EQUATORIAL RESOURCES LIMITED — Investor Presentation 2004

Dec 7, 2004

Investor Update • November 2004

Welcome to the first edition of the EQiTX quarterly investor newsletter

It has been a busy two months for me, and a particularly active and successful year for EQITX. My enthusiasm to join the great team at EQITX has proven to be well placed. I've learnt a lot about the EQITX business and look forward to contributing my expertise to the advancement of the projects in which EQiTX has invested and the business activities of the company.

A highlight for me was the publication in a leading scientific journal of the seminal research findings arising from trials of the VacTX technology. This validation of our technology by international scientific peers is a very strong endorsement that our investment in the lipopeptide immunotherapy technology is sound.

Dr David Jackson and his team have settled into laboratories at the Department of Microbiology and Immunology at the University of Melbourne to continue studies designed to take the lipopeptide technology closer to commercialisation.

Having recognised the strategic importance of pulling out all stops with the Gingerol project. EQITX has increased its investment in ZingoTX taking our equity to 44.6 per cent. We made this decision to enable our promising compounds to complete the preclinical phase as soon as possible.

While this newsletter concentrates on the VacTX technology with an interview with the Chief Scientist Dr David Jackson, I plan to focus on ZingoTX in our next issue, hopefully with some exciting news.

Please complete and return the reply paid insert for future correspondence in your preferred format.

Sue MacLeman, Chief Executive Officer

VacTX Technology recognised by international research community

During the week of 18 October, results of pre-clinical studies on the VacTX lipopeptide technology were published in the Proceedings of the National Academy of Sciences USA (PNAS), one of the world's most-cited multidisciplinary scientific journals. The published results show that the VacTX 'lipopeptide'-based immunotherapeutics generate strong immune responses capable of protecting mice from influenza, aggressive tumours and of lowering the sex hormone testosterone, which could be used as an adjunct therapy for prostate and breast cancers.

The lipopeptide immunotherapeutics are simple, relatively small molecules that can be designed to activate the immune system in a variety of different ways. The 'lipo' part of the molecule helps with its entry into dendritic cells (see interview with Dr David Jackson) while each end of the 'peptide' component has a different function. One end of the peptide triggers the immune response to the disease target, while the other end helps to boost the immune response to that target. Finally, the overall shape of the molecule helps convince the immune system to mount a strong response to the perceived 'attack'.

Investor Highlights

. EQITX has increased its investment in ZingoTX to 44.6 per cent

• The ZingoTX Gingerol Project is now well on the way to completing Milestone 2, involving a medicinal chemistry program to synthesise new, more active derivatives of gingerol • VacTX has established laboratories in the Department of Microbiology & Immunology at the University of Melbourne

Mice vaccinated with a peptide target from influenza virus, then infected with the virus, were noted to have 99.7 per cent fewer viral particles in their lungs than the unvaccinated mice. This showed that the immune system of the vaccinated mice 'remembered' the influenza virus and cleared it more quickly and effectively, thereby preventing disease.

Similarly, mice vaccinated against an experimental melanoma peptide showed much less tumour growth than untreated animals when both groups were given melanoma cells and mice with established lung cancer that were treated with a lipopeptide vaccine had a greater rate of disease free survival than untreated mice.

These comprehensive studies show the potential of the VacTX lipopeptide technology for the treatment of infectious diseases and cancers, and for inactivation of hormones and other regulatory proteins.

The structure of this new vaccine molecule is surprisingly simple, yet it contains elements that no one had previously thought to combine in this way' Prof. Gustav Nossal, who presented to the National Academy of Sciences, USA

Interview with Dr David Jackson, Chief Scientist at VacTX

Dr David Jackson is the Chief Scientist at VacTX and led the team that discovered the lipopeptide technology

Below, he answers some questions about what distinguishes the lipopeptide technology from other vaccine technologies.

Broadly speaking, what is the VacTX lipopeptide technology?

The technology is an immunotherapy based on the smallest elements recognised by the body's immune system. These elements are short strings of amino acids called peptides which are part of longer strings called proteins. The immune system normally chops up proteins and processes the peptides to induce the type of immune response required to combat that specific invader. The VacTX lipopeptide technology is an application of this concept, incorporating peptides that are known to stimulate the desired immune response. Administration of a lipopeptide immunotherapeutic aims to activate the recipient's immune system and direct the immune response to either prevent or treat the target disease.

In what situations do you see VacTX immunotherapeutics being used after validation in clinical trials?

To date, we can only comment on the results of preclinical studies, which have been overwhelmingly positive. We've been able to prevent viral and bacterial infections, stop the growth of tumours and inactivate hormones. In fact, VacTX immunotherapeutics have met every challenge we've thrown at them, from cancer and infectious diseases to modifying normal processes such as reproduction, by inactivating the hormones that control it.

What is it about a small lipid that makes all the difference?

The VacTX lipid is found in bacterial cell walls and is a well-known danger signal - our immune system has evolved over the millennia to recognise this lipid in invading bacteria. The surface of dendritic cells, the surveillance cells of the immune system, carries special proteins that can recognise the lipid by its shape. By using the natural processes at work in our immune system we have a way of targeting our peptides to the right cell for maximum effect.

From a commercialisation perspective, what would you say are the three best things about the VacTX's technology?

Firstly the fact that the lipopeptide stimulates an immune response to very specific target peptides, including peptides from normal body proteins without the need for additional, potentially toxic, molecules is a big bonus.

Secondly these products are totally synthetic and pure, which is a big advantage for quality control. At no stage does the manufacturing process use living or dead cells viruses or the genetic material of any organism. They are also relatively quick and inexpensive to manufacture.

Thirdly, the stability of the lipopeptide eliminates the need for refrigeration at any stage of production or storage. It's simply a case of 'just add water' to prepare the dried powder product prior to use. Also, because the lipopeptide vaccines are soluble in water, they can be administered intranasally which helps eliminate needles from clinical medicine.

Its hard to stop at just three, as there are many other factors that help to differentiate the VacTX lipopeptide technology from other vaccine approaches and contribute to the unique competitive advantages that the technology affords the patient and clinician.

New Appointments

EQITX has made the following appointments to assemble a senior management team of the highest credentials:

Chief Executive Officer, Sue MacLeman, has worked in product development and commercialisation at Amgen, Bristol-Myers Squibb, Schering Plough and, before joining EQiTX, at Agenix Ltd as Vice President of Molecular Diagnostic Imaging.

Chief Commercialisation Officer, Joy Hewitt, has a wealth of experience in technology commercialisation through her previous roles in business development at CSL and Amrad.

Chief Operations Officer, Dr Nicholas Ede, joined us from Mimotopes Pty Ltd where he was Head of Drug Discovery. He has managed drug discovery projects with pharmaceutical companies including Janssen-Cilag, Novartis, Chiron and GlaxoSmithKline.

EQITX Limited Level 11, 580 St Kilda Road. Melbourne VIC 3004 Ph. 03 9526 3410. www.egitx.com