INOVIQ LTD — AGM Information 2004

Oct 26, 2004

EUROGOLD LIMITED ACN 009 070 384

NOTICE OF GENERAL MEETING

The Annual General Meeting of the Company will be held at the offices of RFC Limited, Level 8, 250 St George's Terrace, Perth on Friday, 26 November 2004 at 11am (WST).

EUROGOLD LIMITED

ACN 009 070 384

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of shareholders of Eurogold Limited ("Company") will be held at the offices of RFC Corporate Finance Ltd, Level 8, QV1 Building, 250 St George's Terrace, Perth, Western Australia on Friday, 26 November 2004 at 11am (WST) ("Meeting").

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the AGM. The Explanatory Memorandum and the Proxy Form form part of this Notice.

The Directors have determined pursuant to regulation 7.11.38 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on 24 November 2004 at 5pm (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

$\mathbf{1}$ . Reports and Accounts

To receive and consider the financial statements being the statement of financial performance, statement of cash flows for the year ended 30 June 2004 and statement of financial position as at that date, and reports of the Directors and the auditor for the year ended 30 June 2004.

Resolution 1 – Re-election of Mr Dennis Franks as a $2₁$ Director

To consider, and if thought fit, pass as an ordinary resolution the following:

"That Mr Dennis Franks who retires in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a director."

Resolution 2 - Re-election of Mr Neil MacLachlan as a $3₁$ Director

To consider, and if thought fit, pass as an ordinary resolution the following:

"That, Mr Neil MacLachlan, who retires in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a director."

Resolution 3 - Authorisation to Grant Options to $\blacktriangle$ Mr Peter Gunzburg

To consider, and if thought fit pass as an ordinary resolution, the following:

"That in accordance with ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act, Shareholders authorise the Directors to grant 1,500,000 Incentive Options to Mr Peter Gunzburg or his nominee on the terms set out in Schedule 2 of the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who is to receive the Incentive Options or any of his associates.

However, the Company will not disregard a vote if:

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

Resolution 4 - Authorisation to Grant Options to 5. Mr Chris Barker

To consider, and if thought fit pass as an ordinary resolution, the following:

"That in accordance with ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act, Shareholders authorise the Directors to grant 1,500,000 Incentive Options to Mr Chris Barker or his nominee on the terms set out in Schedule 2 of the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who is to receive the Incentive Options or any of his associates.

However, the Company will not disregard a vote if:

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

Dated 20 October 2004 By order of the Board

Pauline Collinson Company Secretary

EUROGOLD LIMITED

ACN 009 070 384

EXPLANATORY MEMORANDUM

$\mathbf 1$ Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the AGM to be held at the offices of RFC Corporate Finance Ltd, Level, 8 QV1 Building, 250 St George's Terrace Perth, Western Australia at 11:00am on Friday, 26 November 2004.

The purpose of this Explanatory Memorandum is to provide information which is material to Shareholders in deciding whether or not to pass the resolutions set out in the Notice.

$2₁$ Resolution 1 – Re-election of Mr Dennis W Franks

Clause 6.3 of the Constitution provides that one third of the Directors shall retire from office at every annual general meeting of the Company and that it is the Director who has been the longest in office who is to retire pursuant to this clause.

Directors retiring pursuant to this clause are eligible for re-election. Mr Franks is the Director who has been the longest in office. Accordingly, he retires in accordance with clause 6.3 of the Constitution and is eligible for re-election.

Mr Franks was appointed as a non-executive Director of the Company on 24 September 2001.

He has over 30 years experience in the finance/investment banking and mining and exploration industries. He has an Accounting Degree and has considerable experience in the management of listed companies both within Australia and overseas.

Resolution 2 – Re-election of Mr Neil MacLachlan as a 6. Director

Article 6.2(b) of the Constitution provides that the Directors may appoint any person as a Director. Article 6.3(j) of the Constitution provides that any Director appointed under article 6.2(b) must retire at the next annual general meeting of the Company and is eligible for re-election at that meeting.

Mr Neil MacLachlan was appointed as a Director in July 2004 and accordingly retires and seeks re-election.

Mr MacLachlan has over 25 years investment banking experience in Europe, South East Asia and Australia and is a former director of Wardley Holdings and James Capel & Co Limited, investment banking subsidiaries of the HongKong and Shanghai Banking Corporation. From 1993 until 1997 he was employed by Barrick Gold Corporation as Executive Vice President, Asia. Mr MacLachlan is also a director of Titan Resources NL and Golden Prospect Plc.

The Board supports the re-election of Mr Neil MacLauchlan.

Resolutions 3 and 4 - Grant of Options to Mr Peter $\overline{7}$ . Gunzburg and Mr Chris Barker

$7.1$ General

The proposed Incentive Options are being granted to Mr Peter Gunzburg and Mr Chris Barker as an incentive to perform.

Resolutions 3 and 4 seek Shareholder's authorisation pursuant to ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act for the Directors to grant 1,500,000 Incentive Options to each of Mr Gunzburg and Mr Barker (or their nominee).

Shareholder approval is required under ASX Listing Rule 10.11 and section 208 of the Corporations Act because Mr Gunzburg and Mr Barker are both a related party of the Company. Furthermore, Shareholder authorisation of the Incentive Options Issue means that this issue will not reduce the Company's 15% placement capacity under ASX Listing Rule 7.1.

Resolutions 3 and 4 are ordinary resolutions.

$7.2$ Specific Information Required by ASX Listing Rule 10.13 and section 219 of the Corporations Act

For the purposes of ASX Listing Rule 10.13 and section 219 of the Corporations Act information regarding the Incentive Option issue is provided as follows:

• $(a)$ 3,000,000 incentive Options will be issued to Mr Gunzburg and Mr Barker (or their nominees).
• $(b)$ Mr Gunzburg currently receives the following remuneration package:

Salary	\$138,000 pa
Vehicle Allowance	\$12,000 pa
Superannuation	\$15,000 pa
Total	\$165,000 pa

The Company is considering increasing the salary of Mr Gunzburg to \$200,000 per annum with effect from 1 September 2004.

• $(c)$ Mr Barker, through MCM Consulting, received consulting fees of:
• $\left(\mathbf{i}\right)$ US\$12,000 per month until 30 August 2004; and
• $(ii)$ US\$24,000 per month from 1 September 2004.

The Company is currently reviewing the remuneration package of Mr Barker. It is considering an annual salary of US\$200,000 per annum with effect from 1 September 2004. If the Company approves the proposed remuneration package then the payments to MCM Consulting will cease.

Mr Barker was a beneficial owner of the vendors of the Ukraine assets the acquisition of which was approved at the general meeting on 15 June 2004. Details of the payments made to the vendors of the Ukraine assets are set out in the Notice of General Meeting dated 14 May 2004.

Mr Barker also receives the following benefits:

• mobile phone expenses approximately US\$350 per month; and $\left(\mathbf{i}\right)$
• $(ii)$ Ukraine in country payments (including salary and directors fees) -US\$400 per month.
• $(d)$ In addition Mr Gunzburg and Mr Barker each receive US\$11,796 per annum in directors fees from Transgold and Explorer (subsidiaries of the Company) which are used by the Company to pay expenses of the Company including travel and other out of pocket expenses.
• $(e)$ Mr Gunzburg and Mr Barker are entitled to reimbursement of all reasonable travelling, accommodation and other expenses that a Director properly incurs in attending meetings of Directors or any meetings of committees of Directors, in attending any meetings of Members and in connection with the business of the Company.
• The Company is a small listed company, which has recently commenced $(f)$ exploration activities of its gold prospects in Ukraine. The Company has limited funds, most of which are allocated to specific research and development activities. As a result, the Board has chosen to issue Incentive Options to Mr Gunzburg and Mr Barker as a key component of their remuneration in order to retain the services of Mr Gunzburg and Mr Barker and to provide incentive linked to the performance of the Company. There are no additional performance criteria on the Incentive Options as:
• the Incentive Options to be granted are priced out of the money; and $\left(\ddot{\mathbf{i}}\right)$
• $(ii)$ given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of Mr Gunzburg and Mr Barker and the performance and value of the company are closely related. As such, the Incentive Options granted will only be of benefit if Mr Gunzburg and Mr Barker perform to the level whereby the value of the Company increases sufficiently to warrant exercising the Incentive Options issued.
• The issue price of each Incentive Option is nil. (g).
• $(h)$ Each Incentive Option entitles the holder to subscribe for one Share at an Exercise Price of 20 cents, expiring on 30 December 2008. The Incentive Options will not be quoted on ASX. One third of the Incentive Options become exercisable 12 months, 24 months and 36 months after grant. If either Mr Gunzburg or Mr Barker ceases to be a director of the Company those Incentive Options not capable of exercise at the date of ceasing to be a director become incapable of being exercised. Further terms and conditions of the Incentive Options are in Schedule 2 of this Explanatory Memorandum.
• $(i)$ The Company will issue the Incentive Options no later than 1 month after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).

$(i)$ Mr Gunzburg and Mr Barker have an interest in the Resolution under which Incentive Options will be issued to each of them and therefore do not want to make a recommendation. In relation to the issue of Incentive Options to be issued to Mr Gunzburg and Mr Barker each other Director has no interest in the outcome of the issue of the Incentive Options and is in favour of the Resolution.

Name of Director	Shares	Options
Peter Gunzburg 1	23,518,685
Chris Barker 2	30,000,000

$(k)$ The current Shareholdings of Mr Gunzburg and Barker are as follows:

¹These Shares include those held by related parties of Mr Gunzburg.

²These Shares are held in Eurogold Holdings (Bermuda) Limited but are subject to a put and call option agreement pursuant to which each share can be swapped for one Share in the Company. Mr Barker is the ultimate beneficial owner of these shares. The interests of Mr Chris Barker may increase to 50,000,000 if the Company decides to increase its interest in the Beregove Project pursuant to the sale and purchase agreement of the Ukraine assets.

On the basis of the assumptions set out below the technical value of one $(1)$ Incentive Option is as follows:

Name	Number of Incentive Options	Vesting Date 1	Value Per Security \$	Total Value S
Gunzburg	500,000	12 months after issue	0.058	29,000
Gunzburg	500,000	24 months after issue	0.043	21,500
Gunzburg	500,000	36 months after issue	0.029	14,500
Barker	500,000	12 months after issue	0.058	29,000
Barker	500,000	24 months after issue	0.043	21,500
Barker	500,000	36 months after issue	0.029	14,500
Total	3,000,000			130,000

(1) Vesting Date is the first date on which the options may be exercised.

This valuation imputes a total value of \$130,000 to Incentive Options. The value may go up or down after that date as it will depend on the future price of a Share. Black & Scholes methodology has been used, together with the following assumptions:

• The risk free rate is the Commonwealth Government securities rate $\left( \mathbf{i} \right)$ with a maturity date approximating that of the expiration period of the Incentive Options as at 18 October 2004 - 5.22%;
• date of valuation is for the purposes of settling the current market $(ii)$ value of a Share is 18 October 2004;
• at this date the share price was 17.5 cents which is the price used in $(iii)$ the valuation: and
• the volatility factor is set as 50% which is based on an average of $(iv)$ comparable companies' historical data from the Australian Graduate School of Management's Risk Measurement Service.
• $(m)$ If the Shareholders approve the proposed grant of Incentive Options, the exercise of those Incentive Options will result in a dilution of all other Shareholders' holdings in the Company of 2% based on issued Shares as at the date of this Notice (including the 30,000,000 shares on exercise of the put and call option).
• $(n)$ The market price of Shares would normally determine whether Mr Gunzburg and Mr Barker will exercise the Incentive Options or not. If the Incentive Options are exercised at a price that is lower than the price at which Shares are trading on ASX, there may be a perceived cost to the Company.
• No funds will be raised by the issue of the Incentive Options as they are being (o) issued for nil consideration.
• Historical share price information for the last 12 months is set out below: $(p)$

	Price	Date
Highest	\$0.20	17 February 2004
Lowest	\$0.069	21 October 2003
Last	\$0.175	18 October 2004

• Other than the information above and otherwise set out in this Explanatory $(q)$ Memorandum, the Company believes that there is no other information that would be reasonably required by Shareholders to pass Resolutions 3 and 4.
• $(r)$ A voting exclusion statement is included in this Notice.

As Shareholder approval is sought under ASX Listing Rule 10.11 approval under ASX Listing Rule 7.1 is not required.

Action to be Taken by Shareholders 8.

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the resolutions set out in the Notice.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Annual General Meeting.

A Shareholder entitled to attend and vote at the Annual General Meeting of the Company may appoint a natural person as the Shareholder's proxy to attend and vote for the Shareholder at the meeting. If the Shareholder is entitled to cast 2 or more votes at the Annual General Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form must be received at the registered office of the Company, Level 4, 172 St George's Terrace, Perth, Western Australia 6000, or by post to PO Box 7493 Cloisters Square, Perth, Western Australia 6850 or Facsimile (08) 94813586 if faxed from within Australia or +618 94813586 if faxed from outside Australia, not less than 48 hours prior to the time of commencement of the Annual General Meeting.

For the convenience of Shareholders a Proxy Form is enclosed with this Notice of General Meeting.

Schedule - 1

Definitions

In this Explanatory Memorandum and Notice of AGM:

"AGM" means the annual general meeting of the Shareholders of the Company for 2004 to be held at the offices of RFC Corporate Finance Ltd, Level 8, QV1 Building, 250 St George's Terrace, Perth, Western Australia, at 11:00am on Friday, 26 November 2004.

"ASIC" means the Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Limigted.

"ASX Listing Rules" means the listing rules of the ASX.

"Company" means Eurogold Limited.

"Constitution" means the Constitution of the Company.

"Directors" means the directors of the Company.

"Incentive Options" means an option to acquire one Share on the terms and conditions contained in Schedule 2.

"Proxy Form" means the proxy form attached to the Notice of AGM.

"Securities" means any security (as defined by the Corporations Act 2001 (Cth) issued or granted (as the case may be) by the Company.

"Shareholder" means a shareholder of the Company.

"Share" means a fully paid ordinary share in the capital of the Company.

Schedule 2

Terms and Conditions of Incentive Options

$1₁$ Entitlement

The Options entitle the holder to subscribe for one Share upon exercise of each Option.

$2₁$ Exercise Price

The exercise price of each Option is \$0.20.

3. Expiry Date

Each Option has an expiry date of 31 December 2008.

4. Exercise Period

The Options are exercisable as follows:

• $(a)$ One third of the Options are exercisable at any time 12 months after their grant until the Expiry Date;
• $(b)$ One third of the Options are exercisable at any time 24 months after their grant until the Expiry Date.
• One third of the Options are exercisable at any time 36 months after their (c) grant until the Expiry Date.

If the Optionholder ceases to be a director of the Company prior to the exercise date in paragraphs (a) to (c) above having occurred, then those Options which have an exercise date after the Ooptionholder ceases to be a director will not be capable of being exercised by the Optionholder.

$5₁$ Notice of Exercise

The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

6. Timing of issue of Shares

After an Option is validly exercised, the Company must as soon as possible:

• $(d)$ issue and allot the Share; and
• do all such acts matters and things to obtain the grant of quotation for the $(e)$ Share on ASX no later than 5 days from the date of exercise of the Option and receipt of cleared funds equal to the sum payable on the exercise of the Options.

$7₁$ Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then shares of the Company.

8. Quotation of Shares on exercise

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

9. Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

$10₁$ Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• $(a)$ the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue: and
• no change will be made to the Exercise Price. $(b)$

$11.$ Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than and issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

New exercise price = O -
$$
\frac{E [P-(S+D)]}{(N+1)}
$$

• $O =$ the old Exercise Price of the Option.
• E = the number of underlying Shares into which one Option is exercisable.
• $P =$ average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
• $S =$ the subscription price of a Share under the pro rata issue.
• $D =$ the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
• the number of Shares with rights or entitlements that must be held to receive a $N =$ right to one new share.

$12.$ Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction.

$13.$ Quotation of Options

No application for quotation of the Options will be made by the Company.

$14.$ Options non-transferable

The Options are non-transferable.

PROXY FORM

APPOINTMENT OF PROXY

I/We

being a Shareholder/Shareholders of the Company and entitled to

votes in the Company, hereby appoint²

or failing such appointment the chairman of the AGM as my/our proxy to vote for me/us on my/our behalf at the annual general meeting of the Company to be held at the offices of RFC Corporate Finance Ltd, Level 8 QV1 Building, 250 St George's Terrace Perth, Western Australia at 11:00am on Friday, 26 November 2004 and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is *[ ]% of the Shareholder's votes*/ [ ] of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company on request).

INSTRUCTIONS AS TO VOTING ON RESOLUTIONS

IMPORTANT:

If the chairman of the AGM is to be your proxy and you have not directed your proxy how to vote on Resolutions 3 and 4, please tick this box. By marking this box you acknowledge that the chairman of the AGM may exercise your proxy even if he has an interest in the outcome of Resolutions 3 and 4 and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box and you have not directed your proxy how to vote, the chairman of the AGM will not cast your votes on Resolutions 3 and 4 and your votes will not be counted in computing the required majority if a poll is called on any of these Resolutions.

The chairman of the AGM intends to vote undirected proxies in favour of all the Resolutions.

Resolution 1	Re-election of Mr Dennis W Franks as a Director	For	Against	Abstain
Resolution 2	Re-election of Mr Neil MacLachlan as a Director
Resolution 3	Grant Options to Mr Peter Authorisation to. Gunzburg
Resolution 4	Authorisation to Grant Options to Mr Chris Barker

AUTHORISED SIGNATURES

This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1	Shareholder 2	Shareholder 3
Sole Director and Sole Company Secretary	Director	Director/Company Secretary
Contact Name	Contact Daytime Telephone	Date

¹ Insert name and address of Shareholder $2$ Insert name and address of proxy $\rightarrow$ Omit if not applicable

Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a natural person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representative prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

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

Joint Holdina:	where the holding is in more than one name all of the holders must sign.
Power of Attorney:	if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.
Companies:	a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Perth office of the Company (Level 4, 172 St Georges Terrace, Perth, WA, 6000, or by post to PO Box 7493 Cloisters Square, Perth, Western Australia 6850 or Facsimile (08) 9481-3586 if faxed from within Australia or +618 9481-3586 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting.