GIP Gippsland

RNS Number:6291L
Gippsland Limited
28 April 2005


GIPPSLAND LIMITED

QUARTERLY ACTIVITY REPORT
Period: January - March 2005
28 April 2005

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HIGHLIGHTS

* Abu Dabbab - 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
* Abu Dabbab Project Finance Progress
* Encouraging Wadi Allaqi Exploration Results

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ABOLITION of 5% ROYALTY FOR ABU DABBAB PROJECT

During 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.

Key Financial Indicators                               Without 5% Royalty
Gross sales - first 13 years                           >US$500 million
Net Free Cashflow - first 13 years                     US$153 million
Internal Rate of Return on all equity basis                               20.2%
IRR on 80% debt 20% equity basis                                          33.2%
Capital Expenditure                                    US$80.5 million
Capital Expenditure Repayment                         

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