INOVIQ LTD — Capital/Financing Update 2005

May 5, 2005

ASX Release

6 May 2005

ASX & AIM Symbol "EUG"

JUNE II GOLD DEPOSIT

HIGHLIGHTS

• The identification and potential development of a second significant hard rock ore body $\bullet$ on Transgold (50% owned by Eurogold) tenements close to the Transgold Plant
• Current Romanian (Non-JORC) resource estimate of:
• 720,000 tonnes $\omega$ 2 g/t Au in the "Branch III" zone; plus
• 500,000 tonnes $\overline{a}$ 3.1 g/t Au in the "Lapushna III" zone
• Significant resource upside potential identified in the middle ground between these two ٠ ore zones is being tested by a drilling programme currently underway
• Located 11 kms by road from the Transgold plant
• Preparatory development work commenced including the completion of access roads
• "June II" represents the third source of hard rock material for the Transgold plant (Eurogold 50%) which can be used to supplement existing toll treated ore and expected production from the Central Tailings Dam Project

Introduction

Eurogold Limited ("EUG") is pleased to announce the development of a second significant ore body, the "June II" deposit, close to its Romanian Transgold operations.

In March EUG announced that as part of its ongoing programme of reviewing historical mining data held by Transgold SA together with results from recently completed exploration work, Eurogold had identified the historically mined Sofia deposit as a priority exploration target for 2005.

As is the case with the Sofia Deposit, the "June II" deposit has significant historical production (estimated to be 1.5 Mtpa $\hat{\omega}$ 3.5 g/t Au) and appears amenable to shallow open pit mining with minimal waste stripping and good CIL recoveries.

History

Like Sofia the June deposit has a long history of mining although never on a large scale. Mining dates back to the 11^th Century (AD) under the Hungarians and Germans. Agricola, the author of De Re Metallica is reported to have visited the mines in 1521. When the Turks invaded in the $17^th$ century the mines became disused but were rehabilitated in the early 1700's when the Austrians reclaimed the territory.

Gold production was recorded in 1905 as 168 kg. At perhaps 10 $g/t$ , the mine would have produced about 20,000 tonnes of ore during the year.

The prosaic "June II" name refers to the date in 1948 when the communists nationalised all industry in Romania.

Geology

Mineralisation is hosted by a series of steeply dipping quartz veins hosted within volcanic rocks consisting of pyroxene andesites and pyroclastics. The main veins persist in a strike direction of NNE-SSW for 2-3 kms and vary in thickness from a few cm's to 20m. The veins dip to the south east at 60-70 deg but the dip is reported to flatten slightly with depth.

Mineralisation is reported to be 70% free gold with auriferous pyrite in the near surface gold zone. At depth (60-70m) the mineralization becomes polymetallic with the introduction of galena and sphalerite. Gold grade appears to remain robust in the polymetallic zone but gold recovery becomes problematic.

In addition to the main veins there are other, less significant veins following the main trend, and, more significantly, offshoots from the main veins extending into the footwall and hangingwall. Photographs of the wider veins clearly show that they are structurally complex and could be described as stockwork zones.

Alteration as silicification is not so well developed in this deposit compared to elsewhere in the district.

Some of the surface excavations are parallel to strike and clearly show the continuity of mineralization but generate sampling data that is difficult to include in an ore resource calculation. Examples of this are;

• 2.62 $g/t$ gold over 34m in the D92 cutting ٠
• 4.71 $g/t$ gold over 34m in the D93 cutting $\bullet$
• 3.46 $g/t$ gold over 35m in the D96 cutting

Six diamond drillholes were completed by Transgold during 2004 to demonstrate the depth continuation of the surface mineralization. Core recovery in the boreholes is described as good and within the range 85-90%.

Proposed Drill Programme 2005

A drilling programme has been tabled for the 2005 field season which proposes ten drillholes, a total of 690m of diamond drilling at a budget cost of US\$100,637. Three fences across the Lapushna III/Branch III area at 100m intervals will be drilled to get additional infill information. If positive results are forthcoming from this work, a feasibility study could be completed to allow production at $June$ 11 to commence in the third quarter of 2005.

Potential Resource

Structure	Tonnes	Gold $g/t$	Cont Oz
Lapushna III-	506,000		51,000
Branch III	720,000	2.0	46,000
Total	1,200,000		97,000

A initial resource estimate by Transgold's Romanian geologists is as follows;

Some qualifying notes to the above resource estimate are as follows;

• The resource estimate was conducted to the standards of the Romanian Association of $\bullet$ Geologists and as such does not comply with the reporting guidelines of the Australian JORC Code.
• The resource extends down to 490 rl below which the mineralization becomes $\bullet$ polymetallic. Surface elevation is around 550 rl.
• As far as possible, mined out tonnage was discounted from the calculation.
• The ground between the two veins has not been included in the resource estimate although $\bullet$ it is known to contain sporadic veining and the country rock itself can be mineralised. North and south extensions to the known mineralization could potentially significantly increase the current estimated resource.

Other Comments

Bifurcating vein gold systems are well known as areas of enrichment and the targeting of the June II area has again shown this to be the case. The opportunity exists in the wider area to examine similar structural zones.

June II and Sofia highlight the potential of the Transgold tenements which, despite their long history of gold mining, remain relatively under explored using modern exploration techniques.

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 Vasile Prodan who is a recognised mining professional. He holds a Degree in Geology from the University of Cluj and has at least five years experience in the estimation, assessment and evaluation of the type of mineral resources and ore reserves in this report and is a member of the Romanian Association of Geologists.

PETER GUNZBURG Executive Chairman