GIP Gippsland

RNS Number:9570H
Gippsland Limited
31 January 2005


GIPPSLAND LIMITED

QUARTERLY ACTIVITY REPORT
Period: October - December 2004
31 January 2005

HIGHLIGHTS

* Abu Dabbab 2Mtpa Bankable Feasibility Study Completed
* Revenue >US$500 million during first 13 years of operation
* Net Free Cash Flow US$153 million during first 13 years of operation
* Potentially World's second largest tantalum producer - >650,000lb/yr Ta2O5
* Abolition of 5% Government Royalty
* Granting of Abu Dabbab Free Trade Zone
   - Zero import duty
   - Zero sales tax
   - Zero profit tax
* Additional Tantalum off-take agreements
* Share Placement to RAB Special Situations LP raising #600,000 (A$1.5 million)


2Mtpa BANKABLE FEASIBILITY STUDY COMPLETED

During the quarter, the Directors of Gippsland Limited ("Gippsland" or "the
Company") released the results of the 2Mtpa Abu Dabbab Bankable Feasibility
Study ("BFS") undertaken by the international engineering group Lycopodium Pty
Ltd.

The BFS determined that the 40Mt Abu Dabbab Project will produce in excess of
650,000 pounds of tantalum pentoxide ("Ta2O5") per year which will firmly
establish the operation as the world's second largest tantalum producer. The
project will also produce 1,530 tonnes of tin metal per year.

The BFS determined that the project will generate gross sales revenue in excess
of US$500 million during the first 13 years of its estimated 20-year mine life.
These sales are from tantalum and tin only and exclude all potential feldspar
sales revenues.

ABOLITION OF 5% ROYALTY FOR ABU DABBAB PROJECT

On 20 January 2005 the Company announced 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 Project.

The abolition of the Abu Dabbab Project's 5% royalty obligation was approved by
the Egyptian
Prime Minister His Excellency Dr Ahmed Nazef and the Minister of Petroleum His
Excellency Eng Sameh Samir Fahmy.

The extinguishment of the royalty is a significant development since the
announcement on 3 November 2004, which released the results of the 2Mtpa Abu
Dabbab BFS incorporating the payment of a 5% royalty to the Egyptian Government.

The impact of the removal of the 5% royalty has resulted in a substantial
financial benefit to the BFS for the Abu Dabbab Project as tabled below.

Table 1: Bankable feasibility study results

Key Financial Indicators                           With 5% Royalty     Without 5% Royalty

Gross sales - first 13 years                       >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
Capital Expenditure Repayment                      4.5 years           

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