FIRST QUARTER ACTIVITIES REPORT – SEPTEMBER 2008 Australian Gold Investments Limited (ASX: AGV) presents the following report on activities for the three months ending 30 September 2008. Also included in this report are details of any significant subsequent events that have taken place in October 2008. The Company currently has two principle gold exploration projects in Western Australia - the Broads Dam Gold Project near Kalgoorlie and the Pilbara Gold Project in the southwest Pilbara (Figure 1), and one principle gold project in New South Wales - the Tia River Gold Project in the New England Orogen (Figure 2). During the first quarter, AGV’s exploration activity in Western Australia was largely confined to further geophysical work across the Zuleika Shear Zone on the Company’s tenements (Figures 3 to 6), ahead of the formal granting of the reversion licences over the Broads Dam tenement package by DoIR, which only took place a few weeks ago, as announced to the market on 13 October 2008. Additional structural analysis was also carried out over the Company’s Pilbara Gold Project area, along the northern edge of the Rocklea Dome (Figure 7). During the same period, AGV’s exploration activity in New South Wales was largely confined to palaeotopographic mapping and analysis over the Tia River Gold Field, near Tamworth, within the newly granted EL 7224 (granted on 15th October 2008) (Figure 8). Exploration Activities: The following section of the report outlines the results of gold exploration work carried out by the Company during the reporting period. BROADS DAM GOLD PROJECT Introduction and Project Location: The Broads Dam Gold Project covers approximately 3,000 hectares of the highly prospective Zuleika Shear Zone, located in the Eastern Goldfields Province of the Yilgarn Craton, Western Australia, approximately 40km north-west of Kalgoorlie (Figure 3).

ד"בס

AAAUUUSSSTTTRRRAAALLLIIIAAANNN GGGOOOLLLDDD IIINNNVVVEEESSSTTTMMMEEENNNTTTSSS LLLIIIMMMIIITTTEEEDDD ABN 18 124 873 507

34/50 Bridge Street, Sydney NSW 2000 Telephone: +61 2 8216 0777 PO Box 114 Bondi, NSW 2026 Facsimile: +61 2 8216 0788 Email: info@agil.com.au Web: www.agil.com.au

For

per

sona

l use

onl

y

Geophysical Exploration at Broads Dam: During the reporting period, AGV geologists undertook further analysis of geophysical data recently processed by Southern Geoscience on behalf of the Company. The processing of the raw geophysical data over the Broads Dam tenements has provided a range of interpretable data sets covering 56 separate images encompassing the following:- Total magnetic field Total count radiation (TC) Potassium radiation (K) Uranium radiation (U) Thorium radiation (Th) Elevation (DTM) Of the 56 images specifically processed, 37 include total magnetic field images (including 12 first vertical derivatives), 11 include radiometric images, 7 include reduced-to-pole TMI images, and 1 digital terrain model image. Comparisons of these data sets have allowed an excellent visualisation of the underlying geology to be interpreted in terms of structures controlling gold mineralisation across the Zuleika Shear Zone. A sub-set of the processed and interpreted geophysical dataset is shown in Figures 4, 5 and 6. In Figure 4 (total magnetic intensity in psudeocolour), the total magnetic field (with the high areas shown red) highlights the major shear zone and the kink in the southern tenement area. The disrupted area in the centre of the southern tenements, lying below the main shear zone, is revealed by a lower intensity orangy-red colour. Portions of a bend in the main shear zone are confirmed in this imagery, which appear to have localised gold mineralisation discussed in the previous quarterly report. In Figure 5 (total magnetic intensity - first vertical derivative), the total magnetic field is strongly expressed, and slightly anastomosing, defining a zone of north-south structures to the south of the central part of the Broads Dam tenements. The magnetic intensity contours in this imagery appear to support the earlier interpretation that north-south trending structures intersect north-west south-east trending structures as a series of conjugate shears, which may host gold mineralisation. In Figure 6 (radiometric image showing total count), the radiometric image confirms the existence of a significant north-south trending structural zone as a distinct red area (corresponding to both high uranium and thorium counts). Moreover, the identified area of intersection between north-south trending structures and north-west south-east trending structures is supported by high uranium and thorium counts, and is therefore worthy of further exploration, particularly as dilation of conjugate fracture sets during shearing may have localized radioactive mineralising fluids. The entire geophysical dataset has also been forwarded to the Company’s Joint Venture Partner, ABM Resources, to aid their proposed drilling program on the southern Broads Dam tenements. As the Company’s geological team continues to identify additional prospective structural and lithological features in the geophysical data, this information will also be made available to assist exploration under the Joint Venture.

For

per

sona

l use

onl

y

Future Focus of Gold Exploration at Broads Dam: As stated in previous quarterly reporting, future exploration at Broads Dam will continue to strongly focus on specific zones along the Zuleika Shear Zone where geological and geophysical data demonstrate that displacements or jogs are interpreted to exist. In particular, geophysical analysis to define drilling targets will concentrate on:-

1. Jogs, kinks, bends or other off-set structural features along the Zuleika Shear Zone itself, particularly in areas where earlier-defined gold target anomalies are coincident with such structures.

2. Gold target anomalies which lie to the south of the main Zuleika Shear Zone and appear to be associated with north-south trending splay faults that appear to connect to the main shear zone.

3. Gold target anomalies and other structures associated with a distinctive disrupted magnetic geophysical anomaly at the southern-most end of the Broads Dam tenement package.

PILBARA GOLD PROJECT The Pilbara Gold Project comprises Exploration Licence E47/1153 which covers the northern half of the Rocklea Dome and encompasses an area of approximately 200km2 (Figure 7). During the reporting period, AGV geologists undertook a more in-depth structural analysis of the northern rim of the Rocklea Dome within E47/1153 to locate additional east-west shear zones close to the intrusion boundary between the Rocklea Dome monzogranite and Hardey Formation pelites and metasandstones. Numerous large-scale dilational jogs associated with fault bends and kinks located on or near shear zones have been recognised. These structures are typically parallel and adjacent to Hardey Formation rocks, and appear to be associated with numerous discontinuous quartz vein stockworks. Future Focus of Gold Exploration on the Rocklea Dome: In order to ground-truth prospective interpreted structural features, future exploration will also focus on mapping the following:-

1. Shear-zones along a major WNW-trending angular unconformity at the base of the Hardey Formation, and

2. Known gold mineralization associated with lithological boundaries and gossanous quartz

stockworks and blows associated with large regional “jogs” and offsets along the basal Hardey Formation shear zone adjacent to the identified unconformity.

TIA RIVER GOLD PROJECT The Tia Gold Project comprises Exploration Licence 7224 located within the New England Orogen, near Walcha, in north-eastern New South Wales (Figure 8). During the reporting period, AGV geologists undertook a palaeotopographic analysis of the Tia River Gold Field to evaluate the extent of prospective deep lead alluvial gold deposits.

For

per

sona

l use

onl

y

Hard rock gold sources adjacent to large valley drainage systems within the licence area appear to have shed payable gold into structurally controlled alluvial depo-centres within and parallel to the Tia River drainage corridor and catchment. The palaeotopographic analysis suggests that erosional retreat of basaltic lava flows, that previously infilled pre-volcanic palaeochannel settings may have resulted in the unroofing of gold-bearing Tertiary deep leads within the licence area. Future Focus of Gold Exploration on the Tia River Gold Field: As the Tia River Gold Project represents an opening gold-bearing deep lead exploration play for the Company, future focus will be on assessing the prospectivity of both deep lead alluvial and hard rock gold-bearing depositional systems within the licence area. Thus, now that the Tia River Gold Project exploration licence has been formally granted, the project will focus in the near to medium term on the following:-

1. Exploration of identified gold-prospective palaeochannel systems juxtaposed to historic gold workings.

2. Exploration for structurally-controlled gold-bearing feeder systems associated with the Tia

River Granodiorite.

“The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based” on information complied by Dr Robert Coenraads (BA Hons, MSc, PhD) and Dr Simon Pecover (BA Earth Science, MSc, PhD). Dr Coenraads is a fellow of the Australasian Institute of Mining and Metallurgy. Dr Coenraads is a full time employee of Australian Gemstone Mining which contracts services to AGV. Dr Pecover is a part time employee of Australian Gemstone Mining which contracts services to AGV. Dr Coenraads and Dr Pecover have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking and to qualify as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources or Ore Reserves”. Dr Coenraads and Dr Pecover consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

For

per

sona

l use

onl

y

Hooper Complex

Rudall Complex

Musgrave Complex

GascoyneComplex

NorthamptonComplex

Canning Basin

Eucla Basin

Perth Basin

BirrinduduBasin

YeneenaBasin

Hamersley Basin

AmadeusBasin

Officer Basin

Ashburton Basin

Edmund Basin

Yerrida Basin EaraheedyBasin

P I L B A R A C R A T O N

Y I L G A R N C R A T O N

HA

L LS

C

RE

EK

O

RO

GE

N

OfficerBasinGunbarrel

Basin

BonaparteBasin

Collier

Basin

Northern CarnarvonBasin

Northern CarnarvonBasin

OrdBasin

KING LEOPOLDOROGEN

Lamboo Complex

CENTRALIANSUPERBASIN

PA

TE

RS

ON

OR

OG

E NCA

PR

I C O R N

O R O G E N

PINJARRAOROGEN

OnshoreBremer Basin

Southern CarnarvonBasin

Granites–Tanami

Complex

Kimberley andSpeewah Basins

Biranup and NornalupComplexes

Bryah andPadbury Basins

ARUNTAOROGEN

Leeuwin ComplexPINJARRA OROGEN

O R O G E N

A L B A N Y – F R A S E R

P I L B A R A C R A T O N

Y I L G A R N C R A T O N

250 kilometres

PILBARA GOLD PROJECT

Figure 1. Location of the Yilgarn and Pilbara Cratons, Western Australia

BROADS DAM GOLD PROJECT

120°

30°

20°

For

per

sona

l use

onl

y

TIA RIVER GOLDPROJECT

Figure 2. Location of the Tia River Gold Project covered by EL 7224.

For

per

sona

l use

onl

y

K algoorlie/ B oulder

Broad Arrow

Ora Banda

Carbine

Grants Patch

Lady Bountiful

Zuleika

Breakaway Dam

Paradigm

Kintore

White Foil

Centenary

K UNDA NA /K UNDA NA E A S T

MT P L E A S A NT

B R OA DS DA M

B L UE F UNNE L

OR A B A NDA /E NT E R P R IS E

PA DDING TON

P roduc tion & R es ourc e

P roduc tion & R es ourc e

89,730oz @ 3.9g/t A u

150,000t @ 4.5g/t Au

P roduc tion & R es ourc e

P roduc tion & R es ourc e

5Moz gold

+5Moz gold

4Moz gold

Rose Dam

Golden Mile

Gidji

Strzelecki

Kunanalling

310 000mE 330 000mE 350 000mE

6 620 000mN

6 600 000mN

Proterozoic dykeSediments, sandstone+conglomeratesFelsic volcanics +sediments

Mafic volcanicsMafic intrusivesUltramaficsGranite

FaultMajor

road/minor road

Gold occurrence

d

10 kilometres

As

Af

Ab

Ad

Um

Ag

Ag

Ag

Railway

d d d

d

d

d

d

d

d

d

As

As As

As

As

As

AfAf

Af Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Af

Ab

Ab

Ab

Um

Ab

Ab

Ab

Ab

Ab

Ab

Ab

AbAb

Ab

Ab

Ab

Ab

Ab

Ab

Ab

Ab

Ab

Ab

AbAb

Ab

Ab

AbAb

Ab

Ab

Ab

Ab

Ab

Ad

Ad

Ad

AdAd

AdAd

Ad

Ad

AdAd

Ad

AdAd

Ad

Ad

Ad

Ad

AdAd

Ad

Ad

Ad

Ad

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Um

Ag

Ag

AgAg

Ag

Ag

Geology simplified after Maprock, 2003

B R OADS DAM G OL D P R OJ E C T

Figure 3. Geological Setting of the Gold-Bearing Zuleika Shear Zone and Kalgoorlie Goldfields

Zuleika Shear Zone

+3Moz gold

For

per

sona

l use

onl

y

Figure 4. Geophysical image over the Broads Dam tenement package showing t .otal magnetic intensity in psudeocolour

For

per

sona

l use

onl

y

Figure 5. Geophysical image over the Broads Dam tenement package showing t .otal magnetic intensity 1st vertical derivative

For

per

sona

l use

onl

y

Figure 6. Geophysical image over the Broads Dam tenement package showing .radiometric total count

For

per

sona

l use

onl

y

Ab

Czc

AFu

AFpAFo

AFh

Al

AFd

Agm

AFl

Agm

Qa

Czc

AFo

Ab

5 kilometres

d

540 000mE530 000mE

7 485 000mN

7 475 000mN

4m @ 11.5 g/t Au

High grade drill hole interval

E47/1153E47/1153

Historic mineral deposit

Czc

Agm

Ab

AFp

AFl

AFh

AFh

AFu

Fe

Au

Au

Au

Au

Figure 7. Pilbara Gold Project – Geology and Exploration Targets

Metadolerite sills

Layered metapyroxenite/metagabbro sills

Bunjinah Formation: metabasalt flows

Afd

AFl

AFu

Pyradie Formation: metamorphosed basalt

Boongal Formation: metabasalt

Hardy Formation: pelite, metasandstone

AFp

AFo

AFh

Metadolerite dykes

Metamorphosed biotite monzogranite

Quartzofeldspathic schist

Metabasalt

d

Agm

Al

Ab

Quaternary alluviumQa

Cainozoic alluviumCza

Forte

scue

Gro

up

LEGEND

Major road/minor roadTenement outline

FaultDrilling 1998-1999

Dolerite dykeMylonite zone

Rocklea Dome Gold Prospect(refer to Figure 22)

For

per

sona

l use

onl

y

Figure 8. Geological map of the Tia River Gold Project area, within EL 7224. Hard rock gold deposits are hosted in shear zones within the Myra Beds juxtaposed to the Tia Granodiorite (Pgt), with the source of the gold-bearing fluids likely to be the Tia Granodiorites. Prospective alluvial deposits occur within the Tia River catchment and fluvial corridor adjacent to the hard rock gold sources flanking the Tia Granodiorites.

(modified after the Dorrigo 250K geological sheet)

Tia River alluvials

Tia River hard rock

sources

EL 7224

For

per

sona

l use

onl

y

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Australian Gold Investments Limited

ABN Quarter ended (“current quarter”)

18 124 873 507 30 Sept 2008

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date (..3.....months) $A’000

1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration

-76 -273

-76 -273

1.3 Dividends received 1.4 Interest and other items of a similar nature

received 63 63

1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) -1 -1

Net Operating Cash Flows -287 -287

Cash flows related to investing activities

1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets

1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets

1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)

Net investing cash flows

1.13 Total operating and investing cash flows (carried forward)

-287 -287

For

per

sona

l use

onl

y

Appendix 5B Mining exploration entity quarterly report

 

+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001

1.13 Total operating and investing cash flows

(brought forward) -287 -287

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Cost of

capital raising

Net financing cash flows

Net increase (decrease) in cash held

-287 -287

1.20 Cash at beginning of quarter/year to date 3,684 3,684 1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter 3,397 3,397

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2

193

1.24

Aggregate amount of loans to the parties included in item 1.10

Nil

1.25

Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated

assets and liabilities but did not involve cash flows

Nil

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the

reporting entity has an interest

Nil

Financing facilities available Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

For

per

sona

l use

onl

y

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 3

3.1 Loan facilities

Nil Nil

3.2 Credit standby arrangements

Nil Nil

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

4.2 Development

Total

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 3,397 3,684

5.2 Deposits at call

5.3 Bank overdraft

5.4 Other (provide details)

Total: cash at end of quarter (item 1.22) 3,397 3,684

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

For

per

sona

l use

onl

y

Appendix 5B Mining exploration entity quarterly report

 

+ See chapter 19 for defined terms. Appendix 5B Page 4 30/9/2001

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per

security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

61,791,763

61,791,763

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

7.5 +Convertible debt securities (description)

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

45,291,763 5,000,000 Performance Options 5,000,000 Performance Options

Nil Nil Nil

Exercise price $0.20 $0.20 $0.30

Expiry date 31/12/2012 31/12/2012 31/12/2012

7.8 Issued during quarter

7.9 Exercised during quarter

7.10 Expired during quarter

7.11 Debentures (totals only)

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y