The cost of these equity-settled transactions with directors and employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined using a binomial model.

In valuing equity-settled transactions, no account is taken of any performance conditions. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date'). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors, will ultimately vest.

This opinion is formed based on the best available information at the reporting date. No expense is recognised for awards that do not ultimately vest. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(u) Earnings per share

The consolidated entity presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the parent entity by the weighted average number of shares outstanding during the period, adjusted for bonus elements in ordinary shares issued during the year.

Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after income tax effect of interest and other financing costs associated with the dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential ordinary shares.

(v) Contributed equity

Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the parent entity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(w) Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(x) Segment Reporting

A segment is a distinguishable component of the consolidated entity that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

(y) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at the balance sheet date.

Critical accounting estimates and judgments

The preparation of the consolidated financial statements requires management to make judgements and estimates and form assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial report, and the reported revenue and expenses during the periods presented therein. On an ongoing basis, management evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the results of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

The consolidated entity has identified the following critical accounting policies under which significant judgements, estimates and assumptions are made and where actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.

Reserve estimates

Reserves are estimates of the amount of product that can be economically and legally extracted from the consolidated entity's properties. In order to calculate reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.

A-15

Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies or fields to be determined by analysing geological data such as drilling samples. This process may require complex and difficult geological judgements and calculations to interpret the data.

The consolidated entity is required to determine and report ore reserves under the principles incorporated in the Australasian Code for Reporting of Mineral Resources and Ore Reserves December 2004, known as the JORC Code. The JORC Code requires the use of reasonable investment assumptions to calculate reserves. For example, if current prices remain above long-term historical averages for an extended period of time, internal assumptions about future prices may involve the use of lower prices to estimate reserves under the JORC Code. Lower price assumptions generally result in lower estimates of reserves.

Because the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of reserves may change from period to period. Changes in reported reserves may affect the consolidated entity's financial results and financial position in a number of ways, including the following:

•

Asset carrying values may be affected due to changes in estimated future cash flows.

•

Depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units of production basis, or where the useful economic lives of assets change.

•

Overburden removal costs recorded on the balance sheet or charged to the income statement may change due to changes in stripping ratios or the units of production basis of depreciation.

•

Decommissioning, site restoration and environmental provisions may change where changes in estimated reserves affect expectations about the timing or cost of these activities.

•

The carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.

Exploration and evaluation expenditure

The consolidated entity's accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the income statement.

Development expenditure

Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied by management in determining when a project is economically viable. In exercising this judgement, management is required to make certain estimates and assumptions similar to those described above for capitalised exploration and evaluation expenditure. Any such estimates and assumptions may change as new information becomes available. If, after having commenced the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.

Property, plant and equipment — recoverable amount

In accordance with the consolidated entity's accounting policy, each asset or cash generating unit is evaluated every reporting period to determine whether there are any indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss recognised to the extent that carrying amount exceeds recoverable amount. The recoverable amount of an asset or cash generating group of assets is measured at the higher of fair value less costs to sell and value in use.

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties, and is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal. Value in use is also generally determined as the present value of the estimated future cash flows, but only those expected to arise from the continued use of the asset in its present form and its eventual disposal. Present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in the asset. Future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), reserves, operating costs, restoration and rehabilitation costs and future capital expenditure. This policy requires management to make these estimates and assumptions which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be impaired and the impairment would be charged against the income statement.

Restoration and rehabilitation

The consolidated entity's accounting policy requires the recognition of provisions for the restoration and rehabilitation of each site. The provision recognised represents management's best estimate of the present value of the future costs required. Significant estimates and assumptions are made in determining the amount of restoration and rehabilitation provisions. Those estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory framework; the magnitude of possible contamination and the timing, extent and costs of required restoration and rehabilitation activity. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the balance sheet by adjusting both the restoration and rehabilitation asset and provision. Such changes give rise to a change in future depreciation and financial charges.

A-16

Share based payments

The consolidated entity issues equity settled share based payments to employees and third parties. Such payments are measured at their fair value at the date of grant. Fair value is measured using a binomial pricing model that requires the exercise of judgement in relation to variables such as expected volatilities and dividend yields based on information available at the time the fair value is measured.

Derivative Financial Instruments

The consolidated entity uses derivative financial instruments including call and put options to partially hedge its exposure to downward movements in the price of gold. At each reporting date, the fair value of outstanding options is measured using pricing models that require the exercise of judgement in relation tovariables such as expected volatilities based oninformationavailable at the reporting date. Asthe underlying drivers for those judgements are constantly changing, the reported derivative financial assets and liabilities are an estimate that may materially change post balance date.

Taxation

The consolidated entity's accounting policy for taxationrequires management's judgement in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only where it is considered probable that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future.

Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management's estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, reserves, operating costs, restoration and rehabilitation costs, capital expenditure, dividends and other capital management transactions. Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised.

In such circumstances, some or all of the carrying amount of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the income statement.

Segment reporting

5.	Segment information is presented in respect of the consolidated entity's business and geographical segments. The primary format, business segments, is based on the consolidated entity's management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise income-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses. Inter-segment pricing is determined on an arm's length basis.

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one period.

Business Segments

The consolidated entity comprises the following main business segments, based on the consolidated entity's management reporting system:

•

Mining and processing. Mining and processing activities commenced in the 2008 reporting period.

•

Mineral exploration.

	Mining and processing						Mineral exploration						Total
	2009		2008		2007		2009		2008		2007		2009		2008		2007
	$		$		$		$		$		$		$		$		$
Revenue
Sales to external customers		77,467,778		23,393,798		—		—		—		—		77,467,778		23,393,798		—
Intersegment sales		—		—		—		—		—		—		—		—		—
Total sales revenue		77,467,778		23,393,798		—		—		—		—		77,467,778		23,393,798		—
Other revenue		—		—		—		—		—		—		—		—		—
Total segment revenue		77,467,778		23,393,798		—		—		—		—		77,467,778		23,393,798		—
Intersegment elimination																—		—
Other revenue														327,760		533,365		1,845,894
Consolidated revenue														77,795,468		23,927,163		1,845,894

A-17

	Mining and processing									Mineral exploration							Total
	2009			2008			2007			2009			2008		2007		2009			2008			2007
	$			$			$			$			$		$		$			$			$
Payments for property, plant and equipment and exploration and evaluation expenditure		16,246,475			34,990,115			48,979,540			(7,914,835	)		13,376,465		9,924,639
Depreciation and amortisation		18,437,429			6,391,159			—			—			1,688,715		—
Non-cash gains/(expenses) other than depreciation and amortisation		(323,446	)		(183,531	)		—			—			—		—
Result
Segment result		15,165,093			(951,182	)		(539,206	)		—			—		—		15,165,093			(951,182	)		(539,206	)
Intersegment elimination																					—			—
Unallocated revenue less unallocated expenses																		(23,391,759	)		(8,587,781	)		(1,341,405	)
Profit before income tax																		(8,226,666	)		(9,538,963	)		(1,880,611	)
Income tax expense																		—			—			—
Profit/(loss) for the year																		(8,226,666	)		(9,538,963	)		(1,880,611	)
Segment assets and liabilities
Segment assets		165,667,554			139,203,296			69,200,561			11,115,743			10,406,786		30,002,238		176,783,297			149,610,082			99,202,799
Intersegment elimination																					—			—
Unallocated assets																		19,101,650			5,671,398			14,381,000
Total assets																		195,884,947			155,281,480			113,583,799
Segment liabilities		29,897,529			16,216,925			11,012,703			—			—		—		29,897,529			16,216,925			11,012,703
Intersegment elimination																					—			—
Unallocated liabilities																		15,946,954			38,364,772			575,298
Total liabilities																		45,844,483			54,581,697			11,588,001

Geographical Segments

In presenting information on the basis of geographical segments, segment revenue, results and assets is based on the geographical location of the assets. The consolidated entity's geographical segments reported are Australia and Papua New Guinea.

	Australia						Papua New Guinea						Consolidated
	2009		2008		2007		2009		2008		2007		2009		2008		2007
	$		$		$		$		$		$		$		$		$

Total external revenue		326,002		439,322		1,845,894		77,469,427		23,487,841		—		77,795,428		23,927,163		1,845,894
Total segment revenue		326,002		439,322		1,845,894		77,469,427		23,487,841		—		77,795,428		23,927,163		1,845,894
Carrying amount of segments assets		16,389,891		1,861,377		14,381,000		179,495,056		153,420,103		99,202,779		195,884,947		155,281,480		113,583,79
Payments for property, plant and equipment and exploration and evaluation expenditure		93,700		96,805		95,590		24,067,610		48,269,745		58,904,179		24,161,310		48,366,550		58,999,769

All external revenue is generated through transactions with Australian domiciled counterparties.

A-18

6.	Revenue and other income

	2009		2008		2007
	$		$		$
(a) Revenue
Gold Income		77,182,556		23,350,248		—
By products		285,112		43,550		—
		77,467,668		23,393,798		—
(b) Other income
Net gain on disposal of property, plant and equipment		52,657		30,455		—
Net gain on disposal of investments		97,270		—		—
Other		10		1,233		5,292
		149,937		31,688		5,292,
(c) Financial income
Interest received		327,760		533,365		1,845,894

7.	Cost of sales

	2009			2008			2007
	$			$			$
Cash operating costs comprise:
• employee expenses		6,223,952			2,423,708			—
• stores and other consumables		13,853,495			3,558,937			—
• fuel, power and water		11,402,866			4,642,255			—
• other		18,208,298			7,469,762			—
		49,688,611			18,094,662			—
Depreciation and amortisation charges		18,437,429			6,409,615			—
Changes in inventories and work in progress		(3,166,690	)		(4,763,684	)		—
		64,959,350			19,740,593			—
Royalties		1,477,299			523,581			—
		66,436,649			20,264,174			—

8.	Operating and other expenses

Profit before income tax includes the following specific expenses:
Operating lease rentals	2,999,950	2,739,279		—
Net foreign exchange losses	1,819,366	1,330,830		—
Employee benefits expense	8,040,573	4,997,000		708,747
Depreciation and Amortisation
Depreciation of plant and equipment	12,619,280	4,702,444		107,639
Amortisation of leased assets	1,565,355	—		—
Depreciation of development expenditure	4,348,844	1,833,055		—
Total depreciation and amortisation expensed	18,533,479	6,535,499		107,639
Finance expenses
Interest and finance charges on interest bearing liabilities	3,198,791	3,031,951		—
Provisions: unwinding of discount	197,556	183,531		—
	3,396,347	3,215,482		—
Amount capitalised	—	(2,025,797	)	—
Finance costs expensed	3,396,347	1,189,685		—
Finance lease contingent rentals	2,216,800	—		—

A-19

9.	Income tax expense

	2009			2008			2007
	$			$			$
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax		(8,226,666	)		(9,538,963	)		(1,880,611	)
Tax at the Australian tax rate of 30% (2008:30%, 2007:30%)		(2,467,999	)		(2,861,688	)		(564,183	)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non allowable items		2,849,271			2,310,566			(411,367	)
Deferred tax assets not recognised		(381,272	)		551,122			975,550
Income tax expense		—			—			—
Effective tax rate		0	%		0	%		0	%
(b) Current tax liabilities
Movements in the provision for current income tax during the period were as follows:
Balance at the beginning of the year		—			—			—
Current year's income tax expense / (benefit) on loss from ordinary activities		381,272			(551,122	)		(975,550	)
Transfer to tax losses not brought to account		(381,272	)		551,122			975,550
Balance at end of year		—			—			—

10.	Trade and other receivables

	2009		2008		2007
	$		$		$
Current
Trade receivables		562,405		1,406,302		—
Other receivables		238,089		351,771		81,277
		800,494		1,758,073		81,277

All trade and other receivables are unsecured.

The consolidated entity's exposure to financial risks including interest rate risk, market risk, currency risk and credit risk is discussed in note 29.

Note 29 also presents information in relation to the fair value of financial instruments.

11.	Inventories

Current
Raw materials and stores	5,847,146	2,638,050	—
Ore stockpiles	9	286,683	—
Gold in circuit	6,685,038	3,980,808	—
Finished goods	1,737,304	496,193	—
	14,269,497	7,401,734	—

12.	Derivative financial instruments

Current assets
Options — cash flow hedges	2,025,000	314,212	—
Current liabilities
Options — cash flow hedges	10,197,958	6,972,407	—
Non current assets
Options — cash flow hedges	686,759	3,495,855	—
Non current liabilities
Options — cash flow hedges	5,748,977	18,911,174	—

The consolidated entity's exposure to financial risks including interest rate risk, market risk, currency risk and credit risk is discussed in note 29. Note 29 also presents information in relation to the fair value of financial instruments. Note 19 presents details of assets pledged as collateral to counterparties to the derivative financial instruments.

A-20

13.	Available for sale financial assets

	2009		2008		2007
	$		$		$
Current
Listed equity securities — at market value		—		—		474,419
Non current
Listed equity securities — at market value		348,974		1,185,074		1,447,200

Available for sale financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity dates.

During the year ended 30 June 2009 the Group recognised an impairment loss of $1,214,402 in relation to listed equity investments. These investments declined significantly in value during the period and in the view of the

Directors the decline in value is not considered to be temporary.

The impairment loss has been recognised in the income statement.

The consolidated entity's exposure to financial risks including interest rate risk, market risk, currency risk and credit risk is discussed in note 29.

Note 29 also presents information in relation to the fair value of financial instruments.

14.	Other assets

Current
Prepayments	166,175	523,821	—
Other	80,617	7,211	85,745
	246,792	531,032	85,745

15.	Property, plant and equipment

	Consolidated
							Other						Mine
	Land and			Plant and			mineral			Assets under			rehabilitation
	buildings			equipment			assets			construction			asset			Total
	$			$			$			$			$			$
2009
Cost
At the beginning of the financial year		7,419,480			76,264,970			50,834,589			383,588			2,401,339			137,303,966
Additions		24,639			18,304,876			7,205,878			8,793,633			—			34,329,026
Disposals		—			—			—			—			—			—
At the end of the financial year		7,444,119			94,569,846			58,040,467			9,177,221			2,401,339			171,632,992
Accumulated depreciation
At the beginning of the financial year		(352,592	)		(4,476,151	)		(2,326,448	)		—			(114,241	)		(7,269,432	)
Charge for the year		(762,686	)		(11,656,675	)		(5,774,827	)		—			(243,271	)		(18,437,459	)
Disposals		—			—			—			—			—			—
Impairment		—			(64,392	)		—			—			—			(64,392	)
At the end of the financial year		(1,115,278	)		(16,197,218	)		(8,101,275	)		—			(357,512	)		(25,771,283	)
Net book value at 30 June 2009		6,328,841			78,372,628			49,939,192			9,177,221			2,043,827			145,861,709
2008
Cost
At the beginning of the financial year		—			9,608,945			—			57,613,648			2,401,339			69,623,932
Additions		145,479			552,114			—			34,292,522			—			34,990,115
Disposals		—			(281,968	)		—			—			—			(281,968	)
Transfers from evaluation and exploration expenditure		—			—			32,971,887			—			—			32,971,887
Transfers from /(to) assets under construction		7,274,001			66,385,879			17,862,702			(91,522,582	)		—			—
At the end of the financial year		7,419,480			76,264,970			50,834,589			383,588			2,401,339			137,303,966
Accumulated depreciation
At the beginning of the financial year		—			(788,961	)		—			—			—			(788,961	)
Charge for the year		(352,592	)		(3,742,217	)		(2,326,448	)		—			(114,241	)		(6,535,498	)
Disposals		—			55,027			—			—			—			55,027
At the end of the financial year		(352,592	)		(4,476,151	)		(2,326,448	)		—			(114,241	)		(7,269,432	)
Net book value at 30 June 2008		7,066,888			71,788,819			48,508,141			383,588			2,287,098			130,034,534

A-21

						Other		Consolidated		Mine
	Land and		Plant and			mineral		Assets under		rehabilitation
	buildings		equipment			assets		construction		asset		Total
	$		$			$		$		$		$
2007
Cost
At the beginning of the financial year		—		4,267,602			—		—		2,401,339		6,668,941
Additions		—		5,341,343			—		49,922,016		—		55,263,359
Disposals		—		—			—		—		—		—
Transfers from evaluation and exploration expenditure		—		—			—		7,691,932		—		7,691,932
Transfers from /(to) assets under construction		—		—			—		—		—		—
At the end of the financial year		—		9,608,945			—		57,613,648		2,401,339		69,623,932
Accumulated depreciation
At the beginning of the financial year		—		(681,322	)		—		—		—		(681,322	)
Charge for the year		—		(107,639	)		—		—		—		(107,639	)
Disposals		—		—			—		—		—		—
At the end of the financial year		—		(788,961	)		—		—		—		(768,961	)
Net book value at 30 June 2007		—		8,819,984			—		57,613,648		2,401,339		68,834,971

	2009			2008		2007
	$			$		$
(a) Leased assets
Plant and equipment includes the following amounts where the Group is a lessee under a finance lease:

Leased equipment
Cost		7,062,775			—		—
Accumulated depreciation		(1,565,355	)		—		—
Net book amount		5,497,420			—		—

(b) Non current assets pledged as security

Refer to note 19 for information on non-current assets pledged as security by Group entities

16.	Exploration and evaluation expenditure


Exploration & Evaluation Expenditure
Cost
At the beginning of the financial year	10,406,786	30,002,238		27,769,231
Additions	708,957	13,376,435		9,924,639
Transfers to property, plant and equipment	—	(32,971,887	)	(7,691,632	)
At the end of the financial year	11,115,743	10,406,786		30,002,238

The ultimate recoupment of capitalised exploration and evaluation expenditure is dependent on successful development and commercial exploitation, or alternatively sale of the exploration areas.

17.	Deferred tax assets and liabilities

(a) Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Deductible temporary differences	1,088,523		295,108	240,420
Tax losses	866,916		1,248,188	751,754
Deferred tax assets brought to account to reduce provision for deferred income tax	(616,253	)	—	—
	1,339,186		1,543,296	992,174

All unrecognised deferred tax assets relate to items recognised in the income statement.

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be applied.

A-22

(b) Provision for deferred income tax
	2009			2008		2007
	$			$		$

Provision for deferred income tax comprises the estimated expense at the applicable tax rate of the following items:

Exploration and evaluation expenditure		265,235			—		—
Property, plant and equipment		351,018			—		—
Deferred tax assets brought to account to reduce provision for deferred income tax		(616,253	)		—		—
		—			—		—

18.	Trade and other payables

Current
Trade payables	12,786,505	10,889,565	8,466,801
Other payables and accruals	7,896,521	3,556,821	696,339
	20,683,026	14,446,386	9,163,140

All trade and other payables are unsecured.

The consolidated entity exposure to financial risks including interest rate risk, market risk, currency risk and credit risk is discussed in note 29. Note 29 also presents information in relation to the fair value of financial instruments.

19.	Borrowings

Current
Bank loans — secured	—	8,561,286	—
Finance lease liabilities	2,094,483	—	—
	2,094,483	8,561,286	—
Non current
Bank loans — secured	—	2,739,755	—
Finance lease liabilities	3,845,885	—	—
	3,845,885	2,739,755	—

The secured bank loans and derivative financial instrument liabilities (refer note 12) are denominated in United States dollars and are secured by fixed and floating charge over the assets of the controlled entity that has received the loans. The parent entity had provided a guarantee in relation to these loans in the prior year but was released from its guarantee on repayment of the bank loans by the controlled entity during the 2009 financial year.

The carrying amount of assets pledged as security for current and non current borrowings that are subject to fixed charges were:

	2009		2008		2007
	$		$		$
Property, plant and equipment		138,070,287		130,034,534		—
Available for sale financial assets		—		1,185,074		—
Exploration and evaluation expenditure		—		10,406,786		—
Investments in controlled entities		—		—		—
		138,070,287		141,626,394		—

Current assets of the consolidated entity with a value of $24,329,033 that are not subject to a fixed charge are subject to a floating charge (2008: $13,655,086, 2007: $Nil).

20.	Provisions

Current
Employee entitlements	491,709	365,819	—
Non current
Rehabilitation and restoration	2,782,426	2,584,870	2,401,339
Other	—	—	23,522
	2,782,426	2,584,870	2,424,861

A-23

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

Rehabilitation and restoration
Carrying amount at start of year	2,584,870	2,401,339	—
Recognition of provision	—	—	2,401,339
Accrual of discount	197,556	183,531	—
	2,782,426	2,584,870	2,401,339

Provision for rehabilitation and restoration

The provision for rehabilitation and restoration is based on the consolidated entity's environmental plans, in compliance with current environmental and regulatory requirements. The costs include obligations relating to reclamation, waste site closure, plant closure and other costs associated with the rehabilitation and restoration of mining and exploration sites. Full provision is made based on the net present value of the estimated cost of rehabilitating and restoring the environmental disturbance that has occurred up to the date of the financial report.

21.	Contributed equity

	2009			2008			2007
	$			$			$

(a) Ordinary shares		173,098,363			133,686,704			105,794,580
Movements in ordinary share capital:
Balance at beginning of financial year		133,686,704			105,794,580			87,802,197
Placement March 2007 at 32 cents		—			—			13,054,141
Placement January 2008 at 72 cents		—			10,527,728			—
Placement March 2008 at 85 cents		—			15,000,000			—
Placement March 2008 at 73 cents		—			987,042			—
Placement August 2008 at 31 cents		10,536,451			—			—
Placement February 2009 at 50 cents		30,824,500			—			—
Conversion of options		—			1,920,477			5,675,316
		175,047,655			134,229,827			106,531,654
Costs of capital raising		(1,949,292	)		(543,123	)		(737,074	)
Balance at end of financial year		173,098,363			133,686,704			105,794,580

	2009		2008		2007
	Number of		Number of		Number of
	shares		shares		shares
(a) Ordinary shares		472,643,276		377,005,725		337,649,110
Movements in ordinary share capital:
Balance at beginning of financial year		377,005,725		337,649,110		272,022,528
Placement March 2007 at 32 cents		—		—		40,800,000
Placement January 2008 at 72 cents		—		14,621,844		—
Placement March 2008 at 85 cents		—		17,647,059		—
Placement March 2008 at 73 cents		—		1,352,112		—
Placement August 2008 at 31 cents		33,988,551		—		—
Placement February 2009 at 50 cents		61,649,000		—		—
Conversion of options		—		5,735,600		24,826,582
Balance at end of financial year		472,643,276		377,005,725		337,649,110

Ordinary shares entitle the holder to one vote per share and to participate in dividends and proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

A-24

(b) Options

Options granted and exercised during the period, and on issue at balance date are as follows:

2009
		Exercise price of		Number of
Date options granted/exercised	Expiry date	options		options
Opening balance	Various	Various			17,333,261
2 December 2008	31 December 2010	$	0.31		1,699,427
1 December 2008	31 October 2011	$	0.35		15,650,000
5 December 2008	31 December 2011	$	0.35		14,000,000
29 December 2008	31 October 2011	$	0.35		8,000,000
Options lapsed					(10,078,261	)
					46,604,427

Each option is convertible into one ordinary share in the company when exercised. Options do not participate in dividends and do not give holders voting rights.

2008
		Exercise price of		Number of
Date options granted/exercised	Expiry date	options		options
Opening balance					9,325,601
21 November 2007	31 December 2009	$	0.50		640,000
21 December 2007	31 December 2008	$	0.40		1,000,000
21 December 2007	31 December 2008	$	0.44		1,000,000
22 December 2007	30 June 2009	$	0.72		713,261
28 April 2008	31 December 2009	$	0.45		4,000,000
28 April 2008	31 December 2010	$	0.80		1,000,000
28 April 2008	31 December 2010	$	1.00		1,000,000
28 April 2008	31 December 2010	$	1.25		1,000,000
28 April 2008	31 December 2010	$	1.50		1,000,000
28 April 2008	31 December 2010	$	2.00		1,000,000
11 June 2008	31 December 2010	$	0.80		400,000
11 June 2008	31 December 2010	$	1.00		400,000
11 June 2008	31 December 2010	$	1.25		400,000
11 June 2008	31 December 2010	$	1.50		400,000
11 June 2008	31 December 2010	$	2.00		400,000
Options lapsed					(610,001	)
Options exercised					(5,735,600	)
Balance at 30 June 2008					17,333,261

Each option is convertible into one ordinary share in the company when exercised. Options do not participate in dividends and do not give holders voting rights.

2007
		Exercise price of		Number of
Date options granted / exercised	Expiry date	options		options
Opening balance	30 June 2007	$	0.20		30,112,183
9 th March 2007	31 December 2008	$	0.50		1,250,000
9 th March 2007	31 December 2008	$	0.80		750,000
23 rd April 2007	31 December 2008	$	0.40		2,040,000
Options exercised in the period					(24,826,582	)
Balance at 30 June 2007					9,325,601

The primary objective of managing the consolidated entity's capital is to ensure that there is sufficient capital available to support the funding requirements of the consolidated entity, including capital expenditure, in a way that optimises the cost of capital, maximises shareholders' returns and ensures that the consolidated entity remains in a sound financial position. There were no changes to the consolidated entity's overall capital management approach during the current year.

The consolidated entity manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when borrowings mature or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof.

A-25

22.	Reserves and accumulated losses

	2009			2008			2007
	$			$			$
Available for sale investments reserve		136,389			6,546			758,090
Hedging reserve — cash flow hedges		(8,068,638	)		(22,073,514	)		—
Share based payments reserve		9,776,417			5,502,877			1,912,347
Foreign currency translation reserve		(644,628	)		(392,076	)		22,572
		1,199,540			(16,956,167	)		2,693,009
Accumulated losses		(24,257,420	)		(16,030,754	)		(6,491,791	)
		(23,057,880	)		(32,986,921	)		(3,798,782	)

(a) Movements

Movements in the reserves and accumulated losses during the reporting period are presented in the Statement of Changes in Equity.

(b) Nature and purpose of reserves

(i) Available for sale investments revaluation reserve

Changes in the fair value and exchange differences arising on translation of investments classified as available for sale financial assets, are taken to the available for sale investment revaluation reserve, as disclosed in note 3(g). Amounts are recognised in profit or loss when the associated assets are sold or impaired.

(ii) Hedging reserve — cash flow hedges

The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity, as described in note 3(i). Amounts are recognised in profit or loss when the associated hedged transaction affects profit or loss.

(iii) Share based payments reserve

The share based payments reserve is used to recognise the fair value of options issued to employees but not exercised and the fair value of shares issued to employees.

(iv) Foreign currency translation reserve

Exchange differences arising on translation of foreign controlled entities are taken to the foreign currency translation reserve as described in note 3(b). The reserve is recognised in profit and loss when the net investment is disposed of.

23.	Earnings per share

	2009			2008			2007
	Cents			Cents			Cents
(a) Basic loss per share		(1.92	)		(2.70	)		(0.70	)
(b) Diluted loss per share		(1.92	)		(2.70	)		(0.70	)

(c) Reconciliation of earnings used in calculating earnings per share
Loss from continuing operations		(8,226,666	)		(9,538,963	)		(1,880,611	)

The potential ordinary shares represented by issued options would have no impact on the loss from continuing operations if exercised.

(d) Weighted average number of shares used as the denominator

Weighted average number of shares used in calculation of basic earnings per share	427,904,462	353,521,502	281,210,827
Adjustment for issued option in calculation of diluted earnings per share	652,442	—	—
Weighted average number of shares used in calculation of diluted earnings per share	428,556,904	353,521,502	281,210,827

A-26

(e) Information concerning the classification of securities

Options issued are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the calculation of basic earnings per share. Details relating to options are set out in note 27.

24.	Auditors' remuneration

	2009		2008		2007
	$		$		$
Remuneration of the auditor of the parent entity:
Auditing or reviewing the financial report		148,911		84,736		72,514
Taxation compliance services		—		1,414		8,050
		148,911		86,150		80,564

25.	Related party transactions

(a) Parent entity

The parent entity is Allied Gold Limited, a company incorporated and domiciled in Australia.

(b) Controlled entities

Interests in controlled entities are set out in note 30.

Disclosures relating to key management personnel are set out in note 26.

(d) Terms and conditions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties, except that the loans to controlled entities were non interest bearing.

Outstanding balances are unsecured and repayable in cash.

26.	Key management personnel disclosures

(a) Details of Key Management Personnel

The key management personnel of the Allied Gold Limited Group during the period 1 July 2006 to 30 June 2009 were:

	•	Mr Mark Caruso, Executive Chairman

	•	Mr Gregory H Steemson, Non Executive Director

	•	Mr Anthony Lowrie, Non Executive Director

	•	Mr Monty House, Non Executive Director (appointed 4 March 2009)

	•	Mr Frank Terranova, Chief Financial Officer (appointed 1 May 2008, appointed as director 10 December 2008)

	•	Mr Richard Johnson, (resigned 3 October 2008)

	•	Mr Jeffrey Moore, Non Executive Director (resigned 7 July 2008)

	•	Mr Ross Hastings, Manager Resource and Development

	•	Mr Peter Torre, Company Secretary

	•	Mr Peter Du Plessis, Resident Manager Simberi Operations (appointed 19 August 2008)

	•	Mr Albert Longo, Chief Financial Officer (until 30 April 2008)

	•	Mr Bob Burban, Exploration Manager (resigned 18 March 2008)

	•	Mr Fergus Hart, Resident Manager Simberi Operations (resigned 29 September 2008)

	•	Mr Grant Brock, Chief Operating Officer (resigned 4 January 2008)

	•	Mr Tony Bubb, Mining Manager (resigned 30 June 2009)

•

Mr Grant Brock, Chief Operating Officer (resigned 4 January 2008

A-27

(b) Key Management Personnel Compensation

Details of the remuneration of directors and the key management personnel of Allied Gold Limited and the Allied Gold Limited Group are set out in (b) the following tables.

Key management personnel of the Group and other executives of the Company and the Group — year ended 30 June 2009

	Short-term
	employee				Share
	benefits —		Post		based
	Cash salary		employment		payments
Name	and fees &		benefits		(non cash)		Total
	$		$		$		$
Non-executive directors
M House		25,000		—		—		25,000
A Lowrie		74,250		—		228,451		302,701
G Steemson		74,250		—		228,451		302,701
Sub-total non — executive directors		173,500		—		456,902		630,402
Executive directors
M Caruso		360,600		—		1,198,555		1,559,155
R Johnson		137,254		10,603		—		147,857
F Terranova #		261,468		23,046		527,616		812,130
Other key management personnel
T Bubb		160,506		25,259		108,020		293,785
F Hart		170,011		9,276		—		179,287
P DuPlessis		175,291		15,776		146,700		337,767
R Hastings		200,000		18,000		312,146		530,146
P Torre		76,000		—		167,622		243,622
Sub-total executive directors and key management personnel		1,541,130		101,960		2,460,659		4,103,749
Total directors and key management personnel		1,714,630		101,960		2,917,561		4,734,151

F Terranova was appointed a director on 10 December 2008. Before this appointment he was the Group's Chief Financial Officer. Amounts shown above include all Mr Terranova's remuneration during the reporting period, whether as a director or as Chief Financial Officer. Amounts received in his position as director amounted to $149,676 made up of cash salary and fees of $137,763, and superannuation of $11,913.

Salaries, fees and benefits includes gross salary and fees, fringe benefits, professional memberships and subscriptions, allowances and leave entitlements. The Company has also paid insurance premiums in respect of Directors' and Officers' Liability Insurance which is not reflected in the above table as there is no appropriate basis for allocation.

A-28

Key management personnel of the Group and other executives of the Company and the Group — year ended 30 June 2008

	Short-term
	employee				Share
	benefits —		Post		based
	Cash salary		employment		payments
Name	and fees &		benefits		(non cash)		Total
	$		$		$		$
Non-executive directors
A Lowrie		72,000		—		921,080		993,080
J Moore		36,000		3,240		—		39,240
G Steemson		72,000		—		—		72,000
Sub-total non — executive directors		180,000		3,240		921,080		1,104,320
Executive directors
G Brock		147,981		155,151		—		303,132
M Caruso		392,400		—		1,521,551		1,913,951
R Johns		170,810		15,373		847,864		1,034,047
Other key management personnel
B Burban		162,949		13,152		—		176,101
F Hart *		252,012		22,680		—		274,692
R Hastings		200,866		18,078		—		218,944
A Longo		150,000		13,500		—		163,500
F Terranova		43,578		3,922		35,578		83,078
Sub-total executive directors and key management personnel		1,520,596		241,856		2,404,993		4,167,445
Total directors and key management personnel		1,700,596		245,096		3,326,073		5,271,765

Key management personnel of the Group and other executives of the Company and the Group — year ended 30 June 2008

	Short-term
	employee				Share
	benefits —		Post		based
	Cash salary		employment		payments
Name	and fees &		benefits		(non cash)		Total
	$		$		$		$
Non-executive directors
A Lowrie		18,000		—		—		18,000
J Moore		36,000		3,240		—		39,240
G Steemson		75,106		—		—		75,106
Sub-total non — executive directors		129,106		3,240		—		132,346
Executive directors
G Brock		149,673		67,776		27,900		245,340
M Caruso		300,000		—		—		300,000
Other key management personnel
B Burban		159,997		14,399		20,375		194,771
F Hart *		240,000		21,600		20,375		281,975
R Hastings		189,134		17,022		—		206,156
A Longo		140,000		12,600		20,375		172,975
Sub-total executive directors and key management personnel		1,178,804		133,397		89,025		1,401,217
Total directors and key management personnel		1,307,910		136,628		89,025		1,533,563

A-29

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

	Fixed remuneration									At risk - LTI
Name	2009			2008			2007			2009			2008			2007
Non-executive directors
M House		100	%		—			—			—			—			—
A Lowrie		24	%		7	%		100	%		76	%		93	%		—
G Steemson		24	%		100	%		100	%		76	%		—			—
J Moore		—			100	%		100	%		—			—			—
Executive directors
M Caruso		23	%		21	%		100	%		77	%		79	%		—
R Johnson		100	%		18	%		—			—			82	%		—
F Terranova		35	%		57	%		—			65	%		43	%		—
Other key management personnel
G Brock					100	%		89	%		—			—			11	%
T Bubb		63	%		—			—			37	%		—			—
F Hart		100	%		100	%		93	%		—			—			7	%
P DuPlessis		57	%		—			—			43	%		—			—
R Hastings		41	%		100	%		100	%		59	%		—			—
P Torre		31	%		100	%		—			69	%		—			—
A Longo		—			100	%		88	%		—			—			12	%
B Burban		—			100	%		90	%		—			—			10	%

2009

	Balance at		Granted as							Balance at		Vested and
Key Management Personnel	start of year		remuneration		Exercised		Lapsed			end of year		exercisable
G Steemson		—		2,000,000		—		—			2,000,000		1,000,000
A Lowrie		2,000,000		2,000,000		—		(2,000,000	)		2,000,000		1,000,000
Mark Caruso		3,400,000		10,000,000		—		—			13,400,000		9,400,000
Peter Torre		—		2,000,000		—		—			2,000,000		1,000,000
Peter Du Plessis		—		1,000,000		—		—			1,000,000		350,000
Tony Bubb		—		750,000		—		—			750,000		250,000
Fergus Hart		500,000		—		—		(500,000	)		—		—
Ross Hastings		—		3,750,000		—		—			3,750,000		1,750,000
Richard Johnson		5,000,000		—		—		(5,000,000	)		—		—
Frank Terranova		2,000,000		6,250,000		—		(2,000,000	)		6,250,000		3,500,000
		12,900,000		27,750,000		—		(9,500,000	)		31,150,000		18,250,000

2008
	Balance at		Granted as								Balance at		Vested and
Key Management Personnel	start of year		remuneration		Exercised			Lapsed			end of year		exercisable
Mark Caruso		—		4,000,000		(600,000	)		—			3,400,000		3,400,000
Grant Brock		500,000		—		—			(500,000	)		—		—
Anthony Lowrie		—		2,000,000		—			—			2,000,000		2,000,000
Bob Burban		500,000		—		(250,000	)		(250,000	)		—		—
Fergus Hart		500,000		—		—			—			500,000		500,000
Ross Hastings		1,000,000		—		(1,000,000	)		—			—		—
Albert Longo		500,000		—		—			(500,000	)		—		—
Richard Johnson		—		5,000,000		—			—			5,000,000		5,000,000
Frank Terranova		—		2,000,000		—			—			2,000,000		2,000,000
		3,000,000		13,000,000		(1,850,000	)		(1,250,000	)		12,900,000		12,900,000

A-30

2007
	Balance at		Granted as							Balance at		Vested and
Key Management Personnel	start of year		remuneration		Exercised			Lapsed		end of year		exercisable
Mark Caruso		3,000,000		—		3,000,000			—		—		—
David Lymburn		600,000		—		600,000			—		—		—
Jeffrey Moore		2,000,000		—		2,000,000			—		—		—
Greg Steemson		1,300,000		—		1,300,000			—		—		—
Grant Brock		—		500,000		—			—		500,000		500,000
Bob Burban		—		500,000		—			—		500,000		500,000
Fergus Hart		—		500,000		—			—		500,000		500,000
Ross Hastings		1,000,000		—		—			—		1,000,000		1,000,000
Albert Longo		—		500,000		—			—		500,000		500,000
		7,900,000		2,000,000		(6,900,000	)		0		3,000,000		3,000,000

(d) Shareholdings of key management personnel

2009

	Balance at		Received as		Options					Balance at
Name	start of year		remuneration		exercised		Net change other			end of year
Mark Caruso		5,577,693		—		—		2,007,500			7,585,193
Jeff Moore		800,000		—		—		(800,000	)		—
M House		—		—		—		10,000			10,000
P Torre		—		—		—		20,000			20,000
Greg Steemson		1,100,000		—		—		—			1,100,000
Anthony Lowrie		1,635,460		—		—		—			1,635,460
Frank Terranova		—		—		—		1,000			1,000
Ross Hastings		300,000		—		—		—			300,000
Richard Johnson		55,000		—		—		(55,000	)		—
		9,468,153		—		—		1,183,500			10,651,653

2008
	Balance at		Received as		Options					Balance at
Name	start of year		remuneration		exercised		Net change other			end of year
Mark Caruso		4,977,693		—		600,000		—			5,577,693
Jeff Moore		800,000		—		—		—			800,000
Greg Steemson		1,600,000		—		—		(500,000	)		1,100,000
Anthony Lowrie		1,635,460		—		—		—			1,635,460
Bob Burban		—		—		250,000		(250,000	)		—
Ross Hastings		300,000		—		—		—			300,000
Albert Longo		2,000		—		—		(2,000	)		—
Richard Johnson		—		—		—		55,000			55,000
		9,315,153		—		850,000		(697,000	)		9,468,153

2007
	Balance at		Received as		Options					Balance at
Name	start of year		remuneration		exercised		Net change other			end of year
Mark Caruso		694,168		—		3,000,000		1,283,525			4,977,693
Jeff Moore		—		—		2,000,000		(1,200,000	)		800,000
Greg Steemson		300,000		—		1,300,000		—			1,600,000
Anthony Lowrie		—		—		—		1,635,460			1,635,460
Ross Hastings		300,000		—		—		—			300,000
Albert Longo		—		—		—		2,000			2,000
		1,294,168		—		6,300,000		1,720,985			9,315,153

All equity transactions with key management personnel, other than those arising from the exercise of remuneration options, have been entered into under terms and conditions no more favourable than those the consolidated entity would have adopted if dealing at arm's length.

(e) Contracts for services of key management personnel

There were formal service agreements with directors and key management personnel. On appointment to the Board, all non-executive directors enter into a service agreement with the relevant group company, in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of director.

A-31

Remuneration and other terms of employment for the Managing Director, Chief Financial Officer and other key management personnel are also formalised in contracts of employment. Some of these agreements provide for the provision of performance related bonuses as well as participation in the Employee Share Option Scheme. Other major provisions of the agreements relating to remuneration are set out below. All contracts with executives may be terminated by either party giving relevant notice.

MV Caruso, Executive Chairman

	•	No fixed term.

	•	Base remuneration of $350,000 per annum inclusive of superannuation effective from 6 October 2008.

•

Entitled to an annual bonus of no more than 30% of base remuneration if key performance indicators set by the Board on an annual basis are achieved. No key performance indicators were established for the year ended 30 June 2009 and as such there was no entitlement to a bonus under this provision of the service agreement.

•

Four weeks notice of termination by Company. In the event that appointment is terminated by the Company, entitled to twelve month's base remuneration plus any amount payable in lieu of notice.

•

Eight weeks notice of termination by Executive. In the event that appointment is terminated by Executive, entitled to three month's base remuneration plus any amount payable in lieu of notice.

•

Granted 4,750,000 Tranche A options, 2,250,000 Tranche B options and 3,000,000 Tranche C options on the terms set out in Part D of this Remuneration Report.

G Steemson, Non Executive Director

	•	No fixed term.

	•	Total fixed remuneration of $75,000 per annum for services as a non executive director.

	•	Annual retainer of $45,000 for geological consulting services.

	•	Four weeks notice of termination.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,000 Tranche C options on the terms set out in Part D of this Remuneration Report.

A Lowrie, Non Executive Director

	•	No fixed term.

	•	Total fixed remuneration of $75,000 per annum for services as a non executive director.

	•	Four weeks notice of termination.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,000 Tranche C options on the terms set out in Part D of this Remuneration Report.

M House, Non Executive Director

	•	No fixed term.

	•	Total fixed remuneration of $75,000 per annum for services as a non executive director.

•

Four weeks notice of termination.

P Torre, Company Secretary

•

Three year term commencing 6 October 2008.

•

Total fixed remuneration of $84,000 per annum.

•

Three months notice of termination by Company. In the event that appointment is terminated by the Company, entitled to the lesser of three month's base remuneration or balance of contract term.

•

Three months notice of termination by Executive. In the event that appointment is terminated by Executive, entitled to three month's base remuneration plus any amount payable in lieu of notice.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,000 Tranche C options on the terms set out in Part D of this Remuneration Report.

F Terranova, Chief Financial Officer

•

No fixed term.

•

Entitled to an annual bonus not exceeding 30% of base payments dependent on achievement of specific objectives as determined by the Chief Executive Officer commencing the financial year ending 30 June 2009. No key performance indicators were established for the year ended 30 June 2009 and as such there was no entitlement to a bonus under this provision of the service agreement.

	•	Eight weeks notice of termination. On termination by the Company entitled to termination pay of twelve months total fixed remuneration.

•

Total fixed remuneration of $285,000, inclusive of superannuation.

A-32

R Hastings, General Manager Resource and Development

	•	Total fixed remuneration of $218,000 inclusive of superannuation.

•

Entitled to four week's pay on termination by the company or by the executive.

P DuPlessis, Resident Manager Simberi Operation

•

Base salary, exclusive of superannuation, was $220,000 per annum.


	•	Entitled to a performance bonus of $22,000 gross based upon the satisfaction of achieving quarterly key performance indicators ("KPI's"). The KPI's are as follows:

(a)

Average cost of gold per ounce sold for the Quarter is AUD $600 or less, as calculated by the Chief Financial Officer

(b)

The total gold shipped per quarter is a minimum of 21,000 ounces.

•

In the event the company terminates the employment, payment of three month's salary will be paid.

R Johnson, Chief Executive officer and Managing Director (appointed 1 January 2008, resigned 3 October 2008)

	•	Fixed term of 3 years commencing 1 January 2008.

	•	Total fixed remuneration of $380,000, inclusive of superannuation, reviewed annually by Board of Directors.

•

Issued with 5 million options on appointment. The options are in five parcels of one million options exercisable at $0.80, $1.00, $1.25, $1.50 and $2.00 respectively. All options expire on 31 December 2010.

•

Entitled to a performance bonus based upon the satisfaction of certain key performance indicators ("KPI's"). No key performance indicators were established for the year ended 30 June 2009 and as such there was no entitlement to a bonus under this provision of the service agreement.

•

Four weeks notice of termination. On termination by the Company entitled to payment of base salary that would have been payable had the full term of the contract been carried out. In the event of the position being made redundant following a takeover of the Company and the term to expiry of the employment contract is less than one year, then entitled to a minimum of 1 times base salary and entitlements at the time of the takeover.

B Burban, General Manager Exploration (resigned 18 March 2008)

•

Base salary, exclusive of superannuation, was $160,000 per annum.

G Brock, Chief Operating Officer and Director (resigned 4 January 2008)

•

Base salary exclusive of superannuation was $285,000 per annum.

A Longo, Chief Financial Officer (until 30 April 2008)

•

Base salary, exclusive of superannuation, was $150,000 per annum.

F Hart, General Manager Simberi Gold Company (resigned 29 September 2008)

	•	Total fixed remuneration of $252,000 inclusive of superannuation, subject to periodic review.

•

Entitled to four week's pay on termination

T Bubb, Mining Manager (resigned 30 June 2009)

•

Base salary, exclusive of superannuation, was $195,800 per annum.

(f) Loans to key management personnel

There were no loans to key management personnel during the period 1 July 2006 to 30 June 2009..

(g) Finance leases

During the financial year the terms of conditions of agreements entered into with Minesite Constructions, a company in which Mark Caruso is a shareholder and director, for the hire of mining equipment in a prior financial year were modified resulting in the classification those agreements being changed from operating leases to finance leases from the time that the modified terms came into effect.

The carrying amount as at the reporting date of various mining equipment subject to finance leases with Minesite Constructions was $3,249,717 (2008: $nil, 2007: $nil). Under the terms of the leases, the Group has the option to acquire the leased assets for their agreed fair value on expiry of the leases.

The leases also provide for the payment of contingent rentals determined on the basis of a fixed charge per machine hour. The total value of contingent rentals paid during the reporting period was $2,216,800 (2008: $nil, 2007:$nil).

The leases expire in October 2011.

A-33

	2009		2008		2007
	$		$		$
Commitments in relation to finance leases with key management personnel are payable as follows:
Within one year		3,325,200		—		—
Later than one but not later than five years		4,156,500		—		—
Minimum lease payments		7,481,700		—		—
Future finance charges		3,641,886		—		—
Recognised as a liability		3,839,814		—		—
Representing lease liabilities:
Current		1,063,713		—		—
Non-current		2,776,101		—		—
		3,839,814		—		—
Finance charges included in the income statement as finance expenses		2,043,900		—		—

(h) Other transactions and balances with key management personnel

Mineral Commodities Limited a company in which Mr Mark Caruso is a Director and Shareholder provided the Company with services including accounting, clerical, secretarial and fully serviced office accommodation. The total amount charged was $26,308 (2008: $26,308, 2007:$86,168).

Aggregate amounts of each of the above types of other transactions with key management personnel of the consolidated entity:

Amounts recognised as expense
Purchase of goods and services	646,384	763,098	86,168
Hire of mining equipment	1,648,760	2,588,360	1,245,183
Amounts recognised as property, plant and equipment
Construction of processing plant	573,333	276,103	—
Amounts recognised as capitalised exploration and evaluation or development expenses
Geological consulting services	78,962	73,982	—

Aggregate amounts payable to key management personnel of the consolidated entity at balance date relating to the above types of other transactions:

Current liabilities

1,127,674

892,272

—

27.	SHARE BASED PAYMENTS

(a) Employee and directors options

The Allied Gold Limited employee option plan was re-approved by shareholders at the Annual General Meeting on 28 November 2008. The plan is designed to provide long term incentives for senior employees (including directors) to deliver long term shareholder returns. All full time employees, part time employees and consultants to the consolidated entity are eligible to participate in the plan at the absolute discretion of the Board. Options are granted under the plan for no consideration and are at terms stipulated at the discretion of the Board. The options hold no voting rights, do not participate in dividends and are not transferable. All options granted are exercisable in exchange for one ordinary share in the parent entity for every option held.

Set out below are summaries of options granted under the plan:

	2009			2008			2007
	Number of			Number of			Number of
	options			options			options
Outstanding at the beginning of the year		14,020,000			3,000,000			7,900,000
Granted		37,650,000			13,640,000			2,000,000
Lapsed		(6,765,000	)		(750,000	)		—
Exercised		—			(1,870,000	)		(6,900,000	)
Vested and exercisable at end of year		44,905,000			14,020,000			3,000,000

The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2009 was $nil (2008: $0.83, 2007:$0.28)).

Fair value of options granted

The fair value of options at grant date is independently determined using a binomial pricing model that takes into account the exercise prices, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

A-34

(6)	This number includes $15,000 in respect of vested option and $30,000 in respect of unvested options held by Mr. Bubb.

(7)	This number includes $60,000 in respect of vested options and $60,000 in respect of unvested options held by Mr. Torre.

(8)	At a shareholders meeting to be held in November 2009, the Company is proposing to seek shareholder approval for the issuance of an aggregate of 37,500,000 options to Messrs. Caruso and Terranova exercisable at $0.50 per share, subject to various conditions.

Incentive Plan Awards — Value Vested or Earned During the Year

The following table sets forth the details regarding the value vested or earned of incentive plan awards for each Named Executive Officer for the financial year ended June 30, 2009.

	Option-Based		Share-Based		Non-Equity Incentive Plan
	Awards — Value		Awards — Value		Compensation — Value
	Vested During the Year		Vested During the Year		Earned During the Year
Name	($)(1)		($)		($)
Mark Caruso,		—		—		—
Executive Chairman
Richard Johnson,		—		—		—
Chief Executive Officer
Frank Terranova,		—		—		—
Chief Financial Officer
Ross Hastings,		—		—		—
Manager Resource and Development
Peter DuPlessis,		28,000		—		—
Resident Manager Simberi Operations
Fergus Hart,		—		—		—
Resident Manager Simberi Operations
Tony Bubb,		20,000		—		—
Mining Manager
Peter Torre,		—		—		—
Company Secretary

Note:

(1)

For this purpose, the options are valued on the date of vesting. The "value vested" represents the aggregate dollar value that would have been realized if the options under the option-based award had been exercised on the vesting date. This is calculated by computing the dollar value that would have been realized by determining the difference between the market price of the underlying securities at exercise and the exercise price of the options under the option-based award on the vesting date

Narrative Discussion

A description of the Company's Option Plan is set out under the heading "Stock Option Plan" below.

Management Agreements and Termination Benefits

Allied Gold has entered into formal service agreements with directors and key management personnel. On appointment to the Board, all non-executive directors enter into a service agreement with Allied Gold, in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the particular appointment.

Remuneration and other terms of employment for the Managing Director, Chief Executive Officer, Chief Financial Officer and other key management personnel are also formalised in contracts of employment. Some of these agreements provide for the provision of performance related bonuses as well as participation in the Option Plan. Other major provisions of the agreements relating to remuneration are set out below. Any contract with an employee may be terminated by either party giving relevant notice.

Mark V. Caruso, Executive Chairman

•

No fixed term.

•

Base remuneration of $350,000 per annum inclusive of superannuation effective from October 6, 2008.

•

Entitled to an annual bonus of no more than 30% of base remuneration if key performance indicators set by the Board on an annual basis are achieved. No key performance indicators were established for the year ended June 30, 2009 and as such there was no entitlement to a bonus for the year ended June 30, 2009 under this provision of the service agreement.

C-49

•

Four weeks notice of termination by Allied Gold. In the event that employment is terminated by Allied Gold,Mr. Caruso is entitled to twelve month's base remuneration plus any amount payable in lieu of notice.

•

Eight weeks notice of termination by Executive. In that event that employment is terminated by Mr. Caruso, Mr. Caruso is entitled to three month's base remuneration plus any amount payable in lieu of notice.

Granted 4,750,000 Tranche A options, 2,250,000 Tranche B options and 3,000,000 Tranche C options.

Frank Terranova, Chief Financial Officer

•

No fixed term.

•

Base remuneration of $285,000, inclusive of superannuation effective from October 6, 2008.

•

Entitled to an annual bonus not exceeding 30% of base payments dependent on achievement of specific objectives as determined by the Chief Executive Officer commencing the financial year ending June 30, 2009. No key performance indicators were established for the year ended June 30, 2009 and as such there was no entitlement to a bonus under this provision of the service agreement.

•

Eight weeks notice of termination. On termination by Allied Gold, entitled to termination pay of twelve months total fixed remuneration.

Peter Torre, Company Secretary

•

No fixed term.

•

Three year term commencing October 6, 2008.

•

Base remuneration of $84,000 per annum.

•

Three months notice of termination by Allied Gold. In the event that appointment is terminated by Allied Gold, Mr. Torre is entitled to the lesser of three month's base remuneration or balance of contract term.

•

Three months notice of termination by Mr. Torre. In that event that employment is terminated by Mr. Torre, Mr. Torre is entitled to three month's base remuneration plus any amount payable in lieu of notice.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,0000 Tranche C options.

Ross Hastings, General Manager Resource and Development

•

No fixed term.

•

Base remuneration of $218,000 inclusive of superannuation.

•

Entitled to four week's pay on termination by Allied Gold or by Mr. Hastings.

Peter DuPlessis, Resident Manager Simberi Operation

•

No fixed term.

•

Base remuneration, exclusive of superannuation, of $220,000 per annum.

•

Entitled to a performance bonus of $22,000 gross based upon the satisfaction of achieving quarterly key performance indicators ("KPI's"). The KPI's are as follows: (a) average cost of gold per ounce sold for the Quarter is AUD $600 or less, as calculated by the Chief Financial Officer; and (b) the total gold shipped per quarter is a minimum of 21,000 ounces.

•

In the event Allied Gold terminates the employment, three month's salary will be paid.

Richard Johnson, Chief Executive Officer and Managing Director (appointed January 1, 2008, resigned October 3, 2008)

•

Fixed term of 3 years commencing January 1, 2008.

•

Base remuneration of $380,000, inclusive of superannuation, reviewed annually by Board of Directors.

•

5 million options issued on appointment. The options are in five parcels of one million options exercisable at $0.80, $1.00, $1.25, $1.50 and $2.00 respectively. All options expire on December 31, 2010.

C-50

•

Entitled to a performance bonus based upon the satisfaction of certain key performance indicators ("KPI's"). No key performance indicators were established for the year ended June 30, 2009 and as such there was no entitlement to a bonus under this provision of the service agreement.

•

Fergus Hart, General Manager Simberi Gold Company (resigned September 29, 2008)

•

Total fixed remuneration of $252,000 inclusive of superannuation, subject to periodic review.

•

Mr. Hart received four week's pay on resignation of his employment with Allied Gold.

Tony Bubb, Mining Manager (resigned June 30, 2009)

•

Base salary, exclusive of superannuation, was $195,800 per annum.

•

Mr Bubb did not receive any termination payment in relation to his resignation.

Tranche A options vest on grant date, Tranche B options vest upon the 100,000 th ounce of gold production between October 1, 2008 and December 31, 2009. Upon production of 75,000 ounces within that timeframe, the directors have the discretion to require the holder to exercise 50% of the Tranche B options in which case the holder will forego the balance of the options. Tranche C options vest when the weighted average price of the Allied Gold Shares is greater than $0.70 on the ASX for five consecutive days.

Pension Plan Benefits

Allied Gold does not have a pension plan that provides for payments or benefits to the Named Executive Officers at, following, or in connection with retirement. In compliance with certain statutory requirements in Australia, Allied Gold is required to make payments to a superannuation fund nominated by the employee at the rate of 9% of the employee's salary. Allied Gold has no involvement in the management or selection of any such fund, and does not have access to information with respect to any such fund, including principal amounts held by such funds or rates of return of such funds. The salary compensation figures set out herein include such superannuation payments.

Director Compensation

Director Compensation Table

The following table sets forth the details regarding compensation paid to Allied Gold non-executive directors during the financial year ended June 30, 2009. Executive directors do not receive additional compensation for acting in the capacity of director.

Non-Equity

Fees

Share-Based

Option-Based

Incentive Plan

All Other

Earned

Awards

Awards(1)

Compensation

Pension Value

Compensation

Total

Name

($)

Gregory Steemson

74,250

Nil

228,451

Nil

302,701

Anthony Lowrie

74,250

Nil

228,451

Nil

302,701

Montague House

25,000

Nil

25,000

Note:

(1)

Fair values at grant date are independently determined using the binominal option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

Narrative Discussion

Fees payable to non-executive directors reflect the demands which are made on, and the responsibilities of, the individual director. Non-executive directors' fees and payments are reviewed annually by the Board. During the year certain non-executive directors received share options in accordance with a resolution approved by shareholders at Allied Gold's Annual General Meeting held on November 28, 2008.

C-51

The Company has the Stock Option plan for the granting of incentive stock options to the employees and consultants of the Company. Incentive stock options are issued to the Company's directors by way of separate option grants as approved by the Company's shareholders. The Company did not grant any stock options to the directors during the most recently completed financial year. The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the shareholders.

Gregory Steemson, Non Executive Director

•

No fixed term.

•

Total fixed remuneration of $75,000 per annum for services as a non executive director.

•

Annual retainer of $45,000 for geological consulting services.

•

Four weeks notice of termination.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,000 Tranche C options.

Anthony Lowrie, Non Executive Director

•

No fixed term.

•

Total fixed remuneration of $75,000 per annum for services as a non executive director.

•

Four weeks notice of termination.

•

Granted 1,000,000 Tranche A options, 500,000 Tranche B options and 500,0000 Tranche C options.

Montague House, Non Executive Director

•

No fixed term.

•

Total fixed remuneration of $75,000 per annum for services as a non executive director.

•

Four weeks notice of termination.

Directors Share-Based Awards and Option-Based Awards

The following table sets forth the details regarding the incentive plan awards for each non-executive director of the Company outstanding as of June 30, 2009.

Option-Based Awards

Share-Based Awards

Number of

Market or

Securities

Value of

Shares or Units

Payout Value

Underlying

Option

Unexercised

of Shares That

of Share-Based

Unexercised

Exercise

Option

in-the-money

Have Not

Awards That Have

Options

Price

Expiration

Options

Vested

Not Vested

Name

(#)

($)

Date

($)

(#)

($)

Gregory Steemson

2,000,000

0.35

30/11/2011

120,000

(1)

—

Anthony Lowrie

2,000,000

0.35

30/11/2011

120,000

(1)

—

Montague House (2)

—

Note:

(1)	This number includes $60,000 in respect of vested options and $60,000 in respect of unvested options held by Mr. Steemson and Mr. Lowrie.

(2)	At a shareholders meeting to be held in November 2009, the Company is proposing to seek shareholder approval for the issuance of 1,500,000 options to Mr. House exercisable at $0.30 per share, subject to various conditions.

C-52

Directors Incentive Plan Awards — Value Vested or Earned During the Year

The following table sets forth the details regarding the value vested or earned of incentive plan awards for each non-executive director of the Company for the financial year ended June 30, 2009.

			Non-Equity Incentive Plan
	Option-Based Awards —	Share-Based Awards — Value	Compensation — Value Earned
	Value Vested During the Year	Vested During the Year	During the Year
Name	($)(1)	($)	($)
Gregory Steemson	Nil	Nil	Nil
Anthony Lowrie	Nil	Nil	Nil
Montague House	Nil	Nil	Nil

Note:

(1)

The "value vested" represents the aggregate dollar value that would have been realized if the options under the option-based award had been exercised on the vesting date. This is calculated by computing the dollar value that would have been realized by determining the difference between the market price of the underlying securities at exercise and the exercise price of the options under the option-based award on the vesting date.

Stock Option Plan

Allied Gold established an employee incentive option scheme (the "Option Plan") for, inter alia, the employees and consultants of Allied Gold or any related entity ("Eligible Persons"). The Option Plan was established to advance the interests of Allied Gold by encouraging stock ownership by Eligible Persons and attracting, motivating and retaining Eligible Participants. The Option Plan is administered by the Board. Under the Option Plan, options to purchase shares may be granted by the Board to Eligible Persons. The Board has the authority, subject to the terms of the Option Plan, to determine the terms, including the limitations, restrictions and conditions, if any, upon such grants and shall take into account the skill, experience, length of service with Allied Gold, remuneration level and such other criteria as the directors consider appropriate in the circumstances. The Option Plan provides that directors are not included as Eligible Persons; the Company has a separate plan on substantially similar terms to the Option Plan for members of the Board of Directors, except that shareholders must ratify grants of stock options to directors and that options granted to directors do not generally expire until their original expiry date, regardless as to whether a director resigns or is not re-elected prior to such expiry date.

The Option Plan provides that, subject to any regulatory requirements, the exercise price for any option granted under the Option Plan shall be determined by the Board of Directors and shall be no less than any minimum specified by the listing rules of the ASX. All offers of option grants will be made using an "Offer Document" as prescribed by the Option Plan or by applicable regulation. The terms of each grant will be set out in the Offer Document. Options are not assignable. The terms of grant of options may be varied by the Board of Directors only in accordance with the rules of the ASX, and requires the consent of the grantee if any such variation would be materially prejudicial to the grantee, other than adjustments to comply with applicable legislation, to correct errors, or to permit Allied Gold to comply with the rules of the ASX or foreign laws or regulatory bodies.

Options are exercisable when the conditions in respect of each grant of options have been satisfied and there is otherwise no prohibition precluding the exercise of such options. Options must be exercised in such minimum numbers as prescribed by the rules of the ASX.

The Board of Directors may determine in its discretion the number of options to be granted to an Eligible Person. Options are exercisable during a period established at the time of their grant, such period to be set out in Offer Document. Any Option not exercised prior to the expiry date will become null and void. Options that are not exercisable at the time an Eligible Person ceases to be an Eligible Person for any reason, including termination of employment for cause or resignation, will be immediately null and void. Options that are exercisable at the time an Eligible Person ceases to be an eligible person for any reason, including termination of employment for cause or resignation, will be exercisable for a period of 60 days after such date of termination or resignation. In the case of death, permanent disability, retirement or redundancy of an Eligible Person, the legal representative of such Eligible Person may exercise any unexercised options which are otherwise eligible to be exercised. In such event, the Board of Directors may, in its discretion, permit the exercise of Options that are not exercisable at such time and have not otherwise lapsed. In all cases, the Board of Directors may determine in its discretion that any options that are not otherwise exercisable, but have not lapsed, may be exercised within any such additional time as determined by the board.

C-53

RISK FACTORS

An investment in Allied Gold and the Allied Gold Shares is subject to risks and uncertainties. The occurrence of any one or more of these risks or uncertainties could have a material adverse effect on the value of any investment in Allied Gold and the business, prospects, financial position, financial condition or operating results of the Company. Prospective investors should carefully consider the information presented in this Bidder's Statement/Offer and Circular, including the following risk factors, which are not an exhaustive list of all risk factors associated with an investment in Allied Gold or the Allied Gold Shares or in connection with the operations of the Company:

Allied Gold depends on a single mineral project.

Allied Gold currently has one operating gold mine, the Simberi gold mine. Any event leading to the reduction in production or closure of this mine will have a material adverse effect on the Company's financial performance and results of operations.

The Simberi Project accounts for all of the Company's mineral resources and reserves and the potential for the future generation of revenue. Any adverse development affecting the progress of the Simberi Project may have a material adverse effect on the Company's financial performance and results of operations. These developments include, but are not limited to, unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage, hiring suitable personnel and engineering contractors, or securing supply agreements on commercially suitable terms,.

Precious metal exploration projects may not be successful and are highly speculative in nature.

The exploration for and development of precious metals involves significant risks which even a combination of careful evaluation, experience and knowledge cannot eliminate. While the discovery of a precious metal deposit may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish mineral reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. Whether a precious metal deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of precious metals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital. There is no certainty that the expenditures made by the Company towards the search and evaluation of precious metal deposits will result in discoveries of commercial quantities of such metals.

Mining operations generally involve a high degree of risk.

Mining operations are subject to all the hazards and risks normally encountered in the exploration for and development and production of precious metals, including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding, variations in grade, deposit size, density and other geological problems, hydrological conditions, metallurgical and other processing problems, mechanical equipment performance problems, the unavailability of materials and equipment including fuel, labour force disruptions, unanticipated transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not limited to, petroleum, and adverse weather conditions and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Should any of these risks and hazards affect any of Allied Gold's proposed mining operations, it may cause the cost of production to increase to a point where it would no longer be economic to produce gold from the Company's mineral reserves, which would have a material and adverse affect on the financial condition, results of operation, and cash flows of the Company.

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Gold price volatility may affect the future production, profitability, financial position and financial condition of Allied Gold.

The development and success of the Simberi Project will be primarily dependent on the future price of gold. Gold prices are subject to significant fluctuation and are affected by a number of factors which are beyond the control of the Company. Such factors include, but are not limited to, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major gold-producing countries throughout the world. The price of gold and other base and precious metals has fluctuated widely in recent years, and future serious price declines could cause continued development of, and commercial production from, the Company's properties to be impracticable or uneconomic. Depending on the price of gold and other base metals, projected cash flow from planned mining operations may not be sufficient and the Company could be forced to discontinue development and may lose its interest in, or may be forced to sell, some of its properties. Future production from the Company's mining properties is dependent on gold prices that are adequate to make these properties economically viable. Furthermore, reserve calculations and life-of-mine plans using significantly lower gold prices could result in material write-downs of the Company's investment in mining properties and increased amortization, reclamation and closure charges. In addition to adversely affecting the Company's mineral reserve estimates and its financial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.

Allied Gold's mineral resources and reserves are estimates only.

There is no certainty that the mineral resources, or any future mineral reserve, attributable to Allied Gold will be realized. Until mineral reserves or mineral resources are actually mined and processed, the quantity of mineral resources and mineral reserve grades must be considered as estimates only. In addition, the quantity of mineral reserves and mineral resources may vary depending on, among other things, metal prices and currency exchange rates. Any material change in the quantity of mineral reserves, mineral resources, grade or stripping ratio may affect the economic viability of the properties. In addition, there can be no assurance that gold recoveries or other metal recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. Results of drilling, metallurgical testing and production and the evaluation of mine plans subsequent to the date of any estimate may require revision of such estimate. The volume and grade of reserves mined and processed and recovery rates may not be the same as currently anticipated. Any material reductions in estimates of mineral reserves and mineral resources, or of the Company's ability to extract these mineral reserves, could have a material adverse effect on the Company's results of operations and financial condition. Also, a reduction in estimated reserves could require material write-downs in investment in the affected mining property and increased amortization, reclamation and closure changes.

Foreign investments and operations are subject to numerous risks associated with operating in foreign jurisdictions.

Allied Gold conducts mining, development or exploration activities in Papua New Guinea. Allied Gold's foreign mining investments are subject to the risks normally associated with the conduct of business in foreign countries. The occurrence of one or more of these risks could have a material and adverse effect on Allied Gold's profitability or the viability of its affected foreign operations, which could have a material and adverse effect on Allied Gold's future cash flows, earnings, results of operations and financial condition.

Risks may include, among others, labour disputes, invalidation of governmental orders and permits, corruption, uncertain political and economic environments, sovereign risk, war (including in neighbouring states), civil disturbances and terrorist actions, arbitrary changes in laws or policies of particular countries, the failure of foreign parties to honour contractual relations, corruption, foreign taxation, delays in obtaining or the inability to obtain necessary governmental permits, opposition to mining from environmental or other non-governmental organizations, limitations on foreign ownership, limitations on the repatriation of earnings, limitations on gold exports, instability due to economic under-development, inadequate infrastructure and increased financing costs. In addition, the enforcement by the Company of its legal rights to exploit its properties may not be recognized by the government of Papua New Guinea or by its court system. These risks may limit or disrupt Allied Gold's operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without fair compensation.

The economy and political system of Papua New Guinea should be considered by investors to be less predictable than those in countries in which the majority of investors are likely to be resident. The possibility that the current, or a future, government may adopt substantially different policies, take arbitrary action which might halt production, extend to the re-nationalization of private assets or the cancellation of contracts, the cancellation of mining and exploration rights and/or changes in taxation treatment cannot be ruled out, the happening of any of which could result in a material and adverse effect on the Company's results of operations and financial condition.

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The following are risks more specifically associated with the Company's operations in Papua New Guinea;

(a)

Legal Systems

Papua New Guinea has a less developed legal system than Australia or Canada, which may result in risks such as: (i) potential difficulties in obtaining effective legal redress in the courts of Papua New Guinea, whether in respect of a breach of law or regulation, or in an ownership dispute; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v) relative inexperience of the judiciary and courts in such matters. The commitments of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed.

(b)

Civil Unrest

There have been instances of civil unrest within Papua New Guinea. Although the Company believes that the risk of civil insurrection on Simberi Island and the Tabar Islands in general is unlikely, there can be no assurance that the people of the region will not disrupt operations at the proposed mine site in the future.

(c)

Government Stability

Allied Gold's mining operations are subject to political, economic and other uncertainties, including the risk of civil rebellion, expropriation, nationalisation, renegotiation or nullification of existing contracts, mining licenses and permits or other agreements, changes in laws or taxation policies, currency exchange restrictions, changing political conditions and international monetary fluctuations. Future Papua New Guinea Government actions concerning the economy or the operation and regulation of nationally important facilities such as mines could have a significant effect on the company. No assurances can be given that the Simberi operation will not be adversely affected by future developments in Papua New Guinea. Fiscal and tax policy in Papua New Guinea can be uncertain and subject to sudden changes. For example, the Papua New Guinea Government imposed and later replaced a 4% mining levy and 15% withholding tax on interest in 1998 and 1999. In addition to the national Papua New Guinea Government, Papua New Guinea has a system of 19 provincial level governments, which are funded almost entirely by direct grants from the national Papua New Guinea Government. In the past, there have been disagreements between the Papua New Guinea Government and the provincial level governments of Papua New Guinea, primarily in relation to power sharing and revenue arrangements.

(d)

Papua New Guinea Land Policy

Since 1978, the Papua New Guinea Government has maintained a policy of holding an equity participation option of up to 30% in mining projects located in Papua New Guinea. This equity has been purchased on a historical or sunk cost basis. In 1992, the previous Papua New Guinea Government announced a decision to increase the Papua New Guinea Government's equity interest in an existing gold project at Porgera and renegotiated that interest from 10% to 25%. Although the other joint venturers in the Porgera project resisted this move, a price was ultimately negotiated and accepted by all parties. The Company is not aware of any current intention on the part of the Papua New Guinea Government to seek equity participation in its Papua New Guinea projects. No assurance can be given that the Papua New Guinea Government will not seek to acquire equity in the Simberi or other Tabar Islands properties in the future. In the past the Papua New Guinea Government has taken equity only in major mining projects of national significance.

Approximately 97% of land in Papua New Guinea is held under a land tenure system, the nature and terms of which vary considerably throughout the country. In general, land held under such tenure cannot be alienated and is almost entirely communally owned. Title to most land in Papua New Guinea has not been recorded or registered and there has been little surveying. As a result, title to land (in Western legal terms) is often unclear. Disputes over land ownership are common, especially in the context of resource developments. Identifying all the affected landowners, and structuring compensation arrangements that are both fair and acceptable to all of them, can be difficult. The Company believes that the satisfactory resolution of local landowner concerns is essential to the development and operation of a mine in Papua New Guinea and believes that it enjoys sound relationships with the affected landowners. The Company has always been committed to spending considerable time, effort and expense in order to resolve landowner issues relating to the Simberi operation, but there can be no assurance that disruptions arising out of landowner dissatisfaction will not occur.

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Allied Gold may experience regulatory, consent or permitting delays.

The business of mineral exploration, project development, mining and processing is subject to various national and local laws and plans relating to: permitting and maintenance of title; environmental consents; taxation; employee relations; heritage/historic matters; health and safety; royalties; land acquisition; and other matters.

There is a risk that the necessary permits, consents, authorizations and agreements to implement planned exploration, project development, or mining may not be obtained under conditions or within time frames that make such plans economic, that applicable laws, regulations or the governing authorities will change or that such changes will result in additional material expenditures or time delays.

There is no assurance as to Allied Gold's ability to sustain and expand mineral reserves and resources.

Because mines have limited lives based on proven and probable mineral reserves, the Company will be required to continually replace and expand its mineral reserves as its mines produce gold. The life-of-mine estimates included in this document in respect of the Simberi Project may not be correct. The Company's ability to maintain or increase its annual production of gold in the future will be dependent in significant part on its ability to bring new mines into production and to expand mineral reserves at existing mines. The Simberi Project has an remaining life of over 10 years based only on proven and probable mineral reserves.

Feasibility studies may be used to determine the economic viability of a deposit. Many factors are involved in the determination of the economic viability of a deposit including the achievement of satisfactory mineral reserve estimates, the level of estimated metallurgical recoveries, capital and operating cost estimates and the estimate of future gold prices. Capital and operating cost estimates are based upon many factors, including anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, ground and mining conditions, expected recovery rates of the gold from the ore and anticipated environmental and regulatory compliance costs. Each of these factors involves uncertainties and as a result Allied Gold cannot give assurance that its development or exploration projects will become operating mines. If a mine is developed, actual operating results may differ from those anticipated, thereby impacting on the economic viability of the project.

Allied Gold's current and proposed exploration and mining activities are predominantly in one country.

Allied Gold is conducting its exploration and development activities predominantly in Papua New Guinea. Allied Gold believes that the Government of Papua New Guinea supports the development of natural resources. There is no assurance that future political and economic conditions in Papua New Guinea will not result in the Government of Papua New Guinea adopting different policies respecting foreign development and ownership of mineral resources. Any such change in policy may result in changes in laws affecting ownership of assets, land tenure and mineral concessions, taxation, royalties, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, which may affect both Allied Gold's ability to undertake exploration and development activities in respect of future properties as well as its ability to continue to explore and develop those properties in respect of which it has obtained mineral exploration rights to date.

Allied Gold's title to mineral rights could be challenged.

The acquisition and retention of title to mineral rights is a detailed and time consuming process. Title to, and the area of, mineral resource claims may be disputed or challenged. The Company's right to explore for, mine, produce and sell gold from the Simberi Project is based on the Exploration and Mining License. Should Allied Gold's rights under the Exploration and Mining License not be honoured or be unenforceable for any reason, or if any material term of the Exploration and Mining License is unilaterally changed or not honoured, including the boundaries, Allied Gold's ability to explore and produce gold in the future would be materially and adversely affected, and this would have a material and adverse effect on the Company's financial performance and results of operations.

Allied Gold relies on its management team and outside contractors, and the loss of one or more of these persons may adversely affect Allied Gold.

The success of the operations and activities of Allied Gold is dependent to a significant extent on the efforts and abilities of its management and outside contractors. Investors must be willing to rely to a significant extent on management's discretion and judgment, as well as the expertise and competence of outside contractors. Allied Gold does not have in place formal programs for succession of management and training of management, nor does it hold key person insurance on these individuals. The loss of one or more of these key employees or contractors, if not replaced, could adversely affect Allied Gold's profitability, results of operations and financial condition.

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Inferred mineral resources are uncertain and their economic viability cannot be assured.

Inferred mineral resources cannot be converted into mineral reserves as the ability to assess geological continuity is not sufficient to demonstrate economic viability. Due to the uncertainty which may attach to inferred mineral resources, there is no assurance that inferred mineral resources will be upgraded to resources with sufficient geological continuity to constitute proven and probable mineral reserves as a result of continued exploration.

Allied Gold has a limited history of mining operations.

The Company has a limited history of mining operations, and there is no assurance that it will successfully operate profitably or provide a return on investment in the future. Other factors mentioned in this section entitled "Risk Factors" may also prevent Allied Gold from successfully operating a mine.

Allied Gold's properties are subject to environmental risks.

Mining operations have inherent risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. Laws and regulations involving the protection and remediation of the environment and the governmental policies for implementation of such laws and regulations are constantly changing and are generally becoming more restrictive. Allied Gold cannot give any assurance that, notwithstanding its precautions, breaches of environmental laws (whether inadvertent or not) or environmental pollution will not materially and adversely affect its financial condition and its results from operations.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations. Environmental hazards may exist on the properties on which the Company holds interests which are unknown to the Company at present and which have been caused by previous or existing owners or operators of the properties. Reclamation costs are uncertain and planned expenditures may differ from the actual expenditures required.

Allied Gold's insurance coverage does not cover all of its potential losses, liabilities and damages related to its business and certain risks are uninsured or uninsurable.

The Company's business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes or slowdowns, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment or laws, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company's properties or the properties of others, delays in development or mining, monetary losses and possible legal liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards which may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Currency fluctuations may affect the costs that Allied Gold incurs in its operations.

The Company's revenue from Gold sales is received in United States dollars while a significant portion of its operating expenses will be incurred in the Australian dollars, Papua New Guinean Kina and other foreign currencies. From time to time, the Company will borrow funds and will incur capital expenditures that are denominated in foreign currency. The appreciation of non-U.S. dollar currencies in those countries where Allied Gold has mining and exploration operations against the U.S. dollar would increase the costs of gold production at such operations which could materially and adversely affect the Company's profitability, results of operation and financial position.

Allied Gold has a history of operating losses and there can be no assurance that Allied Gold will ever be profitable.

Allied Gold's operations have sustained operating losses during recent fiscal years.

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Allied Gold may require additional capital in the future and no assurance can be given that such capital will be available at all or available on terms acceptable to Allied Gold.

There can be no assurance that financing will be available to the Company or, if it is, that it will be offered on acceptable terms. If additional financing is raised through the issuance of equity or convertible debt securities of the Company, the interests of shareholders in the net assets of the Company may be diluted. Any failure of the Company to obtain required financing on acceptable terms could have a material adverse effect on the Company's financial condition, results of operations and liquidity and require the Company to cancel or postpone planned capital investments.

INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS

None of the directors or senior officers of Allied Gold, or associates or affiliates of the foregoing persons are indebted to Allied Gold or have been the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by Allied Gold.

ONGOING SHAREHOLDER AND OTHER REPORTING

REQUIREMENTS IN CANADA, AUSTRALIA AND THE UK

Canada

Insider Requirements

Under Canadian securities legislation, a person or company (and any director or officer of such company) who beneficially owns, directly or indirectly, or exercises control or direction over, securities of a reporting issuer carrying 10% or more of votes attached to all securities of a reporting issuer is, like directors and senior officers of the reporting issuer, considered an "insider" of the reporting issuer. Insiders of a reporting issuer are subject to requirements under securities legislation in Canadian jurisdictions to report trades of shares. These and other requirements of Canadian securities legislation will apply to the Company if it becomes a reporting issuer in one or more provinces in Canada. Allied Gold is currently not reporting issuer in any jurisdiction in Canada at this time. However, as an ASX and AIM listed issuer, the Company will still be required to comply with all relevant Australian and UK laws and regulations, including the ASX Listing Rules and AIM Rules.

Australia

Disclosure of Shareholding

The Australian Corporations Act requires that a shareholder who has, or together with associates (as defined in the Australian Corporations Act) have a voting power of 5% or more of the voting shares in the Company must give a prescribed notice to the Company and ASX of the fact, and that shareholder must continue to give a prescribed notice if there is a movement of at least 1% in their holding.

Foreign Investment Review Board Approval

Under the Australian Foreign Acquisition and Takeovers Act, the Australian Treasurer may make blocking or unwinding orders if a non-Australian foreign person or entity acquires a substantial interest in an Australian company (i.e. if that person, alone or with associates, controls 15% or more of the voting power of the company, or holds an interest in 15% or more of the issued shares of the company, or if that person in conjunction with one or more other persons and associates controls 40% or more in aggregate of the voting power of the company or has an interest in 40% or more of the company's issued shares), without first obtaining approval from the Foreign Investment Review Board. Proposed acquisitions may require notification and the control of such acquisitions depends on the policy of the Australian Government and of the Australian Foreign Investment Review Board from time to time.

Takeover Provisions

The takeover provisions of the Australian Corporations Act apply to dealings in the Company's shares. The Australian Corporations Act forbids the acquisition of a "relevant interest" (defined broadly as either holding the securities, having the power to exercise (or control the exercise of) a right to vote attached to the securities, or having the power to dispose (or control the exercise of a power to dispose) of the securities) in a company incorporated in Australia if, as a result, the voting power of the acquirer alone or with associates (or any other person) would increase from 20% or below to more than 20%, or from a starting point that is above 20% and below 90%.

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United Kingdom

Disclosure of Shareholding

Where a person holds, either directly or indirectly, shares or financial instruments (such as options) of U.K. issuers (including issuers admitted to AIM) a notification obligation to the Financial Services Authority (FSA) arises. In the case of Allied Gold, a non-U.K. issuer with shares admitted to AIM, shareholders need to disclose holdings at 5%, 10%, 15%, 20%, 25%, 30%, 35%, 50% and 75%.

MATERIAL CONTRACTS

Except for contracts made in the ordinary course of business, the Company has not entered into any contracts material to the Company since July 1, 2008, or before July 1, 2008 which are still in effect, other than the following:

the Pre-Bid Agreement;

the Implementation Agreement;

a dry hire contract dated August 2008 with Minesite Construction Services Pty Ltd. relating to the hire of mining equipment; and

a letter of intent with Barrick Gold Corporation dated March 10, 2008 to enter into a $20.0 million farm-in agreement with respect to Allied Gold's exploration licence EL 609 on Tatau and Big Tabar Islands as described in "General Development of the Business — Three Year History".

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

Allied Gold is not the subject of any legal proceedings or regulatory actions material to Allied Gold, to which Allied Gold is a party or to which any of its properties is subject and no such proceedings or actions are known to be contemplated.

EXPERTS

Information of an economic (including economic analysis), scientific or technical nature regarding the Simberi Project is included in this Bidder's Statement/Offer and Circular based upon the Technical Report entitled "Simberi Gold Project, Simberi Island, Papua New Guinea" dated September 25, 2009 which was prepared for Allied Gold by Stephen Godfrey and John Battista of Golder Associates and Phil Hearse of Battery Limits, all of whom are "Qualified Persons" as defined in National Instrument 43-101 and are independent of Allied Gold within the meaning of National Instrument 43-101.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as disclosed in this Bidder's Statement/Offer and Circular, no director or senior officer of Allied Gold or any shareholder holding, on record or beneficially, directly or indirectly, more than 10% of the issued shares, or any of their respective associates or affiliates, had any material interest, directly or indirectly, in any material transaction with Allied Gold within the three years preceding the date of this Bidder's Statement/Offer and Circular or in any proposed transaction which has materially affected or would materially affect Allied Gold.

AUDITORS

The auditors of Allied Gold are BDO Kendalls Audit & Assurance (WA) Pty Ltd, 128 Hay Street, Subiaco, Western Australia, 6008.

REGISTRAR AND TRANSFER AGENTS

Allied Gold's registrar and transfer agent in Australia is Computershare Investor Services Pty Ltd. Level 2, Reserve Bank Building, 45 St. Georges Terrace, Perth, Western Australia, Australia, 6000. The Company's registrar and transfer agent in the United Kingdom is Computershare Investor Services PLC at P.O. Box 82, The Pavillions, Bridgwater Road, Bristol, BS99 7NH, United Kingdom. In the event that Allied Gold is successful in obtaining a listing on the TSX, it intends to retain Computershare Investor Services Inc. at 100 University Ave., 8th Floor, North Tower, Toronto, Ontario M5J 2Y1 as its registrar and transfer agent in Canada.

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SCHEDULE "A" TO ANNEX C

ALLIED GOLD LIMITED

AUDIT, COMPLIANCE AND RISK COMMITTEE CHARTER

2.	INTRODUCTION

This charter governs the operations of the Audit, Compliance and Risk Committee (Committee) which is established as a standing committee of the Board in accordance with Allied's constitution.

PURPOSE

3.1

Purpose

The purpose of the Committee is to provide assistance to the Board in its review of:

	(a)	Allied's financial reporting, internal control structure, risk management systems;

	(b)	the internal and external audit functions; and

(c)

Allied's compliance with legal and regulatory requirements in relation to the above.

3.2

Power

In discharging its role, the Committee may investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of Allied and may engage advisers as it determines necessary to carry out its duties.

4.	DUTIES AND RESPONSIBILITIES

4.1	Understanding the business

The Committee must ensure it understands Allied's structure, controls, and types of transactions in order to adequately assess the significant risks faced by the Company in the current environment.

4.2	Financial reporting

The primary responsibility of the Committee is to oversee the Company's financial reporting process on behalf of the Board and report the results of its activities to the Board.

While the Committee has the responsibilities and powers set forth in this charter, it is not the duty of the Committee to plan or conduct audits.

The Board is responsible for Allied's financial reports including the appropriateness of the accounting policies and principles that are used by Allied.

The external auditors are responsible for auditing Allied's financial reports and for reviewing Allied's unaudited interim financial reports.

The Committee has the responsibilities set out below.

4.3	Assessment of accounting, financial and internal controls

The Committee will discuss with management and the external auditors the adequacy and effectiveness of the accounting and financial controls, including Allied's policies and procedures to assess, monitor, and manage business risk, and legal and ethical compliance programs.

Any opinion obtained from the internal or external auditors on Allied's choice of accounting policies or methods should include an opinion on the appropriateness and not just the acceptability of that choice or method.

The Committee will meet separately with management and the external auditor to discuss issues and concerns, including, but not limited to, their assessments of the effectiveness of internal controls and the process for improvement. The Committee will provide sufficient opportunity each year for the external auditor to meet privately with the members of the Committee without management being present. The Committee will review with the external auditor any audit problems or difficulties and management's response.

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The Committee will receive regular reports from the external auditor on the critical policies and practices of the Company, and all alternative treatments of financial information (within generally accepted accounting principles) that have been discussed with management.

4.4	Appointment of external auditors

The Committee will be directly responsible for making recommendations to the Board on the appointment, reappointment or replacement (subject, if applicable, to member approval), remuneration, monitoring of the effectiveness, and independence of the external auditor, including the resolution of disagreements between management and the auditor regarding financial reporting.

The Committee will pre-approve all audit and non-audit services provided by the external auditor and will not engage the external auditor to perform any non-audit/assurance services that may impair or appear to impair the external auditor's judgment or independence in respect of Allied. The Committee may delegate pre-approval authority to a member of the Committee. The decisions of any Committee member to whom pre-approval authority is delegated must be presented to the full Committee at its next scheduled meeting.

4.5	Assessment of the external audit

At least annually, the Committee will obtain and review a report by the external auditor describing (or meet, discuss and document the following with them):

(a)

the audit firm's internal quality control procedures;

(b)

any material issues raised by the most recent internal quality control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the last 5 years, in respect to one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and

(c)

all relationships between the external auditor and Allied(to assess the auditor's independence).

In addition, the Committee will set clear hiring policies for employees or former employees of the external auditor in order to prevent the impairment or perceived impairment of the external auditor's judgment or independence in respect of Allied, consistent with the standards of auditor independence contained in the Corporations Act 2001 (Cth).

4.6	Independence of the external auditors

The Committee will review and assess the independence of the external auditor, including, but not limited to, any relationships with Allied or any other entity that may impair or appear to impair the external auditor's judgment or independence in respect of Allied. The Committee will also advise the Board annually whether the Committee is satisfied the provision of non-audit services is compatible with external auditor independence standards, as required by the Corporations Act 2001 (Cth).

4.7	Scope of the external audit

The Committee will discuss with the external auditor the overall scope of the external audit, including identified risk areas and any additional agreed-upon procedures. In addition, the Committee will also review the external auditor's compensation to ensure that an effective, comprehensive and complete audit can be conducted for the agreed compensation level.

The Committee will consider the financial reports and other information required by the ASX or AIM Listing Rules prior to the filing of these with ASX and AIM. Also, the Committee will discuss the results of the half-year review and any other matters required to be communicated to the Committee by the external auditor under generally accepted auditing standards. The Chair of the Committee may represent the entire Committee for the purposes of this review.

The Committee will consider all representation letters signed by management. Also, the Committee will discuss the results of the annual audit and any other matters required to be communicated to the Committee by the external auditors under generally accepted auditing standards.

The Committee will oversee the procedures for the receipt, retention, and treatment of complaints received by Allied regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of Allied of concerns regarding questionable accounting or auditing matters.

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5. MEMBERSHIP

The members of the Committee will be members of, and appointed by, the Board and will comprise at least 3 non-executive directors that have diverse, complementary backgrounds, with 2 directors who are assessed to be independent. The Chairman of the Committee will be an independent non-executive director.

All Committee members will be financially literate, or become financially literate within a reasonable period of time of appointment. At least one member will have accounting and/or related financial management expertise as determined by the Board.

MEETINGS

The Committee will meet at least 4 times each year.

MINUTES

Minutes of meetings of the Committee will be kept by the Company secretary and, once those minutes have been approved by the Chairman of the Committee, will be distributed to all members of the Board for noting at the next Board meeting.

8.	EVALUATION

The Committee will annually assess the performance of the Committee as a whole, as well as the effectiveness of this Committee charter.

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The Depositary for the Offer is:

COMPUTERSHARE INVESTOR SERVICES INC.

By Registered Mail, Courier or Hand Delivery:		By Mail:

Computershare Investor Services Inc.		Computershare Investor Services Inc.
100 University Avenue		P.O. Box 7021
9 th Floor		31 Adelaide Street East
Toronto, Ontario M5J 2Y1		Toronto, Ontario M5C 3H2

Attention: Corporate Actions		Attention: Corporate Actions

North American Toll-Free Number: 1-800-564-6253

Overseas Number: 514-982-7555

E-mail: corporateactions@computershare.com

The details for the Allied Gold Information Line established for the Offer are:

Australian Toll-Free Number: 1-800-898-557

North American Toll-Free Number: 1-866-806-0447

E-mail: info@alliedgold.com.au

Any questions and requests for assistance may be directed by Shareholders to the Depositary or the Allied Gold Information Line at the contact details set out above. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

	Six Months
	Ended June 30				Year Ended December 31
	2009		2008		2008		2007		2006
High		0.9363		0.9782		0.9822		0.9474		0.9187
Low		0.7838		0.8736		0.7524		0.8389		0.8137
Rate at end of period		0.9363		0.9740		0.8550		0.8670		0.9187
Average rate for period		0.8570		0.9311		0.9002		0.8982		0.8543

No.		Reasons why you should accept Allied Gold's offer

1.		The Offer terms are attractive

		w You will receive a premium for your ASG Shares

2.		Allied Gold Shares have strong investment characteristics

		w By accepting the Offer, you will participate in Allied Gold's future

3.		You will benefit from the creation of a larger and stronger company

		w The Combined Company will own an attractive portfolio of projects with an enhanced production profile

4.		Allied Gold brings greater capability to develop the Gold Ridge project

		w Allied Gold has the capability to bring the Gold Ridge project to production

5.		Allied Gold has entered into a pre-bid (lock-up) agreement with Resource Capital Fund III LP, ASG's largest shareholder

		w The prospect of a competing offer may be low

6.		Allied Gold intends to apply for a listing on the TSX

		w Allied Gold intends to apply for a listing of the ASG Shares on the TSX. If Allied Gold is successful in listing on the TSX, Shareholders who accept the Offer will continue to hold a security that is tradable on the TSX.
		Listing on the TSX will be subject to Allied Gold fulfilling all of the listing requirements of the TSX. There is no assurance that listing a listing on TSX will be obtained

7.		You may be a shareholder in a company controlled by Allied Gold if you do not accept the Offer

		w You may be exposed to a number of risks and disadvantages if you do not accept the Offer and remain a minority shareholder in ASG

	Allied Gold		Implied Offer		ASG		Implied Offer
Trading Period	VWAP		Price @ 0.85		VWAP		Premium
	C$		C$		C$		%
5 days		0.490		0.417		0.369		13.0	%
20 days		0.458		0.389		0.304		28.2	%
60 days		0.410		0.349		0.313		11.6	%
180 days		0.373		0.317		0.273		16.2	%

No.	Allied Gold attributes	Description

1.	Gold producer	•	100% ownership of the Simberi gold mine, located on the northern most island of the Tabar Islands in Papua New Guinea

		•	Production commenced in early 2008, current production of 80,000 oz gold per annum increasing to 100,000 oz gold per annum post oxide expansion

		•	Average cash costs of approximately U.S.$490 per oz for the 12 months ended June 30, 2009

2.	Long-life resource	•	Total resources of approximately 4.6 Moz gold and 10.1 Moz silver at Simberi Island

		•	Opportunities for additional resource expansion

3.	Growth potential	•	Simberi oxide expansion expected to add 20,000 oz gold per annum, increasing production from Simberi to around 100,000 oz gold per annum during fiscal year 2010

		•	Sulphide resources provide opportunity for a further 100,000 oz gold per annum commencing in fiscal year 2012

		•	Exploration interests, including Tatau and Big Tabar Islands in PNG (under farm-in arrangements with Barrick Gold Corporation) and exploration interests in Mapimi, Mexico

		•	Targeting production of more than 300,000 oz gold per annum by fiscal year 2013 through organic and acquisition growth

4.	Capability	•	Proven project delivery capability in challenging environments

		•	Allied Gold has a strong track record in successful project development, operations management and exploration

5.	Financial position	•	Strong financial position with a cash balance of A$20.5 million as at June 30, 2009

		•	Successfully repaid all outstanding secured bank debt associated with the Simberi operations ahead of schedule

Shareholder	% Holding
M&G Investment Management		19.85	%
Baker Steel Capital Managers		8.32	%
Capital Research Global Investors		5.51	%
Fidelity		4.40	%
Barrick Gold Corporation		4.07	%

No.	Benefit	Description
1.	Emerging producer in the Pacific Rim	•	The Combined Company will control two material gold mines in the highly prospective Pacific Rim region, along the "Rim of Fire"

2.	Diversified portfolio of operating, development and exploration assets	•	The Combined Company will own an attractive portfolio of projects at different levels of development, including:

			•	Simberi Oxide mine (producing)

			•	Simberi Oxide expansion project (feasibility)

			•	Simberi Sulphide development project (pre-feasibility)

			•	Gold Ridge project (final feasibility)

			•	Significant exploration projects, some in conjunction with Barrick Gold Corporation

		•	Importantly, the Combined Company is expected to have two operating mines, the Simberi gold mine in PNG and the Gold Ridge mine in the Solomon Islands, within the next 2 years

3.	Enhanced production profile	•	The Combined Company will have an attractive portfolio of projects at different levels of development, providing the foundation for long-term, sustainable production growth

		•	The Combined Company is expected to produce more than 300,000 oz gold per annum from 2013 from current projects:


			Notes:

			1.	Gold Ridge production forecasts based on ASG investor presentation, August 2009.
			2.	Oxide, sulphide and other production forecasts based on management estimates, with expansion projects subject to final investment decisions (FID), construction and commissioning. Chart assumes Gold Ridge is developed ahead of the Simberi sulphide project. This would be subject to FID.

4.	Larger reserve and resource base	•	Combined reserves of 2.0 Moz gold and combined resources of 6.6 Moz gold

		•	Significant capacity for mine expansion

5.	Capability to develop the Gold Ridge project	•	The Combined Company will be better positioned to deliver the development of the Gold Ridge project, due to:

			•	Allied Gold management's experience in operational commissioning of the Simberi mine in a remote location

			•	The Combined Company's greater access to capital

No.	Benefit	Description
6.	Material operating synergies	•	The Combined Company will benefit from material operating synergies, including:

			•	Rationalisation of duplicated head office and administrative costs

			•	Savings in transport costs from having two operations in close proximity in the Pacific Rim region

			•	Savings in procurement costs from greater purchasing power and economies of scale

			•	Combined exploration teams and expertise allowing the Combined Company to focus on the most attractive prospects

7.	Greater relevance to the investment community	•	The Combined Company will have a market capitalisation of approximately A$300 million (C$280 million) (assuming a 100% acquisition)

		•	Because of its greater size, the Combined Company is expected to benefit from:

			•	Potential index inclusions

			•	Increased trading liquidity

			•	Increased appeal to a wider set of global investors

			•	Greater access to funding from a broader range of financers and on more attractive terms

		•	The Combined Company's enhanced access to funding is also expected to allow it to pursue investments in other, larger projects

		Page
NOTICE TO HOLDERS OF AUSTRALIAN SOLOMONS GOLD LIMITED OPTIONS AND WARRANTS		ii

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION		ii

INVESTMENT DECISIONS		iii

INFORMATION CONCERNING AUSTRALIAN SOLOMONS GOLD LIMITED		iii

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES		iv

CURRENCY EXCHANGE RATE INFORMATION		iv

NOTICE TO NEW ZEALAND SHAREHOLDERS		iv

NOTICE TO FOREIGN SHAREHOLDERS		iv

PRIVACY		vi

ENFORCEMENT OF LEGAL RIGHTS		vi

CHAIRMAN'S LETTER

REASONS WHY ASG SHAREHOLDERS SHOULD ACCEPT THE OFFER

QUESTIONS AND ANSWERS ABOUT THE OFFER		1

GLOSSARY		7

INTERPRETATION		12

SUMMARY OF THE OFFER		13

OFFER		18

1.	The Offer	18

2.	Conditions of the Offer	18

3.	Take-Up and Payment for Deposited Shares	23

4.	Time for Acceptance	25

5.	Manner of Acceptance	25

6.	Extensions, Variations and Changes to the Offer	29

7.	Changes in Capitalization of ASG; Liens	29

8.	Right to Withdraw Deposited ASG Shares	30

9.	Return of Deposited Shares	31

10.	Mail Service Interruption	31

11.	Notice and Delivery	31

12.	Market Purchases	32

13.	Other Terms of the Offer	32

CIRCULAR		34

1.	The Offering Parties	34

2.	Australian Solomons Gold	38

3.	Profile of the Combined Company	40

4.	Recommendation of the Board of Directors of ASG	42

5.	Background to the Offer.	42

6.	Strategic Rationale for the Proposed Acquisition	46

7.	Purpose of the Offer and Allied Gold's Plans for ASG	47

8.	Risk Factors Related to the Offer	50

9.	Acquisition of ASG Shares Not Deposited	52

		Page
10.	Ownership of and Trading in Securities of ASG and Benefits from the Offer	53

11.	Commitments to Acquire Securities of ASG	53

12.	Arrangements, Agreements, Commitments or Understandings	53

13.	Acceptance of the Offer	53

14.	Material Changes and Other Information	53

15.	Effect of the Offer on the Market for and Listing of ASG Shares	54

16.	Regulatory Matters	54

17.	Certain Australian Income Tax Considerations	55

18.	Certain Canadian Federal Income Tax Considerations	58

19.	Depositary	62

20.	Offerees' Statutory Rights	62

21.	Legal Matters and Experts	62

22.	Directors' Approval	63

23.	Additional Information	63

CONSENT OF CLAYTON UTZ		65

CONSENT OF WILDEBOER DELLELCE LLP		66

CONSENT OF PRICEWATERHOUSECOOPERS		67

AUDITORS' CONSENT		68

CERTIFICATE OF AGL (ASG) PTY LTD		69

CERTIFICATE OF ALLIED GOLD LIMITED		70


Who is Allied Gold?		Allied Gold is an Australian incorporated and based company listed on the ASX and AIM. It is a gold producer currently producing gold from its 100% owned Simberi Oxide Gold Project in Papua New Guinea since February 2008. See Section 1 of the Circular, "The Offering Parties".

What does this Bidder's Statement/Offer and Circular mean?		The Offeror, a wholly-owned subsidiary of Allied Gold, is offering to buy all your ASG Shares on the terms set out in this Bidder's Statement/Offer and Circular. See Section 1 of the Offer, "The Offer". You may only accept this Offer in respect of all the ASG Shares held by you, not just some of them. This Offer does not apply to you if you no longer hold any ASG Shares. You are encouraged to read this Bidder's Statement/Offer and Circular and the Target's Statement/Director's Circular ASG will shortly be sending to you, consider your personal financial circumstances and obtain professional advice before making any decision regarding your ASG Shares. This Bidder's Statement/Offer and Circular was prepared by the Offeror and Allied Gold (the "Offering Parties") for distribution to you, the Shareholders. It sets out the terms and conditions of the Offer and contains important information that may be relevant to your decision whether or not to accept the Offer. This Bidder's Statement/Offer and Circular is an important document. If you are in any doubt as to how to deal with this document, you should consult your broker or your legal, financial or other professional adviser as soon as possible.

What is the Offeror offering to buy?		The Offeror is offering to acquire all of your ASG Shares, including ASG Shares that are issued before the end of the Offer Period as a result of the conversion of, or exercise of rights under, other ASG securities. See Section 1 of the Offer, "The Offer".

Is the ASG board of directors recommending the Offer?		Yes. ASG has confirmed that the Independent Directors of ASG intend to unanimously recommend that you accept the Offer in the absence of a superior proposal to the Offer and that, subject to a superior proposal, each of the Independent Directors of ASG intends to accept the Offer in respect of ASG Shares that they own or control. ASG has also confirmed that it has received a fairness opinion from Gryphon Partners confirming that the Offered Consideration is fair from a financial point of view to the Shareholders.


What are the intentions of the Offering Parties?		The Offeror is seeking to acquire all of the ASG Shares. If it acquires 90% or more of the ASG Shares, it intends to compulsorily acquire the balance of the outstanding ASG Shares as permitted under the Australian Corporations Act. See Section 9 of the Circular, "Acquisition of ASG Shares Not Deposited". In addition, if Allied Gold takes up and acquires at least 50.1% of the ASG Shares under the Offer, it has certain intentions relating to ASG, including taking the following actions: — undertaking a full review of the operations of ASG; — applying to delist the ASG Shares from trading on the TSX; — applying to the applicable securities regulatory authorities in Canada for an order that ASG cease to be a reporting issuer in such jurisdictions; and — seeking to maximise the performance of the business operations under the management of Allied Gold's existing management team. Section 7 of the Circular, "Purpose of the Offer and Allied Gold's Plans for ASG" provides information regarding Allied Gold's intentions regarding ASG.

Are there any risks in accepting the Offer and owning Allied Gold Shares?		Yes. Section 8 of the Circular, "Risk Factors Related to the Offer" and Annex C (Additional Information Regarding Allied Gold), "Allied Gold Limited — Risk Factors" provide information regarding the risks associated with accepting the Offer and owning Allied Gold Shares. Shareholders should carefully review these risks before deciding whether to accept the Offer.

What will I receive if I accept the Offer?		If you accept the Offer, subject to the satisfaction of the conditions to the Offer, you will receive 0.85 Allied Gold Shares for every one ASG Share you hold. See Section 1 of the Offer, "The Offer". If you accept the Offer and you are a Foreign Shareholder (i.e., you are resident outside Australia, New Zealand or Canada or an Ineligible U.S. Shareholder), you will not be entitled to receive Allied Gold Shares as consideration for ASG Shares held by you pursuant to the Offer. In these circumstances, the Allied Gold Shares which would otherwise have been issued to you will instead be issued to a Nominee approved by ASIC, who will sell those Allied Gold Shares and remit the net proceeds of such sale to you in cash (payable in Canadian dollars). However, if you are a Foreign Shareholder, you will be entitled to receive Allied Gold Shares as consideration for ASG Shares held by you pursuant to the Offer if the Offering Parties are satisfied that they are not legally or practically constrained from making the Offer to you in the relevant jurisdiction and issuing Allied Gold Shares to you on acceptance of the Offer, and that it is lawful for you to accept the Offer in such circumstances in the relevant jurisdiction.

What is the value of the Offer?		On September 16, 2009, the last trading day prior to Allied Gold's announcement of its intention to make the Offer, the closing price on the ASX of the Allied Gold Shares was A$0.51 (or C$0.47) and the closing price on the TSX of the ASG Shares was C$0.41 (or A$0.44). Based on the VWAP of the Allied Gold Shares on the ASX for the 20 trading days ended September 16, 2009, converted to Canadian dollars on a daily basis, the Offer represents a premium of approximately 28% over the VWAP of the ASG Shares on the TSX for the same period. The implied value of the Offer will change as a consequence of changes in the market price of Allied Gold Shares from time to time during the Offer. For further details, see Section 1 of the Circular, "The Offering Parties — Price Range and Trading Volumes of Allied Gold Shares".


How many Allied Gold Shares could be issued pursuant to the Offer?		Allied Gold will issue an additional 110,316,953 Allied Gold Shares, based on the number of ASG Shares outstanding on a fully diluted basis as of September 16, 2009 (as indicated in the public record) and assuming that all of the ASG Shares outstanding as of September 16, 2009 are tendered to the Offer, but that none of the ASG Shares issuable upon exercise of ASG Options, ASG Warrants or other convertible securities that were outstanding as at September 16, 2009 are tendered to the Offer, and that the Offeror takes up and pays for such ASG Shares under the Offer. See Section 1 of the Offer, "The Offer".

Will my ownership and voting rights as a shareholder of Allied Gold be the same as my ownership and voting rights as a shareholder of ASG?		The Allied Gold Shares that you will receive as consideration for your ASG Shares have voting rights similar to the ASG Shares, carrying the right to one vote per share. However, your ownership and voting interests in Allied Gold will be diluted relative to your current proportional ownership and voting interests in ASG. As at September 25, 2009, there were 472,643,276 Allied Gold Shares outstanding. Based on the issuance of 110,316,953 Allied Gold Shares to holders of ASG Shares (the maximum number of Allied Gold Shares to be issued under the Offer), former Shareholders will hold, in aggregate, approximately 18.9% of the Allied Gold Shares outstanding upon the completion of the Offer. See Section 1 of the Circular, "The Offering Parties — Authorized and Outstanding Share Capital" and Section 8 of the Circular, "Risk Factors Related to the Offer".

Will I be able to trade the Allied Gold Shares I receive?		You will be able to trade the Allied Gold Shares that you will receive under the Offer through the facilities of the ASX and AIM. In connection with the Offer, Allied Gold has applied to list on the ASX and AIM the Allied Gold Shares offered to Shareholders pursuant to the Offer. It is a condition of the Offer that all necessary orders, authorizations or consents which are required under applicable securities laws and rules and policies of the ASX and the AIM for the offering, issuance and listing of the Allied Gold Shares under the Offer on usual conditions have been granted. Allied Gold is not a reporting issuer in any jurisdiction of Canada and the Allied Gold Shares to be issued to Canadian Shareholders under the Offer will be subject to resale restrictions in Canada until such time as Allied Gold becomes a reporting issuer in Canada. Allied Gold intends to apply for a listing of the Allied Gold Shares (including the Allied Gold Shares to be issued to Shareholders pursuant to the Offer) on the TSX. If Allied Gold is successful in listing on the TSX, Shareholders who accept the Offer will continue to hold a security that is tradable on the TSX. Listing on the TSX will be subject to Allied Gold fulfilling all of the listing requirements of the TSX. There is no assurance that a listing on the TSX will be obtained.

Are there any conditions to the Offer?		Yes, the Offer is subject to a number of conditions which are set out in detail in Section 2 of the Offer, "Conditions of the Offer". Importantly, the Offer is subject to the condition that ASG Shares representing not less than 50.1% of the outstanding ASG Shares (calculated on a fully diluted basis) shall have been validly deposited under the Offer and not withdrawn at the Expiry Time. The Offeror may choose to waive certain of these conditions as described in Section 2 of the Offer, "Conditions of the Offer".


What if the conditions of the Offer are not satisfied or waived?	If the Offer expires with conditions remaining unsatisfied and not waived, the Offer will lapse, and your acceptance will be void. In other words, you will continue to hold all of your ASG Shares (unless you otherwise sell them). The Offering Parties will inform you of whether the conditions have been satisfied or waived during the Offer Period in accordance with its obligations under the Australian Corporations Act and applicable Canadian securities laws. The Offeror may extend the Offer Period in accordance with the Australian Corporations Act and Canadian securities laws in order to allow additional time for conditions to be satisfied. See Section 6 of the Offer, "Extensions, Variations and Changes to the Offer".

How do I accept the Offer?	You may only accept the Offer in respect of all of your ASG Shares, not some of them. To accept the Offer, you must follow the procedures set out in Section 5 of the Offer — "Manner of Acceptance".

When does the Offer expire?	The Offer will be open for acceptance until 8:00 p.m. (Toronto time) on k , 2009, unless the Offer is extended or withdrawn by the Offeror in accordance with the Australian Corporations Act and applicable Canadian securities laws. See Section 4 of the Offer, "Time for Acceptance".

Can the Offeror extend the Offer Period?	Yes, the Offeror may, in its sole discretion, elect to extend the Expiry Time for the Offer from the time referenced in the answer to the previous question, up to a maximum Offer Period of 12 months under the Australian Corporations Act. The Offeror may also elect to extend the Expiry Time in prescribed circumstances under Canadian securities laws. If the Offeror elects to extend, or is required to extend, the Expiry Time for the Offer, the Offering Parties will publicly announce the variation and Shareholders will be sent written notice of any extension as required by applicable law. See Section 6 of the Offer, "Extensions, Variations and Changes to the Offer".

What happens if I do not accept the Offer?	If you choose not to accept the Offer, there are certain risks of which you should be aware:

	•	If the Offer is not successful, the ASG Share price may fall in the absence of another bidder making an offer. The prospects of another bidder emerging may be lower given that RCF has committed to tender ASG Shares representing approximately 19.9% of the outstanding ASG Shares to the Offer, and to publicly announce its intention to accept the Offer in respect of the remaining ASG Shares it owns totalling a further 29.0% of the outstanding ASG Shares; and

	•	If the Offeror becomes the majority (or a major) shareholder in ASG and ASG remains a listed company, the market for your ASG Shares may be less liquid or less active. As a result, it may be more difficult for you to sell your ASG Shares at a price implied by the market price or on a timely basis.

	In addition, if Allied Gold acquires 90% or more of the ASG Shares, it intends to compulsorily acquire the balance of the outstanding ASG Shares as permitted under the Australian Corporations Act. See Section 9 of the Circular, "Acquisition of ASG Shares Not Deposited". You should consult your broker or financial adviser to ascertain the impact of the risks outlined above on the value of your ASG Shares.

If I accept the Offer, when will I receive Allied Gold Shares?		If you accept the Offer, Allied Gold will issue your Allied Gold Shares to the Depositary as consideration for your ASG Shares within three business days of acquiring your ASG Shares on the Take Up Date.

		If you accept the Offer and you are a Foreign Shareholder (ie, you are resident outside Australia, New Zealand or Canada or an Ineligible U.S. Shareholder), you will not be entitled to receive Allied Gold Shares as consideration for ASG Shares held by you pursuant to the Offer. In these circumstances, the Allied Gold Shares which would otherwise have been issued to you will instead be issued to a Nominee approved by ASIC, who will sell those Allied Gold Shares and remit the net proceeds of such sale to you in cash (payable in Canadian dollars).

		See Section 3 of the Offer, "Take-Up and Payment for Deposited Shares".

Will I need to pay any brokerage or stamp duty if I accept the Offer?		If you are the registered owner of your ASG Shares and you deliver them directly to the Depositary, you will not incur any brokerage fees or be obliged to pay stamp duty in connection with your acceptance of the Offer. If you own your ASG Shares through a broker or other nominee, and your broker tenders the ASG Shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply.

		If you are a Foreign Shareholder, the proceeds of sale of the Allied Gold Shares to which you would otherwise have become entitled to receive as a consequence of accepting the Offer will be net of sale costs, including brokerage. See Section 3 of the Offer, "Take-Up and Payment for Deposited Shares".

What are the tax implications of acceptance?		General summaries of the possible Australian and Canadian tax consequences of accepting the Offer are set out in Section 17 of the Circular, "Certain Australian Income Tax Considerations" and Section 18 of the Circular, "Certain Canadian Federal Income Tax Considerations" respectively. The Offering Parties recommend that you seek independent professional tax advice in relation to your own particular circumstances.

Can I sell my ASG Shares in the market?		Yes, but you may incur brokerage costs if you do. If you have already accepted the Offer, you will be unable to settle any subsequent sale of your ASG Shares to which the Offer relates, subject to you being entitled to withdraw your acceptance. See "Can I withdraw my acceptance?" below.

Can I withdraw my acceptance?		Under the Offer terms, you cannot withdraw your acceptance except where a withdrawal right arises under the Australian Corporations Act or Canadian securities laws.

		Awithdrawal right will arise under the Australian Corporations Act if the Offer remains subject to one or more defeating conditions as defined in the Australian Corporations Act (see Section 2 of the Offer, "Conditions of the Offer") and, after you have accepted the Offer, the Offer is varied in a way that postpones, for more than one month, the time by which the Offering Parties need to meet their obligations under the Offer.

		Under Canadian securities laws, you may withdraw ASG Shares previously tendered by you at any time: (i) before ASG Shares deposited under the Offer are taken up by the Offeror under the Offer, (ii) if your ASG Shares have not been paid for by the Offeror in Allied Gold Shares within three business days after the Take-Up Date, and (iii) in certain other circumstances.

		See Section 8 of the Offer, "Right to Withdraw Deposited ASG Shares".

Can I exercise my ASG Options or ASG Warrants and then accept the Offer?		Yes — the Offer extends to ASG Shares issued and outstanding prior to the end of the Offer Period as a result of the conversion of, or exercise of rights under, other ASG securities. The Offer does not otherwise extend to ASG Options and ASG Warrants. See Section 1 of the Offer, "The Offer".

Do I have dissenters' rights under the Offer?		No, Shareholders will not have dissenters' or appraisal rights in connection with the Offer. However, pursuant to the Australian Corporations Act, Shareholders will have certain dissent rights in the event that the Offeror seeks to compulsorily acquire any ASG Shares that it does not acquire under the Offer, but these do not include a right to be paid a judicially determined fair value for your ASG Shares.

Will ASG continue as a public company?		If, as a result of the Offer and any subsequent Compulsory Acquisition, the number of holders of ASG Shares is sufficiently reduced, Allied Gold will be permitted to apply to Canadian securities regulatory authorities for ASG to cease being a reporting issuer in Canada. The rules and the regulations of the TSX could also, upon the consummation of the Offer and/or a subsequent Compulsory Acquisition, lead to the delisting of the ASG Shares from the TSX. To the extent permitted by applicable law, Allied Gold intends for ASG to cease to be a reporting issuer in Canada and to delist the ASG Shares from the TSX. See Section 7 of the Circular, "Purpose of the Offer and Allied Gold's Plans for ASG".

Who is the Depositary under the Offer?		Computershare Investor Services is acting as Depositary under the Offer. The Depositary will be responsible for receiving certificates representing deposited ASG Shares and accompanying Letters of Transmittal and other documents. The Depositary is also responsible for receiving Notices of Guaranteed Delivery, giving notices, if required, and accepting and making payment for all ASG Shares purchased by the Offeror under the terms of the Offer. The Depositary will also facilitate book- entry transfers of ASG Shares.

Where do I go for further information?		For all questions or assistance relating to the manner of accepting the Offer, or for additional copies of this Bidder's Statement/Offer and Circular and related materials, please contact the Depositary. For all other questions or assistance relating to the Offer, or for additional copies of this Bidder's Statement/Offer and Circular and related materials as well, please contact the Offering Parties through the Allied Gold Information Line. Contact details for the Depositary and the Allied Gold Information Line are specified on the back page of this Bidder's Statement/Offer and Circular. The information in this section is a summary only of the Offer and is qualified by the detailed information set out elsewhere in this Bidder's Statement/Offer and Circular. You should read the entire Bidder's Statement/Offer and Circular and the Target's Statement/Directors' Circular that ASG will shortly be sending to you, before deciding whether to accept the Offer.

	Allied Gold Shares on the ASX								Allied Gold Shares on the AIM
	High		Low		Close		Volume		High		Low		Close		Volume
	(A$)		(A$)		(A$)		(#)		(£)		(£)		(£)		(#)
2009
September (1 to 16)		0.545		0.42		0.51		6,115,478		0.30		0.22		0.28		7,783,332
August		0.47		0.41		0.45		5,478,961		0.24		0.22		0.22		4,619,513
July		0.455		0.38		0.415		6,805,747		0.21		0.19		0.21		5,955,650
June		0.55		0.34		0.415		11,613,507		0.27		0.19		0.21		8,132,679
May		0.45		0.29		0.45		13,911,518		0.25		0.16		0.25		8,808,662
April		0.44		0.32		0.32		3,004,337		0.21		0.16		0.16		2,246,835
March		0.46		0.365		0.46		7,489,085		0.20		0.17		0.20		3,393,650
February		0.57		0.33		0.455		7,937,333		0.23		0.16		0.20		6,665,424
January		0.465		0.30		0.34		4,577,992		0.23		0.14		0.17		2,542,534

2008
December		0.43		0.22		0.42		4,746,942		0.21		0.10		0.21		3,348,268
November		0.31		0.20		0.27		3,438,956		0.14		0.10		0.11		1,968,618
October		0.315		0.185		0.215		4,479,475		0.14		0.09		0.09		3,432,811
September		0.365		0.245		0.32		6,597,303		0.16		0.11		0.14		6,437,190

	ASG Shares on the TSX
	High		Low		Close		Volume
	(C$)		(C$)		(C$)		(#)

2009
September (1 to 16)		0.43		0.265		0.41		1,724,764
August		0.35		0.29		0.29		82,628
July		0.38		0.285		0.35		1,035,278
June		0.41		0.335		0.38		426,715
May		0.48		0.21		0.40		14,104,046
April		0.305		0.15		0.25		548,230
March		0.175		0.12		0.15		283,377
February		0.22		0.09		0.15		988,800
January		0.145		0.04		0.14		1,054,763

	Proven						Probable						Total
Category Unit	Mt		g/t Au		Koz		Mt		g/t Au		Koz		Mt		g/t Au		Koz
Allied Gold
Simberi	12.1			1.2		465		10.0		1.2		381		22.0		1.2		846
ASG
Gold Ridge		—		—		—		19.6		1.8		1,148		19.6		1.8		1,148
Combined
Total		12.1		1.2		465		29.6		1.6		1,529		41.6		1.5		1,994

	Measured						Indicated						Inferred						All Categories
Category Unit	Mt		g/t Au		Koz		Mt		g/t Au		Koz		Mt		g/t Au		Koz		Mt		g/t Au		Koz
Allied Gold
Simberi	15.2			1.2		569		31.6		1.2		1,243		77.8		1.1		2,748		124.6		1.1		4,560
ASG
Gold Ridge		5.9		1.9		346		23.6		1.7		1,226		8.3		1.8		465		37.8		1.7		2,037
Combined
Total		21.1		1.3		915		55.2		1.4		2,469		86.1		1.2		3,213		162.4		1.3		6,597

	As at
	June 30, 2009

Cash and cash equivalents		29,665,152
Current assets		47,567,680
Total assets		256,718,121
Current liabilities		34,903,337
Long term debt		5,940,368
Total equity		204,302,129

	Outstanding as at June 30, 2009 (audited)(1)			Outstanding as at June 30, 2009 After giving effect to the Offer(2)
Long term debt	$	5,940,368		$	5,940,368
Issued capital — ordinary shares (authorized: unlimited)		472,643,276			582,635,767
	$	173,098,363		$	229,360,000
Reserves	$	1,199,540		$	1,199,540
Accumulated losses	$	(24,257,420	)	$	(26,257,420	)
Total Capitalization	$	150,040,483		$	204,302,129

	Note		2009			2008			2007
			$			$			$
Revenue		6		77,467,668			23,393,798			—
Cost of sales		7		(66,436,649	)		(20,264,174	)		—
Gross profit				11,031,019			3,129,624			—
Unrealised losses on derivatives				(21,828	)		—			—
Corporate expenses				(7,545,907	)		(4,404,307	)		(2,826,386	)
Share based remuneration	27(b)			(4,130,120	)		(3,590,530	)		(89,025	)
Impairment of available for sale assets				(1,214,402	)		—			—
Other expenses				(3,426,778	)		(4,049,118	)		(816,386	)
Other income		6		149,937			31,688			5,292
Financial income		6		327,760			533,365			1,845,894
Financial expenses		8		(3,396,347	)		(1,189,685	)		—
Loss before tax				(8,226,666	)		(9,538,963	)		(1,880,611	)
Income tax benefit/(expense)		9		—			—			—
Loss after tax attributable to members of the parent entity				(8,226,666	)		(9,538,963	)		(1,880,611	)
Basic earnings per share (cents)	23(a)			(1.92	)		(2.70	)		(0.70	)
Diluted earnings per share (cents)	23(b)			(1.92	)		(2.70	)		(0.70	)

									Foreign			Available for
							Share-Based		Exchange			Sale Investments			Cash Flow
	Issued			Accumulated			Payments		Translation			Revaluation			Hedging
	Capital			Losses			Reserve		Reserve			Reserve			Reserve			Total
	$			$			$		$			$			$			$
At 1 July 2006		87,802,197			(4,611,180	)		1,823,322		(23,070	)		—			—			84,991,269
Revaluation of investments availablefor sale		—			—			—		—			758,090			—			758,090
Translation of foreign controlled entities		—			—			—		45,642			—			—			45,642
Total income recognised directly in equity during the year		—			—			—		45,642			758,090			—			803,732
Loss for the period		—			(1,880,611	)		—		—			—			—			(1,880,611	)
Total recognised income and expense during the year		—			(1,880,611	)		—		45,642			758,090			—			(1,076,879	)
Cost of equity raising		(737,074	)		—			—		—			—			—			(737,074	)
Share-based payments		—			—			89,025		—			—			—			89,025
Share placements		13,054,141			—			—		—			—			—			13,054,141
Conversion of options		5,675,316			—			—		—			—			—			5,675,316
At 30 June 2007		105,794,580			(6,491,791	)		1,912,347		22,572			758,090			—			101,995,798
Revaluation of investments available for sale		—			—			—		—			(751,544	)		—			(751,544	)
Translation of foreign controlled entities		—			—			—		(414,648	)		—			—			(414,648	)
Changes in the fair value of cash flow hedges — gross		—			—			—		—			—			(23,225,075	)		(23,225,075	)
Transfer to net profit — gross		—			—			—		—			—			1,151,561			1,151,561
Total income recognised directly in equity during the year		—			—			—		(414,648	)		(751,544	)		(22,073,514	)		(23,239,706	)
Loss for the period		—			(9,538,963	)		—		—			—			—			(9,538,963	)
Total recognised income and expense during the year		—			(9,538,963	)		—		(414,648	)		(751,544	)		(22,073,514	)		(32,778,569	)
Cost of equity raising		(543,123	)		—			—		—			—			—			(543,123	)
Share-based payments		—			—			3,590,530		—			—			—			3,590,530
Share placements		26,514,770			—			—		—			—			—			26,514,770
Conversion of options		1,920,477			—			—		—			—			—			1,920,477
At 30 June 2008		133,686,704			(16,030,754	)		5,502,877		(392,076	)		6,546			(22,073,514	)		100,699,783
Changes in fair value of investments available for sale		—			—			—		—			129,843			—			129,843
Translation of foreign controlled entities		—			—			—		(252,552	)		—			—			(252,552	)
Changes in the fair value of cash flow hedges		—			—			—		—			—			6,520,145			6,520,145
Transfer to net profit		—			—			—		—			—			7,484,731			7,484,731
Total income recognised directly in equity during the year		—			—			—		(252,552	)		129,843			14,004,876			13,882,167
Loss for the period		—			(8,226,666	)		—		—			—			—			(8,226,666	)
Total recognised income and expense during the year		—			(8,226,666	)		—		(252,552	)		129,843			14,004,876			5,655,501
Cost of equity raising		(1,949,292	)		—			—		—			—			—			(1,949,292	)
Share-based payments		—			—			4,273,540		—			—			—			4,273,540
Share placements		41,360,951			—			—		—			—			—			41,360,951
At 30 June 2009		173,098,363			(24,257,420	)		9,776,417		(644,628	)		136,389			(8,068,638	)		150,040,483

Plant and equipment	3 to 8.5 years
Buildings	8.5 years
Other mineral assets	3 to 8.5 years

	Tranche A			Tranche B			Tranche C
	options			options			options
Fair value at grant date	$	0.0924		$	0.0924		$	0.0858
Exercise price	$	0.35		$	0.35		$	0.35
Grant date	1/12/2008			1/12/2008			1/12/2008
Expiry date	31/10/2011			31/10/2011			31/10/2011
Share price at grant date	$	0.27		$	0.27		$	0.27
Expected price volatility of shares		60	%		60	%		60	%
Expected dividend yield		0	%		0	%		0	%
Risk free interest rate		3.27	%		3.27	%		3.27	%
Discount applied in relation to vesting conditions		0	%		30	%		0	%

	Director			Employee			Director			Employee
	options			options			options			options
Exercise price	$	0.40 - $0.44		$	0.50		$	0.45 - $2.00		$	0.80 - $2.00
Grant date	21/12/2007			21/11/2007			28/3/2008			11/6/2008
Expiry date	31/12/2008			31/10/2009			31/12/2008 and 31/12/2010			31/12/2010
Share price at grant date	$	0.72		$	0.75		$	0.75		$	0.65
Expected price volatility of shares		70	%		70	%		50	%		50	%
Expected dividend yield		0	%		0	%		0	%		0	%
Risk free interest rate		6.35	%		6.35	%		6.31	%		8.11	%

	Director options			Employee options
Exercise price	$	0.30 to $0.40		$	0.50 to $0.80
Grant date	30 November 2005			1 March 2007
Expiry date	30 June 2007			31 December 2008
Share price at grant date	$	0.415		$	0.32
Expected price volatility of shares		55	%		60	%
Expected dividend yield		0	%		0	%
Risk free interest rate		5.26	%		6.15	%

Loss after income tax	(8,226,666	)	(9,538,963	)	(1,880,661	)
Depreciation and amortisation	18,533,479		6,535,499		107,639
Provision — employee entitlements	125,890		—		80,415
Unrealised foreign exchange adjustments	(806,601	)	(3,092,637	)
Share-based payments	4,130,120		3,590,530		89,025
Unwinding of environmental discount	197,556		183,531
Interest on finance leases	2,266,409		—
Foreign exchange losses on borrowings	2,155,392		—
Impairment of available for sale assets	1,214,402		—
Proceeds from sale of derivatives	5,122,882		—
Other	(204,443	)	—		(823,966	)
Changes in assets and liabilities during the year:
Increase (decrease) in payables and receivables	(2,945,220	)	2,039,420		638,991
Net cash used in operations	21,563,200		(282,620	)	(1,788,507	)

Increase in capital accruals	4,000,000	—	—
Property, plant and equipment acquired under finance leases	7,062,775	—	—
Equity settled evaluation and exploration expenditure	—	987,042	—
Equity settled costs of raising equity capital	143,240	286,350	—

2009
	Less than		1 to 2		2 to 3		3 to 4
	1 year		years		years		years		Total
Put options (US Dollar/Gold)
Amount (ounces)		39,748		20,154		—		—		59,902
US$/oz	US$	700	US$	700		—		—	US$	700
Call options (US Dollar/Gold)
Amount (ounces)		34,429		20,154		—		—		54,583
US$/oz	US$	700	US$	700		—		—	US$	700

	30 June 2009				30 June 2008					30 June 2007
	USD		Kina		USD			Kina		USD		Kina
	$		$		$			$		$		$
Financial assets
Cash and cash equivalents		3,928,292		554,906		(173,408	)		105,567		—		124,273
Trade and other receivables		558,351		117,872		1,406,302			—		—
Derivative assets		2,711,759		—		3,810,067			—		—
		7,198,402		672,778		5,042,961			105,567		—		124,273
Financial liabilities
Trade and other payables		1,920,071		9,356,717		—			825,704		48,588		2,162,285
Borrowings		—		2,100,554		11,301,041			—		—		—
Derivative liabilities		15,946,935		—		25,883,581			—		—		—
		17,867,006		11,457,271		37,184,622			825,704		48,588		2,162,285

	Less than 6		6 to 12		Between 1		Between 2				Carrying
	months		months		and 2 years		and 5 years		Total		amount
	$		$		$		$		$		$
Non derivatives
Trade and other payables		18,133,857		—		—		—		18,133,857		18,133,157
Borrowings		2,279,800		2,279,800		1,290,337		90,431		5,940,368		5,940,368
Total non derivatives		20,413,657		2,279,800		1,290,337		90,431		24,074,225		24,074,225
Derivatives
Net settled — outflows		4,656,493		5,778,864		6,108,635		—		16,543,992		15,946,935
Total derivatives		4,656,493		5,778,864		6,108,635		—		16,543,992		15,946,936

	Place of	Ownership interest
	Incorporation	2009		2008		2007
		%		%		%
Parent Entity
Allied Gold Limited	Australia		—		—		—
Controlled Entities
Aretrend Pty Ltd	Australia		100		100		100
Advance R & D Pty Ltd	Australia		100		100		100
Nord Pacific Ltd, (i) and its controlled entities;	Canada		100		100		100
Simberi Gold Company Limited (ii)	PNG		100		100		100
Nord Australex Nominees (PNG) Ltd (iii)	PNG		100		100		100
Nord Australex Nominees Pty Ltd (iv)	Australia		100		100		100
Hicor Corporation (iv)	United States		100		100		100
Compania Minera Nord Pacific de Mexico, S.A. de C.V.(v)	Mexico		100		100		100
Allied Tabar Exploration Pty Ltd (vi)	Australia		100		100		100
Tabar Exploration Company Ltd (vii)	PNG		100		100		100

				Australian
	Allied Gold			Solomons
	Limited			Gold Limited
	12 months			12 months
	ended			ended			Consolidation
	June 30, 2009			June 30, 2009			Adjustments		Consolidated
	$			$			$		$
Revenue		77,467,668			—			—		77,467,668
Cost of sales		(66,436,649	)		—			—		(66,436,649	)
Gross profit		11,031,019			—			—		11,031,019
Unrealised losses on derivatives		(21,828	)		—			—		(21,828	)
Corporate expenses		(7,545,907	)		(1,909,503	)		—		(9,455,410	)
Share based remuneration		(4,130,120	)		—			—		(4,130,120	)
Impairment of available for sale assets		(1,214,402	)		(27,517,000	)		—		(28,731,402	)
Other expenses		(3,426,778	)		(1,060,688	)		—		(4,487,466	)
Other income		149,937			27,212,687			—		27,362,624
Financial income		327,760			200,777			—		528,537
Financial expenses		(3,396,347	)		(12,666,833	)		—		(16,063,180	)
Profit / (Loss) before tax		(8,226,666	)		(15,740,560	)		—		(23,967,226	)
Income tax benefit/(expense)		—			—			—		—
Profit / (Loss) after tax attributable to members
of the parent entity		(8,226,666	)		(15,740,560	)		—		(23,967,226	)

Purchase Price	A$
110,316,953 common shares of Allied Gold @ $0.51		56,261,646
Net assets acquired:
Current assets		11,695,918
Other assets		5,877,487
Exploration and evaluation assets		50,072,398
Liabilities		(7,074,625	)
		56,261,646