GIP Gippsland

RNS Number:0307J
Gippsland Limited
18 September 2006

2006-09-18

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

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ABU DABBAB FEASIBILITY STUDY UP-DATE

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Gippsland (ASX & AIM: "GIP") today advises that the Abu Dabbab feasibility study
completed by Lycopodium Engineering Ltd during November 2004 is presently being
updated to reflect current-day costs.

The project cost estimate as of November, 2005, based on the Feasibility Study,
was approximately US$90 million, including capital costs (2Mtpa processing
plant, mining fleet, haul roads, power plant, and general infrastructure) and
financing costs during the construction period. The Directors are pleased to
report that Lycopodium's work to date indicates that these project costs are
likely to increase by less than 10% over the November 2005 estimate.

The feasibility study update will include the benefit of improved recoveries
derived from the testwork and process flowsheet optimisation that have been
on-going since the completion of the original study. The update will also
incorporate certain process flow-sheet features as suggested by the
International Finance Corporation (IFC) which has been granted a mandate to
arrange Abu Dabbab project finance.

The 40 million tonne Egyptian Abu Dabbab project is scheduled to produce in
excess of 650,000 pounds of tantalum concentrate per year. Gippsland has entered
into a 5-year off-take agreement with a major tantalum concentrate processor for
the majority of this tantalum. The tantalum customer has indicated a willingness
to consider increasing the tantalum off-take price to take into account the
capital and operating expense increases that have occurred since the 2004
feasibility study was completed.

The Directors advise that Abu Dabbab feasibility study update is well advanced
and expected to be completed and presented to the IFC prior to 31 October 2006.

RJ (Jack) Telford
Executive Chairman


For further information please contact:

Jack Telford
Gippsland Limited
www.gippslandltd.com
t: +61 (0)8 93898611
e: telford@gippslandltd.com

Laurence Read / Ed Portman
Conduit PR
t: +44 (0)20 7429 6605 / 6607
e: laurence@conduitpr.com
e: ed@conduitpr.com

Les Polden / Luke Cairns
Hoodless Brennan Plc
t: +44 (0)20 7538 1166
e: L.Polden@HBcorporate.com
e: L.Cairns@HBcorporate.com



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

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