EUROGOLD LIMITED $(ACN 009 070 384)$

Annual Report

EUROGOLD LIMITED CORPORATE DIRECTORY

Directors

Peter Gunzburg Christopher Barker Dennis Franks B.Bus Brett Montgomery Neil MacLachlan

Company Secretaries

Pauline Collinson Les Kozel

Principal Registered Office in Australia

Level 4 172 St Georges Terrace Perth Western Australia 6000 Telephone: 08 9481 0572 Facsimile: 08 9481 3586 Website: www.eurogold.com.au

Postal Address

PO Box 7493 Cloisters Square Perth Western Australia 6850

Share Registry - Australia

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St George's Terrace Perth Western Australia 6000 Telephone: 08 9323 2000 Facsimile: 08 9323 2033

Share Registry - United Kingdom

Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 7NH United Kingdom Telephone: +44 (0)870 703 6025 Facsimile: +44 (0)870 703 6115

Auditors Ernst & Young Central Park 152 St George's Terrace Perth Western Australia 6000

Solicitors

Hardy Bowen Level 1, 28 Ord Street West Perth Western Australia 6005

Bankers - Australia BankWest 853 Hav Street

West Perth Western Australia 6000

Bankers - London

UniCredito Italiano S.p.A London Branch 17 Moorgate London EC2R 6PH

ASX Code EUG - Fully Paid Ordinary Shares

AIM Code EUG - Fully Paid Ordinary Shares

Nominated Advisor to AIM

RFC Corporate Finance Ltd Level 8, 250 St Georges Tce Perth, Western Australia 6000

Nominated Broker to AIM

Durlacher Ltd Moorgate Hall 155 Moorgate London EC2M6XB The last 12 months have featured a number of important advances for your Company as it continues to consolidate its position in the Carpathian Mountains of Central Europe.

Principal amongst these has been the acquisition of a 75% interest in the Saulvak deposit in the southwest of Ukraine with a current Soviet defined resource of some 570,000 ounces of gold.

Management's aim is to increase the size of the resource at Saulyak through a reinterpretation of the geology and an associated drilling programme and convert the Soviet classification to a "JORC" classification and bring the mine into early production.

The deposit is located approximately one kilometre from an existing rail head which will allow for the economic transfer of the ore to the 50% owned Transgold processing facility in neighbouring Romania.

Initial metallurgical testwork suggests +95% recovery through the Transgold plant and a cash cost of production of less than US\$200/oz. The Saulvak acquisition should significantly enhance the profitability of the Romanian operations because it allows the 8 gm/t Saulyak ore to be blended with the lower grade ore of the Romanian tailings operations without diminishing plant thoughput.

The Saulyak acquisition coincided with a listing on the London AIM market and the raising of approximately A\$6 million. It also saw the strengthening of your board and management with the appointment of Chris Barker as a Director and the Company's Chief Operating Officer, and London based non-executive Director Neil MacLachlan.

In the 12 months since the last Annual Report the gold price has increased by approximately 10% (in US\$) and the price of Eurogold ("EUG") has increased by approximately 140% (7 cents to 17 cents).

Our aim over the next 12 months will be to successfully merge and ramp up the Ukrainian and Romanian operations so that Eurogold can take its place alongside the other mid sized producers of the former Soviet Union and thereby continue to enjoy a re-rating by the market.

On behalf of the Board

Peter Gunzburg Chairman

21 October 2004

Your directors submit their report for the year ended 30 June 2004.

DIRECTORS

The names and details of the directors of the company in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Peter L Gunzburg	Executive Chairman - Appointed 24 September 2001 Mr Gunzburg has over 20 years experience as a stockbroker. He has a Commerce Degree from the University of Western Australia and has previously been a director of Resolute Ltd, the Australian Stock Exchange Limited, Eyres Reed Ltd and CIBC World Markets Australia Limited. He is the Chairman of Fleetwood Corporation and PieNetworks.
Christopher J Barker	Executive Director - Appointed 13 July 2004 Mr Barker is an experienced management consultant and mining engineer and is the principal of a management consulting group specialising in the mining industry. In the last ten years he has been both Chairman and a director of a number of mining companies including LionOre Nickel, Great Southern Mines Ltd and Yilgarn Gold Ltd. Mr Barker has extensive experience in the Former Soviet Union and was appointed the general director of the second largest gold project in Russia at Nezdaniskoye for the initial stage of the project development. He holds certification to run operations in the FSU and has both resident and work permits for the Ukraine.
Dennis W Franks	Non-Executive Director - Appointed 24 September 2001 Mr Franks has in excess of 30 years experience in the finance-investment banking and mining and exploration industries. He has an Accounting Degree and has considerable experience in the management of listed companies both within Australia and overseas.
Brett Montgomery	Non-Executive Director - Appointed 15 August 1989 Mr Montgomery has over 20 years experience in the gold mining industry and management of public companies.
Neil MacLachlan	Executive Director - Appointed 13 July 2004 Mr MacLachlan has over 25 years investment banking experience in Europe, South East Asia and Australia and is a former director of Wardley Holdings and James Capel & Co Limited, investment banking subsidiaries of the Hong Kong and Shanghai Banking Corporation. From 1993 to 1997 he was employed by Barrick Gold Corporation as Executive Vice President, Asia. Mr MacLachlan is also a director of Titan Resources NL and Gold Prospect Plc.

Interests in the shares and options of the company and related bodies corporate As at the date of this report, the interests of the directors in the shares and options of Eurogold Limited were:

	Ordinary Shares	Options over Ordinary shares
Peter Gunzburg	23,518,685	Nil
Brett Montgomery	Nil	Nil
Dennis W Franks	Nil	Nil
Neil MacLachan	350,000	Nil
Christopher Barker (i)	Nil	Nil

(i) 30,000,000 Options are held indirectly by Christopher Barker in Eurogold Holdings (Bermuda) Limited. These are subject to a Put and Call Option Agreement for the

conversion to 30,000,000 shares in Eurogold Limited. This option has not been exercised as at the date of this report.

EUROGOLD LIMITED DIRECTORS' STATEMENT

LOSS PER SHARE

	Cents
l Basic Loss Per Share	'nα
Diluted Loss Per Share

Operating results for the year were:

	2004	2003
Revenue from ordinary activities	633.983	1.283.098
Operating loss after taxation and Outside Equity Interests	(1, 131, 533)	(1,341,720)

CORPORATE INFORMATION

Corporate structure

Eurogold Limited is a company limited by shares that is incorporated and domiciled in Australia. Eurogold Limited is the ultimate parent entity and has prepared a consolidated financial report incorporating the entities that it controlled during the financial year (refer note 6 in the financial report).

Nature of operations and principal activities

During the year, the principal activities of Eurogold Limited and its controlled entities were the exploration and assessment of mineral tenements held, and the provision of exploration services in Romania and the Ukraine.

There have been no significant changes in the nature of those activities during the year.

Employees

The consolidated entity employed a total of 25 employees as of 30 June 2004 (2003: 26).

REVIEW AND RESULTS OF OPERATIONS

Corporate Highlights

Due Diligence completed and acquisition of interests in the Saulyak and Beregove gold projects in the Ukraine finalised post balance date;
The successful placement of 48,000,000 shares at £0.05 each to UK institutional clients of Durlacher Ltd which raised £2.4m (equated to approximately A\$6.1m).
Admission to the Alternative Investment Market of the London Stock Exchange ("AIM") on 20 July, 2004:
Appointments of Messrs Christopher Barker and Neil MacLachlan to the Board of Eurogold Limited.

Operational Highlights

Granting of 333km² Oas Prospecting Permit in Romania.
First hard rock deposit came onstream from Hanau
Successful implementation of the biox industrial trial phase

INVESTING ACTIVITIES

Eurogold is focussed on mining and processing gold in the Carpathian Mountains of Eastern Europe, principally in Romania and Ukraine.

In Romania the company's interests are held through shareholdings in two Romanian companies, Transgold SA (Eurogold 50%) and Explorer SA (Eurogold 98%). Transgold is the owner and operator of the Baia Mare gold processing facility in north-west Romania and has the rights to exploration licences in the surrounding area. Transgold's Baia Mare gold plant is the only modern Carbon-in-Leach plant in operation in Eastern Europe. At present the plant is processing a mixture of current tailings from the adjacent Remin gold plant, various pyrite concentrates sourced from within Romania and hard rock material from various local sources.

The Company recently acquired a 75% interest in the Saulyak gold project in the far southwest of Ukraine, close to the Romanian border. The Saulyak project was explored in detail by the USSR during the 1970's and 1980's and includes more than 9 kilometres of underground development on two levels and 30 km of diamond drilling. Eurogold proposes to develop Saulyak by means of adits driven from the adjacent valley. Initially the mine will be planned to produce around $25,000$ ounces of gold per year ramping up to $50,000$ ounces as the project develops.

As part of the Saulyak acquisition, a 6.33% interest was acquired in the Beregove gold project comprising the Beregove, Muzhievo and Kvasove gold prospects.

The company is moving into a period of rapid growth driven by the development of the Saulyak gold mine in the Ukraine and the recovery of the Suior and Central tailings in Romania. Within two years the company expects to be recovering more than 100,000 ounces of gold per annum.

$1.0$ TRANSGOLD SA - (Eurogold 50%)

$1.1$ General

During the year Transgold refinanced its existing line of credit into a come and go overdraft facility of US\$0.85m. The new facility has enabled a more flexible use of funds to provide working capital and to further the work required for the Central Tailings Dam Project. This project contains approximately 8.0 million tonnes of tailings which would provide 4 years of feed for the processing plant and it is planned to bring this project on stream in late 2005, subject to project finance being approved. It is planned to supplement these tailings with a variety of other ore sources. Prior to the Central project coming on stream, the Transgold plant will operate below full capacity.

There have been encouraging results on the bacterial oxidation of the Suior pyrite concentrate material. This is a joint venture between Remin SA who owns the concentrate, Minmet Plc who own the rights to the bacterial leaching technology and Transgold SA.

The Hanau project is expected to contribute approximately 7,000 tonnes per month of hard rock ore commencing late in 2004.

Rehabilitation of the Meda tailings project has made steady progress during the year and is within budget. Completion is scheduled for early 2005.

$1.2$ Production

Gold Operations

During the year 232,956 tonnes of Remin material was treated. Total ounces produced were 26,668 of gold and 122,724 of silver. Of this 1.546 ounces of bullion gold were toll treated for third parties.

Transgold also treated concentrate material from various suppliers within Romania. Transgold continued to keenly pursue the sourcing and treatment of alternative feedstock from suppliers within Romania. A total of 26,900 tonnes of concentrates were treated during the year.

Development of the Hanau open pit continued during the year, with overburden removal being about two thirds complete by year end. A total of 11,842 tonnes was treated. The pit has a probable reserve of 148,000 tonnes at 2.9 $g/t$ Au and 1.34 million ounces Ag. It is expected that Hanau will provide approximately 7,000 tonnes of material per month in the second half of 2004, until full mining is able to be commenced in spring 2005.

$1.3$ Exploration

All exploration has been conducted by Explorer SA, a Romanian registered 98% owned subsidiary of Eurogold. Explorer conducts exploration on four tenements totalling 408 km² that it holds in its own right and manages the exploration on three tenements totalling 78km² held by Transgold SA.

During the year exploration licences held by Transgold were renewed with the NRMA (Romanian Mines Department) with their expiry date extended to April 2007.

$1.4$ Regulatory Issues

SC Aurul SA (now Transgold SA) was previously the subject of litigation from a number of small litigants and the Hungarian Government, following the tailings dam incident in January 2000. The fifth court hearing with the Hungarian Government has been delayed pending a review by a newly appointed Judge and the reconsideration of evidence submitted to date.

In the interim the Hungarian Government has commenced a related legal action through a local Romanian Court in Baia Mare for a number of legal requests to be implemented. These revolved around the appointment of an expert to review certain aspects of works required to be carried out to date by Transgold. In Transgold's opinion this action has been satisfactorily dealt with by Transgold's legal representation.

$2.0$ SAULYAK GOLD PROJECT - UKRAINE (Eurogold 75%)

$2.1$ General

Post balance date, Eurogold acquired 75% of the Saulyak Gold Project in southwest Ukraine. The Saulyak project lies within the Eastern Carpathian Arc which forms part of the major Alpine-Balkan-Carpathian-Dinaride belt which traverses central and Eastern Europe and through to Turkey.

The Saulyak Project is located in the Zakapattia Oblast [Region] in low mountainous terrain and has a well developed infrastructure and some nine kilometres of underground tunnels on two levels into the ore zones within the mountain.

A well developed access road exists up the mountain and drill rigs have been able to undertake surface exploration generally where required during the year.

The underground tunnels on the two levels have been re-accessed and are currently being refurbished to enable the planned evaluation and development programme to be commenced.

It is planned to mine underground ore and transport it direct to the Baia Mare plant in Romania using the existing railway system which links Ukraine and Baia Mare. The Ukrainian railway system passes within one kilometre of the Saulyak deposit and a rail link reaches a crushing facility in Baia Mare.

A 276 $\text{km}^2$ exploration licence has been applied for which surrounds the 3.5 $\text{km}^2$ mining licence. The key areas of development of the Saulyak Project are as follows:

Re-evaluation of the structural geology;
Underground evaluation and exploration drilling; $\bullet$
Geo-chemical surface sampling programme;
Ore reserve data input and computer orebody modelling:
Ore reserve certification and mining licence application;
Project surface infrastructure, work area and office building establishment;
Underground rehabilitation and refurbishment programme;
Trial mining design development and geotechnical assessment;
Metallurgical testwork programme at external test facility;
Environmental assessment and ore transport permitting review. $\bullet$

$2.2$ Due Diligence

As part of the due diligence process conducted by RSG Global, two cross-cuts No's 12 and 28 from the 498 RL underground workings of the Saulyak deposit, were re-sampled on 11 February 2004. The programme also sampled a horizontal channel. A 5cm wide by 2cm deep channel situated approximately 50cm above the old channel had been pre-cut with a hand held diamond saw.

The pre-cut channel was sampled at one metre intervals and was understood to correspond to the same intervals as the original sampling. The samples were analysed for Au only by $50g$ fire assay with an atomic absorption finish to a detection limit of 0.01ppm. The results of the re-sampling confirmed the presence of significant gold mineralisation in the interpreted ore body at Saulyak. The results of the due diligence channel sampling programme are set out in the tables below:

	Saulyak Project February 2004 Due Diligence Channel Sampling Results
Sample No	$SGS_Au$ (g/t)	Expedition_Au (g/t)
	Cross-Cut 12
71572	2.96	1.0
71573	9.30	9.2
71574	6.85	76
71575	21.67	243
71576	9.35	47
71577	0.97	4.0
71578	7.75	8.0
71579	4.51	1.6
71580	0.53	0.8
71581	3.63	0.6
71582	0.24	0.4
71583	0.25	0.4
	Cross-Cut 28
71584	30.41	6.1
71585	33.15	3.6
71586	7.54	8.6
71587	4.39	2.0
71588	3.08	6.7
71589	0.99	6.7
71590	0.01	1.6

		Saulyak Project February 2004 Due Diligence Channel Sampling Intersection Summary
Intersection/Sample	Analabs_Au	(Ig/t Cutoff, 30g/t Upper Cut) Expedition Au	Comments
	(g/t)	(g/t) Cross-Cut 12
I	2.96	1.0
$\overline{2}$	9.30	9.2
3	6.85	76.0	Cut to 30g/t
4	21.67	243.0	Cut to 30g/t
5	9.35	47.0	Cut to 30g/t
6	0.97	4.0
7	7.75	8.0
8	4.51	1.6
Ġ,	0.53	0.8
10	3.63	0.6
$\mathbf{H}$	0.24	0.4
12	0.25	0.4
Intersection	10m at 6.75	8m at 14.22	Using 30g/t top cut
		Cross-Cut 28
	30.41	6.1	Cut to 30g/t
	33.15	3.6	Cut to 30g/t
	7.54	8.6
	4.39	2.0
	3.08	6.7
	0.99	6.7
	0.01	1.6
Intersection	5m at 15.00	7m at 5.04	Using 30g/t top cut.
Combined Intersections	15m at 9.50	15m at 9.93	Using 30g/t top cut

Exploration and evaluation detailed re-sampling of all safe underground development is planned in order to develop a JORC compliant resource. Given successful refurbishment of the underground development, it is also planned to undertake underground diamond drilling to delineate extensions to the gold mineralisation adjacent to and away from the existing underground development.

Together with the underground sampling and drilling programme, extensive metallurgical sampling and testwork, along with geotechnical assessment and engineering studies will be undertaken. The exploration and development programme proposed by the Company is considered to be entirely consistent with the status and potential of the Saulyak Project.

During the year a number of activities were undertaken commencing with a mapping and geochemical sampling programme over an untested area of the Saulyak licence. Following this a contract was signed with a Ukrainian drilling group who commenced a drill programme to enable an evaluation to be done of the equipment and confirm whether it was suitable for the immediate and longer term requirements. The programme is continuing and is expected to be completed before the winter sets in.

The underground portal and entry refurbishment work was completed and the tunnel refurbishment is underway. The refurbishment has included considerable work on drainage, clean-up and the opening and installation of a ventilation system

$2.3$ Underground Ore Delineation

As progressive refurbishment of the underground development is completed it is planned to undertake underground diamond drilling to delineate current areas for early mine design and also to test for extensions to the gold mineralisation adjacent to and away from the existing underground development.

$2.4$ Technical Developments

$2.4.1$ Exploration Modelling - to ensure all future exploration is well directed and programmed highlevel geological orebody modelling is being undertaken. Work on auditing, collating and developing the geological database is progressing and it is envisaged that by year end a model of the Saulyak deposit will be developed.

$2.4.2$ Ore Reserve and Resource and Computerisation – in line with the requirement to obtain a mining licence, certification of the ore reserves is in progress. Concurrent with the above and to meet external requirements a geological data block model has been developed to incorporate all the data available. As part of this, and to validate the information further, re-sampling of areas of underground development is planned in order to develop JORC compliant Reserves and Resources.

2.4.3 Metallurgical and Geo-Technical Evaluation - to evaluate the earlier metallurgical results and develop a metallurgical flowsheet for the orebody in detail, a programme of metallurgical sampling and testwork along with geotechnical assessment and engineering studies will be undertaken. A 200 kg sample has been taken and sent for testing at Ammtec laboratories in Australia under supervision by the engineering group, Lycopodium.

$2.4.4$ Permitting, Approvals, Staffing, Training and Systems. -the requirement for development and approval of the operating 'Projekt' plans for 2004 progressed which has enabled recruiting of personnel and an ongoing training programme is underway for the local workforce.

$3.0$ BEREGOVE GOLD PROJECT - UKRAINE (Eurogold 6.33%)

$3.1$ General

The company acquired a 6.33% interest in the Beregove Gold Project. The project is located 10 kilometres east of the border between Hungary and Ukraine. The mining tenure at Beregove comprises two Subsoil Use Licences, covering the Muzhivske and Kvasivske deposits.

The mining and processing of ore from the small scale underground operation continues.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes other than those matters referred to above in the state of affairs of the chief entity or the consolidated entity during the financial year.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Acquisition of Ukrainian companies

Post vear end the Company successfully completed the acquisition of a 75% interest in the Saulyak project and a 6% interest in the Beregove project in the Ukraine. In their independent competent persons report included in the AIM admission document. RSG Global Resources concluded that with successful and well targeted exploration, the Saulyak deposit "has the potential to host a significant gold-silver deposit, in excess of the currently defined C class 'reserve' (of 2.1mt at a cut grade of 8.4g/t for 578,000 oz's) or as defined under the Ukrainian State system".

The Company completed a capital raising of £2.4 million (approximately $A$6.1m$ ) in conjunction with the Company's admission to the Alternative Investment Market of the London Stock Exchange ("AIM") on 20 July 2004. As a result of the capital raising and in conjunction with the AIM Listing 48,000,000 million shares were issued.

The Company appointed Messrs Christopher Barker and Neil MacLachlan to the Board of Directors on 13 July 2004.

The Directors are not aware of any other matters or circumstances of a material nature that have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

It is the Company's intention to increase production at the Transgold owned processing facility by bringing into production the Central Dam Tailings Project and to instigate the other development initiatives outlined in this report as and when the circumstances permit.

ENVIRONMENTAL REGULATION AND PERFORMANCE

Eurogold has obligations under documentation entered into between, amongst others, it and the lending banks to an associated entity with respect to compliance with environmental law. Eurogold is not in default in relation to any of those obligations.

DIVIDENDS

No dividend has been declared or paid during the financial year.

SHARE OPTIONS

Unissued shares

At the date of this financial report, there are 2,000,000 unlisted facilitator options on issue to acquire ordinary shares under options which are exercisable at A\$0.30 each on or before 31 March 2007. These facilitator options were issued as a result of the capital raising completed post balance date.

Shares issued as a result of the exercise of options

During the financial year, no options to acquire ordinary shares in Eurogold Limited were exercised. Since the end of the financial vear no options have been exercised although 48,000,000 new shares were issued subsequent to the Company's listing on AIM.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company does not currently have any indemnification or any insurance of directors and officers.

INTERESTS IN CONTRACTS OR PROPOSED CONTRACTS WITH THE COMPANY

During the financial year, no director has had any interest in a contract or proposed contract with the company being an interest the nature of which has been declared by the director in accordance with Section 300(11)(d) of the Corporations Act 2001. Post balance date, as part of the Ukrainian acquisition, Christopher Barker through related entities entered into a Put and Call Option Agreement with the Company to acquire 30,000,000 shares in Eurogold upon exercise of the Put and Call Option Agreement.

DIRECTORS' MEETINGS

During the year 7 directors' meetings, were held. The number of meetings in which directors were in attendance was as follows:

	Directors' Meetings
	No. of meetings held while in office	Meetings attended

Peter L Gunzburg
Brett Montgomery		6
Dennis W Franks
Neil MacLachan ¹
Christopher Barker ¹

¹: Neil MacLachan and Christopher Barker were appointed 13 July 2004.

DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS

Remuneration policy

The Board of Directors is responsible for determining and reviewing compensation arrangements for the directors and the executive team. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Such officers are given the opportunity to receive their base emolument in the form of salary and fringe benefits such as motor vehicle allowances.

To assist in achieving these objectives, the Board links the nature and amount of executive directors' and officers' emoluments to the company's financial and operational performance.

Details of the nature and amounts of each element of the emolument of each director of the company and each of the five executive officers of the company and the consolidated entity receiving the highest emolument for the financial year are as follows:

Emoluments of Directors of Eurogold Limited

			Annual Cash Emoluments		Total Cash
	Office	Base Fee	Other	Super- annuation	Emoluments
		\$	\$	S	S
P L Gunzburg	Chairman
(ii)(iii)		140,525	16,900	13,500	170,925
B Montgomery	Non-Executive
(i)(ii)	Director	421	25,000		25,421
D W Franks (ii)	Non-Executive
	Director	30,421		2,700	33,121
Neil MacLachlan	Non-Executive
	Director
Chris Barker	Executive
	Director
$(i)$ Refer Note 23 $(e)$
(ii) Includes Directors Fees from Explorer
(iii) P Gunzburg received Directors Fees from Transgold SA of \$8417

Emoluments of highest paid executive officers of the company and the consolidated entity

			Annual Cash Emoluments	Long Term Emoluments	Total Cash
	Office	Base Fee	Other	Super- annuation	Emoluments
1 Hudrea	Executive Chairman-
	Explorer S.A.	32.172	,684		33,856

The Company and consolidated entity has only one executive officer as defined in the Corporations Act 2001.

No options have been granted to any directors or executives for services provided.

The terms 'director' and 'officer' have been treated as mutually exclusive for the purposes of this disclosure.

The elements of emoluments have been determined on the basis of the cost to the company and the consolidated entity.

Executives are those directly accountable and responsible for the operational management and strategic direction of the company and the consolidated entity.

The category 'Other' includes the value of any non-cash benefits provided.

Options granted to directors and executive officers

The Company currently has an Options Scheme in place however during the year no options were granted to either directors or executive officers of the Company.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Eurogold Limited support and have adhered to the principles of corporate governance. The Company's corporate governance statement is contained in the following section of this annual report.

AUDIT COMMITTEE

The Company presently does not have an audit committee as the directors believe that the Company is not of a size, nor are its financial affairs of such complexity to justify a separate Audit Committee, All matters which might be dealt with by such a committee are subject to full scrutiny of Board meetings. This decision will be reviewed as the Company develops in the future. Notwithstanding this it is the Board's responsibility to ensure that an effective internal control framework exists within the entity. This includes the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as nonfinancial considerations.

Signed in accordance with a resolution of the directors

P L Gunzburg Chairman

Date: 30 September 2004

The Board of Directors of Eurogold Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of Eurogold Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination and selection of Directors and for the operation of the Board.

Unless disclosed below, the best practice recommendations of both the ASX Corporate Governance Council and the AIM Listing Rules (The Alternative Investment Market of the London Stock Exchange), including the Combined Code On Corporate Governance have been applied for the entire financial year ended 30 June 2004. Where there has been any variation from the recommendations it is because the Board believes that the company is not as yet of a size, nor are its financial affairs of such complexity to justify some of those recommendations and as such those practices continue to be the subject of the scrutiny of the full Board.

Board Composition:

The Board is comprised of five Directors, of which the Chairman and Managing Director; and the Director of the Ukraine Operations are the only executive Directors. Both the ASX and AIM rules favour that the Chairman be an independent Director, however as Mr Peter Gunzburg has been primarily concentrating on the company's development over the past three years, has extensive knowledge of both the Australian and London stock market and understands the culture and governmental procedures of both Romania and the Ukraine, the Board believes that his role and status be both as an Executive and as Chairman.

The skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, their attendances at meetings and their term of office are detailed in the Directors' Report. The majority of the Board are independent Directors, the names of the Directors of the company in office at the date of this statement are:

Name	Position
Peter Lynton Gunzburg	Chairman – Executive Director
Christopher John Barker	Executive Director
Dennis Wayne Franks	Independent Director
Brett Montgomery	Independent Director
Neil MacLachlan	Independent Director

When determining whether a Director is independent, the Board has determined that the Director must not be an executive and:

is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a $\bullet$ substantial shareholder of the company;
within the last three last years has not been employed in an executive capacity by the company or another group member, or been a Director after ceasing to hold any such employment;
within the last three years has not been a principal or employee of a material professional adviser or a material consultant to the company or another group member, or an employee materially associated with the service provided;
is not a material supplier or customer of the company or other group member, or an officer of or otherwise associated directly or indirectly with a significant supplier or customer;
has no material contractual relationship with the company or another group member other than as a Director of the company;
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the company.

Independent Directors' have the right to seek independent professional advice in the furtherance of their duties as Directors, at the company's expense. Written approval must be obtained from the Chairman prior to incurring expense on behalf of the company.

Peter Gunzburg is also a Director of Eurogold's subsidiary companies Explorer SA and Transgold SA; Dennis Franks and Brett Montgomery are also Directors of Explorer SA.

The Board and Board Nominations:

The company does not presently operate a nomination committee however as the company develops its corporate profile increasingly towards the capital markets of Europe, the Board is establishing guidelines for the future nomination and selection of potential new directors. In the interim, the full Board (subject to members voting rights in general meeting) is responsible for selection of new members and has regard to a candidates experience and competence in areas such as mining, exploration, geology, finance and administration that can assist the Company in meeting its corporate objectives and plans.

Under the Company's Constitution:

the maximum number of Directors on the Board is ten;
a Director (other than the Managing Director) may not retain office for more than three years without $\bullet$ submitting for re-election; and
at the Annual General Meeting each year effectively one third of the Directors in office (other than the Managing Director) retire by rotation and must seek re-election by shareholders.

Securities Trading Policy:

The company has not as yet adopted a formal securities trading policy however the Directors and employees are restricted from acting on material information until it has been released to the market in accordance with the ASX requirements of continuous disclosure. Furthermore the ability of Directors and certain employees of AIM listed companies to deal in the Company's securities is restricted in a number of ways, by statute, common law and by Rule 19 of the AIM Rules. This rule imposes restrictions beyond those imposed by law in that the Directors and certain employees and persons connected with them do not abuse and do not place themselves under suspicion of abusing, price-sensitive information that they have or are thought to have, especially in periods leading up to announcement of results (closed periods).

Remuneration Committee and Policies:

The company has not as yet appointed a Remuneration Committee. All matters which might be dealt with by such a committee are subject to full scrutiny of Board meetings. This decision will be reviewed on a regular basis as the company develops.

All compensation arrangements for Directors and Senior Executives are determined and approved by the Board, after taking into account the current competitive rates prevailing in the market.

The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and non-monetary components of the Executive Directors and executives, are detailed in the Director's Report.

There are no schemes for retirement benefits other than statutory superannuation for independent Directors.

EXTERNAL AUDITORS:

The auditors of the Company, Ernst & Young, have open access to the Board of Directors at all times.

AUDIT COMMITTEE:

The Company presently does not have an audit committee as the directors believe that the Company is not of a size, nor are its financial affairs of such complexity to justify a separate Audit Committee. All matters which might be dealt with by such a committee are subject to full scrutiny of Board Meetings. This decision will be reviewed as the Company develops. Notwithstanding this it is the Board's responsibility to ensure that an effective internal control framework exists within the entity. This includes the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations.

MANAGING RISKS:

The Board meets regularly to evaluate, control, review and implement the Company's operations and objectives.

Regular controls established by the Board include:

detailed monthly financial reporting;
delegation of authority to the Managing Director to ensure approval of expenditure obligations;
implementation of operating plans, cash flows and budgets by management and Board monitoring of progress against projections; and
procedures to allow Directors, and management in the furtherance of their duties, to seek independent professional advice via the utilisation of various external technical consultants.

The Board recognises the need to identify areas of significant business risk and to develop and implement strategies to investigate these risks.

COMMITMENT TO SHAREHOLDERS & ETHICAL STANDARDS:

The Board supports the highest standards of corporate governance and requires its members and the management and staff of the Company to act with integrity and objectivity in relation to:

Compliance with laws and regulations affecting the company's operations;
The ASX's Corporate Governance and the AIM Listing Rules, including the Combined Code On Corporate Governance;
Employment practices:
Responsibilities to the community;
Responsibilities to the individual;
The environment:
Conflict of interests:
Confidentiality;
Ensure that shareholders and the financial community are at all times fully informed in accordance with the spirit and letter of the ASX's continuous disclosure requirements and the AIM Rules;
Corporate opportunities or opportunities arising from these for personal gain or to compete with the company;
Protection of and proper use of the company's assets and
Active promotion of ethical behaviour.

MONITORING OF THE BOARD'S PERFORMANCE AND COMMUNICATION TO SHAREHOLDERS:

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is constantly reviewed by the Chairman. The company does not presently have an evaluation of the Board and all the Board members performed by an independent consultant however may do so once the company develops.

The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Directors. Information is communicated to the shareholders through:

the Annual Report which is distributed to all shareholders;
the availability of the Company's Quarterly Report to shareholders so requesting;
the Half-Yearly Report distributed to shareholders so requesting;
adherence to continuous disclosure requirements;
the Annual General Meeting and other meetings so called to obtain shareholder approval for Board action as appropriate; and
the provision of the Company's website containing all of the above mentioned reports, corporate governance practices and policies and its constant update and maintenance.

EUROGOLD LIMITED STATEMENT OF FINANCIAL PERFORMANCE YEAR ENDED 30 JUNE 2004

			Consolidated		Eurogold Limited
	Notes	2004 \$	2003 Ŝ	2004 Ŝ	2003 \$
REVENUES FROM ORDINARY
ACTIVITIES	$\overline{2}$	633,983	1,283,098	273,433	659,917
Borrowing costs	3		(92)		(92)
Depreciation expense	3	(58, 013)	(57, 222)	(2,240)	(2, 437)
Consumables		(101, 010)	(167, 779)
Administration expenses		(462,050)	(456, 661)	(462,050)	(442, 439)
Salaries and employee benefits		(428, 270)	(695, 341)	(248, 696)	(214, 191)
Consultants fees		(240,798)	(482, 633)	(169, 249)	(51,200)
Write down of capitalised expenditure	3	(265,768)	(210, 694)
Write down of intercompany receivable				(176, 132)
Foreign exchange gain/(loss)	3	(48, 419)	80,398	(53, 485)	(100, 133)
Cost of listed investments disposed of		(189, 148)	(746, 800)	(189, 148)	(746, 800)
Other expenses		(34, 579)		(1,074)
Loss from ordinary activities before
income tax expense	$\ddot{4}$	(1, 194, 072)	(1,453,726)	(1,028,641)	(897,375)
Income tax (expense)/benefit Loss from ordinary activities after		62,888	101,010
income tax expense		(1, 131, 184)	(1,352,716)	(1,028,641)	(897,375)
Net (profit)/loss attributable to Outside Equity Interest	15	(349)	10,996
Net loss attributable to members of
Eurogold Limited		(1, 131, 533)	(1,341,720)	(1,028,641)	(897,375)
Share issue costs	13	(75, 453)	(47, 273)	(75, 453)	(47, 273)
Total changes in equity other than those resulting from transactions with owners as owners attributable to
members of Eurogold Limited		(1,206,986)	(1,388,993)	(1, 104, 094)	(944, 648)
Basic loss per share (cents)	20	(0.9)	(1.4)
Diluted loss per share (cents)	20	(0.9)	(1.4)

The Statement of Financial Performance should be read in conjunction with the accompanying notes.

EUROGOLD LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2004

			Consolidated		Eurogold Limited
		2004	2003	2004	2003
	Notes	S	\$	\$	\$
Current Assets
Cash assets	16	358,946	1,040,022	184,755	891,685
Receivables	5	265,464	75,319	220,465	18,381
Other financial assets	6	6,100	118,682	6,100	118,682
Other	7	227,690	1,498	224,787
Total Current Assets		858,200	1,235,521	636,107	1,028,748
Non-Current Assets
Receivables	5	10,161	8,990	795,604	1,109,096
Other financial assets	6			346,860
Plant and equipment	8	140,597	194,770	5,321	3,888
Deferred exploration, evaluation $\&$
development	9	1,104,067	1,223,932
Other	10	1,391,164		1,391,164
Total Non-Current Assets		2,645,989	1,427,692	2,538,949	1,112,984
TOTAL ASSETS		3,504,189	2,663,213	3,175,056	2,141,732
Current Liabilities
Payables	$\mathbf{1}$	685,556	90,877	669,415	50,422
Provisions	12	36,976	18,551	36,976	18,551
Total Current Liabilities		722,532	109,428	706,391	68,973
Non-Current Liabilities
Deferred tax liabilities	$\overline{4}$		70,423
Total Non-Current Liabilities		$\overline{\phantom{0}}$	70,423
TOTAL LIABILITIES		722,532	179,851	706,391	68,973
NET ASSETS		2,781,657	2,483,362	2,468,665	2,072,759
EQUITY
Parent Entily Interest
Contributed equity	13	18,986,341	17,561,794	18,986,341	17,561,794
Accumulated losses	14	(16,216,175)	(15,084,642)	(16,517,676)	(15,489,035)
Total parent entity interest in
equity		2,770,166	2,477,152	2,468,665	2,072,759
Outside equity interest	15	11,491	6,210
TOTAL EQUITY		2,781,657	2,483,362	2.468.665	2,072,759

The Statement of Financial Position should be read in conjunction with the accompanying notes.

EUROGOLD LIMITED STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2004

		Consolidated		Eurogold Limited
		2004	2003	2004	2003
	Notes	S	\$	\$	\$
Cash Flows from Operating Activities
Receipts from customers		346,274	664,173
Payments to suppliers and employees		(1,187,502)	(1,946,677)	(749, 290)	(899, 859)
Interest Income		34,490	12,300	30,281	12,300
Borrowing costs paid			(92)		(92)
Expenditure on mining interests		(145,903)	(138, 178)
Net cash flows used in operating activities	16(b)	(952, 641)	(1,408,474)	(719,009)	(887, 651)
Cash Flows from Investing Activities
Proceeds from sale of investments		229,382	604,165	229,382	604,165
Purchase of investments		(84,366)	(233, 607)	(84, 366)	(233, 607)
Proceeds from sale of property, plant and equipment		800	43,452	800	43,452
Payments for property, plant and equipment		(11,761)	(116, 783)	(4,746)	(365)
Payments in respect of acquisition of assets in progress		(1,057,301)		(1,057,301)
Advance to related parties		(160, 619)		(430, 728)	(693, 739)
Net cash flows used in investing activities		(1,083,865)	297,227	(1,346,959)	(280, 094)
Cash Flows from Financing Activities
Proceeds from issue of shares		1,500,000	1,555,000	1,500,000	1,555,000
Share issue expense		(140,962)	(47,273)	(140, 962)	(47,273)
Net cash flows from financing activities		1,359,038	1,507,727	1,359,038	1,507,727
Net increase (decrease) in cash held		(677, 468)	396,480	(706, 930)	339,982
Cash at the beginning of the financial year		1,040,022	668,559	891,685	551,703
Exchange rate effects on cash		(3,608)	(25,017)
Cash at the end of the financial year	16(a)	358,946	1,040,022	184,755	891,685

The Statement of Cash Flows should be read in conjunction with the accompanying notes.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES $\mathbf{1}$ .

$(a)$ Basis of accounting

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views).

The financial report has been prepared in accordance with the historical cost convention.

$(b)$ Change in accounting policy

The accounting policies adopted are consistent with those of the previous financial year.

Principles of consolidation $(c)$

The consolidated financial statements are those of the consolidated entity, comprising Eurogold Limited (the parent company) and all entities that Eurogold Limited controlled from time to time during the year and at balance date.

Information from the financial statements of subsidiaries is included from the date the parent company obtained control until such time as control ceases. Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the parent company has control.

Subsidiary acquisitions are accounted for using the purchase method of accounting.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

$(d)$ Foreign currencies

Translation of foreign currency transactions

Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of exchange ruling at the date of the transaction.

Amounts payable to and by the entities within the consolidated entity that are outstanding at the reporting date and are denominated in foreign currencies have been converted to local currency using rates of exchange ruling at the end of the financial year.

All resulting exchange differences arising on settlement or restatement are brought to account in determining the net profit or loss for the financial year.

Translation of financial reports of overseas operations

All overseas operations are deemed integrated foreign operations, as each is financially and operationally dependent on Eurogold Limited. The financial reports of overseas operations are translated using the temporal method and any exchange differences are recognised as revenue or expense in net profit or loss in the reporting period in which they arise.

Cash and cash equivalents (e)

Cash on hand and in banks and short-term deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 2 working days, net of outstanding bank overdrafts.

Bank overdrafts are carried at the principal amount. Interest is charged as an expense as it accrues.

$(f)$ Receivables

Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectable debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Receivables from related parties are recognised and carried at the nominal amount due. Interest is taken up as income on an accrual basis.

Inventories $(g)$

Inventories are valued at the lower of cost and net realisable value on a first in first out basis.

$(h)$ Investments

Listed shares held for trading are carried at cost.

Investments in associates are carried at the lower of the equity-accounted amount and recoverable amount in the consolidated financial report and the lower of cost and recoverable amount in Eurogold Limited's financial report.

All other non-current investments are carried at the lower of cost and recoverable amount.

Recoverable amount $(i)$

Non-current assets are not revalued to an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. In determining recoverable amount the expected net cash flows have not been discounted to their present value.

Property, plant and equipment (j)

Cost and valuation

All classes of plant and equipment are measured at cost.

Depreciation

Depreciation is provided on a straight-line basis on all plant and equipment, at rates calculated to allocate the cost less estimated residual value at the end of the useful lives of the assets against revenue over those estimated useful lives.

Major depreciation periods are:

Plant and equipment $3 - 5$ years

$(k)$ Exploration, evaluation, development and restoration costs

Costs carried forward

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area, or where activities in the area have not at balance date, reached a stage to allow reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an area of interest abandoned are written off in full in the year in which the decision to abandon the area of interest is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Amortisation

When production commences the accumulated costs for the relevant area of interest are amortised over the life of the area on a production output basis.

Restoration costs

While an obligation exists for restoration activities to be undertaken for any exploration activities performed on the tenements, these are usually performed during the year and recognised in the statement of financial performance for the period.

$\mathbf{I}$ Payables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accruals basis.

$(m)$ Employee entitlements

Provision is made for employee entitlement benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave and any other employee entitlements expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates expected to be paid when the liability is settled. All other employee entitlement liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to government guaranteed securities that have terms to maturity approximating the terms of the related liability are used.

Employee benefit expenses and revenues arising in respect of the following categories:

wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave and other leave benefits; and
other types of employee benefits

are recognised against profit on a net basis in their respective categories.

The value of any share options issued under the Options Scheme, described in Note 21, are not recognised as an employee expense.

Provisions $(n)$

Provisions are recognised when the consolidated entity has a legal, equitable or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation.

$\omega$ Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

$(p)$ Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Rendering of Services

Revenue is recognised when the services have been rendered in accordance with the terms and conditions of the contract.

Interest

Control of a right to receive consideration for the provision of, or investment in, assets has been attained.

Dividends

Control of a right to receive consideration for the investment in assets is attained, usually evidenced by approval of the dividend at a meeting of shareholders.

Taxes $(q)$

Income tax

Tax-effect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated on the accounting profit after allowing for permanent differences. To the extent timing differences occur between the time items are recognised in the financial statements and when items are taken into account in determining taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a provision for deferred income tax. The net future income tax benefit relating to tax losses and timing differences is not carried forward as an asset unless the benefit is virtually certain of being realised.

The income tax expense for the year is calculated using the 30% tax rate.

Goods and services tax

Revenues, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

receivables and payables are stated with the amount of GST included

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or pavables in the Statement of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or pavable to, the taxation authority.

$(r)$ Earnings per share

Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element,

Diluted EPS is calculated as net profit attributable to members, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
$\blacksquare$ other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Operating Leases $(s)$

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight-line basis.

$(t)$ Comparatives

Where necessary, comparatives have been reclassified and repositioned for consistency with current vear disclosures.

		Consolidated		Eurogold Limited
2. REVENUE FROM ORDINARY ACTIVITIES	2004 ${\mathbb S}$	2003 S	2004 S	2003 \$
	Revenue from operating activities
	Revenue from the provision of exploration
	services	356,341	621,469
	Revenue from non-operating activities
	Interest received - other persons Proceeds from disposal of listed	34,490	14,012	30,281	12,300
	investments	202,058	604,165	202,058	604,165
	Proceeds from the sale of other investments
		27,324	43,452	27,324	43,452
	Proceeds from sale of property, plant $\&$
	equipment	800		800
Other		12,970		12,970
	Total revenue from non-operating activities	277,642	661,629	273,433	659,917
	Revenue from Ordinary Activities	683,983	1,283,098	273,433	659,917
3.	EXPENSES AND LOSSES/(GAINS)
$\bf(a)$	Expenses
	Depreciation of non current assets
	Plant and equipment	58,013	57,222	2,240	2,437
	Borrowing costs expensed
	Interest expense
	- Other persons/corporations		92		92
	Operating lease rental
	Minimum lease payments	27,997	20,414	27,997	20,414
	Provision for employee entitlements	23,834	9,578	23,834	9,578
	Provision for diminution of listed investments	7,800		7,800
	Write down of exploration expenditure	265,768	210,694
	Write down of intercompany receivable			176,132
(b)	Losses/(Gains)
	Net loss/(gain) on disposal of shares	(12,910)	142,635	(12,910)	142,635
	Net foreign currency losses/(gains)	48,419	(80, 398)	53,485	100,133
	Loss on disposal of plant $&$ equipment	7,121		273
	Gain on disposal of other investments	(27, 324)	(43, 452)	(27, 324)	(43, 452)

	Consolidated		Eurogold Limited
	2004	2003	2004	2003
	S	S	S	S
INCOME TAX 4.
The prima facie tax on operating loss is different to the income tax provided in the financial statements as follows:
Prima facie tax (benefit)/expense on
(loss)/profit from ordinary activities at 30%	(339,355)	(436,118)	(308, 592)	(269,213)
Add/(less) tax effect of permanent differences:
Non-deductible expenditure
Other items (net)	(62, 888)	(101, 010)
Tax losses not brought to account as future
income tax benefits	339,355	436,118	308,592	269,213
Income tax (benefit)/expense attributable to
ordinary activities	(62, 888)	(101,010)
Deferred tax assets and liabilities
Provision for deferred income $tax -non$
current		70,423

(i) Unrecognised future income tax benefits:

The future income tax benefit in respect of tax losses of the parent entity and the consolidated entity has not been accounted for as an asset in the financial statements as the realisation of the benefit is not virtually certain. The future income tax benefit applicable to the tax losses are subject to confirmation from the Australian Taxation Office.

These benefits will only be obtained if:

(a) The consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the losses and deductions to be realized;
(b) The consolidated entity continues to comply with the conditions for deductibility imposed by the law; and no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the deduction for the losses

	Consolidated		Eurogold Limited
	2004	2003	2004	2003
Notes	S	\$	\$	S
5. RECEIVABLES
Current Receivables
Other debtors	50,904	21,378	37,840	18,381
Amounts other than trade debts receivable from related parties: Other related parties - associated companies	214,560	53,941	182,625
	265,464	75,319	220,465	18,381
Non-Current Receivables
Other receivables	10,161	8,990
Related party receivables Other related parties			795,604	1,109,096
	10,161	8,990	795,604	1,109,096

(a) Terms and conditions

Terms and conditions relating to the above financial instruments:

(i) Other debtors are non-interest bearing and have repayment terms between 30 days and 60 days.

(ii) Details of the terms and conditions of related party receivable are set out in note 25.

6. OTHER FINANCIAL ASSETS

Current
Unlisted shares at cost		50,000		50,000
Listed shares at cost	13,900	68,682	13,900	68,682
Provision for diminution in value	(7,800)		(7,800)
	6,100	118,682	6,100	118,682
Quoted market value of shares listed a) on a prescribed stock exchange at balance date	6,100	56,000	6.100	56,000
Non-Current
Shares in controlled entity			1,097,863	756,296
Provision for diminution in value			(751,003)	(756, 296)
Unlisted shares in associated entity			7.605.188	7,605,188
Provision for diminution in value			(7,605,188)	(7,605,188)
			346,860

The directors have assessed that the investment in Transgold SA has no recoverable amount due to the potential liability to Transgold SA that may arise due to litigation resulting from the accidental overflow of treatment water from the tailings dam spillage in January 2000. The equity method of accounting has been suspended following the write down of the investment to nil.

(b) Particulars relating to controlled entities:

Chief Entity	Country of Incorporation		Percentage held by consolidated entity	Chief Entity Investment
		2004	2003	2004	2003
		₩	$\frac{1}{2}$	s	\$
Chief Entity:
Eurogold Limited
Controlled entities of Eurogold Limited:
Eurogold Holdings (Bermuda) Limited (i)(iii)	Bermuda	100.0	0.0	17.246
Eurogold (Bermuda) Limited (i)(iii)	Bermuda	100.0	0.0
Explorer S.A. (ii)	Romania	98.3	97.5	329.614
Esmeralda Mining Limited (i)	Cyprus	100.0	100.0
				346,860

All interests in controlled entities are in the ordinary shares of these entities.

(i) These entities are not audited locally by Ernst & Young.

(ii) This entity is audited locally by a member firm of Ernst & Young International.

(iii) Eurogold Holdings (Bermuda) Limited and Eurogold (Bermuda) Limited were incorporated on the 8 June 2004.

			Consolidated		Eurogold Limited
			2004	2003	2004	2003
		Notes	S	S	S	\$
7.	OTHER CURRENT ASSETS
	Prepayments		2,903	1,498
	Costs of share issue in process at balance
date			224,787		224,787
			227,690	1,498	224,787
8.	PLANT AND EQUIPMENT
	$-$ At cost		350,587	369,028	44,279	41,916
	- Accumulated depreciation		(209, 990)	(174, 258)	(38,958)	(38, 028)
			140,597	194,770	5,321	3,888
(a)	Reconciliation Reconciliations of the carrying amounts of plant and equipment and at the beginning and end of the current and previous financial year.
	Plant and equipment
	Carrying amount at beginning of year		194,770	135,209	3,888	5,960
	Additions		11,761	116,783	4,746	365
	Disposals		(7, 921)		(1,073)
	Depreciation expense		(58, 013)	(57,222)	(2,240)	(2, 437)
	Carrying amount at end of year		140,597	194,770	5,321	3,888

				Consolidated	Eurogold Limited
			2004	2003	2004	2003
		Notes	\$	$\mathbb S$	\$	${\bf S}$
9.	DEFERRED EXPLORATION,
	EVALUATION AND
	DEVELOPMENT COSTS
	Exploration, evaluation and development costs carried forward in respect of mining
	areas of interest
	Pre-production
	- exploration and evaluation phases		1,104,067	1,223,932
	The ultimate recoupment of costs carried
	forward for exploration and evaluation
	phases is dependent on the successful
	development and commercial exploitation or sale of the respective mining areas.
10.	OTHER NON-CURRENT ASSETS

	Expenditure carried forward in respect of acquisitions of assets in progress at balance
date			1,391,164		1,391,164
11.	CURRENT PAYABLES
	Trade creditors		657,099	66,873	623,712	30,422
	Sundry creditors and accruals		28,457	24,004	28,457	20,000
	Payable to controlled entity				17,246
			685,556	90,877	669,415	50,422
	Terms and conditions
$\bf{a)}$

Terms and conditions relating to the
above financial instruments

Trade liabilities are non-interest $(i)$ bearing and are normally settled on
30 day terms.

Sundry creditors and accruals are
non interest bearing and have an
average term of 45 days. $(ii)$

			Consolidated		Eurogold Limited
	Notes	2004 \$	2003 \$	2004 S	2003 S
12. CURRENT PROVISIONS
Employee entitlements		36,976	18,551	36,976	18,551
(a) Movements in employee entitlement provision
Carrying amount at beginning of the year		18,551	13,280	18,551	13,280
Additional provision		23,834	9,578	23,834	9,578
Amounts utilised during the year		(5,409)	(4,307)	(5,409)	(4,307)
Carrying amount at end of the year		36,976	18,551	36,976	18,551
13. CONTRIBUTED EQUITY
issued and paid up capital
Ordinary shares fully paid		18,986,341	17,561,794	18,986,341	17,561,794
Movements in shares on issue (a)
			2004		2003
		Number of shares	S	Number of shares	S
Beginning of the financial year		116,165,209	17,561,794	89,065,209	16,054,067
- capital raising for working capital		10,000,000	1,500,000	20,000,000	1,200,000
- exercise of options				7,100,000	355,000
- share issue costs			(75, 453)		(47, 273)
As at 30 June 2004		126,165,209	18,986,341	116,165,209	17,561,794

$(b)$ Terms and conditions of contributed equity

Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

	Consolidated			Eurogold Limited
	2004 S	2003 S	2004	2003 S
ACCUMULATED LOSSES 14.
Balance at the beginning of the year	(15.084.642)		$(13,742,922)$ $(15,489,035)$	(14.591.660)
Net loss attributable to members	(1, 131, 533)	(1,341,720)	(1.028, 641)	(897, 375)
Balance at end of the year	(16.216, 175)	(15,084,642)	(16,517,676)	(15, 489, 035)

		Consolidated		Eurogold Limited
		2004	2003	2004	2003
		\$	\$	S	S
15.	OUTSIDE EQUITY INTEREST
	Reconciliation of outside equity interest in
controlled entities:
Opening balance		6,210	17,206
	Gain on disproportionate issue of equity	4,932
	Share of operating (loss)/profit	349	(10,996)
Closing balance		11,491	6,210	$\overline{\phantom{a}}$
16.	STATEMENT OF CASH FLOWS
(a)	Reconciliation of cash
Cash balances comprises
- Cash at bank		193,465	920,154	184,755	891,685
- Deposits at call		165,481	119,868
		358,946	1,040,022	184,755	891,685
(b) operations	Reconciliation of the operating loss after tax to the net cash flows from

Interest	Net loss after tax and before Outside Equity		(1,352,716)	(1,028,641)	(897,375)
Depreciation		(1, 131, 184) 58,013	57,222	2,240	2,437
	Loss on disposal of plant and equipment	7,121		273
	(Profit)/loss on disposal of listed shares	(12,910)	142,635	(12,910)	142,635
	(Profit)/loss on disposal of other investments	(27, 324)	(43, 452)	(27, 324)	(43, 452)
	Net unrealised Foreign Exchange (gains)/losses	48,419	(80, 398)	53,485	100,133
	Write down of exploration expenditure	265,768	210,694
	Write down of intercompany receivable			176,132
	Provision for diminution of listed investments	7,800		7,800
	Changes in Assets & Liabilities:
Receivables		(30,697)	54,197	(19, 459)	5,040
Inventories			1,770
	Future Income Tax Benefit	7,258
Other current assets		(1,405)	(1,498)
Development	Deferred Exploration, Evaluation &	(145,903)	(32,763)
Payables		59,431	(252, 182)	110,970	(202, 340)
Employee Entitlements		18,425	5,271	18,425	5,271
	Deferred income tax liability	(75, 453)	(117, 254)
	Net cash provided by operating
activities		(952, 641)	(1,408,474)	(719,009)	(887, 651)

			Consolidated		Eurogold Limited
			2004	2003	2004	2003
		Notes	S	\$	S	\$
17.	EXPENDITURE COMMITMENTS
(a)	Exploration expenditure commitments
	- not later than one year - later than one year but not later		576,470	299,670
	than five years		2,305,879	614,324
	- aggregate expenditure contracted for at balance date but not provided for		2,882,349	913,994

$(b)$ The amounts are part of the exploration activity permit obligations agreed with the National Agency for Minerals and Resources (Romania). One of the conditions for retention of the exploration licenses held is meeting the stipulated regulations, minimum exploration expenditure and activity as set by the National Agency for Minerals and Resources. Otherwise forfeiture of tenements may occur.

There are three bank deposit guarantees included in non-current assets totalling \$10,161 (2003: \$8,990) (note 5), that have been granted in favour of the National Agency for Minerals and Resources representing 0.5% of the annual required exploration expenditure program submitted by Explorer S.A. and approved by the National Agency for Minerals and Resources

Operating lease commitments
Minimum lease payments - not later than one year	6.120	14.148	6.120	14.148
- later than one year but not later than five years - later than five years		6.120 -		6.120
- aggregate expenditure contracted for at balance date but not provided for	6.120	20.268	6.120	20.268

$(d)$ Operating leases have an average lease term of 5 years, and relate to the office space of Eurogold. The lease expires on 30/12/2004.

18. SEGMENT INFORMATION

Revenue is derived by the consolidated entity from the provision of exploration services.

The consolidated entity operates predominantly within the gold exploration and extraction business segment and in one geographical segment being Romania.

19. ECONOMIC DEPENDENCY

The consolidated entity does not have any economic dependency with any one client or group of clients.

	2004 S	2003 S
20. LOSS PER SHARE
The following reflects the income and share data used in the calculation of basic and diluted earnings per share:
Net profit (loss) after tax Adjustments:		$(1,131,184)$ $(1,352,716)$
Less net loss/(profit) attributable to outside equity interest	(349)	10,996
Earnings used in calculation of diluted earnings per share	(1, 131, 533)	(1,341,720)
Weighted average number of ordinary shares on issue used in the calculation of basic EPS	120,044,990	98,379,456
Effect of dilutive securities Share options (i)
Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	120,044,990	98,379,456

(i) No Share Options on issue

			Consolidated		Eurogold Limited
			2004	2003	2004	2003
		Notes	Ŝ	S	S	S
21.	EMPLOYEE BENEFITS AND SUPERANNUATION COMMITMENTS
(a)	The aggregate employee benefit liability is comprised of:
	Accrued wages, salaries and on costs		8,907		8,907
	Provisions (current)		36,976	18.551	36,976	18.551
			45,883	18.551	45.883	18.551

$(b)$ Employee Option Scheme

An Employee Option Scheme has been established where Eurogold Limited may, at the discretion of management, grant options over the ordinary shares of the Company to directors, executives and certain members of staff. Options will be granted in accordance with performance guidelines established by the directors of Eurogold Limited although executive management retains final discretion on the issue of Options. No Options have been issued under this scheme since the scheme was implemented.

$22.$ DIRECTORS & EXECUTIVES DISCLOSURES

(a) Details of Specified Directors and Specified Executives

(i) Specified directors

P L Gunzburg	Managing Director
D W Franks	Director (Non-Executive)
B Montgomery	Director (Non-Executive)
N T MacLachlan	Director (Non-Executive)	Appointed 13 July 2004
C J Barker	Director (Executive)	Appointed 13 July 2004

(i) Specified executives

I Hudrea Executive Chairman - Explorer

(b) Remuneration of Specified Directors and Specified Executives

(i) Remuneration Policy

To assist in achieving these objectives, the Board links the nature and amount of executive directors' and officers' emoluments to the company's financial and operational performance.

(ii) Remuneration of Specified Directors and Specified Executives

Specified		Post
Directors	Primary Salary & Fees	Employment Superannuation	Equity	Other	Total
			Options
PL Gunzburg
2004	140,525	13,500		16,900	170,925
2003	138,000	13,500		12,000	163,500
DW Franks
2004	30,421	2,700			33,121
2003	34,500	3,105			37,605
B Montgomery
2004(i)	421			25,000	25,421
2003				25,000	25,000
C Barker
2004
2003
N MacLachlan
2004
2003

Total Remuneration: Specified Directors
2004	171,367	16,200		138,034	325,601
2003*	197,500	16,605		12,000	226,105

(i) Refer Note 23(e)

		Post
Specified	Primary	Employment	Equity	Other	Total
Executives	Salary & Fees	Superannuation	Options

Hudrea (i)
2004	32,172	$\blacksquare$		1,684	33,856
2003	62,003	۰	۰		62,003

	Total Remuneration: Specified Executives
2004	32,172	$\blacksquare$		1,684	33,856
$2003*$	62,003	$\blacksquare$			62,003

(i) I Hudrea is the only specified director of the consolidated entity.

*Group totals in respect of the financial year 2003 do not necessarily equal the sums of amounts disclosed for 2003 for individuals specified in 2004, as different individuals were specified in 2003.

Shareholdings of Specified Directors and Specified Executives $(c)$

Equity instruments of directors

Interests at balance date

Interests in shares and options of entities within the consolidated entity held by directors of the reporting entity and their director related entities.

		Eurogold Limited Ordinary Shares	Eurogold Limited Options Over Ordinary Shares
	2004	2003	2004 2003
			Exercise			Exercise Price/
Director	No.	No.	No.	Price/Expiry	No.	Expiry
P L Gunzburg	23,518,685	23,196,085		N/A		N/A
B Montgomery				N/A	$\overline{\phantom{a}}$	N/A
D W Franks				N/A		N/A
N MacLachlan	350,000			N/A	SALE	N/A
C Barker				N/A	$\overline{\phantom{a}}$	N/A

Movements in directors' equity holdings

During the year, Mr P L Gunzburg acquired 322,600 ordinary shares through an on market purchases.

During 2003 Mr P L Gunzburg acquired 2,500,000 ordinary shares through the exercise of options at an average exercise price of 5 cents, 3,963,334 ordinary shares under the terms of the capital raising in April 2003, and 825,000 ordinary shares through an on market purchase in January 2003.

There have been no other transactions concerning shares or share options between entities in the reporting entity and directors of the reporting entity or their director related entities.

All equity dealings with directors have been entered into with terms and conditions no more favourable than those that the entity would have adopted if dealing at arm's length.

(d) Loans to specified directors and specified executives

(i) There are no loans to specified directors or specified executives.

(d) Other transactions and balances with specified directors and specified executives

Services

Consulting fees of A\$25,000 (2003: A\$25,000) were paid to Gerise Pty Ltd a company in which Mr B Montgomery is a director and has a financial interest and all transactions are on normal commercial terms and have been included in remuneration of directors [Note 23 (b) (ii)]

Consulting fees of A\$96,134 (2003: Nil) were paid to Management Consultants Mining a company in which Mr C Barker is a director and has a financial interest and all transactions are on normal commercial terms.

		Consolidated		Eurogold Limited
		2004		2004	2003
	Notes	\$	S	S	\$
AUDITORS' REMUNERATION 24.
Amounts received or due and receivable by
Ernst & Young Australia for:
an audit or review of the financial report of
the entity and any other entity in the
consolidated entity		29,890	30.975	29.890	30,975
tax advice provided to the entity and any $\overline{\phantom{a}}$
other entity in the consolidated entity		29,560	19.650	29,560	19.650
other services		56,300		56,300
		115,750	50,625	115,750	50,625
Amounts received or due and receivable by a
related firm of Ernst & Young Australia for:
an audit or review of the financial report
of subsidiaries		15,432	13.183
		131 199	63.ROR	115 750.	ዳበ ፈንዳ

25. RELATED PARTY DISCLOSURES

Other related party transactions

Loans

During the financial year to 30 June 2004, Eurogold Limited has provided interest free loans to controlled entities totalling A\$430.728 (2003: A\$693.739). On 31 December 2003, Eurogold Limited was issued 12.500 USA\$20 ordinary shares in its controlled entity Explorer SA as repayment of amounts owing under the interest free loans. Additionally, on this date the directors of Eurogold Limited resolved to forgive A\$176,132 of the amounts owing from Explorer SA. At balance date the total amount outstanding was A\$766,141 (2003: A\$1,109,096). There is no specified repayment date.

On 11 September 2003, an unsecured short term advance of US\$29,000 (A\$42,096) was made by Eurogold Limited to a director of its controlled entity, Explorer SA. The advance is interest free and repayable within one vear.

During the financial year ended 30 June 2004, Eurogold Limited has provided interest free loans to associated entities totalling A\$126,922 (2003: A\$Nil). At balance date the total amount outstanding was A\$126,922 (2003: A\$Nil). There is no specified repayment date and no repayments were made during the period.

During the year, exploration services totalling A\$356,341 (2003: A\$621,469) were provided by a controlled entity of the Company to an associate of the Company on normal commercial terms and conditions.

Ultimate parent

Eurogold Limited is the ultimate Australian holding company.

SUBSEQUENT EVENTS 26.

Post year end the Company successfully completed the acquisition of a 75% interest in the Saulyak project and a 6% interest in the Beregove project in the Ukraine.

The Company listed on the Alternative Investment Market of the London Stock Exchange ("AIM") in July 2004. after the successful placement of 48,000,000 shares at £0.05 each to UK institutional clients of Durlacher Ltd raising £2.4m (equated to approximately A\$5.6m).

There has been no other event or circumstance of a material nature since balance date which may have an effect on this financial report.

27. FINANCIAL INSTRUMENTS

Interest Rate Risk $(a)$

The consolidated entity's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both unrecognized and recognized at balance date, are as follows:

$11.77777777777777777777777777777777777$

FINANCIAL INSTRUMENT	FLOATING INTEREST RATE		NON-INTEREST BEARING		TOTAL		WEIGHTED AVERAGE EFFECTIVE INTEREST RATE
	2004	2003	2004	2003	2004	2003	2004	2003
	\$	\$	S	\$	\$	S	%	℅
Financial Assets $\mathbf{u}$
Cash assets	358.946	1,040,022		w	358,946	1,040,022	4.93%	3.36
Trade and other receivables		$\blacksquare$	61,065	21,378	61,065	21,378	N/A	N/A
Receivables – other related
parties	w	$\blacksquare$	214,560	53,941	214.560	53.941	N/A	N/A
Other financial assets	w		6,100	118,682	6,100	118,682	N/A	N/A
Total financial assets	358,946	1,040,022	281,725	194,001	640,671	1,234,023
Financial Liabilities (ii)
Trade and other payables		$\blacksquare$	685,556	90,877	685.556	90,877	N/A.	N/A
Total financial liabilities		w	685,556	90,877	685,556	90,877

27. FINANCIAL INSTRUMENTS (cont'd)

Net fair values of financial assets and liabilities (b)

All financial assets and liabilities have been recognised at the balance date. The carrying value approximates fair value.

$(i)$ The following methods and assumptions are used to determine the net fair values of financial assets and liabilities

Recognised Financial Instruments:

Cash and cash equivalent: The carrying amount approximates fair value because of their short-term maturity.

Receivables and payables: The carrying amount approximates fair value.

Listed shares: Fair value is the current quoted market bid price, adjusted for transaction costs necessary to realise the asset or settle the liability.

$(c)$ Credit Risk Exposures

The consolidated entity's maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount, net of any provision for doubtful debts, of those assets as indicated in the balance sheet.

Concentration of Credit Risk

The consolidated entity minimises concentrations of credit risk in relation to accounts receivable by undertaking transactions with a large number of customers within the resources industry. The consolidated entity is not materially exposed to any individual overseas country or individual customer.

28. CONTINGENT LIABILITIES

Eurogold Limited is a defendant in proceedings commenced by the Republic of Yugoslavia in Yugoslavia seeking damages for the accidental overflow of treatment water from the tailings dam spillage on January 30, 2000. Legal advice received by Eurogold Limited is that Eurogold Limited has no liability to the Republic of Yugoslavia with respect to those proceedings.

Eurogold Limited has a contingent liability under the terms of the release of its obligations to the bankers to the construction of the Baia Mare Project. Eurogold Limited was a security provider to the bankers. An associated company, Transgold S.A., must comply with its obligations, including the rehabilitation of the Meda dam-site, failing which the company's obligations (otherwise released by Deed of Release) will be reinstated. The directors believe that Transgold S.A. will be able to comply with its rehabilitation obligations.

29. IMPACT OF ADOPTING AASB EQUIVALENTS OF INTERNATIONAL REPORTING STANDARDS

The company has recently commenced its review of accounting policies and financial reporting from current Australian Standards to Australian equivalents of International Financial Reporting Standards (IFRS). As the company has a 30 June vear-end, priority has been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 July 2004. This will form the basis of accounting for Australian equivalents of IFRS in the future, and is required when the company prepares its first fully IFRS compliant financial report for the year ended 30 June 2006. The likely impact on the company's existing accounting policies is as follows:

• Deferred Exploration and Evaluation Expenditure - No specific IFRS guidance currently exists for the treatment of exploration and evaluation expenditure. An exposure draft ED6 "Exploration for and Evaluation of Mineral Resources" ("ED6"), has been drafted which proposes that the treatment previously used under Australian GAAP may continue to be used subject to impairment testing.

If the stated "grandfathering" approach embodied in ED6 and discussed by the IASB in July 2004 is implemented, the Company expects that the existing policy of accounting for exploration and evaluation will comply with IFRS requirements and therefore no significant difference is expected to result in relation to the recognition of exploration and evaluation assets;

Impairment of Assets Under AASB 136 "Impairment of Assets", the recoverable amount of an asset is determined as the higher of net selling price and value in use. This will result in a change in the group's current accounting policy which determines the recoverable amount on the basis of undiscounted cashflows. The impact of the adoption of this standard is yet to be quantified by the company;
$Taxes$ Under AASB 112 "Income Taxes", the company will be required to used a balance sheet liability $\bullet$ method which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax-based balance sheet. The impact of the adoption of this standard is yet to be quantified by the company;
Employee Benefits Under AASB 2 "Share Based Payments", the company will be required to determine the fair value of options issued to employees as remuneration and recognise an expense in the Statement of Financial Performance. This standard is not limited to options and also extends to other forms of equitybased remuneration. It applies to all share-based payments issued after 7 November 2002, which have not vested as at 1 January 2005.

Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of the future equity based remuneration plans are unknown; and

Investments – Under IFRS 139 "Financial Instruments: Recognition and Measurement", the company will be required to classify its listed investment in Ellendale Resources Ltd as held for trading and recognise its holding in the opening balance sheet, as at 1 July 2004, at fair value. The effect of the adoption of this policy is not considered material by the company.

EUROGOLD LIMITED DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Eurogold Limited, I state that:

$\left| \right|$ In the opinion of the directors:
the financial statements and notes of the company and of the consolidated entity are in $(a)$ accordance with the Corporations Act 2001, including:
- giving a true and fair view of the company's and consolidated entity's financial position as at $(i)$ 30 June 2004 and of their performance for the year ended on that date; and
- $(ii)$ complying with Accounting Standards and Corporations Regulations 2001; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when $(b)$ they become due and payable.

On behalf of the Board

P L Gunzburg Chairman

Perth

Date: 30 September 2004

EUROGOLD LIMITED INDEPENDENT AUDIT REPORT

Independent audit report to members of Eurogold Limited

Senne

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for Eurogold Limited (the company) and the consolidated entity, for the year ended 30 June 2004. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

Indenendence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion

In our opinion, the financial report of Eurogold Limited is in accordance with:

$(a)$ the Corporations Act 2001, including:
giving a true and fair view of the financial position of Eurogold Limited and the consolidated entity at 30 June 2004 and $f$ i) of their performance for the year ended on that date; and
$(ii)$ complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
$(b)$ other mandatory financial reporting requirements in Australia.

Commt + Tony

Ernst & Young

$7.7$

V W Tidy Partner Perth Date: 30 September 2004

EUROGOLD LIMITED ADDITIONAL ASX INFORMATION

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is as follows. The information is as 20 October 2004.

SUBSTANTIAL SHAREHOLDERS

	Fully Paid Ordinary Shares
	Ordinary Shares	Percentage

Trovex Pty Ltd	20,196,085	15.91
National Nominees Limited	16,505,735	13.00
Nefco Nominees Pty Ltd	13,147,262	10.36
HSBC Custody Nominees (Australia) Limited	9,622,750	7.58
Westpac Custodian Nominees Limited	7,685,000	6.05
ANZ Nominees Limited	7,090,025	5.59

TOP 20 SHAREHOLDERS

a) Fully Paid Ordinary Shares

	Quoted Shares
	amans:	Percentage

Trovex Pty Ltd	20,196,085	15.91
National Nominees Limited	16,505,735	13.00
Nefco Nominees Pty Ltd	13, 147, 262	10.36
HSBC Custody Nominees (Australia) Limited	9,622,750	7.58
Westpac Custodian Nominees Limited	7,685,000	6.05
ANZ Nominees Limited	7,090,025	5.59
Colbern Fiduciary Nominees Pty Ltd	4,000,000	3.15
Worldwise Enterprises Pty Ltd	2,270,000	1.79
Ibella Company Limited	2,259,000	1.78
Topsfield Pty Ltd	1,800,000	1.42
Peloton Pty Ltd	1,442,700	1.14
Rivista Pty Ltd	1,387,344	1.09
Mr PLGunzburg $\leq$ The Bricklanding Super A/C $\geq$	1,052,600	0.84
Bouchi Pty Ltd	1,050,000	0.83
Athabasca Pty Ltd	1,001,000	0.79
Barminco Pty Ltd	1,000,000	0.79
Mulloway Pty Ltd	1,000,000	0.79
Rollason Pty Ltd	1,000,000	0.79
Running Water Limited	1,000,000	0.79
Topsfield Pty Ltd	1,000,000	0.79
Total	95,509,501	75.27

EUROGOLD LIMITED ADDITIONAL ASX INFORMATION

b) Options

	Example 1. Unquoted Facilitator Options
a shekara ta 1999, a shekara ta 1999, a shekara ta 1999, a shekara ta 1999, a shekara ta 1999, a shekara ta 1	Number
	$\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$
Alchemy Securities Pty Ltd Durlacher Limited	2,000,000
	2,000,000
Total	4,000,000

c) Options

	Unquoted Options
	Number	Herrentroe
Alpha Minerals and Ukraine Resources (Indirectly held by C Barker in Eurogold Holdings (Bermuda) Limited and subject to a Put & Call Agreement for the conversion to 30,000,000 shares in Eurogold Limited).	30.000.000	1H)
Total	30,000,000

DISTRIBUTION OF SHAREHOLDERS

Holding Range	Total Holders	Units	%Issued Capital
	700	317,906	0.25
$1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$	177	436,858	0.34
	59	526,414	0.41
$10,001 - 100,000$	14 I	6,243,672	4.91
100,001 and over	97	119,750,358	94.09
Total	.174	127,275,208	100.00

As at 20 October 2004, there were 823 shareholders with less than marketable parcel.

CLASS OF SHARES AND VOTING RIGHTS

The voting rights attaching to the ordinary shares is each shareholder is entitled to one vote per ordinary share.

The consolidated entity does not have an audit committee as directors are involved in its day to day operations and therefore do not consider that an audit committee is necessary.

BOARD RESPONSIBILITIES

The board acts on behalf of the shareholders and is responsible for ensuring the efficient operation and administration of the company and is responsible for identifying areas of business risk and ensuring that these risks are adequately managed.

The board has procedures to allow directors, in the furthermore of their duties, to seek independent professional advice at the Company's expense.

AI assistant

INOVIQ LTD — Annual Report 2004

65112_rns_2004-10-26_b7fe6bf5-84ef-42e4-a235-d1c59dbf55b1.pdf

Annual Report

EUROGOLD LIMITED CORPORATE DIRECTORY

Directors

Company Secretaries

Principal Registered Office in Australia

Postal Address

Share Registry - Australia

Share Registry - United Kingdom

Auditors Ernst & Young Central Park 152 St George's Terrace Perth Western Australia 6000

Solicitors

Bankers - Australia BankWest 853 Hav Street

Bankers - London

Nominated Advisor to AIM

Nominated Broker to AIM

Peter Gunzburg Chairman

DIRECTORS

Names, qualifications, experience and special responsibilities

EUROGOLD LIMITED DIRECTORS' STATEMENT

LOSS PER SHARE

CORPORATE INFORMATION

Corporate structure

Nature of operations and principal activities

Employees

REVIEW AND RESULTS OF OPERATIONS

Corporate Highlights

Operational Highlights

INVESTING ACTIVITIES

$1.0$ TRANSGOLD SA - (Eurogold 50%)

$1.1$ General

$1.2$ Production

Gold Operations

$1.3$ Exploration

$1.4$ Regulatory Issues

$2.0$ SAULYAK GOLD PROJECT - UKRAINE (Eurogold 75%)

$2.1$ General

$2.2$ Due Diligence

$2.3$ Underground Ore Delineation

$2.4$ Technical Developments

$3.0$ BEREGOVE GOLD PROJECT - UKRAINE (Eurogold 6.33%)

$3.1$ General

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Acquisition of Ukrainian companies

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

ENVIRONMENTAL REGULATION AND PERFORMANCE

DIVIDENDS

SHARE OPTIONS

Unissued shares

Shares issued as a result of the exercise of options

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

INTERESTS IN CONTRACTS OR PROPOSED CONTRACTS WITH THE COMPANY

DIRECTORS' MEETINGS

DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS

Remuneration policy

Emoluments of Directors of Eurogold Limited

Emoluments of highest paid executive officers of the company and the consolidated entity

Options granted to directors and executive officers

CORPORATE GOVERNANCE

AUDIT COMMITTEE

Board Composition:

The Board and Board Nominations:

Securities Trading Policy:

Remuneration Committee and Policies:

EXTERNAL AUDITORS:

AUDIT COMMITTEE:

MANAGING RISKS:

COMMITMENT TO SHAREHOLDERS & ETHICAL STANDARDS:

MONITORING OF THE BOARD'S PERFORMANCE AND COMMUNICATION TO SHAREHOLDERS:

EUROGOLD LIMITED STATEMENT OF FINANCIAL PERFORMANCE YEAR ENDED 30 JUNE 2004

EUROGOLD LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2004

EUROGOLD LIMITED STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2004

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES $\mathbf{1}$ .

$(a)$ Basis of accounting

$(b)$ Change in accounting policy

Principles of consolidation $(c)$

$(d)$ Foreign currencies

Translation of foreign currency transactions

INOVIQ LTD Annual Report 2004