ELEMENTOS LIMITED — Governance Information 2010

Dec 30, 2010

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31 December 2010

SHARE TRADING POLICY

Attached is the Elementos Limited Trading Policy, provided in compliance with ASX Listing Rule 12.9 when it comes into effect on 1 January 2011.

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Paul Crawford Company Secretary

For more information, please contact:

Corey Nolan Managing Director Phone: +61 (7) 3871 3985 Email: admin@elementos.com.au

Elementos is an Australian, ASX-listed, exploration company, with a number of projects in Argentina and Australia, which offer an attractive investment environment. 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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Securities Trading Policy

Background

The Corporations Act prohibits a person from dealing, or procuring other persons to deal, in the Securities of a company if the person:

• possesses inside information about the company; and,

• knows, or ought reasonably to know, that the information is inside information.

The prohibition applies to dealing by Elementos Employees in Elementos Securities. It can also apply to dealing in Securities of another company where an Elementos Employee is in possession of inside information about that other company in the course of their employment with Elementos.

The Act imposes significant penalties where a breach of the insider trading laws occurs. The offence is to use information to trade or cause others to trade in the Company’s shares.[1]

Application

The Company’s Securities Trading Policy (the “Policy”) applies to:

• Directors of Elementos;

• Employees of Elementos and its related bodies corporate; and,

• Contractors and Consultants engaged by Elementos who, in the course of their engagement with Elementos, come into possession of inside information about Elementos or another company.

In this Policy, all of these people are referred to as “Employee/s”.

Additional responsibilities apply to Elementos Directors, Executive Officers and others identified as Designated Employees.

Aspects of this Policy also extend to associates of Employees, such as family members or companies and other entities controlled by Employees and their associates.

Purpose

The purpose of this Policy is to prevent Elementos Limited (“Elementos” or the “Company”) and Employees from breaching legislative prohibitions on insider trading by dealing in the Securities of Elementos or other companies while in possession of inside information.

The Policy also outlines when Employees may deal in Elementos Securities, or the Securities of other companies.

1 Causing others to trade means to incite, induce, encourage, or tip off.

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For the purposes of this Policy, Securities also includes shares in a company and other instruments such as exchange traded options and warrants (“Securities”).

Policy

EMPLOYEES MUST NOT TRADE IN ELEMENTOS LIMITED SECURITIES IF THEY HAVE INSIDE INFORMATION RELATING TO ELEMENTOS OR ANY GROUP COMPANY.

Employees are prohibited from directly or indirectly (a) buying, selling or otherwise trading in Elementos shares, or in shares of any other corporation where by reason of being a director of the Company or any other corporation they possess material, price sensitive information which is not generally available; or, (b) where buying or selling those shares in some way infringes the law against insider trading.[2] And it is the individual responsibility of each Employee to ensure that they comply with the spirit and the letter of the insider trading laws.

Furthermore, Employees may not deal in Elementos Securities in designated blackout periods set out below.

What is inside information?

Inside information is information about a company that is not generally available to the market and that, if it were to be made generally available to the market, would reasonably be expected to have a material effect on the price or value of Securities issued by the company (that is, Information that is “price sensitive”). Information is generally available if:

• it consists of readily observable matter; or,

• it has been publicly disclosed by an announcement to the ASX and a reasonable period for its dissemination among investors has elapsed; or,

• it consists of deductions, conclusions or inferences made or drawn from other generally available information.

Elementos has legal obligations to disclose immediately to the market all information which would reasonably be expected to have a material effect on the price or value of its Securities. However, there are circumstances where information of this kind is not required to be disclosed, particularly if it relates to an incomplete proposal or to matters which are insufficiently definite to warrant disclosure.

Examples of information that might be inside information include information about:

• Elementos’ financial performance, particularly in comparison with forecast results or market expectations;

• a substantial transaction under consideration;

2 As no definition of “generally available” is given in the Corporations Act, Elementos recommends that at least one business day be allowed following the release of price sensitive information to the ASX, before an employee may undertake a trade.

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• an actual or proposed change to capital structure, including a share issue or a debt refinancing;

• a material claim or unexpected liability;

• significant changes in personnel.

Employees are often in possession of “inside information”, which they lawfully receive during their employment (for example, assay results or production reports). Employees may not trade (or cause trading to occur) in Elementos Securities until that information is generally available.

What is dealing in Securities?

To deal in Securities is to acquire or dispose of any economic interest in those Securities. This includes:

• acquiring or disposing of the Securities;

• entering into an agreement to acquire or dispose of the Securities; or,

• granting, accepting, acquiring, disposing, exercising, or discharging an option or other right or obligation to acquire or dispose of the Securities.

Consequences of breaching prohibition against insider trading

Insider trading is a criminal offence and may attract substantial fines or imprisonment. Civil penalties may also apply, including the payment of compensation to any person who has suffered loss or damage because of insider trading.

Employees who fail to adhere to the requirements of this Policy may face disciplinary action, including termination.

The Australian Securities Exchange (ASX), the Australian Securities and Investments Commission (ASIC), and external governance advisers all monitor Elementos’ compliance with this Policy. Breaches of the Policy by Employees can have material adverse consequences for Elementos’ reputation with the ASX and ASIC, and with the investment community at large.

Blackout periods

Employees must not deal in Elementos Securities at any time if they are in possession of inside information about Elementos.

Employees also must not deal in Elementos Securities during any of the following blackout periods:

• the period between 1 July and the close of business on the second day after Elementos announces its Preliminary Final Results (Appendix 4E);

• the period between 1 January and the close of business on the second day after Elementos announces its Half Year Results (Appendix 4D);

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• the period between the commencement of a calendar month when Elementos is required to announce its Quarterly Activities report and the close of the second business day after the respective Quarterly Activities Report is announced;

• the period ending at the close of the second day after Elementos announces price sensitive information.

Subject to additional requirements set out below—particularly those related to Designated Employees—Employees may deal in Elementos Securities at any other time.

Dealing in Securities of other companies

From time to time, Elementos will be engaged in activities which might result in inside information about another company becoming available to an Employee because of his or her role or position with Elementos. For example:

• another company may provide information about itself, or about a third company, to Elementos in the course of a proposed transaction;

• Elementos may be considering a transaction which, if implemented, may have an effect on another company and the value of that company’s Securities;

• Elementos may receive information about the financial or operating performance of a company with which Elementos has a joint venture or in which it has invested.

Employees must not deal in Securities of another company if they are in possession of inside information about that other company.

Short-term or speculative dealing

Elementos encourages Employees to be long-term investors in Elementos Securities and to act in a way that promotes growth in long-term returns for all holders of Elementos Securities. Speculation in short-term fluctuations in the value of Elementos Securities does not promote market confidence in the integrity of Elementos or Employees.

Employees must not deal in Elementos Securities as a short-term trader or on a speculative basis. Employees who acquire Elementos Securities must not dispose of those Securities, or enter into arrangements (such as margin loans) which could result in those Securities being disposed of, within six months of acquisition.

This prohibition does not apply to Securities acquired as a result of the exercise of an option or similar right where the option or right has been held for at least six months. This prohibition also does not apply to Elementos shares acquired by Employees under Elementos’ Employee Share Option Scheme.

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Derivatives

Elementos may grant Elementos shares, options or performance rights to Employees as part of their remuneration entitlements. These grants will usually be subject to the satisfaction of performance hurdles before they vest in the Employee.

The use of Derivatives over unvested Elementos Securities has the potential to allow Employees to realise value from those Securities even if the performance hurdles have not been satisfied. This would undermine the intended alignment between the performance of Employees and the interests of Elementos shareholders.

Employees are not permitted to use Derivatives in relation to any unvested Elementos Securities. For this purpose, a Derivative includes any option, forward contract, swap, futures contract or warrant, or any other arrangement, which itself or in combination with one or more other Derivatives would have the effect of providing an Employee with greater benefit than would otherwise have been realised in respect of the unvested Elementos Securities.

Subject to receiving the prior written approval of the Board, Employees may use Derivatives in relation to Elementos Securities which have vested.

Dealings in Elementos Securities by Designated Employees

Any Director, Officer, or Employee included In the following schedule (collectively, “Designated Employee”) who proposes dealing in Elementos Securities must, before the dealing occurs, notify the Company Secretary of the proposed dealing in writing (or by email) setting out the full details of the proposed dealing including:

• Name of security holder;

• Proposed date of dealing;

• Type of proposed transaction (purchase, sale, etc); and,

• Number of Securities involved.

Such Designated Employee must not undertake the proposed dealing until it has been approved in writing (or by email) in accordance with the following protocol:

Dealing to be undertaken by the	Dealing to be approved by:
following Designated Employee:
Chairman	Chairman of the Audit Committee
Director	Chairman of the Board
Company Secretary	Chairman of the Board
Managing Director	Chairman of the Board
Chief Financial Officer	Chairman of the Board

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Member of the Executive Team	Managing Director
Nominated Employee3	Managing Director

An approval to undertake the proposed dealing will be valid for two (2) weeks but completion of the proposed dealing must not occur during a blackout period and must otherwise comply with the requirements of this Policy.

The requirements for Designated Employees to seek approval before dealing in Elementos Securities do not apply to:

• the acquisition of Securities under Elementos’ Employee Share Option Scheme;

• the acquisition of shares under a dividend reinvestment plan;

• participation in an offer or invitation made to all or most of the security holders; for example, rights issues, general share buy-back offers and share purchase plans.

Restrictions applicable to associates of Designated Employees

The need to seek prior approval of any proposed transaction extends to associates including family members or companies and other entities controlled by the Designated Employee. This means that a Designated Employee must take all steps reasonably necessary for the Designated Employee’s associates to:

• avoid dealing in Elementos Securities during a blackout period;

• avoid dealing in Elementos Securities as a short-term trader or on a speculative basis;

• notify the Company Secretary of, and seek approval for, proposed dealings in Elementos

• Securities.

Margin Loans

Margin loans to support an investment in Securities have the potential to compromise an Elementos Employee’s ability to comply with this Policy or with the legal prohibition against insider trading. This is because the terms of a margin loan may require the sale of Securities during a blackout period (in relation to Elementos Securities) or at a time when the Elementos Employee is in possession of inside information about Elementos or another company in which the Elementos Employee holds Securities.

Employees are prohibited from entering into margin loan arrangements to fund the acquisition of Elementos Securities or in relation to which Elementos Securities may be used as a security against repayment of the loan.

3 The Managing Director may, from time to time, designate any Elementos Employee as a Nominated Employee for the purpose of this Policy. Such Employee may occupy a position, or perform a role, which may attract public scrutiny of dealings by those Employees in Elementos Securities.

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The following requirements will apply to margin loans proposed to be obtained by a Designated Employee to acquire Securities of any other company in relation to which it is reasonably foreseeable that the Designated Employee could come into possession of inside information as a consequence of being an Elementos Employee.

▷ The Designated Employee must provide notice of, and obtain approval for, the proposed margin lending arrangements following the process outlined above. Approval must be obtained before the margin lending arrangements are entered into.

• Similarly, the Designated Employee must ensure that the terms of the margin lending arrangements do not require, or allow for, Securities of any company to be disposed of at a time when the Designated Employee is in possession of inside information in relation to that company.

• The Designated Employee must promptly inform the Company Secretary in writing (or by email) of any margin call that is made under the margin lending arrangements, and of the terms of that margin call.

Exemption to allow dealings during blackout periods

The Company Secretary has the discretion to give approval to an Elementos Employee to dispose of Elementos Securities during a blackout period if both of the following conditions are satisfied:

• the Elementos Employee is experiencing genuine financial hardship or there are other exceptional circumstances; and,

• the Elementos Employee is not actually in possession of inside information about Elementos.

An Elementos Employee seeking approval to dispose of Elementos Securities during a blackout period should do so in accordance with procedures set out in this Policy. Full details of why the Elementos Employee considers that exceptional circumstances exist should be included.

The Company Secretary must maintain a record of all approvals given to sell Elementos Securities during a blackout period.

The Company Secretary must promptly inform the Board of all instances where approval has been given to an Employee to sell Elementos Securities during a blackout period.

Glossary

Terms used in this Policy have the meaning set out below:

Elementos means Elementos Limited (ABN 49 138 468 756).

Elementos Board means the board of directors of Elementos.

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Employees means each director, officer and employee of Elementos or its related bodies corporate (within the meaning of section 50 of the Corporations Act), and each contractor and consultant to Elementos or its related bodies corporate who are contractually bound to comply with this Policy.

Elementos Executive Team means Employees who hold a senior management role and who are direct reports to the Elementos Managing Director.

associate in relation to a Elementos Employee means:

• a member of the Elementos Employee’s immediate family; and,

• a company or other entity controlled by the Elementos Employee or a member of their immediate family.

Company Secretary means the Company Secretary of Elementos from time to time. This is currently Paul Crawford, who can be contacted at pc@elementos.com.au or on (07) 3871 3985.

Corporations Act means the Corporations Act 2001 (Cth) .

deal or dealing in relation to Securities means to acquire or dispose of any economic interest in those Securities. The term is intended to be interpreted broadly and includes:

• acquiring or disposing of the Securities;

• entering into an agreement to acquire or dispose of the Securities; or,

• granting, accepting, acquiring, disposing, exercising, or discharging an option or other right or obligation to acquire or dispose of the Securities.

Derivatives has the meaning given in Section 761D of the Corporations Act and includes options, forward contracts, swaps, future contracts and warrants and any combination of one or more of these things.

inside information in relation to a company means information about the company that is not generally available and that, if it were to be made generally available, would reasonably be expected to have a material effect on the price or value of Securities issued by the company.

Securities include shares, options, rights, debentures, interests in a managed investment scheme, Derivatives, and financial products covered by section 1042A of the Corporations Act.

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