INOVIQ LTD — Capital/Financing Update 2004

Nov 16, 2004

ASX RELEASE

SAULYAK DRILLING RESULTS

16 November 2004

ASX Symbol "EUG"

UKRAINE - SAULYAK PROJECT (EUG 75%)

Drill Results

Diamond drillhole C-408 has intersected 7.3m @ 7.32 g/t Au within a total mineralised zone of 12.9 metres indicating a substantial extension of the Saulyak ore body.

• The intersection confirms the presence of economic gold mineralisation 700 metres down $\bullet$ dip from the current Soviet C1 C2 resource of $578,000$ oz and approximately 100 metres up dip from the Soviet drill hole C-304 which intersected 8m $\omega$ 14 g/t Au.
• Additional exploration data supplied by the Regional Geological Expedition Office and $\bullet$ reviewed concurrently with the drill programme suggests the Saulyak project shear zone hosting the mineralisation may extend along strike a further 1.5km from the current outcrop, taking the total strike length to approximately 2.5kms and adding significant potential for further strike extensions of ore zones.
• In the Eurogold AIM Admission Document it was noted that "gold distribution is highly irregular at a local scale but averages $6-9$ g/t over ore body widths. Gold occurs as discrete particles up to 0.2mm that are typically located along the margins of veins and on the boundaries of sulphide grains, resulting in free milling metallurgical characteristics".

This result appears to be entirely consistent with this view.

SAULYAK DRILLING PROGRAMME 2004

The Saulyak Development Plan surface drilling programme was commenced in August 2004 following approval of the programme of work from the Ukrainian authorities. The programme was intended to:

• test and evaluate local drilling rigs and drilling equipment; and ٠
• reach the lower ore zones of the deposit to obtain lithological information to confirm the continuity and potential up dip and lateral extensions from the earlier drilled hole $C-304$ .

Two diamond drill holes were drilled using two different rigs and different drilling equipment. The holes were drilled from surface on top of the Saulyak mountain down dip of where the Saulyak deposit mineralised lithology outcrops on the side of the mountain. Both holes were logged, the core cut and the samples sent to the SGS internationally accredited assay laboratory in Romania.

Diamond Drill Hole C-408 completed in October 2004 using western designed and manufactured core-barrels and bits gave a core recovery above 95%. C-408 was drilled to a depth of 513 metres and intersected at a depth of 414 metres a zone of ore of 7.3m $\omega$ 7.32 g/t Au including 0.5 metres at 105 $g/t$ Au [an averaged duplicated assay result].

Core recovery from the first hole, C-304/2, using in country equipment, was less than 70% and below international standards. Assay results from C-304/2 are still pending but because of the poor core recovery, will be less reliable.

Surface drilling has now been stopped for winter and the drill rig has been demobilised. Underground drilling, adit development and refurbishment, and other feasibility work will continue throughout the winter months as Eurogold progresses the Saulyak feasibility study.

* * * * *

All of the mining activity for the Eurogold Group is located outside Australia and as such all of the mineral resources or ore reserves in this report are based on information compiled by Mr Simon Pepper who is a recognised mining professional on the basis that he:

• $I.$ has a B.Sc.(Hons) Geological Sciences from Aston University;
• $\overline{2}$ . has at least five years experience in the estimation, assessment and evaluation of the type of mineral resources or ore reserves in this report; and
• $\overline{3}$ . is a member of the Institution of Mining and Metallurgy and a member of Chartered Engineers, United Kingdom.

PETER GUNZBURG Executive Chairman

Figure 1 - Saulyak Underground Development and Mineralisation

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