GIP Gippsland

RNS Number:6726X
Gippsland Limited
31 January 2006



Gippsland Limited ("Gippsland" or "the Company")


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QUARTERLY ACTIVITY REPORT
Period: October - December 2005
31 January 2006

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HIGHLIGHTS


* Abu Dabbab tantalum project finance mandate
* Abu Dabbab locked-cycle testwork completed
* Mobilisation of Abu Dabbab earthmoving and mining contractors
* Completion of Abu Dabbab Social & Environmental Impact Assessment
* Wadi Allaqi gold exploration expansion
* Indaba 2006 International Mining Conference


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Abu Dabbab project finance mandate


During the October to December quarter the Directors of Gippsland Limited
("Gippsland" or "the Company") have continued negotiations in regard to project
finance for the Company's 40Mt Abu Dabbab tantalum-tin project. The Directors
are pleased to report that the negotiations, which are progressing well, are
expected to be completed during early February 2006.


Abu Dabbab LOCKED CYCLE TESTWORK


During the quarter the company completed the locked cycle testwork for the Abu
Dabbab project. The testwork, which achieved increased tantalum and tin
recovery, confirmed previous testwork results while highlighting a number of
opportunities to refine process engineering design and optimise tantalum
recovery.


Mobilisation Abu Dabbab earthmoving & mining contractors


During the quarter Gippsland together with its Egyptian joint venture partners
held on-site meetings with a group of Egyptian earthmoving and mining
contractors that have been selected to participate in the bidding process for
the initial engineering contracts associated with the Abu Dabbab project. The
major tasks discussed with the contractors relate to the timing and initial
development of the 2Mtpa open pit mine and haul road construction.

Similar site meetings will take place during the current quarter in relation to
plantsite and tailing storage facility earthworks. It is intended that by
holding these preliminary discussions, the contract tender process following a
project go-ahead decision will be as short as possible.


Abu Dabbab social & Environmental Impact Assessment


The Environmental Impact Assessment ("EIA") for the Abu Dabbab Project was
approved by the Egyptian Government's Environmental Affairs Agency in
September 2005. The structure and content of the EIA, undertaken over a period
of some 16 months, was completed in accordance with guidelines established by
the World Bank Group which complemented those provided by Egyptian legislation.

During the quarter Gippsland subsequently commenced an Environmental and Social
Impact Assessment ("ESIA") to present to the broader international community,
completing this task in January 2006. The ESIA expanded the EIA to include
greater emphasis on socioeconomic baseline information, socioeconomic impact
assessment, mitigation strategies for potential negative social impacts,
broad strategies for implementing community development initiatives while
describing the public consultation procedures carried out to date and procedures
for ongoing public consultation.

The ESIA undertaken by the company's environmental consultants Environics Egypt
and Klohn Crippen Berger Ltd demonstrates the Company's commitment to world best
practice environmental and sociological standards.


Wadi Allaqi Gold Exploration


During the July-September and October - December quarters of 2005 the Company
released outstanding gold exploration results for its Wadi Allaqi exploration
areas located to the south-east of Aswan in Egypt. The Company subsequently
entered into a drilling contract which was due to commence during January 2006
however delays arranging passage through Egyptian customs for the new
multipurpose drilling rig caused its shipment from Australia to be delayed by
approximately one month. Shipping space has now been booked on a vessel due to
sail from Fremantle on 3 February 2006 for Port Said.

While the rig is in transit, Gippsland will complete additional mechanical
trenching where the previous sampling ended within mineralisation. While the
machinery is on site some road access and drill pad preparation for the drilling
programme will be completed. The Directors are confident that the trenching
programme will highlight extensions to the know areas of high-grade
mineralisation thus providing additional high-priority drill targets within the
areas being explored.

Wadi Allaqi exploration results to date include:

(1) Seiga (gold)

At Seiga previous sampling has delineated a 50.5m wide zone of gold
mineralisation averaging 5.5g/t across old workings. This wide zone of
mineralisation includes 20.3m at 7.40g/t and 8m at 7.7g/t (trench CP1) and 20m
at 2.83g/t. (trench CP2) located immediately to the west of CP1.

Rock chip sampling and shallow trenching along a profile 70m to the north (CP6)
returned 15.5m at 9.25g/t. The profile included 4.5m at 6.69g/t on the western
side of some old 4.5m wide workings plus 11m at 10.29g/t on the eastern side
where the sampling profile ended.

The trenching programme determined that the gold mineralisation extends over a
length of 250m and is open to the north and south and in part to the east and
the west.

A first phase drilling programme totalling 2,300m to test the prospect has been
prepared and will be the first site to be drilled.

(2) Haimur (gold)

The trenching results confirmed the presence of anomalous gold values within the
bedrock and that the regolith sampling had been effective. The best intersection
recorded by the trenching was 5m at 44.45g/t in trench HT9. The results are
considered to be very encouraging as they confirm the presence of anomalous gold
in the bedrock closely associated with zones of shearing.


Indaba 2006 international mining conference - Cape Town


The Company will be represented at the Indaba 2006 International Mining
Conference being held in Cape Town, South Africa 7 - 9 February 2006. Gippsland
has acquired a display booth (number 163) and will be making a presentation to
conference attendees.


Aguero dispute


As previously disclosed to the marketplace, one of Gippsland's investee
companies is Here2win.com Pty Ltd ("Here2win") in which Gippsland owns a 90%
interest. Mr Alex Aguero "Aguero" through his wholly owned company, Highforce
Investments Pty Ltd ("Highforce"), holds a 10% equity stake in Here2win.

In 1999 Gippsland entered into a Deed with Aguero to form Here2win for the
purpose of establishing a business selling to internet users a horse racing
gaming product. The terms of the Deed provided that Aguero be appointed as
Managing Director of Here2win and be entitled to certain benefits upon
satisfaction of certain conditions including proper performance of his duties as
set out in the Deed, use of investment funds solely for the purposes set out in
the Deed and establishment of the business with a website that allowed arms
length paying customers to subscribe for the products of the business.

On 14 August 2000 Gippsland announced to the Australian Stock Exchange Ltd that
the services of Aguero, had been terminated. The Here2win business was never
established.

In 2001 Aguero commenced an action against Gippsland in the Supreme Court of
Western Australia alleging a breach of the Deed and entitlement to certain
benefits under the Deed. Aguero is claiming damages based on what he alleges is
the money he would have recovered if he had received and sold and/or exercised
Gippsland options and/or Gippsland shares in the period between March-April
2000.

Gippsland continues to vigorously defended Aguero's claim on the basis (amongst
other things) that Aguero has breached the Deed and is not entitled to the
benefits claimed and that in any event, the damages claimed cannot be properly
substantiated.

Gippsland has counterclaimed for re-payment of $450,000 paid to Aguero/Highforce
in the period from November 1999 to May 2000.

The trial of this action is listed to be heard by the Supreme Court of Western
Australia commencing 17 March 2006.


For further information please contact:


Jack Telford
Gippsland Limited
Tel: +61 (0)8 9389 8611
jtelford@gippslandltd.com
www.gippslandltd.com

Leesa Peters / Laurence Read
Conduit PR
Tel: +44 (0)20 7429 6666
leesa@conduitpr.com
laurence@conduitpr.com

Les Polden
HB-corporate
Tel: +44 (0)20 7510 8576
l.polden@HB-corporate.com

Note:

In accordance with Listing Rule 5.6 of the Australian Stock Exchange Limited,
the geological information in this report that relates to Exploration Results,
Mineral Resources and Ore Reserves is based on data compiled by Dr John
Chisholm, a Fellow of The Australasian Institute of Mining and Metallurgy. Dr
Chisholm who is an Executive Director of Gippsland Limited with over 25 years
experience in the mineral industry including the evaluation of exploration data,
mineral resources and ore reserves, has consented to the issue of the
information in this report in the form and context in which it appears.








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