RNS Number:3176K
Gippsland Limited
12 October 2006

12 October 2006

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

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PHASE 2 WADI ALLAQI DRILLING
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Gippsland (ASX & AIM: "GIP") announces that Phase 2 of RC drilling has commenced
in the Company's Wadi Allaqi gold tenements in Egypt.

The Phase 2 programme commences at Seiga where Gippsland's recently completed
and announced Phase 1 drilling programme delineated zones of gold mineralisation
up to 75m wide over an open-ended strike length of 800m.

The initial in-fill drilling will test a 220m length of the shear situated to
the north-west of holes CRC012 and CRC013, and south of CRC015 completed during
April-May 2006 and announced on 1 June 2006. Hole CRC012 was drilled below the
centre of the ancient workings and intersected 28m at 4.18g/t Au between 28-56m.
Hole CRC013 drilled at the northern end of the ancient workings intersected 24m
at 5.21g/t Au between 48-72m. This zone is thought to correspond with the
high-grade mineralisation (15.5m at 9.73g/t Au) recorded in surface profile CP6.
Hole CRC015 intersected 12m at 1.32g/t Au from 4m.

The drilling at Seiga will also test gold mineralisation located 450m to the
south-east of the ancient pit where Phase 1 drilling intersected a zone of
mineralisation 25m wide averaging 1.4g/t Au and open along strike to the
south-east.

At the conclusion of the Seiga drilling, the drill crew will move to Shashoba
situated 6km to the south-east were recent drilling delineated a number of high
priority targets. This in-fill drilling programme will also test the extensions
to the mineralisation shown to exist over an open-ended strike length of 2.2km.

The Phase 2 Wadi Allaqi drilling programme will continue through to February
2007 save for a short break in operations for Christmas.

RJ (Jack) Telford
Executive Chairman

For further information please contact:

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

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

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

Note: In accordance with Listing Rule 5.6 of the Australian Stock Exchange
Limited and Part two of the London Stock Exchange AIM Guidance Notes for Mining,
Oil and Gas Companies, 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.




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

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