INOVIQ LTD — AGM Information 2004

May 16, 2004

EUROGOLD LIMITED ACN 009 070 384

NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at Level 34, Central Park, 152-158 St Georges Terrace Perth on Tuesday 15 June 2004 at 11am (WST).

EUROGOLD LIMITED

ACN 009 070 384

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of shareholders of Eurogold Limited ("Company") will be held at Level 34, Central Park, 152-158 St Georges Terrace Perth on Tuesday 15 June 2004 at 11am (WST) ("Meeting").

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. 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 13 June 2004 at 11am (WST).

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

AGENDA

Resolution 1 - Authorisation to Enter into Put and Call $\mathbf 1$ Agreement

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

That, in accordance with ASX Listing Rule 7.1, Shareholders give approval for the Company to:

• grant the Put Option pursuant to the Put and Call Agreement; $(a)$ and
• $(b)$ issue, upon the exercise of the Call Option pursuant to the Put and Call Agreement, up to 50,000,000 Shares,

on the terms and conditions in section 3 of the Explanatory Memorandum."

Voting exclusion

The Company will disregard any votes cast on this resolution by the Vendors or any associates of the Vendors.

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

$(b)$ 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 2 - Election of Christopher Barker as a $2.$ Director

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

"That, Christopher Barker is hereby elected as a director of the Company pursuant to Article 12.5 of the Constitution with effect from completion of the Ukraine Transaction."

Resolution 3 - Authorisation of Placement Facility $3₁$

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

"That, in accordance with ASX Listing Rule 7.1, Shareholders approve the allotment and issue of up to 100,000,000 Shares each at an issue price of at least 80% of the average market price of the Shares calculated in accordance with ASX Listing Rule 7.3.3 at the date(s) of issue by way of a placement on the terms and conditions in section 5 of the Explanatory Memorandum."

Voting exclusion

The Company will disregard any votes cast on this resolution by a person who may participate in the Placement Facility and might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associates of such a person.

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 - Ratification of Placement 4.

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

"That in accordance with ASX Listing Rule 7.4 Shareholders ratify the allotment and issue of 10,000,000 Shares each at A\$0.15 made on 25 February 2004 for a total consideration of A\$1,500,000 on the terms and conditions in section 6 of the Explanatory Memorandum."

Voting exclusion

The Company will disregard any votes cast on this resolution by a person who participated in this issue of the Shares, or any associate of such a person. However, the Company will not disregard a vote if:

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

Resolution 5-Authorisation of Facilitator Options 5. Issue

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

"That, in accordance with ASX Listing Rule 7.1, Shareholders approve the Directors to issue of up to 5,000,000 Facilitator Options to the facilitators of the listing of Eurogold on AIM on the terms and conditions in section 7 of the Explanatory Memorandum."

Voting exclusion

The Company will disregard any votes cast on this resolution by a person who may participate in the Facilitator Options Issue and might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associates of such a person.

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
• $(b)$ 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 6 - Adoption of New Constitution 6.

To consider and, if thought fit, to pass as a special resolution, the following:

"That, with effect from the Effective Date and in accordance with section 136 of the Corporations Act, the regulations contained in the printed document produced to this General Meeting and signed by the Chair for identification purposes are hereby approved and adopted as the constitution of the Company in substitution for and to the exclusion of the existing constitution of the Company."

$\overline{7}$ . Resolution 7-Employee Option Scheme

To consider, and if thought fit pass with or without amendment as an ordinary resolution, the following:

"That in accordance with Exception 9 of ASX Listing Rule 7.2 Shareholders approve the establishment of an employee options scheme to be called the "Eurogold Employee Option Scheme" and the issue of Employee Options pursuant to this scheme on the terms and conditions in Schedule 10".

Voting Exclusion

The Company will disregard any votes cast on this resolution by a director of the Company or their associates, except the directors who are ineligible to participate in the Scheme. However, the Company will not disregard a vote if:

• it is cast by the person as a 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 directions on the Proxy Form to vote as the proxy decides.

Dated 14 May 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 in connection with the business to be conducted at the Meeting to be held at Level 34, Central Park, 152-158 St Georges Terrace Perth on Tuesday 15 June 2004 at 11am (WST).

Ukraine Transaction $2₁$

$2.1$ Introduction

On 23 January 2004 the Company entered into a Heads of Agreement to purchase the rights of the Vendors in the Saulyak and Beregove Gold Projects in Ukraine. The Vendors hold their interest in these projects via their 100% shareholding in SRL and ZRL which will be acquired by the Company. SRL currently has a 74.68% interest in SLLC the company which owns the Saulyak Gold Project. ZRL currently has a 6.33% interest in ZLLC the company which owns the Beregove Gold Project.

The parties are legally bound to implement and give effect to the Heads of Agreement and to negotiate in good faith formal agreements. The principal agreements which will be entered into will include the following:

• Sale and Purchase Agreement; and $(a)$
• $(b)$ Put and Call Agreement.

$2.2$ Commercial Terms

Sale Agreement

To implement the Ukraine Transaction it is proposed that the Company will incorporate two new subsidiary companies, Newco 1 and Newco 2. Under the Sale and Purchase Agreement it is proposed that Newco 2 will purchase all of the share capital in SRL and ZRL from the Vendors for the following consideration:

• $(a)$ up to 50,000,000 Newco 1 Shares (30,000,000 Newco 1 Shares at completion of the acquisition with up to 20,000,000 Newco 1 Shares to be issued if the board of the Company elects to obtain greater than a 50.1% interest in the Beregove Gold Project; and
• $(b)$ the reimbursement of costs of the Vendors incurred prior to the execution of the Heads of Agreement in relation to the acquisition of their interest in and the development costs of the Saulyak and Beregove Gold Projects up to a maximum of US\$400,000, of which US\$200,000, being the costs in respect of the Saulyak Gold Project, will be paid at completion of the Ukraine Transaction and US\$200,000, being the costs in respect of the Beregove Gold Project, will

be paid on the earlier to occur of the successful listing of Eurogold on AIM or Eurogold raising AUD\$1,000,000.

It is proposed that completion of the Ukraine Transaction will be subject to and conditional upon the satisfaction of the following conditions precedent by the dates stated:

• $(a)$ agreeing and executing formal agreements - 21 May 2004;
• $(b)$ Shareholder approval of Resolution 1 - 16 June 2004;
• $(c)$ the Company giving notice to the Vendors that it is satisfied with the results of its due diligence in accordance with the terms of the Heads of Agreement - 28 May 2004; and
• $(d)$ the Vendors giving notice to the Company that they are satisfied with the results of their due diligence in accordance with the terms of the Heads of Agreement - 28 May 2004.

The Heads of Agreement provides for the extension of these dates by agreement between the Company and the Vendors.

There can be no quarantee that these conditions will be satisfied or waived by the dates specified. If any condition precedent is not satisfied or waived by the date specified (or such later date as agreed) then the Ukraine Transaction will not proceed.

Payments to be made by the Company

The Company has agreed to make certain payments to the Vendors or on behalf of the Vendors as contained in Schedule 5.

Capital and Corporate Structure

On completion of the Ukraine Transaction the capital structure of the Company is in Schedule 3.

On completion of the Ukraine Transaction the corporate structure of the Company is in Schedule 4.

It was initially proposed that Newco 1 would seek to be listed on AIM. Due to timing issues with the pre-emptive rights in relation to the existing assets of Eurogold this is not possible and Eurogold will now seek to be listed on AIM. On completion of the Ukraine Transaction ZRL and SRL will become wholly owned subsidiaries of Newco 2. Newco 2 will be a wholly owned subsidiary of Newco 1.

Following completion of the Ukraine Transaction the Company may consider a corporate restructure of the Eurogold group to change the domicile of the holding company of the Eurogold group. The benefit of the proposed structure is that the Company will have maximum flexibility to achieve this.

From listing of Eurogold on AIM until the earlier of:

• completion of the Put and Call Options; $(a)$
• $(b)$ the listing of Newco 1 in place of Eurogold (or any other entity in place of Eurogold) on AIM; or
• $(c)$ the expiry of the option term

("Voting Restriction Period").

the Newco 1 Shares held by the Vendors will have restricted voting entitlements. From the end of the Voting Restriction Period the Newco 1 Shares issued to the Vendors will have the same voting entitlements as all other shares on issue in Newco 1.

Increase in the Company's interest in the Beregove Gold Project

The board of the Company may at its discretion (through ZRL) increase the interest of the Company in the Beregove Gold Project subject to further negotiations and government approvals, pursuant to the ZLLC Agreement. Mr Christopher Barker will abstain from voting on any resolution in respect of an increase in the interest of the Company in the Beregove Gold Project.

On the occurrence of the Company obtaining an interest in the Beregove Gold Project of 50.1% (which is at the discretion of the board of the Company) at any time within 23 months after the completion of the Ukraine Transaction, the Company must procure the issue of 15,000,000 Newco 1 Shares to the Vendors. For each 1% increase in the interest in the Beregove Gold Project above 50.1% a further 200,000 Newco 1 Shares will be issued to the Vendors up to a maximum of 20,000,000 Newco 1 Shares.

If the Company does not acquire a greater than 50.1% interest in the Beregove Gold Project by the date which is 23 months after the completion of the Ukraine Transaction, then the Vendors may at no cost require the Company to transfer the Company's interest in the Beregove Project back to the Vendors.

Any time 6 months after completion of the Ukraine Transaction, the Vendors have the right to request the Company to re-transfer its right in the Beregove Gold Project to the Vendors. If this right is exercised by the Vendors, then the Vendors must reimburse the Beregove Payment to the Vendors. The obligation of the Vendors to reimburse the Beregove Payment is reduced by US\$10,000 for each month that elapses after the right to exercise the re-transfer first arises (6 months after completion of the Ukraine Transaction). If the re-transfer occurs then the Vendors must not enter into any transaction with a third party (other than an existing shareholder of ZLLC) involving a change in ownership of the Beregove Gold Project without first offering the Company a first right of refusal.

If an opportunity arises to increase the Company's interest in the Beregove Gold Project in the period of the first 6 months after completion of the Ukraine Transaction and the board of the Company elects not to exercise that right, then the Vendors may immediately exercise the re-transfer rights detailed in the paragraph above and the terms and conditions set out in that paragraph will apply save that the amount of the Beregove Payment to be reimbursed by the Vendors will be reduced by US\$10,000 per month from the date of completion of the Ukraine Transaction.

If at any time within 6 months of the re-transfer of the Beregove Gold Project to the Vendors, the Vendors negotiate a deal with a third party (after allowing the Company to exercise its first right of refusal) which incorporates the right to reimbursement of prior costs the Company and the Vendors will share the reimbursement equally.

If the Company acquires a greater than 50.1% interest in the Beregove Gold Project then the re-transfer rights above terminate.

Pursuant to the ZLLC Agreement the Company will assume the obligations of ZRL in respect of the Beregove Gold Project which include the obligations to perform:

• $(a)$ technical (mining and engineering) expert assessment of ZLLC and its assets according to international practices;
• $(b)$ prepare a draft program of development for the Beregove Gold Project over the next 15 years which shall include analysis of the feasibility and expediency of commercial mining of Beregove Gold Project 's base metal reserves;
• $(c)$ prepare a draft estimate of the budget required to realise the program of development of mining of the Beregove Gold Project (including a concentrating plant) and the program of geological prospecting of the deposits in the Beregove Gold Project;
• $(d)$ a legal review of ZLLC to confirm that ZLLC was established and has been operating in accordance with the effective legislation; and
• $(e)$ a financial audit compilation of ZLLC according to international practices.

Put and Call Agreement

It is proposed that the Company and the Vendors will enter into the Put and Call Agreement under which the Put and Call Options will be granted.

The Put and Call Options may be exercised at any time by the Vendors or Eurogold after the completion of the Ukraine Transaction.

On exercise of either the Put Option or the Call Option, the Company will issue one (1) Company Share for each Newco 1 Share.

The Put and Call Options expire 24 months from completion of the Ukraine Transaction.

If the Company elects to exercise the Call Option, such election will be subject to shareholder approval under Listing Rule 10.1.

If any of the additional 20,000,000 Newco 1 Shares are issued to the Vendors as a consequence of the Company increasing its interest in the Beregove Gold Project to greater than 50.1%, then the terms of the Put and Call Agreement will apply to the Newco 1 Shares from the date of their issue.

The exchange of Newco 1 Shares for Company Shares on the exercise of the Put or Call Option in respect of any of the additional 20,000,000 Newco 1 Shares issued may be subject to Shareholder approval pursuant to section 611(7) of the Corporations Act. If the exchange of Newco 1 Shares for Company Shares is subject to Shareholder approval under section 611(7) of the Corporations Act and such Shareholder approval is not obtained within 3 months of the option exercise notice then the Vendors will be entitled to reacquire its direct interest in the Beregove Gold Project and be paid a break fee of US\$500,000.

Consulting Arrangements

With effect from the date of execution of the Heads of Agreement until completion of the Ukraine Transaction the Company will retain Management Consultants Mining (a related entity (as that term is defined in the Corporations Act) of Mr Christopher Barker). Management Consultants Mining will provide 2 weeks consulting services per month at a remuneration of US\$12,000 per month and will provide consulting services primarily for the development of Saulyak Gold Project but also in respect of the satisfaction of the obligations of ZRL under the ZLLC Agreement.

After completion of the Ukraine Transaction, Management Consultants Mining will be retained as consultants to assist in the development of the Saulyak Gold Project on the usual and reasonable terms for the provision of such consulting services for a period not exceeding 2 weeks in each calendar month or such other arrangement as agreed.

$2.3$ Ukraine assets

The Saulyak and Beregove Gold Projects are both situated in South West Ukraine in the same Carpathian region as the companies 50% owned Romanian operations (via Transgold SA).

Saulyak Gold Project - Eurogold 75%

The Saulyak Gold Project is located in the southwest of the Ukraine in the Carpathian Mountains, approximately 60km NE of the Transgold treatment plant in Baia Mare. A granted 3.3km² exploration licence covers the project.

The Saulyak Gold Project is an underground gold prospect, explored in detail during the 1970's and 1980's when over 9km of underground development and 30km of drilling was completed by the State. No production took place but extensive sampling and metallurgical testwork, conforming to rigid Soviet protocol, was completed. The two 30m spaced adits remain accessible.

Deposit Description

Gold mineralisation is hosted by a laterally extensive, 40m thick, 30^° SW dipping thrust zone, located within Palaeozoic metasediments that has been exposed at surface and in underground workings. Mineralisation is hosted within multiple, intensely deformed quartz-carbonate and biotite-sericite-chlorite schist bodies averaging 5-6 metres thick with individual zones up to 250m in strike length. Underground development and surface drilling has traced gold mineralisation along the principle mineralised zone for a strike distance of approximately 1km and down dip for up to 1.3km from the surface The Company believes that additional structurally outcrops. (Figures 2 and 3). controlled mineralised lenses will be defined within the plane of the thrust, such as has been intersected in drill hole C-304.

Gold mineralisation appears to be strongly correlated with abundance of silica, either in the form of strongly deformed quartz veins, or as silica alteration. The gold mineralised zones occur as multiple lenses within the thrust zone. It should be noted that surface trenching, drilling and down-hole geophysical exploration techniques indicate that there are up to four sub parallel horizons that have returned anomalous or potentially economic gold intercepts.

Gold distribution is highly irregular at a local scale but averages 6-9g/t over ore body widths. Gold occurs as discrete particles up to 0.2mm that are typically located along the margins of veins and on the boundaries of sulphide grains, resulting in free milling metallurgical characteristics. Metallurgical test work conducted to date indicates up to 95% gold recovery via direct cyanidation. Total sulphide content is typically less than 6% of ore volume and potentially deleterious elements are reported to be close to, or below analytical detection limits.

Figure 2: Schematic Cross Section A-A' through the Saulyak Gold Deposit

Figure 3:

Exploration and Development

The Company is currently creating a digital database of all previous exploration results to enable a resource estimate to be completed. Although re-sampling conducted by the company to date has verified the mineralisation, it is likely that a more extensive program of re-sampling and some underground drilling will be required in order for any resource estimate to be JORC compliant. It is anticipated that this work will be completed by late 2004.

The Company believes this large mineralised system has the potential to host a significant gold deposit and that additional mineralised lenses will be delineated in the immediate vicinity of the Saulyak deposit. The Company has applied for a 276 $km^2$ exploration licence covering the region surrounding the Saulyak deposit. Several under-explored gold occurrences occur within the licence area and it is likely that regional low-level geochemical exploration will identify additional targets. Total expenditure commitment for the EL over the 5 year licence period is US\$270,000.

The Company's initial aim is to develop a 20-25,000 ounce per annum low cost gold mine at Saulyak, that may subsequently be ramped up to 50,000 ounces per annum, with a mine life in excess of 10 years based on present resources. The Company believes that the Saulyak Gold Project is an excellent acquisition with strong prospects of success due to the following reasons:

• $(a)$ Operations will be straightforward with easy adit access due to steep terrain and treatment via standard gravity and cyanidation concentration techniques resulting in low technical and regulatory risk.
• Existing underground development has demonstrated simple geometry and $(b)$ mineralisation continuity.
• Access and infrastructure are excellent with paved highway, railway and $(c)$ power all immediately adjacent.
• $(d)$ Locally available skilled workforce.
• The rail links between the Saulyak site and Transgold's 2.5 mtpa CIL facility in $(e)$ Baia Mare, Romania mean that ore can be economically transported for processing.
• $(f)$ Considerable additional exploration potential on the present lease areas and additional lease applications submitted for approval.

Beregove Gold Project - Eurogold 6.33%

It is Eurogold's intention to keep a watching brief on the potential of the Beregove Gold Project and in particular examine the possibility of taking advantage of Eurogold's Romanian subsidiary Transgold, which operates the 2,500,000 tonne per annum carbon in leach plant in neighbouring Romania. Eurogold believes that with an appropriate methodical exploration and development plan, coupled with the group's experience in operating in Eastern Europe, the Beregove Gold Project has the potential to produce an economic gold discovery.

3. Resolution 1 – Authorisation to Enter into Put and Call Agreement

$3.1$ General

Resolution 1 seeks Shareholders' approval pursuant to ASX Listing Rule 7.1 for the grant of the Put Option by the Company pursuant to the Put and Call Agreement and the issue of up to 50,000,000 Shares upon the exercise of the Call Option pursuant to the Put and Call Agreement.

The Vendors will be issued 30,000,000 Newco 1 Shares on completion of the Ukraine Transaction pursuant to the Sale and Purchase Agreement. If either the Put Option or Call Option is exercised then 30,000,000 Shares will be issued on exercise of either option.

On the occurrence of the Company obtaining an interest in the Beregove Gold Project of 50.1% (which is at the discretion of the board of the Company) by the date which is 23 months after the completion of the Ukraine Transaction, the Company must procure the issue of 15,000,000 Newco 1 Shares to the Vendors. For each 1% increase in the interest in the Beregove Gold Project above 50.1% a further 200,000 Newco 1 Shares will be issued to the Vendors up to a maximum of 20,000,000 Newco 1 Shares. These Newco 1 Shares become subject to the terms of the Put and Call Agreement on issue. If either the Put or Call Option is exercised in respect of these Newco 1 Shares one Share will be issued for each Newco 1 Share held.

ASX Listing Rule 7.1 prohibits a company from issuing or agreeing to issue more than 15% of its issued capital in 12 months. Accordingly, the Company cannot issue Shares under the Put and Call Agreement without Shareholder approval pursuant to Resolution 1.

Completion of the Sale and Purchase Agreement will not proceed if the Company cannot enter into the Put and Call Agreement.

$3.2$ Specific information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3 information regarding the grant of the Put Option is provided as follows:

• $(a)$ The Put Option is one security, the maximum number of Shares which may be issued on the exercise of the Put Option under the Put and Call Agreement is 50,000,000.
• $(b)$ The Put Option will be issued within 3 months after the date of the Meeting.
• No cash consideration is being paid in respect of the grant of the Put Option. $(c)$
• The Shares issued pursuant to the exercise of the Put Option will each be $(d)$ issued in consideration for one Newco 1 Share.
• The Put Option will be granted to the Vendors. $(e)$
• $(f)$ On exercise of the Put Option ordinary fully paid shares in the capital of the Company will be issued.
• $(g)$ No funds are being paid on the exercise of the Put Option.
• $(h)$ A voting exclusion statement is included in this Notice in respect of Resolution 1.

For the purposes of ASX Listing Rule 7.3 information regarding the issue of Shares pursuant to the Call Option is provided as follows:

• Upon the exercise of the Call Option the maximum number of Shares which $(a)$ the Vendors may be issued is 50,000,000.

• $(b)$ ASX has granted a waiver to the Company under ASX Listing Rule 7.3.2 to enable the Company to issue the Shares pursuant to Resolution 1(b) within 24 months of the Meeting.

• $(c)$ The Shares issued pursuant to the exercise of the Call Option will each be issued in consideration for one Newco 1 Share.

• The Shares will be issued to the Vendors. $(d)$
• $(e)$ On exercise of the Call Option ordinary fully paid shares in the capital of the Company will be issued.
• $(f)$ No funds are being paid on the issue of the 50,000,000 Shares pursuant to the exercise of the Call Option.
• A voting exclusion statement is included in this Notice in respect of Resolution $(g)$ $\ddagger$ .

Resolution 2 – Election of Christopher Barker as a 4. Director

Resolution 2 seeks election of Mr Christopher Barker as a director of the Company with effect from completion of the Ukraine Transaction.

Mr Barker is an experienced management consultant and mining engineer, and is principal of a management consulting group specialising in the mining industry internationally. In the last ten years he has been both chairman and a director of a number of mining companies that have included being a founding director of LionOre Nickel Ltd, and Great Southern Mines Ltd, both of which evolved into successful producers.

Mr Barker has also had extensive executive general management experience in both project development and operations and has successfully managed both large gold and base metals projects and operations around the world. These include holding the position as co-ordinating general manager of Ashanti Gold Corporation during the major expansion in early 1990's and the subsequent major A\$1.6 billion float. Prior to that he was the founding head of the highly successful project development of the Macraes Mining Project in New Zealand that was brought in ahead of schedule and considerably under budget.

In more recent times Mr Barker has spent considerable time in the Former Soviet Union ("FSU") gaining extensive experience on the management systems, controls and government legislation to successfully manage operations in the region. In line with this Mr Barker was appointed as the general director of the second largest gold project in Russia at Nezdaniskoye for the rehabilitation and bringing into production the initial stage of the project development including the introduction and permitting of specialised cyanide processing technology into the operation.

Most recently Mr Barker has been involved in the Ukraine and completed a review of various gold and base metals operations prior to initiating the development at the Saulyak Gold Project. He holds both certification to run operations in the FSU and has both resident and work permits for the Ukraine. He leads a team of experienced FSU management and technical staff as the general director of the SLLC.

Resolution 3 - Authorisation of Placement Facility 5.

$5.1$ General

Resolution 3 seeks Shareholders' approval pursuant to ASX Listing Rule 7.1 for the Directors to allot and issue up to 100,000,000 Shares each at an issue price of at least 80% of the average market price of existing issued Shares calculated in accordance with ASX Listing Rule 7.3.3 at the date(s) of issue ("Placement Facility").

The Directors believe that it is desirable to maximise the Company's capacity to issue equity securities because it may be necessary to raise additional working capital pending the completion of the Ukraine Transaction.

The effect of Resolution 3 will be to allow the Directors to issue up to 100,000,000 Shares during the period of three months after the Meeting (or a longer period, if allowed by ASX), without using up the Company's 15% placement capacity under ASX Listing Rule 7.1. The Company has not yet made any agreement or arrangement to issue these Shares, and there is no certainty that it will proceed with the issue.

$5.2$ Specific information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3 information regarding the Placement Facility is provided as follows:

• $(a)$ The maximum number of Shares the Company can issue under the Placement Facility is 100,000,000.
• $(b)$ As subscriptions to the Placement Facility have not yet been arranged, the Company proposes that the Shares will be allotted and issued at the discretion of the Directors.
• The Shares to be issued will be fully paid ordinary shares in the capital of the $(c)$ Company.
• $(d)$ The Shares will be issued by the Company at an issue price of at least 80% of the average market price of the Shares calculated in accordance with ASX Listing Rule 7.3.3 at the date(s) of issue.
• $(e)$ The Shares will be issued progressively no later than 3 months after the date of the Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2).
• $(f)$ The funds raised will be used for working capital purposes.
• $(q)$ A voting exclusion statement is included in this Notice.

Resolution 4 – Ratification of Placement 6.

$6.1$ General

Resolution 4 seeks Shareholders ratification pursuant to ASX Listing Rule 7.4 for the issue of 10,000,000 Shares made pursuant to a private placement.

Under ASX Listing Rule 7.1, a company may only issue a limited number of equity securities in any 12 month period.

On 9 February 2004 the Company announced that it had completed a placement by issuing 10,000,000 Shares to clients of Williams de Broë Plc each at A\$0.15 to raise A\$1,500,000.

By issuing the 10,000,000 Shares the Company has substantially used its 15% placement capacity.

The Company wishes to restore its 15% placement capacity and accordingly under ASX Listing Rule 7.4 seeks Shareholder ratification for the aforementioned issue of 10,000,000 Shares.

$6.2$ Specific information required by ASX Listing Rule 7.5

For the purposes of ASX Listing Rule 7.5 information regarding these issues of securities is provided as follows:

• 10,000,000 Shares were allotted and issued. $(a)$
• $(b)$ The issue price of each Share was A\$0.15.
• The Shares are fully paid ordinary shares in the capital of the Company. $(c)$
• $(d)$ 10,000,000 Shares were allotted and issued to National Nominees Limited, Melbourne as nominee for clients of Williams de Broë Plc.
• $(e)$ The Company used funds raised by the issue of the Shares to partly fund the payments referred to in Schedule 5 and to supplement working capital.
• $(f)$ A voting exclusion statement is included in the Notice.

Resolution 5-Authorisation of Facilitator Options $\overline{7}$ . Issue

$7.1$ General

Resolution 5 seeks Shareholders' approval pursuant to ASX Listing Rule 7.1 for the Directors to issue up to 5,000,000 Facilitator Options to the Facilitators in consideration of the services provided by the Facilitators in relation to the listing of Eurogold on AIM ("Facilitator Options Issue").

The effect of Resolution 5 will be to allow the Directors to issue up to 5,000,000 Facilitator Options during the period of three months after the Meeting (or a longer period, if allowed by ASX), without using up the Company's 15% placement capacity under ASX Listing Rule 7.1. There is no certainty that it will proceed with all of the Facilitator Options Issue.

$7.2$ Specific information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3 information regarding the Facilitator Options Issue is provided as follows:

• $(a)$ The maximum number of Facilitator Options the Company can issue under the Facilitator Options Issue is 5,000,000.

• $(b)$ The Facilitator Options will be issued at the discretion of the Directors to the Facilitators.

• The Facilitator Options will be issued for nil consideration. $(c)$

• $(d)$ Each Facilitator Option entitles the holder to subscribe for one Share at a price of 30 cents, exercisable on or before 31 March 2007. The Facilitator Options will not be officially quoted by ASX.
• $(e)$ The Facilitator Options will be issued progressively no later than 3 months after the date of the Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2).
• No funds will be raised by the Facilitator Options Issue. $(f)$
• $(q)$ A voting exclusion statement is included in this Notice.

Resolution 6 - Adoption of New Constitution 8.

Adoption of a New Constitution

It is proposed that the current Company constitution be updated to reflect compliance with current law and enable the Company to better function in accordance with its constituent documents. The proposed constitution has been approved by ASX as required under the ASX Listing Rules.

Resolution 6 seeks Shareholder approval for the adoption of a new constitution in accordance with section 136 of the Corporations Act. Resolution 6 is a special resolution and so requires a vote of 75% in its favour to be passed.

A copy of the Proposed Constitution will be sent to any Shareholder upon request and will also be available for inspection at Eurogold Limited, Level 4, 172 St Georges Terrace Perth 6000 during normal business hours prior to the General Meeting and available for inspection at the General Meeting.

The new Constitution will become effective from the Effective Date which is the date on which the Company name will be changed in accordance with Resolution 6.

In summary, the Proposed Constitution includes provisions to the following effect:

Shares

The issue of shares and options by the Company is under the control of the Directors, subject to the Corporations Act, ASX Listing Rules and any rights attached to any special class of shares.

Preference Shares

The Corporations Act requires certain rights of preference shares to be either set out in the Company's constitution or approved in general meeting by special resolution before preference shares are issued.

The Proposed Constitution sets out a framework of rights for preference share issues from which the Board can determine to allot and issue preference shares, without the need to obtain further shareholder approval every time an allotment of preference shares is proposed. Schedule 5 to the Proposed Constitution contains the framework as well as specific rights of preference shares as to the repayment of capital, requirements for redemption (if the preference shares are redeemable), participation in surplus assets and profits, voting rights and priority of payment of capital and dividends. Other specific terms, including the dividend amount, the redemption date (if applicable) and redemption amount (if applicable), would be set by the issuing resolution of the Directors.

Details of the preference share provisions are contained in schedule 9 of this Explanatory Memorandum.

Reductions of Capital

The Proposed Constitution is consistent with the Corporations Act requirements which must be satisfied by the Company in undertaking an alteration of capital.

Liens

If the Company issues partly paid shares and a call made on those shares is unpaid, the Company will have a lien over the shares on which the call is unpaid. The lien may be enforced by a sale of those shares.

Transfer of Shares

The Company may participate in any clearing and settlement facility provided under the Corporations Act, the ASX Listing Rules and the ASX Settlement & Transfer Corporation Pty Ltd ("ASTC") Operating Rules. Transfers through ASTC are affected electronically in ASTC's Clearing House Electronic Sub register System (CHESS). For the purposes of the Company's participation in the CHESS, the Company may issue holding statements in lieu of share certificates. The Company will not charge any fee for registering a transfer of shares. The Directors may refuse to register a transfer of shares in the circumstances permitted or required under the Corporations Act and ASX Listing Rules.

Proportional Takeovers

A proportional takeover bid is one in which the offeror offers only to buy a specified proportion of each Shareholders' shares.

The Proposed Constitution provides for Shareholder approval of any proportional takeover bid for the shares. Subject to the ASX Listing Rules and ASTC Operating Rules, the provisions require the Directors to refuse to register any transfer of shares made in acceptance of a proportional takeover offer until the requisite Shareholder approval has been obtained.

The perceived advantages of including proportional takeover provisions in the Proposed Constitution are that such provisions may:

• $(a)$ enhance the bargaining power of Directors in connection with any potential sale of the Company;
• improve corporate management by eliminating the possible threat of a hostile $(b)$ takeover through longer term planning;
• make it easier for Directors to discharge their fiduciary and statutory duties to $(c)$ the Company and its Shareholders to advise and guide in the event of a proportional bid occurring; and
• $(d)$ strengthen the position of Shareholders of the Company in the event of a takeover, assuming the takeover will result in a sharing of wealth between the offeror and Shareholders, as the more cohesive Shareholders are in determining their response the stronger they are. A requirement for approval can force Shareholders to act in a more cohesive manner. Where

Shareholders know that a bid will only be successful if a specified majority of Shareholders accept the offer, they have less to fear by not tendering to any offer which they think is too low.

The perceived disadvantages of including proportional takeover provisions in the Proposed Constitution include the following matters:

• $(a)$ a vote on approval of a specific bid suffers from a bias in favour of the incumbent Board:
• the provisions are inconsistent with the principle that a share in a public $(b)$ company should be transferable without the consent of other Shareholders; and
• $(c)$ a Shareholder may lack a sufficient financial interest in any particular company to have an incentive to determine whether the proposal is appropriate.

To comply with the Corporations Act, the proportional takeover provisions must be renewed by Shareholders in general meeting at least every 3 years to remain in place.

Details of the proportional takeover provisions are contained in schedule 7 of this Explanatory Memorandum.

Alterations of share capital

Shares may be converted or cancelled with Shareholder approval and the Company's share capital may be reduced in accordance with the requirements of the Corporations Act and the ASX Listing Rules.

Buy Backs

The Company may buy back shares in itself on terms and at such times determined by the Directors

Disposal of less than a Marketable Parcel

For the sake of avoiding excessive administration costs, the Proposed Constitution contains provisions enabling the Company to procure the disposal of shares where the Shareholder holds less than a marketable parcel of shares within the meaning of the ASX Listing Rules (being a parcel of shares with a market value of less than \$500). To invoke this procedure, the Directors must first give notice to the relevant Shareholder holding less than a marketable parcel of shares, who may then elect not to have his or her shares sold by notifying the Directors.

The proposed disposal of unmarketable parcel provisions of the Proposed Constitution are set in schedule 8 of this Explanatory Memorandum.

Variation of class rights

Class rights attaching to a particular class of shares may be varied or cancelled with the consent in writing of holders of 75% of the shares in that class or by a special resolution of the holders of shares in that class.

Meetings of Shareholders

Directors may call a meeting of Shareholders whenever they think fit. Shareholders may call a meeting as provided by the Corporations Act. The Proposed Constitution contains provisions prescribing the content requirements of notices of meetings of

Shareholders and all Shareholders are entitled to a notice of meeting. Consistent with the new Corporations Act provisions, a meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of Shareholders is 2 eligible voters.

The Company will hold annual general meetings in accordance with the Corporations Act and the ASX Listing Rules.

Voting of Shareholders

Resolutions of Shareholders will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. On a poll each eligible Shareholder has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.

Proxies

An eligible Shareholder may appoint a proxy to attend and vote at the meeting on the Shareholder's behalf. The Proposed Constitution contains provisions specifying the form and manner of lodgement of proxy instruments. A Shareholder that is a corporation may appoint an individual to act as its representative.

Directors

Unless changed by the Company in general meeting, the minimum number of directors is 3 and the maximum is 10. The existing directors and the Company may appoint a new Director to fill a casual vacancy or as an addition to the board. Any such Director must retire at the next following annual general meeting of the Company (at which meeting he or she may be eligible for election as director). No Director other than the Managing Director may hold office for longer than 3 years without submitting himself or herself for re-election.

Powers of Directors

The business of the Company is to be managed by or under the direction of the Directors.

Remuneration of Directors

The fees payable to Directors must not exceed the amount as determined by the Shareholders in General Meeting and such sum must not be paid by way of commission on, or percentage of, profits or operating revenue.

Execution of documents

In accordance with the recent amendments to the Corporations Act, the Proposed Constitution provides for execution of documents by the Company without the use of the Company's company seal.

Dividends

The Directors may fix the amount, the time for payment and the method of payment of a dividend. Subject to any special rights attaching to shares (such as preference shares), dividends will be paid proportionately. The Company is not required to pay any interest on dividends.

Indemnities and insurance

To the extent permitted by law, the Company indemnifies every person who is or has been a Director or Secretary of the Company against a liability incurred by that person in his or her capacity as a Director or Secretary provided that the liability does not arise out of conduct involving a lack of good faith (otherwise referred to as an excluded liability). A similar indemnity is provided in respect of legal proceedings. The Company may also pay the premiums on directors' and officers' liability insurance.

Resolution 7 - Employee Option Scheme $9₁$

Resolution 7 seeks Shareholder approval in accordance with the ASX Listing Rule 7.2 Exception 9 for the establishment of the Eurogold Employee Option Scheme and the issue of Employee Options pursuant to this Scheme.

The two main purposes of the Scheme are to give an incentive to the Eligible Employees to provide dedicated and ongoing commitment and effort to the Company and for the Company to reward Eligible Employees for their efforts. The Scheme contemplates the issue to Eligible Employees of options to subscribe for Shares.

ASX Listing Rule 7.1 places restrictions on the number of equity securities, including options, which a listed company may issue in any 12 months. However, certain issues are exempt from this ASX Listing Rule and are effectively disregarded for the purposes of counting the number of securities which a company may issue.

Exempt issues include an issue of securities to persons participating in an employee option scheme where shareholders have approved the issue of securities under the scheme as an exemption from ASX Listing Rule 7.1. Shareholder approval must be given in a general meeting held not more than 3 years before the date of issue.

In order to take advantage of the exemption from ASX Listing Rule 7.1 and allow the Company greater flexibility to issue securities, Shareholders are requested to approve the Scheme as an exemption from ASX Listing Rule 7.1.

This approval will be effective for a period of 3 years from the date of passing by Shareholders of Resolution 7.

For the purposes of ASX Listing Rule 7.2 Exception 9 the terms and conditions of the Scheme are contained in Schedule 10.

$10₁$ Risks

There are a number of risk factors that Shareholders should consider when evaluating the matters in the Notice and Explanatory Memorandum. The principal risk factors include, but are not limited to, those in Schedule 2 which should be read in its entirety.

Shareholders should also appreciate that the value of the Shares on ASX may rise or fall depending on a range of factors beyond the control of the Company.

Any of the factors set out in Schedule 2 or any other factors identified in the Notice and Explanatory Memorandum may materially affect the financial performance of the Company after completion of the Ukraine Transaction.

$11.$ Action to be taken by Shareholders

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

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 Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Schedule 1 - Definitions

In this Explanatory Memorandum and Notice:

"AIM" means the Alternative Investment Market operated by the London Stock Exchange.

"ASIC" means the Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Limited.

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

"Beregove Gold Project" means the prospective gold projects of Muzhievn and Kvasova adjacent to the town of Beregove in Ukraine, in relation to which ZLLC presently holds exploration and development rights and interests including (without limitation) all assets, infrastructure and improvements which comprise the Beregove Gold Project.

"Beregove Payment" means the deferred reimbursement of up to US\$200,000 costs of the Vendors in respect to the acquisition and development of the Beregove Gold Project which is set out in more detail under the sub-heading Sale Agreement in item 2.2 of the Explanatory Memorandum.

"Call Option" means the right of the Company to require the Vendors to exchange an equal number of Shares for all of the Newco 1 Shares held by the Vendors issued as consideration pursuant to the Sale and Purchase Agreement.

"Company" or "Eurogold" means Eurogold Limited ACN 009 070 384.

"Completion Date" means the date of completion of the Ukraine Transaction.

"Corporations Act" means the Corporations Act 2001 (Cth).

"Constitution" means the constitution of the Company.

"Director" means a director of the Company.

"Effective Date" means the date on which ASIC alters the details of the Company's registration in accordance with section 157(3) of the Corporations Act.

"Eligible Employees" has the meaning given in Schedule 10.

"Employee Option" has the meaning given in Schedule 10.

"Explanatory Memorandum" means the explanatory memorandum to the Notice.

"Facilitators" means the facilitators of the listing of Eurogold on AIM.

"Facilitator Option" means an option over a share on the terms and conditions contained in Schedule 6.

"Meeting" has the meaning given in the introductory paragraph of the Notice.

"Newco 1 Shares" means a fully paid ordinary share in the capital of Newco 1.

"Notice" means this notice of meeting.

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

"Put and Call Agreement" means the proposed put and call agreement pursuant to which the Put and Call Options are granted.

"Put Option" means the right of the Vendors to require the Company to exchange all of the Newco 1 Shares held by the Vendor issued as consideration pursuant to the Sale and Purchase Agreement for an equal number of Shares.

"Put and Call Options" means the Put Option and Call Option.

"Resolution" means a resolution contained in this Notice.

"Sale and Purchase Agreement" means the sale and purchase agreement pursuant to which the Ukraine Transaction will occur.

"Saulyak Gold Project" means SLLC which owns 100% of the mining tenements (including tenement applications), assets, infrastructure and improvements which comprise the Saulyak Gold Project.

"Scheme" has the meaning given in Schedule 10.

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

"Shareholder" means a shareholder of the Company.

"SLLC" means Saulyak Limited Liability Company.

"SRL" means Saulyak Resources Limited.

"Ukraine Assets" means the Saulyak Gold Project and the Beregove Gold Project.

"Ukraine Transaction" means the acquisition of all of the equity capital in ZRL and SRL by the Company.

"Vendors" means Alpha Minerals Limited and Ukraine Resources Limited.

"ZLLC" means Zakarpatpolymetaly Limited.

"ZLLC Agreement" means the Agreement on Extension of Zakarpatpolymetaly Limited Liability Company dated 1 September 2003.

"ZRL" means Zakar Resources Limited.

Schedule 2 - Risk Factors

Introduction $1₁$

The risk factors outlined in this schedule should be carefully considered when evaluating the matters in the Notice and Explanatory Memorandum.

Any of the factors set out in this schedule or any other factors identified in the Notice and Explanatory Memorandum may materially affect the financial performance of the Company.

There are a number of risk factors that Shareholders should consider when evaluating the matters in the Notice and Explanatory Memorandum. The principal risk factors include, but are not limited to, those in this schedule which should be read in its entirety.

$2₁$ General Risks

$2.1$ Securities investments

There are risks associated with any securities investment. The prices at which the Shares trade may fluctuate in response to a number of factors.

Further, the stock market and in particular the market for mining and exploration companies, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. There can be no quarantee that these trading prices will be sustained. These factors may materially affect the market price of the Shares regardless of the Company's operational performance.

$2.2$ Share market conditions

The market price of the Shares may 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. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

$2.3$ Economic risk

Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors that may contribute to that general economic climate include, the level of direct and indirect competition against the Company, industrial disruption, the rate of growth of gross domestic product in Australia and other jurisdictions that the Company has mineral assets in (including the Republic of Ukraine), interest rates and the rate of inflation.

2.4 Foreign exchange risk

The value or sale price of the commodities that may be produced by the Company (if any) will expose the income of the Company to the effects in the change in currency (exchange rate) risk.

The international price of most commodities are denominated in United States Dollars, whereas the income and expenditure of the Company are, and will be accounted for in Australian dollars. The revenues of the Company will be exposed to the fluctuations

and volatility of the price of minerals and the rate of exchange between the United States Dollar and the Australian Dollar, as determined in international markets.

As the Company's current mineral assets are located in the Republic of Ukraine, capital and ongoing operational expenditure are also denominated in United States Dollars.

$2.5$ Competition

The Company competes with other companies, including major mineral exploration and mining companies. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. Many of the Company's competitors not only explore for and produce minerals, but also carry out refining operations and other products on a worldwide basis. There can be no assurance that the Company can compete effectively with these companies.

$2.6$ Title

All of the tenements or licences in which the Company has or may earn an interest in will be subject to applications for renewal or grant (as the case may be). The renewal or grant of the term of each tenement or licence is usually at the discretion of the relevant government authority.

If a tenement or licence is not renewed or granted, the Company may suffer significant damage through loss of the opportunity to develop and discover any mineral resources on that fenement

$\overline{3}$ . Minerals Industry Risks

$3.1$ 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.

There is no assurance that exploration and development of the mineral interests owned by the Company, or any other projects that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.

$3.2$ Resource estimates

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available.

In addition, 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.

$3.3$ Payment obligations

Under the exploration permits and licences and certain other contractual agreements to which the Company is or may in the future become party, the Company is or may become subject to payment and other obligations. In particular, the permit holders are required to expend the funds necessary to meet the minimum work commitments attaching to the permits and licences. Failure to meet these work commitments will render the permit liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies which may be available to other parties, this could result in dilution or forfeiture of interests held by the Company.

$3.4$ Operating risks

As the Company's current mineral assets are not in a development phase, the Company may be subject to all the risks inherent in the establishment of new mining operations. No assurances can be given to the level of viability that the Company's operations may achieve.

The operations of the Company, once it commences production, may have to be shut down or operations may otherwise be disrupted by a variety of risks and hazards which are beyond the control of the Company, including environmental hazards, industrial accidents, technical failures, labour disputes, unusual or unexpected rock formations, flooding and extended interruptions due to inclement or hazardous weather conditions, fire, explosions and other accidents at the mine, processing plant or related facilities beyond the control of the Company.

These risks and hazards could also result in damage to, or destruction of, production facilities, personal injury, environmental damage, business interruption, monetary losses and possible legal liability. While the Company currently intends to maintain insurance within ranges of coverage consistent with industry practice, no assurance can be given that the Company will be able to obtain such insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims.

$3.5$ Commodity price volatility

It is anticipated that any revenues derived from mining will primarily be derived from the sale of gold. Consequently, any future earnings are likely to be closely related to the price of this commodity and the terms of any off-take agreements that it enters into.

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include world demand for base metals, forward selling by producers, and production cost levels in major metal-producing regions.

Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, the commodity as well as general global economic conditions. These factors may have an adverse effect on the Company's exploration, development and production activities, as well as on its ability to fund those activities.

$3.6$ Environmental risks

The Company's projects are subject to regulations regarding environmental matters and the discharge of hazardous wastes and materials. The respective governments and other authorities that administer and enforce environmental laws determine these environmental requirements. As with all mining projects, these projects would be expected to have a variety of environmental impacts should development proceed.

The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws.

The cost and complexity of complying with the applicable environmental laws and regulations may prevent the Company from being able to develop potentially economically viable mineral deposits.

Although the Company believes that it is in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities, such as accidental spills, leakages or other unforseen circumstances, which could subject the Company to extensive liability.

Further, the Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals will prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations, which may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect is operations in any area.

The Company has not incurred any significant costs for contamination resulting from its operations and the Company believes that it is in material compliance with all applicable laws relating to the protection of the environment, including laws regulating the discharge of materials. However, there can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments in such respect which could have a material adverse effect on the Company's business, financial condition and results of operations.

Specific Risks 4.

$4.1$ Ukraine sovereign risks

The Saulyak and Beregove Gold Projects are located in Ukraine. Ukraine's economy differs from the economies of most developed countries in many respects, including government intervention; level of development; growth rate; control of foreign exchange; and allocation of resources.

Political risk

The Company's investment in the Saulyak and Beregove Gold Projects may be exposed to adverse political developments that could affect the economics of the project. The relevant authorities from the Peoples Republic of Ukraine have supported the projects to date, but there is no assurance that this support will continue for the projects' duration. The Company's investment in the Saulyak and Beregove Gold Projects may be exposed to adverse political developments that could affect the economics of each operation.

State ownership

Ukraine's economy has been undergoing a transition from a planned economy to a more market-oriented economy. Although in recent years the Ukrainian government has implemented economic reforms, reduced state ownership and established sound corporate governance in business enterprises, a substantial portion of productive assets in Ukraine are still owned by the Ukrainian government. In addition, the Ukrainian government continues to play a significant role in regulating industry by

imposing industrial policies. It also exercises significant control over Ukraine's economic growth through the allocation of resources, control of foreign currencydenominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Future earnings from the Saulyak and Beregove Gold Projects could be affected if the Ukrainian government was to reverse recent trends and impose restrictions on business.

Foreign investment

In Ukraine, foreign companies could be required to work within a framework, which is different to that imposed on local companies. The Ukrainian government may also prevent and/or influence the sale of interests in the Saulyak and Beregove Gold Projects or other companies registered in Ukraine, which may reduce the value of investments and/or mining projects located in Ukraine.

Currency

Foreign exchange transactions continue to be subject to foreign exchange controls and require certain approvals. These limitations could affect effect the ability to obtain foreign exchange through debt or equity funding, or for capital expenditures, or for the repatriation of profits and capital from Ukraine based foreign operated mining operations which could have a significant effect on business operations.

Developing legal system

The Ukrainian government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new interpretation and enforcement of these laws and regulations involve uncertainties. In addition, as the Ukrainian legal system develops, changes in such laws and regulations, their interpretation or their enforcement may have a material adverse effect on business operations.

Any material adverse changes in government policies or legislation of the People's Republic of Ukraine that affect mineral exploration, development or mining activities, may affect the viability and profitability of Saulyak and/or Beregove Gold Projects.

Approval process

Nearly all projects require government approval. There can be no certainty that these approvals will be granted in a timely manner, or at all.

$4.2^{\circ}$ Resources and resource estimates

Geological information provided to the Company has been based on data generated by exploration work previously carried out by various parties. The Company has not completed due diligence on the geological information and as such there is no guarantee that data generated by prior exploration work on the various projects is reliable. Although re-sampling conducted by the company to date has verified the mineralisation, it is likely that a more extensive program of re-sampling and some underground drilling will be required in order for any resource estimate to be JORC compliant. It is anticipated that this work will be completed by late 2004.

$4.3$ Joint venture parties and contractors

The Company is unable to predict the risk of:

• $(a)$ financial failure, non compliance with obligations or default by a participant in any joint venture to which it (through the subsidiaries it will acquire) is, or may become, a party; or
• $(b)$ insolvency or other managerial failure by any of the contractors used by any joint venture in its exploration activities; or
• insolvency or other managerial failure by any of the other service provider used $(c)$ by any joint venture for any activity.

Other Risks 5.

The risk factors set out in this schedule are not exhaustive of the risks faced by the Company. The above factors, and other risks not specifically referred to above, may materially affect the financial performance of the Company and the value of its Shares. Neither the Company nor the Directors provide any assurances or guarantees of future profitability, distributions, payment of dividends, return of capital or performance of the Company or its Shares.

Schedule 3 - Capital Structure

Time	Number of Shares
Currently on issue	126,165,208
On exercise of Put and Call Option Agreement (assuming no increase in the Beregove Gold Project)	30,000,000
Maximum number of additional Shares issued on exercise of Put and Call Agreement (assuming Eurogold's interest in the Beregove Gold Project increases to a level for the maximum number of Newco 1 Shares to be issued to the Vendors)	20,000,000
Maximum number of Shares to be issued under Resolution 3 of this Notice of Meeting	100,000,000
Maximum number of Shares to be issued under Resolution 5 of this Notice of Meeting	5,000,000
Total Shares Issued	281,165,208

Schedule 4 - Corporate Structure

Schedule 5 - Payments and Reimbursements

Payments to Vendors

Description of Payment	Amount
For the purpose of ZRL paying the same to ZLLC in part satisfaction of its subscription for 4.33% of ZLLC to fund pre-feasibility studies	US\$125,000 (Paid)
For the purpose of ZRL paying the same to ZLLC in part satisfaction of its subscription for 4.33% of ZLLC to fund pre-feasibility studies	US\$125,000 (Paid)
To pay the Vendors in respect of meeting Beregove Gold Project expenses incurred during the negotiation of the acquisition by the Company	US\$100,000 (Paid)
For SLR to pay to Ukrainian Polymetals SJSC	US\$100,000
Operating Expenses of Saulyak and Beregove Gold Projects from time of signing Heads of Agreement to completion of the Ukraine Transaction	US\$87,000 (estimate)
Management Consultant Fees	US\$52,000 (estimate)

Reimbursement of the Vendors Expenses (other than the payments referred to above)

Description of Payment	Amount
In relation to the Saulyak Gold Project	US\$200,000
In relation to the Beregove Gold Project	US\$200,000

Notes

The reimbursements above must be substantiated and do not include the payments referred to in the payments table above.

Schedule 6-Terms and Conditions of Facilitator Options

$1₁$ Entitlement

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

$\overline{2}$ . Exercise Price

The exercise price of each Facilitator Option is \$0.30.

$\overline{3}$ . Expiry Date

Each Facilitator Option has an expiry date of 5:00 pm WST on 31 March 2007.

4. Exercise Period

The Facilitator Options are exercisable at any time on or prior to the Expiry Date.

5. Notice of Exercise

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

6. Timing of issue of Shares

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

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

$7.$ Shares issued on exercise

Shares issued on exercise of the Facilitator 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 Facilitator Options.

9. Participation in new issues

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

their Facilitator Options prior to the date for determining entitlements to participate in any such issue.

$10.$ 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 Facilitator Option will be increased by the number of Shares which the optionholder would have received if the optionholder had exercised the Facilitator Option before the record date for the bonus issue; and
• $(b)$ no change will be made to the Exercise Price.

$11.$ Adjustment for rights issue

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

New exercise price = $O - E [P-(S+D)]$

$N+1$

• $\Omega$ $\equiv$ the old Exercise Price of the Facilitator Option.
• the number of underlying Shares into which one Facilitator Option is F $\frac{1}{2}$ exercisable.
• P average market price per Share weighted by reference to volume of the $\frac{1}{2}$ underlying Shares during the 5 trading days ending on the day before the exrights date or ex entitlements date.
• S $\overline{\phantom{m}}$ the subscription price of a Share under the pro rata issue.
• D. $\frac{1}{2}$ the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
• $N$ the number of Shares with rights or entitlements that must be held to receive a 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 Facilitator Options

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

14. Facilitator Options non-transferable

The Facilitator Options are non-transferable.

15. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the options with the appropriate remittance should be lodged at the Company's Registry, Computershare Investor Services, Level 2 Reserve Bank Building 45 St George's Terrace, Perth, WA 6000 Australia, or sent by fax +61 (0)8 9323 2033.

Definitions $\mathbf{1}$ .

In this schedule:

"Approving Resolution" means a resolution to approve a proportional takeover bid in accordance with this schedule.

"Deadline" means the 14th day before the last day of the bid period for a proportional takeover bid.

"Voter" means a person (other than the bidder under a proportional takeover bid or an associate of that bidder) who, as at the end of the day on which the first offer under that bid was made, held bid class securities for that bid.

$2₁$ Refusal of transfers

$2.1$ Requirement for an Approving Resolution

• The Company must refuse to register a transfer of Shares giving effect to a $(a)$ takeover contract for a proportional takeover bid unless and until an Approving Resolution is passed in accordance with this schedule.
• $(b)$ This schedule ceases to apply on the 3rd anniversary of its last adoption, or last renewal, in accordance with the Corporations Act.

$2.2$ Voting on an Approving Resolution

• $(a)$ Where offers are made under a proportional takeover bid, the Directors must, subject to the Corporations Act, call and arrange to hold a meeting of Voters for the purpose of voting on an Approving Resolution before the Deadline.
• $(b)$ The provisions of the Constitution concerning meetings of Shareholders (with the necessary changes) apply to a meeting held under paragraph 2.2(a).
• $(c)$ Subject to the Constitution, every Voter present at the meeting held under paragraph 2.2(a) is entitled to one vote for each Share in the bid class securities that the Voter holds.
• $(d)$ To be effective, an Approving Resolution must be passed before the Deadline.
• $(e)$ An Approving Resolution that has been voted on is taken to have been passed if the proportion that the number of votes in favour of the resolution bears to the total number of votes on the resolution is greater than 50%, and otherwise is taken to have been rejected.
• $(f)$ If no Approving Resolution has been voted on as at the end of the day before the Deadline, an Approving Resolution is taken, for the purposes of this schedule, to have been passed in accordance with this schedule.

Definitions $\mathbf{1}$ .

In this schedule:

"Sale Share" means a Share which is sold or disposed of in accordance with this schedule.

Power to sell unmarketable parcels $2.$

$2.1$ Existing unmarketable parcels

• Subject to the applicable law, the Company may sell the Shares of a $(a)$ Shareholder if:
• $(i)$ the total number of Shares of a particular class held by that Shareholder is less than a marketable parcel;
• $(ii)$ the Company gives that Shareholder notice in writing stating that the Shares are liable to be sold or disposed of by the Company; and
• $(iii)$ that Shareholder does not give notice in writing to the Company, by the date specified in the notice of the Company (being not less than 42 days after the date of the Company giving that notice), stating that all or some of those Shares are not to be sold or disposed of.
• $(b)$ The Company may only exercise the powers under paragraph 2.1(a), in respect of one or more Shareholders, once in any 12 month period.
• The power of the Company under paragraph 2.1(a) lapses following the $(c)$ announcement of a takeover bid. However, the procedure may be started again after the close of the offers made under the takeover bid.

$2.2$ New unmarketable parcels

• Subject to the applicable law, the Company may sell the Shares of a $(a)$ Shareholder if:
• $(i)$ the Shares of a particular class held by that Shareholder are in a new holding created by a transfer on or after 1 September 1999; and
• that transfer is of a number of Shares of that class that was less than $(ii)$ a marketable parcel at the time the transfer document was initiated, or in the case of a paper based transfer document, was lodged with the Company.
• The Company may give a Shareholder referred to in paragraph 2.2(a) notice $(b)$ in writing stating that the Company intends to sell or dispose of the Shares.

Exercise of power of sale $3.$

$3.1$ Extinguishment of interests and claims

The exercise by the Company of its powers under paragraph 2 extinguishes, subject to this schedule 4:

• $(a)$ all interests in the Sale Shares of the former Shareholder: and
• $(b)$ all claims against the Company in respect of the Sale Shares by that Shareholder, including all dividends determined to be paid in respect of those Share and not actually paid.

$3.2$ Manner of sale

• $(a)$ Subject to the Applicable Law, the Company may sell or dispose of any Shares under paragraph 2 at any time:
• using a financial services licensee on the basis that person obtains $(i)$ the highest possible price for the sale of the Shares; or
• $(ii)$ in any other manner and on any terms as the Directors resolve.
• $(b)$ The Company may:
• exercise any powers permitted under the applicable law to enable the $(i)$ sale or disposal of Shares under this schedule:
• $(ii)$ receive the purchase money or consideration for Sale Shares;
• appoint a person to sign a transfer of Sale Shares; and $(iii)$
• $(iv)$ enter in the register the name of the person to whom Sale Shares are sold or disposed.
• The person to whom a Sale Share is sold or disposed need not enquire $(c)$ whether the Company:
• properly exercised its powers under this schedule in respect of that $(i)$ Share; or
• properly applied the proceeds of sale or disposal of those Shares, $(ii)$

and the title of that person is not affected by those matters.

• The remedy of any person aggrieved by a sale or disposal of Sale Shares is in $(d)$ damages only and against the Company exclusively.
• A certificate in writing from the Company signed by a Director or Secretary $(e)$ that a Share was sold or disposed of in accordance with this schedule 4 is sufficient evidence of those matters.

$3.3$ Application of proceeds

$(a)$ If the Company exercises the powers under paragraph 2.1, either the Company or the person to whom a Sale Share is sold or disposed of must pay the expenses of the sale or disposal.

• $(b)$ The Company must apply the proceeds of any sale or disposal of any Sale Shares in the following order:
• in the case of an exercise of the powers under paragraph 2.2, the $(i)$ expenses of the sale or disposal;
• $(ii)$ the amounts due and unpaid in respect of those Shares; and
• $(iii)$ the balance (if any) to the former Shareholder or the former Shareholder's personal representative, on the Company receiving the certificate (if any) for those Shares or other evidence satisfactory to the Company regarding the ownership of those Shares.

$3.4$ Voting and dividend rights pending sale

• $(a)$ If the Company is entitled to exercise the powers under paragraph 2.2, the Company may by resolution of the Directors remove or change either or both:
• $(i)$ the right to vote; and
• $(ii)$ the right to receive dividends,

of the relevant Shareholder in respect of some or all of the Shares liable to be sold or disposed of.

$(b)$ After the sale of the relevant Sale Shares, the Company must pay to the person entitled any dividends that have been withheld under paragraph 3.4(a).

Schedule 9 - New Constitution: Preference Shares

$\mathbf{1}$ Definitions

In this schedule, unless the context otherwise requires:

"Conversion Circumstances" means, in respect of a Converting Preference Share, whether the Preference Share is liable to be converted or convertible:

• at the option of the Holder, or of the Company, or both; $(a)$
• $(b)$ upon the happening of a particular event; or
• $(c)$ at a fixed time.

"Conversion Date" means, in respect of a Converting Preference Share, the date (if any) specified in the Issue Resolution for the conversion of that Preference Share or the date upon which an event specified in the Issue Resolution occurs which results in the conversion of that Preference Share.

"Conversion Number" means the number, or formula for determining the number, of ordinary Shares into which a Converting Preference Share will convert upon conversion.

"Converting Preference Share" means a Preference Share which is specified in the Issue Resolution as being liable to be converted or convertible into ordinary Shares in a manner permitted by the Corporations Act, whether at the option of the Holder or otherwise.

"Dividend" means any distribution of any property (including without limitation, money, Paid Up shares, debentures, debenture stock or other securities of the Company or of any other Corporation) to a Holder in respect of a Preference Share as a dividend, whether interim or final.

"Dividend Date" means, in respect of a Preference Share, a date specified in the Issue Resolution on which a Dividend in respect of that Preference Share is payable.

"Dividend Rate" means, in respect of a Preference Share, the terms specified in the Issue Resolution for the calculation of the amount of Dividend to be paid in respect of that Preference Share on any Dividend Date, which calculation may be wholly or partly established by reference to an algebraic formula.

"Franked Dividend" has the meaning given in section 160APA of the Income Tax Assessment Act 1936 (Cth)

"Holder" means, in respect of a Preference Share, the registered holder of that Share.

"Issue Resolution" means the resolution specified in paragraph 3.

"Preference Share" means a Share issued under Article 2.2 of the Constitution.

"Redeemable Preference Share" means a Preference Share which is specified in the Issue Resolution as being liable to be redeemed in a manner permitted by the Corporations Act.

"Redemption Amount" means, in respect of a Redeemable Preference Share, the amount specified in the Issue Resolution to be paid on redemption of the Redeemable Preference Share.

"Redemption Circumstances" means, in respect of a Redeemable Preference Share, whether the Preference Share is liable to be redeemed:

• $(a)$ at the option of the Holder, or of the Company, or both;
• upon the happening of a particular event; or $(b)$
• $(c)$ at a fixed time.

"Redemption Date" means, in respect of a Redeemable Preference Share, the date specified in the Issue Resolution for the redemption of that Preference Share or the date upon which an event specified in the Issue Resolution occurs which results in the redemption of that Preference Share.

"Specified Date" means, in respect of a Redeemable Preference Share, the date (if any) specified in the Issue Resolution before which that Redeemable Preference Share may not be redeemed by the Holder.

Rights of Holders $2₁$

Each Preference Share confers upon its Holder:

• the rights referred to in the Constitution; $(a)$
• $(b)$ the right in winding up to payment in cash of the amount then paid up on it, and any arrears of Dividend in respect of that Preference Share in priority to any other class of Shares;
• $(c)$ the right in priority to any payment of a Dividend to any other class of Shares, to a cumulative preferential dividend payable on each Dividend Date in relation to that Preference Share calculated in accordance with the Dividend Rate in relation to that Preference Share: and
• $(d)$ no right to participate beyond the extent elsewhere specified in this paragraph 2 in surplus assets or profits of the Company, whether in winding up or otherwise.

3. Issue Resolution

• $(a)$ The Directors may allot a Preference Share by a resolution of the Directors specifying:
• $(i)$ the Dividend Date;
• $(ii)$ the Dividend Rate:
• $(iii)$ whether the Preference Share is or is not a Redeemable Preference Share:
• if the Preference Share is a Redeemable Preference Share, the $(iv)$ Redemption Amount, the Redemption Date, the Redemption

Circumstances and any Specified Date for that Redeemable Preference Share:

• $(v)$ whether the Preference Share is or is not a Converting Preference Share:
• $(v_i)$ if the Preference Share is a Converting Preference Share, the Conversion Circumstances, the Conversion Number and any Conversion Date: and
• $(vii)$ any other terms and conditions to apply to that Preference Share.
• $(b)$ The Issue Resolution in establishing the Dividend Rate for a Preference Share may specify that the Dividend is to be:
• $(i)$ fixed:
• variable depending upon any variation of the respective values of any $(ii)$ factors in an algebraic formula specified in the Issue Resolution; or
• $(iii)$ variable depending upon such other factors as the Directors may specify in the Issue Resolution,

and may also specify that the Dividend is to be a Franked Dividend or not a Franked Dividend.

• $(c)$ Where the Issue Resolution specifies that the Dividend to be paid in respect of the Preference Share is to be a Franked Dividend the Issue Resolution may also specify:
• $(i)$ the extent to which such Dividend is to be franked; and
• $(ii)$ the consequences of any Dividend paid not being so franked, which may include a provision for an increase in the amount of the Dividend to such an extent or by reference to such factors as may be specified in the Issue Resolution.

Redemption 4.

• $(a)$ Subject to the Corporations Act, the Company must redeem a Redeemable Preference Share on issue:
• $(i)$ in the case where the Redeemable Preference Share is liable to be redeemed at the option of the Company, on the specified date where the Company, not less than 10 Business Days before that date, has given a notice to the Holder of that Redeemable Preference Share stating that the Redeemable Preference Share will be redeemed on the specified date;
• in the case where the Redeemable Preference Share is liable to be $(ii)$ redeemed at the option of the Holder, on the specified date where the Holder of that Redeemable Preference Share, not less than 10 Business Days before that date, has given a notice to the Company stating that the Redeemable Preference Share will be redeemed on the specified date; and

• $(iii)$ in any event, on the Redemption Date,

• $(iv)$ but no Redeemable Preference Share may be redeemed by the Holder before the Specified Date unless the Redemption Date occurs before that date.

• $(b)$ On redemption of a Redeemable Preference Share, the Company, after the Holder has surrendered to the Company the Certificate (if any) in respect of that Redeemable Preference Share, must pay to the Holder the Redemption Amount by:
• $(i)$ directly crediting the account nominated in writing by the Holder from time to time: or
• $(ii)$ cheque made payable to the Holder or such other person nominated in writing by the Holder sent through the post to:
  • $(1)$ in the case where the Holder is a joint holder of the Redeemable Preference Share, the address in the Register of the person whose name stands first on the Register in respect of the joint holding; or
  • $(2)$ otherwise, to the address of the Holder in the Register.

Conversion 5.

• Subject to the Corporations Act, the Company must convert a Converting $(a)$ Preference Share on issue:
• $(i)$ in the case where the Converting Preference Share is liable to be redeemed at the option of the Company, on the specified date where the Company, not less than 10 Business Days before that date, has given a notice to the Holder of that Converting Preference Share stating that the Converting Preference Share will be converted on the specified date;
• $(ii)$ in the case where the Converting Preference Share is liable to be redeemed at the option of the Holder, on the specified date where the Holder of that Converting Preference Share, not less than 10 Business Days before that date, has given a notice to the Company stating that the Converting Preference Share will be converted on the specified date; and
• $(iii)$ in any event, on the Conversion Date.
• $(b)$ On conversion of a Converting Preference Share the Company must allot to the Holder additional ordinary Shares such that following conversion the Holder holds that number of ordinary Shares in accordance with the Conversion Number. Conversion of a Converting Preference Shares does not constitute a cancellation, redemption or termination of a Converting Preference Share or the issue, allotment or creation of a new Share.
• $(c)$ The allotment of additional ordinary Shares on Conversion does not constitute a cancellation, redemption or termination of a Converting Preference Share. Conversion is the taking effect of existing rights of a Converting Preference Share and the ending of the special rights attached to the Converting Preference Share.

$(d)$ Following Conversion, each Converting Preference Share will rank equally with and will confer rights identical with and impose obligations identical with all other fully paid ordinary Shares then on issue.

6. Certificate

The Certificate (if any) issued by the Company in relation to any Preference Share. must specify in relation to that Preference Share:

• the date of issue of the Preference Share: $(a)$
• the Dividend Rate and Dividend Dates: $(b)$
• whether the Preference Share is a Redeemable Preference Share; $(c)$
• if the Preference Share is a Redeemable Preference Share, the: $(d)$
• $(i)$ Redemption Circumstances;
• $(ii)$ Redemption Amount; and
• $(iii)$ Redemption Date to the extent possible or if not, the event which if it occurs will result in redemption of that Redeemable Preference Share; and
• $(e)$ if the Preference Share is a Converting Preference Share, the:
• Conversion Circumstances; $(i)$
• $(ii)$ Conversion Number: and
• Conversion Date to the extent possible or if not, the event which if it $(iii)$ occurs will result in conversion of that Concerting Preference Share; and
• $(iv)$ any other matter the Directors determine.

Schedule 10 - Employee Option Scheme Terms and Conditions

In this schedule, unless the context otherwise requires:

"Acceptance Form" means the acceptance form in Schedule 1 of the Scheme.

In this Explanatory Memorandum and Notice:

"ASX" means the Australian Stock Exchange Limited.

"ASIC" means the Australian Securities and Investments Commission.

"Associated Body Corporate" means:

• $(f)$ a related body corporate (as defined in the Corporations Act) of the Company;
• a body corporate which has an entitlement to not less than 20% of the voting $(q)$ shares of the Company; and
• $(h)$ a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.

"Business Day" means those days other than a Saturday, Sunday, New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day, Boxing Day and any other day which the ASX shall declare and publish is not a business day.

"Effective Date" means the date on which ASIC alters the details of the Company's registration in accordance with section 157(3) of the Corporations Act.

"Eligible Employees" means Directors (executive and non-executive), full time or part time employees of the Company or its Associated Bodies Corporate.

"Employee Option" means an option to acquire a Share issued in accordance wit the Scheme.

"Notice of Exercise of Option" means the Notice of Exercise of Option in Schedule 2 of the Scheme or such other form as the Directors may in their absolute discretion approved from time to time.

"Offer Period" means the period referred to in the definition of that expression in Section 624 of the Corporations Act, provided that where a takeover bid is publicly announced prior to the service of a off-market bidder's statement on the Company in relation to that takeover bid the Offer Period shall be deemed to have commenced at the time of that announcement.

"Scheme" means the Eurogold Limited ACN 009 070 384 Employee Option Scheme which Eligible Employees will be invited to participate in accordance with the Terms and Conditions.

"Terms and Conditions" means the terms and conditions in Schedule 10 as amended from time to time.

"Trigger Event" means:

• $(a)$ the despatch of a notice of meeting to consider a scheme of arrangement between the Company and its creditors or members or any class thereof pursuant to section 411 of the Corporations Act;
• $(b)$ the service of a bidder's statement or a like document on the Company; or

$(c)$ the date upon which a person or a group of associated person becomes entitled, subsequent to the date of issue of the Employee Option, to sufficient Shares to give it or them the ability, in general meeting to replace all or allow a majority of Directors in circumstances where such ability was not already held by a person associated with such person or group of associated persons.

The Directors are empowered to operate the Scheme in accordance with the ASX Listing Rules and on the following terms and conditions:

• The Directors may in their absolute discretion, but subject to paragraph 6(c) of $(a)$ the Scheme, offer to issue Employee Options to Eligible Employees in accordance with the Scheme.
• $(b)$ The Eligible Employees to participate in the Scheme shall be as the Directors in their absolute discretion determine and shall take into account skills. experience, length of service with the Company, remuneration level and such other criteria as the Directors consider appropriate in the circumstances.
• $(c)$ Employee Options may not be offered under this Scheme without the issue of a prospectus in accordance with Chapter 6D of the Corporations Act, if the aggregate of:
• the number of Employee Options to be issued; $(i)$
• $(ii)$ the number of Shares which would be issued if all the current Employee Options issued under any employment incentive scheme were exercised:
• $(iii)$ the number of Shares which have been issued as a result of the exercise of Employee Options issued under any employee incentive scheme, where the Employee Options were issued during the preceding five years; and
• $(iv)$ all other Shares issued pursuant to any employee incentive scheme during the preceding five years;

but disregarding any offer made, Employee Options or Shares issued by way of or as a result of:

• an offer to a person situated at the time of receipt of the offer outside $(i)$ Australia:
• $(ii)$ an offer that was an excluded offer or invitation within the meaning of the Corporations Act as it stood prior to the commencement of Schedule 1 of the Corporate Law Economic Reform Program Act 1999; or
• an offer that did not need disclosure to investors because of section $(iii)$ 708 of the Corporations Act

would exceed 5% of the then current number of Shares on issue.

$(d)$ The Directors may, in their absolute discretion, offer to an Eligible Employee Employee Options under the Scheme, notwithstanding that it has previously issued more than the 5% limit in paragraph 6(c), up to a maximum of 10%, provided that the issue is made in accordance with the requirements of Chapter 6D of the Corporations Act;

• $(e)$ Employee Options will be issued free of charge to Eligible Employees. The exercise price of the Employee Options shall be as the Directors in their absolute discretion determine, provided that it shall not be less than that amount which is equal to 90% of the weighted average market price of the Shares in the 5 days in which sales in the Shares were recorded immediately preceding the day on which the Directors resolve to offer the Employee Options.
• $(f)$ The Employee Options are not exercisable unless the Shares have been quoted on ASX throughout the 12 month period immediately preceding the exercise of the Employee Options, without suspension during that period exceeding in total 2 trading days.
• $(g)$ The Directors may limit the total number of Employee Options which may be exercised under the Scheme in any year.
• $(h)$ The Employee Options may be exercised by an Eligible Employees at any time during the period commencing 12 months from the date the Employee Options are issued and ending on the expiry date of the Employee Options.
• All Employee Options with a common expiry date shall have the same $(i)$ exercise price and rights to participate in issues of securities by the Company.
• $\left(\mathbf{j}\right)$ Unless the Directors in their absolute discretion determine otherwise, Employee Options shall lapse upon the earlier of:
• $(i)$ the expiry of the exercise date;
• $(ii)$ the option holder ceasing to be an Eligible Employees by reason of dismissal, resignation or termination of employment, office or services for any reason;
• $(iii)$ the expiry of 30 days after the option holder ceases to be an Eligible Employees by reason of retirement; or
• $(iv)$ a determination by the Directors that the option holder has acted fraudulently, dishonestly or in breach of his or her obligations to the Company or an Associated Body Corporate;
• $(k)$ Each Employee Option entitles the holder to subscribe for and be issued one Share.
• $\left(\mathbb{I}\right)$ Shares issued pursuant to the exercise of Employee Options will in all respects, including bonus issues and new issues, rank equally and carry the same rights and entitlements as other Shares on issue.

• $(m)$ There are no participating rights or entitlements inherent in the Employee Options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Employee Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced. This will give option holders the opportunity to exercise their Employee Options prior to the date for determining entitlements to participate in any such issue.

• $(n)$ The Employee Options will not be quoted on ASX. However, application will be made to ASX for official quotation of the Shares issued on the exercise of the Employee Options if the Shares are listed on ASX at that time.

• $(o)$ An application to be issued Employee Options may be made by Eligible Employees invited to participate in the Scheme in such form and on such terms and conditions concerning the closing date for applications as the Directors in their absolute discretion determine.
• $(p)$ If at any time the issued capital of the Company is reconstructed, all rights of option holders are to be changed in a manner consistent with the ASX Listing Rules.
• $(q)$ Subject to and in accordance with the ASX Listing Rules (including any waiver issued under such Listings Rules), the Directors (without the necessity of obtaining the prior or subsequent consent of shareholders of the Company in a general meeting) may from time to time amend (including the power to revoke, add to or vary) all or any provisions of the Terms and Conditions in any respect whatsoever, by an instrument in writing, provided that rights or entitlements in respect of any Employee Option issued before the date of amendment shall not be reduced or adversely affected unless prior written approval from the affected holder(s) is obtained.
• At the absolute discretion of the Directors, the terms upon which Employee $(r)$ Options will be issued may incorporate performance related factors. Such factors may reflect, inter alia, profitability levels, increases in production or decreases in production costs and may, subject to paragraph (p) above, be amended from time to time in a manner favourable to the option holder. However such performance related factors, if included in the Employee Option terms or so amended shall not act in any way to constitute a breach of the Terms and Conditions.
• $(s)$ Notwithstanding the Terms and Conditions, upon the occurrence of a Trigger Event the Directors may determine:
• $(i)$ that the Employee Options may be exercised at any time from the date of such determination, and in any number until the date determined by the Directors acting bona fide so as to permit the holder to participate in any change of control arising from a Trigger Event provided that the Directors will forthwith advise in writing each holder of such determination. Thereafter, the Employee Options shall lapse to the extent they have not been exercised; or
• $(ii)$ to use their reasonable endeavours to procure that an offer is made to holders of Employee Options on like terms (having regard to the nature and value of the Employee Options) to the terms proposed under the Trigger Event in which case the Directors shall determine an appropriate period during which the holder may elect to accept the offer and, if the holder has not so elected at the end of that period, the Employee Options shall immediately become exercisable and if not exercised within 10 days, shall lapse.
• $(t)$ An Employee Option may not be transferred or assigned except that a legal personal representative of a holder of an Employee Option who has died or whose estate is liable to be dealt with under laws relating to mental health will be entitled to be registered as the holder of that Employee Option after the

production to the Directors of such documents or other evidence as the Directors may reasonably require to establish that entitlement.

• $(u)$ An Employee Option is exercisable by the holder lodging with the Company a Notice of Exercise of Option together with a cheque for the exercise price of each Employee Option to be exercised and the relevant Employee Option certificate or such other evidence of ownership that the Directors may determine from time to time. If not all of the holder's Employee Options are being exercised, a holder must exercise Employee Options in multiples of 1.000.
• $(v)$ Neither participation in the Scheme by the Company or an Associated Body Corporate or any Eligible Employees or option holders or anything contained in these Terms and Conditions shall in any way prejudice or affect the right of the Company or an Associated Body Corporate to dismiss any Eligible Employees or option holder or to vary the terms of employment of any Eligible Employees or option holder. Nor shall participation or the rights or benefits of an Eligible Employees or option holder under the Terms and Conditions be relevant to or used as grounds for granting or increasing damages in any action brought by an Eligible Employees or option holder against the Company or an Associated Body Corporate whether in respect of any alleged wrongful dismissal or otherwise.
• $(w)$ At all times during which Eligible Employees may subscribe for or purchase Shares upon exercise of an Employee Option issued pursuant to the Scheme, the Company shall provide, within a reasonable period of a request by an Eligible Employees, the current market price of the Shares and the offer price of the Employee Options and the Shares. The manner in which this information will be made available shall be explained in the invitation to Eligible Employees to purchase Shares.
• $(x)$ The Scheme shall be administered by the Directors who shall have power to:
• $(i)$ determine appropriate procedures for administration of the Scheme consistent with these Terms and Conditions:
• $(ii)$ resolve conclusively all questions of fact or interpretation or dispute in connection with the Scheme and settle as the Directors in their absolute discretion determine expedient any difficulties or anomalies howsoever arising with or by reason of the operation of the Scheme;
• $(iii)$ delegate to any one or more persons for such period and on such conditions as it may determine the exercise of any of the Directors' powers or discretions arising under the Scheme; and
• $(iv)$ subject to the ASX Listing Rules, waive strict compliance with, amend or add to the Terms and Conditions of the Scheme except for the provisions of clause (d), and where such actions are taken such actions shall be conclusive, final and binding on option holders.