ELEMENTOS LIMITED

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27 October 2010

NOTICE OF ANNUAL GENERAL MEETING

Attached is the Notice of Annual General Meeting and Proxy Form which has been mailed to shareholders. The Annual General Meeting will be held at 2pm on Tuesday, 30 November, 2010.

For more information, please contact: Paul Crawford, Company Secretary Phone: +61 (7) 3871 3985 Email: [email protected]

Elementos is an Australian, ASX-listed, exploration company, with a number of projects in Argentina and Australia, which offer an attractive investment environment with low sovereign risk. The properties are all in mineral rich, highly prospective provinces, with developed infrastructure nearby.

Please visit us at www.elementos.com.au

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ABN 49 138 468 756

Notice of Annual General Meeting and Explanatory Statement

Annual General Meeting to be held at Level 1 349 Coronation Drive, Milton, Queensland Australia on 30 November, 2010 commencing at 2pm.

This Notice of Annual General Meeting and Explanatory Statement should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

Directors	Mr A. Anthony McLellan (Chairman)
	Mr Corey Nolan (Managing Director)
	Mr Neil Stuart (Non-Executive Director)
	Mr Mark McCauley (Non-Executive Director)
Secretary	Paul Crawford
Registered Office	Level 1
	349 Coronation Drive
	MILTON, QLD 4064
	AUSTRALIA
	Ph: (+617) 3871 3985
	Fax: (+617) 3720 8988
	Email: [email protected]
	Website: www.elementos.com.au
Auditors	Hayes Knight Audit (Qld) Pty Ltd
	Level 19
	127 Creek Street
	BRISBANE QLD 4000
	AUSTRALIA
Legal Advisers	Hemming+Hart
	Level 2
	307 Queen Street
	BRISBANE QLD 4000
	AUSTRALIA
Share Registry	Registries Limited
	Level 7
	207 Kent Street
	SYDNEY NSW 2000
	AUSTRALIA

NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY STATEMENT

Notice is given that the 2010 Annual General Meeting of Shareholders of Elementos Limited (ABN 49 138 468 756) ( Company ) will be held at Level 1/ 349 Coronation Drive, Milton, Queensland Australia on 30 November, 2010 at 2.00 pm.

ORDINARY BUSINESS:

Accounts

To receive and consider the financial report of the Company and the reports of the Directors and auditor for the year ended 30 June 2010.

To consider, and if thought fit, to pass the following resolution as an advisory only resolution:

1. Directors’ Remuneration Report

“That the Directors’ Remuneration Report for the year ended 30 June 2010 be adopted.”

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

2. Election of Mr A. Anthony McLellan as a Director

“That Mr McLellan, having been appointed as a Director of the Company since its incorporation, be elected a Director of the Company.”

3. Election of Mr Mark McCauley as a Director

“That Mr McCauley, having been appointed as a Director of the Company since the previous meeting, be elected a Director of the Company.”

4. Grant of Options to Mark McCauley

“Subject to the passing of Resolution 3, that for the purposes of Chapter 2E of the Corporations Act 2001 and Listing Rule 10.11 and for all other purposes, the grant of 1,000,000 options to Mr McCauley, a Director, for no consideration and otherwise for the purposes and on the terms and conditions described in the Explanatory Statement, be approved.”

Voting exclusion statement

The Company will disregard any votes cast on this resolution by Mr McCauley and any of his associates. The Company 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 it is cast by the person chairing the Meeting as a proxy for the person who is entitled to vote, in accordance with the directions on the proxy form to vote as the proxy decides.

By Order of the Board

Paul Crawford Company Secretary

Dated: 27 October 2010

EXPLANATORY STATEMENT

Annual Financial Report

The financial report of the Company for the year ended 30 June 2010, comprising the financial statements, notes, Directors’ report and auditor’s report, is included with this Notice of Annual General Meeting.

Time will be allowed during the meeting for consideration and questions by the Shareholders of the financial report and associated Directors’ and auditor’s reports.

Resolution 1: Adoption of the Directors’ Remuneration Report.

The Corporations Act requires all listed companies to present their remuneration report for each financial year for adoption by Shareholders at the Company’s Annual General Meeting ( Meeting ). The report can be found as a separately identified “Remuneration Report” within the Directors’ Report section of the Company’s 2010 Annual Report.

Time will be allowed during the Meeting for consideration and questions by Shareholders of the Remuneration Report.

The vote on this resolution is advisory only and does not bind the Directors or Company.

Resolution 2: Election of Mr A. Anthony McLellan as a Director

Mr McLellan was appointed to the Board of Directors on 19 October, 2009 as a non-executive Director. Mr McLellan has over fifty years business experience in Australia and overseas as CEO of major international companies, including the predecessor of Barrick Gold. Mr McLellan has experience in a range of resource industries and been instrumental in the acquisition, operation, and divestment of a number of major Australian resources companies. He was Non-executive Director and Chairman of Norton Gold Fields Limited to June 2010, Non-executive Director and Chairman of Allomak Limited to February 2009, Non-executive Directpr and Chairman of Bemax Resources Limited until July 2008 and Non-executive Director of Felix Resources Limited from 2003 to 2008.

Mr McLellan is active in the not-for-profit world as a director of the Menzies Research Centre and Chairman of the Australian Christian lobby.

Resolution 3: Election of Mr Mark McCauley as a Director

Mr McCauley was appointed to the Board of Directors on 8 October, 2010 as a Non-executive Director. Mr McCauley is currently Managing Director of RMM Capital, a Queensland based private equity firm specialising in resource investments. Prior to that, Mr McCauley was the chief financial officer and company secretary of Felix Resources Limited, a highly-successful coal company which, during Mr. McCauley’s tenure grew in market capitalisation from approximately $30 million to over $1 billion through a number of successful mergers, acquisitions and green field project developments.

Mr McCauley is also a director of Norton Goldfields Limited, and recently acted as Chief Executive Officer of this company for a period of eight months working through a successful management restructure and repositioning of Norton.

Mr McCauley holds an Honours Degree in Engineering (majoring in Mining) from the University of Queensland, and a Masters in Business Administration from Bond University. Mr McCauley is also a graduate of the Advanced Management Programme at Harvard Business School, and a member of the Australian Institute of Company Directors.

Resolution 4: Approval of Grant of Options under the Employee and Officer Share Option Plan

Introduction

Subject to the passing of Resolution 3, Shareholder approval in accordance with the provisions of Part 2E of the Corporations Act 2001 (Cth) ( Corporations Act ) and Listing Rule 10.11 and for all other purposes, is sought for the grant of 1,000,000 options to Mr Mark McCauley, for no consideration ( Options ).

Key Details of Options

Key details of the Options to be granted by the Company to Mr McCauley are set out below.

Recipient Director	Number	Vesting Date	Expiry Date	Exercise Price
Mr Mark McCauley	500,000	On the date when the Company’s share price reaches 30 cents.	5 years after the date of issue.	25 cents per option
	500,000	On the date when the Company’s share price reaches 35 cents.	5 years after the date of issue.	25 cents per option

Part 2E of the Corporations Act

Part 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of a public company unless the benefit falls within one of various exceptions to the general prohibition. One of the exceptions includes where the company first obtains the approval of its shareholders in a general meeting in circumstances where the requirements of Part 2E in relation to the convening of that meeting have been met.

A “related party” for the purposes of the Corporations Act is defined widely and includes a director of the public company and any alternate director.

A “financial benefit” for the purposes of the Corporations Act has a very wide meaning. It includes the public company paying money or issuing securities to the related party. In determining whether or not a financial benefit is being given, it is necessary to look to the economic and commercial substance and effect of what the public company is doing (rather than just the legal form). Any consideration which is given for the financial benefit is to be disregarded, even if it is full or adequate.

Resolution 4, if passed, will confer financial benefits to Mr McCauley, and the Company seeks to obtain member approval in accordance with the requirements of Part 2E of the Corporations Act and for this reason and for all other purposes the following information is provided to shareholders.

1. The Related Party to whom Resolution 4 would permit a financial benefit to be given

Mr McCauley, (or his respective nominees), being a Director of the Company.

2. The Nature of the Financial Benefit

The nature of the proposed financial benefit to be given is:

a. the grant of 1,000,000 Options;
b. the Options shall be exercisable into fully paid ordinary shares at an Exercise Price of $0.25 per share exercisable on or before the date that is five (5) years from the date of issue; and
c. the Options shall be granted for no cash consideration. Consequently no funds will be raised as a result of the grant of the Options. A total of $250,000 in additional share capital would be raised if the Options were exercised in full.

The terms of the Options are set out at Annexure A to this Explanatory Statement.

3. Directors’ Recommendation

None of the Directors, other than Mr McCauley, has an interest in this resolution. As the proposed recipient of Options, Mr McCauley has an interest in the resolution, and therefore makes no recommendation in relation to it. The Directors, with Mr McCauley abstaining, recommend that you vote in favour of resolution 4.

The reasons for the Directors’ recommendation are:

a. The grant of the Options as proposed to Mr McCauley will provide reward and incentive for future services provided to the Company to further the progress of the Company; and
b. In the Company’s circumstances, the Directors considered that the incentive provided a cost-effective and efficient incentive as opposed to alternative forms of incentives (eg cash bonuses, increased remuneration). However, it must be recognised that there will be an opportunity cost to the Company, being the price at which the Company could grant the Options to a third party.

4. Director’s Interest and other Remuneration

Mr McCauley has a material personal interest in the outcome of Resolution 4, as it is proposed that the Options be granted to him (or his respective nominee) as set out in Resolution 4.

Excluding the Options referred to above, Mr McCauley (and entities associated with him) holds no other shares and no other options of the Company. Please refer to the table below.

Other than the Options to be issued to Mr McCauley pursuant to Resolution 4, Mr McCauley shall receive director’s fees of $40,000 per annum including superannuation from the Company for his services as Non-executive Director of the Company.

If all of the Options granted to Mr McCauley are exercised the following will be the effect on the share holdings in the Company:

Director	Current Share Holding	% of Total Share Capital (54,000,001 shares on issue)	Share Holding upon exercise	% of Total Share Capital (55,000,001 shares on issue)
Mr McCauley	Nil	0%	1,000,000	0.18%

5. Valuation

The Options are not currently quoted on the ASX and as such have no market value. The Options may acquire future value dependent upon the extent to which the shares exceed the Exercise Price of the Options during the term of the Options.

As a general proposition, options to subscribe for fully paid ordinary shares in a company have value. There are various formulae which can be applied to determining the theoretical value of options.

The Board has determined the value of the Options to be issued pursuant to this resolution to be approximately 9.97 cents per Option (representing a total value of approximately $99,700).

This value has been derived using a Binomial Model Option Pricing Model assuming the following:

a Share price of 22 cents (being the closing price of Shares on the ASX on 18 October 2010);
an exercise price of 25 cents;
a risk free rate of 5.25% per annum;
a volatility factor of 57%, which has been determined having regard to the historical trading of Shares on ASX;
an expiry date of five years from the date of issue; and
all other terms and conditions as outlined in this Explanatory Statement.

6. Any other Information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its Directors

There is no other information known to the Company or any of its Directors except as follows:

Opportunity Costs

The opportunity costs and benefits foregone by the Company issuing the Options to Mr McCauley is the potentially dilutionary impact on the issued share capital of the Company (in the event that the Options are exercised). Until exercised, the issue of the Options will not impact upon the number of ordinary shares on issue in the Company. To the extent that upon their exercise the dilutionary impact caused with the issue of shares will be detrimental to the Company, this is more than offset

by the advantages accruing from the Company securing the services of experienced and skilled directors on appropriately incentivised terms.

It is also considered that the potential increase of value in the Options is dependent upon a concomitant increase in the value of the Company generally.

Dilutionary Effect

If all of the Options granted are exercised by Mr McAuley the following will be the dilutionary effect on the current issued capital of the Company.

Shareholders	Current Share Capital	Current Share Capital	Share Capital upon exercise	Share Capital upon exercise
Current Shareholders	54,000,001	100%	54,000,001	99.82%
Mr McCauley	Nil	0%	1,000,000	0.18%
Total	54,000,001	100%	55,000,001	100%

Share Price History

In order to assist Shareholders to appropriately consider this resolution, it is noted that the Company’s shares have traded on ASX in the 3 months prior to the date of this Notice of Annual General Meeting between $0.15 on 19 July 2010 and $0.255 cents on 1 October 2010. At the close of trading on 19 October 2010, the Company’s share price was $0.23 cents.

7. ASX Listing Rules

Listing Rule 10.11 prohibits the issue of securities to a director of a company unless the approval of the Shareholders of the company is obtained. Listing Rule 7 broadly prohibits a company from issuing more than 15% of its Shares in any one year. Pursuant to Listing Rule 7.2 (Exception 14), if Shareholder approval is given under Listing Rule 10.11, further approval is not required for the purposes of Listing Rule 7.1.

Listing Rule 10.11 requires an entity to obtain the approval of Shareholders to an issue of securities to a related party. Mr McCauley, being a Director of the Company, is a related party. Accordingly, because the issue of the Shares will result in the Company issuing securities to a related party, approval under Listing Rule 10.11 is required.

For the purposes of Listing Rule 10.11, and for all other purposes, the following information is provided to shareholders for the purposes of this resolution:

a. the options will be granted as soon as practicable after the Meeting, but in any event, no later than one month after the date of the Meeting; and
b. If any or all of the options are exercised, the funds raised from the issue of Shares will contribute to the Company’s working capital.

Annexure A Terms and Conditions of Options

The Options to be granted by the Company to the Director, in accordance with Resolution 4 are to be issued on the following terms and conditions:

The options are options to subscribe for ordinary shares in the capital of the Company.
Shares issued on exercise of the options will rank pari - passu with all existing ordinary shares of the Company from the date of issue.
Subject to the Company’s Constitution, the Corporations Act, the Listing Rules and the ASTC Settlement Rules, the options will not be transferable.
The options may be exercised wholly or in part by notice in writing ( Exercise Notice ) to the Company at any time on or after the Vesting Date but before the Expiry Date.
The options will not be quoted on the ASX.
The Company will allot the number of shares the subject of any valid Exercise Notice, and apply at its cost for quotation on ASX of the shares so allotted.
The option holder will be permitted to participate in new issues of securities of the Company on the prior exercise of the options, in which case the holder of the options will be afforded the period of at least 14 days notice prior to and inclusive of the books closing date (to determine entitlements to the issue) to exercise the options.
In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company:
(a) the number of options, the exercise price of the options, or both will be reconstructed (as appropriate) in a manner consistent with the ASX Listing Rules, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of the options which are not conferred on shareholders; and
(b) subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the options will remain unchanged.
The terms of the options will 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 will not be changed to reduce the exercise price, increase the number of options or change any period for exercise of the options.
The options will be forfeited if:
(a) If the Director ceases to hold office as a director of the Company and does not exercise the options within the shorter of the six months following his ceasing to hold office as director and the Expiry Date; subject always to the Vesting Date occurring during that Period; and
(b) If a Recipient Director ceases to hold office as a director of the Company during the option period because of:
(i) Being convicted of any breach of a criminal provision of the Corporations Act;

(ii) Being convicted of any other criminal office; or
(iii) Committing a material breach of his employment or consultancy agreement (as the case may be) with the Company.

Definitions:

Expiry Date means five years after the grant of the options.

Option Period means the period between the grant of the options and the expiry date.

Vesting Date means:

(a) For 500,000 of the Options - the date the Company’s share price on ASX reaches $0.30; and
(b) For the remaining 500,000 of the Options - the date the Company’s share price on ASX, reaches $0.35.

Elementos Limited ABN 49 138 468 756

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FOR ALL ENQUIRIES CALL: (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

FACSIMILE +61 2 9290 9655

ALL CORRESPONDENCE TO:

Registries Limited GPO Box 3993 Sydney NSW 2001 Australia

Your Address

This is your address as it appears on the company’s share register. If this is incorrect, please mark the box with an “X” and make the correction on the form. Securityholders sponsored by a broker should advise your broker of any changes. Please note, you cannot change ownership of your securities using this form.

YOUR VOTE IS IMPORTANT

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECORDED BEFORE 2 pm (BRISBANE TIME ) SUNDAY 28[TH] NOVEMBER 2010

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 Appointment of Proxy

Indicate here who you want to appoint as your Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. 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 security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an “Appointment of Corporate Representative” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry.

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 securities registry or you may copy this form.

To appoint a second proxy you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the 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 in the same envelope.

STEP 2 Voting Directions to your Proxy

You can tell your Proxy how to vote

To direct your proxy how to vote, place a mark in one of the 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.

STEP 3 Sign the Form

The form must be signed as follows :

Individual: This form is to be signed by the securityholder.

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

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 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 not later than 48 hours before the commencement of the meeting at time 2pm (Brisbane time) on Tuesday,30[th] November 2010 . Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxies may be lodged using the reply paid envelope or:

BY MAIL - Share Registry – Registries Limited, GPO Box 3993, Sydney NSW 2001 Australia

BY FAX - + 61 2 9290 9655

IN PERSON - Share Registry – Registries Limited, Level 7, 207 Kent Street, Sydney NSW 2000 Australia

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration .

ELEMENTOS LIMITED

## **STEP 1 - Appointment of Proxy** > I/We being a member/s of **Elementos Limited** and entitled to attend and vote hereby appoint the Chairman of the Meeting (mark with an **OR** ‘X’) **==> picture [178 x 33] intentionally omitted <==** 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 at the **Annual General Meeting of Elementos Limited to be held at to be held at Level 1, 349 Coronation Drive, Milton QLD 4064 on Tuesday the 30th of November 2010 at 2pm (local time)** and at any adjournment of that meeting, to act 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. **STEP 2 - Voting directions to your Proxy – please mark** � **to indicate your directions** |**STEP 2 - Vot**|**ing directions to your Proxy – please mark**�**to indicate your direction**|**s**|||||| |---|---|---|---|---|---|---|---| |**Ordinary Business**||**For**|**Against**
**Abstain***||||| |Resolution 1|**Directors’ Remuneration Report**||||||| ||||||||| |Resolution 2|**Election of Mr A. Anthony McLellan as a Director**||||||| ||||||||| |Resolution 3|**Election of Mr Mark McCauley as a Director**||||||| ||||||||| |Resolution 4|**Grant of Options to Mark McCauley**||||||| ||||||||| In addition to the intentions advised above. The Chairman of the Meeting intends to vote undirected proxies in favour of each of the items of business. *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. **==> picture [487 x 101] intentionally omitted <==** **----- Start of picture text -----**
STEP 3 - 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
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact Name ……………………………….…….. Contact Daytime Telephone ………………………………….. Date / / 2010
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AI assistant

ELEMENTOS LIMITED — AGM Information 2010

64837_rns_2010-10-27_cec2223a-6ce1-45e1-ae98-faf2fbe1429b.pdf

NOTICE OF ANNUAL GENERAL MEETING