting.

Resolution 1 to be put to Shareholders of the General Meeting relates to the holding of AGD in Guanaco Mining Company ( GMC ) and its relationship with its major shareholder, Guanaco Capital Holding Corp ( GCH ).

The Resolution is designed to simplify the corporate structure and AGD’s interest in its principal financial asset, GMC. Because it involves AGD’s major shareholder, GCH, which is also the holder of the balance of the equity in GMC, a third party valuation of GMC and an Independent Expert’s Report on the fairness and reasonableness of the proposed transaction from the point of view of the unassociated AGD Shareholders has been commissioned by your Board. That valuation and Independent Expert’s Report has been mailed to Shareholders with this Notice of Meeting.

1.1 General

At a General Meeting on 22 May 2007, Shareholders approved a three step restructure which:

simplified the corporate structure of the AGD group;
extinguished the loans that GMC owed to both AGD and GCH; and
gave AGD a 51% interest and operatorship of GMC.

A further resolution approved at the same meeting consolidated the issued capital of AGD on the basis of one new Share/Option for every ten Shares/Options on issue.

The Directors are now proposing further changes to address what they see as potential barriers to investment in AGD by institutional and private investors. The Directors consider the barriers to be:

a perceived dominance of AGD’s share register by GCH which holds 77.82% interest in AGD in addition to a 49% interest in GMC; and
insufficient free float or minority shareholders’ interests in AGD. A larger free float than 22.18% in AGD is desirable for the reasons that:
AGD may no longer be seen to be dominated by one shareholder;
liquidity in AGD Shares traded on ASX would improve; and
AGD Shares may be more attractive to institutional and private investors.

Resolution 1 which will be put to this meeting has as its objectives:

further simplifying the corporate structure by giving AGD 100% ownership of GMC; and
increasing the free float (minority Shareholders’ interests) of AGD.

1.2 Resolution 1

The first resolution is as follows:

The key terms of the enforceable undertaking referred to in Resolution 1 are reflected in a deed given by GCH in favour of AGD as follows:

Subject to approval by the Shareholders of AGD at a meeting to be held on or about 28 May 2008 of a resolution to approve the acquisition by AGD of all fully paid shares in Guanaco Mining Company that it does not now own in consideration for the issue of fully paid ordinary shares in AGD to GCH, GCH irrevocably undertakes in favour of AGD to immediately offer a distribution in specie of all the shares GCH holds in AGD in order to distribute to its shareholders each shareholder’s indirect pro rata shareholding in AGD.

GCH acknowledges that, immediately following completion of the Transaction for the acquisition by AGD of all of GCH's shares in GMC and the resultant issue of AGD shares to GCH, it will become entitled to greater than 90% of the issued capital of AGD. GCH irrevocably undertakes in favour of AGD that it is not the purpose of this transaction nor is it GCH’s present intention to exercise its right to compulsorily acquire all the ordinary shares in AGD that it does not own.

Figure 1 reflects the present position:

May 2008 R estructure S tructure prior to May 2008

==> picture [279 x 172] intentionally omitted <==

----- Start of picture text -----

AGD Minority GC H Minority IF IS
S hareholders S hareholders
33.38% 66.62%
G uanaco C apital Holding
22.18%
77.82%
Austral Gold Limited
100.0% 49.0%
Golden R ose International Limited
18%
33%
Guanaco Mining C ompany
----- End of picture text -----

It should be noted for the purposes of the figures in this section that Golden Rose International Limited is in the process of voluntary liquidation and from mid 2008, 100% of Austral Gold holding in GMC will be held directly and not through Golden Rose International.

Figure 2 shows the position after Austral Gold acquires the 49% of GMC now owned by GCH through the issue of shares to that company:

May 2008 R estructure S tep 1 – 100% GMC acquired by AGD

==> picture [230 x 172] intentionally omitted <==

----- Start of picture text -----

AGD Minority GC H Minority IF IS
S hareholders S hareholders
33.38% 66.62%
G uanaco C apital Holding
8.80%
91.20%
Austral Gold Limited
100.0%
Golden R ose International Limited
67%
33%
Guanaco Mining C ompany
----- End of picture text -----

As set out in the Notice of Meeting, contingent only on the approval of Resolution 1 by shareholders at this meeting, GCH will under an enforceable undertaking, distribute to its minority shareholders those shares in Austral Gold held by GCH on their behalf.

The diagrammatic effect of this is as follows:

May 2008 R estructure S tep 2 – In specie distribution of AGD shares to G C H shareholders

==> picture [230 x 165] intentionally omitted <==

----- Start of picture text -----

AGD Minorities F ormer GC H IF IS
Minorities
8.80% 30.44% 60.76%
Austral Gold Limited
100.0%
Golden R ose International Limited
67% 33%
Guanaco Mining C ompany
----- End of picture text -----

Following this distribution of Austral Gold shares to minority shareholders in GCH, a broader spread of minority interests in Austral Gold and a larger free float will be achieved, just under 40% compared to the current 22.18%.

To allow shareholders to assess the financial impact of Resolution 1, the Balance Sheet of Austral Gold as at 31 December 2007 Half Yearly Report is compared with a proforma Balance Sheet following the transaction proposed in Resolution 1.

Consolidated AGD at 31-Dec-07	GMC Pro- at Forma 31-Dec-07 Adj. Note	Pro-Forma Group 31-Dec-07
47,242 14,199 61,441 24,065,168 2,155,764 7,086 11,162 26,239,180 26,300,621 15,635 2,317,196 2,332,831 23,967,790 15,914,254 -2,182,835 10,236,371 23,967,790 23,967,790	149,137 40,459 189,596 981,300 -24,065,168 1 -2,155,764 2 15,535,908 46,764,092 3 200,163 16,717,371 16,906,967 499,286 732,100 1,231,386 15,675,581 22,417,756 6,002,244 4 97 -6,742,272 9,868,526 5 0 4,672,390 6 15,675,581 15,675,581	196,379 54,658
		251,037
		981,300 62,307,086 211,325
		63,499,711

		63,750,748

		514,921

		3,049,296

		3,564,217

		60,186,531
		44,334,254 97 943,419 14,908,761
		60,186,531

		60,186,531

Notes

1 Being elimination of investment in associate now classified as subsidiary
2 Being elimination of goodwill as value fully recognised in evaluation and exploration expenditure
3 Being valutaion of mine in line with independent experts report
4 Being elimination of GMC issued capital on consolidation and issue of 101,500,000 AGD shares @ 28c/share for acquisition of 49% of GMC
5 Retained earnings of AGD Group pre acquisition adjusted for;
elimination of pre-acquisition losses of GMC
acquisition discount on acquisition of 49% interest in GMC
6 Revaluation reserve arising from application of step acquisition accounting in respect of the change of GMC from investment in associate to subsidiary

For ease of reference by shareholders, the following key information on the Guanaco Gold/Silver/Copper Project has been extracted from the Independent Expert’s Report attached to this Notice of Meeting.

The Guanaco District is situated on the western edge of the main Chilean porphyry copper belt. The region has produced in excess of 2 million ounces ( ozs) of gold since first discovery in 1878, with intense exploitation between 1886 and 1939.

The Guanaco property is located 200 kilometres (km) southeast of Antofagasta and about 50 km east of the Pan American highway. The mine is reported to have produced 9.3 tonnes of gold in 1938 and 3.7 tonnes in 1939 and a total of 30 tonnes to the mid 1980s. Copper is recorded as mined between 1928 and 1930, although no production details are available.

The Guanaco mine is 70 km from Meridian Gold’s El Penon gold mine which produces 320,000 ozs of Au annually at a cost of less than US$50 per oz. Guanaco is also 80 km from BHP Billiton’s Escondida mine, which produces 1.2 million t of copper (Cu) annually and is one of the world’s largest copper mines.

Three open pit mines were operated by Amax: Dumbo and Defensa open pits exploiting the Dumbo Defensa vein structure and Perseverancia pit exploiting the Chilena vein structure.

Substantial assets also exist on site including a crushing plant, heap leach processing plant including a Merrill Crowe recovery plant, administration block, laboratory, warehouse, maintenance facilities, an accommodation complex and mobile equipment.

Over the concession there are numerous gold and copper mineralisation targets with most of the gold production coming from less than one-third of the known 3.5 km mineralized strike length of the Dumbo-Defensa vein system. During late 1999 and early 2000 a wide spaced drilling program identified the Cachinalito mineralisation. Drilling undertaken by Amax and Kinross also identified potential for underground mineable mineralisation at the following locations:

Dumbo, between the west wall of the pit and the Soledad property boundary;
Cachinalito, to the east of existing access and mined out stopes on the Soledad property; and
Chilena, again between the Soledad property where the vein has apparently been mined and the Perseverancia open pit.

A technical review by SRK Consultants quoted JORC compliant resources which are summarised in the table below. Between March and May of 2006 the current owners undertook a drilling program consisting primarily of reverse circulation (RC) drilling and some diamond holes followed by a second program between August and October 2006. The programs consisted of 25,000 metres of drilling. An independent technical expert, Magri Consultores Limitada ( Magri), completed a geostatistical assessment of the new drilling results in January 2007. The results of Magri’s report were summarized in AGD’s December 2006 Quarterly Report.

During the latter part of 2007 a further drilling program was undertaken to test mineralisation along strike from existing ore bodies and at newly interpreted ore zones consisting of 19,903 metres of drilling. Although gold intersections were encountered no revised or additional resources are yet available. Additionally drilling of the low grade leach pads was also undertaken during 2007. On 14 April 2008 AGD released a report by

Magri which provided an estimate of the leach pad gold resources. The JORC compliant resources estimated by Magri are also summarized in the table below.

Resource		SRK Estimation	SRK Estimation	SRK Estimation	Magri Estimation*	Magri Estimation*	Magri Estimation*
		Tonnes	Grade	Ounces	Tonnes	Grade	Ounces
		(m)	(g/t)		(m)	(g/t)
Cachinalito	Measured	-	-	-	0.859	4.62	127,490
	Indicated	1.838	5.69	335,000	1.077	3.70	128,195
	Inferred	2.000	5.50	355,000	0.654	3.52	74,069

Dumbo West	Measured	-	-	-	0.158	2.88	14,660
	Indicated	1.773	2.20	125,000	0.524	2.65	44,662
	Inferred	1.500	2.20	100,000	1.405	1.77	80,068

Perseverancia	Measured	-	-	-	0.066	4.04	8,540
	Indicated	-	-	-	0.102	3.76	12,284
	Inferred	2.500	5.00	400,000	0.059	3.27	6,173
Total		9.611	4.26	1,315,000	4.904	3.15	496,141
Leach Pads	Measured	-	-	-	8.334	0.54	145,748
	Indicated	11.100	0.73	260,000
	Inferred	-	-	-
Total		20.711	2.37	1,575,000			641,919

The transaction proposed in Resolution 1 has been examined by Interfinancial Limited and found to be fair and reasonable to the shareholders of Austral Gold

1.3 General Information in respect of GCH, IFIS and its intentions for AGD

GCH is a company incorporated in the British Virgin Islands. IFIS is the principal shareholder of GCH and GCH and IFIS are controlled by Mr Eduardo Elsztain, a prominent Argentinian fund manager.

Mr Elsztain studied Economic Sciences at the University of Buenos Aires. He has been carrying out activities in the real estate sector for more than 25 years. He founded Dolphin Fund Management. He is the Chairman of the Boards of IRSA, Cresud and Alto Palermo, among other public companies listed both in Buenos Aires and New York, Bacs Banco de Crédito & Securitización and Consultores Asset Management, among others. Among other public listed companies, he is the Vice-Chairman of the Board of Banco Hipotecario and a director of BrasilAgro and YPF.

GCH and IFIS have informed AGD that, as at the date of this Notice of Meeting and on the basis of the facts and information available to it, if Shareholders approve Resolution 1 that they:

(a) have no intention of making any significant changes to the business of AGD in a manner that may be detrimental to non-associated Shareholders;
(b) do not intend to redeploy any fixed assets of AGD except for investigating the possible joint venture, partial sale or total sale of any of AGD’s tenements in a manner that would be beneficial for AGD;
(c) do not have any present intention to inject further capital into AGD, other than its participation in any rights issue that may be implemented by AGD;

(d) do not intend to transfer any property between AGD and GCH or any person associated with any of them other than as set out in this Notice;
(e) have no current intention to change AGD’s existing policies in relation to financial matters or dividends in a manner that may be detrimental to nonassociated Shareholders; and
(f) have no current intentions regarding the future employment of the present employees of AGD and have no current intention to change the Board.

1.4 General overview of GMC and the Guanaco Project

A general overview of GMC and the Guanaco project is set out in the Independent Expert’s Report (sections 5.1 and 5.2) and non-associated Shareholders are advised to read those sections in full.

1.5 Regulatory Requirements

The ASX Listing Rules and the Corporations Act set out the regulatory requirements that must be satisfied in relation to the Transaction.

1.6 ASX Listing Rules 10.1 and 10.11

ASX Listing Rule 10.1 provides that an entity (or any of its subsidiaries) must not acquire a substantial asset from, or dispose of a substantial asset to, a related party, a subsidiary, a substantial holder or an associate of any of those entities without shareholder approval. A person is considered a “substantial holder” if the person and the person’s associates have a relevant interest, or had a relevant interest at any time in the 6 months before the transaction, in at least 10% of the total votes attached to the voting securities.

An asset is “substantial” if its value or the value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity interests of AGD as set out in the latest accounts given to ASX under the Listing Rules.

For the purpose of ASX Listing Rule 10.1, GCH is a substantial holder in AGD. The proposed transaction therefore requires Shareholder approval for the purpose of ASX Listing Rule 10.1 because AGD is acquiring GMC Shares from GCH and the value of the Shares being issued exceeds 5% or more of the equity interests of AGD.

ASX Listing Rule 10.1 provides that shareholder approval sought for the purpose of that rule must include a report on the proposed acquisition from an independent expert.

If Resolution 1 is passed, Shares will be issued to GCH, a related party by virtue of the fact that GCH has a voting power in excess of 50% in AGD and therefore could be deemed to “control” AGD. For this reason, and the fact that Mr Elsztain, a director of AGD controls GCH and IFIS, Shareholder approval under ASX Listing Rule 10.11 is also required prior to issuing these Shares.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares as approval is being obtained under ASX Listing Rule 10.11. Shareholders should note that the issue of these Shares to GCH will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

For the purposes of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 1:

(a) the maximum number of Shares to be issued by AGD to GCH (or its Associates) is 101,500,000 Shares, taking the total number of Shares owned by GCH to 153,496,153 Shares;
(b) the allottee of the Shares will be GCH, noting that GCH will then complete a distribution in specie of all the Shares it owns in AGD to its shareholders;
(c) the Shares will be issued on the same terms as the existing fully paid ordinary shares in AGD;
(d) the Shares will be issued as consideration for the Transaction as set out in this Explanatory Statement;
(e) the Shares will be issued as soon as practicable after the meeting and in any event not later than 1 month after the date of this meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated that the Shares will be issued on one date; and
(f) no funds will be raised from the issue of the Shares.

1.7 Item 7 of Section 611 of the Corporations Act

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the company increases:

(a) from 20% or below to more than 20%; or
(b) from a starting point that is above 20% and below 90%.

The voting power of a person in a company is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting Shares in the company in which the person and the person’s associates have a relevant interest.

A person ( second person ) will be an “associate” of the other person (first person) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the person;
(b) the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; and
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the company’s affairs.

A person has a relevant interest in securities if they:

(a) are the holder of the securities;

(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

Item 7 of Section 611 of the Corporations Act provides an exception to the prohibition, whereby a person may acquire a relevant interest in a company’s voting shares with shareholder approval.

Shareholder approval under Item 7 of Section 611 of the Corporations Act is sought for Resolution 1. Although the relevant interest of GCH will initially increase to above 90% and accordingly the section does not apply at that time, as a result of the distribution in specie, the relevant interest of GCH and IFIS will then be 60.76% and the minority shareholders will be 30.44%, and because the minority shareholders have not held a relevant interest of greater than 20% of AGD, approval is sought.

The information set out below is required to be provided to Shareholders under the Corporations Act and ASIC Policy Statement 74 in respect of obtaining approval for Item 7 of Section 611 of the Corporations Act. Shareholders are also referred to the Independent Expert’s Report annexed to this Explanatory Statement.

1.8 Details of GCH and its Associates

The background information on GCH is set out in the Independent Expert’s Report. A full list of GCH’s Associates is set out in Schedule 1 to this Explanatory Statement.

1.9 Identity of persons who will hold a relevant interest in the Shares on completion of the Transaction

On completion of the Transaction the following persons will hold a relevant interest in Shares:

(a) GCH; and
(b) the Associates of GCH as set out in Schedule 1.

As at the date of this Explanatory Statement, GCH holds a relevant interest of 77.82% in AGD. The maximum increase in GCH’s voting power as a result of Resolution 1 is 13.38%. The maximum voting power that it will have on completion of the Resolution 1 is 91.2% (assuming no Options are exercised or converted).

Following the distribution in specie, the relevant interest of IFIS will be 60.76%, on the basis that the shareholders of GCH will be distributed their entitlement to Shares.

The above paragraphs assume that:

(a) all of the Shares the subject of Resolution 1 have been issued and no additional Shares are issued (whether by the exercise of Options or otherwise); and
(b) no parties other than GCH or its Associates as stated in Schedule 1 will receive an increase in voting power as a result of the Transaction.

1.10 Section 208 of the Corporations Act

Under Chapter 2E of the Corporations Act, a public company cannot give a “financial benefit” to a “related party” unless one of the exceptions to the section apply or shareholders have in general meeting approved the giving of that financial benefit to the related party.

In the current circumstances, the transfer of GMC Shares to GCH and the issue of Shares in AGD to GCH as a result of the Transaction constitute a “financial benefit” as defined in the Corporations Act. Further, GCH is a “related party” of AGD as defined under the Corporations Act by virtue of GCH being in “control” of AGD and Mr Elsztain controlling GCH.

The Directors are of the view that the exceptions under the Corporations Act to the provision of a financial benefit to a related party may not apply in the current circumstances.

The Directors have determined to seek Shareholder approval under Section 208 of the Corporations Act to implement the Transaction.

Pursuant to Sections 217 to 227 of the Corporations Act, the Company provides the following information to Shareholders in respect of the proposed financial benefit to be given to GCH:

(a) the related party to whom the financial benefit will be given is GCH and Mr Elsztain, a director and controller of GCH. GCH presently has voting power of approximately 77.82%;
(b) the nature of the financial benefit to be given is the issue of Shares in AGD to GCH as a result of the Transaction. The value of these Shares is set out in the Independent Expert’s Report;
(c) GCH currently has an interest in 51,996,153 Shares in AGD;
(d) if Shareholders approve the Transaction, the effect will be to increase the interest of AGD in GMC to 100% and to initially increase the voting power of GCH in AGD to 91.2%. This will dilute the non-associated shareholders to a voting power of 8.8% in AGD. Following this, it should be noted that GCH will distribute the AGD shares it owns to its shareholders resulting in IFIS having a voting power of 60.76% of AGD and all other shareholders of AGD (including the GCH minorities) holding the balance;
(e) Mr Elsztain has been paid zero remuneration as a Director of AGD over the past 2 years;
(f) the trading history of the Shares on ASX since 1 June 2007 (post 1 for 10 consolidation) is set out below:

	Price	Date
Highest	34.0 cents	19 October 2007
Lowest	15.0 cents	28 November 2007
Last	28.0 cents	15 April 2008

(g) the ASIC in reviewing documents lodged under section 218 relating to the giving of a financial benefit to a related party of a public company requires explanatory information regarding the value of the financial benefit and the value of the asset being acquired. Shareholders should refer to the valuation in the Independent Expert’s Report prepared by Interfinancial Limited which forms part of this Explanatory Statement.

Based on the information available, including that contained in this Explanatory Statement and the Independent Expert’s Report, including the advantages and disadvantages outlined in detail in those two documents, all of the Directors consider that the Transaction the subject of Resolution 1 is in the best interests of AGD.

Each of the Directors (other than Messrs Elzstain, Zang, Vergara del Carril and Ms Zang who have declined to make a recommendation due to their connection with GCH) recommend that Shareholders vote in favour of Resolution 1.

No Director voted against the proposal to put the Resolutions to Shareholders contained in this Notice of Meeting and Explanatory Statement.

Each Director, other than (other than Messrs Elzstain, Saul and Vergara del Carril and Ms Zang , who hold shares in AGD or whose associated entities hold Shares) and is entitled to vote intends to vote those Shares in favour of Resolution 1.

1.11 Capital Structure

The proposed capital structure of AGD following completion of all the Transaction the subject of this Notice is set out below:

subject of this Notice is set out below:
Shares	Number
Fully paid ordinary shares on issue at date of Notice	66,812,125
Shares to be issued to GCH	101,500,000
Total Shares on issue on Completion of Transaction	168,312,125

2. Resolution 2

The second resolution is as follows:

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

“That Ms Natalia Zang, having been appointed by the Board as a director of the Company on 19 of March 2008 and, being eligible for re-election, be reelected as a director of the Company."

Ms Natalia Zang was appointed by the Board as a director of AGD on 19 March 2008. Until such date, she has been alternate director of AGD. Her appointment is required to be voted on by Shareholders at the General meeting, following her appointment.

Pursuant to clause 12.4 of the Constitution, the Directors may at any time appoint a person to be a director, either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed holds office only until the next following General Meeting and is then eligible for re-election.

Ms Natalia Zang is Managing Director of GCH and she has been a Director of GMC since 18 May 2007. She was designated as an alternate Director of Austral Gold on 24

November 2006 and appointed by the Board as a Director of AGD on 19 March 2008. She now seeks re-election in accordance with Clause 12.4 of the Constitution.

ROLE OF THE INDEPENDENT EXPERT

The Independent Expert’s Report assesses whether the proposals outlined in Resolution 1 are fair and reasonable to the Shareholders who are not associated with GCH. The Independent Expert’s Report also contains an assessment of the advantages and disadvantages of the Transaction the subject of Resolutions. This assessment is designed to assist all Shareholders in reaching their voting decision.

Interfinancial Limited has provided the Independent Expert’s Report and has provided an opinion that it believes the proposal as outlined in Resolution 1 is fair and reasonable to the Shareholders of AGD not associated with GCH. It is recommended that all Shareholders read the Independent Expert’s Report in full.

RESPONSIBILITY FOR INFORMATION

The information concerning AGD contained in this Explanatory Statement, including information as to the views and recommendations of the Directors has been prepared by AGD and is the responsibility of AGD.

Interfinancial Limited has prepared the Independent Expert’s Report in relation to Resolution and takes responsibility for that report and has consented to the inclusion of that report in this Explanatory Statement. Interfinancial Limited is not responsible for any other information contained within this Explanatory Statement.

Shareholders are urged to read carefully the Independent Expert’s Report to understand the scope of the report, the methodology of the assessment, the sources of information and the assumptions made.

Certain statements in the Explanatory Statement relate to the future. Those statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of AGD to be materially different from future results, performance or achievements expressed or implied by those statements. These statements reflect views only as of the date of the Explanatory Statement. Neither the Company nor any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in the Explanatory Statement will actually occur and you are cautioned not to place undue reliance on those forward looking statements.

The Explanatory Statement does not take into account the individual investment objectives, financial situation and particular needs of individual Shareholders. If you are in doubt as to what you should do you should consult your legal, financial or professional adviser prior to voting.

GLOSSARY

AGD means Austral Gold Limited (ABN 30 075 860 472).

Associates means the associates of GCH listed in Schedule 1.

ASX Listing Rules or Listing Rules means the listing rules of ASX.

ASX means ASX Limited.

Board means the board of directors of AGD.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of AGD.

Explanatory Statement means the explanatory statement to accompanying the Notice.

GCH means Guanaco Capital Holding Corporation.

GMC means Guanaco Mining Company.

GMC Shares means fully paid ordinary shares in the capital of GMC.

IFIS means IFIS Limited, the principal shareholder of GCH, and a company controlled by Mr Elsztain.

Meeting means the meeting convened by the Notice.

Notice or Notice of Meeting means this notice of meeting.

Options means an option to acquire a Share.

Resolution means a resolution contained in the Notice.

Share means a fully paid ordinary share in the capital of AGD, unless specified to the contrary.

Shareholder means a holder of Shares.

Transaction means the transactions the subject of Resolution 1.

SCHEDULE 1 – ASSOCIATES OF GCH

Eduardo Sergio Elszstain (controller of GCH)

IFIS Limited (principal shareholder of GCH)

Dolphin Fund Plc (shareholder of GCH)

ANNEXURE A

INDEPENDENT EXPERT’S REPORT

PREPARED BY

INTERFINANCIAL LIMITED

(AFS LICENCE NO.238136)

FOR THE PURPOSES OF SHAREHOLDER APPROVAL FOR EACH OF RESOLUTIONS 1 AND 2 AS SET OUT IN THE NOTICE OF MEETING AND EXPLANATORY STATEMENT FOR A GENERAL MEETING OF SHAREHOLDERS OF AUSTRAL GOLD LIMITED TO BE HELD ON WEDNESDAY 28 MAY 2008.

ANNEXURE A

INDEPENDENT EXPERT’S REPORT

PREPARED BY

INTERFINANCIAL LIMITED (AFS LICENCE NO.238136)

FOR THE PURPOSES OF SHAREHOLDER APPROVAL FOR EACH RESOLUTIONS 1 AND 2 AS SET OUT IN THE NOTICE OF MEETING AND EXPLANATORY STATEMENT FOR A GENERAL MEETING OF SHAREHOLDERS OF AUSTRAL GOLD LIMITED TO BE HELD ON WEDNESDAY 28 MAY 2008.

Incorporating Equity Capital Markets Limited

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InterFinancial Limited

Financial Services Guide

About us

InterFinancial Limited ( IFL or we or us or our ) has been engaged by the directors of Austral Gold Limited ( AGD or Company ) to provide general financial product advice in the form of an independent expert’s report ( Report ) in connection with certain transactions with Guanaco Capital Holding Corporation ( GCH ), a substantial holder in, and related party of, the Company. This transaction is to be implemented by the Company if a resolution approving the transaction is passed at a general meeting of the Company.

The Corporations Act 2001 (Cth) requires us to provide this Financial Services Guide ( FSG ) in connection with the Report which was prepared for the benefit of AGD. However, you are not the party who engaged us to prepare the Report. We are not acting for any person other than AGD.

This FSG provides important information designed to assist retail clients in their views of any general financial product advice provided by IFL in the Report. It is not intended to comprise personal retail financial product advice to retail investors or market-related advice to retail investors. This FSG contains information about our engagement by the directors of AGD to prepare the Report in connection with certain transactions with GCH ( Engagement ), the financial services we are authorised to provide, the remuneration we (and any other relevant parties) may receive in connection with the Engagement, and details of our internal and external dispute resolution systems and how these may be accessed.

Financial services we are licensed to provide

Our Australian Financial Services Licence authorises us to provide the following services to both retail and wholesale clients:

to provide financial product advice in relation to deposit products, securities, derivatives, managed investment schemes (excluding investor directed portfolio services), superannuation, and government debentures, stocks and bonds; and
to deal in a financial product by arranging for another person to apply for, acquire, vary or dispose of the abovementioned financial products.

General financial product advice

The Report contains only general financial product advice. It was prepared without taking into account your personal objectives, financial situation or needs. Where the advice relates to the application for, or acquisition of, a financial product, you should also obtain and read carefully the relevant offer document or explanatory memorandum provided by the issuer or seller of the financial product before making a decision regarding the application for or acquisition of the financial product.

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Remuneration, commissions and other benefits

IFL charges fees for its services, and will receive a fee for its work on the Report. These fees have been agreed on, and will be paid solely by AGD, which has engaged our services for the purpose of providing the Report. IFL may seek reimbursement from AGD of any out of pocket expenses incurred in providing these services. Further details on our fees are set out in section 7.3 of the Report.

Associations and relationships

Other than as set out in this FSG, IFL has no associations or relationships with any person who might reasonably be expected to be capable of influencing it in providing advice under the Engagement. IFL, its officers, employees, consultants and other related parties have not and will not receive, whether directly or indirectly, any commission, fees, or benefits, except for the fees for services rendered in producing the Report. Neither IFL nor its directors and executives has an interest in securities, directly or indirectly, which are the subject of the Report. IFL may perform paid services in the ordinary course of business for entities that are the subject of the Report.

Complaints

Our Australian Financial Services Licence requires us to have an internal complaints-handling mechanism. All complaints must be addressed to us in writing. If we are not able to resolve your complaint to your satisfaction, you are entitled to have your matter referred to the Financial Industry Complaints Service ( FICS ). You will not be charged for using the FICS service.

To contact IFL: To contact the FICS: Level 3, Emirates House Financial Industry Complaints Service Limited 167 Eagle Street PO Box 579 GPO Box 975 Collins Street West Brisbane, Qld 4000 Melbourne, Vic 8007 Tel: 07 3218 9100 Tel: 1800 355 405 Fax: 07 3218 9199 Fax: 023 9621 2291

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15 April 2008

The Directors Austral Gold Limited Suite 201, 80 Williams Street Sydney NSW 2011

Dear Sirs

INDEPENDENT EXPERT'S REPORT TO AUSTRAL GOLD LIMITED SHAREHOLDERS

1 INTRODUCTION

Austral Gold Limited ( AGD or the Company ) is a gold explorer with interests in a major international gold project and a number of Australian exploration projects, including:

a 51% interest in the Guanaco gold, silver and copper project ( Guanaco ), located 220 kilometres ( km ) south east of Antofagasta, Chile, comprising a concession covering 150 square kilometre ( sq km ); and
a 95% interest in the Bullabulling gold exploration project located 60 km west-southwest of Kalgoorlie in the Eastern Goldfields of Western Australia, comprising 8 granted prospecting licences covering a total area of 1,233 hectares.

AGD has called a general meeting of AGD shareholders to seek approval by resolution ( Resolution ) of a transaction designed to increase AGD’s holding in Guanaco Mining Company ( GMC ) and to increase liquidity in AGD’s share trading on the Australian Securities Exchange ( ASX ) (Proposed Transaction).

The Resolution seeks shareholder approval for AGD to acquire a further 49.0% interest in GMC from Guanaco Capital Holding Corporation ( GCH ), to increase its interest in GMC to 100.0% (and, consequently, in Guanaco). If the Resolution is approved, GCH’s interest in AGD would increase from 77.82% to 91.20%.

As a condition of the Resolution, an undertaking will be given by GCH for the in specie distribution of all of the shares GCH holds in AGD to its shareholders on a pro rata basis. The pro-rata distribution of AGD shares to GCH shareholders will result in a broader spread of shareholdings in AGD and potentially a larger free float of approximately 39.24% of AGD compared to the current free float of approximately 22.18%. Inversiones Financieras del Sur SA ( IFIS ), which owns 66.62% of GCH, will therefore hold 60.76% of AGD shares following the implementation of the proposed transaction and the in specie distribution.

AGD has prepared an explanatory statement ( Explanatory Statement ) to explain the effect of the Resolution to be put before shareholders of AGD other than GCH and its associates ( Non-associated Shareholders ) at a general meeting of the Company.

The directors of AGD have engaged InterFinancial Limited ( IFL ) to prepare an independent expert’s report ( Report ) to express an opinion as to whether or not the Resolution is fair and reasonable to Non-associated Shareholders and the reason for that opinion. This Report will accompany the Explanatory Statement to be sent by AGD to its shareholders. This Report should be read in full, including all of the assumptions upon which our work is based, together with the Explanatory Statement and any other information provided to shareholders.

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This Report has been prepared solely for use by the Non-associated Shareholders to assist them to make an informed decision as to whether to vote for or against the Resolution, or to abstain from voting. This Report should not be used by any other persons or for any other purpose.

A Non-associated Shareholder’s decision to accept or reject the Resolution is likely to be influenced by their particular circumstances, for example, a Non-associated Shareholder’s tax considerations. This Report does not address circumstances specific to an individual Non-associated Shareholder. Non-associated Shareholders who are in any doubt as to the action they should take should consult with their own independent professional adviser.

IFL is independent of AGD and has no interests in AGD. In April 2007, IFL undertook, on behalf of the directors of AGD, an Independent Expert’s Report which in relation to a proposed transaction that was approved by shareholders at a General Meeting on 22 May 2007 and which

simplified the corporate structure of the AGD group;
extinguished the loans that GMC owed to both AGD and GCH;
gave AGD a 51% interest in, and operatorship, of GMC; and
increased GCH’s holding in AGD from 66.80% to 78.12% (since reduced to 77.82%).

2 SUMMARY OF OPINION

2.1 Assessment

Fairness

IFL has reviewed technical and commercial information provided to us by AGD and in Section 5.3 of this Report and has determined that a fair value for 100% of the Guanaco mine is between $47.1 million and $77.5 million, with a preferred value of $62.3 million.

With the issue of 101.5 million AGD shares to GCH for 49% of the Guanaco mine, this places an implied price $0.30 on each AGD share to be issued to GCH. The price of $0.30 per share represents a 7.1% premium to the most recent AGD share price at the time of this report of $0.28 and a premium of 3.4% to the 3 month Volume Weighted Average Price (VWAP) of $0.29.

Since implementation of the Proposed Transaction should not result in an adverse change in control of AGD by GCH, and a premium is being paid by GCH for the additional shares in AGD, IFL has concluded that the Proposed Transaction the subject of the Resolution is fair.

Reasonableness

Where a Proposed Transaction of this kind is fair, ASIC Regulatory Guide 111 entitled “Content of expert reports” ( RG 111 ) provides that it is also reasonable. Accordingly, we find the Proposed Transaction the subject of the Resolution to be reasonable.

2.2 Opinion

In summary, IFL is of the opinion that the Proposed Transaction to be approved by the Resolution is fair and reasonable to Non-associated Shareholders.

The above is a summary of our opinion and our Report should be read in full including

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all assumptions on which it is based.

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1	INTRODUCTION............................................................................................................................ 1
2	SUMMARY OF OPINION............................................................................................................... 2
	2.1 Assessment.............................................................................................................................. 2
	Fairness.......................................................................................................................................... 2
	Reasonableness............................................................................................................................. 2
	2.2 Opinion ..................................................................................................................................... 2
3	DETAILS OF PROPOSAL ............................................................................................................. 5
	3.1 Proposal ................................................................................................................................... 5
4	SCOPE OF THE REPORT ............................................................................................................ 6
	4.1 Purpose of the Report .............................................................................................................. 6
	4.2 Basis of Evaluation................................................................................................................... 7
	4.3 Conclusion................................................................................................................................ 8
5	OVERVIEW OF AGD ..................................................................................................................... 9
	5.1 Guanaco Project Overview....................................................................................................... 9
	5.2 Guanaco Gold Project ............................................................................................................ 10
	5.3 Guanaco Valuation................................................................................................................. 11
	5.3.1 Implied Enterprise Value.................................................................................................... 11
	5.3.2 Exploration & Acquisition Expenditure............................................................................... 13
	5.3.3 Comparative Equivalent Values......................................................................................... 14
	5.3.4 Forecast EBITDA Multiple.................................................................................................. 14
	5.3.5 Discounted Cash Flows (DCF) .......................................................................................... 15
	5.3.6 Summary of Fundamental Valuations................................................................................ 16
	5.4 Assumptions ........................................................................................................................... 16
	5.4.1 Commodity Price Forecasts............................................................................................... 16
	5.4.2 Gold Price........................................................................................................................... 17
	5.4.3 Silver Price ......................................................................................................................... 18
	5.4.4 A$/US$ Exchange Rate ..................................................................................................... 18
6	LIMITATIONS, REPRESENTATIONS AND RELIANCE ON INFORMATION............................. 20
	6.1 Sources of Information ........................................................................................................... 20
	6.2 Assumptions ........................................................................................................................... 20
7	QUALIFICATIONS, DECLARATIONS AND CONSENTS ........................................................... 21
	7.1 Qualifications .......................................................................................................................... 21
	7.2 Declarations............................................................................................................................ 22
	7.3 Independence......................................................................................................................... 22
	7.4 Indemnity ................................................................................................................................ 22
	7.5 Consents ................................................................................................................................ 23
	7.6 Other....................................................................................................................................... 23
	Appendix A: Calculation of Discount Rates ..................................................................................... 24

All monetary references refer to Australian dollars unless otherwise noted.

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3 DETAILS OF PROPOSAL

3.1 Proposal

AGD has called a general meeting of AGD shareholders to vote on the Resolution. In broad terms, the effect of the Proposed Transaction to be implemented following approval of the Resolution will be to:

increase AGD’s interest in Guanaco from 51.0% to 100% and increase GCH’s interest in AGD from 77.82% to 91.20%; and
then increase the direct shareholding in AGD of GCH’s minority shareholders through an in specie distribution by GCH of all of its shares in AGD.
Following the in specie distribution:
GCH’s minority shareholders will hold approximately 39.24% of AGD shares; and
IFIS, which is the majority shareholder in GCH, will retain approximately a 60.76% interest in AGD.

Resolution

“That, subject to Guanaco Capital Holding Company ( GCH ) delivering an enforceable undertaking to AGD in the terms as set out in the Explanatory Statement accompanying this Notice of Meeting, for the purposes of ASX Listing Rule 10.1 and 10.11, sections 208 and 611 (item 7) of the Corporations Act, and for all other purposes, shareholders approve the acquisition by AGD of all fully paid shares in Guanaco Mining Company ( GMC ) that it does not now own in consideration for the issue of fully paid ordinary shares in AGD to GCH and the distribution by GCH of its fully paid shares in AGD to its shareholders on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

As discussed in more detail in Section 5.1, GCH holds a 49% interest in Guanaco through GMC. If the Resolution is approved, AGD intends to acquire GCH’s 49% interest in Guanaco. AGD proposes to issue to GCH 101.5 million shares in consideration for GCH’s 49% interest in Guanaco. Following the acquisition of Guanaco and the issue of AGD shares, AGD’s interest in Guanaco will increase to 100% while GCH’s interest in AGD will increase to 91.20%. However, following GCH’s in specie distribution of AGD shares to shareholders of GCH, IFIS’s holding in AGD will be 60.76%, significantly less than GCH’s current holding of 77.82%.

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4 SCOPE OF THE REPORT

4.1 Purpose of the Report

ASX Listing Rules

According to Listing Rule 10.1 of ASX ( Listing Rules ), an entity must not acquire a substantial asset from a related party, or substantial holder, without shareholder approval. An asset is ‘substantial’ if its value, or if the value of the consideration for it is, 5% or more of the equity interest of an entity.

Listing Rule 10.10 provides that a notice of meeting for the purposes of Listing Rule 10.1 must include a voting exclusion statement and a report on the transaction from an independent expert stating whether the transaction is fair and reasonable to holders of the company’s ordinary securities whose votes are not to be disregarded.

The directors of AGD have engaged IFL to prepare this report as:

GCH is both a related party of, and a substantial holder in, AGD;
AGD is acquiring shares from GCH; and
the value of the shares being issues by AGD exceeds 5% of the equity interests of AGD.

Further, Listing Rule 10.11 provides that an entity must not issue, or agree to issue, equity securities to a related person without shareholder approval (unless a relevant exception applies). Listing Rule 10.13 specifies the information that the entity must provide to its shareholders. While the required information does not include an independent expert’s report, the directors of AGD consider that this Report will assist the Non-associated Shareholders in determining whether to approve the Resolution.

Under Listing Rule 14.11, the votes of the party to the transaction and its associates must be disregarded where approval is being sought under Listing Rule 10.1. Listing Rule 14.11 also provides that the votes of the person who is to receive securities in relation to an entity and its associates must be disregarded where approval is being sought under Listing Rule 10.11. Accordingly, only the votes of Non-associated Shareholders will be counted in determining whether the Resolution has been passed.

Corporations Act 2001 (Cth)

Under section 606(1) of the Corporations Act 2001 (Cth) ( Corporations Act ), GCH may exceed the 20% threshold under the takeover provisions if shareholder approval is obtained pursuant to item 7 of section 611 of the Corporations Act. Although the Corporations Act does not require an analysis of whether the acquisition of AGD shares by GCH is fair and reasonable, it does require the Company to disclose all material information on how to vote on the resolution. ASIC Policy Statement 74 ( PS 74 ) then indicates that, as part of this obligation, directors should provide shareholders with an analysis of whether the proposal is fair and reasonable when considered in the context of the shareholders other than those involved in the proposed allotment. PS 74 further provides that the obligation on the directors to provide shareholders with this analysis can be satisfied by the provision of an independent expert’s report. Accordingly, the directors of AGD have elected to commission this Report to satisfy their obligation to provide an analysis of whether the Proposed Transaction is fair and reasonable to Nonassociated Shareholders.

Part 2E.1 of the Corporations Act governs related party transactions. Section 219 of that Part sets out the requirements for information to be provided to shareholders but does not expressly require the inclusion of an independent expert’s report. Once again,

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although an independent expert’s report is not expressly required, the directors of AGD consider that this Report will assist the Non-associated Shareholders in determining whether to pass the Resolution.

This Report has been prepared by IFL for the benefit of Non-associated Shareholders (and no other party) to assist them in considering whether or not to approve the Resolution. This Report will accompany the Notice of Meeting and Explanatory Statement to be sent to shareholders. The sole purpose of this Report is as an expression of IFL's opinion as to whether the Resolution is fair and reasonable, having regard to the interests of the Non-associated Shareholders.

IFL's opinion should not be construed as a recommendation as to whether or not to vote in favour of any of the Resolution. Approval or rejection of the Restructure Resolution is a matter for individual Non-associated Shareholders based on their own circumstances, including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. Non-associated Shareholders, who are in any doubt as to the action they should take in relation to the Resolution, should consult their own independent professional adviser.

4.2 Basis of Evaluation

There is no statutory definition of the expression “fair and reasonable” and the expression has different meanings for different regulatory purposes.

In determining whether the proposed transaction is fair and reasonable, we have had regard to the views expressed by ASIC in RG111 and Regulatory Guide 112 “Independence of experts” (to the extent that they are relevant) which provide some guidance in relation to the preparation of independent expert’s reports.

As ASX offers no guidance as to the meaning of “fair and reasonable” for the purposes of Listing Rule 10.1, IFL considers that it is appropriate to have regard to ASIC’s guidance in assessing whether the Proposed Transaction is fair and reasonable for the purposes of Listing Rule 10.1.

According to RG111, if a proposal to shareholders requires approval that relates to an issue of shares by a company, then an expert should apply the analysis applicable to a takeover bid as set out in RG111.9 - RG111.14 (as if the ‘bidder’ was the other party and the ‘target’ was the company that is the subject of the proposed scheme).

RG111.10 states that an offer is fair if the value of the offer price or consideration is equal to, or greater than, the value of the securities the subject of the offer (assuming 100% ownership and therefore control of the company). Accordingly, the proposed offer is fair if the value of the consideration paid by GCH for the shares in AGD is greater than the assessed value of the ordinary shares in AGD.

An offer is considered reasonable if it is fair, but if an offer is not fair it may still be considered reasonable if an expert believes that there are sufficient reasons for shareholders to accept the offer in the absence of any higher offer before the close of the offer.

According to RG111.12, an expert may consider the following factors, amongst others, in assessing the reasonableness of an offer:

GCH’s pre-existing voting power in securities in AGD;
other significant security holding blocks in AGD;
the liquidity of the market in AGD’s securities;
any special value of AGD to CGH;
the likely market price if the proposed offer is unsuccessful; and

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the value to an alternative party and likelihood of an alternative offer being made.

In the process of making an assessment of the Offer, IFL has made certain assumptions. Where these assumptions are material to our work we have stated them in this Report.

4.3 Conclusion

We have considered the Proposed Transaction and Resolution and, taking account of the issues discussed above, we believe that the Proposed Transaction is fair and reasonable for the reasons set out in this Report.

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5 OVERVIEW OF AGD

5.1 Guanaco Project Overview

Background & Corporate Structure

In 1991 Amax Gold Inc. ( Amax ) obtained an option over the Guanaco gold project ( Guanaco ) located 220 km south east of Antofagasta, Chile, from Minera Guanaco Ltd. and defined a reserve of 11.5 million tonnes ( mt ) containing gold ( Au ) grades of 1.77 grams per tonne ( g/t ). Amax leased some additional property from State owned ENAMI ( ENAMI ) in 1992 and began open pit mining in February 1993 using conventional heap leaching and a Merrill Crowe recovery plant. Although average gold grades were between 3 and 4 g/t, the mining operation closed in 1997 due mainly to the low gold prices and some metallurgical complications related to copper in the ore.

In 1999 Kinross Gold acquired Amax and the property was taken over by its local subsidiary Kinam Guanaco ( Kinam ). In January 2003, AGD (formerly Diamond Rose NL) obtained, through its subsidiary Golden Rose International Limited ( GRIL ), an option to acquire Guanaco, comprising a concession covering 150 sq km excluding the Soledad claims ( Soledad ), adjacent to the Guanaco mine, as well as a few other minor third-party properties. To help fund the acquisition, Guanaco Capital Holding Corporation ( GCH ) agreed to provide funds to complete the purchase conditional on GCH holding title in Guanaco, pending an equitable distribution of equity being concluded and also on AGD managing the project on terms and conditions to be agreed upon.

Guanaco was acquired by Guanaco Mining Company Ltd ( GMC ) and a binding international arbitration in July 2003, determined that GCH should hold 51% of the equity in Guanaco. GMC was therefore owned 51% by GCH and 49% by GRIL.

In December 2005, GCH increased its interest in GMC through the acquisition of the minority interests in GRIL of 26.99%. GCH’s interest in Guanaco, excluding its flow through interest arising from its holding in AGD (66.716%), was approximately 64.22%. AGD had a 73.01% interest in GRIL and, accordingly, the effective interest in Guanaco was approximately 35.78%.

At a General Meeting of AGD on 22 May 2007, shareholders approved several resolutions which had the effect of simplifying the corporate structure of the AGD group; extinguishing the loans that GMC owed to both AGD and GCH; gave AGD a 51% interest and operatorship of GMC and increased GCH’s holding in AGD from 66.80% to 78.12%. IFL undertook, on behalf of the Directors of AGD, an Independent Experts Report which was provided to AGD shareholders as part of the explanatory memorandum.

The resultant structure prior to the current Resolution is shown in the diagram below.

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----- Start of picture text -----

AGD Minority GCH Minority IFIS
Shareholders Shareholders
33.38% 66.62%
22.18% Guanaco Capital Holding
77.82%
Austral Gold Limited
100.0% 49.0%
Golden Rose International Limited
18%
33%
Guanaco Mining Company
----- End of picture text -----

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Should AGD shareholders vote in favour of the Resolution then the resultant corporate structure is shown in the following diagram.

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----- Start of picture text -----

AGD Minorities Former GCH IFIS
Minorities
8.80% 30.44% 60.76%
Austral Gold Limited
100.0%
Golden Rose International Limited
67% 33%
Guanaco Mining Company
----- End of picture text -----

As part of the funding arrangements GCH has funded some of AGD’s share of project costs and funded its head office and Australian exploration activities.

5.2 Guanaco Gold Project

The Guanaco District is situated on the western edge of the main Chilean porphyry copper belt. The region has produced in excess of 2 million ounces ( ozs ) of gold since first discovery in 1878, with intense exploitation between 1886 and 1939.

The Guanaco property is located 200 kilometres (km) southeast of Antofagasta and about 50 km east of the Pan American highway. The mine is reported to have produced 9.3 tonnes of gold in 1938 and 3.7 tonnes in 1939 and a total of 30 tonnes to the mid 1980’s. Copper is recorded as mined between 1928 and 1930, although no production details are available.

Three open pit mines were operated by Amax: Dumbo and Defensa open pits exploiting the Dumbo Defensa vein structure and Perseverancia pit exploiting the Chilena vein structure.

Over the concession there are numerous gold and copper mineralisation targets with most of the gold production coming from less than one-third of the known 3.5 km mineralized strike length of the Dumbo-Defensa vein system. During late 1999 and early 2000 a wide spaced drilling programme identified the Cachinalito mineralisation. Drilling undertaken by Amax and Kinross also identified potential for underground mineable mineralisation at the following locations:

Dumbo, between the west wall of the pit and the Soledad property boundary;
Cachinalito, to the east of existing access and mined out stopes on the Soledad property; and
Chilena, again between the Soledad property where the vein has apparently been mined and the Perseverancia open pit.

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A technical review by SRK Consultants quoted JORC compliant resources which are summarised in the table below. Between March and May of 2006 the current owners undertook a drilling programme consisting primarily of reverse circulation (RC) drilling and some diamond holes followed by a second programme between August and October 2006. The programmes consisted of 25,000 metres of drilling. An independent technical expert, Magri Consultores Limitada ( Magri ), completed a geostatistical assessment of the new drilling results in January 2007. The results of Magri’s report were summarized in AGD’s December 2006 Quarterly Report.

Resource		SRK Estimation	SRK Estimation	SRK Estimation	Magri Estimation*	Magri Estimation*	Magri Estimation*
		Tonnes (m)	Grade (g/t)	Ounces	Tonnes (m)	Grade (g/t)	Ounces
Cachinalito	Measured	-	-	-	0.859	4.62	127,490
	Indicated	1.838	5.69	335,000	1.077	3.70	128,195
	Inferred	2.000	5.50	355,000	0.654	3.52	74,069

Dumbo West	Measured	-	-	-	0.158	2.88	14,660
	Indicated	1.773	2.20	125,000	0.524	2.65	44,662
	Inferred	1.500	2.20	100,000	1.405	1.77	80,068

Perseverancia	Measured	-	-	-	0.066	4.04	8,540
	Indicated	-	-	-	0.102	3.76	12,284
	Inferred	2.500	5.00	400,000	0.059	3.27	6,173
Total		9.611	4.26	1,315,000	4.904	3.15	496,141
Leach Pads	Measured	-	-	-	8.334	0.54	145,748
	Indicated	11.100	0.73	260,000
	Inferred	-	-	-
Total		20.711	2.37	1,575,000			641,919

Kriged estimate with 1g/t cutoff [leach pads?]

5.3 Guanaco Valuation

A number of valuation methodologies are available to determine an estimate of the value of company assets, although not all methods are applicable to resource company valuations, nor does sufficient information necessarily exist to use them reliably. In the case of Guanaco, five methods commonly used for valuing projects have been applied to determine an appropriate valuation range, including:

Implied Enterprise Value
Exploration & Acquisition Expenditure
Comparative Equivalent Values
Forecast EBITDA Multiple
Discounted Cash Flows

Each of these methods is described below in more detail.

5.3.1 Implied Enterprise Value

For listed companies it is possible to derive their market capitalisation by multiplying the issued stock times the market price and then by deducting the net cash assets of the

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company (cash or liquids less debt) the enterprise value ( EV ) is reached. The enterprise value is effectively the market inferred valuation of the Company’s project assets.

AGD has currently 68.812 million shares on issue with the most recent share market trade of $0.28 per share for a market capitalisation of $19.27 million. However, the trading volumes for AGD are very low with little or no trading volume on individual weeks as shown in the chart below. A VWAP based on a 3 month rolling weekly average is also shown on the chart. The current VWAP is $0.29 per share.

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AGD Volume & Price
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500 40
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0 0
Jan- Mar- M Jun- A Oct- Dec- Feb- Apr- Jun- Jul- Sep-Nov- Jan- Mar-
06 06 ay- 06 ug- 06 06 07 07 07 07 07 07 08 08
06 06
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Source: Iress and IFL
AGD 3 month VWAP
70
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Price 3 month VWAP
Source: Iress and IFL
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Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08
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Prior to the proposed transaction AGD holds a 51.0% interest in Guanaco, a 95% interest in the Bullabulling gold exploration project and net cash of $2.1 million after the recent sale of its Rocklea tenements. These together represent the market value of $19.27 million. The WA exploration asset is an early stage project and therefore AGD’s interest is deemed to have only a very modest value of $0.1 million given that there has been little exploration expenditure to date. The implied value for AGD’s 51.0% interest in Guanaco is therefore $17.07 million or $33.47 million for 100% of the project.

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The shortcoming of this approach is the assumption that the market has correctly priced the assets, especially when the volumes are very low and the share price may not truly reflect a fully informed market. Additionally, there may be market concern over the failure of the drilling program completed during 2007 to significantly increase the resource base and AGD’s ability to fund ongoing exploration and the development of a viable gold mining operation.

It should be pointed out that GCH has agreed to fund AGD’s business operations and to meet its operational obligations with respect to the Guanaco project for the foreseeable future.

5.3.2 Exploration & Acquisition Expenditure

Previous exploration expenditure on a tenement can be used to provide an indicative level of value. Highly prospective tenements will generally encourage a higher level of exploration expenditure. This is a very raw evaluation as sunk costs are sunk and the implication that the current value is related to the level of previous expenditure is often tenuous. However, where exploration results can’t be defined in dollar terms and in the absence of other methodologies, it can provide a relative guide to value.

The method can be enhanced by multiplying the value by a multiplier that can range from 0 to 5 to reflect the future potential of the permit sometimes called the multiple of exploration expenditure method ( MEEM ), but again this is somewhat arbitrary. Past exploration expenditure that doesn’t add to the knowledge base of the property should be excluded from the assessment. In other words, if all previous expenditure had shown no exploration potential then there is little or no value applicable to that permit.

In the case of Guanaco, exploration expenditure has been incurred to prove up mineralisation estimated by Amax. The table below lists exploration expenditure and project overheads (excluding head office costs) since acquisition. The present value of these expenditures is approximately $11.5 million.

Year	Expenditure (US$m)
2003	0.618
2004	1.134
2005	1.250
2006	4.336
2007	1.704
Total	8.809

Prior to the acquisition of the tenements by GMC, the previous owners Amax, had identified mineralisation including the existing leach dumps with potential to contain 1.575 million ounces of gold. This figure was made up of 720,000 ounces in the indicated resource category and a further 855,000 ounces as inferred as complied in a technical report by SRK Consultants in November 2002 as discussed in Section 5.2.

To acquire the project a payment of US$7.1 million was made to ENAMI of which $6.5 million was paid by GMC in three instalments between 2003 and 2005 and the remainder by Kinam. An additional royalty of 3% of gross revenue from gold and silver production is payable to ENAMI, although the $6.5 million cash payment can be credited against future royalty payments. GMC is also required to pay Kinam US$0.3 million per annum until first production and then a 5% gross profits royalty. The Kinam obligation can be satisfied by a once off the cash payment of US$7.5 million. An approximate present value for the acquisition price, assuming first production in 2010, is estimated at approximately $19.0 million.

The total expenditure to date on the Guanaco is the sum of acquisition price and the exploration costs which amount to $30.5 million. Given the exploration results of 2007 and the current envisaged exploration programme an MEEM of between 1.4 and 1.9

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times is considered by IFL as appropriate, for a valuation of between $42.7 million to $58.0 million.

5.3.3 Comparative Equivalent Values

As discussed above, Guanaco has drill defined resources. A gold exposure per enterprise value ($/oz) can therefore be calculated for Guanaco. Other ASX listed companies also provide exposure to gold by way of defined resources and can be used as a valuation marker for AGD. The table below lists other ASX listed gold companies that are not in production and have published resources.

Company	Share Price	EV ($m)	Resources	Resources	Resources	EV/ Resource ($m/oz)
			Ounces (oz)	Grade (g/t)	Tonnes (MT)
RegisResources	$0.31	46	2,800,000	1.2	77.6	$16
CortonaResources	$0.23	13	390,000	3.3	3.8	$34
MidasResources	$0.09	19	473,000	1.6	9.1	$41
Navigator Resources	$0.39	39	950,000	2.2	14.1	$41
Centamin Egypt	$1.49	1080	11,600,000	1.5	234.9	$93
IntegraMining	$0.58	189	1,600,000	2.8	18.2	$118
AvocaResources	$2.20	468	2,286,000	4.3	16.7	$205
Goldstar	$0.18	17	49,000	10.0	0.2	$357
Andean Resources	$1.59	578	1,544,865	4.0	12.0	$374
Weighted Average						$182

Source: IFL, company reports

The weighted average of EV per ounce from the above table is $182. The variance from $16 to $374 reflects the different qualities of the resources with respect to total number of ounces, average grade and exploration potential. Generally, the larger the number of ounces, and more importantly, the higher the grade which provides for a larger operating margin, the higher the EV per ounce.

Given the size and grade of the resources at Guanaco, IFL would place a value of between $90 and $120 per ounce for AHD’s resources, which equates to a valuation of $57.8 million to $77.0 million based on a resource of 641,919 ounces.

5.3.4 Forecast EBITDA Multiple

The most common valuation technique used by the equities market is to apply a multiple to a company’s maintainable earnings or net profit after tax. Alternatives to the net profit include earnings before interest, tax, depreciation and amortisation ( EBITDA ) or earnings before interest and tax ( EBIT ). It is necessary that the company has positive earnings and preferable if they can be maintained for a reasonable length of time with some future growth. The multiple to be applied must therefore reflect the “quality of the earnings” and relies on the availability and comparison with other comparable market data.

Guanaco is not in production, but the Company hopes that after completion of the current exploration program and feasibility study that construction of the mine could commence in early 2009 with first production in the first half of 2010. The first full year of earnings could therefore occur in 2011. IFL has estimated the potential earnings that could be derived from the project based on operating parameters discussed in section 5.3.5. The EBITDA for 2011 was estimated at $56.4 million.

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Company	Price	EV	EBITDA (f)	EBITDA (f)	EBITDA (f)	EBITDA (f)
		($m)	2008	2009	2010	2011
Bendigo Mining	$0.29	90	n/a	n/a	2.4	1.2
Dominion Mining	$3.07	275	5.3	6.4	6.0	n/a
Equigold	$4.47	940	17.4	7.6	9.0	8.6
Kingsgate Consolidated	$3.75	306	16.0	3.5	2.1	2.6
Oceana	$2.34	457	3.7	3.1	1.9	2.0
St Barbara	$0.78	787	35.8	19.7	9.4	8.2
Weighted Average			18.4	9.4	6.7	5.7

Source: IRESS, broker reports and IFL estimates

The table above lists consensus forecast EBITDA for a number of ASX listed companies. The weighted average for 2010 is 5.7 times. Given that size of the Guanaco gold production, an appropriate multiple to apply would be 2.5, for a valuation of $141.0 million. As AGD is not in production at this time, the capital cost of development and acquisition of approximately $38.9 million has to be deducted for an unrisked value of $102.1 million. A probability risk factor has to be applied which is subjective given the uncertainty surrounding many of the mine parameters at this early stage of the project evaluation. IFL has determined that an appropriate probability risk factor to apply for success is between 50% and 75% for a risked value range of between $51.0 million and $76.5 million.

5.3.5 Discounted Cash Flows (DCF)

The DCF methodology is based on the generally accepted theory that the value of an asset depends on its future net cash flows, discounted to their net present value ( NPV ) at an appropriate discount rate (the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

DCF valuations are particularly applicable to assets with limited lives, such as mining operations. Where appropriate, future yearly cash flows have been estimated and then discounted back to March 2007. The discount rate applied is IFL’s estimate of AGD’s weighted average cost of capital ( WACC ) of 12.42% (see Appendix A). However, there is some debate as to applicable discount rates to be applied to gold companies where in theory commodity price risk can be hedged away which as discussed in Appendix A could imply a discount rate equal to the risk free rate of 6.15%.

The [recent] exploration programs have been undertaken in combination with a feasibility study to determine the viability of the mine. IFL has used information provided by management, on current estimates of capital and operating costs. There is obviously at this stage a relatively higher margin of error on these figures.

The primary inputs into the cash flow model were as follows:

Capital cost of US$30 million – value of existing surface infrastructure is estimated at around US$1 million
Annual production of 500,000 tonnes per annum commencing in the second quarter of calendar 2010
Cut off grade of 2g/t for an average mine grade of approximately 4.5 g/t sourced primarily from underground mining
Operating costs of US$27 to US$30/t mined, US$16/t treated and US$5/t for administration
Gold recovery of 95% except for Dumbo west with recoveries of 75%. Silver recovery of 75%
Heap leach grade of 0.55g/t with 50% recovery
Nominal tax rate of 30%

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Mine life of up to 9 years subject to viable project economics
Forecast gold price, silver price and exchange rate as discussed in section 5.4
No value ascribed for copper
Inflation rate of 3.5%, (historically over recent years the Chile inflation rate has been between 2.4% and 3.1%)

The NPV derived form the model at a discount of 12.42% was $ 80.0 million while at a discount rate of 6.15% the NPV was $111.0 million. These are unrisked values and a probability risk factor has to be applied. This is subjective given the uncertainty surrounding many of the mine parameters at this early stage of the project evaluation. IFL has determined a probability risk factor for success of 50% to 75% for a risked value range of between $40.0 million and $83.3 million.

5.3.6 Summary of Fundamental Valuations

The table below summarises the fundamental values obtained from the different valuation approaches discussed in the preceding sections.

Valuations	Minimum ($m)		Maximum $(m)
Expenditure	42.7	to	58.0
Comparative Values	57.8	to	77.0
EBITDA Multiple	51.0	to	76.5
NPV	40.0	to	83.3

The valuation methods are subjective and rely on comparisons and uncertain information which results in variation in the project value although all fall into a reasonable range. Taking into account the relative merits of the methodologies summarised above, IFL currently values 100% of Guanaco at between $47.1 million and $77.5 million and a preferred value of $62.3 million.

5.4 Assumptions

As part of the valuation process IFL has made certain forecast assumptions with regard to exogenous variables including relevant commodity prices, exchange rates and inflation rates that will have a direct impact on the project valuation. The primary assumptions are detailed below.

5.4.1 Commodity Price Forecasts

In the IFL forecasts it has been assumed that each of the two metals are valued in the market-place as commodities. As with all commodities, price is set at the balance point of supply and demand and consequently is driven by the multiplicity of economic factors affecting production and consumption. Classic examples of these factors include:

Supply Side Factors

Demand Side Factors

costs of production economic activity availability of ore reserves availability of substitutes investment in production facilities effects of re-cyling and reuse stocks at terminal markets consumption and hoarding

In addition, price is significantly driven by investment activity, both speculative and risk managing, in the derivative and physical markets. Pricing is therefore also a function of sentiment and the comparative returns offered by other investments.

The interaction of these factors are extremely complex and (perhaps more importantly

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from a long-run valuation perspective) inconsistent across time. In our view therefore, complex econometric modeling has limited application for this purpose and a more reliable long-run pricing forecast is obtained by analysis of long term historical price trends expressed in constant dollars.

Accordingly, for this valuation we have calculated annual commodity prices in 2007 US dollar terms in an annual time series running back to 1900. The data for this study is taken from US Geological Survey historical price data.

Across this historical time-frame there have been a number of structural or institutional distortions in the market prices of each of these commodities. We have identified those time sections which in our opinion are not representative of current (and expected) market conditions and excluded these data from our forecasts.

5.4.2 Gold Price

From 1900 to the Second World War, the gold price was substantially controlled by the Central Banks of the Gold Standard currency countries. From 1946 until 1973 the ‘official’ gold price was regulated under the terms of the Bretton Woods Agreement by the IMF to preserve the value of currencies during the post war reconstruction.

From 1973 gold was allowed to find its free market price; the data used in the price forecast study is therefore restricted to the 34 year period 1973 to 2007.

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Long-Run Gold Price History
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Actual Price '07$ Price Nymex FuturePrice
Average Adjusted Average
Source: Iress and IFL
US$ per oz
----- End of picture text -----

The impact of the 1980/81 gold price ‘spike’ on the mean is significant – as shown on the chart above if the peak is smoothed to the mean (US$612/oz) in those two years, the Adjusted Average falls to US$570/oz. However, given that the Gold Futures strip is currently trading well above the spot price, we believe that this degree of price volatility is still in the market. For short term forecasts IFL has relied on broker consensus forecasts while for the longer term the mean adjusted for US All Groups CPI.

Price Forecast

2008(f) 2	009(f) 2010(f) 2011(f)	Onwards
Calendar Year Price (US$/oz) 844	878 874 800	750
Broker and IFL estimates

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5.4.3 Silver Price

Although it was also a ‘monetary metal’, during the sample period the silver price has not been controlled other than by an informal and inconsistent market reference to the gold price. For consistency with gold we have restricted the analysis to the same 33 year period from 1973 to 2006.

During this period the silver market followed the same spike as that of gold – and this was exaggerated by the attempt of the Bunker Hunt Syndicate to control the global silver market.

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Long-Run Silver Price History
60
50
40
30
20
10
0
Actual Price 07$Price Nymex FuturePrice
Average Adjusted Average
Price US$/0z
----- End of picture text -----

Source: Iress and IFL

The mean price of silver over the sample period is US12.87/oz (in 2007 dollars). Adjusting for the 1980/91 spike this falls to US$10.70/oz. Similarly to gold however we believe that the silver price will remain volatile and do not believe that it is appropriate to adjust the data for the spike. For short term forecasts IFL has relied on broker consensus forecasts while for the longer term the mean adjusted for US All Groups CPI.

Price Forecast

2008(f)	2009(f) 2010(f) 2011(f)	Onwards
Calendar Year Price (US$/oz) 14.41	14.65 14.01 13.33	13.00

Broker and IFL estimates

5.4.4 A$/US$ Exchange Rate

Revenues generated from the potential development of Guanaco will be dominated in US dollars. For valuation purposes, given that the financial model has been derived in US$, it is necessary to forecast the Australian/US dollar exchange rate. As shown in the figure below, from 1990 to 2002 the A$ declined relative to the US$, due to a weakening trade deficit. From 2002 strengthening commodity prices have lifted the value of the A$ against the US$.

The outlook for the domestic currency remains solid while commodity prices maintain what are cyclically very high levels. It is reasonable to expect that most, if not all, commodity prices will correct if the global economy loses its recovery momentum into 2008 and beyond as the impetus from China, India and Eastern Europe is offset by a gradual deceleration in US and Europe. In a domestic context, the likelihood is that GDP growth will recede from recent growth rates circa 4% real back toward the trend rate of 3%. The long term equilibrium rate for the $A is likely to be $US0.78, inline with the trading average before the latest surge in global metal and energy prices.

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A$/US$ Exchange Rate
1.0
0.9
0.8
0.7
0.6
0.5
0.4
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
----- End of picture text -----

Source: Iress and IFL

Most analysts are forecasting a partial weakening in energy and metal commodity prices within the next few years as growth in Chinese infrastructural expenditure tapers. This is likely to have a knock on effect with a weaker A$, although commodity prices are forecast to remain above historic averages.

The table below is a consensus of analyst forecasts and IFL long term estimate.

A$/US$ Exchange Rate Forecast

Year end Ju	ne 2008(f) 2009(f	) 2010(f)	2011	(f) Onward
A$/US$	0.88 0.88	0.84	0.8	3 0.78

Broker and IFL estimates

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6 LIMITATIONS, REPRESENTATIONS AND RELIANCE ON INFORMATION

6.1 Sources of Information

IFL has relied on the following information in the preparation of this Report:

Notices of Meeting and Explanatory Statement which this Report accompanies.
AGD press and ASX releases.
Other confidential correspondence, project presentations, and working papers.
Site visit and discussions with onsite personnel in relation to IFL’s previous expert report for AGD
IFL has also held discussions with, and obtained information from senior management of AGD.
January 2008, Report on the Results of a Program of Exploration and Fence Drilling – GCM
February 2008, Review of controlled source Audi-frequency Megnetotelluric Data – Ellis Geophysical Consulting Inc.
January 2007, Exploration Program, Guanaco Mining District II Region of Antofagasta, Chile – Stabro Kasaneval.
January 2007, Geological Resource Estimation for Cachinalito W. & Central, Dumbo W. and Perseverancia Zones – Magri Consultores Limitada.
December 2006, Mineralization Styles and Exploration Potential Of El Guanaco Gold District, Northern Chile – Richard Sillitoe.
November 2005, Guanaco Project Valuation Report – Sandercock and Associates Pty Ltd.
August 2005, Visit to Guanaco – Fluor.
January 2003, Resumption of Operations at the Guanaco Gold Mine, Chile – Golden Rose International Limited.
November 2002, Technical Review of the Guanaco Property – SRK Consultores.
Publicly available information on other listed mining companies.

6.2 Assumptions

IFL's opinion is based on economic, sharemarket business trading, financial and other conditions and expectations prevailing at the date of this Report. These conditions can change significantly over relatively short periods of time. If they did change materially subsequent to the date of this Report the opinion could be different in these changed circumstances. However, IFL has no obligation or undertaking to advise any person of any change in circumstances which comes to its attention after the date of this Report or to review, revise or update its Report or opinion.

This Report is also based on publicly available information and on financial and other information provided by AGD (either directly or through its advisers). IFL has considered and relied upon this information and its completeness, accuracy and fair presentation. AGD has represented in writing to IFL that, to its knowledge, the information provided by it was complete, accurate and not misleading in any material respect. The information provided to IFL has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to whether the Proposed

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Transaction the subject of the Resolution is fair and reasonable. However, in preparing reports such as this, time is limited and IFL does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or "due diligence" investigation might disclose. Except as expressly set out in this Report, IFL has not attempted to independently verify the completeness, accuracy or fair presentation of any of the information provided by AGD. In any event, an opinion as to whether a proposal is fair and reasonable is more in the nature of an overall review rather than a detailed audit or investigation. IFL confirms that its procedures and enquiries do not constitute an audit in accordance with Australian Accounting Standards ( AAS ), nor does it constitute a review in accordance with AAS 902 applicable to review engagements.

IFL has no reason to believe that any material facts have been withheld and AGD has confirmed in writing that it believes it has provided all relevant information of which it is aware but IFL does not represent that it has received all relevant information.

An important part of the information used in forming an opinion of the kind expressed in this Report is comprised of the opinions and judgements of management. This type of information was also evaluated through analysis, enquiry and review to the extent practical. However, such information is often not capable of external verification or validation.

Preparation of this Report does not imply that IFL has audited in any way the management accounts or other records of AGD. It is understood that the accounting information that was provided was prepared in accordance with generally accepted accounting principles and in a manner consistent with the methods of accounting in previous financial years of AGD (except where noted or where required due to a change in accounting standards).

In forming its opinion, IFL has also assumed that:

matters such as title, compliance with laws and regulations and contracts are in good standing and will remain so;
the information set out in the accompanying Explanatory Statement is complete, accurate and fairly presented in all material respects;
the publicly available information relied on by IFL in its analysis was accurate and not misleading;
the legal agreements required to give effect to the Resolution will be implemented in accordance with their terms; and
the legal mechanisms to effect the Resolution is appropriate and will be effective.

7 QUALIFICATIONS, DECLARATIONS AND CONSENTS

7.1 Qualifications

IFL provides corporate advisory services in relation to mergers and acquisitions, capital raisings, corporate restructuring and financial matters generally. One of its activities is the preparation of company and business valuations and the provision of independent advice and expert's reports in connection with mergers and acquisitions, takeovers and schemes of arrangements. IFL directors have prepared a number of public expert's reports since its formation in 1987.

The principal person responsible for preparing this Report on behalf of IFL is Dr Victor Rudenno B.E., M.Com., PhD, SFFinsia, MAusIMM who has a significant number of years of experience in relevant corporate advisory matters. Dr Rudenno is an

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authorised representative of IFL pursuant to its Australian Financial Services Licence under Part 7.6 of the Corporations Act.

7.2 Declarations

It is not intended that this Report should be used or relied upon for any purpose other than as an expression of IFL’s opinion as to whether the Proposed Transaction the subject of the Resolution is fair and reasonable, having regard to the interests of the Non-associated Shareholders. IFL expressly disclaims any liability to any AGD shareholder who relies or purports to rely on this Report for any other purpose and to any other party who relies or purports to rely on this Report for any purpose.

This Report has been prepared by IFL with care and diligence and the statements and opinions given by IFL in this Report are given in good faith and in the belief on reasonable grounds that such statements and opinions are correct and not misleading. However, no responsibility is accepted by IFL or any of its directors, officers or employees for errors or omissions however arising in the preparation of this Report, provided that this shall not absolve IFL from liability arising from an opinion expressed in bad faith.

IFL has had no involvement in the preparation of the Notice of Meeting or the Explanatory Statement and has not verified or approved any of the contents of the Notice of Meeting or the Explanatory Statement. IFL does not accept any responsibility for the contents of the Notice of Meeting, the Explanatory Statement or any other documents provided to AGD shareholders (except for this Report).

7.3 Independence

IFL is entitled to receive a fee of $20,000 (exclusive of GST) for the preparation of this Report. IFL is also entitled to be reimbursed for any out-of-pocket expenses incurred in the preparation of this Report. Except for this fee and the reimbursement of these expenses, IFL has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this Report.

Neither the signatories to this Report nor IFL hold securities in AGD. No such securities have been held at any time over the last two years.

Neither the signatories to this Report nor IFL has had within the past two years any business relationship material to an assessment of IFL’s impartiality with AGD, or its associates, other than in connection with the preparation of this Report or as otherwise disclosed in this Report. IFL has previously provided AGD with some restructuring advice.

Prior to accepting this engagement IFL considered its independence with respect to AGD and any of their respective associates with reference to ASIC Regulatory Guide 112 entitled “Independence of Experts”. In IFL’s opinion, it is independent of AGD and their respective associates.

A draft of this Report was provided to AGD and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this Report as a result of this review and there was no alteration to the methodology, evaluation or opinions set out in this Report as a result of issuing the draft.

7.4 Indemnity

AGD has agreed that no claim will be made by it or any of its subsidiaries against IFL, any of their directors, officers, partners, employees or agents ( Indemnified Persons ) to recover any loss or damage which AGD or any of its subsidiaries may suffer by reason of or arising out of anything done or omitted in relation to the preparation and provision

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of this Report, provided that such loss or damage does not arise from the negligence or willful default of any of the Indemnified Persons.

AGD has unconditionally indemnified IFL and its related bodies corporate and their respective officers, employees and agents against any losses, claims, damages, liabilities, costs, expenses and outgoings whatsoever ( Losses ) which they may suffer or incur directly or indirectly arising out of:

IFL relying on information provided by AGD or any of its employees, agents or advisers; or
AGD failing to provide IFL with material information in relation to the Transaction.

Further, AGD must pay and must indemnify IFL against any Losses in relation to any investigations, enquiries or legal proceedings by ASIC, ASX or any other competent regulatory body arising out of, or in connection with, the Transaction, including reasonable legal expenses and disbursements incurred by IFL and fees payable to IFL to attributable to time reasonably spent by its staff assessed at its hourly rates to the extent that investigation, enquiry or legal proceeding is not caused by an act or omission of the Indemnified Persons.

7.5 Consents

IFL consents to the issuing of this Report in the form and context in which it is to be included in the Explanatory Statement to be sent to AGD shareholders in relation to the Resolution. Neither the whole nor any part of this Report nor any reference thereto may be included in, or attached to, any other document without the prior written consent of IFL as to the form and context in which it appears.

IFL takes no responsibility for the content of the Explanatory Statement or any other documents provided to AGD shareholders, other than this Report.

7.6 Other

The opinion of IFL is made at the date of this Report and reflects circumstances and conditions as at that date. In particular, IFL provides no representations or warranties in relation to the future value of shares of AGD.

AGD shareholders who are in any doubt as to the action they should take should consult their own independent professional adviser.

IFL has prepared a Financial Services Guide as required by the Corporations Act. The Financial Services Guide is set out at the beginning of this Report.

Yours faithfully

Victor Rudenno B.E., M.Com., PhD, SFFinsia, MAusIMM

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Appendix A: Calculation of Discount Rates

Overview

Selection of an appropriate discount rate to apply to the forecast cash flows of any resource project fundamentally is a matter of judgment. There is a formulaic approach that can and is derived by theory; however, a mechanistic application of financial theory can result in a discount rate that is not applicable in reality. Hence, it should be stressed that there is no "correct" discount rate. Despite the growing acceptance and application of various theoretical models, many companies may rely on less sophisticated approaches and use relatively arbitrary "hurdle rates" which do not vary significantly over time despite interest rate movements.

IFL estimates that a range of reasonable discount rate to be applied to the mining assets of AGD is 6.15% to 12.42%

IFL considers the rates adopted to be reasonable discount rates that shareholders of AGD would use irrespective of the outcome or shortcomings of applying any particular theoretical model.

The discount rates that IFL has adopted are reasonable relative to the rates derived from theoretical models and have been based on an estimated weighted average cost of capital (WACC). There are three main considerations to the determination of an appropriate WACC, namely cost of equity, cost of debt and debt/equity mix.

The cost of equity was derived from the Capital Asset Pricing Model (CAPM) methodology. The CAPM is probably the most widely accepted and used methodology for determining the cost of equity capital. However, while the theory underlying the CAPM is rigorous the practical application is subject to shortcomings and limitations and the results of applying the CAPM model should only be regarded as providing a general guide.

Weighted Average Cost of Capital (WACC)

The WACC is given by Officer’s (1994) formula used to calculate an after-tax WACC under a dividend imputation system:

E D WACC  re  rd  1  tc  1  V V Where V sum of debt and equity values; E value of equity; D value of debt; Re cost of equity; Rd cost of debt; [t] c the corporate tax rate; and  the value of imputation tax credits (gamma)

This is an after tax discount rate to be applied to nominal ungeared after-tax cash flows.

Overview of the CAPM Framework

The CAPM provides a theoretical basis for determining a discount rate that reflects the returns required by diversified investors in equities. CAPM is based on the assumption that investors require a premium for investing in equities above risk free investments (such as Australian government bonds). The premium is commonly known as the market risk premium and notionally represents the premium required to compensate for investment in the equity market in general.

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The risks associated with an investment in a company can be classed as either specific risks or systematic risks. Specific risks are risks that are specific to a particular company or business and are unrelated to movements in equity markets. Systematic risk is the risk that returns from an investment or business will vary with market returns in general. If returns on an investment are expected to be perfectly correlated with returns on the market, then the return required on the investment would be equal to the return required from the market. (ie. the risk free rate plus the market risk premium).

CAPM postulates that the return required on investment or assets can be estimated by applying to the market risk premium a measure of systematic risk described as the equity beta factor. The equity beta for an investment reflects the covariance of the return from that investment with the return from the market as a whole. Covariance is a measure of relative volatility and correlation. The equity beta of an investment represents its systematic risk only. It is not a measure of the total risk of a particular investment. In general, an investment with an equity beta greater than 1 is riskier than the market and an investment with a beta of less than 1 is less risky.

The formula for deriving the cost of equity using CAPM is as follows:

Re = Rf + Beta (Rm - Rf)	Re = Rf + Beta (Rm - Rf)
Where
Re	is the expected return on equity;
Rf	is the risk free rate;
Beta	is the equity beta factor;
Rm	is the expected market return; and
Rm – Rf	is the market risk premium.

The equity beta for a company is normally estimated by observing the historical relationship between returns from the company or comparable companies and returns from the market in general.

Risk-Free Rate

For the purpose of this report, IFL has adopted a risk free rate of 6.15% (as of April 2008). The risk free rate approximates the yield to maturity on 10-year Australian Government bonds prevailing for April 2008.

Market Risk Premium

The market risk premium (Rm - Rf) represents the additional return that investors require to invest in equity securities as a whole over a risk free investment which is not observable and therefore a historical premium is used as a proxy. Australian studies have been limited but indicate that the long run average premium has been in the order of 6% measured over more than 100 years of data.

The market risk premium is not constant and may change over time as investors perceive that equities are more risky than at other times and will increase or decrease their expected premium.

A market risk premium of 6% has been assumed which IFL believes is within the range of generally accepted figures of long term market risk premiums in the Australian capital market.

Equity Beta

Beta is a measure of the expected covariance (ie. volatility and correlation of returns) between returns on an investment and returns on the market as a whole. The conventional practice for estimating beta is to calculate a historical beta using past share price and market returns data and use it as a proxy for the future.

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Equity Beta estimate

To obtain an equity beta for AGD, Ordinary Least Squares (OLS) betas are calculated based on, weekly price movements against the All Ordinaries Accumulation Index over a two year period.

Due to the thin trading of AGD stock, a weighed average of betas for its resource peers was used as a surrogate.

Table A1: Beta Methodologies and Results

Methodology	Resource Peers
Beta estimate	1.04

Debt/Equity Mix

The selection of the appropriate debt/equity ratio is very subjective and should be consistent with the level implicit in the measurement of beta. For mining companies, the debt levels should represent the weighted average level of debt financing expected over the forecast period rather than just at the current point in time which is not possible in this situation. The tax deductibility of the cost of debt means that the higher the proportion of debt the lower the WACC, although this could be offset, at least in part, by an increase in the beta as leverage increases.

Debt levels should reflect the optimum level of gearing utilised by the firm to maximise shareholder returns. The optimal capital structure is assumed to be an optimal trade-off between the tax deductibility of debt, and the added financial risk associated with additional debt. It is reasonable to assume that firms in certain growth industries may be less debt-laden than firms in more mature industries (e.g. utilities are typically 50% debt financed or more) in order to reserve cash for acquisition funding or other growth strategies.

After having given due consideration to the size and stage of operation of the mine and information provided by AGD management regarding the future use of debt financing, IFL understands that AGD’s gold projects are to remain wholly equity financed in the foreseeable future.

Gold Futures Methodology

The principles underpinning theoretical valuation methods such as the Discounted Cash Flow (DCF) methodology are that the intrinsic value of a single project, or a portfolio of projects is that the value of a project or portfolio of projects can be estimated by discounting a series of forecast cash flows at a discount rate that represents the risk characteristics of that project or portfolio.

A number of research studies provide conflicting conclusions over whether conventional DCF methodology is the most appropriate methodology for valuing gold mining projects. The central tenet to this research is that gold should not be considered like any other commodity but should be viewed and treated as a financial asset, which can be bought, sold and over which hedging contracts can be entered into.

The Gold Futures Methodology (GFM) can be described as the valuation of gold projects by reference to the market for gold futures. The GFM is not an industry rule-ofthumb valuation method. Conversely, the GFM does not reflect general practice methods of valuing gold mining companies. However, the GFM does have a strong theoretical background amid a number of research reports that support the use of the GFM.

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The GFM purports the view that gold should be treated a financial asset and the risk of a gold mining project can be reduced by the producers entering into a series of gold futures contracts that fixes the future price of the commodity, eliminating revenue risk from fluctuating gold prices. Such hedging policies reduce the inherent risk of a project, and hence, the future cashflows from a gold mining project should be discounted at the risk-free rate. Uncertainties that apply to a gold mining project such as the operating cost aspects of a mining operation are taken into account by adjusting the expected volume of gold production.

However, the use of the risk free rate does not imply that the cash flows from a project are devoid of risk. Rather, the use of the risk free rate implies that the project cash flows are not subject to any systematic risk.

The application of the GFM in deriving the present value of a gold mining project involves discounting forecast production revenue less any associated extraction costs to present value terms over the life of the mining project. This may be represented as follows:

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where:

PV is the present value of the mining project;

[is the gold futures price in each future period t;]

[F] t

Qt is the expected volume of gold to be produced in each future period t;

[is the expected extraction cost in each period t; and]

[E] t

R f is the risk free rate over the forecast period.

A number of independent research studies provide empirical evidence that normal WACC methods tend to underestimate the present value of gold producers. Therefore, the application of the prevailing risk free rate as provided for under the GFM provides an additional reference point for valuation purposes by serving as an upper bound on present values and hence valuation ranges.

Having regard to the above, IFL views that the application the prevailing risk free rate of 6.15% as the discount rate for mining assets under the Gold Futures Methodology can be appropriate

Summary of WACC Parameters

Parameter/Estimate	High	Low
Equitybeta	1.04	n/a
Debt / Value	0.0%	n/a
Market riskpremium	6.0%	n/a
Risk-free rate	6.15%	6.15%
Corporate tax rate	30.0%	n/a
Cost of debt	n/a	n/a
Cost of equity	12.42	n/a
WACC Estimate	12.42%	6.15%

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PROXY FORM

APPOINTMENT OF PROXY AUSTRAL GOLD LIMITED ABN 30 075 860 472

I/We

being a Member of Austral Gold Limited entitled to attend and vote at the Meeting, hereby

Appoint

Name of proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at PKF Chartered Accountants & Business Advisers , Geoff Harris Room Level 10, 1 Margaret Street, Sydney, NSW on Wednesday 28 May 2008 commencing at 3:00pm (AEST) and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions. Voting on Business of the General Meeting FOR AGAINST ABSTAIN

Resolution 1 – Acquisition of a substantial asset Resolution 2 – Election of a Director

If you do not wish to direct your proxy how to vote, 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 resolutions and votes cast by him other than as proxy holder will be disregarded because of the interest. The Chairman will vote in favour of all of the resolutions if no directions are given.

YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY FORM WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

Signed this day of

2008

By:

Individuals and joint holders

Companies (affix common seal if appropriate)

Signature Director Signature Director/Company Secretary Signature Sole Director and Sole Company Secretary

AUSTRAL GOLD LIMITED ABN 30 075 860 472

Instructions for Completing ‘Appointment of Proxy’ Form

A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.
A duly appointed proxy need not be a member of AGD. In the case of joint holders, all must sign.
Corporate shareholders should comply with the execution requirements set out on the proxy form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:
two directors of the company;
a director and a company secretary of the company; or
for a proprietary company that has a sole director who is also the sole company secretary – that director.

For AGD to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

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
Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.
To vote by proxy, please complete and sign the proxy form enclosed:
(a) send the proxy form by post to Austral Gold Limited, Terrace Tower, Suite 605, 80 William Street, Sydney, New South Wales 2011; or
(b) by facsimile to the Company on facsimile number (02) 9380 7972, so that it is received not later than 3:00pm (AEST) on 26 May 2008.

AI assistant

Austral Gold Limited — Proxy Solicitation & Information Statement 2008

47360_rns_2008-04-27_9c0b421c-549a-4533-b568-f727f3ededfc.pdf

AUSTRAL GOLD LIMITED ABN 30 075 860 472 NOTICE OF GENERAL MEETING

THIS PAGE INTENTIONALLY LEFT BLANK

CONTENTS P AGE

T IM E AND PL ACE OF M EETING AND HOW T O VOT E

VENUE

YOUR VOTE IS IMPORTANT

VOTING IN PERSON

VOTING BY PROXY

Proxy forms received later than this time will be invalid.

NOT ICE OF GENERAL M E ETIN G

AGENDA

1. RESOLUTION 1 – ACQUISITION OF A SUBSTANTIAL ASSET

2. RESOLUTION 2 – APPROVAL FOR RE-ELECTION OF MS NATALIA ZANG

AUSTRAL GOLD LIMITED

EXPL AN AT OR Y STAT EM EN T

1.1 General

1.2 Resolution 1

Notes

1.3 General Information in respect of GCH, IFIS and its intentions for AGD

1.4 General overview of GMC and the Guanaco Project

1.5 Regulatory Requirements

1.6 ASX Listing Rules 10.1 and 10.11

1.7 Item 7 of Section 611 of the Corporations Act

1.8 Details of GCH and its Associates

1.9 Identity of persons who will hold a relevant interest in the Shares on completion of the Transaction

1.10 Section 208 of the Corporations Act

1.11 Capital Structure

2. Resolution 2

ROLE OF THE INDEPENDENT EXPERT

RESPONSIBILITY FOR INFORMATION

GLOSSARY

SCHEDULE 1 – ASSOCIATES OF GCH

INDEPENDENT EXPERT’S REPORT

PREPARED BY

ANNEXURE A

INDEPENDENT EXPERT’S REPORT

PREPARED BY

InterFinancial Limited

Financial Services Guide

About us

Financial services we are licensed to provide

General financial product advice

Remuneration, commissions and other benefits

Associations and relationships

Complaints

Dear Sirs

INDEPENDENT EXPERT'S REPORT TO AUSTRAL GOLD LIMITED SHAREHOLDERS

1 INTRODUCTION

2 SUMMARY OF OPINION

2.1 Assessment

Fairness

Reasonableness

2.2 Opinion

Table of Contents

All monetary references refer to Australian dollars unless otherwise noted.

3 DETAILS OF PROPOSAL

3.1 Proposal

Resolution

Resolution

4 SCOPE OF THE REPORT

4.1 Purpose of the Report

ASX Listing Rules

Corporations Act 2001 (Cth)

4.2 Basis of Evaluation

4.3 Conclusion

5 OVERVIEW OF AGD

5.1 Guanaco Project Overview

Background & Corporate Structure

5.2 Guanaco Gold Project

5.3 Guanaco Valuation

5.3.1 Implied Enterprise Value

5.3.2 Exploration & Acquisition Expenditure

5.3.3 Comparative Equivalent Values

5.3.4 Forecast EBITDA Multiple

5.3.5 Discounted Cash Flows (DCF)

5.3.6 Summary of Fundamental Valuations

5.4 Assumptions

Austral Gold Limited Proxy Solicitation & Information Statement 2008