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PROSPECTUS

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IMPORTANT NOTE AND DISCLAIMER

l'un Prospectus is dateix 9 November 2005 and is a repludement prospectos which replaces the prospectus dated 4 November 2005 which was fodued with ASIC on that date. ASIC and ASY take no responsibility for the content of this Presinctius.

The Offer contained in this Prospectus closes on the Closing Date of 9 December 2005. The Company reserves the notifical change the Closing Date without reduce. No securities will be issued on the basis of this Prospectus later than its expry date. being 13 months after the date of lodgroem of this Prospectus with ASIC

This Prospectus (and tor New Zealand investors the accompanying hivestment Stated term) may be verred unline at www.aestudas.auckl.com.au. Paper conies of this Prospective and Investment Statement can be printed from the website or will be made. available upon request by telephone: 1300-556-161 or facsimile: (98)-8236-2305 or emas adminisaustralasia jold com au

The Company has not authorised any person or entity to provide any liftermation or make any representation relating in this Offer. Any information relating to this Offer that is not contained in this Prospectus may six be relied upon as having been authorised by the Company. The distribution of this Prospectus in prischetiscs consider Australia and New Zealand may be restricted by law and does not constitute an offer in any place in which or to any person to whom, it would not be lawful to make such an offer. New Instanct investors should also tead the accompanying investment Statement. All currency amounts in both documents are expressed as Australian dollars unless otherwise stated.

Application will be made to ASX within seven they after the natio of this Prospectus for the Company to be admitted to the Official List of ASX and lor quotation of the Shans and Opinius. Official quidation of the Shares and Options you commence as soon as practicable after the Company is admitted to the Official of ASK. The fact that ASA may admit the Company to its Official List is not to be taken in any way as an interactive of the interior of the Company or the Shares and Openes being issued.

The mixeral tensorients and applications held by the Company are a an experience and evanded stage. This and the lact the Company has no restory of concentrate makes any intestitutor of States and Chileris tracelation. Investors statud francicler the entire contents of this two-persons catching and tells by the county an Treestrum Rele

Before deciding to participate in this cities was savide consideris appropriateness, having regard to the speciality cannot of the investment, your phectives, financial situation and macrithe hermanend that you seek professional investment adjace muanin'i investment in these shares.

OVERVIEW^.

Focussed on gold and copper-gold.
An experienced team with a successful track record. $\bullet$
A strong business plan to build the project base.

Two advanced projects.

Wetherstones Project -- gold deposit evaluation Otago Region, South Island, New Zealand
High grade indicated by underground exploration, drilling and historic mining.
Potentially containing up to 1 million ounces of gold at less than 200 metres depth.
Aim to confirm potential in 12 months; resources in year two.
Glencoe Project pre-production $\sim$

Pine Creek Region, Northern Territory

Glencoe gold deposit contains estimated resources of 90,000 ounces gold averaging 1.9 grams/tonne at less than 100m depth.
Extending untested to depth, where mineralised structure should intersect more prospective stratigraphy.

Three regional greenfields projects

In regions of abundant gold endowment and historic production.
Targetting multi-million ounce gold discoveries. .
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Applying innovative exploration approaches. .
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CORPORATE DIRECTORY

Australasia Gold Limited MN 104 757 904

Directors

John Roberts Chairman Trevor Ireland Managing Director Norton Jackson AM Non-Executive Director Mick Billing Non-Executive Director and Company Secretary

Registered Office

346 Carrington Street Adelaide South Australia 5000

Principal Business Office

13 Moodland Close Aldgate South Australia 5154

Share Registrar

Computershare Investor Services Pty Limited Level 5, 115 Grentell Street Adelaide South Australia 5000

Independent Geologist

David C Fielding Consulting Geologist b Weldon Way City Beach Western Australia 6014

Auditor and Independent Accountant

HLB Mann hidd Stephens (SA) Chartered Accountarits 82 Fullarton Road Norwood South Australia 5067

Solicitor

Lynch Meyer 190 Flinders Street Adelaide South Australia 5000

Corporate Adviser

Baron Partners Limited Level 3, 60 Waymouth Street Adelaide South Australia 5000

Broker to the Issue

Cameron Stockbrokers Limited Lever 5, 10 Spring Street Sydney NSW Australia 2000

Important Dates Continued by Continued Bank Bank and Service State Bank Bank and Service State Bank Bank and Service State Bank and Service State Bank and Service State Bank and Service State Bank and Service State Bank

Existing	TANDRETH 2003

	ENTRALISTICALISM

Intenied allohaent"	Beschier 2005

Expected quotation December 2005

Bertholder General Provincia de la p

Chairman's Letter $\mathbf{A}$ Details of the Offer m У. Directors and Officers $12 \overline{ }$ $\mathbf{z}$ The Company $14$ $\overline{\mathbf{z}}$ The Projects 4 18 5. Independent Geologist's Report $32 \,$ 5.3 Otago Project 38 5.4 Pine Creek Project $4\overline{R}$ 5.5 Lachlan Project ĥĥ. 76 Solicitor's Report Ġ. 7 Einancial Information 96 97 7.1 Independent Accountant's Report 7.2 Pro Forma Statement of Financial Position $100$ Investment Risks 108 'n. 9 Additional Information 112 Directors Report $127$ Definitions 128 Glossary of Technical Terms 129 Application Forms and Instructions $127$

Dear Investor.

On behalf of the Board of Directors, I have pleasure in presenting this Prospectus inviting you to become a shareholder in Australasia Gold Limited. The members of my Board bring together an exceptional body of experience in technical and commercial areas to manage the projects we have acquired and the corporate development we have envisioned.

Australasia Gold is a mineral explorer-mine developer focussed on gold with advanced projects in the south island of New Zealand and in the Northern Territory. The Company has been established to build a significant mining enterprise by exploration and development and by acquisition.

Initially we will test extensions of the Wetherstones gold deposit revealed in the 75 year old Golden Crescent inclined adit, and complete the feasibility study of the Glencoe gold deposit in the Pine Creek region of the Northern Territory. The Company will also explore mineralisation and prospective targets in the Otago and Pine Creek regions in proximity to Wetherstones and Glencoe respectively, and in central New South Wales between the Cadia-Ridgeway gold-copper and Lucknow gold deposits.

In all of these projects the work of previous explorers has identified, but not taken advantage of, the opportunity to move the project forward with concomitant increase in value. Each of them is centrally located in a region with substantial recognised gold endowment, and both historic and modern gold production. Each region, and our tenement areas in particular, have received little exploration attention in recent times. We look forward to bringing fresh insight to the advancement of all of these projects, and the potential each holds for new discoveries.

We see these cornerstone projects as the foundation upon which we can build an enduring and expanding business which yields value through exploration success and ultimately, profitable mining.

We also envisage building the Company's portfolio of projects by strategic acquisitions within our chosen regions and elsewhere.

The information contained in this Prospectus is very important. I urge you to read it carefully, and to seek your own advice before making any investment decision. My fellow Directors and I look forward to welcoming you as a shareholder in Australasia Gold Limited.

Yours sincerely,

A. R. Doberts.

John Roberts Chairman

John Roberts Chairman Australasia Cold Fimited

The information contained in this section is not intended to be comprehensive and should be read together with more detailed information appearing elsewhere in this Prospectus.

$1.1$

SHARES AND OPTIONS OFFERED FOR SUBSCRIPTION

Australasia Gold Limited is offering for subscription 15 million Shares at a price of \$0.20" each payable in full on application (the "Planned Offer"). Shares will be issued together with one free Option for each two shares issued to subscribers pursuant to this Prospectus. The Options are exercisable at \$0.20* on or before 30th June 2008.

Newly issued Shares and Options will rank equally in all respects with all other existing shares and options on issue. The rights and liabilities attaching to Shares and the terms of the Options are summarised in Sections 9.1 and 9.2 of this Prospectus.

Directors of the Company reserve the right to accept oversubscriptions of up to \$500,000° in the event that Applications received by the Company exceed the amount of the Planned Offer. The minimum subscription pursuant to the Offer is \$2.5 million (Section 1.9).

Applications can be made by completing the Application Form attached to this Prospectus in accordance with the instructions set out on the back of the form, and as described in Section 1.5 ("How to Apply").

The Company reserves the right to reject any Application or to allocate to applicants fewer Shares than the number applied for.

$1.2$ OFFER PERIOD

Subscription lists will open on the Opening Date 14 November 2005 and will remain open until 5.00pm CST on the Closing Date 9 December 2005 subject to the right of the Company to close the Offer before that date or to extend the Closing Date without prior notice. Investors are therefore encouraged to lodge Applications as soon as possible after the Opening Date. However, if ASIC extends the statutory Exposure Period beyond 7 days from 4 November 2005, then the Opening Date of the Offer will be deemed to be the Business Day following the last day of the extended Exposure Period.

$1.3$ PURPOSE OF THE OFFER AND USE OF FUNDS

The purpose of the Offer is to provide the Company with sufficient funds for the continuation of exploration, feasibility studies and mine development on the Company's tenements, and for the acquisition of additional projects, as described in Sections 3 and 4 of this Prospectus.

The Board is satisfied that if the Offer achieves at least the minimum subscription the Company will have sufficient funds to carry out its major stated objectives.

In this Prospectus all dollar amounts are expressed as Australian dollars unless otherwise stated.

New Zealand investors' applications can be accompanied by NZ\$ denominated cheques - see Section 1.5.2 "New Zealand Investors" for details

$1.4$

CAPITAL STRUCTURE

The proposed capital structure of the Company at the completion of the Issue will be as follows:

	Planned Offer: \$3.0 million		Minimum: \$2.5 million
	Shares	Options	Shares	Options
Property Acquisition	8.033.333	4.016.667	8.033.333	4.016.667
Proractors ²⁰	6.151.161	4894859	6.161.161	4 894.859
Promoters Entitlements ²	350.557	689.785	350.557	654 785
Shares and Attaching Options to be offered persuant to the Offer-	15.000.000	7.500.000	12.500.00	5.250.000
t33	29.545.051	17101314	27.045.051	15.816.311

In addition 6 million "Premissm Options" have been issued to the vendors. Specifically, three tranches each of 2.000,000 Options with specific expiry dates and exercise prices, namely 3 years after listing date exercise price \$0.40; 4 years exercise price \$0.60. and 5 years exercise price \$0.80. Details in Material Agreements (Section 9.6.5 of this Prospectus).
Promoters include subscribers of seed capital, current and former Directors and Officers and certain consultants. Directors have entered into agreements with the Company to accept Shares and Options in lieu of cash for directors fees and other services provided to the Company. Baron Partners and Cameron Stockbrokers are entitled to receive Options. possoant to their agreements with the Company. The issue of such Shares and Options is contingent upon the Company's listingon ASX. Details in Material Ageements, Directors' Interests and Related Party Transactions (Sections 9.6, 9.7 & 9.14).

The subscription of the allowable \$0.5 million in over subscriptions would result in the issue of an additional 2.5 million Shares and 3-25 million Ootions

$1.5$ HOW TO APPLY

$1.5.1$ Australian Investors

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Applications must be for a minimum of 10,000 Shares at the application price of \$0.20 per Share (\$2,000.00). Applications for more than 10,000 shares must be in multiples of 1,000 Shares.

If you wish to participate in the Offer you may apply:

By completing the Application Form accompanying this Prospectus in accordance with the instructions set out on the reverse of the Application Form. Additional Copies of the Prospectus and Application Form can be obtained from the Company or downloaded from the Company's website at www.australasiagold.com.au; or
by applying online and lodging subscription funds via BPAY®, through the Company's website (www.australasiagold.com.au). For more details refer to page 134.

In addition to applicants being able to download the Prospectus, the Company will send upon request a paper copy of the Prospectus and Application Form free of charge during the period for which the Offer is open. Application forms must not be circulated to prospective investors unless accompanied by a copy of this Prospectus.

Applications must be accompanied by payment in full for the Shares applied for. Payment other than for online Applications, must be by a cheque or bank draft payable in Australian dollars drawn on an Australian registered bank for the amount of the Application Monies being the number of Shares applied for multiplied by the application price of \$0.20 per Share. Cheques or bank drafts should be made payable to "Australasia Gold Limited Float Account" and crossed "Not Negotiable".

All Applications should be forwarded to Computershare Investor Services Pty Ltd, GPO Box 1903, Adelaide, South Australia 5001, or Level 5, 115 Grenfell Street, Adelaide, South Australia 5000, so that they are received by the Company no later than 5.00pm CST on the Closing Date.

Detailed instructions on how to complete an Application appears on the back of the Application Form. The Company will hold all application money received from investors applying for Shares under this Prospectus, and all other money paid by investors in respect of the Shares, in trust on behalf of the investors until the Shares are issued. If an Application for Shares cannot be completely or partially accepted, application money held in respect of the Shares that have not been issued will be returned to the applicant as soon as practicable without interest.

$1.5.2$ New Zealand Investors

A New Zealand Investment Statement has been prepared in connection with the Offer. The New Zealand Investment Statement can be obtained from the Company's website (www.australasiagold .com.au), or on request from the Company or the share registry.

Applications must be accompanied by payment in full for the Shares applied for. Applications must be accompanied by a cheque or bank draft payable in New Zealand dollars drawn on a New Zealand registered bank for an amount equal to the Application monies being the number of Shares applied for, multiplied by the application price of approximately N2\$0.22 per Share. The actual N2\$ price per Share will be determined by the Company on the Closing Date by multiplying AU\$0.20 by the NZ\$/AU\$ exchange rate offered to it by its bankers at 11 am or such other time as the Company in its absolute and sole discretion determines on the Closing Date. Cheques or bank drafts should be made payable to "Australasia Gold Limited Float Account" and crossed "Not Negotiable".

For the purposes of ascertaining the N2\$ application amount to accompany their Application Forms ("the N2\$ application amount"), New Zealand investors should multiply the number of the Shares applied for by NZ\$0.22 (i.e. NZ\$2.200 per 10.000 shares applied for). The number of Shares able to be allotted to successful New Zealand applicants will be determined by dividing the NZ\$ application amount by the actual NZ\$ price per Share determined on the Closing Date and rounding it down to the nearest whole number of Shares.

All Applications should be forwarded to Computershare Investor Services Pty Ltd. GPO Box 1903. Adelaide, South Australia 5001, or Level 5, 115 Grenfell Street, Adelaide, South Australia 5000, so that they are received by the Company no later than 5.00pm Australian CST on the Closing Date.

By way of example only: a successful applicant encloses a cheque for N7\$2,200 with his/her Application. The N7\$7AU\$ exchange rate offered to the Company by its bankers on the Closing Date is NZ\$1.06 / AU\$1.00. The actual NZ\$ price per Share is equal to NZ\$0.212 (being AU\$0.20 x 1.06). The number of Shares allotted to the successful applicant is 10.377 (being NZ52,200 / NZ50,212 rounded down to the nearest whole number of Shares).

The BPAY® facility (Section 1.5.1 and page 134) is available to investors drawing application monies from an account at an Australian branch of an Australian bank.

$\mathbf{b}$

No refunds will be provided to New Zealand investors where, as a result of rounding the number of Shares to be issued down to the nearest whole number of Shares, the NZ\$ application amount exceeds the NZ\$ amount credited in respect of the Shares (in any event such excess amount will not exceed AU\$0.20 per investor).

NZ investors should also note the general instructions to Australian Investors (See Section 1.5.1 above) regarding availability of funds, completion of Application Form, and handling of funds subscribed, which apply equally to New Zealand Investors.

$1.5.3$ Other Overseas Investors

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer of invitation. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the securities, or the Offer, or otherwise to permit a pubic offering of the securities, in any jurisdiction outside Australia and New Zealand.

The Offer pursuant to an electronic Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia and New Zealand (provided it is accompanied by the New Zealand Investment Statement referred to in Section 1.5.2).

RISK FACTORS $1.6$

The Shares offered by this Prospectus should be considered speculative in nature. Risk factors which should be considered in relation to an investment in the Company are set out in Section 8.

This Prospectus provides information to potential investors in Australasia Gold Limited and should be read in its entirety. If after reading this Prospectus you have any questions about any aspect of the Offer or investment in the Company, you should consult your stock broker, accountant or independent financial adviser before lodging your Application Form.

A New Zealand Investment Statement has been prepared in connection with the Offer. The New Zealand Investment Statement can be obtained from the Share Registry, the Australasia Gold website or the office of Australasia Gold (contact details: see inside front cover of this Prospectus).

$1.7$ ASX LISTING

Application will be made to ASX within seven days of the date of this Prospectus for the Company to be admitted to the Official List of ASX and for official quotation of the Shares and the Options. The fact that ASX may admit the Company to its Official List is not to be taken as an indication of the merits of the Company or the Shares and Options being issued. ASX, its officers and employees take no responsibility for the contents of the Prospectus or the reports that it contains.

If application for official quotation is not made within seven business days after the date of this Prospectus or permission for official quotation is not granted by ASX within three months after the date of this Prospectus, none of the Shares and Options offered under the Prospectus will be aflotted. If no allotment is made, all Application monies will be refunded without interest to Applicants within the time period prescribed under the Corporations Act.

$1.8$ CHESS AND ISSUER SPONSORSHIP

Upon being admitted to the Official List of the ASX and in accordance with the Listing Rules and the ASTC Settlement Rules, the Company will participate in the CHESS system for the clearing and settlement of transactions in the Company's Securities; the transfer of the Company's Securities; and for the registration of transfers of the Company's Securities.

Investors will have the choice of holding their Shares in the Company on an issuer sponsored sub-register or on the CHESS sub-register.

Investors electing to use the issuer sponsored sub-register will be issued with holding statements setting out the number of Australasia Gold Shares and Options they hold. Participants in the issuer sponsored sub-register system will receive a Shareholder Reference Number (SRN).

Investors electing to use the CHESS sub-register will receive a letter from the Company confirming the number of Shares and Options issued to them and at the end of the month following allotment of the shares will receive CHESS holding statements confirming the number of Shares and Options that have been allotted. The Company will not be issuing Share or Option certificates. Participants in the CHESS sub-register will receive a Holding Identification Number (HIN).

Investors will receive a CHESS or issuer sponsored holding statement (depending on the sub-register elected) at the end of each month during which there is a transaction affecting the holding of the investor's Shares and Options.

1.9 ISSUE OF SHARES

The Minimum Subscription is 12.5 million Shares or \$2,500,000. No Shares will be allotted until the Minimum Subscription has been reached. If the Minimum Subscription has not been received by the Closing Date of this Prospectus the Company will refund all subscription monies received. No interest will be paid on monies refunded.

The Company retains an absolute discretion in allocating securities under the Offer and reserves the right to accept any Application in whole or in part, or to reject any Application. Application monies will be held in trust on behalf of Applicants until Shares are issued. Where Applications are rejected or fewer Shares are allotted than applied for, surplus Application money will be refunded without interest.

It is the responsibility of Applicants to determine their allocation prior to trading in Shares and attaching Options. Applicants who sell Shares or attaching Options before they receive their holding statement do so at their own risk.

$1.10$ RESTRICTED SHARES

Shares and Options issued prior to the Offer may be subject to the restricted securities provisions of the Listing Rules. Consequently a proportion of such securities, to be determined by ASX, may be required to be held in escrow for a period of time, as determined by ASX.

Prior to quotation, it will be necessary for the holders of the securities affected to enter into restriction agreements with the Company. The effect of the restriction agreements is that the restricted securities cannot be dealt with during a period to be determined by ASX. See Section 9.14 for details.

$1.11$ BROKER TO THE OFFER

The Offer is not underwritten. The Company has an agreement with Cameron Stockbrokers Limited to act as broker to the issue. The agreement is sumerised under Material Agreement in the Additional Information section of the Prospectus. Once the minimum subscription amount has been achieved, commissions of up to 5% will be payable by the Company to other supporting stockbrokers on amounts raised. No stamp duty, brokerage or commission is payable by applicants for Shares under this Offer.

Directors and

DIREGIORS AND TO SE SE THE SET THE SET OF ST

John Roberts BSc, FAusIMM Chairman (non-executive)

John Roberts is a geologist with 48 years experience in the mineral exploration and mining industries in Australia and in the US. During that time he has been involved in a number of new mine developments and re-developments. John was responsible for Homestake Gold of Australia Limited's activities from 1977 to 1993 and served as Managing Director from 1987 when the company listed on the ASX.

Mr Roberts was Chairman of Directors of Ballarat Goldfields NL, an ASX listed gold exploration company, from mid 1997 to October 2002. He was also Chairman of Directors of Australian Resources Limited from 1993 to 1997 and a Director until early 1999. He served as a Director of Nord Pacific Limited from 1994 to early 2004 and as Chairman of that company for the last two years of his term as a Director.

John Roberts is currently Chairman of Directors of Mithril Resources Ltd, an Adelaide-based. ASX listed nickel exploration company. He is also President of the South Australian Chamber of Mines and Energy, an ex-officio member of the South Australian Minerals and Petroleum Expert Group (whose members promote investment in the SA resources sector) and Chairman of the Discipline of Geology and Geophysics Industry Liaison Committee, University of Adelaide.

Troyor troland

Trevor Ireland BSc (Hons Ec Geol), MSc, FAuslMM CP, MMICA, GAICD Managing Director

Trevor Ireland was for almost 20 years an exploration executive with North Flinders Mines Limited and then Normandy Mining Limited. He has extensive managerial experience in regional and advanced exploration projects, estimating resources, managing joint ventures and working in Aboriginal Land in a career spanning more than 30 years. He has been associated with a number of mineral discoveries, economic evaluations and mine developments in the Tanami Desert region of Northern Territory, Western Australia and West Africa.

He was for 5 years an Executive Director of Normandy NFM Ltd, for one year a Non-executive Director of East African Gold Mines Ltd and currently serves as a Non-executive Director of NuStar Mining Corporation Limited.

He is Chairman of the Adelaide Branch of the Australasian Institute of Mining and Metallurgy and is a member of the panel which evaluates submissions to the SA Government's "PACE" drilling subsidy initiative.

ET ALTER ALTERATIV

Norton Jackson

Michael Billing

Norton Jackson AM, FTSE, ME Director (non-executive)

Norton Jackson has diplomas and degrees in mining, metallurgy and applied chemistry from Adelaide University and a Masters of Engineering degree from the University of Melbourne. He has served in milling, mining and mineral research operations in Australia and Fiji, and worked in the management of the American Cyanamid Company in Asia, Europe and North America for 20 years.

Mr Jackson has served on the Boards of numerous mining companies and academic and research organisations including Aberfoyle Limited, Poseidon Ltd, Australian Mineral Development. Laboratories Australian Mineral Foundation and University of South Australia. He is a Member in the Order of Australia and a Fellow of the Australian Academy of Technical Sciences and Engineering.

Michael Billing BBus, ASA Director (non-executive) and Company Secretary

Mick Billing is an accountant with over 25 years of mining industry experience in company secretarial and chief financial officer roles, including extensive periods in senior accounting and commercial roles with Bougainville Copper Ltd and WMC Resources Ltd. He has had experience with debt and equity raising and project evaluation and feasibility studies in Australia and overseas.

He is a director and company secretary of Southern Gold Ltd and Company Secretary of Flinders Diamonds Limited and Australian Orthopedic Innovations Limited.

$-13-$

The Company

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$3.1$ THE CONFANY

Australasia Gold aims in the short-medium term to develop into a mid-ranked Australian based gold producer and explorer. The initial portfolio comprises wholly-owned projects in three regions, two of which have the potential to move quickly towards production following quite limited programs of exploration. The Board also envisages building the Company's economic base by strategic acquisitions and successful exploration, within its selected regions and elsewhere. The experience of board members in corporate management, exploration and mine development, corporate finance and project management effectively equips the Company to recognise and secure economically robust projects.

The initial projects are located in the Otago (South Island, New Zealand), Pine Creek (Northern Territory) and Lachlan (New South Wales) regions. Gold deposits already identified in the Company's tenements, the gold endowment and the productive history of each of these regions imply potential for future discoveries. Exploration success will create a foundation for the growth over time of a robust, respected, profitable gold mining and exploration company.

In addition to developing and mining gold deposits, Australasia Gold has been formed to capture the value added by successful gold exploration. In a world where the major gold mining companies have dramatically reduced their commitment to greenfields exploration, the board believes there is a niche for a specialised exploration company to generate prospects and project opportunities. Competition between mining companies to acquire an interest in such projects can result in premium pricing and superior shareholder returns. Potential exists to generate cash returns, to grow value as the value of interests retained in partially divested projects increase, and to create opportunities to conduct ongoing exploration funded by partner companies. Australasia Gold aims to take advantage of these opportunities.

The Board envisages the creation of value for shareholders:

by adding value to the Company's existing projects through successful exploration, and the conduct of mining operations where economically justified;
$\ddot{\bullet}$ by the realisation of value created by successful exploration, to generate returns which will fund ongoing exploration; and
by broadening its portfolio of projects through the addition of appropriate new projects with production and exploration potential in areas of relatively low sovereign risk.

The board envisages, subject to satisfactory completion of feasibility studies, the generation of early cash flow during the second year, through the commencement of production from the Glencoe gold deposit in the Pine Creek region of the Northern Territory.

At each of Wetherstones (Otago region, evaluation of mineralisation), Glencoe (Pine Creek region, pre-production), and Lucknow (Lachlan region, exploration), the work of previous explorers has created, but not taken advantage of, the opportunity to add significant value to the project. Exploration models to be tested in exploration tenements in proximity of Wetherstones and Glencoe bring new approaches in regions well endowed with gold mineralisation, but underexplored in recent times. The Board believes that each of these projects can be successfully advanced, forming the foundation of a mining enterprise and more extensive regional exploration projects in each of these regions.

$3.2$ CORPORATE GOVERNANCE

The Board undertakes to complement its commitment to technical excellence in exploration and mining operations by the adoption of the highest practicable standards of corporate responsibility including financial probity, occupational health and safety of its personnel and the public, respect of the interests of co-stakeholders in the land upon which it operates and minimization of environmental impacts of its activities. For more detail, see the Additional Information Section 9.15 of this Prospectus.

$3.3$ STRATEGY

Australasia Gold has a clear vision of the standards and principles which will underpin all its activities and decision making. These include:

Active exploration programs. Australasia Gold will direct the majority of its funds into field programs as outlined in the following section. The field programs all involve drilling immediately or at an early stage. Active staged programs will ensure each successive phase is well iustified by the results of the preceding phase. We passionately believe that high quality geological input into exploration decision making results in more quality discoveries and optimises costs. Simultaneously, regional studies and the assessment of commercial opportunities will ensure that the Company is well placed to make strategic acquisitions.
Technical excellence, insight, and innovation to create opportunities. Applying the in-depth knowledge which has marked board members' individual career successes will give Australiasia Gold the maximum chance to create opportunities and to excel in area selection, exploration projects and successful mine development and operations. Gold is exceptional amongst the metals for the variety of settings in which it may occur within a productive region. Australasia Gold will build its expertise in relation to the potential gold occurrence in its focus regions. These may be dissimilar to the deposits known and previously targeted by other exploration programs within such regions. Where targets are identified outside the Company's tenements, acquisitions will be initiated.

Two excellent "company-making" examples of the kind of discoveries to which Australasia Gold aspires are provided by the Callie orebody in the Tanami region of Northern Territory (discovered by North Flinders Mines Ltd), and the Ridgeway orebody, situated close to Cadia, N.S.W. (discovered by Newcrest Ltd). Both these orebodies are economically superior by an order of magnitude to the deposits previously known in the regions concerned. Their discoveries resulted from the application of innovative geological insights to ongoing exploration programs, and support by board and management of the exploration proposals concerned.

Australasia Gold aims to be an in-depth, expert operator in carefully selected prospective regions, where it will evaluate a wide range of opportunities. It will conserve funds by the effectiveness of its targeting and the exploration methods applied, and will redirect those initiatives which do not yield progressive encouragement. The Board regards as a core strength, its ability to correctly make decisions about exploration and development at a relatively early stage, thereby optimizing the application of shareholders' funds within existing projects and in selecting targets for acquisition.

Each of the gold fields we have chosen to explore has the potential to reward innovative research by the discovery of new, concealed deposits possibly of different geological style and setting than those presently known in the regions concerned, and the Company will progressively target these. In particular our exploration models include:

in the Otago (NZ) gold field repetitions of the palaeoplacer gold of Wetherstones style, and $\bullet$ concealed primary gold-bearing fodes in basement rocks;
in the Pine Creek (NT) gold field analogues of the gold deposits of the Tanami region (especially Callie), where concealed by alluvium or younger rocks; and
in the Molong Volcanic Belt (NSW) structurally controlled gold and copper-gold deposits of $\bullet$ diverse style concealed beneath a veneer of younger volcanic rocks.

$3.4$ PROGRAM AND RISDGET

The Company's proposed program of work is detailed in Section 4.6 of this Prospectus. In summary, it comprises (assuming the subscription of \$3.0 million):

	Vear 1	Year 2
		(Subject 1st Year Results)
OTAGO PROJECT
Wetherstones (drilling & permitting)	\$390.000	\$400.000
Regional Exploration	\$120,000	\$105,000
PINE CREEK PROJECT
Glencoe (drilling & feasibility)	\$370.000	\$120,000
Regional Exploration	\$200.000	\$150.000
LACHLAN PROJECT
Exploration (drilling geochemistry)	\$105,000	\$50,000
NEW PROJECTS
Evaluation	\$ 50.000	\$50.000

In the absence of encouragement, funding will be redirected to higher priority targets or to new projects.

$\mathbf{p}$

$-17$ $-$

4.1 ASSETS AND PROJECTS OF THE COMPANY

Australasia Gold owns three regional projects:

In the Otago goldfield in the South Island of New Zealand the Wetherstones gold deposit and associated exploration tenements. Targets are relatively high grade palaeoplacer deposits with up to 1 million ounces of contained gold and primary lode gold deposits of medium grade and up to several million ounces of contained gold.
In the Pine Creek gold province in the Northern Territory the Glencoe gold deposit and associated exploration tenements. The Company aims to generate early cash flow by mining the Glencoe gold deposit (subject to feasibility) and to discover lode and Callie-style gold deposits of medium grade and multi-million ounce magnitude in the extensions of Glencoe and at shallow depth elsewhere.
In the Lachlan Fold Belt, New South Wales the Lucknow Exploration Licence. Targets indicated by deposits in the district range from vein mineralisation containing hundreds of thousands of ounces at high grade to the multi-million ounce stockwork deposits of lower grade.

The projects are more fully described, and the Company's proposals assessed, in the Independent Consulting Geologist's Report, Section 5 of this Prospectus.

$4.2$ CTAGO PROJECT, NEW ZEALAND

Regional Setting

The Otago region of New Zealand's South Island has produced at least 8 million ounces of alluvial gold. The +5 million ounce Macraes gold deposit is thought to typify the primary source of the alluvial mineralisation and is the model for the Company's primary gold targets.

New Zealand has experienced a dynamic geological history due to its position at the junction of two oppositely-moving crustal plates.

The progressive uplift of gold-bearing schist basement has fed the deposition of auriferous alluvial deposits since the end of the Cretaceous Period, some 65 million years ago. Some of the earliest deposited alluvials have been uplifted, and subsequently eroded and reworked into younger alluvial deposits, while others have been tilted and downfaulted, and thereby protected from subsequent geological dismemberment.

Wetherstones Gold Deposit

The Wetherstones alluvial deposit extends from surface to a depth of more than 100m below ground surface. Its basal unit, the so-called Blue Spur Conglomerate ("BSC"), is variably cemented and is gold-enriched compared to the body of overlying alluvial material. Covering approximately 5 sq km, the Wetherstones conglomerate is the most extensive of several such sedimentary sequences preserved in the area.

$19^°$

$4.2$

OTAGO PROJECT, NEW ZEALAND / Wetherstones Gold Deposit continued

Location of Gold Deposits and Australasia Gold Projects in the Otago Region.

In the adjacent Gabriels Gully, just 3 km north west of Wetherstones, the BSC was the source of the gold of the first major gold discovery made in the Otago alluvial gold province, in 1861.

The subsequent rush to the Gabriels Gully & Wetherstones fields yielded, at its peak, a recorded 200,000 ounces of production in 1862 alone, and a reported aggregate overall production from Blue Spur sources of significantly more than 500,000 ounces of gold.

Exploration Permit EP 40 664 and surrounding Prospecting Permit PP 39 265 cover the area of the old Wetherstones gold mine, and its down-dip extensions, which have not been systematically mined, nor fully explored.

Remnant of Blue Spur Conglomerate (BSC) in Gabriels Gully.

$\overline{a}$

$\sim$

EN EN LANDER HANDELD OG DET ELLER FRA STANDARDEN.
1990-1991 – DE FRANKE HANDELD OG DET ELLER FRA STANDARDEN.

The near-surface alluvial deposits at Wetherstones were intermittently mined during the 19th and 20th centuries by classical alluvial techniques. There are a number of accounts of relatively shortlived attempts to mine the down-dip extensions of the basal BSC by underground methods. These terminated for various technical reasons, and not because of exhaustion of the gold lode. In 1929-30 an inclined tunnel was excavated along the basal contact to a depth below surface of about 100m. (See Figures 4 & 5, Independent Geologist's Report, Section 5.3.1 of this Prospectus)

These underground excavations provide invaluable information on the economic potential of the deposit and mining conditions which might be encountered

Exposure of Blue Spur Condiomerate (BSC) at Wetherstones.

by a modern open cut miner. If the grade and width of mineralisation indicated by sampling results from the incline were to be representative of one kilometre of palaeochannel, that part of the deposit would contain approximately 200,000 tonnes of mineralised conglomerate with approximately 120,000 ounces of contained gold. Potential is inferred for the existence of several kilometres of channel in the subsurface of the Wetherstones basin.

Exploration by Otago Gold Limited

Drilling by Otago Gold totalling 37 holes of average 28m depth helped to define the distribution, grade of contained gold, and quite variable thickness of BSC around the northern margin of the basin.

The drill samples also confirmed the discovery of variably auriferous pyrite in parts of the BSC. Although pyrite comprises only a small percentage component of the rock, pyrite extractions evaluated by Dominion Laboratories in 1931, and by Otago Gold in 1997 yielded up to 30 ounces of gold to the tonne (of pyrite). Pyritic gold may significantly increase the total gold recoverable from the Wetherstones deposit, but has not been considered in previous economic assessments of the deposit.

Exploration of Extensions

The Gabriels Gully Prospecting Permit PP 39 265, of approximately 95 sq km surrounds the Wetherstones Exploration permit. It enables the Company to evaluate the potential of a 15 x 5 km belt of country containing extensions of the Wetherstones sedimentary basin, and additional strike extensions of the BSC depositional environment, and concealed basement structures prospective for primary mineralisation.

Additional land access agreements will be required with landholders affected by proposed exploration and any future mining activity, both at Wetherstones and in the Prospecting Permit areas.

$-21-$

$4.2$

OTAGO PROJECT. NEW ZEALANO CONTINES

Otago Regional Exploration Projects

Australasia Gold holds Prospecting Permits PP 39 264 and PP 39 266 in the St Bathans area (250 sq km) and the Buster-Naseby area (460 sq km) respectively and Exploration Permit PP 40 711 (597ha) Waikerikeri located just northwest of Alexandra. They cover significant past production centres in the northern Otago alluvial gold province. St Bathans in particular is renowned as the source of almost 150,000 ounces of recorded historical gold production, much of it from an alluvial channel of recorded grades up to approximately 30 g/t gold *. According to contemporary reports and more recent drilling, the channel continued to depth beyond the capability of then available mining technology and infrastructure.

At Waikerikeri, very limited drilling by Otago Gold demonstrated that high grades of alluvial gold remain in place, including best intersections of 3m @ 4.8 g/m³ (2 g/t gold") and 8m @ 0.5 g/m³ (0.2 g/t gold*) within 20m of surface.

As significant former production centres, all these areas retain potential for the discovery of shallow blind alluvial deposits and primary gold mineralisation.

Program for the Otago Projects

During the first year the Company proposes to commence a staged drilling and geophysical program designed to confirm the Wetherstones geological model and demonstrate the economic potential of the deposit, and ultimately to enable resources to be estimated as a part of feasibility studies. If warranted by results, a feasibility study will be undertaken in the second year.

The program for the three Prospecting Permits and Waikerikeri during the first year will comprise mainly the compilation of existing geological, exploration and mining records, supported by field prospecting. This information will be used to plan a properly targeted program of reconnaissance including drilling commencing in the second year.

Farintand in Wetherstones valley above the gold deposit.

The grade references in historic literature use the alluvial miners' terms and units - weight of gold per volume of rock (eq g/m3). The conversion to more familiar hard rock miners' terms - weight of gold per weight of rock (q/t) - depends on the density of the rock, typically in the range two to three, so the grade in g/m³ will be 2-3 times greater than the equivalent grade in g/t. 1,000 milligrams (mg) = 1 gram.

$22$

$\sim$

PINE CREEK PROJECT. NORTHERN TERRITORY

Regional Setting

The Pine Creek Inlier is an area of mostly sedimentary rocks dating to the Early Proterozoic Era (approximately 1,800 million years ago). It is one of a number of such sedimentary basins of similar age, geological history and gold endowment.

The Pine Creek Inlier is recognized in "The Geology of the Mineral Deposits of Australia and Papua New Guinea", as the Australian Proterozoic basin with the greatest number of deposits containing more than 3 tonnes (100,000 ounces) of gold. In particular the gold deposits of the Tanami and Pine Creek regions have many characteristics in common. Anticlinal structures and persistent shear zones are major hosts. In the Company's view the Pine Creek region displays all the key geological characteristics thought to be associated with gold deposits of the style, scale and grade of the + 5 million ounce Callie gold deposit in the Tanami region.

The most prospective host rocks of the Pine Creek Infier occur over much of the area of Australasia Gold's tenements, at surface and at relatively shallow depth, but are often concealed by shallow transported overburden. The overburden has inhibited their effective exploration.

The Pine Creek Project

Australasia Gold's Pine Creek Project includes a block of mineral claims covering the Glencoe gold deposit, tenements covering four satellite gold occurrences (plus extensions) in reasonable proximity to Glencoe, and a joint venture right to explore for and mine gold in prospective adiacent areas.

Past exploration expenditure at Glencoe alone exceeds \$2.1 million.

Glencoe Deposit

The total of measured, indicated and inferred resources at the Glencoe deposit has been estimated as approximately 1.5 million tonnes (Mt) averaging 1.9 grams/tonne (g/t), containing approximately 90,000 ounces of gold, to 100m depth. The estimate was prepared in accord with the then current provisions of the JORC Code. The deposit displays many features characteristic of the quartz-vein hosted style of mineralisation which is particularly widespread in the Pine Creek Inlier (e.g. Enterprise, Union Reefs, Toms Gully, Woolwonga and Zapopan). The production histories and current resources of these deposits show the potential of this ore style to develop significant bodies of better grade. For example: Toms Gully (resources + production approximately 2.5 Mt averaging 8-9 g/t gold), Zapopan (resources approximately 0.3 Mt averaging 15 g/t gold) and Cosmo Howley: (7.5 Mt averaging 4.3 g/t gold - i.e. more than 1 million ounces, including a higher grade component of 2 Mt in excess of 6 g/t).

4.3 PINE CREEK PROJECT, NORTHERN TERRITORY / Glencoe Descalt continued

Bulk Sampling Pit Wall, Glencoe West Zone, showing anticlinal structure, alteration and mineralised shearing of host metasediments.

The Glencoe deposit was drifled to a maximum depth of 100 metres, and bulk sampled during the 1980's. Some 70,000 tonnes of ore are recorded as having been excavated from four shallow trial pits. The records reveal the recovery of 37% more tonnes than was contained in the relevant part of the detailed resource model, without dilution of the estimated grade. From this it may be inferred that the resource estimate is conservative as to tonnage, while the grades predicted from drilling and gold recovery from oxidised ore were validated by the trial. Details are reported in the Independent Geologists Report (Section 5.4.2.) Only preliminary metallurgical tests were made on primary mineralisation, with variable results.

Each of the four shoots which make up the Glencoe resource remains open at depth, particularly in the easterly down plunge extension direction.

The Redbank Mineral Claim located three km to the west of Glencoe shows high gold values in the near surface gossan zone of an apparently stratabound gold occurrence (e.g. a costean intercept of 8m averaged 10.9 g/t gold, and a shallow drillhole intercept of 8m averaged 19.3 g/t gold). Limited reverse circulation (RC) drilling failed to locate the immediate extensions of this mineralisation.

Feasibility Considerations

It is the Board's view that changes in mining and processing technology, gold price and cost structures since the original evaluation, and the exploration potential of the deposit, warrant a new feasibility study. Glencoe is situated in close proximity to all-weather road access and other regional infrastructure and services which should facilitate mining efficiency and cost management.

In order to determine how much of the Glencoe resource may be economic to mine, metallurgical testing of primary mineralisation and geotechnical studies to optimize pit design will be required, as well as environmental investigations and other work preparatory to permitting.

Barring currently unexpected developments in the feasibility investigation phase, and subject to the satisfying itself as to the profitability of mining and the availability of toll milling capacity, the Board anticipates Australasia Gold could be ready to commence production from the Glencoe deposit within 12 months of listing.

$24 -$

EN EN ETA EN EN EN EN EL EL EL EL EL EL EL EL EL EL EL EL EL

22344

Location of the Pine Creek Inlier, major gold deposits and Australasia Gold Project Areas.

Pine Creek Exploration

Blocks of Mineral Leases cover each of Johns Hill, Star of the North, Great Northern and Great Western gold deposits. EL 24142 covers the strike extensions largely beneath alluvial cover of the mineralised structures hosting these deposits and other gold deposits in the district.

A joint venture with Softwood Plantations Pty Ltd in the McKinlay area approximately 30 km east of Glencoe grants to Australasia Gold a 100% interest in any gold mineralisation discovered in two exploration licences EL's 22301 & 23824.

All of these areas are located within trucking distance of Glencoe. Most contain relics of historic mining. All contain features which are elsewhere associated with the major gold deposits of the region. Much of the area is concealed by blacksoil plain, diminishing the effectiveness of the reconnaissance previously undertaken by prospectors and explorers. The Company regards the areas as highly prospective for thinly concealed structurally controlled gold deposits of the Pine Creek - Tanami style.

$-$ 25 $-$

$4.3$

PINE CREEK PROIECT, NORTHERN TERRITORY continued

Program for the Pine Creek Project

As soon as practicable after listing, the Company will commence a program to complete the feasibility study of mining at Glencoe, including drilling, dump sampling, metallurgical testing, detailed mine planning, and the estimation of ore reserves. Exploration drilling will target the intersection of mineralising structures with deeper, more prospective stratigraphic horizons. Environmental studies which may be necessary for permitting purposes will also be undertaken.

Initial exploration work will be principally geological in nature, including detailed review of past exploration results, regolith studies and field reconnaissance. Field programs, including bedrock geochemical and IP geophysical surveys, prior to drilling will commence in the second year.

4.4 LACHLAN PROJECT, NEW SOUTH WALES

Regional Setting

The 100 km long Molong Volcanic Belt is a major element of the Lachlan Fold Belt. The 400-450 million year old volcanics, limestones, associated sediments and granitoid intrusions of the Blayney-Orange District are handsomely endowed with gold and copper-gold deposits of diverse style and geological setting

Location Map of major deposits, geological setting, and EL 6040.

The Lachlan River Transverse Zone is a west-northwest crustal dislocation which appears to have provided a conduit for igneous intrusions and mineralizing fluids throughout much of the region's geological history, and it encloses many of the better mineral deposits. It also encloses the much younger Mt Canobolas volcanic centre and its surrounding volcanic mantle. This thin sheet of volcanic debris today conceals the prospective rocks of the Molong Volcanic belt in the area of EL 6040.

$26 -$

$\mathbf{b}$ e

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b) $\mathbb{C}$ $\overline{\phantom{a}}$

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Relics of the Lucknow Mines in Lucknow Township*.

Some of the gold deposits in this suite of rocks and within 20 km of the Australasia Gold tenement include:

	• Cadia Ridgeway – Resources and Production = $+20$ million ounces of gold Porphyry gold-copper deposits
Browns Creek	- Resources and Production = $\div$ 1 million ounces of gold Skarn-hosted disseminated copper-gold deposit.
Lucknow	$-$ Production = $+$ 400,000 ounces of gold High grade gold in quartz-base metal sulphide veins

Forest Reefs $-$ Production = $+100,000$ ounces of gold

The exposure of three of these deposits at the margins of the blanketing volcanics, gives encouragement. that additional mineralisation may be concealed by the remaining basalt.

Lucknow Project

EL 6040 (82 sq km) covers rocks of the Forest Reefs Volcanics and associated sediments and intrusives in the area between the city of Orange and Cadia-Ridgeway and Browns Creek gold deposits. The EL is mostly covered by the Tertiary basalt blanket described above, which has inhibited exploration of the underlying Ordovician basement rocks.

Drilling within and to the west of the EL 6040 has indicated the thickness of volcanic material over much of its area is likely to be less than 50 metres. Windows of older volcanic-suite rocks exposed within the basalt area confirm a general thinning of the volcanic blanket to the south and east across the EL.

Magnetic surveys of the tenement area confirms the continuation beneath the basalt, of geology similar to that of the mineralized areas outside the area of basalt cover and consequently, prospectivity for deposits of similar styles as described above.

The depleted Lucknow Mine is held by a third party under Mining Lease Application (MLA 197 0.6 sq. km)

$27 -$

4.4 LACMLAN PROIECT. NEW SOUTH WALES / Lucknow Prolect continued

Previous exploration of the basalt-covered area has been limited. Surface geochernical surveys have successfully identified geochemically anomalous levels of gold, arsenic, copper, and lead in both the western and central parts of the tenement. Significant geochemical anomalies are also reported to extend across the western boundary of EL 6040 from the adjacent exploration licence.

Mineralised Prospects and Potential

The Summer Hill anomaly just north of EL 6040 contains weakly mineralized, altered intrusives potentially associated with a concealed porphyry system. The Huntley Prospect in the central area was drilled in 1995. Its source was narrow gold-copper vein mineralisation generally of the Lucknow style. Results are detailed in the Independent Geologist's Report (Section 5.5.5).

These discoveries confirm that the Ordovician rock suite is prospective beneath the basalt veneer.

Program for the Lachlan Project

The blanket of volcanic cover, combined with the major discovery potential and the diversity of target deposit style and setting of the project area requires that the exploration net is widely cast.

During the first year it is the Company's intention to conduct drill-reconnaissance of targets which can be identified from the existing magnetic data and geochemical database.

$4.5$ PROJECT ACOUISITIONS

It is a core part of the Company's strategy to broaden its interests by the acquisition of additional projects, either to increase its opportunities in regions in which it is already active, or as new regional initiatives.

The Company envisages and will target farmin or direct acquisition opportunities which would potentially accelerate its progress to producer status, particularly where we perceive under-exploited exploration potential. Targets therefore would include advanced projects with established reserves or resources and exploration potential, and pure exploration situations meeting key model critieria.

To these ends, the Company will maintain a project generation effort dedicated to identifying and evaluating such opportunities both within Australia and if appropriate, internationally. the Company will primarily target greater than 1 million ounce orebodies and systems.

The experience and connections of Directors provide a sound foundation for the Company to recognise and secure robust projects.

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4.6 PROGRAM AND RUDET

Introduction

The design and costing of programs to advance each of the above projects is tabulated below. In general the scheduling of expenditure assumes reasonably encouraging results in accord with the models outlined.

Objectives

The Board has established the following major performance targets for the Company following the successful raising of the funds sought in this Prospectus.

Wetherstones Project: In year 1, drilling to confirm the geological model of the deposit and to define its potential to contain greater than 400,000 ounces of gold at a grade greater than 5g/t gold. In year 2, infill and extensional drilling to enable the estimation of resources sufficient to support a feasibility study; plus environmental, metallurgical and engineering studies.
Glencoe Project: In year 1, completion of preparations for mining including feasibility studies and permitting activities; and commencement of exploration of depth extensions. In year 2, the establishment of profitable production and continued exploration for extensions.
Exploration Projects:
Otago and Pine Creek: compilation of exploration records and development of drill targets; initial geological and geochemical reconnaissance in preparation for wide-ranging geological, geochemical and geophysical reconnaissance exploration programs during year 2.
Lachlan: drill-testing of existing targets; reinterpretation of geophysical data and reconnaissance geochemical drill surveys.

Timing

It is planned (subject to the availability of contractors and seasonal conditions) that first drilling results will be generated from Glencoe in the first quarter, and from Wetherstones and Lucknow in the first half-year following listing.

The Company will progressively review the significance of results coming to hand, to optimise the allocation of funds to subsequent programs and the relative rates of advancement of the various projects. Where appropriate, joint venture partners may be sought who would contribute to continuing funding

$29$ -

$\mathcal{A}, \mathcal{B}$

PROGRAM AND BUDGET COMMUNIC

Other Matters

The programs are scheduled assuming that the targeted \$3.0 million is raised in full by the IPO. In the event that the funds raised are between the nominated minimum of \$2.5 million and \$3.0 million, the expenditure rate will be reduced accordingly on all projects. The working capital raised at the minimum subscription level will be sufficient for the Company to achieve its major objective in its two principal projects - to demonstrate the economic potential of the Wetherstones deposit, and to bring Glencoe to production-readiness, albeit with slightly increased risk associated with the decisions required to be made. If oversubscriptions of up to \$500,000 are accepted by the Company this will enable the program to be accelerated or the funds may be used for new project acquisition purposes.

Investors should note that subject to the Company's success in achieving its objectives outlined above, funds raised as a result of the Offer may be insufficient to sustain in the longer term, all ongoing activities of the kinds contemplated by the Board and described in this Prospectus. Therefore it is possible that the Company will, at some future time, need to raise additional finance by either share placement or issue, third party financing or joint venture arrangement in order to realize its objectives.

All dollar amounts in the following budget, and throughout this Prospectus, refer to Australian dollars unless otherwise specified.

Competent Person

The information in Sections 1 to 4 of this Prospectus that relates to exploration results, mineral resources or ore reserves is based on information compiled by T J Ireland who is a Fellow of the Australasian Institute of Metallurgy, and qualifies as a Competent Person as defined in the 2004 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).

Exploration Program and Budget

PROJECT	EXPLORATION PROGRAM COMPONENT	VEAR-1 BIDGET (S)	YEAR 2 BUDGET (S)	Marine Research for man a WA 22
OTAGO
Wetherstones	Preparatory work & exploration survey	80,000	70.000	20,999 5000
	Drilling & feasibility	310,000	330,000	250,000 379,000
TOTAL - Wetherstones		390.000	400,000	300. JUNIOR 19 44000
OTAGO
Regional	Access & target generation	60.000	35,000	54.001 25,000
	Drilling	60,000	70,000	60.000 Signa
1014L - Otago Regional		120,000	105,000	102200 22.00
PINE CREEK
Glencoe	Feasibility study	230.000	Self-funded	11 Mil. an and
			operations (if feasible)
	Extensions drilling	140,000	120,000	(0,000) 10000
TOTAL - Giencoe		370,000	120.000	215,00 100.OA
PINE CREEK
Regional	Target generation	45,000		45.000
	Drilling & geophysical and geochemical surveys	155,000	150.000	BOOT 10.000
TOM - Pine Creek
Regional		200.000	150.000	VA DELL' 100 M
LACHLAN
Lucknow	Drilling	105,000	50,000	72.OO 20,000
TOML - Lachlan		105,000	50.000	22.00 28.062

PROJECT GENERATION
New Project(s)	Identification & evaluation activities	50,000	50,000	30.000 10.000
IOIAL - Project Generation		50,000	50.000	20,000 stijdto

CORPORATE	Tenement office, corporate & IPO	575,000	315,000	29. OG 374 W

TOML - Corporate		575,000	315,000	255.860 995.000
GRAND TOTAL		1,810,000	1,190,000	240 O.O 1, MARIN
ВИДСЕТИИ EXPENDITURE			\$3,000,000	sa jing jum

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Independent Ceologists

Report

INDEPENDENT GEOLOGIST'S REPORT

29th August 2005

David Fielding Consulting Geologist

ACN 80 036 041 447

David C Fielding Bsc(Hons) MSc EAUSIMM (CP Geo) 6 Weldon Way City Beach WA 6014 $T_{\Omega}$ 08 9385 7588 Mobile: 0427-778-792

The Directors Australasia Gold Limited 13 Woodland Close Aldgate SA 5154

Dear Sirs.

INDEPENDENT TECHNICAL REPORT ON AUSTRALASIA GOLD LIMITED'S EXPLORATION PROPERTIES

The author, Dave Fielding ("the author") was commissioned by Australasia Gold Ltd (Australasia) by letter dated 29th September 2003, to prepare an Independent Geologist's Report on its mineral exploration properties. The author was not required to provide a valuation of the properties and this has not been done. The report was prepared by the author for inclusion in a Prospectus to originally to be lodged in early 2004. Lodgement of the Prospectus is now planned to be dated on or about 9th November 2005 for the issue of 15 million ordinary shares of \$0.20 each payable in full and one free option for every two shares. Australasia is seeking to raise \$3 million for the purpose of exploration, evaluation and development of its mineral properties.

This report is based on a desktop study of technical information carried out by the author in Adelaide and Port Lincoln, between the 1st and 25th of October 2003. A subsequent two day review with minor amendments to the report was carried out on the 29th and 30th August 2005.

The author has based this review on information made available by Australasia which included technical reports by previous workers, consultants' reports and other relevant published and unpublished information. Reasonable enquiries were made to confirm completeness of the information but no exhaustive search for all possible sources of information was made. Australasia has warranted to the author that it has made available all technical information known to it which is material to this report, and that no material new information has subsequently been acquired.

Australasia's mineral properties are grouped under 3 projects namely the Otago Project New Zealand (two Exploration Permits, and three Prospecting Permits), the Pine Creek Project (three Exploration Licences, nine Mineral Claims and fourteen Mineral Leases), and the Lachlan Project (one Exploration Licence).

A one-day trip was made to Sydney to complete enquiries into the Glencoe resource estimate.

No field inspections were carried out. In the author's judgement field visits were not warranted because:

Otago Project - The cornerstone of this project is the Wetherstones prospect. Information on this prospect is principally from old records and the target horizon is concealed. The available data included field mapping and a comprehensive review of mining and exploration records carried out for previous owners which has been relied upon by the author. The St Bathans, Waikerikeri and Mt Buster prospects were examined in the field and reviewed for Otago Gold in 1994-95 by a respected consulting geologist with expertise in alluvial gold deposits, who prepared detailed technical reports on each of these areas, which the author has relied upon.

Pine Creek Project - The cornerstone of this project is the Glencoe gold deposit. The area includes minimal outcrop and trial mining pits excavated by previous owners are partly filled with water. This deposit was discovered and evaluated throughout in a professional manner by a single company Magnum Gold NL through their consulting geologists Earth Resources Australia (ERA). Data quality was uniformly excellent. $/2$

$2/$

Lachlan Project - The entire project is in an area of basalt and soil cover with minimal outcrop

A large number of recent photographs taken by Mr Trevor Ireland for Australasia in August 2003, was available for each of the project areas.

This report has been prepared in accordance with the "Code and Guidelines for Assessment and/or Valuation of Mineral and Petroleum Assets and Mineral and Petroleum Securities for independent expert reports" (the VALMIN Code), as amended by the Australasian Institute of Mining and Metallurgy on 22nd November 1997 and issued in April 1998.

The quoted mineral resource estimate for the Glencoe deposit is based on published figures from the Magnum Gold NL Annual Report for 1989 which were stated to be in accordance with quidelines under the JORC code as published in June of that year. The author reviewed and validated the underlying data and geological interpretation. Computational aspects of the resource estimate were validated by an independent specialist in association with the author. The impact of trial mining and tribute mining subsequent to publication of the 1989 resource estimate was also reviewed.

The author has not independently researched the ownership and current standing of tenements and tenement applications.

A draft copy of this report was furnished to the directors of Australasia who have checked it for material errors of fact or interpretation.

In the opinion of the author, the Company's exploration properties are sufficiently prospective, subject to normal exploration risk, to be worthy of the proposed exploration programmes and budgets.

Australasia has provided the author with an indemnity in relation to information provided by it, which was material to this report. The Company has also agreed to indemnify the author against any claim arising out of the assignment to prepare the report, except where the claim arises as a result of any proved wilful default or negligence or unlawful act on the part of the author.

The author has no material interest in any of the properties mentioned in this report. The sole benefit to the author for preparing this report is a professional fee paid at negotiated commercial rates and reimbursement of expenses. The payment of these fees is in no way contingent on the outcome of the prospectus.

The author consents to the inclusion of this report in the Prospectus dated on or about 9th November 2005 in the form and context in which it appears and to the references to the report. made elsewhere in the prospectus. The author has not withdrawn his consent prior to the lodgement of the prospectus.

Your faithfully

Dave Fielding

INDEPENDENT GEOLOGIST BACKGROUND EXPERIENCE AND QUALIFICATIONS

Dave Fielding has a BSc (Hons) degree in geology, a MSc (Minex) degree from the Royal School of Mines London. He is a Fellow of the Australasian Institute of Mining and Metallurgy and a Chartered Professional Geologist.

Dave Fielding has extensive experience in exploration in Australia, Africa and Indonesia having held senior exploration positions with CRA Exploration and Werrie Gold Limited. This includes direct hands-on involvement with slate belt style gold mineralisation of Glencoe Type (Big Rush Qld, Mt Tymn Pine Creek NT) and with the Orange - Parkes porphyry district as Chief Geologist NSW for CRA Exploration based in Orange.

$34$

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$5.1$ SUMMARY

Australasia Gold Limited (Australasia) is seeking to raise \$3 million to explore, evaluate and potentially develop three groups of gold properties. These include the Otago Project South Island. New Zealand. the Pine Creek Project Northern Territory, Australia and the Lachlan Project New South Wales, Australia. All projects are located in established gold districts with a history of substantial past production.

Australasia acquired a 100% interest in these properties.

The Otago Project comprises four groups of exploration titles covering areas of significant past alluvial gold production in Central Otago. Formation of alluvial gold deposits in Central Otago is a consequence of several cycles of fault controlled uplift and rapid erosion in response to tectonic instability throughout the Tertiary.

Wetherstones: The Wetherstones prospect is one of several fault bounded remnants of the late Cretaceous Blue Spur Conglomerate including Gabriels Gully which was the site of a major goldrush in 1861. Exploratory underground development in the 1930's confirmed the existence of a fault controlled channel in basement schist with an average recovered grade of 4000 mg/m³ over its lower 2 metres. This channel occurs at a depth between 50 and 100 metres and remains open to the south.

Additional higher grade (+1000 mg/m³ Au) mineralisation was intersected in a limited RC drilling programme by Otaqo Gold Ltd in 1997. Australasia plans to spend \$390,000 in the first year on a programme to evaluate a range of options from selective mining of higher grade basal material to bulk mining the full conglomerate section. The proposal is for seismic sounding to target channel positions, RC drilling to determine geometry and controls on mineralisation and large diameter drilling and bulk sample processing to obtain reliable grade information.

Waikerikeri and St Bathans: Several cycles of alluvial gold mineralisation have been identified in these areas of which the oldest and highest grade are Tertiary age channel deposits of the St Bathans member which directly overlie basement and occur as deformed fault slivers along range front faults bounding the north western edge of the Tertiary Manuherikia Basin. Gold has been reworked into successively younger piedmont gravels (Maori Bottom Formation), older terrace deposits and Recent alluvium. The principal target is higher grade older channels particularly where these may be concealed beneath younger deposits. The bulk mining potential of younger alluvials also presents an attractive target. This was emphasised by a limited RC drilling programme at Waikerikeri by Otago Gold Ltd in 1997 which intersected gold values between 100 and 4000 mg/m³ in younger gravels.

Australasia plans to spend \$90,000 on a programme comprising compilation of previous records, sampling and reconnaissance mapping at St Bathans and at Waikerikeri, additional drilling programme to follow up encouraging results of the earlier RC drilling programme.

Mt Buster, Kyeburn and Naseby: These deposits are covered by a large prospecting permit centred on the northern margin of the Tertiary Maniototo Basin which has a similar history of repeated uplift and erosion along range front faults. Past production at Naseby and Kyeburn which are located within the Maniototo Basin, came mostly from disconformities in poorly sorted piedmont gravels (Maori Bottom Formation) and from younger alluvial deposits.

The principal target in this area remains higher grade older channel deposits equivalent to the St Bathans member, which are concealed by younger alluvium.

$-35$

$$.1$

SUMMARY / The Olago Project, Mt Buster, Kveburn and Naseby continued

Australasia plans to spend \$30,000 in the first year defining targets for potential older channel deposits. Targets will initially be based on compilation of past mining and exploration records (including work by BHP and CRA Exploration), aerial photo interpretation and sampling. The outcome of this reconnaissance phase would be a second year programme of RAB drilling to map basement profiles.

The Pine Creek Project is made up of several properties which are close to and share many geological similarities with significant past gold producers such as Brocks Creek. Woolwonga and Goodall. in the Pine Creek mineral field.

Glencoe: A published geological resource of 1.5 MT @ 1.9 g/t Au in 4 deposits was determined at Glencoe in 1989 by past owners Magnum Gold Ltd*. Mineralisation occurs as quartz veins developed close to the crest of a sheared antiform in turbidites of the Mt Bonnie Formation. The resource has been reduced in the upper part by bulk sampling to a depth of 10 metres. Gold recoveries between 87% and 97% were achieved in oxide mineralisation. Limited testwork indicated gold recoveries between 66% and 89% in primary mineralisation. Australasia plans to spend \$370,000 to evaluate commercial viability of Glencoe within 12 months by a programme of metallurgical, geotechnical and resource confirmation drilling.

Mt Wells North, McKinlay: Large parts of these two exploration licences are poorly drained with shallow colluvial cover which has hampered exploration in the past. Potential is seen for large gold deposits developed along northwest trending anticlines in carbonaceous and sulphidic units of the Koolpin Formation. Australasia plans to spend \$80,000 in the first year to compile and evaluate past exploration results in conjunction with regional magnetic, gravity and terrain data. The objective is to target anticlinal corridors and to follow these up by a programme of soil and stream sediment sampling, visual prospecting and RAB drilling to obtain basement geochemistry.

North Goodall MCN's, Terry's MCN's & Mt Ringwood EL: These groups of mining tenements include known gold mineralisation in favourable structural settings of which several have been previously mined as high grade structurally controlled shoots. Potential for large tonnage gold deposits at shallow depth has been reduced by more recent exploration but potential remains for additional high grade deposits as satellite feed to an operation at Glencoe. The Mt Ringwood EL was incorporated into the Pine Creek Project during 2004. The EL includes continuation of mineralised structures within the North Goodall MCNs. In the first year, Australasia plans to spend \$120,000 to compile and interpret the large volume of past work and carry out ground geophysics and sampling with a view to establishing at least one drilling target.

The Lachlan Project comprises a single exploration licence EL6040 located between the Cadia-Ridgeway mines and the historic Lucknow and Browns Creek gold deposits. The licence has many of the salient geological features which are associated with these deposits including a similar suite of andesitic lavas, volcaniclastics, high level intrusives, sediments and ultramatics. It remains underexplored because much of the prospective geology is concealed by Tertiary basalt cover. Existing targets in the licence include gold mineralisation at Huntley and several gold geochemical anomalies. Past work established that basalt is only weakly magnetic and that the magnetic character of the underlying Ordovician rocks can be used as a quide to exploration beneath the basalt. Australasia plans to spend \$105,000 in the first year to integrate all past information, extend geochemical sampling (including basement drilling) and carry out further drilling at Huntley. The project represents an area of significant neglect because of its similar geology and proximity to major ore deposits.

* Magnum Gold Ltd has consented to the use of its name in the Prospectus.

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$\sim$

Ċ $\bar{\phantom{a}}$

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Fig 1: Location of major projects.

$5.2$ INTRODUCTION

This report is a review of the salient exploration aspects of three principal projects held by Australasia Gold Limited (Australasia). Two of these projects are located in Australia and one in New Zealand as shown in Figure 1, namely:

Otago Project (gold, South Island, New Zealand)
Pine Creek Project (gold, Northern Territory, Australia)
Lachlan Project (gold, copper-gold New South Wales, Australia)

These projects have been acquired by Australasia through four property transactions which have been detailed in the "Material Agreements", Section 9.6 of this Prospectus). Under these agreements Australasia has acquired a 100% interest in all properties with three minor exceptions in the Northern Territory, where its entitlement is to 100% of gold deposits only, and in New Zealand, where a profit royalty is payable.

This report is based on information from historical records, published and unpublished reports and maps. In addition personal contact was made with key individuals involved in the Glencoe resource estimate and with evaluating the Otaqo alluvial deposits.

The properties which are described in this report represent a variety of styles of gold mineralisation in host rocks with ages ranging through Palaeoproterozoic (Pine Creek), Palaeozoic (Lachlan) through Tertiary to Recent (Otago).

Each of the projects is located in a district with a substantial history of gold production and potential for future discoveries.

A glossary of the technical terms used in this report appears on page 129 of this Prospectus.

$5.3$ OTAGO GOLD PROJECT

The Company currently holds title to four prospect areas in the world-ranked Central Otago gold province on New Zealand's south island (Figure 2).

Fig 2: Orago Project - regional geology and gold deposits.

Gold production from this district is estimated at around 8.3 million ounces since discovery of alluvial gold at Gabriels Gully in 1861. Until development of a major hard rock gold mining operation at Macraes in 1990, most gold production came from alluvial deposits. Henley and Adams (1979) include Otago with giant gold placer districts in North America (California and the Yukon) as having formed in response to tectonic instability on the Pacific margin between late Cretaceous and Tertiary times.

Episodic movement associated with vertical uplift along the Alpine Fault caused block faulting and produced the basin and range topography which characterises Central Otago. Gold in quartz veins in older schists is believed to be the primary source of gold in alluvial deposits which are the product of several cycles of rapid erosion of uplifted ranges into adjacent basins (Figure 2).

Australasia's targets in the Otago district are early-deposited paleoplacer gold deposits and primary mineralisation with grade and tonnage characteristics capable of sustaining production in excess of 50,000 ounces per annum.

$\mathbf{b}$ Ġ $\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$

In keeping with historic practice in New Zealand alluvial gold grades are guoted in milligrams per cubic metre ( $mq/m³$ ). This is a reflection of the importance in alluvial mining of volume rather than tonnage in grade determinations. For comparison, a gold grade of 1000mg/m³ at a density of 2 tonnes per cubic metre would equate to a "hard rock" gold grade of 0.5 grams per tonne.

$5.3.1$ Wetherstones (PP 39 265, EP 40 664)

The Wetherstones project is located close to the town of Lawrence approximately 65km west of Dunedin and adjoining Gabriels Gully, where the first major gold discovery in Otago was made in 1861 (Figure 2).

Prospecting Permit (PP) 39 265 includes the Wetherstones (EP 40 664). Forsythe, and Waitahuna alluvial fields which are associated with infaulted remnants of the gold bearing, late Cretaceous Blue Spur Conglomerate along the Tuapeka Fault. Past mining activities were focussed on near surface conglomerate and younger terraces and Recent alluvials. Deeper sections of conglomerate could not be reached by surface mining due to limitations of mining equipment at the time.

It is the potential for moderate grade gold mineralisation (>1000mg/m³) in the Blue Spur Conglomerate at Wetherstones which is attractive to Australasia. This review of geology and past mining and exploration results has relied on detailed historical reports and mapping of the prospect.

$5.3.1.1$ Geology

The principal gold mineralised unit at Wetherstones is the Blue Spur Conglomerate of probable late Cretaceous age.

This unit comprises a schist and quartz pebble conglomerate which is up to 150 metres thick, and developed as in-faulted grabens along the north west trending Tuapeka fault zone. Original channels may have occupied fault controlled depressions in basement schists.

The Blue Spur Conglomerate is itself covered by a varied sequence of younger alluvial gravels, sands, silts, clays and loess deposits.

The conglomerate is made up of a poorly sorted mixture of schist and quartz pebbles set in a muddy matrix. Historical mining records suggest an overall dip of 20 to 25 degrees towards the east within individual fault blocks. The lowermost conglomerate section is moderately to strongly consolidated and is referred to by the early mining term "cement". A blue grey colour is characteristic of unoxidised material and reflects the presence of fine pyrite reported by past explorers to be auriferous.

Geological mapping, historic records and and subsurface prospecting show the conglomerate to be developed over an area of about 5 sq km with a generally south easterly disposition conforming to the two upper tributaries of Wetherstones Creek (Figure 3).

The north western boundary of the conglomerate was originally defined by the discovery outcrop. This has largely been removed by sluicing operations which were carried out down-dip to vertical depths up to 10 metres. The north eastern boundary is marked by the north west trending Tuapeka Fault. The deposit is affected by a number of other north west trending faults eq. Corner's Dump Fault, which may have actively controlled higher grade channels.

OTAGO GOLO PROIECT / Wetherstones (PP 39 265, EP 40 664) Geology continued

Fig 3: Wetherstones Gold Deposit - Geology.

$5.3.1.2$ Mining Activity 1862-1933

Discovery of the Wetherstones deposit in 1862 took place one year after discovery of gold at Gabriels Gully just 3 km to the northwest.

Between 1862 and 1878 surface mining was focussed on easily worked younger unconsolidated alluvials. References to water shortages explain why companies rather than individuals came to dominate the field after 1865. Mapping in 1988 indicated that the bulk of sluicing and dredging operations on the upper alluvials was confined to the north western half of EP40 664 presumably because near-surface grades in the south eastern part are lower.

High grade gold bearing conglomerate lower in the sequence appears to have been the main target from 1878 onwards. The Wetherstones Cement Company developed a series of vertical shafts to mine conglomerates at least partly by underground methods. Mining was focused on the lowermost 6 metres of conglomerate immediately overlying basement. Grades were variable with very high grades $(> 2$ ounces per cubic yard or 60,000mg/m³) reported from discrete channels or "qutters". Gold production of 7,000 ounces was reported by the Company between 1878 and 1888. Production declined until formation of the Golden Crescent Gold Mining Company and introduction of improved technology in 1899. This company reported gold production of 14,000 ounces over a continuous period between 1899 and 1931. Production came from a mix of sluicing operations on younger alluvial deposits and mining of the Blue Spur Conglomerate "cement" by drill and blast methods. A decline in gold production from 1923 is attributed to increased depth of overburden as the conglomerate "cement" was followed down dip towards the east.

$\mathbf{b}$

Ò $\overline{a}$

$\sim$

$5, 3, 1, 3$ Exploration

Underground exploration for high-grade "gutters" commenced in 1929 with development by the Golden Crescent Sluicing Company of a 234 metre easterly trending inclined drive which closely followed the basement contact. Run of mine material was sluiced and gold recovery recorded at periodic clean-up. Results compiled from historic records are presented in Figure 4 showing original grades presented in grains troy per cubic yard.

Fig 4: Watherstones Gold Deposit - Grades recorded from the Goldan Crescent Decline.

In 1931 GW Thompson collected a series of vertical channel samples at approximately 6 metre intervals along the drive. Channel samples represented the basal metre (3 feet) of alluvial material. Results are compared with the Golden Crescent recovered grades in Figure 4. Both sample sets are in agreement about the general trend of gold grades which suggests the presence of a high grade "qutter" in the deeper part of the mine. Chip sample grades can be seen to be generally higher than bulk sample grades which is probably due to a combination of the following factors:

Channel samples were focused on the lowermost 1 metre of conglomerate and consequently the highest grade material.
Channel samples were crushed and assayed (method not specified) whereas the bulk samples $\overline{a}$ were processed as-mined through a sluice with no crushing. Any unliberated free gold or gold contained in pyrite would not have been recovered.
Channel samples were smaller and consequently more prone to extreme variability i.e. the classical "nugget effect".

$5.3.7.3$ OTAGO GOLD PROIECT / Wetherstones (PP 39 265, EP 40 664) Exploration continued

A sample of ovrite rich material from the Golden Crescent drive was submitted for separation and assay of pyrite concentrate and returned a gold grade of 30 ounces per tonne. If as reported pyrite made up 0.6% of the gravel by weight this equates to a bulk grade of 5.6 g/t Au. This suggests that gold from auriferous pyrite (which was not recovered by early miners) could significantly enhance the Wetherstones resource.

In 1932 the Wetherstones Gold Mining Company completed a drillhole located 600 metres south of the Golden Crescent drive. This hole intersected significantly elevated gold values (estimated 933mq/m³) at the basement contact between 122.8 and 123.4 metres. Results for the upper part of the drilhole were estimated to be less than 21mg/m³. A second inclined drive was commenced to test this intersection (Figure 3). This drive did not follow the basal contact but traversed lower grade material higher up in the sequence and gold recoveries were low. An offshoot drive to the basal contact is reported to have intersected gold values of 1200mg/m³ over a distance of 50 metres.

The Wetherstones basin was investigated as a bulk tonnage low grade deposit in 1968 and again in 1980. Both investigations were essentially desktop studies with minimal new data acquired and neither proceeded to test the deposit.

Otago Gold Ltd carried out a drilling programme in the vicinity of the Golden Crescent drive in 1997. A total of 37 slimhole RC drillholes were completed to test bulk grades through the conglomerate section and to confirm the presence of higher grade mineralisation close to basement. Drill cuttings were examined at one metre intervals for visible gold. A measured volume from each visually selected interval was processed by gravity separation. Recovered gold was weighed in milligrams and converted to mg/m³ based on sample volume. Intervals with grades above 1000 mg/m³ are shown in Table 1 and drilling is summarised in Figure 5.

Ю	From	H.	Intercept	my/m ³
W001	28	30	2	1524
WOO3	35 ₁	37	z	17531
W003	37	38	1	Workings
WOO3	39	40	I.	1300
W004	38	40	$\bar{z}$	3045
MOO5	43	46	İ	4369
W010	26	30	4	2189
W018	29	29	O	3290
W019	26.	28	2	1889
WO32	27	28	í.	8201
WO34	27	28	T	1624
W027	28	29	1	1150
W029	22	73	1	1116
WO35	27	29	2	1923
W036	25	ZT	2	2690
1510277	595.00	$-2.7$	×.	$-1222$

$\mathcal{L}{\mathcal{A}}$ , and the second second sequence of $\mathcal{L}{\mathcal{A}}$ , and $\mathcal{L}{\mathcal{A}}$ , and $\mathcal{L}{\mathcal{A}}$ , and $\mathcal{L}_{\mathcal{A}}$

Table 1: Wetherstones, Slimhole RC gold grades >1000 mg/m³

$\mathbf{b}$

$\sim$

b) Ċ

$\bar{\phantom{a}}$

$\sim$

Better gold grades in slim hole RC drill holes are located just above the basement contact and the presence of appreciable pyrite was noted in geological logs.

A number of drill holes intersected old workings and elevated gold grades north of the Golden Crescent Shaft. Old workings are aligned parallel with the Dump Fault and probably define a continuation of the high grade "gutter" at the eastern end of the Golden Crescent inclined drive. This target remains open to the south east.

Elevated gold grades were also intersected to the south west of the Golden Crescent drive (W27, W29 and W32) and east of the Dump Fault, two close to the Tuapeka Fault (W002 and W001).

Two drill samples of pyrite rich conglomerate were submitted to Amdel Adelaide to determine the gold content of pyrite and the following results were reported:

Pyrite from a composite sample made up from drill holes WOO2 and WOO4 assayed 66 g/t Au.
Assays of pyrite contained in a sample from drillhole W033 returned minimal gold.

Further work should be done to examine the distribution of auriferous pyrite which may significantly enhance the resource.

While results from the slim hole RC programme are of a semi-quantitative nature, drilling has confirmed the presence of significantly elevated gold grades in basal conglomerates in the Wetherstones basin. Gold content in the lower grade upper part of the conglomerate and in overlying gravels and tailings has not been determined but must be assumed to be low.

Fig 6: Wetherstones Gold Deposit - interpreted sub-surface geology and mineralisation.

GTAGO GOLD PROJECT continued

$5.3.2$ St Bathans PP 39 264

This large Prospecting Permit covers an area on the north eastern margin of the Manuherikia Basin, one of several elongate fault bounded basins of Tertiary aged fluviatile and lacustrine sediments overlying metamorphosed basement rocks in Central Otago (Figure 2). This review is largely based on review reports commissioned by Otago Gold Ltd.

$5, 3, 2, 1$ Geology

The area has a complex geological history characterised by repeated tectonic activity which has given rise to the district's characteristic basin and range topography.

Fault-controlled uplift of basement schists during the early Tertiary produced a sedimentary sequence (Manuherikia Group) comprising coarse alluvial channel deposits grading upwards into finer lake sediments. The earliest channel deposits of the St Bathans Member contain the highest gold grades.

Late Tertiary uplift and tectonic activity resulted in significant deformation of the early basin sediments followed by rapid erosion and sedimentation to produce piedmont gravels of the Pleistocene Maori Bottom Formation. Renewed uplift resulted in rapid erosion of the Pleistocene sediments and redeposition as younger alluvial fans, river terraces and Recent channel deposits. Gold originally eroded from quartz veins in basement schists was incorporated into each of these cycles.

Gold was discovered in the district in 1862 with main production from the St Bathans, Vinegar Hill, Surface Hill and Cambrians workings which (with the exception of Vinegar Hill) are all located within PP39 264. Workings are concentrated in the basal St Bathans Member which is exposed on the margins of uplifted basement blocks.

Basement schists underlying the unconformity with gravels of the St Bathans Member have been intensely kaolinised. The most intense kaolinisation occurs where palaeochannels contain mature well rounded gravels. Best gold grades which are found in these basal gravels appear to coincide with deepest zones of kaolinisation.

$5.3.2.2$ Past Exploration

The area has not been intensively explored for alluvial gold.

Two drillholes completed south of the flooded St Bathans (Blue Lake) workings in the 1930's achieved intercepts of 71 metres at 276 mg/m³ and 126m at 292 mg/m³ respectively. Both holes were boosted by a high grade zone between 1 and 2 metres thick. This zone was interpreted to be a high grade gold bearing shoot known locally as the Kildare paystreak.

A seismic survey completed by Asarco in the 1960's identified a number of targets which were interpreted as shallow basement positions with potential for concealed basal gravels of the St Bathans Member. A total of 21 drill holes on these targets were completed by Gold Mines of NZ and achieved a best intercept of 12m @ 326 mg/m³. This result was not regarded as sufficiently encouraging to continue.

Bulk sampling near the Surface Hill workings by Asarco in the 1960's achieved a grade of 170 mg/m³ in an 18 metre thick palaeochannel deposit. No further work was carried out.

$5, 3, 2, 3$ Exploration Targets

It appears that while major outcropping basal gravels have been found and worked, potential remains for smaller deposits along the range front fault defining the NW boundary of the Manuherikia Basin. Potential is also inferred for a fold repeat/extension to the high grade basal gravels at the St Bathans Blue Lake deposit which are concealed by Recent alluvials in the bed of Dunstan Creek.

$5.3.3$ Waikerikeri EP 40 711

This review is based mostly on Otago Gold Ltd's consultant reports. The tenement is located over a very large complex alluvial fan through which upthrust basal gravels of the Manuherikia Group have been partly exhumed and reworked into younger deposits. The fan is developed in response to uplift of the Dunstan Mountains along the Dunstan Range Fault which continues through to the present. In common with deposits near St Bathans the basal conglomerates are distributed as palaeochannels (St Bathans Member) with very high gold grades. Old workings on these rich basal gravels extend for approximately 2.5 kilometres along the range front.

The Waikerikeri alluvial fan is made up of very coarse and poorly sorted gravels. Gold grades increase in channel lag deposits and local disconformities resulting from periodic movement along the range front fault. Grades also apparently increase towards the Dunstan Fault.

$5.3.3.1$ Slim Hole RC Drilling

A total of 12 slim hole RC drill holes were completed at Waikerikeri by Otago Gold Ltd. Drill hole collars are located between and adjacent to old workings. The target was older gravels of the St Bathans Member and holes were located as close as possible to the Dunstan Fault to test for the reported higher grades.

Table 2: Waikerikeri Slimhole RC drilling. Better gold intercepts

Hole	From	n.	Intercept	$m$ y $/m3$
WK4	20	$\overline{22}$	2	1548
WK5	6	8	$\overline{z}$	204
WK6	12	20	8	480
WK7	D	12	B	4821
WK9	13	22	g	369
WK10	5	$\mathbf{6}$	1	271
WK10	13	18	Z,	305
WK11	Ø	g	1	271
WK11	ш	12	T	181
WK11	14	18	4	763
WK12	$\boldsymbol{\Lambda}$	8	4	147
WK12	10	12	2	520
WK12	16	19	3	565

$\sim$

$\mathbf{b}$

$5.3.3.3$ OTAGO GOLD PROJECT / Walkerikeri EP 40 711 Slim Hole RC Drilling continued

Drill cuttings were panned at one metre intervals and examined for visible gold. Recovered gold from a known volume from each visually mineralised interval was weighed and recalculated to a gold grade in mg/m³. Better intervals are shown in Table 2.

The drilling is not thought to have intersected older gravels of the St Bathans Member but did return significantly elevated gold values from younger gravels (Table 2).

These results are considered to be sufficiently encouraging to warrant further drilling within this small licence area.

5.3.4 Buster Naseby (PP 39 266)

Three gold mining fields are located in PP 39 266. The age of alluvial gold deposits varies from the older alluvials at Mt Buster which occur as isolated erosional remnants through to terrace gravels and Recent channel deposits of the Kyeburn and Naseby areas in the northern part of the Maniototo basin (Figure 2).

$5.3.4.1$ Kyeburn

In this mining field to the south west of Mt Buster, basement schists are overlain by a deformed sequence of gravels and sandstones including coal measures of the Kyeburn Formation. This material is probably equivalent to the Manuherikia Group and the older gravels to the St Bathans Member. At Kyeburn these gravels are partly overlain by piedmont gravels of the Maori Bottom Formation. Most of the gold in this field was historically won from younger terrace and modern channel gravels and partly from coarse gravets at disconformities in the Maori Bottom Formation.

Exploration trenching has identified individual channels incised to bedrock with bulk grades between 600mg/m³ and 1700mg/m³, although available tonnages appear to be quite small and exploration potential to be limited.

$5.3.4.2$ Naseby area

The Naseby alluvial field was worked by small scale miners between 1863 and 1959 with a recorded production of 283,000 ounces of gold. Records indicate that early production in the Naseby field came from colluvium with gold grades up to 1000 mg/m³.

At Naseby, the oldest gravel units comprise the upper Hogburn Formation and the lower Wedderburn Formation which are separated by a marine unit (the Naseby Greensand). It is the overlying Maori Bottom Formation rather than the older gravels which were targeted by the early miners. At Naseby this unit is made up of a coarse poorly sorted mixture of schist fragments and well rounded quartz gravels separated by sitty and sandy layers. Quartz gravels are typically hard with a dense clay rich matrix and generally less than 5m thick. These gravels have been the source of significant past production. Remaining production comes from younger terrace gravels and Recent alluvial and eluvial deposits.

Potential for bulk tonnage alluvial deposits was evaluated by a programme of surface channel sampling of mostly younger alluvial deposits. Results from this work indicate a potential target of 200 million cubic metres at a grade of 50 mg/m³.

5.3.5 Proposed Exploration Programme

As noted above the target is for one or more deposits which meet hard rock rather than alluvial mining criteria. Priority will be given to discovery of high grade alluvial gold deposits within the oldest cycle of palaeogravels equating with the Bluestone Conglomerate and the St Bathans member. Secondary targets include high volume lower grade gold deposits in Piedmont gravels and recent channel deposits. Potential is also seen for primary gold mineralisation (Macraes equivalent) in basement schists.

In the programme proposed by Australasia the immediate focus is to develop and drill high grade targets at Wetherstones and Waikerikeri. Over time additional exploration targets will be worked up and tested. The funding allocated is in accord with the programme outlined.

5.3.5.1 Matherstange

RC drilling to confirm interpreted position of the mineralised channel
Seismic survey to obtain detailed basement profiles and establish fault positions and to develop a three dimensional picture of the conglomerate sequence.
RC and diamond core drilling to test the distribution of gold mineralisation and to obtain metallurgical and geotechnical information
Large diameter bulk sample drilling.

Given the importance of basement architecture, particularly faults in controlling better grade mineralisation this is a practical programme to establish high grade "gutter" positions and bulk grades through overlying sediments.

5.3.5.2 Regional Targets

At Waikerikeri the programme is designed to build on results from the early slim hole RC drilling programme and to establish potential for a significant resource within this relatively small tenement area. The main elements of this programme comprise: RAB drilling within the target area developed by Otago Gold; ground geophysics to profile basement and identifiy channel positions; and RC drill traverses across interpreted channels.

The programmes in the prospecting permits are more generalised and reflect the need to compile past exploration data, carry out prefiminary mapping and sampling and develop conceptual targets in the first year. Geophysical surveys and RAB drilling are proposed in the second year.

Immediate targets include 1930's vintage intercepts south of Blue Lake at St Bathans with potential for concealed St Bathans Member at shallow depth.

The approach outlined by Australasia given the size and prospectivity of the licence areas is considered to be appropriate.

$\mathbf{r}$ $\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$

$\mathbf{b}$

Overview

$5.4.1$

Fig 6: Pine Creek District - regional geological setting, Australasia Gold tenements and major gold deposits.

The Pine Creek project comprises a group of tenements located in the Palaeoproterozoic Pine Creek Orogen of the Northern Territory Australia. (Figure 1) This project area is underlain by a highly deformed sedimentary sequence with lesser volcanics and basic intrusives which has been extensively intruded by granite. The Pine Creek district has been a major gold producer since discovery of gold at Pine Creek during construction of the overland telegraph line in 1864.

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var kol

Fig T: Pine Creek District - regional magnetic image, Australasia Gold tenements and major gold deposits.

Reviews have been published of salient geological aspects which have influenced formation of gold orebodies in the Pine Creek district. In most cases gold mineralisation is associated with quartz veins and the authors have considered important factors which influence the source of gold bearing fluids, transport mechanisms and ultimately preferred sites for emplacement of gold bearing quartz veins.

The importance of younger granite intrusions as a heat and fluid source is emphasised. Proximity to major long lived faults eg the Pine Creek Shear Zone and Giants Reef Fault are probably also important in the transport of mineralising fluids. Zoning of mineral deposits with respect to the granites has been noted whereby tin mineralisation occurs closer to the granite and base metal and gold mineralisation successively further away. The relationship between gold deposits, granite and major structures can be seen in district geology and magnetics (Figures 6 and 7).

Deposition of gold mineralisation in the district is subject to a high degree of structural control and typically occurs in quartz veins, along or close to the axial zone of regional anticlines. Gold mineralised quartz veins usually contain pyrite and arsenopyrite and occur as stockworks in shear zones, bedding-parallel veins and saddle reefs. Veins range from a few millimetres to several metres in thickness. Examples in the district are the Woolwonga, Goodall, Enterprise and Brocks Creek deposits.

$5.4.1$ PINE CREEK PROJECT / Overview continued

The influence of carbonaceous or ferruginous sediments in controlling sites of gold deposition has been described in parts of the Brocks Creek, Mt Bonnie and Cosmo Howley deposits.

In spite of intensive past exploration focused on well exposed parts of the district, there are still opportunities for virgin discoveries of outcropping mineralisation as indicated by the Company's Rocks Ridge gold prospect which was discovered by visual prospecting. In addition there are large poorly drained areas where prospective host rocks are concealed by a veneer of alluvial and colluvial material which has been a barrier to effective regional exploration. These covered areas have the potential to host large undiscovered mineralised systems.

Australasia's primary target is a Callie style gold deposit where moderate grade gold mineralisation (>5q/t) is associated with quartz veins in fine grained metasediments draped over domal structures in granitic basement. Secondary targets include lower grade "Slate Belt" style deposits similar to Brocks Creek.

$5.4.2$ Glencoe (MCN 20-MCN 25, MCN 3578, MCN 4248)

Interpretation from aerial photographs of an anticlinal fold between Brocks Creek and Woolwonga led to initial pegging of mineral claims in 1983. Further exploration between1984 and 1991 defined a gold mineralised vein system over a strike length of 1800 metres.

This report on the prospect has relied upon detailed annual and interim exploration reports. Exploration carried out during this period has included:

A total of 600 rotary air blast (RAB) drill holes to approximately 6 metres depth were drilled to determine the distribution of arsenic in bedrock as a pathfinder for near-surface gold mineralisation.
A total of 59 diamond holes for 3,707 metres and 310 reverse circulation percussion (RC) drill holes for 11,240 metres were drilled (Figure 8).
A total of 37 Costeans were completed over mineralised zones for a total of 2,633 metres.
Metallurgical testing of surficial material as potential heap leach feed.
Limited metallurgical testing of RC samples of in-situ mineralisation as potential Carbon In Pulp (CIP) feed.
A geological resource estimate 1.5 MT @1.9 g/t Au, in four discrete zones was reported to Magnum shareholders in 1989. (Figure 8)
Approximately 49,000 tonnes of ore from the four principal mineralised zones was mined under a bulk sampling programme. A recovered grade of 2.02 g/t gold was reported.
Approximately 20,000 Tonnes of material from the west zone was tribute mined by Territory Goldfields under a joint venture agreement with Magnum. This material was not processed.

Despite encouraging gold recoveries by bulk sampling the deposit was considered by Magnum to be too small to be developed as a stand-alone operation.

50 -

$\sim$

$\alpha$

$\overline{16}$

$\Omega$

$\triangleright$

$\alpha$

$5.4.2.1$ Geology

$51 -$

Mineralisation occurs in a complex anastomosing quartz vein system associated with shearing in a sequence of interbedded sandstones, sittstones, and mudstones of the Palaeoproterozoic Mount Bonnie Formation (Figures 7-13).

Stratigraphic subdivision of the host sequence is hampered by the lack of clear marker units. The lithological characteristics were interpreted to be consistent with a stratigraphic position in the Mt. Bonnie Formation rather than the overlying Burrell Creek Formation because of the relatively higher proportion of carbonaceous and pyritic sediments.

Minor biotite-chlorite rich mafic dykes (lamprophyres) intrude the sediments and may themselves be altered and mineralised.

Drilling and mining activities have confirmed that the host sequence has been folded about an anticline with an axial plane dipping steeply to the south west and a fold axis plunging shallowly towards the south east.

Fig 8: Glencoe Deposit - Simplified surface projection of structure and mineralisation.

$5.4.2.1$

PINE CREEK PROJECT / Clancoe (MCN 20-MCN 25. MCN 3578. MCN 4248) Geology continued

Fia Br Glencoe Deposit - Cross sections of aeology, mineralisation and resource outlines, West Central Zone Traverse 3500E.

$5.4.2.2$ Mineralisation

Gold mineralisation occurs in quartz veins which range from millimetres to several metres thick. Gold mineralisation is closely associated with development of sulphides principally arsenopyrite, pyrite and trace chalcopyrite. Veins have typically been oxidised to a depth of 30 metres.

As noted above, gold mineralisation occupies positions close to the anticlinal crest. The major control is by discordant subvertical fracture systems subparallel to axial planar cleavage. Rock type apparently exerts a secondary control with elevated gold grades along favoured strata particularly carbonaceous mudstone and lamprophyre dykes.

A late stage phase of chlorite alteration and brecciation has been recognised. This alteration appears to have remobilised mineralisation and is associated with increased gold grades.

Anomalous levels of arsenic (values from 10ppm to 3000ppm) coincide with gold mineralisation. Bedrock arsenic geochemistry based on RAB drilling was used to outline an irregular corridor which contains the currently known gold resources (Figure 8). The 50ppm arsenic contour remains open to the south east.

In the sulphide zone, gold occurs in pyrite and arsenopyrite and as silica enclosed free gold. In the oxide zone gold occurs as free particles in a goethite +/-scorodite matrix.

Better mineralisation was identified in four discrete zones termed the Western, North Central, Mid Central and South Central zones (Figure 8). These are separated by narrower and less continuous zones of mineralisation.

$52$ -

Poorly consolidated surficial material consisting of regolith and sub outcropping weathered mineralisation contains appreciable but variable gold grades. Much of the surficial material was removed for treatment in the trial mining phase discussed below.

$5.4.2.3$ Resource Estimate

In 1989 after completion of exploration drifling, a resource estimate was carried out which took into account in-situ mineralisation in the West, North Central, Mid Central and South Central Zones and low grade auriferous gravels from the four zones.

The resource was estimated using a simple cross sectional method and was approached conservatively because of the complex geometry associated with anastomosing and discontinuous vein mineralisation. Robustness of the resource estimate is dependent on a number of factors of which data quality and the quality of the geological interpretation are particularly important and are discussed below.

Drilling

The drillhole database used in the resource estimate did not include outlying holes.

A total of 288 RC driffholes for a total of 10,570 metres were used in the resource estimate. RCdriffing employed the "crossover" sampling system and as a consequence, sample quality would be lower compared with the modern face sampling system. Many RC drillholes reported poor sample return below the water table because of high water inflows. The problem was rectified in late 1988 and the rig was replaced by a larger drilling rig with a higher volume compressor (Milligan 2003 pers. comm.).

Diamond drilling was carried out with HQ triple tube equipment and appropriate drilling fluids to maximise core recovery. All of the 59 holes completed were included in the resource estimate. Diamond core recoveries of 100% were achieved in fresh material although there was appreciable core loss in strongly fractured mineralised zones and in heavily oxidised material.

Two fines of close spaced drifling, each with 11 vertical RC holes at 2.5m centres to depth of 20 metres on sections 3524mE (West Zone) and 3978mE (North Central Zone) were completed as an aid to interpretation and to provide bulk samples for metallurgical testing.

Accurate 3D coordinates of drill hole collar positions were provided by survey controlled photogrammetric contoured base maps at 1:1000 scale which were compiled from specially acquired low level photography. These sheets employ Australian Map Grid and local grid co-ordinate systems (Local grid is offset 34 degrees towards the east from grid north).

Down-hole surveys were carried out on all diamond holes. It is apparent that drill holes did not deviate significantly from set up. Down-hole surveys were not carried out on RC holes but in view of the shallow depth (37.5 metres average) of RC drill holes and the lack of deviation of diamond holes, it is reasonable to assume that deviation of RC drill holes was negligible.

RC drill cuttings were bagged, logged and sampled over 1m intervals while diamond core was sampled to geologically defined boundaries.

$\mathbf{b}$

Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria M

$5.4.2.3$

PINE CREEK PROJECT / Giencoe (MCN 20-MCN 25, MCN 3578, MCN 4248) Reseurce Estimate continued

$Fig. 32.$ Glencoe Deposit -Cross sections of geology, minoralisation and resource outlines, West Central Zone Traverse 3587E.

$Fig. 3.2.$ Glencoe Deposit -Cross sections of geology. mineralisation and resource outlines, North Central Zone Traverse 4020E.

$Fig. 32.$ Glencoe Deposit -

Cross sections of geology. minoralisation and resource outlines, Mid Central Zone Traverse 4000E.

n de la film de la companya de la film de la companya de la companya de la companya de la companya de la film
La 1922 de la companya de la companya de la companya de la companya de la film de la companya de la companya d

Fig 13: Glencoe Deposit -Cross sections of geology, minoralisation and resource outlines. South Central Zone Traverse 4046e.

Geological Interpretation

As noted the Glencoe mineralised system exhibits strong structural control whereby quartz veins which are host to mineralisation are located as stockworks in the principal shear system and subsidiary shears and in dilational bedding conformable positions including saddle veins. The lithological control by carbonaceous mudstone and lamprophyre dykes has also been recognised in the resource model.

In detail the distribution of mineralisation is highly complex but broad continuity of the principal mineralised shears within each of the four zones has been reasonably well established (Figure 7).

Continuity of the bedding parallel mineralisation is less well established at the current drill spacing and further drilling would be required to tighten this up. The generally easterly plunge of the Glencoe antiform is reflected in the resource outlines. For example, in the western zone, thicker mineralisation occurs at a higher RL at the western end and at successively deeper RL's towards the east.

Coarse gold particles have only rarely been recognised (I. Milligan pers. comm.) and most of the gold appears to occur as fine inclusions in sulphides, quartz and in the oxidised zone as fine free gold in a geothitic matrix.

A boundary between oxidised and primary mineralisation was determined to be approximately 30m below surface (RL70). No evidence of supergene enrichment of gold at or about this interface was noted.

Boundaries to mineralisation in the geographical resource reflect the complexity of the mineralisation and have been constructed to take the above geological controls into account.

Talendaria

$55 -$

$5.4.2.3$

PINE CREER PROJECT / Giencoe (MCN 20-MCN 25. MCN 3578. MCN 4248) Resource Estimate continued

Assays

A total of 16,000 assays were incorporated into the resource estimate. All assays were by fire assay by Australian Assay Laboratories Pine Creek. Assay protocols at the time included normal use of laboratory repeats and standards (I. Milligan 2003 pers. comm.).

A programme of check fire assaying of 303 samples from RC holes GCRC173-GCRC270 was examined. Some significant outliers are evident but in general there is a good correlation between original and duplicate assays.

As noted above, sampling and assay of diamond core was carried out to geological boundaries. This produced resource intercepts between 10 centimetres and 6.9 metres in length. Assays were recomposited to 1 metre downhole length for inclusion into the resource estimate.

Metallurgy

A composite 800 kg costean sample of unconsolidated surface material overlying the West Zone was submitted for a column leach test as potential heap leach feed. Gold recovery of 81.5% was achieved after 49 days based on an estimated head grade of 1.1 g/t. (Much of this surface material was subsequently removed and treated under the bulk sampling programme)

RC cuttings of oxidised in-situ mineralisation from the four main mineralised zones were submitted for metallurgical testing to measure potential gold recovery by the CIP method. Samples were crushed and ground to 80% passing 75 microns and bottle roll tested for 48 hours. Recoveries of 93-97% were achieved as shown in Table 3.

Table 3: Glencoe, bottle roll test results on oxide mineralisation.

Gold recoveries from small samples of primary mineralisation by the same process were reported to be 66% for the North Central Zone and 89% for the South Central zones. Further testwork on primary mineralisation will be required.

Resource Estimation Procedure

The four main mineralised zones form the bulk of the resource estimate as reported by Magnum (Magnum Gold NL Annual Report 1989). Two estimates namely a "Geological Resource" and a "Potentially Ore Grade Resource" were published, each based on cut off and compositing criteria as described below.

Geological Resource - This estimate is based on a cutoff of 0.5 g/t Au, a minimum intercept width of 1 metre and a density of 2.5 g/cc. High grades were cut to 20 g/t Au. This produced a result of 1.5 million tonnes @ 1.9 g/t Au to a vertical depth of 100 metres and includes 668,000 tonnes at 2.04 g/t Au to a vertical depth of 30 metres. Resource categories are presented in Table 3.

$56 -$

$\mathbf{r}$ ċ $\sim$ $\hat{\mathbf{c}}$ b. $\circ$ $\sim$ d.

Potentially Ore-Grade Resource - This estimate was based on a simulated 2.5 metre bench $\ddot{\phantom{1}}$ interval, a cutoff grade of 1 g/t Au, and high grades cut to 20 g/t Au. This was published as 550,000 tonnes at 2.3 g/t Au to a vertical depth of 60 metres including a Measured Resource of 300,000 tonnes at 2.57 g/t to 30 metres depth. This was the estimate used as the basis for bulk sampling.

Mineralised outlines were determined on each drifted section based on cut-off criteria and constrained by the geological interpretation. A comparison using selected sections, between the "Geological" and "Potential Ore Grade" resource outlines and the geological interpretation is presented in Figures 9-13. Pit outlines from subsequent bulk sampling and tribute mining are also indicated on section.

The computational process behind the resource estimates was validated by an independent specialist as part of this review (Bampton 2003).

Removal of parts of this resource by bulk sampling and mining activities is discussed below.

Table 3: Glencoe, In-situ Geological Resource Published by Magnum Gold NL 1989 (based on minimum intercept of 1 metre, cut-off grade of 0.5 g/t, SG of 2.5 and with high values cut to 20 g/t).

RL Interval	Measured	Indicated	Inferred	Total
West
$RL + 70m$ $R = 40 - 70m$	148,000 @ 2.13 66.000 @ 1.82	19.000 @ 1.50	13,000 @ 1.70	148,000 @ 2.13 $98.000 \ @ \ 1.74$
RL 0-40m		11,000 @ 2,00	65,000 @ 1.70	76,000 @ 1.74
North Central
$R1 + 70m$	$26.000 \times 1.86$			216.000 @ 1.86
RI 40-70m	100,000 @ 1.77	54 000 @ 1.55	$9,000 \; \text{\textdegree}$ $1,0$	$163.000 \Leftrightarrow 1.70$
RL 0-40m		47009@195	132,000 @ 1.70	$179.000\varnothing$ 1.77
Mid Gentral $R1 + 70n$	83,000 @ 2.12		$4000 \approx 200$	$37,000 \, \odot \, 2.10$
RL 40-70m		26.000 @ 1.43	43,000 @ 1.50	69,000 @ 1.47
RL 0-40m			78,000 @ 1.50	78,000 @ 1.50
South Central
$R1 + 70m$	39,000 @ 3.45	3000@192		$42,000 \, \omega \, 3.34$
RL 40-70m RL 0-40m	22.000 @ 3.08	$1000 \times 0.80$ $6,000 \ @ 3,11$	$7,000 \, \text{\textdegree}$ $1.90$ 29 800 40 2 70	30,000 @ 2.73 35,000 @ 2.77
Sub-totals
$RL + 20m$	486,000 @ 2.11	$3,000 \; \omega$ 1.92	$4,000 \; \Leftrightarrow \; 2.00$	493,000 @ 2.11
RL 40-70m	188,000 @ 1.94	100,000 @ 1.50	72,000 @ 1.60	360,000 @ 1.75
RL 0-40m		$64,000 \ @ \ 2,07$	304,000 @ 1.70	368,000 @ 1.80
	$674,000 \; \textcircled{a} \; 2.06$	167,000 @ 1.73	380,000 @ 1.70	1,221,000 @ 1.91
Far West $R1 + 70m$		$15,000 \ll 1.80$		15,000 @ 1.80
$R1 + 0m$			30,000 @ 1,50	30,000 @ 1.50
East
$R1 + 70m$		$10.000 \ @ 2.00$		$10,000 \, \odot \, 2,00$
$R1 + 0m$			$20.000~\omega$ $2.00$	$20,000 \odot 2,00$
Surface Mineralisation
0.2m	98.000 @ 1.17	$25,000 \; \text{\textcirc} \; 1.71$	$25,000 \in 1.77$	$148,000 \approx 1.77$
Totals	772.000 @ 2.02	217,000 @ 1.75	455,000 @ 1.70	1,444000 @ 1.68
			SAY 1,500,000 @ 1.9q/t
NOTE: Surface RL canges from 98 to 107 metres above sea level, with an average of about 103m over the area containing the
defined resources. Tonikt corresponds to an approximate depth of 33 metres 40mRL corresponds to about 63 metres depth, and
Onki to some 130m

$-$ 57 $-$

PINE CREEK PROIECT / Giencoe (MCN 20-MCN 25, MCN 3578, MCN 4248) communi

$5.4.2.4$ Bulk Sampling/Toll Treatment 1989-1990

A decision was taken by Magnum to undertake a bulk sampling operation to improve confidence and to validate resource estimates and metallurgical recoveries.

In late 1989 a joint venture agreement was reached between Magnum Gold NL and the Tanami Joint Venture (Zapopan, Kumaqai Gumi, Kintaro) under which bulk excavation was subsequently carried out by Henry Walker Ltd.

Mining of the four main zones was carried out to a depth of 10-12 metres utilising a drill and blast method with 3m blast holes on 3m centres. Pit outlines are shown in plan and section in Figures 8-13.

Grade control for mining was by continuous sampling of dozer rip lines located at 8m spacings across strike. Initially all blast holes were sampled but because of the effectiveness of rip line samples the process was changed to sampling only blast holes which coincided with rip lines.

A cut off grade of 1 g/t was applied and material between 0.5 g/t and 1g/t Au was placed in a low grade stockpile adjacent to the South Central Zone pit.

A total of 49,000 tonnes of ore were mined from four pits between October 1989 and February 1990. Bulk sampling was supervised by a competent "ore spotting" grade control geologist and trucked to the Mt Bonnie mill and CIP plant for gold recovery. A gold silver dore product from Glencoe was refined for a recovered total of 103,000 grams of gold. This equates to a recovered grade of 2.02 g/t Au and an overall gold recovery of 87% from an implied head grade of 2.34 g/t Au.

The 2.5m bench resource estimate, grade control estimates and head grade to the mill are compared in Table 4 with respect to tonnes and grade. (Asterisks denote information destroyed by fire at Mt Bonnie plant)

It can be seen that tonnes of ore to the mill were significantly higher than the resource estimate for a similar gold head grade, which resulted in a 37% increase in contained gold to the plant. This emphasises the conservative nature of the 2.5m bench estimate and the importance in this style of deposit of visual grade control.

Table 4: Glencoe, Bulk sampling by Tanami JV, Comparison between mill feed, grade control (GC) and the bench resource estimate (BRE).

Pit and Litt RLs		Tonnes			Grade o/t Au		Contained Gold
	HIII	80	BRE	MIL	8Œ	BRE	新闻	КG	BRE
North Central RL163-RL93	18	10561	9000		-214	23		22640	20700
Mid Central RE102-RE91	7890	9676	6100	2.57	2.38.	23	20271	22152	14030
South Central RL99.5-RL89.5		11801	9200		2.53	3.5.		29902	32200
West RL106 RL96	20673	16998	9700		1.98	21		33611	20379
Totals	48965	48936	34000	2.433	2.23	2.57	119398	109127	87300

$58 -$

$\sim$

$\cap$

$\bar{\phantom{a}}$

$\sim$

$5.4.2.5$ Mining by Territory Goldfields JV 1995

Negotiation of a royalty agreement with Territory Goldfields, owners of the Cosmo Howley plant culminated in a short-lived mining operation.

Mining consisted of enlarging the bulk sample pit on the West Zone and drilling and blasting to a vertical depth of 7.5 metres below the existing pit floor. An in-pit reserve of 20,326 tonnes at 2.05 g/t was guoted based on an SG of 2.4, a cut off grade of 1 g/t Au and assays cut to 10 g/t Au.

Records supplied to Magnum indicated that the following material had been mined:

9765 tonnes @ 1.88 g/t Au (ore stockpile)
13495 tonnes @ 0.72 g/t (low grade stockpile)

Magnum has few details about the mining process. Lower than predicted grades are noteworthy perhaps because visual grade control was not carried out.

Mined material was not treated by the JV and remained at grass at cessation of mining in March 1995. Stockpiles have not been positively identified by Australasia and selective dump/stockpile sampling will be needed before an estimate of broken ore can be made.

$5.4.2.6$ Glencoe Discussion

A compilation of blast hole and available pit plans suggests that the total volume mined from the four open pits is 234,000 bcm.

The geological resource at Glencoe has been depleted by bulk sampling of 49,000 tonnes.

The presence at grass of 23,000 tonnes of ore mined but not treated under the tribute mining agreement, needs to be confirmed by dump sampling.

There is a reasonable expectation for additional surface and oxide mineralisation above the 70m RL (33m depth) in the outlying (East and Far West zones) and surface and oxide material along strike. As noted above, mineralisation is located within a corridor of anomalous arsenic which remains open to the south east (Figure 8).

Given the complexity of the deposit there is a strong possibility that a significant increase in contained gold compared to the resource estimate, may be achieved by meticulous visual grade control.

Metallurgical testwork has confirmed suitability of oxide ore for treatment by the CIP process while further testing is required for primary mineralisation.

PINE CREEK PROJECT continued

$5.4.3$ Pine Creek Exploration Targets

As shown in Figures 6 and 7, the Company holds a number of other exploration and mining tenements in the Pine Creek district. In these diagrams the tenements are shown in relation to geology, regional magnetics and more significant gold deposits. The Company's tenements fall into two categories:

Exploration Licences. These have been selected as having potential for the discovery of major gold deposits. Prospectivity within the EL's is partly based on recognition of key exploration criteria outlined above, namely proximity to granites, major anticlinal fold axes and prospective stratigraphy located in a poorly exposed and relatively under-explored part of the Pine Creek district.
Mining Tenements. These cover a number of known gold occurrences some of which were mined in the past and have recorded high grades. These have been identified as having potential for modest tonnages of high grade gold mineralisation which could be economically trucked to a central processing facility. The intention is to carry out drilling for discrete structurally controlled near-surface shoot positions which were not recognised or were too low grade for the early miners.

$5.4.3.1$ Mt Wells North/McKinlay, (EL 22301, EL 23824, MCNA 5115)

These tenements occupy the corridor between two major granitic intrusives which are thought to have been a major source of heat and mineralising fluids and to have played a role in the formation of gold, tin and base metal deposits in the district. The licences are underlain by deformed metasediments including carbonaceous and iron rich Koolpin Formation of the South Alligator Group which are believed to be prospective for large high grade gold deposits. Mapped north west plunging anticlinal fold axes subparallel with the major Pine Creek Shear can be seen in regional magnetics (Figure 7). Granites are also reflected in regional magnetics, in part by concentric magnetic patterns related to contact metamorphism of adjacent sediments.

A number of gold deposits are located within the tenements of which some have been prospected intermittently over the last 100 years (eg McKinlay), while others, (eg Tooheys and Rocks Ridge) were discovered more recently from stream sediment geochemistry and visual prospecting.

Prospective stratigraphy in much of the tenement area is concealed by black soil and alluvium of the McKinlay River floodplain which has hampered exploration in the past.

Targets which have been identified in the licence area are as follows:

Tooheys/Rocks Ridge

Gold is reported to occur within oxidised quartz veins in a zone of apparently stratabound shearing and silicification which can be traced over a distance of 4 kilometres. Both the silicified zone and enclosing Wildman Siltstone are strongly folded about NW trending axes. Mineralisation occurs in a dissected area of scree cover and scattered outcrop.

Costeaning and drilling on the northern end of the silicified zone (Tooheys North) in 1988, confirmed a shallow (25°) dipping mineralised zone with gold grades up to 17 g/t. This deposit was subsequently mined on a small scale and records indicate that 8955 ounces of gold were produced at a recovered grade at 8.5 g/t.

80 -

$\mathbf{b}$ $\mathbf{r}$ $\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$ Two other prospects have been identified along the Tooheys structure including a zone with grab samples to 12 g/t at the southern end (Tooheys South). This zone was explored in the mid 1990's without success.

Visual prospecting and rock-chip sampling areas of gossan, silicification and quartz veining 5 kilometres south of the Tooheys zone turned up anomalous grab samples of quartz float with assays up to 4.5 g/t Ag, close to a zone of silicification with apparent similarities to the Tooheys zone. This prospect termed Rocks Ridge has been retained under MCNA 5115 and emphasises potential in the district for undiscovered outcropping gold mineralisation. Additional mapping and sampling will be necessary to determine whether the Tooheys and Rocks Ridge prospects are part of a regionally extensive and previously unrecognised zone of mineralisation.

McKinlay

This prospect which is excluded from the licences is described as a small group of old workings on north west trending shear hosted quartz veins. The prospect forms a slight topographic rise in an otherwise flat colluvium covered area. Gold mineralisation is associated with arsenopyrite and pyrite and veins are located in the axial zone of an anticline through siltstones and greywackes of the Mount Bonnie Formation. This prospect highlights the potential for unrecognised mineralisation in anticlinal positions in poorly exposed parts of the licence area.

$5.4.3.2$ Redbank (MCN 4254)

This prospect is located 3 km west of the Glencoe project in reasonably dissected terrain with extensive scree cover. Bedrock geology comprises argilites, arenites and ferruginous cherty units which strike east north east and are folded about south west plunging open folds. These sediments, like Glencoe, are thought to form part of the Mount Bonnie Formation.

In essence the prospect comprises two areas of scorodite (hydrated oxide of iron and arsenic) rich gossan 180 metres apart. Grab rock chip values up to 8 g/t Au are reported from the eastern gossan (Area "A").

A percussion drill intercept of 8m @ 19.33 g/t Au was reported in gossan at shallow depth confirming high surface gold grades at Area "A" with a costean intercept of 8 metres at 10.9 g/t Au at surface. Mineralisation is apparently hosted by aplititic intrusives which have been mapped as concordant with bedding in the enclosing sediments.

The prospect was vigorously explored by Magnum Gold as part of their regional programme around Glencoe. Results indicate that the outcropping mineralisation is neither tabular nor laterally continuous. The possibility of a small steeply plunging shoot of high grade mineralisation remains to be fully tested. If this could be confirmed, it would open up the possibility of repeats along strike within the apparently bedding-parallel mineralised zone.

A soil arsenic anomaly in the NW of the tenement and two electrical geophysical targets remain untested.

PINE CREEK PROJECT / Pine Creek Exploration Targets continued

$5.4.3.3$

North Goodall Prospects (MLN 872-874 Johns Hill, MLN 875-877, 883 Star of the North, MLN 878-879 Great Northern, MLN 880-882 Great Western)

These prospects including Johns Hill, Star of the North, Great Northern and Great Western are located within 8 kilometres of the Goodall deposit and about 30 kilometres north of Glencoe (Figure 6). Mineralised quartz veins are hosted in mudstone, siltstone, sandstone and greywacke of the Burrell Creek Formation close to the extension of the Pine Creek shear zone which is reflected in regional magnetic data (Figure 7). In all cases gold mineralisation is associated with variable pyrite and arsenopyrite bearing quartz veins developed along or close to the axial regions of north to north east trending anticlinal folds. The Johns Hill and Star of the North prospects are located 2 kilometres apart on the hinge of the same regional antiform.

Old workings are confined to structurally controlled shoots with high reported gold grades which have been confirmed by grab sampling of mullock derived from these workings. (Johns Hill 19.5q/t Au, Star of the North 30g/t Au and Great Northern 8.8 g/t Au)

This area was explored in the 1970's by a number of groups including Peko and Pan d'Or, and several diamond drill holes were completed.

Western Mining Ltd as part of its regional assessment of the Goodall area carried out a programme of regional mapping and including detailed mapping and sampling of the John's Hill and Star of the North prospects and a more cursory examination of the Great Northern and Great Western deposits. They obtained values in grab samples from dumps and mullock heaps up to 15 g/t Au.

The most intensive exploration of the project area included mapping, sampling, costeaning and drifting. The following descriptions are mostly based on results from this work (Individual Reports Listed under Principal References).

Johns Hill

Workings are located within a 400 metre long arsenic soil anomaly which is open to the south beneath extensive colluvium. Old workings comprise a 5m deep shaft, shallow trenches and open cuts. Grab samples from mullock heaps have returned gold values between 1.1 g/t Au and 19.5 g/t Au. Detailed exploration included 9 costeans and 12 RC drill holes mostly above 50 metres vertical depth. Drilling at Johns Hill was carried out on 25 metre sections with RC and costeans over a strike length of 150 metres. Generally very low values were returned from this work.

Star of the North

Old workings are located on a 150 metre long NE trending pyrite rich quartz lode exposed on a low rise in an area of poor outcrop. Strong shearing is evident on the margins of the lode and most of the mining was confined to small high grade shoots.

Pan d'Or obtained a best value of 0.2m @ 22.5 q/t Au from 97.7m in diamond hole RDD1.

Three costeans over 100 metres of strike length intersected two zones of mineralisation with values up to 2.9 g/t Au and follow up RC drillholes achieved some encouraging results (Table 5).

Table 5: Star of the North, better RC and costean results

STAID.	Drillhole/Costean	Thickness	GALAD
SNRC5	RC Drifthole	40	$\mathbb{Z}[d]$
SNROG	RC Drilinole	20	16
SNRC10	RC Drilinole	25	47.
5NC2	Costean	5.5.	$2.3 -$
SNC2	Costean	70	17
SNC7	Costean	6.0	29.
SNC ₇	Costean	аn

Great Northern

Production appears to have been from a single shoot. Rock chip samples from an outcropping saddle reef returned values up to 8.8 g/t Au at surface. One of three diamond holes returned a best results of 1.75 g/t Au over a width of 0.3m.

There is evidence of working of nearby alluvials by the early Chinese miners.

Great Western

This prospect comprises a group of 6 quartz veins disposed en echelon over a strike length of about one kilometre and located in the axial zone of regional anticline. Individually veins trend between north and north east and dip steeply towards the west. Shallow workings are located on all reefs with most work apparently focused on the southern or "No.6" reef. Unlike the other prospects, there is only patchy arsenic anomalism over the Great Western prospect. Two diamond holes by Pan d'Or achieved a best intersection of 1.15m @ 4 g/t Au associated with disseminated galena, pyrite and sphalerite in vein quartz.

The North Goodall group of deposits have been subjected to relatively detailed exploration including drilling, costeaning and geological mapping and it must be concluded that potential for laterally continuous mineralisation is low. Potential remains for high grade shoots which were overlooked or ignored by early miners.

Mt Ringwood

The Mt Ringwood EL cover the strike extensions of the above mineralised structures (Figure 7), mostly concealed by alluvial drainage sediment.

$5.4.3.4$ Daly River Prospects (MCN 2588-259, Terry's and MCN 3994-3995, Specky Creek)

Terry's

The Terry's prospect is situated well to the south west of other groups. It was discovered in 1975 by a grab sample of oxidised vein quartz which returned 5.5 g/t Au. The prospect is located in a heavily altered granophyre (Ti Tree granophyre) close to the Giants Reef fault adjacent to a large regional magnetic anomaly associated with a differentiated mafic complex.

Exploration has included stream sediment sampling, soil sampling, percussion drilling, costeaning, and induced polarisation surveys.

$\mathbf{b}$

$-63$ $-$

$5.4.3.4$

PINE CREEK PROJECT / Pine Creek Exploration Targets continued

Daly River Prospects (MICN 2588-259, Terry's and MCN 3994-3995, Specky Creek) This programme delineated a zone of gold mineralisation over a strike length of 77 metres as summarised below:

Section 9398E, 2m @ 4 g/t Au (TRP29) from 31m.
Section 9377E, 2m @ 8.18 g/t Au from 20m (TRP17) the extension of 1m @ 38 g/t in a costean.
Section 9350E, 4m @ 2.37 g/t (TRP27) from 26m, and 5m @ 2.35g/t (TRP28) from 30m.
Section 9321E, 2m @ 2.1q/t (TR32) from 25m.

$5.4.4$ Exploration Programme Pine Creek

As noted above the principal target is moderate to high grade gold mineralisation akin to the Callie deposit. While the Glencoe resource is modest in size and grade, early development is a priority in order to establish a cash flow for the Company. Glencoe also offers an opportunity to test for deeper higher grade mineralisation akin to Cosmo Howley or Callie which may support an underground operation.

Working outwards from known mineralisation and revisiting areas which have only been superficially tested are valid approaches in this terrain and funding allocated is in accord with the programme outlined.

$5.4.4.1$ Glencoe

The following exploration programme has been proposed by Australasia with the objective of rapidly reaching a decision on the feasibility of mining the Glencoe deposits.

Drilling for metallurgical samples to contirm suitability of the primary mineralisation for treatment by the CIP process:
Drilling for geotechnical information to enable optimal pit design.
Sampling of dump material to determine reserves at grass.
Environmental and social impact studies.
Exploration of the downplunge extensions of the mineralised structures.

$5.4.4.2$ Exploration Licences

The programme put forward by Australasia seeks to identify one or more stand-alone gold resources within its large EL areas. The proposal is for a greenfields exploration programme comprising the following elements.

Compilation and interpretation of existing public domain information to identify target areas according to criteria as described above.
Field reconnaissance of target areas and formulation of a detailed exploration plan.
Semi-regional to detailed bedrock geochemical survey of concealed target areas and structurally favourable corridors.

$5.4.4.3$ Mining Tenements

The proposal as regards the known gold deposits on mining tenements will depend upon a detailed compilation and reinterpretation of existing exploration records and field mapping. It is likely that this will develop into a programme of electrical geophysics (sulphidic quartz veins are expected to be resistive chargeable bodies) and to bring at least one of the prospects to drilling stage by the end of the first year of exploration to maximise potential for synergy with any development at Glencoe.

$64$

$5.5$

LACHLAN PROJECT

$\mathbf{p}$ ċ $\ddot{\phantom{0}}$ $\bar{\omega}$ $\hat{\mathbf{c}}$ $\overline{16}$ ù. $\approx$

$\alpha$

Fig 14: Lachlan Orogen - Distribution of Ordovician Rocks and Tertiary Volcanic Cover .

$5.5.1$ Introduction

Exploration Licence 6040 (Lucknow) is located in the Central New South Wales porphyry district which forms part of the Lachian Fold Belt, an extensive belt of sediments, volcanics and high level intrusive rocks stretching from Tasmania to Queensland (Figure 14).

$\cdots$

$5.5.1$ LACHLAN PROJECT / Introduction continued

The Lachlan Fold belt includes major mineral deposits extending from the massive sulphide districts of western Tasmania (Que River, Henty), Victoria (Benambra) and the NSW Highlands (Woodlawn), through to the NSW porphyry gold copper district of Central NSW where EL 6040 is situated.

The Central NSW porphyry copper district contains a number of very significant copper/gold, gold and base metal deposits which include:

The Lake Cowal porphyry copper, the North Parkes gold copper porphyry deposits and the world class porphyry gold/copper deposits at Cadia and Ridgeway. The district also includes large but currently sub-economic porphyry copper/gold deposits at Copper Hill and Cargo and lower grade extensions to the Lake Cowal deposit.
The Lucknow goldfield which is distinguished by structurally controlled bonanza grade (3-500 ounce per tonne) gold mineralisation in quartz veins. The Lucknow goldfield is subject of a separate mining lease application and is excluded from EL 6040.
A number of significant past gold producers including the skam-hosted Browns Creek deposit.
Volcanogenic massive sulphide deposits eg Lewis Ponds.

Palaeozoic rocks underlying EL 6040 formed part of a complex island arc system in which subduction of oceanic crust along the eastern Australian continental margin led to development of a number of north south trending belts of andesitic volcanics, sediments and shallow sub volcanic intrusions which are clearly identifiable on regional magnetics.

Fig 14A: Lachlan Orogen - Lucknow Area magnetics

$66$ –

The following factors which are believed to be important in localising major ore deposits in the district, have been recognised in EL 6040:

Coincidence with or close proximity to major magmatic centres interpreted as deep magnetite-bearing granitic intrusions which give rise to large discrete magnetic anomalies.
Location along linear belts of Ordovician age lavas and volcaniclastic sediments which are recognisable as linear zones of moderate to high magnetic amplitude separated by magnetically quiet zones reflecting intervening sediments. Typically volcanic belts are made up of andesitic lavas and tuffs of shoshonitic composition which have been intruded by high level bodies typified by monzonite with a similar bulk composition to the volcanics.
Occurrence within the Lachlan Transverse Zone (LTZ) a broad NW-SE trending structural corridor defined by major faults and magnetic linears which intersect north south trending volcanic belts at a high angle.

Australasia's principal target in this terrain is a large intrusive related gold or gold copper deposit akin to Cadia-Ridgeway. The licence is located along strike from these deposits and includes the same suite of palaeozoic volcanic rocks and intrusives. The presence of Tertiary basalt cover has been a barrier to simple surface exploration in the past.

5.5.2 Geology and Mineralisation

EL 6040 is located along the Ordovician Molong Volcanic Belt which includes the Cadia and Ridgeway orebodies. The Lake Cowal and North Parkes deposits are located along the sub-parallel Junee Narromine Belt, some 60 kilometres to the west (Figure 14).

EL 6040 is underlain by a sequence of intermediate (andesitic) volcanics, sediments and serpentinised ultramafic rocks (Figure 15). The stratigraphy of Palaeozoic rocks in EL 6040 is subdivided into the following units:

Byng Volcanics/Blayney Volcanics. These are thought to be the oldest unit recognised and comprise mafic and intermediate lavas, tuffaceous rocks and volcaniclastic sediments.
Oakdale Formation. This unit which includes chert, siliceous siltstones and minor andesitic volcanics conformably overlies the Byng Volcanics. Serpentinised ultramafic rocks along the eastern margin of EL 6040 are included in the Oakdale Formation.
Forest Reefs Volcanics. This unit which is mapped in the vicinity of the Cadia deposits, is interpreted from magnetic data to extend onto the southwestern part of EL 6040.

Intrusives including felsic porphyry sills and dykes of probable Ordovician age have been recognised in association with base metal/gold mineralisation at the Huntley prospect. An intensely altered monzodiorite intrusive was recognised at Summer Hill.

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Albanya (Albanya Albanya)

$5.5.2$

LACHLAN PROIECT / Geology and Mineralisation (Controled)

In the western part of the Licence, Palaeozoic rocks are concealed by Tertiary basalt and these highly prospective rocks remain unexplored.

Basalt thickness as determined from water bore information varies from negligible to more than 100 metres and reflects the variability of the underlying pre-Tertiary land surface (RGC 1988). Several areas of outcropping palaeozoic rocks occurring as erosional inliers or "windows" in the overlying basalts (e.g. Huntley) emphasise the variable thickness of basalt cover.

Fig 15: EL 6040 Regional geology, major gold deposits and prospects.

The Lucknow goldfield (which is excluded from EL 6040 under Mining Lease No ML55/MLA 197 -Figure 15) was discovered around 1855. The deposit was described as comprising very high grade gold mineralisation occurring in shoots controlled by the intersection between east west trending quartz veins and a sheared contact between andesitic volcanics and serpentinised ultramafics dipping at around 65 degrees to the north east.

Mining was conducted on more than 16 sulphidic quartz calcate veins up to 1.8 metres wide which extend into the sheared contact or "lode" from the west i.e. from the andesitic footwall.

Some idea of gold grades can be assessed from the following description by Harper "Returns from the Snobs claim gave 15-20 oz of gold to the dish (about 20lb of dirt), the Shamrock, 112 oz to the ton, Golden Gate claim, 1500 ounces from 7 tons...". High grades are developed only where veins intersect the sheared contact or "lode" which extends in a north westerly direction for a distance of around 1 kilometre. The "lode" extends beneath Tertiary basalt to the south east.

$5.5.3$ Previous Exploration

Exploration has been focused in the north eastern part of EL 6040 on the margin of the Tertiary basalt. Successive phases of exploration were as follows:

The concealed south eastern extension of the Lucknow "lode" outside of MLA 197 was targeted by Ajax because research had showed that the most southerly 1920's era exploration shaft through basalt had remained in the ultramatic hanging wall without ever intersecting the lode or the footwall andesite. A total of six diamond holes were completed to test this concept. Altered and pyritic "lode" rocks were intersected in several holes but no significant gold mineralisation was identified.

In 1987, there was a systematic appraisal of part of EL 6040 as part of a larger regional exploration programme. The programme comprised the following:

A detailed aeromagnetic and radiometric survey which demonstrated that magnetic signatures of the underlying Palaeozoic rocks can be discerned through basalt cover (Figure 14A).
Inspection of known mineral occurrences. This led directly to discovery of gold mineralised quartz veins at Huntley where old pits are located in an erosional window through Tertiary basalt. At Huntley, mineralised quartz veins occur in a north east trending shear zone which separates andestic tuffs and lavas (probably part of the Ordovician Blayney Volcanics) from fine grained sediments (probable Oakdale formation). This mineralisation is described in more detail below.
Follow up sampling, ground geophysics and drilling at Huntley.
Limited stream sediment sampling using the bulk cyanide leach method.

$\mathbf{b}$

5.5.3 LACHLAN PROIECT / Previous Exploration continued

The subsequent phase comprised:

Aircore drilling for a total of 80 holes was completed across the Newhaven Shear in an effort to better define mineralisation at Huntley.
Regional regoleach soil sampling programme comprising 1851 samples over the eastern half of EL 6040 (Figure 15).
Limited RC and aircore drilling was carried out on targets defined by the regoleach programme. See Boral prospect described below.

A programme comprising 403 auger samples were collected by Australasia in December 2004 and submitted for regoleach analysis. Sampling was designed to infill between pre-existing regoleach traverses. Only low level to weakly anomalous responses were achieved by the programme. This programme does not appear to significantly downgrade the exploration potential of the areas tested for a number of reasons:

The survey was carried out during unseasonably heavy rain which hampered access and downgraded the underlying geochemical process whereby weakly bonded metal ions in the soil profile are prone to being diluted or dissolved.
Samples were collected in an area which was mostly basalt covered and consequently assay values represent different background populations

$5.5.4$ Exploration Targets

Potential is seen in the licence for:

Cadia/North Parkes style gold copper mineralisation associated with subvolcanic monzonite intrusives. Discrete magnetic anomalies can be seen in aeromagetic data (Figure 14).
Extensions and/or repetitions of bonanza grade quartz vein gold mineralisation at Lucknow. Serpentinised ultramafics are readily identifiable as high amplitude lenticular magnetic anomalies.
Browns creek style skarn mineralisation where mineralisation occurs in the contact zone between mineralised intrusives and reactive carbonates in the volcano-sedimentary sequence. Such mineralisation which is typically accompanied by magnetite may be reflected by anomalous magnetics.

Exploration programmes have generated a number of targets within EL 6040 with potential for significant gold mineralisation (Figure 15). These include gold and base metal mineralisation at Huntley, and the regoleach gold anomaly at Boral. In addition there are a number of conceptual targets including potential for structural repetitions of Lucknow style gold mineralisation.

$\sim$

$\cap$ $\bar{\phantom{a}}$

$\sim$

5.5.5 Huntley Prospect

Follow up of mineral occurrence No 141 on the Bathurst 1:250,000 sheet by RGC under the Ajax JV led to discovery of vein quartz mineralisation containing high grade gold values with associated base metal sulphides. Grab samples yielded up to 12 g/t Au, 4.4% Zn, 2% Pb and 19 g/t Ag in an erosional window through Tertiary basalt. This discovery was followed up by a programme comprising

Electrical geophysical surveys which defined chargeability anomalies associated with the mineralised quartz veins.
Trenching to obtain a better surface picture of mineralisation.
Drilling for a total of 9 diamond holes and 2 RC drillholes.

From drilling it appeared that quartz carbonate veins with gold and base metal sulphides were localised along the north west trending Newhaven shear zone which is developed along the contact between andesitic tuffs and lavas of the Byng Volcanics and cherty and silty sediments of the Oakdale Formation. Altered porphyry dykes adjacent to the shear zone appear to be associated with better gold values (Figures 16 and 17).

Surface trenching at Huntley obtained intervals up to 7m @ 2.4 g/t (best value 1m @ 10.25 g/t).

Aircore results (HAC018, Figure 16) have identified additional mineralisation at Huntley and highlight potential for repeats of the Huntley style of mineralisation perhaps where the Newhaven shear is intersected by south west trending quartz veins.

Surface trenching at Huntley obtained intervals up to 7m @ 2.4 q/t (best value 1m @ 10.25 g/t).

Aircore results (HACO18, Figure 16) have identified additional mineralisation at Huntley and highlight potential for repeats of the Huntley style of mineralisation perhaps where the Newhaven shear is intersected by south west trending quartz veins.

Fig 16: Huntley Prospect - geology and drilling results.

Fig 17: Huntley Prospect Cross Section 630540N - geology and mineralisation.

LACHLAN PROJECT CONDINING

5.5.6 Regoleach Anomalies

Anomalous regoleach gold values are summarised in Figure 15 and include the Dry Run and Boral targets which were selected by the operator for initial follow up.

The Boral target, which returned the highest regoleach gold assays in the entire survey area, was selected for detailed soil sampling and drilling. No significantly anomalous results were obtained and the source of this target has not been confirmed.

The Dry Run target is associated with a zone of sericite pyrite altered sediments extending over a distance of 500 metres. This target is mostly defined by arsenic with relatively low gold values.

At Summer Hilf (subsequently relinquished by the Company) weakly anomalous regoleach arsenic and gold values are associated with altered pyritic monzodiorite in an erosional window through basalt. This target which highlights the potential for mineralised intrusives in the licence area was not followed up due to its proximity to the town of Orange.

5.5.7 Proposed Exploration Programme EL 6040

As noted above the principal target is a major intrusive related gold or gold copper deposit akin to the Cadia Ridgeway deposits.

The programme proposed by Australasia for the first year, comprises the following elements:

Review and re-interpretation of past exploration data to establish immediate drilling targets.
Percussion and RAB/Aircore drilling on immediately identifiable targets (which would probably include Huntley).
Reconnaissance percussion drilling to obtain information about basalt depth.

The programme proposed by Australasia involving early RAB and aircore drilling on magnetic targets beneath the basalt is appropriate given the shortcomings of surface geochemistry in this environment. While modest in size in the first year, this programme has the potential to quickly identify extensions to known gold mineralisation and to discover new mineralisation under basalt cover.

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5.6 LIST OF REFERENCES

Otago

Bluck, R.G., 2003, Report on Slimhole Reverse Circulation Drilling in the area of the Golden Crescent Workings at Wetherstones. Exploration Permit No 40-510. Unpublished Report prepared for Otago Gold Pty Ltd.

Chrisp, G., 1997, Prospecting Permit No 30 050, Waikerikeri Dunstan Range Front, Technical Report for the period ending 14th February 1997. Unpublished Report prepared for Otago Gold Pty Ltd.

Corner, N.G., 1988, Wetherstones Gold Property Otago, New Zealand, (PL31/1089). Unpublished Geological Consultants Report for CR Nauman.

Els, B.G., J.H. Youngson and D. Craw. 2003; Blue Spur Conglomerate; auriferous late Cretaceous fluvial channel deposits adjacent to normal fault scarps, southeast Otago, New Zealand. New Zealand Journal of Geology and Geophysics Vol. 46; 123-139.

Henley R.W., J. Adams, 1979, on the evolution of giant gold placers. Australasian Institute of Mining and Metallurgy Proceedings pp B41 to B50.

Ireland, T.J. 2004, Wetherstones gold deposit - a new perspective. Australasian Institute of Mining and Metallurgy New Zealand Branch Annual Conference, Nelson, New Zealand

McDonnell, B., 1992. Report on PL 31 1644 St Bathans. Report by McDonnell and Associates for L & M Mining.

Robinson, C. J., 1994 - 1, Lawrence Area Project Central Otago New Zealand. Unpublished Geological Consultants Report prepared for Otago Gold Ltd.

Robinson, C.J. 1994 - 2, Upper Manuherikia-Ida Basins Project, Central Otago New Zealand. Unpublished Geological Consultants Report prepared for Otago Gold Limited.

Robinson, C.J., 1994 - 3, Waikerikeri Project Central Otago New Zealand. Unpublished Geological Consultants Report for Otago Gold Limited.

Robinson, C.J., 1995, Individual Project Summary and recommendations Central Otago Region New Zealand. Unpublished Geological Consultants Report prepared for Corporate Developments Pty Ltd.

Utting, B.S. 1994, Wetherstones.- a million ounce prospect?. Report for BSU Consultants Ltd.

Pine Creek

Bampton, K., 2003 AUSTRALASIA GOLD LIMITED, Glencoe Gold Project - Northern Territory Resource Notes. Report by Independent Specialist Consultant.

Carthew, S., 1996, Exploration Licence 9430 Toughys, Annual Report for the period ending 15th May 1997. Unpublished Statutory Report on behalf of Corporate Developments Pty Ltd.

Central Mineralogical Services 1990: Mineralogical report on samples RB1-RB7 and RB31 and RB32.

Eupene Exploration Enterprises Pty Ltd; 1989, Report on the 1989 Exploration MLN 872-MLN 883 Northern Territory Australia. Unpublished Statutory Report for White Mining Services / Nickel Rim Mines Ltd.

Hancock, S.L. and M.A. Ward, 1987, Annual Report on adjoining exploration licences 1656, 4778, 2361, 2362, 4919, Pine Creek Geosyncline NT to May 1987. Unpublished Statutory Report by Western Mining Ltd.

Jenkins, B.L., 1992, Magnum Gold NL, Redbank Exploration Licence 4902 Northern Territory, Exploration Year 6 and Final Report. (Area retained as MC's). Unpublished Statutory Report by ERA Pty Ltd for Magnum Gold NL.

Milligan I.M., 1996, MCN4247 to 4255 Redbank, Northern Territory. Term 1 report, March 1992 to December 1996. Unpublished Statutory Report by ERA Pty Ltd for Magnum Gold NL.

Milligan I.M., and M.R. Bunny 1989, Glencoe Gold Project NT Resource Estimation Report. Unpublished Report ERA Pty Ltd for Magnum Gold NL.

Milligan LM., 1997. Report on Activities on Mineral Claims N20 to N43, N1303 to N1313 and N3578 "Glencoe Prospect" Northern Territory for Period 6th October 1992 to 5th July 1997. Unpublished Statutory Report by ERA Pty Ltd for Magnum Gold NL.

Milligan, I.M., 1988, Glencoe Prospect NT Exploration Licence 4810, Mineral Claims N20 to N43 and N1303 to N1310, Report on Exploration to 19th November 1988. Unpublished Statutory Report by ERA Pty Ltd for Magnum Gold NL.

Milligan, I.M., 1989. Report on Exploration on Mineral Claims N20 to N43, N1303 to N1313 and N3578 "Glencoe Prospect" Northern Territory for the year to 19th November 1989. Unpublished Statutory Report by ERA Pty Ltd for Magnum Gold NL.

Nicholson, P.M., G.S. Eupene, 1990, Gold Deposits of the Pine Creek Inlier. In Geology of the Mineral Deposits of Australia and Papua New Guinea. Ed. F.E. Hughes pp 739 - 742. Australasian Institute of Mining and Metallurgy Monograph 14.

Russell R., 1988, Air Photograph interpretation in the Mt Ringwood area, Northern Territory. Unpublished Consultants Report for White Industries Ltd.

Trescabe Pty Ltd, 1995, First annual report on EL8256. Unpublished Statutory Report Trescabe Pty Ltd.

White Industries Ltd., 1988, Mt Ringwood Joint Venture MLN 872 to MLN 883, Report on Exploration for the period 11 April 1988 to 31 December 1988. Unpublished Statutory Report for White Mining Services/Nickel Rim Mines Ltd.

NSW Lucknow

Bird, D., 1999, Exploration Licence 5234 Browns Creek South, Annual Report for the 12 month period ending 15th March 1999. Unpublished Statutory Report by Hargraves Resources NL.

Flitcroft, M., 1987, EL2310 and 2379 Lucknow Orange District NSW. Sixth six monthly reports, 27th May to 26th November 1987. Unpublished Statutory Report by RGC No GS1987/326.

Pratt, B., 1985, Progress Report on Exploration Licences 2310 and 2379, Lucknow NSW for the period November 27th 1984 to May 26th 1985. Unpublished Statutory Report by Boyd Pratt and Associates for Ajax Joinery Pty Ltd.

Pratt, B., 1985, Progress Report on Exploration Licences 2310 and 2379, Lucknow NSW for the period May 27th 1985 to November 26th 1985. Unpublished Statutory Report by Boyd Pratt and Associates for Ajax Joinery Pty Ltd.

RCG Corp. 1988. Annual Report for EL's 2310 and 2379 Lucknow Area. Open file report by RGC 1988 - 133 DMR.

Redfire Resources Ltd, 2000. Information Memorandum, Lucknow, EL 5770, Orange District, New South Wales. Unpublished internal report Redfire Resources.

Rutherford, N.F., 1991, First annual report for EL 5770 Lucknow, Orange District, New South Wales. Unpublished Statutory Report by Rutherford Mineral Resource Consultants for Redfire Resources.

Rutherford, N.F., 2005, Summary Review of Soil Sampling EL 6040 Lucknow Orange District NSW. Unpublished Internal Report for Australasia Gold Ltd.

Johnston, C., 2000, EL4643 (renewed as EL5234) Orange - Millthorpe NSW. Final report on exploration carried out between 15th March 1994 and 14th March 2000. Unpublished Statutory Report by Hargraves Resources NL.

Harper L.F., 1920, The Lucknow Gold Field. Mineral Resources Publication No. 30, Department of Mines, Geological Survey, New South Wales.

$\mathbf{p}$

LYNCH MEYER MEMBER OF THE XEMBEDY STRAMG LEGAL GROUP

3 November 2005

The Directors Australasia Gold Limited 13 Woodland Close ALDGATE SA 5054

Dear Sirs.

Prospectus - Solicitors Report

This report is prepared for inclusion in a Prospectus to be dated on or about 9th November 2005 ("Prospectus") and issued by Australasia Gold Limited offering for subscription 15,000,000 ordinary shares of \$0.20 each with attached options in the capital of Australasia Gold Limited ("the Company").

This report relates to:

Mining tenements owned by the Company and by its wholly owned subsidiaries Otago Gold Limited ("Otago Gold") and The Australian Land Company Pty Ltd ("TALC") and mining tenements the Company is interested in as joint venturer or the Company is applying for.
The material agreements of the Company summarised in Section 9.6, of the Prospectus.
The constitution of the Company and the rights attaching to ordinary shares in the Company as set out in the Company's constitution.

MINING TENEMENTS

We have through our agents conducted searches of:

the New South Wales mining tenement in the Register maintained by the New South Wales ("NSW") Department of Mineral Resources ("the NSW Department") pursuant to the Mining Act 1992 ("the NSW Act"):
the Northern Territory mining tenements in the Register maintained by the Department of Business, Industry & Development (NT) ("the NT Department") pursuant to the Mining Act 1980 $(NT)$ , and
the New Zealand mining tenements in the Register maintained by the New Zealand Crown Minerals department pursuant to the Resource Management Act 1991.

These searches were undertaken periodically between 1 July 2005 and 17 August 2005 in the case of the Northern Territory tenements, 4 July 2005 in respect of the New South Wales tenement and on 27 July 2005 in the case of the New Zealand tenements. As a result of these searches and the reports from our interstate and New Zealand agents, we consider that our report provides an accurate statement as to the status of, and the Company's and its subsidiaries' interests in, the mining tenements listed in the Schedule 1-3 up to the latest dates of those searches.

BALKIBUG TEREBRERITS CONTINUED

We have assumed the information in the Registers maintained by the Departments is accurate and up to date. The references in the Schedules to the areas of the tenements are taken from details shown on the Departments' Registers. No survey was conducted to verify the accuracy of those areas.

NATIVE TITLE (AUSTRALIA)

In preparing this report, we have not been asked to comment on the likelihood of any native title claims being made in respect of the areas the subject of the mining tenements. However, the tenements may be located within areas subject of claims or applications for native title. Both the Native Title Act 1993 (Commonwealth) ("NTA") and related State and Territory native title legislation and aboriginal lands rights and aboriginal heritage legislation may affect access to exploration areas or to obtain production titles. Settling claims may incur costs to the Company. The degree to which this may impact on the Company's activities will depend on factors including the status of particular tenements and their locations. At this stage, the Company is not able to quantify the impact, if any, of such matters on its operations.

NT Northern Territory

Attached is Schedule 1 outlining the relevant particulars of the Northern Territory tenements obtained from searches and enquiries made by our agent.

$\blacksquare$ Native Title

From enquiries by our agents of the National Native Title Tribunal ("NNTT") and the NT Department, we are aware of three native title claims over the parts of the land covered by the tenements. These are identified in Notes 9, 11, 13 and 23 respectively in Schedule 1.

The Federal Court has referred these claims to the NNTT for mediation. This should enable the hearing of claims to commence.

It is possible that further claims may be made in the future. Where land is subject to native title, the NTA imposes restrictions upon the grant of mining tenements in relation to that land, including the requirement to negotiate with native titleholders. As such, the existence and determination of native title in relation to the land the subject of the tenements could inhibit exploration and mining operations, or cause significant delays in relation to future conversion of licences and applications for mining tenements over the subject land, or possibly challenge the validity of the grant of part or all of the rights conferred therein.

$\overline{2}$ Native Title Act 1993

In 1992 the decision of the High Court in Mabo v Queensland recognised the concept of Aboriginal native title to land where those rights survived the acquisition of sovereignty by non-indigenous people. The NTA was enacted in response to the Mabo case to requlate dealings with native title lands, and its substantive provisions commenced on 1 January 1994.

The NTA was substantially amended in 1998 in response to the 1996 High Court decision of Wik v Queensland. The Wik case recognised that the granting of a pastoral lease did not necessarily extinguish all native title rights, some of which could co-exist with rights held under a pastoral lease.

Accordingly, the NTA (as amended) now provides a legislative scheme which sets out how native title is validly extinguished, allows "past acts" (including mining tenements and ancillary titles granted before 1 January 1994, which might otherwise be invalid due to the native title) and "intermediate period acts" which took place between 1 January 1994 and 23 December 1996 to be validated, authorises valid acts in relation to native title lands occurring after the introduction of the NTA, provides for a negotiation process between government, native title and non-native title parties in relation to certain future uses of native title lands, and provides for compensation to be claimed for the extinguishment or impairment of native title.

In the Northern Territory, however, the NTA procedures continue to apply in conjunction with the Validation (Native Title) Act (as amended). This Act is consistent with the standards set by the NTA for future dealings affecting native title.

$\mathbf{R}$ Validity of the Tenements

$3.1$ Tenements granted prior to 1 January 1994

The NTA permits a State to validate "past acts". Under the NTA mining tenements granted in the Northern Territory prior to 1 January 1994 are deemed to be valid. With respect to the Tenements that were granted prior to 1 January 1994, native title (if any exists) has been suspended by their grant. To the extent that the exercise of native title rights and interests is inconsistent with the exercise of the rights conferred by those Tenements, the rights under each particular Tenement will have priority for the term of the relevant grant.

As set out in Schedule 1, the vast majority of the Tenements were granted prior to 1 January 1994.

$3.2$ Tenements granted between 1 January 1994 and 23 December 1996

The Northern Territory Government granted some mining tenements during the period between 1 January 1994 and 23 December 1996 without complying with the requirements of the NTA. Accordingly, there was a risk that some of the Tenements granted in this period may be invalid as a result of non-compliance with the NTA. This risk has been removed by the 1998 amendments to the NTA and corresponding Northern Territory legislation so far as the Tenements were granted over land, which is the subject of a pastoral lease, or other prescribed leasehold land.

There are no Tenements granted in this period.

$3.3$ Tenements granted since 23 December 1996

Mining Tenements granted since 23 December 1996 which affect native title rights and interests will be valid provided that the future act procedures set out in 3.4 below were followed by the relevant parties.

ELs 22301 and 23824 fall within this category.

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Ika m

Northern Territory -- Validity of the Tenements continued

$3.4$ Future Tenement Grants

The valid grant of any mining tenement, which may affect native title, requires full compliance with the provisions of the NTA in addition to compliance with the usual procedures under the relevant Territory mining legislation. The primary procedure prescribed under the NTA is the "right to negotiate" process.

The right to negotiate process involves the publishing or advertising of a notice of the proposed grant of a tenement followed by a 6-month period of negotiation between the Territory Government, the tenement applicant and the relevant registered native title claimant. If agreement is not reached to enable the grant to occur, the matter may be referred to arbitration before the NNTT, which has a further 6 months to reach a decision. The decision of the NNTT may be reviewed by the relevant Federal Minister

The right to negotiate process is not required to be followed in respect of a proposed future act in instances where the expedited procedure applies. Under the NTA, a future act is an act attracting the expedited procedure if:

3.4.1 the act is not to interfere directly with the carrying on of the community or social activities of the persons who are the holders of native title in relation to the land; and
3.4.2 the act is not likely to interfere with areas or sites of particular significance, in accordance with their traditions, to the persons who are holders of the native title in relation to the land; and
3.4.3 the act is not likely to involve major disturbance to any land or waters concerned or create rights whose exercise is likely to involve major disturbance to any land.

When the proposed future act is considered to be one that attracts the expedited procedure, persons have until 3 months after the notification date to take steps to become a native title party in relation to the relevant act (for example the proposed granting of an exploration licence). The future act may be done unless, within four months after the notification day, a native title party lodges an objection with the NNTT against the inclusion of a statement that the proposed future act is an act attracting the expedited procedure. It has been the practice of the Territory administration to use the expedited procedure.

If there are no native title parties or no objections lodged within the four-month period, the act may be done. If one or more native title parties object to the statement, the NNTT must determine whether the act is an act attracting the expedited procedure. If the NNTT determines that it is, the Territory may do the future act (i.e. grant an exploration licence).

Further, the right to negotiate process does not have to be pursued in cases where an indigenous land use agreement ("ILUA") is negotiated with the relevant Aboriginal people and registered with the NNTT. In such cases, the procedures prescribed by the ILUA must be followed to obtain the valid grant of the tenement. These procedures will vary depending on the terms of the ILUA.

As set out in the Schedule 1, MCNA 5115 is an application in the NTA future act process.

$\mathbf{A}$

$\mathbf{b}$

$\mathbf{r}$

$\sim$

$\cap$

$\bar{\phantom{a}}$

$\sim$

Renewals and Extensions of Tenements

As with the granting of mining tenements, renewals and extensions of mining tenements granted prior to 1 January 1994, to the extent the renewals were invalid due to native title, have been validated by legislation.

Renewals of mining tenements granted between 1 January 1994 and 23 December 1996 have been similarly validated provided certain statutory criteria have been met.

Renewals made after 23 December 1996 of tenements validly granted before that date will not be subject to the right to negotiate process provided:

the area to which the earlier right is made is not extended; $4,1$
$4.2$ the term of the new right is not longer than the term of the earlier right; and
$4.3$ the rights to be created are not greater than the rights conferred by the earlier grant.

There is doubt as to whether the right to negotiate process applies to second and subsequent renewals but this matter is yet to be determined by the Courts.

Other than as stated above, renewals of mining tenements are subject to the same right to negotiate process as is described in 3.4 above.

$\overline{\mathbf{5}}$ Native Title and Future Applications

For future purposes, it is important to note that where it is proposed to convert all or any part of an exploration licence to a mining lease it will be necessary to go through the right to negotiate process (discussed above) with any native title holders or claimants whose claims are accepted for registration at the relevant time.

Some of the Tenements are currently subject to native title claim, and other claims may arise in future. The tenement holder at the time, applying to convert may negotiate and enter into agreement(s) with native title claimants or holders in relation to the grant of mining lease applications in future. Any such agreements may, depending on their terms, affect the costs or economics of any mining project the tenement holder may wish to conduct. In the absence of a negotiated agreement with the native title claimants, there is no quarantee that passing through the native title future act processes will result in mining lease applications ultimately being granted.

The NTA provides for a right of compensation in favour of affected native title parties to the extent that the future acts extinquish or impair the relevant native title parties' rights to the continued enjoyment of their traditional rights over land comprised within the grants. The right to compensation only arises after the native title has been determined by the court to exist. At the date of this Report, it is not possible to assess the level of compensation which will be payable to native title parties in relation to any grant of a mineral lease made under the NTA procedures. The Mining Act 1980 (NT) provides that the applicant for, or holder of, a mining tenement is liable for compensation payable to native titleholders in connection with the grant of a mining tenement.

Bar Northern Territory continued

6 Tenements on Pastoral Leases - Native Title

All the Tenements are on pastoral lease land which admits the continued existence of native title rights and interests to the extent that such native title rights and interests have continued to exist in accordance with Aboriginal traditional law and custom and are not inconsistent with the rights of the holder of the pastoral lease and any other extinguishing event.

$\overline{1}$ Sacred Sites

Sacred sites are sites that are sacred to Aboriginals or otherwise of significance according to Aboriginal tradition, and includes any land that, under a law of the Northern Territory, is declared to be sacred to Aboriginals or of significance according to Aboriginal tradition.

The Northern Territory Aboriginal Sacred Sites Act (Sacred Sites Act) protects sacred sites in the Northern Territory. Any explorer or miner is required to work within the sacred site protection regime created by this legislation being the Aboriginal Areas Protection Authority ("AAPA") prior to any relevant ground disturbance. The relevant land council (in this case the Northern Land Council) is also likely to become involved.

In response to our agents searches, AAPA has advised that it has no Recorded or Registered sites within the Areas of the Tenements.

Inspecting the Register does nothing more than indicate that some sacred sites have been registered. The only definitive method of investigating the possibility of the existence, location and extent of sites is for there to be a specific sacred site survey undertaken taking into account the proposed activities on the land.

AAPA can (after due procedure) issue an Authority Certificate setting out the conditions (if any) on which, under the Sacred Sites Act, proposed works can be carried out or use made of the land. As long as the holder of an Authority Certificate complies with its conditions, the holder is indemnified against prosecution.

As pointed out in notes 7 and 15 to Schedule 1, AAPA has advised that Authority Certificates was issued in 1997 and 1999 in relation to MLNs 816, 872, 873, 874 and 898 to Acacia Resources. Whilst an Authority Certificate may remain in place, as with any proposed work on tenements, it is recommended that application be made to AAPA for an Authority Certificate regardless of whether a certificate has issued previously - primarily because the then proposed activities may vary from those activities upon which the earlier certificate may have been based.

It should be recognised that some custodians of sacred sites will only reveal the existence of a site if they believe that the site may be threatened by the proposed activity and it is therefore essential that the details of any proposed activity which generates the need for the survey encompasses the most likely greatest impact on the land if exploration is successful and a mine eventuates.

$-82$

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$\sim$

$\overline{\mathbf{R}}$ Northern Territory Exploration Licences - General Comments

Exploration Licences are issued subject to standard terms and conditions under the Mining Act 1980 (NT). An EL may not be granted, unless approved by the Minister, if the effect of the grant would be that the total area controlled by one person would exceed 5000 "blocks", as defined in the Act.

The area of land in respect of which an EL may be granted must be contained in a single licence area and must not exceed 500 blocks. An EL may be granted for a term not exceeding 6 years, however there is provision for the EL to be renewed for 2 further periods of 2 years at the Minister's discretion.

The size of an EL must be reduced at 24 months from its grant and each 12 months after that date so that the number of blocks to be retained in the licensed area for the ensuing 12 months is not more than half the number of blocks contained in the area at the commencement of the initial 24 month period or subsequent 12 month period. The Minister on application can waive this reduction. An EL is granted subject to certain standard conditions and includes obligations relating to rehabilitation, payment of rent, minimum expenditure, and reporting requirements.

Rent of an EL ranges from \$10/graticule block in the first year to \$160/graticule block in the sixth and subsequent years.

Northern Territory Mineral Leases - General Comments

ML's are granted for the purpose of mining minerals and/or erecting infrastructure in support of a mine. They are granted for a maximum of 25 years and are renewable for terms of a maximum of 25 years.

A ML may require a bond or other security before a lease is granted in an amount to be determined by the Minister. Its purpose is to ensure that the lease holder performs rehabilitation and stabilisation of the land after operations have been completed.

The rental for a ML is \$10.00 per hectare per year.

$10$

$\overline{\mathbf{9}}$

Northern Territory Mineral Claims - General Comments

MC's are granted to prospect for and mine for minerals or explore for extractive minerals. They are for a maximum of 10 years and are renewable for terms of a maximum of 10 years.

Whilst it would be possible to construct and operate a mine under a MC, the powers of a miner under a MC are somewhat limited compared to those under a ML in that a MC does not provide for the provision of infrastructure, etc.

The rental for a MC is \$10.00 per hectare per year.

$-83$ $-$

$11$ Other Applicable Legislation

Other Territory and Commonwealth legislation applicable to operations on the Tenements includes:

11.1 The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) provides for the preservation of areas and objects which are of particular significance to Aboriginals in accordance with Aboriginal tradition, and may have the potential to halt exploration activities in the event that the Minister makes a declaration for protection and preservation of an area of Aboriginal significance under the Act.
11.2 The Mining Act 1980 (NT) includes obligations requiring tenements to be rehabilitated.
11.3 The Mining Act 1980 (NT) has a requirement that no works (apart from low impact work on ELs) can be undertaken without an Authorisation granted by the Minister under the Mining Management Act (NT).
11.4 The Mining Management Act (NT) requires the lodgment of a mining management plan that governs proposed activities on any tenements. As well as covering mining activities, that mining management plan must deal with safety, health and environmental issues in addition to any other matters raised in the process leading to the grant of the Authorisation.

NSW New South Wales

Tenement Details $\blacktriangleleft$

Attached is Schedule 2 outlining the relevant details of the only tenement in New South Wales obtained from searches and enquiries made by our agents.

This is Exploration Licence EL 6040 which is owned by The Australian Land Company Pty Ltd. It was granted on 21 January 2003 and expired on 20 January 2005. It has been renewed with effect from 1 August 2005 until 20 January 2007 The tenement gives TALC the exclusive right to explore for group 1 minerals (which include gold, silver, platinum and other metallic minerals).

The tenement is comprised of two non-contiguous areas which, in total, comprise 29 units.

The tenement is a low impact exploration licence which is a special category of exploration licence granted under the Mining Act 1992 ("the Act") that limits the types of prospecting activities that may occur, namely aerial surveys, geological and surveying field work that does not involve clearing, sampling by hand methods, ground based geophysical surveys and drilling and associated activities that do not involve clearing or site excavation other than the minimum necessary to establish a drill site.

The annual expenditure requirement imposed by the NSW Department to ensure the tenement is properly exploited is \$59,000.00.

Access Arrangements

The holder of the tenement is not authorised to carry out any prospecting operations on land in relation over which there are registered native title bodies corporate or registered native title claimants. other than in accordance with and access arrangement agreed with the registered native title body corporate or registered native title claimants.

$\mathbf{z}$

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$\cap$

$\bar{\phantom{a}}$

$\sim$

The Act also provides that the holder is not authorised to carry out prospecting operations on any land otherwise than in accordance with an access arrangement agreed with any other land holders including non-native title land holders.

An access arrangement with a registered native title claimant must, among other things, include a condition which provides for the protection and avoidance (by the holder of the tenement) of any area or site within the boundaries of the tenement which are of particular significance to the native title holders.

Searches show that there are no registered native title bodies' corporate or registered native title claims over the area covered by the tenement.

$\mathbf{3}$ Renewal of the Tenement

The NSW Department's practice is to grant and renew exploration licences for 2 year terms (although the Act allows for the grant and renewal of exploration licences for periods of up to 5 years).

An exploration licence will not usually be renewed over an area that is greater than half the number of units comprising the original exploration licence area (unless the Minister is satisfied that special circumstances exist that justify the renewal over an area that is larger than half of the original exploration licence area).

Restrictions on Prospecting Activity under the Tenement 4

As indicated above, the tenement is a low impact exploration licence. A low impact exploration licence is a special category of licence that restricts the types of prospecting operations that may be carried out on the land covered by the licence.

The grant and renewal of low impact exploration licences is effectively excluded from the requirement to comply with the "right to negotiate" provisions of the NTA as they do not create a right to mine.

The north west of the tenement includes a parcel of land dedicated or reserved as State Forest. This area comprises a small proportion of the tenement. This is likely to be an "exempted area" within the meaning of Section 30 of the Act. This precludes the holder from exercising any rights under the tenement within the "exempted area" until it has obtained the consent of the Minister for Mineral Resources.

k Native Title

The NSW Department's map of the area indicates the possibility that there may be some land within the boundaries of the tenement that is Native Title Land over which native title rights and interests have not been extinguished.

As a practical matter, we understand that the NSW Department generally assumes (given the vast areas in respect of which exploration licences are granted) that the grant of a new exploration licence or the application to vary the licence conditions to allow for additional prospecting operations will affect some Native Title Land and that the "right to negotiate" provisions of the NTA will, accordingly, need to be satisfied in each case.

In addition to the applicability of the NTA described above, the following is relevant.

開設数

New South Wales Aboriginal Sites continued

Aboriginal Sites

There may be sites of aboriginal heritage of significance located on the land on which the Tenement is situated.

The National Parks and Wildlife Act 1974 ("NPW Act") allows for the Governor, with the concurrence of the Minister administering the Crown Lands Consolidation Act 1913, to dedicate any unoccupied Crown lands as an "Aboriginal area".

Land within an "Aboriginal area" will be deemed to have been dedicated for the purpose of preserving, protecting and preventing damage to relics or Aboriginal places within the "Aboriginal area". However, the "Aboriginal areas" are excluded from the area covered by the tenement.

The NPW Act also authorises the Minister to declare lands on which a relic or 'Aboriginal place" is situated to be a "protected archaeological area". An "Aboriginal place" is any area declared by the Minister to be a place that is or was of special significance to Aboriginal culture.

The Director-General of National Parks and Wildlife may give directions prohibiting or regulating the entry on and use of land within a "protected archaeological area". A person may not enter, remain on or use, lands within a "protected archaeological area" in a manner which is contrary to a direction given by the Director-General.

The NPW Act makes it an offence to destroy, deface or damage, or knowingly permit the destruction, defacement of or damage to, a relic or "Aboriginal place" without the consent of the Director-General of National Parks and Wildlife.

To ensure that TALC does not contravene the provisions of the NPW Act in carrying out prospecting operations on the area covered by the Tenement, it may need to conduct heritage surveys and consult the traditional owners of the land (if any) to determine whether any Heritage Sites exist and then ensure that any interference with or disturbance of those sites is in accordance with the NPW Act.

NZT New Zealand Tenements

Attached is Schedule 3 outlining the relevant particulars of the New Zealand tenements obtained from searches and enquiries made by our agents.

$\blacksquare$ Mining Tenements Generally

All gold and silver in New Zealand is the property of the Crown. No Crown-owned minerals may be extracted from any land within New Zealand without an appropriate permit. A permit is granted by Crown Minerals (a division of the New Zealand Ministry of Economic Development ("Crown Minerals")) in respect of specific minerals and land and the Minister of Energy ("the Minister") has a wide discretion to impose such conditions as he/she thinks fit.

The Mining Tenements comprise Prospecting Permits and Exploration Permits granted under the Crown Minerals Act 1991 (NZ) ("Crown Minerals Act").

$\overline{2}$ Prospecting Permits

A Prospecting Permit remains in force for a period of two years and may be extended for up to another two years. Prospecting Permits are granted to enable identification of land likely to contain mineral deposits. The Crown Minerals Act confers on the holder of a Prospecting Permit the right to apply for Exploration Permits and subsequently apply for Mining Permits over any of the part of the land subject of that Permit. The activities permitted pursuant to a Prospecting Permit are very low impact activities and include geological mapping, aerial surveying (including geophysics) and surface geochemical surveys.

$\mathbf{3}$ Exploration Permits

Exploration Permits remain in force for a period of up to five years and may be extended for up to another five years. At the end of the fourth year of the Exploration Permit, the holder must relinquish not less than half of the area of the licence.

Exploration Permits are granted to enable the determination of the potential for and feasibility of mining in an area. The activities permitted pursuant to an Exploration Permit may include drilling, bulk sampling and mine feasibility studies subject to conditions imposed from time to time under the Crown Minerals Act.

Exploration Permits generally require the permit holder to make reasonable efforts to explore the permit area and to take all reasonable steps to undertake a defined minimum work programme as set out in the Permit.

$\overline{\mathbf{A}}$ Mining Permits

The Crown Minerals Act regulates the issue of mining permits to allow mining of Crown-owned minerals. Mining Permits are issued when the nature and extent of mineral deposits have been accurately determined. A Mining Permit remains in force for a period of a maximum of 40 years. Mining Permits are granted subject to various conditions prescribed under the Crown Minerals Act including payment of royalties, expending required levels of expenditure and completion of reporting requirements and the holder making reasonable efforts to undertake the permitted mining activities pursuant to its work programmes. Additional conditions may be imposed on each Permit as may be required by Crown Minerals. Mining Tenements in New Zealand are also subject to other statutory requirements.

$\overline{\mathbf{s}}$

Crown Minerals Act Miscellaneous Provisions

$5.1$ The granting of a Land Access Permit is not required for Prospecting Permits except where access is required over Conservation Land. An Access Agreement will be required from the Department of Conservation where land is in a Conservation Area under the Conservation Act 1987 (NZ). The Prospecting Permits granted to the Company (39 264 to 39 266 inclusive) are not in a Conservation Area.

Accordingly, no access agreement is required in respect of the Company's prospecting targets. within these permitted areas.

$\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$

$\mathbf{b}$

$\mathbf{r}$

83.ZT

New Zealand Crown Minerals Act Miscellaneous Provisions continued

∰

$5.2$ Permit holders must arrange land access with the owner and occupier of land where an Exploration Permit is obtained. Land Access Agreement is not required for a Prospecting Permit where minimum impact activity as defined in the Crown Minerals Act is to be carried out. "Minimum impact activity" is defined under the Crown Minerals Act to mean any of the following:

Geological, geochemical, and geophysical surveying
Taking samples by hand or hand held methods
Aerial surveying
Land surveving
Any activity prescribed as a minimum impact activity
Any lawful act incidental to any activity to which the above paragraphs relate to the extent that it does not involve any activity that results in impacts of greater than minimum scale and in no circumstances shall include activities involving:
The cutting, destroying, removing, or injury of any vegetation on greater than a minimum scale: or
The use of explosives; or $\bullet$
Damage to improvements, stock, or chattels on any land; or
Any breach of the provisions of the Act or any other Act, including provisions in $\bullet$ relation to protected native plants, water, noise, and historic sites; or
The use of more persons for any particular activity than is reasonably necessary; or $\bullet$
Any impacts prescribed as prohibited impacts; or
Entry on land prescribed as prohibited land. .

The works the Company is required to carry out under the Work Programmes Exploration Permits (40.664 and 40.711) would be able to be undertaken as minimum impact activities.

$5,3$ Where land access for an Exploration Permit is required, access arrangements are required to be agreed between the permit holder and the owner and occupier of the land. Where access arrangements cannot be agreed, then an access arrangement may be determined by an Arbitrator appointed as required by the Crown Minerals Act.
$5.4$ Activities carried out under Exploration and Mining Permits are subject to compliance with all other applicable statutes in particular the Resource Management Act 1991 (N.Z.).

$\mathbf{r}$

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$\hat{\mathbf{c}}$

$\overline{16}$

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$\alpha$

6 Resource Consents

Resource consents are granted under the Resource Management Act 1991 (NZ). The purpose of the Act is to promote sustainable management of New Zealand's natural and physical resources. The resource management consent process in New Zealand requires public notification by consenting authorities and extensive consultation regarding the environmental effects of exploration and mining of minerals. Third parties claiming an interest in the consents sought for exploration and mining have rights of appearance to participate in consent applications. The consent process can cause delays or rejection of consents applied for by the Company. The Prospecting Permits do not require Resource Management applications.

The Resource Management Act includes the relationship of Maori to take account of Maori ancestral land, water sites and toanga (treasures). Consultation with Maori, including local tribes, in mining or exploration activity is an important aspect of obtaining consents.

The granting of resource consents is governed by local authorities (Regional Councils and District Councils) in regard to water and air and land use matters. Consents are generally granted for a fixed term and may require renewal during the mining term. There are risks that appropriate consents at the commencement and renewal may not be granted or may be granted on terms, which are not satisfactory to enable the company to proceed to exploration or mining.

$-89$

OPINION

We have examined the following copies of documents provided to us by the Company:

1 Its Constitution
2 The Material Agreements described in Section 9.6 of the Prospectus

Based on those copy documents, we have prepared, for inclusion in the Prospectus, summaries of the provisions of the Material Agreements and a summary of the rights attaching to ordinary shares in the Company as set out in the Company's Constitution.

The Material Agreements described in Section 9.6, of this Prospectus include two contracts entered into by the Company, one with Farmtell Management Services Pty Ltd and the other with South Cove Ltd for the acquisition by the Company of all of the shares owned in The Australian Land Company Pty Ltd ("TALC") and Otago Gold Ltd, respectively.

Prior to the Company entering into those contracts, Lynch Meyer conducted due diligence investigations into TALC and Otaqo Gold together with their holding companies. Our investigations showed a significant lack of appropriate records to have been maintained by TALC and Otaqo Gold Ltd. Searches of Australian Securities and Investments Commission and the New Zealand Companies Office records show that documents that have been filed are consistent with the information provided by the vendors.

There are risks associated with the acquisition of any company arising from the fact that the acquirer cannot be certain:

that the owner of the shares has valid title to all of the issued shares of the company, or
that the records of the company reveal all transactions and obligations entered into or liabilities which have arisen.

When a purchaser acquires the shares of a company, the purchaser would normally seek to reduce the risks associated with the acquisition of the company by obtaining suitable warranties and indemnities from the vendor of the shares and the directors of the vendor and by appropriate due diligence investigations of the company's records.

Due to the deficiencies in the corporate records, our investigations were unable to provide the Company with the normal assurances about these issues that could be given if the usual records were available. However, as the outlines of these Material Agreements indicate, the vendors and Mr Chrisp provided extensive warranties and indemnities in respect of:

the ownership of the shares
the good standing of TALC and Otago Gold
their mining tenements and
unknown liabilities.

$90 -$

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$\sim$

The Material Agreements appear to have been duly executed. We have assumed the authenticity of all seals and signatures.

Subject to the above, in our opinion:

1 Those summaries are not misleading or deceptive;
2 There is no material omission from any of the summaries; and
3 Each contains a fair and accurate summary of its subject matter which investors and their professional advisers would reasonably require, and reasonably expect to find in the Prospectus, in deciding whether or not to apply for shares in the Company.

CONSENTS AND DECLARATIONS

This report is strictly limited to the matters referred to above and is not to be read as extending, by implication or otherwise, to any other matter. With the exception of the abovementioned summaries, we have had no involvement in the preparation of any part of the Prospectus and we disclaim any responsibility for the other contents of the Prospectus and express no opinion on the existence of any likelihood of there being a native title claim made in respect of the land to which the mining tenements relate

The partners of Lynch Meyer and the staff involved in the preparation of this report have no interest in or financial relationship with the Company. Other than a time based fee for the preparation of this report, no pecuniary or other benefit, direct or indirect, has been received by Lynch Meyer in connection with the making of this report.

In providing this report, we have relied on (and have not sought to verify) the accuracy of information provided to us by our agents and the Departments and the NNTT in response to their searches of their records and registers. In reliance upon this information, we believe this report does not contain anything which is false in a material particular or which is materially misleading or deceptive in the form and context in which it appears. Except as stated we have not undertaken any additional searches of other government agencies or of courts or tribunals.

We have given, and have not, before the lodgment of the Prospectus of which this report forms part, withdrawn our consent to the issue of the Prospectus with this report in the form and context in which it is included.

Yours faithfully

Lynch Meyer

— 91 —

NORTHERN TERRITORY SCHEDULE 1 - TENEMENTS

Glossary: TALC = The Australian Land Company Pty Ltd (ACN 009 617 350) MAGNUM = Magnum Gold NL (ACN 003 170 376) CORPORATE = Corporate Developments Pty Ltd (ACN 009 610 271) SOFTWOOD = Softwood Plantations Pty Ltd (ACN 050 120 315) AAG = Australasia Gold Ltd (ACN 104 757 904)

Tenement	Status	Date Granted	Expiry Date	Area (sq km) funtess otherwise specified)	Registered Holder Applicant (100% untess otherwise stated)	Current/Annual Statutory Expenditure Commitments	Material Contract(s)/ Registered Interest(s)	Native Title Claim(s) & Registered Sacred Sites	Notes
GLENEDE
MCN 1313	Granted/Current	12/05/89	05/10/05	$12$ ha	MAGNUM	B	18	23	1, 19
MCN 3578	Granted/Current	07/08/90	05/10/07	40 na	TALC	B		23	ŧ
MCN 4248	Granted/Current	13/03/92	31/12/06	39 ha.	TALC	B		23.
MCN 20	Granted/Current	16/05/83	05/10/06	20 ha	TALC.	В	2, 3	23
14CM 21	Granted/Current	16/05/83	05/10/06	$20$ ha	TALC	В.	2, 3	23
MCN 22	Granted/Current	16/05/83	05/10/06	20 na.	TALC	B	2.3	23
MCN 23	Granted/Current	16/05/83	05/10/06	20 ha.	TALC	3	23	23
MCN 24	Granted/Current	16/05/83	05/10/06	20 ha.	TALC	B.	2, 3	23
MCN 25	Granted/Current	16/05/83	05/10/06	20 ₁₃	MAGNUM	8	2, 3, K	23	1
REDBANK
MCN 4254	Granted/Current	13/03/92	31/12/06	39.6 ha.	talc	Ø.		23
STAR OF THE NORTH
MLN 875	Graated/Current	13/03/80	31/12/20	79 ha.	CORPORATE	В	ď	J,	Б
MIN 876	Granted/Current	13/03/80	31/12/20	79 ha	CORPORATE	8		Ã.	£
MAN 877 MIN 883	Granted/Current Granted/Current	13/03/80 13/03/80	31/12/20 31/12/20	79 ha. 7.9 ha.	CORPORATE CORPORATE	3 3	Ą 'N	5.	6 6
								S.
GREAT NORTHERN
141 N 878	Granted/Current	13/03/80	31/12/20	78 ha	CORPORATE	B	4	5.	Б
M1N 879	Granted/Current	13/03/80	31/12/20	78 ha.	CORPORATE	B		T.	ű
GREAT WESTERN
MLN 880	Granted/Current	13/03/80	31/12/20	796 ha.	CORPORATE	B	đ	Ã.	£
MIN 881	Granted/Current	13/03/80	31/12/20	$178$ ha	CORPORATE	8	и	5.	6
MIN 882	Granted/Current	13/03/80	31/12/20	$778$ ha.	CORPORATE	В	Ń.	5	Б
HOHNS HILL
MIN 872	Granted/Current	13/03/80	3142/20	7.8 ha	CORPORATE	Ł	J.	5.7	Đ
MIN 873	Granted/Current	13/03/80	31/12/20	$8$ Ha.	CORPORATE	B	Î.	5. T	ß.
M1N 874	Granted/Current	13/03/80	31/12/20	8 _ha	CORPORATE	B	À	5.7	Б
MI WELLS NORTH £1 22301	Granted/Current	11/04/03	13/04/09	[32 Blocks]	SOFTWEIGD	\$20,400	21	ġ,	1,20

MCKINLAY £1 23624
	Granted/Current	12/02/04	8/02/10	[31 Blocks]	SOFTWOOD	\$7,500	21, 22	g
MT RINGWOOD
£1 24142	Granted/Current	7/10/04	3/10/10	[27 Blocks]	AAG	\$15,000		17	38

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.... $\sim$ $\mathbf{a}$ $\bar{\omega}$ $\approx$ $\circ$ $\circ$ $\overline{\phantom{0}}$ $\Omega_{\rm h}$

NORTHERN TERRITORY SCHEDULE 1 - TENEMENTS continued

Tenement	Status	Date Granted	Expiry Date	Area (sq km) funless otherwise specified)	Registered Holder / Applicant (100% unless otherwise stated)	Current/Annual Statutory Expenditure Commitments	Material Contract(s)/ Registered interest(s)	Native Title Claim(s) & Registered Sacred Sites	Notes
TERRYS:
MCN 2588	Graned/Current	17/09/88	31/12/06	20 па.	CORPORATE	ß.	$\mathcal{H}$	41	12.
MCN 2589	Granted/Current	17/09/88	31/12/06	18 ha.	CORPORATE	8.	11	11	12
MCM 2590	Granted/Current	17/09/88	31/12/06	18 ha.	CORPORATE	B	Ħ	11	12.
MCN 2591	Granted/Current	17/09/88	31/12/06	18 h ₂	CORPORATE	8.	10	$\mathbf{11}$	12
MCN 3994	Grasted/Current	23/01/91	31/12/06	40 hz.	CORPORATE	8	40	11	42
WCN 3995	Granted Current	23/01/91	31/12/06	40 hz.	CORPORATE	B.	10	$\mathbf{H}$	12
ROCKS RIDGE
MENA 5115	Application lodged 20/09/96			130 hal	SOFTWOOD	8.		Đ.	E.
PORTERS
MIN 816	Granted/Current	22/04/76	31/12/19	8.09 ha	CORPORATE	В		1, 13	M.
GOOD SHEPHERD
MLN 898	Granted/Current	10/10/80	31/12/20	8 ha	CORPORATE	B aaaaa	Raamaan	13, 15	14

NEW SOUTH WALES SCHEDULE 2 - TENEMENTS

Glossary: TALC = The Australian Land Company Pty Ltd (ACN 009 617 350)

Tenement Status	Date	Expiry	Area (sq km)	Registered Holder /	Annual	Material	Matrue Title Notes
	Granted	Date:	funtess	Applicant (100%	Statutory	Contract(s)/	$\text{Claim}(s)$ &
			otherwise specified)	unless otherwise stated)	Expenditure Commitments	Registered Interest(s)	Registered Sacred Sites

LUBRAQIN
EL 6040 NSW	21/01/03 Gramed/Current	20/01/07	$29$ Units	TALC	\$59,000	-Nii.	12

NEW ZEALAND SCHEDULE 3 - TENEMENTS

Glossary: EP = Exploration Permit

$PP = Prospecificing Permit$

Ienement	Stalus	Oate Granted	Expiry Date	Area (sq km) funtess otherwise specified)	Registered Holder / Applicant (100% unless otherwise stated)	Annual Statutory Expenditure Commitments	Material Contract(s)/ Reqistered interest(s)	Native Title Claim(s) & Registered Satred Sites
WEIHZISTONES FP 40 664	Grasted/Current	23/04/04	23/04/09	310 ha	AAG	See Note 1	Mil	NI.
WAIKERIKERI EP 40 711	Granted/Current	12/11/04	11/11/09	596.9 ha	AAG	See Note 1	Mil	Mil
ST BATHANS PP 39 264	Granted/Current	18/06/04	17/05/06	250	AAG	See Note 1	.NII	.WH
GABRIELS GULLY PP 39 265	Granted/Current	18/05/04	17/05/06	10%	AAG	See Note 1	$\mathbf{M}$	[NN]
BUSTER-NASEBY PP 39 266	Granted/Current	1/05/04	31/05/06	459	AAG	See Note 1	-NH	-MI.

NOTES - NORTHERN TERRITORY

Tenement located wholly within Perpetual Pastoral Lease No 1111 (Ban Ban Springs). 1
2 Tenement has Agreement D4348 (being the purchase agreement whereby Magnum became proprietor) registered against it and as there are no ongoing liabilities under the agreement, the agreement can presumably be terminated.
3 Tenement has Agreement D4417 (being a variation of Agreement D4348) registered against it and as there are no ongoing liabilities under the agreement, the agreement can presumably be terminated.
Tenement has Agreement D6116 (being the purchase agreement under which Corporate became 4 proprietor) registered against it and as there are no ongoing liabilities under the agreement, the agreement can presumably be terminated.
5 Land beneath this Tenement is subject to Native Title Claim DC00/28 (Mt Ringwood) registered from 19/01/2001.
Tenement located wholly within Perpetual Pastoral Lease No. 718 (Mt Ringwood). 6
7 Tenement is covered by an existing Authority Certificate (C1999/015) issued in 1999 by the Aboriginal Areas Protection Authority.
8 There is no current annual expenditure commitment applicable to this class of tenement.
9 Land beneath this Tenement is subject to Native Title Claim DC01/21 (Ban Ban Springs) registered from 24/05/2001.
10 Tenement has Agreement D6031 (being an agreement whereby Playford Resources NL held an option to purchase this tenement and others and which was exercisable before 30 June 1994). registered against it and as there is no evidence of extension of the option period, the agreement can presumably be terminated.
11 Land beneath this Tenement is subject to Native Title Claim DC01/28 (Fish River) registered from 24/05/2001.
12 Tenement located wholly within Perpetual Pastoral Lease No. 1005 (Elizabeth Downs).
13 Land beneath this Tenement is subject to Native Title Claim DC01/23 (Douglas North) registered from 25/10/2001.
14 Tenement located wholly within Perpetual Pastoral Lease No. 903 (Douglas).
15 Tenement is covered by an existing Authority Certificate (C1997/137) issued in 1997 by the Aboriginal Areas Protection Authority.
16 A transfer in favour of TALC of 100% of MAGNUM's interest in the mineral claim has been lodged. This remains subject to the Minister's approval before registration can occur.
17 Land beneath this tenement is subject to Native Title Claim DC 00/28 (Mt Ringwood) registered from 19/01/01 and Native Title Claim DC 00/30 (Mt Keppel) registered from 16/02/2001.

$\mathbf{p}$

$\mathbf{r}$

$\sim$

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$\bar{\phantom{a}}$

$\alpha$

18 Tenement located wholly within Perpetual Pastoral Lease No. 718 (Mt Ringwood), Perpetual Pastoral Lease No. 1163 (Old Mt Bundey). Perpetual Pastoral Lease No. 991, Crown Lease in perpetuity No. 1222 and Crown Lease in perpetuity No. 1058.
19 Claim expires 1/10/05. renewal will not be applied for.
20 Statutory Reduction of the licence was due 14 April 2004. An Application to the Minister to defer reduction of licence area received 15 March 2005. No determination made to date.
21 Tenement has Joint Venture Agreement dated 22 April 2004 registered against it as dealing D91999 wherein Australasia has the right to search for and exploit Gold and Silver and Softwood retains the rights to all other minerals.
22 Tenement has Acquisition and Joint Venture Agreement dated 30 September 2004 registered against it as dealing D92064 wherein Territory Iron Pty Limited has the right to search for and exploit Iron Ore.
23 Land beneath this Tenement is subject to Native Title Claim DC04/05 (West Ban Ban 2) registered from 25/02/05.

NOTES - NEW SOUTH WALES

1 Some land within the boundaries of the tenement may be Native Title Land in respect of which native title rights and interests have not been extinguished.
There may be sites of aboriginal heritage of significance located within the tenement. $\overline{2}$

NOTES - NEW ZEALAND

1 Apart from annual fees there are no expenditure requirements. However, permit holders are required to submit an annual summary of expenditure and of prospecting/exploration activities. The Company estimates the cost of agreed technical programs in respect of the tenements to be conducted over a two year period from the date of grant are as follows:
EP 40 664 \$150,000.00
$\div$ EP 40 711 \$30,000,00
PP 39 264 \$22,000.00
$\bullet$ PP 39 265 \$15,000.00
$\bullet$ PP 39 266 \$19,000.00

$-$

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$7.1$

i
8 Mann Judd Stephens (S.A.)

Chartered Accountants

17 October 2005

The Directors Australasia Gold Limited 13 Woodland Close ALDGATE SA 5154

Dear Sirs.

INDEPENDENT ACCOUNTANT'S REPORT

General

We have prepared this Independent Accountant's Report on historical financial information of Australasia Gold Limited ('Australasia Gold') for inclusion in a Prospectus dated 9th November 2005 relating to the proposed issue by Australasia Gold of 15,000,000 shares at an issue price of \$0.20 per share to raise \$3,000,000.

Historical Financial Information - Australasia Gold Limited

We have been appointed auditors of the company since 18th September 2003. We have audited the financial reports of the company for the following reporting periods:

16 May 2003 to 30 June 2003;
1 July 2003 to 30 June 2004; $\bullet$
1 July 2004 to 30 November 2004; and
1 July 2004 to 30 June 2005.

Audits of Controlled Entities

We have audited the financial reports for the years ended 30 June 2003 and 2004 and the periods 1 July 2004 to 30 November 2004 and 1 December 2004 to 30 June 2005 for each of the Controlled Entities of Australasia Gold Limited listed below:

. The Australian Land Company Pty Ltd; and
Otago Gold Ltd.

Pro Forma Historical Statement of Financial Position as at 30 June 2005 and Notes to Pro Forma Historical Statement of Financial Position for Year Ended 30 June 2005

Scope

You have requested us to prepare a report covering the Pro Forma Historical Statement of Financial Position as at 30 June 2005 and Notes to Pro Forma Historical Statement of Financial Position for the year ended 30 June 2005 ('Pro Forma Financial Report'), which assumes completion of the contemplated transactions disclosed in Note 3 of the Pro Forma Financial Report. The contemplated transactions in Note 3 are described collectively as 'the proforma transactions'.

$97$ -

Scope continued

Review of Pro Forma Historical Financial Information

The historical financial information set out in the Proforma Financial Report has been extracted from the audited Financial Report of Australasia Gold for the year ended 30 June 2005. Our audit report issued in respect of this Financial Report was unqualified. The Directors of Australasia Gold Limited are responsible for the preparation of the Pro Forma Financial Report including determination of the adjustments required to bring to account the proforma transactions referred to in Note 3.

We have conducted our review of the Pro Forma Financial Report in accordance with the Australian Auditing and Assurance Standard AUS 902 'Review of Financial Reports'. We made such enguiries and performed such procedures as we, in our professional judgment, considered reasonable in the circumstances including:

Analytical procedures on the Pro Forma Financial Report for the relevant historical period:
A review of work papers, accounting records, and other documents;
A review of the assumptions used to compile the Pro Forma Financial Report:
A review of the adjustments made to the Pro Forma Financial Report referred to in Note 3:
A comparison of consistency in application of the recognition and measurement principles in Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Company disclosed in Notes 1 and 2 of the Pro Forma Financial Report; and
Enquiry of Directors and others.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Acquisition of Rights to Explore and Exploit Tenements

On 22 April 2004 Australasia Gold entered into comprehensive agreements with Farmtell Management Pty Ltd, South Cove Limited (South Cove), Corporate Developments Pty Ltd (Corporate), Softwood Plantations Pty Ltd (Softwoods) and Graham Maxwell Chrisp to acquire rights to explore and exploit tenements through the purchase of The Australian Land Company Pty Ltd ("Australian Land"). Otago Gold Ltd ("Otago Gold"), tenements from Corporate and a joint venture with Softwoods as further detailed in the Solicitor's Report and Material Agreements section of this Prospectus. The considerations paid for the acquisition of Australian Land, Otago Gold and tenement assets and the benefit of debts owed by Australian Land and Otago Gold to South Cove are detailed in Section 9.6 of the Prospectus under material agreements.

Oualifications

The directors in measuring acquisition cost of assets purchased have made such allocations, apportionments and estimations of cost as they deemed appropriate in determining the proportion of cost to be allocated to each tenement. Such costs have been attributed to those entities in whose names the tenements are registered. There has not been an independent valuation of tenements assets acquired. We have relied on the Independent Geologist's Report in order to substantiate recoverable values of tenements. We have not verified the existence of the tenements. We have relied on the Solicitor's Report to corroborate the existence of the tenements.

$98$ -

The financial reports in respect of controlled entities The Australian Land company Pty Ltd and Otago Gold Ltd for reporting periods prior to 30 June 2003 have not been audited.

Conclusion:

Review Statement on Pro Forma Historical Statement of Financial Position as at 30 June 2005 and Notes to Pro Forma Historical Statement of Financial Position for the Year ended 30 June 2005

Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that:

the Pro Forma Historical Statement of Financial Position as at 30 June 2005 and Notes to Pro Forma Historical Statement of Financial Position for the year ended 30 June 2005 have not been properly prepared on the basis of the Pro Forma transactions as set out in Note 3,

in accordance with the recognition and measurement principles prescribed in Accounting Standards and other mandatory professional reporting requirements, and accounting policies adopted by Australasia Gold disclosed in Notes 1 and 2.

Subsequent Events

Apart from the matters dealt with in this report, and having regard to the scope of our report, to the best of our knowledge and belief no material transactions or events outside of the ordinary business of the Company and its controlled entities have come to our attention that would require comment on, or adjustment to, the information referred to in our report or that would cause such information to be misleading or deceptive.

Independence or Disclosure of Interest

HLB Mann Judd Stephens (S.A.) does not have any interest in the outcome of this issue other than for the preparation of this report and acting as auditors of the company for which normal professional fees will be received.

Consent

We have given consent to our Independent Accountant's Report being included in the Prospectus in the form and context in which it appears, and had not withdrawn that consent as at the date of signing of the Prospectus.

HLB Mann Judd Stephens (S.A.) takes no responsibility for any other material in the Prospectus.

Yours faithfully,

HAM STUd Stepens (SA)

HLB MANN JUDD STEPHENS (SA) CHARTERED ACCOUNTANTS

Phil Plummer PARTNER

Ġ $\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$

$\mathbf{b}$

Australasia Gold Limited And Controlled Entities ACN 104 757 904

$7.2$ PROFORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2005

	Notes 3	Historical Financial Report as at 30 lune 2005	Pro forma Minimum Subscription	Pro forma Planned Subscription
		\$	\$	\$
CURRENT ASSETS
Cash assets		179,399	2,255,899	2,730,899
Receivables		6,695	6.695	6,695
Other financial assets		24,654	24,654	24,654
Total Current Assets		210,748	2,287,248	2,762,248
NON-CURRENT ASSETS
Receivables		20,000	20,000	20,000
Exploration & Evaluation Expenditure	4	2,569,683	2,569,683	2,569,683
Total Non-Current Assets		2,589,683	2,589,683	2,589,683
TOTAL ASSETS		2,800,431	4,876,931	5,351,931
CURRENT LIABILITIES
Payables		33,043	33,043	33,043
Total Current Liabilities		33,043	33,043	33,043
NON CURRENT LIABILITIES
Total Non-Current Liabilities
TOTAL LIABILITIES		33,043	33,043	33,043
NET ASSETS		2,767,388	4,843,888	5,318,888
EQUITY
Contributed equity	5.	2,878,281	4,954,781	5,429,781
Retained losses		(110, 893)	(110, 893)	(110, 893)
TOTAL EQUITY		2,767,388	4,843,888	5,318,888

This statement should be read in conjunction with the accompanying notes and audited Financial Report of the entity as at 30 June 2005 (Historical Financial Reports). Copies of the Financial Report have been lodged with ASIC and are available from the Company at no charge, or may be accessed via the Company's website on www.australasiagold.com.au

NOTES TO PROFORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2005

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The Historical Financial Report is a general purpose financial report prepared in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The Historical Financial Report covers the economic entity of Australasia Gold Ltd and controlled entities, and Australasia Gold Ltd as an individual parent entity. Australasia Gold Ltd is a company limited by shares, incorporated and domiciled in Australia.

The Historical Financial Report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. Fair value means the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

The following is a summary of the material accounting policies adopted by the Company in the preparation of the Historical Financial Report. The accounting policies have been consistently applied, unless otherwise stated.

Revenue Recognition

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Income Tax

Income tax is brought to account using a method of tax effect accounting whereby income tax expense for the period is calculated on the accounting profit after adjusting for items which, as a result of their treatment under income tax legislation, create permanent differences between that profit and the taxable income.

The tax effect of timing differences which arises from the recognition in the accounts of items of revenue and expenses in periods different from those in which they are assessable or allowable for income tax purposes, are represented in the statement of financial position as "future income tax benefits" or "provision for deferred income tax", as the case may be at current tax rates. A future income tax benefit is only carried forward as an asset where realisation of the benefit can be regarded as being assured beyond reasonable doubt.

Foreign Currency

Amounts payable or receivable in foreign currency in the consolidated accounts are recognised at the exchange rate prevailing on balance date.

Receivables

Receivables represent the principal amounts due at balance date plus accrued interest and less, where applicable, any unearned income and provisions for doubtful accounts.

MOTE ?

NOTES TO PROFORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 HME 2005 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

Accounts Payable

Trade and other payables are recognised when the company becomes obliged to make future payments resulting from the purchase of goods and services.

Employee Entitlements

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of wages and salaries, annual leave, and long service leave expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of wages and salaries, annual leave, and long service leave which are not expected to be settled within 12 months, are measured as the present value of the estimated future cash outflows to be made by the company in respect of services provided by employees up to reporting date.

Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest. This expenditure is comprised of net direct costs and an appropriate portion of related overhead expenditure.

Identifiable exploration assets acquired are recognised as assets at their cost of acquisition.

Recoupment of exploration and evaluation expenditure is dependent on successful development and commercial exploitation or alternatively sale of the respective areas of interest. These costs are written off when their ultimate recoupment is not reasonably assured.

Capital Raising Costs

In accordance with Urgent Issues Group Abstract 23, the company has determined that relevant costs associated with the raising of capital are to be offset directly against contributed equity. These costs include professional advisers' fees related to the intended capital raising but do not include management time and overheads.

$102$ —

NOTE 2

IMPACT OF ADOPTING AUSTRALIAN EQUIVALENT TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

The company will be required to prepare financial statements that comply with Australian equivalents to International Financial Reporting Standards ("A-IFRS") for annual reporting periods beginning on or after 1 January 2005. Accordingly, the company's first half-year report prepared under A-IFRS will be for the half-year reporting period ending 31 December 2005, and its first annual financial report prepared under A-IFRS will be for the year ending 30 June 2006.

The company has recently commenced the process of evaluating the high level impact of A-IFRS on the company and consequently has not yet finalised how it is going to manage the transition to A-IFRS. The directors expect to complete the impact study and commence a plan to prepare the company to be A-IFRS compliant shortly.

While no decision has vet been made as to the policy alternatives to be applied or the extent to which it will affect the company, the directors have identified the following as being the key accounting policy differences expected to arise on transitioning to A-IFRS. This does not represent an exhaustive list of the differences that will arise, and further analysis may change the company's assessment of the importance or otherwise of the various differences.

First-time adoption of A-IFRS

On first-time adoption of A-IFRS, the company will be required to restate its comparative balance sheet such that the comparative balances presented comply with the requirements specified in the A-IFRS. That is, the balances that will be presented in the financial report for the half-year ending 31 December 2005 and year ending 30 June 2005 may not be the balances that will be presented as comparative numbers in the financial report for the following half year, and year end, as a result of the requirement to retrospectively apply the A-IFRS. In addition, certain assets and liabilities may not qualify for recognition under A-IFRS, and will need to be derecognised. Required adjustments on first-time adoption are to be made against opening retained earnings (1 July 2005).

Capitalised Exploration and Development Expenditure

An A-IFRS on extractive industries has not yet been issued. Consequently, the company is unable to determine the change in policies and related impacts, if any, that may arise on adoption of A-IFRS on its extractive-related operations and balances at reporting date.

Impairment testing

Under A-IFRS all current and non-current assets will be subject to impairment testing. The company will be required to test the values attributed to assets where impairment is indicated. Such testing will require the company to identify the smallest group of assets generating independent cash inflows, called cash generating units ("CGUs"), and determine the recoverable amount for each CGU. Recoverable amounts are determined using the higher of either value in use calculated using reliable estimates of future discounted cash flows, or fair values. Where the carrying amount of a CGU exceeds the recoverable amount, an impairment loss exists which will be recognised in the statement of income. The company has not yet determined the impact, if any, of any impairment which may be required. It is not practicable to determine the impact of the change in accounting policy for future financial reports, as any impairment or reversal thereof will be affected by future conditions.

$\mathbf{b}$ e $\sim$ A3 b) Ò $\bar{\phantom{a}}$ $\sim$ MOTE 2

NOTES TO PROFORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 HWE 2005 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENT TO INTERNATIONAL FINANCIAL REPORTING STANDARDS continued

Income tax

The company currently recognises deferred taxes by accounting for the differences between accounting profit and taxable income, which give rise to 'permanent' and 'timing' differences. Under A-IFRS, deferred taxes are measured by reference to the 'temporary differences' determined as the difference between the carrying amount and tax base of assets and liabilities recognised in the balance sheet. As A-IFRS has a wider scope than the entity's current accounting policies, it is likely that the amount of deferred taxes recognised in the balance sheet will increase.

Adjustments to the recognised amounts of deferred taxes will also result as a consequence of adjustments to the carrying amounts of assets and liabilities resulting from the adoption of other A-IFRS. The likely impact of these changes on deferred tax balances has not currently been determined.

Financial assets and financial liabilities

Under current Australian Generally Accepted Accounting Principles (GAAP), financial assets and financial liabilities are recognised at cost, at fair value, or at net market value. On adoption of A-IFRS, the company will be required to classify these financial instruments into various specified categories. The classification of the instrument will affect the instrument's subsequent measurement - at amortised cost using the effective interest rate method, fair value with movements recognised through equity or fair value recognised through the profit and loss. The company is evaluating the different options available, but has not made any determination at reporting date of the accounting to be adopted, and consequently, the impact of the change on the financial statements cannot yet be quantified.

Share-based payments

Share-based compensation forms part of the remuneration of executives, employees and consultants of the company. The company does not recognise an expense for any share-based compensation granted. Under A-IFRS, the consolidated entity will be required to recognise an expense for such share-based compensation. Share-based compensation will be measured at the fair value of the share options determined at grant date. The entity will not retrospectively recognise share-based payments vested before 1 January 2005 as permitted under A-IFRS first time adoption. Post 1 January 2005, for any share-based compensation granted the consolidated entity will recognise an expense and a corresponding increase in share capital.

$-$ 104 $-$

ZEOTION 7

NOTE 3

$\sim$

$\circ$

$\sim$

$\alpha$

BASIS OF PREPARATION OF THE PRO FORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2005

The Pro Forma Historical Statement of Financial Position of Australasia Gold Limited and its Controlled Entities, based upon the Financial Report of Australasia Gold Limited for the year ended 30 June 2005 (Historical Financial Report) has been adjusted for the following transactions as if they had taken place on 30 June 2005:

$3.1$ Assuming Minimum Subscription

Issue of 343,333 shares to seed investors to raise an additional \$51,500 to fund the Company's working capital requirements.
. In accordance with the offer outlined in the prospectus the issue of 12,500,000 shares at \$0.20 per share to raise \$2,500,000 (minimum subscription).
The payment of expenses associated with the offer as outlined in the Prospectus. These expenses $\bullet$ are estimated to be \$475,000 (refer Note 6) and have been charged directly against equity.

$3.2$ Assuming Planned Subscription

Issue of 343,333 shares to seed investors to raise an additional \$51,500 to fund the Company's $\blacksquare$ working capital requirements.
$\bullet$ In accordance with the offer outlined in the prospectus the issue of an additional 2,500,000 shares at \$0.20 per share to raise a further \$500,000 (planned subscription).
The payment of expenses associated with the offer as outlined in the Prospectus. These additional expenses are estimated to be \$25,000 and have been charged directly against equity.

NOTE 4 EXPLORATION & EVALUATION EXPENDITURE TO 30 JUNE 2005

Mineral exploration tenements at fair value	1.942.417
Mineral exploration tenements at cost	560.402
Expenditure incurred during the year	-66.864
Expenditure written off during the year
Cost carried forward	2.569.683

$-105 -$

NOTES TO PROFORMA HISTORICAL STATEMENT OF FINANCIAL POSITION AS AT 30 RINE 2005

NOTE 5

CONTRIBUTED EQUITY

Contributed equity comprises

	2005
	No.
Movement in issued shares for the year
Balance at beginning of financial year 1 July 2004	16.863.161	-2.714.747
Basilæd at 1 neats.
issiæd at 12.5 cents
issued at 15 cents	1,206,667	381.000
Costs associated with the issue of sbares		(17.466)
Balance at end of financial year per
Elistorical Financial Report 30 June 2005	18,067,828	2.878,283

	Minimum Raising		Planned Raising
	No.	s	No.
Balance at beginning of financial year 1 July 2005	18,067,828	2.878.281	38.067.828	2.878.281
Less: Shares cancelled per resolution of members 25.8.2005	(4,216,667)		(4,216,667)
Seed Capital raised (Note 3.3.1)	343,333	51,500	343.333	51.500
Subscribed per initial Public Offer	32,500,000	2,500,000	15,000,000	3,000,000
Share Issue expenses (Note 6)		(475.000)		(500,000)
issue to directors & promoters on completion of the issue **	3.083.791		1.083.791
Less voluntary reduction in directors and promoters entitiement	(733, 234)		(733.234)
Equity on completion of offer	27.045.051	4.954.783	29.545.053	5.429.781

^k* The calculation of directors and promoters entitlement on completion of the issue has been accrued to 30th September 2005.

NOTE 6

$\mathbf{b}$ $\mathbf{r}$ $\sim$ A3 $\sim$ Ó $\tilde{\phantom{a}}$ $\sim$

COSTS OF THE ISSUE

	Minimum Raising	Planned Raising
Funds raised	2,500,000	3,000,000
Expenses associated with the offer:
Legal Fees	20,000	20,000
Independent Accountant	5,000	5,000
Independent Geologist	5.000	5,000
Prospectus Artwork/Printing	35,000	35,000
Prospectus Mailing	10,000	10,000
Share Registry Fees	10.000	10,000
ASX Listing Fees	30,000	30,000
Travel & Marketing	30.000	30,000
Advertising & Website	10,000	10,000
Office Costs	50,000	50,000
Advisor	80.000	80,000
Brokerage	375,000	200,000
Contingency	15,000	15,000
Total expenses of the offer	475,000	500,000

NOTE 7 CONTINGENT LIABILITIES

The Company has had the benefit of consulting services from directors, which have not been remunerated. In the event of a successful IPO and listing on the Australian Stock Exchange, the Company has agreed to allot shares and options in compensation for those services. These are disclosed as follows:

	No. of Shares	No. of Options
J B Roberts	114.583	57.292
-1 J Ireland	529.208	264.604
N Jackson	258.333	129.167
M R Billing	41.667	20.833

In addition the Company upon successful listing on the Australian Stock Exchange is required to pay salary and consulting fees to Mr T Ireland, and entities in which he has an interest. This entitlement is made up of; salary \$61,455, and consulting fees of \$18,900.

The Company has had the benefit of consulting services from Mr J Santich, which have not been remunerated. In the event of a successful IPO and listing on the Australian Stock Exchange, the Company has agreed to allot shares and options in compensation for those services. As at balance date this obligation stands at 140,000 fully paid shares and 70,000 options.

The Company has agreed with Baron Partners Limited for corporate support and advice on capital raising matters. Expenditure for work in an advisory capacity in relation to the IPO is \$20,000. In the event of a successful IPO and listing on the Australian Stock Exchange, the Company has agreed to allot shares and options to Baron Partners Limited on the basis of 1 share option for every 100 shares in the company subsequent to the public offer and pay them the sum of \$60,000. If more than \$3 million is raised under this Prospectus, Baron will be entitled to a bonus of shares in the Company which will be issued at the issue price under this Prospectus at the rate of \$25,000.00 per \$1 million raised above \$3 million.

LAVASTA KORT RAKS

An investment in Australasia Gold is speculative and prospective investors in the Company should consider the risk factors described in this section, together with the information contained elsewhere in this Prospectus, before deciding whether to apply for Shares and Options. Australasia Gold operates in the mining and exploration industry and accordingly will be subject to the risks inherent in that industry which include, but are not limited to, the following:

Resource Estimates

Resource estimates are judgments based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available. Resource estimates are necessarily imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Should the Company encounter mineralisation or formations different from those predicted by past drilling, sampling and similar examinations, resource estimates may have to be adjusted and mining plans may have to be altered in a way which could adversely affect the Company's operations.

Exploration and Development Risks

Mineral exploration and mining are high risk enterprises, only occasionally providing high rewards. In addition to the normal competition for prospective ground, and the high average costs of discovery of an economic deposit, factors such as demand for commodities, stock market fluctuations affecting access to new capital, sovereign risk, environmental issues, labour disruption, project financing difficulties, foreign currency fluctuations and technical problems all affect the ability of a company to profit from any discovery.

Environmental Risks

The Company's exploration and mining projects are subject to Australian and New Zealand laws and regulations regarding environmental matters and the discharge of hazardous wastes and materials. A preliminary review of each of the Company's tenements revealed no material existing environmental liabilities. However, as with all mining projects, these projects would be expected to have a variety of environmental impacts should development proceed, and the costs of managing them may impact on the profitability of any proposed mining development.

Tenure and Access

Mining and exploration tenements are subject to periodic renewal. There is no quarantee that current or future tenements or future applications for production tenements will be approved.

The Company's tenements are subject to numerous Statutory conditions specific to the Countries and States/Territories in which they are located, and some which are subject to the discretion of the Minister or the Administration in the relevant jurisdiction. The imposition of new conditions, or conditions of increased severity may adversely affect the operations, financial position or performance of the Company.

Each of the Company's tenements is subject to expenditure and/or work commitments which must be met in order to keep such tenement in good standing. If there is a failure to meet commitments this could lead to forfeiture of the tenement.

Native Title Risks

Australasia Gold's tenements in Australia and New Zealand are located within areas which may be the subject of claims or applications for native title. The Native Title Act 1993 (Commonwealth) and related State native title legislation and aboriginal lands rights and aboriginal heritage legislation may affect access to exploration areas or obtaining production titles. In New Zealand the operation of the Resource Management Act and other laws afford Iwi (Maori) people recognition of certain rights in relation to traditional land. Settling claims may incur costs to the Company. The degree to which this may impact on the Company's activities will depend on factors including the status of particular tenements and their locations. At this stage, the Company is not able to quantify the impact, if any, of such matters on its operations.

Valuation

No formal valuation has been completed of the exploration projects or the Shares of the Company. The Company makes no representation as to the value of the exploration assets. Investors and their advisors should make their own assessment as to the value of the exploration projects and the Shares.

Economic and Share Market Conditions

Changes in both domestic and world economic conditions may adversely affect the financial performance of the Company. Australasia Gold intends to seek listing on the ASX. As a listed company, its share price may be subject to influences that may affect the trend of the stock market and the share price of individual companies. Such factors are beyond the control of the Company and its Directors. The market price of the Shares and Options can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource stocks in particular. Shares and attaching Options allotted under this Prospectus carry no quarantee in respect of profitability, dividends, return on capital, or the price at which they may trade on the ASX.

Commodity Price Risk

The Company is exploring for metal commodities, predominantly gold. The value of any ore containing economic quantities of these commodities will be closely related to the price of these commodities, and will be affected by factors beyond the control of the Company. These factors include world supply and demand for metals and fluctuations in foreign currency exchange rates.

Legal Risks

The introduction of new legislation or amendments to existing legislation by governments, developments in existing common law, or the respective interpretation of the legal requirements in any of the legal jurisdictions which govern the Company's operations or contractual obligations, could impact adversely on the assets, operations and, ultimately, the financial performance of the Company and its securities.

Operational Issues

In the event that Australasia Gold commences mining and production, there are risks and hazards beyond the Company's control that may adversely affect its operations. These include, but are not limited to extended interruptions due to inclement or dangerous weather conditions, flooding, earthquakes, fire, explosions and other accidents, industrial disruptions or work stoppages, technical equipment failure, refurbishment and unexpected changes in rock characteristics and structures.

Management

In a small organisation with few executives the progress of the Company could be significantly interrupted by the loss of a key executive. The impact of the loss would depend upon the timing and quality of the replacement appointee. The Managing Director has entered into a two-year contract of employment commencing on the Company's Listing Date. (Details, Material Contracts, Section 9.6)

Government Policy Changes

Government policies are subject to review and changes beyond the control of the Company. Such changes may affect industry profitability as well as the Company's capacity to explore and mine. Changes in community attitudes on matters such as taxation, competition policy, environmental and indigenous lands right issues may impose pressures for reviews and possibly changes in government policies. There is a risk that such changes may affect the Company's exploration plans, its tenement rights and obligations, or may require increased capital or operating expenditures or prevent or delay Company operations.

Additional Funding and Future Capital Needs

The Company believes that its available funds as disclosed in this Prospectus and the net proceeds of this Offer will be adequate to fund continued exploration and other Company objectives as stated in this Prospectus. Further capital may need to be raised but there is no assurance that additional funding will be available on acceptable terms, or at all. Any inability to obtain additional funding, if required, may have a material adverse effect on the Company's business and its financial condition and performance.

Uninsured Loss and Liability

There is a risk that the Company may not be insured against all losses or liabilities that could arise from the hazards and risks of exploration for and development and mining of minerals, and general operations of the corporation, and the Company could incur loss and liability to third parties. If the Company is not covered by its insurance policies, the funds available for operations will be reduced and the value and/or tenure of the Company's assets may be at risk.

It has not been possible to complete a fully comprehensive due diligence of the companies acquired by Australasia Gold. A risk exists that undisclosed liabilities may have escaped identification in the due diligence process undertaken by the Directors in respect of these companies. These matters are more fully described in the Financial Information, and the Solicitor's Report (Sections 6 & 7 of this Prospectus).

$\mathbf{r}$ $\sim$ A3 b) $\cap$ $\bar{\phantom{a}}$ $\sim$

$\mathbf{b}$

SECTION ST

ADDITIONAL INFORMATION

Contents		page
91	Constitution and Rights Attaching to Shares	112
92	Options: Terms and Conditions	114
92	Euture Prospects	115
$\Omega$ 4	Dividend Policy	116
9.5	Commissions	116.
$\Omega/\mathfrak{h}$	Material Agreements	10 ^o
97	Directors & Officers Interests and Benefits	120
98	Remuneration of Directors	120
99.	Lingation	120
90	Interests and Consents of Experts and Advisers	121
911	Javation	122
912	Related Party Transactions	122
9.13	Electronic Prospectus	123
914	Restricted Securities	124
9.19	Corporate Governance	124
916	Privacy Act	126

$9.1$

CONSTITUTION AND RIGHTS ATTACHING TO SHARES

Copies of the Constitution of the Company are available for inspection at the Company's registered office during normal business hours and will be available for at least 6 months after the date of this Prospectus.

The following is a broad summary (though not an exhaustive or definitive statement) of the rights, privileges and restrictions which attach to existing Shares, and which will attach to the Shares to be issued pursuant to this Prospectus:

Voting Rights

At a general meeting of the Company every holder of Shares present in person or by an attorney, representative or proxy has one vote on a show of hands and one vote per fully paid share and for each partly paid share held a fraction of a vote equivalent to the proportion paid.

Dividend Rights

Subject to the rights of holders of shares issued with any special, preferential or qualified rights (at present there are none), the profits of the Company which the Directors of the Company may from time to time determine to distribute by way of dividend are divisible among the holders of shares in proportion to the shares held by them. The holder of a partly paid share must not receive a greater proportion of a dividend than the proportion which the amount paid (not credited) in respect of the share is of the total amounts paid and payable (excluding amounts credited) in respect of the share.

Rights on Winding-Up

Subject to the rights of holders of shares with special rights in a winding-up (at present there are none), on a winding-up of the Company all assets that may be legally distributed among the members will be distributed in proportion to the shares held subject to any amounts unpaid on a share.

Transfer of Shares

A holder may transfer all or any shares held. However, shares which are restricted securities cannot be disposed of during the escrow period except as permitted by the ASX or the Listing Rules. The Directors may refuse to register a transfer of shares or request SCH to apply a holding lock to prevent a transfer in accordance with the Listing Rules.

Creation and Issue of Further Shares

The allotment and issue of any new shares is under the control of the Directors of the Company and, subject to the Listing Rules or the Corporations Act, the Directors of the Company may allot, issue, grant options over or otherwise dispose of those shares to such persons, on such terms and conditions, and with such rights and privileges, as they may from time to time determine.

Variation of Rights

At present, the Company has only one class of shares on issue. If shares of another class were issued, the rights attaching to the shares could thereafter only be varied or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of the shares, or with the written consent of the holders of at least three quarters of the shares then on issue.

General Meetings

Each holder of shares will be entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive all notices, accounts and other documents required to be furnished to shareholders under the Corporations Act or the Listing Rules.

Subject to a resolution which as a matter of law requires a special resolution:

a question arising at a general meeting is decided by a majority of votes on a show of hands unless a poll is demanded
the chairperson does not have a casting vote on a show of hands or on a poll in the event of equality of votes.

Appointment of Directors

The number of directors is fixed by the Directors and must not be less than 3 or more than 12. Directors do not need to hold shares in the Company. The Directors may appoint any person as a director to fill a casual vacancy or as an addition to the existing directors. Any director so appointed only holds office until the next general meeting and must then retire from office. At each general meeting, one third of the Directors or the number nearest to one third, must retire from office and their positions be open to election. A retiring director is eligible for re-election. The managing Director is not subject to this requirement and is not taken into account in determining the rotation of retirement of directors. No person (other than a retiring director) is eligible for election as a director at any general meeting of the Company unless a consent to nomination signed by the person has been lodged at the registered office - in the case of a person recommended for election by the Directors 20 business days before the general meeting and in any other case 30 business days before the general meeting.

$\mathbf{b}$

$0.1$ COMSTITUTOM AND RIGHTS ATTACHIME TO SHARES continued

Remuneration of Directors

The aggregate remuneration paid to all the non-executive directors in any year may not exceed an amount fixed by the Company in general meeting. In addition, every director is entitled to be paid all reasonable travel, accommodation and other expenses incurred on behalf of the Company.

Powers of Directors

Management and control of the business of the Company are vested in the Directors who may exercise all powers and do all things that are within the power of the Company and are not by the Constitution or by law required to be exercised or done by the Company in general meeting.

Indemnity

The Company indemnifies each of its officers out of its assets against any liability incurred and liability for costs and expenses incurred by the officer acting in his or her capacity as an officer to the extent that he or she is not indemnified out of any insurance maintained by the Company.

$9.2$ OPTIONS: TERMS AND CONDITIONS

The terms and conditions on which the Options will be issued to Shareholders are the same as those applying to existing Options and are as follows:

Entitlement to ordinary shares: The optionholder is entitled on payment of 20 cents per share ("the exercise price") to be allotted one ordinary fully paid share for each option exercised.

Exercise date: The options held by the optionholder are exercisable in whole or, subject to minimum requirements, in part up to and including 30 June 2008 (the Expiry Date). Reminder notices will be forwarded to the optionholder prior to the Exercise Date. Options not exercised on or before the Expiry Date will lapse.

Register of options and shares: The options will be recorded on the Company's Register of Optionholders which will initially be maintained in Adelaide. The register will be open for inspection by shareholders and optionholders free of charge. Shares to be allotted on exercise of the options will be recorded on the Company's Register of Members.

Quotation: The Company will use its best endeavours to have the Options listed for quotation with ASX and to maintain such listing until the Expiry Date.

Method of exercise of options: An option is exercisable by the shareholder filling in and signing the Form of Notice of Exercise of Options and lodgement at the office of the Company's share registry together with payment of 20 cents for each option exercised. The minimum number of options which may be exercised at any time is a marketable parcel (as defined in the ASX Listing Rules) except where less than the number of options is held which would create a marketable parcel is held in which case all options held by one holder must be exercised.

Rights of shares allotted on exercise: The Company will make application for official quotation to the ASX of new shares allotted on exercise of the options in accordance with ASX Listing Rules. Shares allotted on exercise of the options will participate equally in all respects with existing issued ordinary shares.

Reconstruction of capital: If during the currency of the options the issued capital of the Company is reconstructed (including capital reductions and share consolidations and divisions), the number or

nominal value of the options to which the holder is entitled will be reconstructed in the same proportion as the issued capital of the Company is reconstructed in accordance with the ASX Listing Rules but in all respects the term for the exercise of the options shall remain unchanged. Where appropriate the exercise price of the Options will be revised in accord with the ASX Listing Rules.

Bonus issue: If there is a bonus issue to the holders of ordinary shares in the capital of the Company. the number of ordinary shares over which an Option is exercisable will be increased by the number of ordinary shares which the holder of the Option would have received if the Option had been issued before the record date for the bonus issue.

Rights issue: If the Company makes a rights issue (other than a bonus issue), the exercise price of Options on issue will be reduced according to this formula: $A = (O - E [P - (S + D)]) / (N + 1)^*$

Participating rights and entitlements: The options carry no right (without exercising the options) to participate in rights issues which may be offered by the Company to its shareholders after the date of issue of the options or in bonus issues or dividends. However the company must give prior notice to Optionholders of any new issue before the record date for determining entitlements to the issue in accordance with ASX Listing Rules and Optionholders have the right to exercise the Options prior to the record date for determining entitlements.

Transfer: Options may be transferred at any time prior to their expiry by completing any usual or common form of transfer. Transfers will be recorded on the Company's Register of Optionholders.

Meetings: Optionholders appearing on the Company's Register of Optionholders at the relevant date will be entitled to receive and will be sent all reports and accounts required to be laid before shareholders in general meeting and all notices of general meetings and will have the right to attend but shall have no right to vote at such meetings.

Amendments: Despite anything else contained in these terms to the contrary, the terms and conditions may be changed by the Company to the extent it reasonably considers to be necessary to comply with the ASX Listing Rules, particularly as they may apply to a reconstruction or reorganisation of the capital of the Company at the time of reorganisation or reconstruction.

$9.3$ FUTURE PROSPECTS

As detailed in the Company's report on its tenement holdings in Sections 3 & 4 of this Prospectus, the Company will own or will have significant holdings in a number of mineral and exploration assets which it proposes to explore and to develop as mines, as well as adding new projects to the portfolio. The Company has an experienced Board capable of undertaking these exploration and development activities. The future prospects of the Company are dependent upon, amongst other things:

a) the existence of undiscovered mineralisation within the Company's tenements;
b) the Company's success in discovering such mineralisation;
c) the continuing availability of sufficient capital to conduct exploration and develop mining operations, and
d) favourable metal prices and exchange rates.

$A$ = the new exercise price of the Option; $O$ = the old exercise price of the Option; $E$ = the number of underlying ordinary shares into which one Option is exercisable; $P$ = the average closing sale price per ordinary share (weighted by reference to volume) on ASX during the 5 trading days immediately preceding the ex rights date or ex entitlements date (excluding special crossings and overnight sales and exchange traded option exercises); S = the subscription price for a security under the pro rata issue; D = the dividend due but not yet paid on existing underlying securities (except those to be issued under the pro rata issue); $\mathbf{N}$ = the number of securities with rights or entitlements that must be held to receive a right to one new security.

d $\sim$ $\Delta t$ $\overline{16}$ b) $\cap$ $\tilde{\phantom{a}}$

$\sim$

$\mathbf{b}$

$9.4$ DIVIDEND POLICY

The policy of the Board is to maximise returns to shareholders whilst conserving sufficient funds to build a strong capital base to support the risks inherent in the business undertaking and to adequately fund ongoing exploration programs.

The Directors at this point in time cannot give any assurances as to the future dividend policy or the extent of future dividends or distributions as these are dependent upon future earnings, the financial and taxation position of the Company, and other factors. In declaring future dividends, the Directors will have regard to the Company's earnings, its overall financial condition, and other relevant factors.

$9.5$ COMMISSIONS

The Company reserves the right to pay any licensed securities dealer a lodgement fee of 5% with respect to valid and accepted Applications bearing the stamp of those dealers.

Commission and brokerage will be paid as set out in the Material Agreements (Section 9.6.9) of this Prospectus. No other amount has been paid within the 2 years preceding the date of this Prospectus or is payable as a commission for subscribing or agreeing to subscribe or for procuring or agreeing to procure subscriptions for any shares in or debentures of the Company resulting from this proposed issue. No Director promoter or expert in the Company has received, or is entitled to receive, a commission or part thereof.

$9.6$ MATERIAL AGREEMENTS

The Directors believe that there are no agreements material to the Company or of such a nature that an investor should have particulars of when making an assessment of whether to apply for shares in the Company, other than those listed below.

1 Joint Venture Agreement with Softwood Plantations Pty Ltd

On 22 April 2004, the Company entered into a joint venture agreement ("IVA") with Softwood Plantations Pty Ltd ACN 550 120 315 to allow the Company to explore exploration licences 22301 and 23824 in the Northern Territory owned by Softwood and MCNA 5115 which Softwood has applied for. Softwood is controlled by Mr Graham Chrisp, a former director of the Company. The Company's participating interest in the joint venture is one hundred percent of gold and silver found in association with gold and ancillary to a commercially mineable gold deposit. Softwood's participating interest is one hundred percent of non-gold related minerals and minerals produced as bi-products of gold-silver production. The Company is liable to maintain the tenements. If Softwood wishes to conduct any exploration for other minerals in respect of the tenements, it is liable for that expenditure. Under the JVA, the Company is also appointed as the Operator of the joint venture. The Company and Softwood may seek to excise from the joint venture, areas of economic mineralisation of the kind which the party has a one hundred percent participating interest and may lodge an application for a tenement over the area excised.

2 Agreement for Acquisition of The Australian Land Company Pty Ltd

On 22 April 2004, the Company entered into an agreement with Farmtell Management Services Pty Ltd ACN 005 720 641 and Mr Graham Chrisp and South Cove Limited, for the purchase by the Company of all of the issued capital in The Australian Land Company Pty Ltd ("TALC") which was

____________________________________

controlled by Mr Graham Chrisp. TALC owns or is entitled to the mining tenements shown in its name (and in the name of Magnum) in the Solicitor's Report in this Prospectus. The amount payable for the shares is \$2.00. In addition, in consideration for the issue of 1,030,000 fully paid shares including options by the Company to South Cove Limited, it assigned to the Company, the benefit of a debt owed by TALC to South Cove Limited of \$AUD203,454.11. Settlement under the agreement occurred on 22 April 2004.

Control of TALC was handed over to the Company at settlement. The agreement also provides that when the Company becomes listed on the ASX, it must pay to farmtell the sum of \$AUD20,000.00 in respect of bonds paid by TALC for some of TALC's mining tenements.

The agreement contains extensive warranties and indemnities from Farmtell and Mr Chrisp in respect of the ownership of the shares, the good standing of TALC, its mining tenements and any unknown liabilities.

Agreement for Acquisition of Otago Gold Ltd $\mathbf{r}$

On 22 April 2004, the Company entered into an agreement with South Cove Limited and Mr Graham Chrisp, for the purchase by the Company of all of the issued capital in the Otaqo Gold Limited ("OGL") which was controlled by Mr Graham Chrisp. OGL owned or was entitled to mining tenements in New Zealand which were subsequently reissued to the Company. The amount payable for the shares was 9,850,000 fully paid shares including options issued by the Company to South Cove. In addition, in consideration for the issue of 1,160,000 shares including options by the Company to South Cove, it assigned to the Company the benefit of a debt owed by OGL to South Cove of \$NZ273.323.09. Settlement under the agreement occurred on 22 April 2004.

Control of OGL was handed over to the Company at settlement.

The agreement contains extensive warranties and indemnities from South Cove and Mr Chrisp in respect of the ownership of the shares, the good standing of OGL, its mining tenements and any unknown liabilities.

Agreement for Acquisition of Mining Tenements from Corporate Developments Pty Ltd 4

On 22 April 2004, the Company entered into an agreement with Corporate Developments Pty Ltd ACN 009-610-271 ("Corporate"), a company controlled by Mr Graham Chrisp, for the purchase by the Company of certain mining tenements held by Corporate in the Northern Territory shown being owned by Corporate in the Solicitor's Report in this prospectus. The amount payable for these tenements was the issue by the Company of 10,000 fully paid shares including options to Corporate. The agreement is subject to the consent of the Northern Territory Minister of State. Settlement will be completed upon that consent being obtained. The agreement contains extensive warranties and indemnities from Corporate as to the good standing of the mining tenements.

5 Capital Reduction, Royalty and Right of Reacquisition Agreement

On 7 July 2005, the Company entered into an agreement with South Cove Limited. This agreement was varied by deed of variation made on 22 July 2005. The main terms of the agreement and deed of variation ("the Royalty Agreement") are:

. A reduction of one third of the Shares owned by South Cove issued pursuant to the agreements numbered 2 and 3 above and cancellation of 2,008,333 Options held by South Cove. This reduction has been made pursuant to approvals made at a special meeting and a general meeting of the Company.

ċ $\sim$ A3 $\overline{16}$ b) $\cap$ $\tilde{\phantom{a}}$ $\sim$

$\mathbf{b}$

MATERIAL AGREEMENTS & Capital Reduction. Royalty and Right of Reacquisition $\mathbb{G}_$ $\mathbb{G}_$ Agreement continued
The Company granted to South Cove a right to a 2% net profit participation royalty in relation to future mining operations conducted on the New Zealand tenements set out in Schedule 3 to the Solicitor's Report in this Prospectus together with other rights which apply if the Company does not meet certain expenditure obligations on the tenements. In addition, South Cove received pre-emptive rights to match other proposals which may be forthcoming in respect of the New Zealand tenements. If South Cove acquires any of the tenements from the Company, it will have to pay the Company a 2% net profit participation royalty on the same terms the Company is liable to pay to South Cove.
The Company has issued to South Cove a total of six (6) million Premium Options made up of 3 tranches of two (2) million each with the following:
- 1 exercise price of \$0.40, exercisable within three (3) years of date of issue;
- 2 exercise price of \$0.60, exercisable within four (4) years of date of issue;
- 3 exercise price of \$0.80, exercisable within five (5) years of the date of issue.

The date of issue was 25 August 2005.

In addition, for a period of five years commencing two years after listing of the Company on the ASX, if expenditure (as reportable to the administrative authorities) at Wetherstones (EP 40 664 and EP 39 265) falls below \$100,000,00 per annum for two consecutive years. or if expenditure on any of the other New Zealand tenements fails below \$20,000.00 per annum for two consecutive years, then the Company will offer South Cove, in exchange for the termination of the 2% net profit participation royalty in respect of the tenement concerned, a joint venture on normal reasonable commercial terms under which South Cove will essentially hold 51% of the Company's interest in the tenement and be the manager of the joint venture.
If the reported expenditure falls below the above threshold levels (\$100,000.00 or \$20,000.00 respectively) in year 3 or any year thereafter. South Cove's right of acquisition of 51% and commencement of a joint venture, as above, will be triggered three months after the end of the year concerned when the Company must declare its expenditure commitment for the following year.
The Company will transfer the 51% of its interest to South Cove at the commencement of the joint venture.
The arrangements regarding annual expenditure and the provisions for a joint venture do not apply to any of the tenements in respect of which the Company has decided to develop a mine.

6 Managing Director's Employment Agreement

On 22 April 2004, the Company entered into a service agreement with its managing director, Trevor John Ireland. The main terms of that agreement as subsequently amended are:

It will take effect upon listing of the Company on the ASX, for a term of two years.
The total salary package includes a base salary of \$150,000.00 per annum, statutory superannuation contributions and the use of a fully maintained motor vehicle of the value of \$50,000.00.

The employment of the managing director may be terminated by the Company for cause. $\ddot{\bullet}$ Also, if the Company is the subject of a successful takeover bid or there is a change in the control of the Company the managing director or the Company have the right to terminate the agreement on four weeks notice and in that event a lump sum payment equal to six months base salary is payable to him.

7 Agreement with Director and Company Secretary

On 15 September 2005, the Company entered into an agreement with Michael Billing, a non-executive director and the secretary of the Company and with his service provider company, MBB Trading Pty Ltd. The main terms of that agreement are:

The appointment of Michael Billing as company secretary and as a non-executive director is confirmed.
The appointment of MBB Trading as a provider of services to the Company is confirmed. Those services are a range of financial and administrative services, which MBB Trading customarily provides to other clients.
The appointment of MBB Trading continues during the appointment of Michael Billing as a $\bullet$ director and/or the secretary of the Company or until the Board of the Company decides to revoke the appointment.
The services to be provided by MBB Trading are on an "as needs" basis.
The fees to be paid to MBB Trading are not fixed but must not exceed commercially competitive rates.
In addition Michael Billing is entitled to be paid directors fees as determined from time to time $\ddot{\bullet}$ (currently \$20,000.00 per annum) together with superannuation.

Corporate Adviser Agreement 8

On 17 February 2004, the Company entered into an agreement with Baron Partners Limited. The main terms of that agreement as subsequently amended are:

Baron is engaged to manage and coordinate the completion of this prospectus, the marketing of the offering and the listing of the Company.
$\ddot{\phantom{0}}$ Baron will advise on all structural aspects of the proposal and coordinate processes to submission of the prospectus.
The engagement was for a term of twelve months and has been extended for an indefinite period.
Upon closure of the issue by the Company and agreement by ASX for listing, Baron will be paid an adviser fee of \$60,000.00, plus options equal to 1% of the number of shares on issue after completion of the IPO (the options being on the same terms as the options issued under this prospectus). If more than \$3 million is raised under the Prospectus, Baron will be entitled to a bonus of Shares in the Company which will be issued at the issue price under this Prospectus. at the rate of \$25,000.00 per \$1 million raised above \$3.0 million. This bonus will accrue pro-rata at the rate of \$25,000 per \$1.0 million additional subscription.
The payment of \$60,000.00 will be in addition to a payment of \$20,000.00 for services provided in an advisory capacity in relation to the IPO prior to the date of this prospectus.

$\sim$

$\mathbf{b}$

119 - 119 - 119 - 119 - 119 - 110 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 111 - 1

MATERIAL AGREEMENTS continued $\mathbb{G}_$ $\mathbb{G}_$

9 Broker to the Issue Agreement

On 8 November 2005, the Company entered into an agreement with Cameron Stockbrokers Limited. Under this agreement Cameron Stockbrokers agreed to act as broker to the Issue for the capital raised under this Prospectus. The main terms of the agreement are as follows:-

Cameron Stockbrokers is not underwriting this capital raising.
Cameron Stockbrokers remuneration consists of:- a fee of \$10,000,00 plus GST; 0.75% of the gross amount raised under this Prospectus plus GST; and 300,000 options in the Company plus GST (payable in cash) upon quotation of the shares issued under this Prospectus
In addition. Cameron Stockbrokers is to be reimbursed for its out of pocket expenses.
Either party may terminate the agreement at any time"

$9.7$ DIRECTORS' & OFFICER'S INTERESTS AND BENEFITS

Except as set out below and in the Related Party Transactions (Section 9.12) and the Material Agreements Section 9.6 of this Prospectus, no current or former Director has any interest in the promotion of the Company or any property acquired or proposed to be acquired by the Company and no Director or firm in which a Director is involved has any interest in the promotion or in any property proposed to be acquired or purchased by the Company and no sums have been paid or agreed to be paid to a Director or to any such firm in cash or shares or otherwise to any persons (in the case of the Director) either to induce him to become or to qualify him as a Director or otherwise for services rendered by him or by such firm in connection with the promotion or formation of the Company or (in the case of an expert) for the services rendered by him or such firm in connection with the promotion or formation of the Company or the preparation or distribution of this Prospectus.

Shares and Options held directly by the Directors and held by entities with which Directors may be associated are as follows:

		Shares	Options
Director	Direct	Indirect	Direct	Indirect
J Roberts	$\overline{\phantom{a}}$	80.000	681.111	40,000
N Jackson	101,000	٠	444.778	٠
T treland	799.161	٠	399.581	٠
M Billing	$\overline{\phantom{a}}$	۰	338,889	٠

$9.8$

REMINERATION OF DIRECTORS

In accordance with the Company's Constitution Directors' fees have been set at \$65,000 per annum in aggregate such fees being payable commencing from 1 July 2003 contingent upon completion of the IPO. In order to reduce impact of accrued Directors Fees upon the Company, Directors have agreed to accept their entitlements as Shares and Options from inception until 30 September 2005.

$9.9$ LITIGATION

The Company and its subsidiaries are not involved in any litigation and is not aware of any litigation pending against it.

$\sim$ 120 $\sim$

$9.10$ INTERESTS AND CONSENTS OF EXPERTS AND ADVISERS

The following have acted as experts and have given their written consents to the issue of this Prospectus with their reports included in the form and context in which they are included and such consents have not been withdrawn before the lodgement of this Prospectus for registration.

The experts who have prepared reports for inclusion in this Prospectus have been/or will be paid fees on a normal commercial basis for the preparation of their reports. Estimates of fees paid and payable are set out against the relevant expert.

Expert	Capacity	Estimated Fee
David Fielding	Consulting Geologist	\$25.000
HLB Mann Judd Stephens (SA)	Chartered Accountants	\$15.000
Lynch Meyer	Solicitors	\$55.000

No expert whose report appears in this Prospectus has:

a) any Shareholding in the Company;
b) the right (whether legally enforceable or not) to subscribe for shares in the Company, or
c) the right (whether legally enforceable or not) to nominate persons to subscribe for shares in the Company.
d) made or purported to make any statement in, nor taken any responsibility for, any part of this Prospectus (with the exception of their professional reports), nor have they authorised or caused the issue of this Prospectus.

The following parties having acted as advisers have given and not withdrawn their consent to be named in this Prospectus in the context of the services they have provided in their professional capacity:

Baron Partners Limited	Corporate Adviser
Computershare Investor Services Pty Limited	Share Registrar
Cameron Stockbrokers Limited	Broker to the Issue

None of these has been involved in the preparation of any part of this Prospectus and did not authorise or cause the issue of any part of this Prospectus, except the Share Registry which provided assistance in the design of the Application Form.

In addition to the above advisers the Company paid \$4,900 for independent legal advice to the independent Directors.

Other than as referred to above, no expert or firm in which any expert is a partner has any interest in the promotion of, or in any property acquired or proposed to be acquired by, the Company and no amounts, whether in shares or otherwise, have been paid or agreed to be paid to any expert (or any firm in which the expert is a partner) for services rendered by the expert or the firm in connection with the promotion or formation of the Company.

The Company will cause a true copy, verified by statement in writing, of the consents of the persons, firms and companies listed above to be deposited within 7 days after lodgement of this Prospectus at the registered office of the Company and shall keep each such copy for a period of at least six months after the lodgement of this Prospectus for inspection by any person without charge.

$\sim$

9.11 TAXATION

The Company will be taxed as a public company.

$9.12$ RELATED PARTY TRANSACTIONS

The Company is not aware of any related party transactions requiring disclosure in the Prospectus other than as set out below:

Ireland Resource Management Pty Ltd ("IRM"), a Company associated with Mr Trevor Ireland has received payment on commercial terms for the management services provided by Mr Ireland. Payments total for the period July 2003 - March 2004 totalled \$14,200, and for the period January - September 2005, \$24,300 and in addition Mr Ireland has been issued 698,161 shares and 348,581 options in lieu of services provided. In addition, Ireland Resource Management is entitled as at 30th September 2005 (contingent upon the listing of the Company and prior to the reduction of entitlements referred to below) to receive contingent payments amounting to \$18,900 and the issue of 189,000 Shares and 94,500 Options. From 1 October 2005 until Listing Date, IRM will continue to be paid \$2,700 per month and to accrue entitlements contingent on the listing of the Company to payments of \$6,300 per month.

Between May and December 2004 Trevor Ireland served as Managing Director of the Company under contract (currently suspended) and (contingent upon the listing of the Company) will receive remuneration in respect of services rendered in that capacity pursuant to the initial operation (prior to suspension) of the contract described in the Material Agreements, (Section 9.6.6) of this Prospectus.

John Roberts, Norton Jackson and Mick Billing have been issued with Options and are also entitled to receive remuneration in respect of services rendered as Directors and Company Secretary of the Company (Section 9.8) Director Remuneration., the payment of which is contingent upon the listing of the Company.

Former Directors and Officers of the Company have been issued with Options and have accrued entitlements to fees (payable contingent upon listing) for their services as outlined in Section 9.8 of this Prospectus. Former Director Mr Graham Chrisp waived his entitlement. Former Company Secretary Dr John Santich has exercised his discretion to take his entitlement half in shares and half in cash.

Sheoak Runner Pty Ltd, a company controlled by Dr John Santich, was issued with Shares and Options for services rendered in connection with the preparation of this Prospectus. A portion of these Shares and Options were cancelled for no consideration by agreement with the Company ratified by General Meeting of Shareholders.

As a part of a capital reconstruction completed in September 2005 Directors and Dr Santich agreed with the Company to reduce by one third the number of Shares and Options which they and their related entities held or to which they were entitled contingent upon listing.

Net entitlements of current and former Directors and Officers to shares to be issued contingent upon listing of the Company as at 30 September 2005 are as follows:

		Shares	Options
Director/Officer	Direct	indirect	Direct	Indirect
J Roberts	60,139		15,625	$\overline{\phantom{a}}$
N Jackson	146.889	٠	12.500	$\sim$
T treland		107.418	$\overline{\phantom{a}}$	53,709
M Billing	36,111	٠	12,500	$\overline{\phantom{a}}$

Shares and Options held directly by former Directors and Officers of the Company and by entities with which they may be associated are as follows:

		Shares	Options
Director/Officer	Direct	Indirect		indirect
J Santich	$\overline{\phantom{a}}$	800.000	500,000	300,000
G Chrisp	101,000	7,667,833	50.500	3,833,667
				Premium Options
G Chrisp	٠	٠	$\overline{\phantom{a}}$	6,000,000

Except as set out above, in the Sections 7, 9.6, 9.7 & 9.8 of this Prospectus, no amount has been paid or agreed to be paid and no benefit has been given or agreed to be given to a current or former Director or Officer, or proposed Director to induce them to become or to qualify as a Director or Officer or for services provided in connection with the formation or promotion of the Company or the Offer.

Except as set out above or elsewhere in the Prospectus, no Director has, or in the last two years has had, an interest in the formation or promotion of the Company, in property to be acquired by the Company in connection with its formation or promotion, or in the Offer.

9.13 ELECTRONIC PROSPECTUS

Pursuant to Class Order 00/44, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus on the basis of a paper prospectus lodged with ASIC and the issue of the securities in response to any electronic application form subject to compliance with certain provisions.

If you have received this Prospectus as an electronic prospectus, please ensure you have received the entire Prospectus accompanied by the Application Form. If you have not, please email the Company at www.australasiagold.com.au and the Company will send to you, for free, either a hard copy or a further electronic copy of the Prospectus or both. The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. In such case, the application monies received will be dealt with in accordance with Section 722 of the "Corporations Act".

$\mathbf{r}$ $\sim$ A3 b. $\cap$ $\tilde{\phantom{a}}$ $\sim$

$\mathbf{b}$

9.14 RESTRICTED SECURITIES

The Directors expect that ASX will classify the following Shares and Options as restricted securities:

Up to 10,455,051 Shares and 7,256,311 Options held or controlled by the parties classified as being related to the Company or promoters (as defined in the Listing Rules), for a period of 24 months from the date of official quotation of Shares and Options on the ASX;

Up to 4,090,000 Shares and 2,045,000 Options held by providers of seed capital (other than those falling within the categories above) and depending on the amount contributed per Share, for a period of up to 12 months from the date of official quotation of Shares and Options on the ASX;

Up to 295,451 Options liable to be granted to the Company's Corporate Adviser for a period of 24 months from the date of official quotation of Shares and Options on the ASX.

Chapter 9 of the Listing Rules precludes holders of restricted securities from disposing of those securities or an interest in those securities or agreeing to dispose of those securities or an interest in those securities for the relevant restriction periods. The holder will also be precluded from granting a security interest over those securities. The ASX may review these restrictions during consideration of the Company's application for admission to the Official List of the ASX. The ASX may also, at its discretion, waive or vary the requirements in accordance with the Listing Rules in the event that an affected holder and the Company apply for a review of any escrow restrictions.

$9.15$ CORPORATE GOVERNANCE

The Directors are committed to the principles underpinning best practice in corporate governance.

A description of the Company's main corporate governance practices is set out below.

Board Responsibility

The Board of Directors takes responsibility for corporate governance of the Company and operates according to the Company's Constitution.

The Board is to be comprised of a majority of non-executive directors, including the Chairman. The Chairman of the Board is to be elected by the Board and the performance of the Directors is to be reviewed on a reqular basis.

Directors have the right, in connection with their duties as Directors to seek independent professional advice at the expense of the Company, subject to prior approval of the Chairman, which may not be unreasonably withheld.

The Board has responsibility for internal control procedures within the Company. Compliance covering financial reporting, quality and integrity of; information, personnel, and operations shall be regularly monitored.

All Directors, managers, and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the performance and reputation of the Company.

Committees

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the establishment of separate board committees. All matters which might otherwise be delegated to committees will be dealt with by the full board.

Ethical Standards

All executives and employees are required to adhere to laws and requlations, and act with the highest standards of honesty, integrity, and objectivity in all dealings with each other, the Company, and suppliers and the community.

The Company is committed to the adoption of a Codes of Conduct which shall be reqularly reviewed and updated as necessary to ensure they reflect the highest standards of behaviour and professionalism.

Continuous Disclosure

The Directors are committed to keeping the market fully informed of material developments to ensure compliance with ASX Listing Rules and the Corporations Act. At each Board meeting specific consideration is given to disclosure of any matters which should be disclosed under the Company's continuous disclosure policy.

Share Trading

Directors, management and other employees as nominated will not be permitted to trade in the Company's securities for a period of one week prior to any anticipated announcement to the ASX and for a 2 day period after an announcement, provided that the person is not in possession of price sensitive information.

Related Party Matters

Directors and senior management will be reguired to advise the Chairman of any related party contract or potential contract. The Chairman will inform the Board, and that person will not participate in discussions or discussions involving the matter.

Shareholder Relations

The Directors aim to ensure that shareholders are informed of all matters necessary to assess the performance of the Company.

Information on all major developments affecting the Company shall be communicated to shareholders through:

The Annual Report;
Quarterly and half yearly reports;
The Annual General Meeting and other General Meetings of shareholders called as appropriate;
Other announcements in accordance with the Company's continuous disclosure policy; and
The Company's web site.

$\bar{\phantom{a}}$

$\sim$

PRIVACY ACT 9.16

Each Applicant who completes an Application Form provides personal information to the Company. Australasia Gold collects, holds, and will use that information to process the Application and service the Applicant's needs as a shareholder.

By submitting an Application Form, each Applicant agrees that the Company may use the information it contains for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and third party service providers (including mailing houses) ASX, ASIC and other regulatory authorities.

The Corporations Act requires that the Company record information (name, address, number of securities held) in respect of each security holder of the Company in its public register. Information in the Company's register is used to facilitate corporate communication including between the Company and security holders, and for compliance with legal and regulatory requirements. Security holders may access and update the personal information recorded in the Company's Register.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

The Directors of the Company report that after due enquiry by them, they have not become aware:

i) of any circumstances which in their opinion materially have affected or will affect the trading or profitability of the Company or of the value of the assets of the Company, and
ii) of any contingent liabilities of the Company, additional to those contingent liabilities appearing in the Prospectus.

The lodgement of this Prospectus was consented to in writing by every Director of Australasia Gold Limited.

Signed for and on behalf of the Directors of Australasia Gold Limited.

A. R. Doberte.

J B Roberts Chairman

T J Ireland Managing Director

achain N Jackson

Director

M R Billing

Director

DEFINITIONS

	in this Prospectus, unless the context otherwise requires:
Application Form	means the application forms that are attached to form part of this Prospectus. Application and Applicant have corresponding meanings.
ASC	means the Australian Securities Commission.
ASIC	means the Australian Securities and Investments Commission.
ASTC Settlement Rules	means the Business Rules issued by ASX Settlement and Transfer Corporation Pty Ltd (ACN 008 504 532).
ASX	means the Australian Stock Exchange Limited and its subsidiaries.
Australasia Gold	means Australasia Gold Limited (ACN 104-757-904).
Australian Land Company	means The Australian Land Company Pty Limited (ACN 009-617-350).
Baron Partners	means Baron Partners Limited (ACN 003-397-528) - corporate adviser to Australasia Gold.
Business Day	means Monday to Friday inclusive, except New Years Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day.
CHESS	means Clearing House Electronic Sub-register System.
Closing Date	means 9 December 2005 being the last date for receipt of completed application forms or such earlier or later date as determined by the Directors.
Company	means Australasia Gold Limited (ACN 104 757 904) and its wholly-owned subsidiaries Otago Gold Limited and The Australia Land Company Limited.
Constitution	means the constitution of the Company adopted on 16 May 2003.
Corporations Act	means the Corporations Act 2001 (Commonwealth of Australia).
Corporate Advisers	means Baron Partners Limited (ACN 003 397 528).
CST	means Australian Central Standard or Summer Time as applicable in Adelaide, South Australia, and references to time in this Prospectus are references to CST.
Directors and Board	mean the Board of Directors of the Company as it is constituted from time to time.
Expiry Date	means in relation to the Options 30 June 2008.
Exposure Period	means the period of 7 days after 4 November 2005, which period may be extended by ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act.
IPO	means the Initial Public Offering of Shares and Options pursuant to this Prospectus.
Issue	means the Offer of Shares and Options pursuant to this Prospectus.
Listing Rules	means the official fisting rufes of the ASX.
Offer	means the offer of Shares and Options pursuant to this Prospectus.
Opening Date	means 14 November 2005 being the fast date for receipt of completed application forms.
Option	means an Option expiring on 30 June 2008 to acquire a fully paid ordinary voting share at an exercise price of AU\$0.20.
Option Exercise Price	means the amount of AU\$0.20 payable to the Company on the exercise of an option.
Otago Gold	means Otago Gold Limited (incorporated in New Zealand).
Planned Offer	means the Offer pursuant to this Prospectus to issue Shares and Options to the value of \$3.0 million.
Premium Option	means an option issued to South Cove Etd on terms described in Section 9.6.5.
Prospectus	means this Prospectus.
Share	means a fully paid ordinary voting share in the capital of the Company.
TALC	means The Australian Land Company Pty Limited (ACN 009 617 350).

$\frac{1}{28}$

GLOSSARY

OF TECHNICAL TERMS CONTINUES.

∠	Aeromagnetic survey	A survey made from an aircraft for the purpose of recording the magnetic characteristics of rocks.
с	Alluvium/alluvial	A loose mass of soil and/or rock fragments transported and deposited by water.
U.	Alteration	Mineralogical reconstitution of a rock by hydrothermal fluids, as distinct from atmospheric weathering.
$\overline{\phantom{a}}$ m	Anastomosing	Refers to a geological feature which divides and rejoins in the manner of a braided stream.
$\simeq$ w.	Andesite/andesitic	A matic volcanic rock composed essentially of catcic feldspar and one or more of the matic minerals pyroxene, olivine and homblende.
盆 U.	Anomaly/anomolous	An area where exploration has revealed results higher (or lower) than the norm or expected level; or the values encountered in such an area.
$\cdots$	Anticline/anticlinal	A fold where the rock strata dip outwards away from the axis.
2	Aplite/aplitic	A fight coloured fine grained igneous rock of moderate depth.
਼	Arsenopyrite	An iron arsenic sulphide, FeAsS.
٥	Аs	Chemical symbol for arsenic.
≏	Assay	Quantitative laboratory determination of the content of valuable metals contained within a rock.
	Aυ	Chemical symbol for gold.
	Auriferous	Gold bearing.
	Banded iron formation (B.I.F.)	Chemical sedimentary rock consisting of finely atternating layers of silica and iron oxide.
	Basement	Older rocks surface which underlie more recent deposits.
	Basin	A low-lying region where eroded water-borne sediments accumulate.
	Bedding	Layering of strata in sedimentary rocks.
	Bedrock	Solid rock underlying superficial weathered rock or soil.
	Biotite	A common rock forming mineral, member of the mica group.
	Brecciated	Fractured, said of a rock composed of angular fragments embedded in a matrix.
	Carbonaceous	Containing fossil organic material in the form of coal or graphite.
	Carbonate	A rock or a component of rock composed primarily of calcium, magnesium or iron and CO3.
	Chert/cherty	A rock with a fine-grained glassy, highly siliceous composition and appearance.
	Chlorite/chloritic	A common rock forming mineral, member of the mica group.
	Colluvium	A loose mass of soil and/or rock fragments transported by mechanical processes such as gravity.
	Concordant	Geological features which are parallel to the bedding of the country rock.
	Conglomerate	A coarse-grained sedimentary rock composed of rounded to sub-angular pebbles, cobbles or boulders set in a finer grained matrix.
	Contact	Surface which marks the change between rocks of different types.
	Costean	A trench through the surface soil or debris to expose the underlying material for mapping and sampling.
	Country rock	The rock mass surrounding a mineral deposit or intrusion.
	Cretaceous	A time period from approximately 135 to 65 million years ago.
	Cross-section	A vertical plane perpendicular to geologic strike.
	Cut-off grade	The minimum grade that is included in a drill intersection or resource estimate.
	Deformation	A general term for the processes of folding, faulting, shearing, compression and extension of rocks as a result of various earth forces.

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C

Deposit	A body of mineralisation that may or may not be economic to mine.
Diamond drilling	Rotary drilling with diamond impregnated bits to produce a solid, continuous core sample of the rock.
Dip	The angle at which a rock layer or any other planar feature is inclined from the horizontal.
Discordant	A feature that is not parallel to the bedding or foliation of the country rock.
Disseminated	A scattered distribution of generally fine-grained mineral through a rock.
Dollar, \$	All dollar amounts are expressed as Australian Dollars unless otherwise stated.
Dore	The gold bullion extracted from gold ore before refining.
Drill core	Cylindrical sample of rock produced by diamond drilling.
Drill cuttings/drill chips	Sample of rock produced by percussion drilling methods such as reverse circulation (RC) drilling.
Dyke	A tabular body of intrusive igneous rock, crosscutting the host strata.
Electromagnetic (EM) survey	A geophysical survey technique which may detect buried sulphide mineralisation.
ERA	The geological consultancy Earth Resources Australia Pty Ltd.
Exploration Licence, EL	An exploration licence issued under the Mining Acts of the Northern Territory or New South Wales.
Exploration Permit, EP	An Exploration Permit issued under the Crown Mineral s Act 1991 of New Zealand.
Fault	A fracture or zone of fractures in rocks along which rocks on one side have moved relative to the other side.
Feldspar	A group of common rock-forming minerals.
Feisic	Bsed to describe light-coloured rocks containing an abundance of feldspars and quartz.
Ferruginous	fron-rich.
Fire assay	A highly accurate method of assaying the gold content of rock samples.
Flitches	Florizontal stices through a mineral deposit.
Foliation/foliated	The banding or lamination in metamorphic rocks, as distinguished from stratification in sedimentary rocks.
Footwall	The mass of rock below a fault, vein or zone of mineralisation.
g/t	An abbreviation for grams per tonne, a unit of measurement of the concentration of gold in rock, equivalent to parts per million.
$g/m^3$	An abbreviation for grams per cubic metre, a unit of measurement of the concentration of gold in rock particularly applied to alluvial gold mineralisation.
Gangue	A mineral in direct association with ore.
Geochemistry/ geochemical	The study of the variation of chemical elements in rocks and solls; a method of exploration based on this.
Geophysics/geophysical	The study of the physical properties of rocks, such as magnetism, conductivity and density; a method of exploration based on this by inferring geologic features from measurements of physical properties.
Geotechnical	Relating to rock quality and structural properties of rock masses which influence mining design and operations.
Glacial/glaciation	Pertaining to glaciers, erosion due to the action of glaciers.
Goethite/goethitic	Yellow, red or brown iron oxide mineral.
Gold recovery	The percentage of contained gold which is extracted from ore during ore processing.
Gossan	A ferraginous deposit remaining after the oxidisation of the original sulphide minerals in a vein or ore zone.
Grade	Quantity of metal per unit weight of host rock.
Grade control	Refers to method used during mining to delineate boundaries between ore and waste.
Granite/granitic	A coarse-grained igneous rock composed dominantly of quartz and K-feldspar, with minor accessory ferromagnesian minerals.

⊄	Granitoid	A general term used to describe intrusive rocks of granite-like composition.
¢	Greywacke	A sandstone with high levels of rock fragments and sitt.
U)	High-grade	Referring to mineralisation or ore containing gold grades well above the average grade of the deposit.
$\overline{\phantom{a}}$	Host rocks	Referring to a specific rock type or layer of rock that is preferentially mineralised.
m
2	Hydrothermal	Pertaining to heated water, in particular the process by which hot water-rich solutions transfer materials or alter rocks.
,,,, 2	HO	Refers to the diameter of diamond drill core commonly used for sampling gold ores.
S,	igneous	Rock formed by the solidification of a molten magma.
$\cdots$ $\simeq$	Indicated resource	As defined in the 3DRC Code, an in-situ mineral resource sampled by drill holes, underground openings or other sampling procedures at locations too widely spaced to ensure continuity but close enough to give a reasonable indication of continuity and where geoscientific data are known with a reasonable level of reliability.
Ω ٥	Inferred resource	As defined in the JORC Code, an in-situ mineral resource, inferred from geoscientific evidence, drill holes, underground openings, or other sampling procedures and before testing and sampling information is sufficient to allow a more reliable and systematic estimation.
C.	Inlier	An area or group of rock surrounded by rocks of younger age.
	Intercept/intersection	Refers to the length of continuous mineralisation encountered in a drift hole, trench or channel sample.
	Intrusion/intrusive	A body of igneous rock that has been injected while molten into pre-existing rocks.
	IP Survey	induced Polarisation, a geophysical survey technique which may detect buried sufphide mineralisation.
	JORC code	The Joint Ore Reserves Committee and ASX standard for the publication of resources, reserves and related information.
	Kaolinised	Describes a rock the composition of which has been altered replacing its original minerals with a new composition which is predominantly of the white clay kaolin, and quartz.
	Lode	Generally tabular body of mineralisation or ore where hydrothermal fluids have altered and reconstituted the original rock.
	Loess	Loosely consolidated massive silty sediment typically distributed and deposited by wind.
	Low-grade	Referring to mineralisation or ore containing gold grades well below the average.
	Mafic	Dark coloured rocks composed dominantly of magnesium, and iron-rich rock-forming silicate minerals.
	Massive	A term used to describe rocks which homogeneous in texture or fabric, lacking bedding, foliation etc.
	Measured resource	As defined in the JORC Code, an in-situ mineral resource calculated with a high confidence level but to which economic parameters have not been applied.
	Meta-sediments	Metamorphosed sedimentary rocks.
	Meta-greywacke	Metamorphosed greywacke.
	Metallurgy/ metallurgical	in this document, the technology of extracting minerals and metals from their ores.
	Metamorphic	Rock which has been altered in composition or texture by the effects of heat and/or pressure.
	Mineable	Able to be mined at a profit.
	Mineral Claim, MC	A Mineral Claim issued under the Mining Act of the Northern Territory.
	Mineral Lease, ML	A Mineral Lease issued under the Mining Act of the Northern Territory.
	Mineralisation	The process by which minerals are introduced into a rock. More generally a term applied to accumulations of economic or related minerals in quantities ranging from anomalous to economically recoverable.
	Mineralised zone	A volume of rock which contains mineralisation.
	Mining Permit, MP	A Mining Permit issued under the Crown Minerals Act 1991 of New Zealand.
	Monzonite	An intrusive rock with approximately equal amounts of alkali and plagioclase feldspar with little or no quartz.

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Open pit/open cut	Excavation produced by surface mining in which ore is extracted from a pit.
Ordovician	A time period from 500 to 440 million years ago.
Ore	Mineral bearing rock which is expected to be mineable at a profit.
Ore shoot	An elongated or lens-like orebody, commonly with a preferred plunge direction.
Oxidise/oxidisation	The process of weathering of rock by exposure to air and circulating ground waters.
ppb	Abbreviation for parts per billion, a unit of measurement of the concentration of metal in rock or soil.
ppm	Abbreviation for parts per million, a unit of measurement of the concentration of metal in rock or soil.
Palaeoproterozoic	Early Proterozoic era of geologic time, 2.5 billion to 1.6 billion years ago.
Pelite	Alternative name for a mudstone; clay component of sedimentary rock.
Piedmont	Rock scree accumulating at the foot of a mountain range.
Pluton/plutonic	An intrusive mass of igneous rock.
Plunge/plunging	The angle at which linear geologic features, such as ore shoots or fold axes, are inclined from the horizontal.
Porphyry	An igneous rock containing phenocrysts, in which larger crystals are surrounded by a groundmass of finer grains.
Processing plant	A collective term for the components of machinery involved in the crushing, grinding, leaching and extraction of gold from the ore.
Prospect	An area of a tenement which has demonstrated potential to host an orebody.
Prospective/ prospectivity	General terms for the perceived potential for the discovery of an orebody based on the knowledge of factors such as favourable geologic setting, structures, alteration, geochemical and/or geophysical responses, and the occur- rence of mineralisation, etc.
Proterozoic	An era of geologic time extending from 570 million years to 2.5 billion years ago.
Pyrite/pyritic	An iron sulphide mineral.
Quartz	A common rock forming mineral composed of silicon dioxide.
RAB drilling	Rotary Air Blast, a rotary drilling technique that uses compressed air to clear the drill bit of cuttings and return them to the surface.
Radiometric survey	A geophysical survey technique in which measurements are made of variations of natural radiation levels.
RC drilling	Reverse Circulation, a rotary percussion drilling technique in which the samples are returned to the surface inside the drill rods minimising sample loss and contamination.
Recent	An era of geologic time covering the period from approximately 8 thousand years ago to the present.
Regolith	The unconsolidated material that overlies bedrock.
Resource	An identified in-situ mineral occurrence from which valuable or useful minerals may be recovered. Mineral resources are divided into inferred, Indicated and Measured categories according to the JORC Code.
Saddle vein/saddle reef	A bedded vein or reef that has the form of an anticline.
Schist	A mica-bearing crystalline metamorphic rock.
Scorodite	A mineral formed by the oxidation of arsenopyrite.
Sediments/ sedimentary rocks	Rocks formed of particles deposited from water, wind or ice.
Serpentinise	A process of alteration affecting ultramafic rocks resulting in the formation of the mineral serpentine.
Sequence	A chronological succession of sedimentary or volcanic rocks.
SG	Specific gravity, a measure of density.
Shaft	A vertical or inclined tunnel from the surface excavated to provide access in an underground mine.
Shear/shear zone	Zone in which rocks have been deformed by lateral movement along paraflel planes.

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⊅	Shoot	See "ore shoot".
с	Shoshonite/shoshonitic	A particular andesitic rock.
U) $\overline{\phantom{a}}$	Silicification/ silicified/silicious	Replacement of the original rock constituents by silica, and rocks so replaced, or otherwise silica-rich.
	Skarn	Altered rocks of mainly lime-bearing silicates formed by a large influx of silica, aluminium, iron and magnesium.
≌ 10000	Stratabound	Refers to mineralisation confined to particular sedimentary beds.
≌	Strike	The orientation of a fayer of rock or geologic structure in the horizontal plane.
U)	Strike length	The horizontal length of a bed, layer of rock or geologic structure.
$\overline{\phantom{a}}$ 2	Structure, structural	Refers to the deformation of rocks by folding, fracturing, faulting and shearing, and the features created by those processes.
⊙	Subduction	The process of convergence of two tectonic plates, one of which usually overrides the other.
٥	Sulphide	A mineral consisting of metallic elements and sulphur.
≏	Tenement	An EL, EP, MC, ML or MP, or any other form of mineral licence or title, held or under application.
	Tectonic	Referring to processes of large-scale deformation of the Earth's surface.
	Tertiary	An era of geologic time covering the period from 65 million years to 1.6 million years ago.
	Top cut	An upper assay limit to which all abnormally high assays in a population are reduced to restrict their influence on the estimated average grade of the resource or intersection.
	Tourmaline	An accessory mineral commonly associated with gold mineralisation.
	Treatment plant	A collective term for the components of machinery involved in the crushing, grinding of ore, and the leaching and extraction of gold.
	Trenching	Exploration by excavation of trenches to access bedrocks below surface cover of soil etc.
	Ultramafic	Refers to the composition of particular igneous rocks with high magnesium and iron contents, and low silica contents.
	Underground	Mining methods where excavations are beneath the surface.
	Unoxidised	Rocks which have not been subjected to significant weathering, in which the sulphide minerals have not been broken down to oxide minerals.
	Vein	A tabular mineral infill of a fissure or crack in a rock, commonly containing quartz.
	Veinlet	Very thin, usually discontinuous veins.
	Volcanoclastic/ volcaniclastic	Sedimentary or volcanic rocks containing an abundance of fragments derived from volcanic eruption.
	Waste	Rock, other than ore, excavated during a mining operation.

$-$ 133 $-$

GRYKWIKYKA APPUILE AIM ONS

Investors wishing to compete an online Application may do so via the Company's website at www. australasiagold.com.au

Investors choosing this option may subscribe using BPAY® facilities or enclose a cheque with the printed copy of the completed online Application Form. BPAY® is available where funds are to be drawn from an Australian branch of an Australian bank.

Before downloading or viewing the electronic Application you will be required to read and accept certain conditions applicable to online Applications.

Further information about online Application is available by visiting the Company's website www.australasiagold.com.au or by contacting:

Australasia Gold Limited Ph: +61 8 8410 2375

Computershare Investor Services Pty Ltd Ph: 1300 556 161

		APPLICATION FORM AUSTRALASIA GOLD LIMITED ACN 108 757 96%

ublic Share Offer
						Registry Use only
										Adviser Code


	This Application Form is important. If you are in doubt as to how to deal with it, please contact your stockbroker or professional adviser without delay. The Application Form relates to a Prospectus dated 9 November 2005 which expires on 3 December 2006. You should read the entire Prospectus carefully before completing this form. To meet the requirements of Australian and New Zealand law, this Application Form must not be distributed enless included in, or accompanied by, the Prospectus, and in the case of New Zealand investors, the Investment Statement. I/We apply for		Number of Shares in Australasia Gold Ltd or such lesser number of Shares which may be allocated to me/us at AU\$0.20 (however New Zealand investors refer Section 1.5.2 of the Prospectus for
			instructions as to calculating the Application amount).
	I/We lodge full Application Money (Number of Shares x AU\$0.20 or NZ\$0.22)
\$							Indicate currency AUS		NZS

	Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable title(s) Title or Company Name Given Name(s)				Surname

	foint Applicant 2 or Account Designated



	foint Applicant 3 or Account Designated
Unit	Enter your postal address -- Include State and Postcode	Street Number Street Name or PO Box/Other Information

	City/Suburb/Town			State		Country					Post Code

	Enter your contact details
	Contact Name						Telephone Number - Business Hours

								Telephone Number - After Hours
	Email address

By submitting this Application Form, I/we declare that this application is completed and lodged according to the Prospectus, and in the case of New Zealand investors, the Investment Statement, and the declaration/statements on the reverse of this Application form and I/we declare that all details and statements made by me/us (including the declaration on the reverse of this Application Form) are complete and accurate. T/we agree to be bound by the Constitution of the Company. It is not necessary to sign the Application Form.

Shares Applied for

.
Form the outside of Shares vari wish to answ the The annivarion must be for a manefully of 10.000 Shares. Analications for means than 3.0.000 Shares. raise be in multiples of 3.000 Shares. One Conton will be issued for each 2 Shares issued under the Prospectus

Application Monies

Enter the amount of Application Monies. To calculate the amount, maitiply the number of Shares by the price per Share. (AU\$0.20 or N730.22) (Reter Section 1.5 of the Prospectus).

Applicant Name(s)

Enter the full name year wish to appear on the statement of share heiding. This must be either your own hame or the name of a company. Up to 3 root Applicants may requise. You should relet to the fable below for the correct forms of recisioable dife. Applications using the wrong form of names may be rejected Clearing House Electronic Sobregister System (CHESS) participants should complete their name identically to that presently registered in the CHESS system.

Postal Address

Enter your postal address tor all correspondence. All communications to you from the Registry will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered

Contact Details

Enter your contact details. These are not contactsory but will assist us if we need to contact you.

eures

Australasia Gold Limited (the Company) will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, the company will operate an electronic Issuer Sponsored Subregister of security holdings. fagether the two Subregisters will make up the Company's principal register of securities. The Company we nor be issuing certaicales to applicants in respect of Shares aloned. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold Shares allented to you under this Application on the CRESS Subrecesser, enter your CRESS HRN. Otherwese, leave this section blank and on ascimient, you will be sponsored by the Company and allocated a Securityte/der Reference Number (SRN).

Payment

Make your cheque or bank draft payable to Australassa Gold Ltd Roar Account in Australian or New Zealand currency and cross a Nor Negotiable. Your cheque or bank drær must be drawn om an Ausnalian Bank or New Zealand Bærk, or payment made through BPAY using an Australian bank (Rafer pago 134).

Complete the cheque details in the boxes provided. The total amount must agree with the aniount shown in box C.

Cheques will be processed on the day of recept and as such, subcent cleared funds must be held in your account as cheques returned urgaid may not be re-presented and may result in your Application being rejected. Per (do not staple) your cheques(s) to the Application Form where indicated. Cash will not be accepted. Receipt for payment will not be forwarded.

Before completing the Application Form the applicant(s) should read this prospectus and, in the case of New Zealand investors, the Investment Statement. By ladging the Application Form. the applicant agrees to take any nursion of Shares that may be allotted to the Applicant(s) pursuant to the Prospectus and, in the case of New Zealand investors, the investment Statement and declares that all details and statements made are complete and accurate. If the Application form has been received electronically the Applicant dectates that he/she has personally received a copy of the Prospectus and (NZ sivestors) the Investment Statement.

Lodgement of Application

Application forms must be received at the Adelaide office of Computershare Investor Services Pry Emited no fater than Sprn Adelaide rame on the Closard Date -9 December 2005. Return the Application Form with cheque(s) attached to

Computershare Investor Services Pty (amazed)	Compusershare Investor Services Pty Limited
GPO Box 1903, Adelaide SA 6001 -	- Level 5, 315 Grentell Street, Adelaste SA 5000-

Privacy Statement

Personal information is collected on this form by Contouriershare Investor Services Pty Limsed ("C(S"), as receptar for securities issuers ("the issuer"). That it in purpose of communications of secureproduct facilitaing distribution payments and other corporate actions and communications. Your personal internation may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CIS. In accordance with the Australian Corporations Act 2003, you may be sent material (including makeum) material) approved by the ssuer in addition to general corporate communications. You may
elect not to receive marketing material by contacting C

If you have any enguisies concerning your application, please contact the Componershare investor Services Psy canited on 1300-556-161

Correct forms of registrable title(s)

Note that ONEY legal entities are allowed to hold Shares. Applications must be made in the name(s) of naural persons, companies or other legal entities ar accordance with the Australian Corocratevis Act. At least one lust given name and the surgame is required tor each natural person. The name of the beneficial owner or any other recistrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable dde(s) below.

APPLICATION FORM AUSTRALASIA GOID LIMITED ACN 108 757 982


		Publie Share Offer			Registry Use only
										Adviser Code


	This Application Form is important. If you are in doubt as to how to deal with it, please contact your stockbroker or professional adviser without delay. The Application Form relates to a Prospectus dated 9 November 2005 which expires on 3 December 2005. You should read the entire Prospectus carefully before completing this form. To meet the requirements of Australian and New Zealand law, this Application Form must not be distributed enless included in, or accompanied by, the Prospectus, and in the case of New Zealand investors, the Investment Statement. I/We apply for
			Number of Shares in Australasia Gold Ltd or such lesser number of Shares which may be allocated to me/us at AU\$0.20 (however New Zealand investors refer Section 1.5.2 of the Prospectus for instructions as to calculating the Application amount).
	I/We lodge full Application Money (Number of Shares x AU\$0.20 or N2\$0.22)
\$							Indicate currency AUS		NZS

	Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable title(s)
	Title or Company Name Given Name(s)				Surname

	foint Applicant 2 or Account Designated

	foint Applicant 3 or Account Designated

	Enter your postal address -- Include State and Postcode
Unit		Street Number Street Name or PO Box/Other Information


	City/Suburb/Town			State		Country				Post Code


	Enter your contact details Contact Name							Telephone Number - Business Hours

								Telephone Number - After Hours

	Email address

Shares Applied for

Application Monies

Enter the amount of Application Monies. To calculate the amount, maitiply the number of Shares by the price per Share. (AU\$0.20 or N730.22) (Reter Section 1.5 of the Prospectus).