GIP Gippsland

RNS Number:5404H
Gippsland Limited
20 January 2005


Gippsland Limited

20 January 2005

ABOLITION OF 5% ROYALTY

Gippsland Limited ("Gippsland" or "the Company"), is very pleased to announce
today the extinguishment of the 5% royalty that was to be levied by the Egyptian
government on gross sales revenue arising from production at the Company's Abu
Dabbab tantalum project.

The abolition of the Project's 5% royalty obligation has been approved by the
Egyptian Prime Minister His Excellency Dr Ahmed Nazef and the Minister of
Petroleum His Excellency Eng Sameh Samir Fahmy. The impact of the removal of the
5% royalty has resulted in a significant financial benefit to the Bankable
Feasibility Study ("BFS") for the Abu Dabbab Project in Egypt and thus the
Project as tabled below:

KEY FINANCIAL INDICATORS              WITH 5% ROYALTY     WITHOUT 5% ROYALTY

Gross sales - first 13 years          >US$500 million     >US$500 million

Net Free Cashflow - first 13 years    US$127 million      US$153 million

Internal Rate of Return on all equity
basis                                           17.4%               20.2%

IRR on 80% debt 20% equity basis                  29%               33.2%

Capital Expenditure                   US$80.5 million     US$80.5 million

Capital Expenditure Repayment         4.5 years          

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