GIP Gippsland

RNS Number:3643Z
Gippsland Limited
07 March 2006

07 March 2006

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

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PROJECT FINANCE MANDATE FOR ABU DABBAB
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DEBT ARRANGING MANDATE

The Directors of Gippsland Limited ("Gippsland" or "the Company") announce today
that the International Finance Corporation* ("IFC"), a member of the World Bank
Group, has been mandated as Lead Debt Arranger for Gippsland's Abu Dabbab
Tantalum-Tin Project (the "Project") in Egypt.

The Project cost estimates as at November, 2005, based on the Feasibility Study
completed by Lycopodium Engineering Ltd in November 2004, is approximately US$90
million, including capital costs (2Mtpa processing plant, mining fleet, haul
roads, power plant, employee accommodation and general infrastructure) and
financing costs during the construction period. The targeted debt component is
60% (US$55 million) of the project costs. The debt financing will be raised via
a combination of an IFC A-Loan, an IFC B-Loan and parallel financing from other
Development Finance Institutions (DFIs) and Export-Credit Agencies (ECAs).

The terms of IFC's involvement in debt financing for the Project is for all
intents and purposes, on standard commercial terms and conditions for
undertakings of this nature and extent.

The fees payable by Gippsland to the IFC in respect of its arranging role does
however include the issuance of 2,250,000 fully paid ordinary Gippsland shares
in 3 tranches of 750,000 each in lieu of up front cash appraisal fees to be
charged by the IFC. The issuance of this equity is subject to and conditional
upon the satisfaction of certain commercial milestones.

The balance of the financing of the Project is to be raised through equity
financing of approximately US$35 million, with potential IFC participation.

US$2M EQUITY INVESTMENT BY IFC IN GIPPSLAND

Pursuant to the Mandate, the IFC has been provided with a 90-day option to
subscribe for US$2M of new fully paid ordinary share equity capital in
Gippsland. If the IFC exercises its option then this equity investment by the
IFC in Gippsland shall be effected as follows:

* By way of the issue of 25 million new fully paid ordinary Gippsland shares at
a price of US$0.08 (approx. A$0.108 / UK#0.046) per share to raise US$2 million
(approx. A$2.69 / UK#1.14 million) cash for Gippsland unless the volume weighted
average price over the 5 trading days prior to the signing of a subscription
agreement between the parties is less than A$0.118 (approx. UK#0.05) then the
subscription price will be 90% of the said average price.

* The 25 million shares issued to the IFC will each have an attaching free
unlisted option having an exercise price of A$0.135 (approx. UK#0.057) and a
life of six (6) years. Gippsland may require the IFC to exercise 12.5 million of
these options in the event that Gippsland shares trade at a weighted average
price equal to or greater than A$0.20 (approx. UK#0.085) for a period of 20
trading days, or relinquish the 12.5 million options.

* The issue of these securities (shares and free attaching options) to the IFC
is subject to Gippsland shareholder approval.

Gippsland has agreed to not issue shares or options at a discount to the issue
price of the shares or value of the options as the case may be for at least a 6
month period post the issue to IFC, should IFC exercise its option to subscribe
the US$2 million.

FURTHER US$2M EQUITY INVESTMENT BY IFC IN GIPPSLAND

Subject also to Gippsland shareholder approval, Gippsland has granted to the IFC
a first right of participation to invest an additional US$3 million at the time
of and on the same terms as are offered by Gippsland when raising the equity
component of the Abu Dabbab project capital cost. IFC will have 30 days within
which to exercise this pre-emptive right.

FEASIBILITY STUDY OPTIMISATION AND OWNER'S TEAM

Gippsland continues to work with Lycopodium, IFC Technical Specialist and
Metallurgical Consultants to optimise the process flow sheet and finalise
confirmatory test work for the Project. The Directors are confident that these
tests and findings will have a positive impact on the overall economics of the
Project. The finalisation of the optimisation of the Project, in parallel with
debt and equity financing arrangements is expected to progress steadily over the
next month.

During this optimisation period, Gippsland will expand its Management Team
including key positions in Finance, Operations, Project Management, Metallurgy
and Geology as it moves from being an exploration company to a World scale
mining operation. Gippsland will immediately seek to appoint a financial advisor
to assist the Company in finalising debt and equity facilities for the Project.

Speaking from London, Gippsland Executive Chairman Jack Telford stated
"Partnering with the IFC is a major milestone in the development of the Abu
Dabbab Tantalum-tin Project and the Egyptian mineral resources sector. The
tantalum market continues to grow steadily, prices are on the rise and the
global supply chain is in a state of uncertainty as a result of an announced
major tantalum mine closure. Abu Dabbab's scheduled 3Q07 start-up could not be
timed better."


RJ (Jack) Telford
Executive Chairman

For further information please contact:

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

Les Polden
HB-corporate
Cell: +44 (0)773 680 8095
Tel: +44 (0)20 7510 8576
l.polden@HB-corporate.com

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

* Established in 1956, IFC (www.ifc.org) is the largest multilateral source of
loan and equity financing for private sector projects in the developing World
where it promotes sustainable private sector development primarily by financing
private sector projects, assisting private companies, financing in international
financial markets whilst providing advice and technical assistance to businesses
and governments.  Its strong shareholder base, triple-A ratings, and the
substantial paid-in capital base allows the IFC to raise funds for its lending
activities on favourable terms in the international capital markets.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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