DIGITALX LIMITED — Proxy Solicitation & Information Statement 2010

Dec 28, 2010

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ACN 009 575 035

NOTICE OF GENERAL MEETING

– and –

PROXY FORM

DATE AND TIME OF MEETING: 27 January 2011 at 3.00pm

VENUE:

Ground Floor

30 Ledgar Road, Balcatta Western Australia 6021

These documents should be read in their entirety. If shareholders are in any doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional advisor.

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VERUS INVESTMENTS LIMITED ACN 009 575 035

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of Verus Investments Limited (“Verus” or the “Company”) will be held on Friday 27 January 2011 commencing at 3.00pm at Ground Floor, 30 Ledgar Road, Balcatta, Western Australia.

The enclosed Explanatory Memorandum accompanies and forms part of this Notice of Meeting.

AGENDA

ORDINARY BUSINESS

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

1. Resolution 1 – Ratification of Prior Option Issue

"That, in accordance with ASX Listing Rule 7.4, this meeting ratifies the issue of 170,000,000 options to acquire ordinary fully paid shares at a price of $0.001 which, at the date of this notice of meeting had not been issued, are expected to be issued in the period up to the date of the General Meeting, to nominees of Alto Capital on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast on this resolution by any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities and any associates of those persons. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

2.

Resolution 2 – Placement Issue of Options

“That, for the purposes of ASX Listing Rules 7.1 and all other purposes, this meeting approves the offer and issue of up to 80,000,000 options to acquire ordinary fully paid shares at a price of $0.001 each on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast on this resolution by by any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities and any associates of those persons. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

3.

Resolution 3 – Approval for the issue of Options to Director, Mr A. McIlwain

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act 2001 and all other purposes, the directors be authorised to issue up to a maximum of 15,000,000 Options to subscribe for shares in the Company to Mr A. McIlwain or his nominee, the details of which are set out in the Explanatory Memorandum.”

Voting Exclusion: The Company will disregard any votes cast on this resolution by Mr A McIlwain, his nominee or his associates. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

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4. Resolution 4 – Approval for the issue of Options to Director, Mr G. Lee

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act 2001 and all other purposes, the directors be authorised to issue up to a maximum of 20,000,000 Options to subscribe for shares in the Company to Mr G Lee or his nominee, the details of which are set out in the Explanatory Memorandum.”

Voting Exclusion: The Company will disregard any votes cast on this resolution by Mr G Lee, his nominee or his associates. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

5. Resolution 5 – Approval for the issue of Options to Director, Mr M. Freeman

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act 2001 and all other purposes, the directors be authorised to issue up to a maximum of 15,000,000 Options to subscribe for shares in the Company to Mr M. Freeman or his nominee, the details of which are set out in the Explanatory Memorandum.”

Voting Exclusion: The Company will disregard any votes cast on this resolution by Mr M. Freeman, his nominee or his associates. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

6. Resolution 6 – Approval for the issue of Options to Director, Mr D. Calcei

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act 2001 and all other purposes, the directors be authorised to issue up to a maximum of 10,000,000 Options to subscribe for shares in the Company to Mr D. Calcei or his nominee, the details of which are set out in the Explanatory Memorandum.”

Voting Exclusion: The Company will disregard any votes cast on this resolution by Mr D Calcei, his nominee or his associates. However, the Company will not disregard a vote if:

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

• b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

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PROXIES

In accordance with section 249L of the Corporations Act 2001, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company;

• a member who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, then in accordance with section 249X (3) of the Corporations Act 2001, each proxy may exercise half of the votes.

In accordance with section 250BA of the Corporations Act 2001, the Company specifies the following information for the purposes of receipt of proxy appointments:

Registered Office: 30 LEDGAR ROAD BALCATTA, WESTERN AUSTRALIA 6021

Facsimile Number: (61 8) 9240 2406

Postal Address: P O Box 717 BALCATTA, WESTERN AUSTRALIA 6914

Each member entitled to vote at the general meeting has the right to appoint a proxy to attend and vote at the meeting on his behalf. The member may specify the way in which the proxy is to vote on each resolution or may allow the proxy to vote at his discretion. The instrument appointing the proxy must be received by the Company at the address specified above at least 48 hours before the time notified for the meeting (proxy forms can be lodged by facsimile).

In accordance with regulation 7.11.37 of the Corporations Regulations 2001, the Company determines that ordinary shares held as at 5pm on 25 January 2011 will be taken, for the purposes of the general meeting, to be held by the persons who held them at that time.

The Chairman of the Meeting intends to vote any undirected proxies in favour of all the resolutions, with the exception of resolutions 3, 4, 5 and 6 where they will be treated as abstentions.

BY ORDER OF THE BOARD

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P M Jurman Company Secretary Perth, Western Australia 17 December 2010

Members who do not plan to attend the meeting are encouraged to complete and return a proxy form.

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VERUS INVESTMENTS LTD

ACN 009 575 035

EXPLANATORY MEMORANDUM

1. INTRODUCTION

This Explanatory Memorandum has been prepared for the information of shareholders of Verus Investments Ltd (“ Verus ” or the “ Company ”) in connection with the business to be conducted at the Company’s General Meeting to be held on Friday 27 January 2011 commencing at 3.00pm at Ground Floor, 30 Ledgar Road, Balcatta, Western Australia.

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

2. RESOLUTION 1 and 2 – Ratification of Prior Option Issue / Placement Issue of Options

2.1 General

On 25 November 2010 the Company announced that Alto Capital (“Alto”) had been mandated to assist with a capital raising. As part consideration for its assistance with a capital raising and for the introduction of the Tunisian Oil & Gas Prospect (Sidi Daher), the Company will issue to Alto and/or its nominees 250,000,000 options at a price of $0.001 each (to raise A$250,000).

The first part of the placement for up to 170 million options shares to acquire ordinary fully paid shares at a price of $0.001 is not subject to shareholder approval and will fall within the Company’s 15% placement capacity under ASX Listing Rule 7.1. Consequently, Resolution 1 seeks shareholder ratification for the allotment and issue of the 170 million options that comprise Tranche 1, which will have the effect of refreshing the Company’s 15% limit for new issues of securities under the ASX Listing Rules.

The second part of the placement for up to 80 million options shares to acquire ordinary fully paid shares at a price of $0.001 will be issued subject to shareholder approval pursuant to Resolution 2.

2.2 Specific Information required by ASX Listing Rule 7.5 with respect to Resolution 1

For the purposes of ASX Listing Rule 7.5 information is provided as follows:

• i. 170,000,000 options will be issued on or before 27 January 2011.

• ii. The issue price of the options is $0.001.

• iii. The terms and conditions of the options are set out in Appendix 1 of this Explanatory Memorandum.

• iv. The options will be issued to professional and sophisticated investor clients of clients of Alto Capital.

• v. The funds will be allocated towards ongoing development activities at its onshore oil and gas investments, and for working capital and general corporate purposes.

A voting exclusion statement is included in the Notice.

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2.3 Specific Information required by ASX Listing Rule 7.3 for the purposes of Resolution 2 (“Further Option Issue”)

For the purposes of ASX Listing Rule 7.3, information is provided as follows:

• i. The maximum number of options to be issued is 80,000,000.

• ii. The options will be issued no later than 3 months after the date of this General Meeting, and it is intended that the allotment will occur on the same day.

• iii. The options will each be issued at $0.001.

• vi. The terms and conditions of the options are set out in Appendix 1 of this Explanatory Memorandum

• vii. The allottees of the Further Option Placement will be issued to professional and sophisticated investor clients of Alto Capital.

• viii. The funds will be allocated towards ongoing development activities at its onshore oil and gas investments, and for working capital and general corporate purposes.

A voting exclusion statement is included in the Notice.

3. RESOLUTION 3, 4, 5 and 6 – Issue of Options to Directors

Shareholder approval is being sought for the issue of options to each of the Directors as follows:

Shareholder approval is being	sought for the issue of optio
	Number of options
AndrewMcIlwain	15,000,000
GregLee	20,000,000
Mark Freeman	15,000,000
DavidCalcei	10,000,000

The options to be issued to directors will expire on 31 December 2013 with an exercise price of 2.5 cents each. Detailed terms and conditions of the Options are provided in Appendix 2.

The purpose of the issue of options is to provide Messrs McIlwain, Lee, Freeman and Calcei an incentive for future services. It is anticipated with the increase in the scale of investment, level of activity necessary to manage the investment portfolio, as well as an expected continuing evaluation of other potential investment opportunities, this will contribute to a significant increase in the time commitment of the directors over the short to medium term. The issue of options as part of the remuneration packages of directors is an established practice of junior public listed companies and, in the case of the Company, has the benefit of conserving cash whilst properly rewarding each of the directors.

Whilst the directors to whom the options are to be issued do not make a recommendation as they each have a personal interest in the proposed issue, they believe that the quantum of options together with the cash fees that they are entitled to is reasonable in the context of the size and complexity of the Company’s activities and also by comparison to other similar-sized junior public listed companies.

The ASX Listing Rules and the Corporations Act 2001 (in certain circumstances) require shareholder approval to be obtained for the issue of options to directors. Accordingly, approval for the issue of the Directors’ Options is sought in accordance with the provisions of Listing Rules 10.11 of the ASX Listing Rules (“Listing Rules”) and Part 2E of the Corporations Act 2001. If approval for the issue of the Directors’ Options is obtained under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

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(A) Requirement for Shareholder Approval

The proposed Resolutions 3, 4, 5 and 6, if passed, will issue securities to and confer financial benefits upon Messrs McIlwain, Lee, Freeman and Calcei who are directors of the Company and the Company seeks to obtain member approval in accordance with the requirements of Chapter 2E of the Corporations Act and ASX Listing Rule 10.11. Accordingly, information required under the Listing Rules and the Corporations Act as well as information that will properly enable shareholders to consider Resolutions 3, 4, 5 and 6 is presented below.

Subject to shareholder approval, the options referred to in resolutions 3 to 6 will be issued free of charge and within one month after the date of this meeting.

(B) Potential Benefits – Issue of Options

If the Directors’ Options are issued pursuant to the proposed resolutions 3, 4, 5, and 6, the Company considers the following benefits arise:

• (i) Messrs McIlwain, Lee, Freeman and Calcei will have a vested interest in the affairs of the Company, as the holders of Options and as shareholders upon exercise of the Options, particularly as the Options are not transferable.

• (ii) The issue of Directors’ Options to Messrs McIlwain, Lee, Freeman and Calcei is a non-cash form of remuneration, thus conserving the Company’s cash reserves. The issue enables the Company to provide its directors with reward for services provided and an incentive for future services they will provide to the Company.

• (iii) The exercise of the Options will provide working capital for the Company at no significant cost. If all of the Directors’ Options proposed to be issued to Messrs McIlwain, Lee, Freeman and Calcei are ultimately exercised, an amount of $1,500,000 would be raised.

(C) Potential Costs – Issue of Directors’ Options

The Directors’ Options are to be granted for nil consideration and thus no funds will be raised by the Company in granting those options.

The potential cost to the Company of the issue of an aggregate of 60,000,000 Options to Messrs McIlwain, Lee, Freeman and Calcei is that there will be a dilution of the issued share capital of the Company if the Directors’ Options are exercised.

Based on 1,641,908,563 fully diluted shares, the exercise of the proposed directors’ options (60 million) would have a dilution effect of approximately 3.6% (with a corresponding increase in cash reserves of $1,500,000). As the Company presently has 28,000,000 options on issue (and a further 250,000,000 options proposed under Resolutions 1 and 2) exercisable at between 1.5 and 4 cents each, it is appropriate to measure the dilution caused by the proposed issue of options to directors by reference to fully diluted shares rather than just ordinary shares presently on issue. On an undiluted basis, the proposed option issues would have a dilution effect of 4.4%.

The price of the Company’s shares quoted on the ASX over the past 12 months has ranged from a low of 1.1 cents on 19 October 2010 to a high of 9.5 cents on 9 February 2010, with a closing price of 1.5 cents on 16 December 2010, the date on which this Explanatory Memorandum was prepared.

Accounting standard, AASB 2 “Share Based Payments” requires that these payments shall be measured at the more readily determinable fair value of the equity instrument. Under the new accounting standards this amount will be expensed in the Income Statement – ie the value attributed to the Directors’ Options (See Section D below) will be expensed in the profit and loss account of the Company. Where the grant date and the vesting date are different the total expenditure calculated will be allocated between the two dates taking into account the terms and conditions attached to the instruments and the counterparties as well as management’s assumptions about probabilities of payments and compliance with and attainment of the set out terms and conditions.

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(D) Valuation of Options

The Company does not have any ASX quoted options with identical or similar terms and conditions as these proposed Directors’ Options and as such there is no comparable market value. Each Option grants the holder a right to be allotted one Share upon exercise of the Option and payment of the exercise price of the Option. Accordingly, the Directors’ Options arguably have a value at the date of their grant. The Directors’ Options may acquire future value dependent upon the extent to which the market value of Shares exceeds the exercise price of the Options during the term of the Options.

As a general proposition, options to subscribe for ordinary fully paid shares in a company have value. Various factors impact upon the value of options including things such as:

• (i) the period outstanding before the expiry date of the options;

• (ii) the exercise price of the options relative to the underlying price or value of the securities into which they may be converted;

• (iii) the proportion of the issued capital as expanded consequent upon exercise represented by the shares issued upon exercise (i.e. whether or not the shares that might be acquired upon exercise of the options represent a controlling or other significant interest);

• (iv) the value of the shares into which the options may be converted; and

• (v) whether or not the options are listed (i.e. readily capable of being liquidated);

and so on.

The Company has estimated the value of the Options using the Black-Scholes Model, which is the most widely used and recognised model for pricing options. The value of an option calculated by the Black-Scholes Model is a function of the relationship between a number of variables, being the share price, the exercise price, the time to expiry, the risk-free interest rate and the volatility of the Company’s underlying share price.

Inherent in the application of the Black-Scholes Model are a number of inputs, some of which must be assumed. The data relied upon in applying the Black-Scholes Model in the present case were as follows:

• (i) an exercise price of the Option of 2.5 cents;

• (ii) length of period prior to conversion being 2 years and 11 months (January 2011 to December 2013). For the purposes of the analysis it was assumed that the Options would not be exercised any earlier than the expiration date, being 31 December 2013;

• (iii) the Company has not forecast any future dividend payments. For the purposes of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• (iv) the risk free rate used for the purposes of the analysis is the Reserve Bank of Australia cash rate as at 16 December 2010 being 4.75%;

• (v) a volatility measure of 60%; and

• (vi) the valuation of the Company’s share price being 1.5 cents, being the value of the Company’s share price as at 16 December 2010.

Using the Black-Scholes Model and the assumed data outlined above, the directors have valued the Options as at 16 December 2010 at 0.42 cents each.

Using this analysis (0.42 cents), the total value of the proposed Options to be granted to each of Messrs McIlwain, Lee, Freeman and Calcei attributed to each Option is as follows:

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Mr McIlwain Mr G Lee Mr M Freeman Mr Calcei TOTAL	Number of options	Total Value of Options
	15,000,000 20,000,000 15,000,000 10,000,000	$63,000.00 $84,000.00 $63,000.00 $42,000.00
	60,000,000	$252,000.00

(E) Identifying the Related Parties

The related parties to whom Resolutions 3, 4, 5 and 6 would permit financial benefits to be given are the directors of the Company, or their nominees, being Messrs McIlwain (in respect of Resolution 3), Lee (in respect of Resolution 4), Freeman (in respect of Resolution 5), and Calcei (in respect of Resolution 6).

(F) Financial Benefit

The nature of the financial benefit is:

• (i) in respect of Resolution 3, the grant of 15,000,000 Options to Mr McIlwain for no consideration;

• (ii) in respect of Resolution 4, the grant of 20,000,000 Options to Mr Lee for no consideration;

• (iii) in respect of Resolution 5, the grant of 15,000,000 Options to Mr Freeman for no consideration; and

• (iv) in respect of Resolution 6, the grant of 10,000,000 Options to Mr Calcei for no consideration.

(G) Related Parties' Existing Interest

Excluding the Directors’ Options the subject of resolutions 3, 4, 5, and 6, the current interests of Messrs McIlwain, Lee, Freeman and Calcei (and entities associated with them) in the Company’s securities are as follows:

ies are as follows:
Director	Shares	Options (Note 1)
Mr McIlwain Mr G Lee Mr M Freeman Mr Calcei TOTAL	3,308,591 2,681,818 2,439,051 1,681,818	3,000,000 3,000,000 - 3,000,000
	10,111,278	9,000,000

Note 1 – These options were previously granted to Messrs McIlwain, Lee and Calcei as part of their remuneration package.

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(H) Directors' Emoluments

Other than the Options, the directors' current annual remuneration is as follows:

		Salary / Director
Director	Position	Fee’s	Consulting	Total
Mr McIlwain	Chairman	$54,500	-	$54,500
Mr Lee	Executive Director	$200,000	-	$200,000
Mr Freeman	Non - Executive Director	$36,000	$24,000	$60,000
MrCalcei	Non - Executive Director	$40,000	-	$40,000

Mr Freeman has in place a consultancy agreement for the provision of services outside the scope of duties as a director. Remuneration by way of consulting fees is for an amount of $2,000 per month.

Mr McIlwain and Mr Calcei have in place consultancy agreements for the provision of services (from time to time) which fall outside their scope of duties as a director. Remuneration by way of consulting fees is calculated on the basis of a daily rate. The term of the consultancy agreements are not fixed, and have allowance for either party to terminate the agreed arrangement by the giving of 30 days notice.

(I) Directors' Recommendation

Messrs McIlwain, Lee, Freeman and Calcei express no opinion and make no recommendation in respect of the resolutions that apply to them respectively. Otherwise, each of the directors recommend that shareholders approve resolutions 3, 4, 5 and 6 for the reasons set out in this Explanatory Memorandum, including:

• (i) Messrs McIlwain, Lee, Freeman and Calcei will have a vested interest in the affairs of the Company, as the holders of Options and as shareholders upon exercise of the Options, particularly as the Options are not transferable;

• (ii) The issue of Options to Messrs McIlwain, Lee, Freeman and Calcei is a non-cash form of remuneration, thus conserving the Company’s cash reserves. The issue enables the Company to provide its directors with reward for services provided and provide an incentive with respect to future services they will provide to the Company to further progress the Company,

and on the basis that, in their opinion, the proposed issue of options is fair and reasonable having regard to the terms of the Options.

(J) Other Information

No stamp duty will be payable in respect of the grant of the Directors’ Options. No GST will be payable by the Company in respect of the grant of the Directors’ Options (or if it is then it will be recoverable as an input credit).

Other than the information above and otherwise set out in this Explanatory Memorandum and the accompanying cover letter, the directors believe that there is no other information known to the Company or its directors that will be reasonably required by shareholders to make a decision in relation to benefits contemplated by the proposed resolutions 3, 4, 5 and 6.

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APPENDIX 1

TERMS AND CONDITIONS OF OPTIONS (RESOLUTIONS 1 and 2)

The Options will be issued with the following terms and conditions:

• (a) Each Option entitles the holder to subscribe for and be allotted one fully paid ordinary Share in the capital of Verus Investments Limited (“the Company”) at an exercise price of 2 cents.

• (b) The Options are exercisable at any time prior to 5.00pm AWST on 31 March 2012 ( the Expiry Date ) by completing notice of exercise and delivering it to the Company share registry together with the payment for the number of shares in respect of which the Options are exercised.

• (c) The Options are transferable and an application will be made to the ASX for Official Quotation of the Options.

• (d) All Shares issued pursuant to the exercise of Options will be allotted and issued not more than 10 Business Days after receipt of a properly executed notice of exercise and the application monies (as cleared funds) in respect of the exercise.

• (e) All Shares issued upon exercise of the Options will rank pari passu in all respects with the Company's fully paid ordinary shares. Subject to ASX listing rules, the Company will apply to ASX for official quotation of all Shares issued upon exercise of the Options within three Business Days after the date of allotment of those Shares.

• (f) There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered or made to shareholders during the currency of the Options. However, the Company will send a notice to each option holder at least five Business Days before the record date for any proposed issue of capital on a pro-rata entitlement basis. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

• (g) There are no rights to a change in exercise price, or in the number of Shares over which the Options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any Options.

• (h) In the event of any reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an Option holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of the reorganisation.

• (i) The Company will, at least 20 Business Days before the Expiry Date, send notices to the Option holders stating the name of the Option holder, the number of Options held and the number of securities to be issued on exercise of the Options, the exercise price, the due date for payment and the consequences of non-payment.

• (j) The terms of the Options shall only be changed if holders (whose votes are not to be disregarded) of ordinary Shares in the Company approve of such a change. However, the terms of the Options shall not be changed to reduce the Exercise Price, increase the number of Options or change any period for exercise of the Options.

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APPENDIX 2

TERMS AND CONDITIONS OF OPTIONS (RESOLUTIONS 3, 4, 5 and 6)

The material terms and conditions of the options are as follows:

• a) Each option entitles the holder to subscribe for and be allotted one ordinary share in the capital of Verus Investments Limited (the “Company”) at a price of 2.5 cents per share until 31 December 2013 (“the Expiry Date”).

• b) The options are exercisable at any time during the exercise period noted above by notice in writing to the Directors accompanied by payment of the exercise price.

• c) Shares will be allotted and issued pursuant to the exercise of options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.

• d) The options are not transferable, except to a spouse of the Optionholder or a company wholly owned by the Optionholder and his or her spouse.

• e) Shares issued upon exercise of the options will rank pari passu in all respects with the Company’s fully paid ordinary shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of options within 3 business days after the date of allotment of those shares.

• f) There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered or made to the shareholders during the currency of the options. However, the Company will send a notice to each Optionholder at least 9 business days before the record date for any proposed issue of capital on an entitlement basis. This will give Optionholders the opportunity to exercise their options (subject to the exercise period referred to above) prior to the date for determining entitlements to participate in any such issue.

• g) There are no rights to a change in the exercise price, or in the number of shares over which the options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any options.

• h) In the event of any reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an Optionholder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of the reorganisation.

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VERUS INVESTMENTS LIMITED (ACN 009 575 035 )

PROXY FORM

Appointment of Proxy

I/We being a member/s of Verus Investments Ltd and entitled to attend and vote hereby appoint

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The Chairman of the Meeting OR (mark with an “X”)

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If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy.

Or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Verus Investments Ltd to be held on 27 January 2011 and at any adjournment of that meeting.

If you do not wish to direct your proxy how to vote, please place a mark in the 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 that interest. The Chairman of the Meeting intends to vote any undirected proxies in favour of all the resolutions, with the exception of resolutions 3, 4, 5 and 6 where they will be treated as abstentions.

If you do not mark the above box and you have not directed your proxy how to vote in the boxes below, the Chairman of the Meeting will not cast your votes on the resolutions and your votes will not be counted in computing the required majority if a poll is called.

Voting directions to your proxy – please mark  to indicate your directions

RESOLUTIONS	RESOLUTIONS	FOR	AGAINST	ABSTAIN*
1.	Ratification of Prior Option Issue			
2.	Placement Issue of Options			
3.	Approval for the Issue of Options to Director, Mr A. McIlwain			
4.	Approval for the Issue of Options to Director, Mr G. Lee			
5.	Approval for the Issue of Options to Director, Mr M. Freeman			
6.	Approval for the Issue of Options to Director, Mr D. Calcei			

• If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

PLEASE SIGN HERE - This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Securityholder 1

Securityholder 2 Securityholder 3

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Sole Director and Sole Company Secretary

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Director

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Director/Company Secretary

Dated: //____

How to complete the Proxy Form

1 Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

2

Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

3 Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) return both forms together.

4 Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of a corporate Securityholder or proxy is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 3.00pm on 25 January 2011. Any Proxy Form received after that time will not be valid for the scheduled meeting.

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Documents may be lodged:

IN PERSON: Registered Office – 30 Ledgar Road, Balcatta, Western Australia 6021

BY MAIL: Registered Office - 30 Ledgar Road, Balcatta, Western Australia 6021 / P O Box 717, Balcatta, Western Australia 6914

BY FAX (61 8) 9240 2406