GIP Gippsland

RNS Number:8828C
Gippsland Limited
14 September 2004



14 September 2004

Gippsland Limited

BANKABLE FEASIBILITY STUDY - Abu Dabbab

The Directors of Gippsland Limited ("Gippsland" or "the Company") are pleased to
announce that on Friday 10 September 2004, they took delivery of the Bankable
Feasibility Study ("BFS") undertaken by the international engineering group
Lycopodium Pty Ltd in regard to the Company's 40Mt Abu Dabbab
tantalum-tin-feldspar project ("Project") located in Egypt.

The BFS is based upon the design throughput of 1.26Mtpa and evaluated the
Project for the first 20 years of its mine life. The study determined that the
Project will produce in excess of 412,000 pounds of tantalum pentoxide ("Ta2O5")
per year along with some 980 tonnes of tin metal per year during the first 20
years of production. The Company has executed a Heads of Agreement with two
major tantalum consumers for the off-take of 420,000 pounds of Ta2O5 per annum
for a 4-year period. Tin output will be sold via the London Metal Exchange.

Based upon a capital expenditure of US$65.5 (A$93.6) million, the Project is
scheduled to generate an operating margin of US$112.3 (A$160.4) million over the
20-year period covered by the BFS.

The project is calculated to have an internal rate of return (IRR) (based on an
all equity structure) of 11.2% over the 20 year period covered by the BFS.

Most significantly the US$65.5 million capital expenditure for the 1.26Mtpa
operation makes allowance for the over-sizing of a number of major components
including jaw crushers, SAG mill and thickeners, to enable through-put to be
expanded to 2Mtpa in a short time-frame. No additional mining equipment would be
required to expand the operation from 1.26Mtpa to 2Mtpa. The additional positive
cash flows that shall arise due to the expansion from 1.26Mtpa to 2Mtpa are not
reflected in above IRR.

Additionally, the BFS is based on the production of Ta2O5 and tin alone and does
not take into account 1Mtpa of ceramic grade feldspar which may be produced as a
co-product to the tantalum and tin production. The additional positive cash
flows that would arise from the sale of feldspar are also not reflected in the
above IRR. Testwork undertaken in Italy demonstrated that the Abu Dabbab
feldspar is ideally suited to the manufacture of high-quality ceramics such as
floor tiles and sanitary ware. The Company has executed a Heads of Agreement
with a large European group for the off-take of 2.65Mtpa of feldspar for
delivery over a 5-year period.

The Directors instructed its engineering consultants to proceed with the BFS on
the basis of Ta2O5 and tin production alone to enable the commencement of
production in the shortest possible time-frame. Following start-up, priority
will be given to the production of ceramic grade feldspar as the revenue from
this product has the potential to equal that of tantalum.

In light of very recent developments within the tantalum industry, the Company
has been urged to consider expanding the Project to 2Mtpa. Accordingly,
Lycopodium has been instructed to quantify the effect of increasing production
to 2Mtpa, as the resulting economies of scale are expected to materially
increase the projected IRR of the Project.

The 40Mt Abu Dabbab Project is owned by the Egyptian registered company Tantalum
Egypt LLC, in which Gippsland has a 50% interest by way of an incorporated joint
venture with the Egyptian Government. Tantalum Egypt LLC also owns the Mining
Licence for the 98Mt Nuweibi tantalum deposit located some 17km from Abu Dabbab.

RJ (Jack) Telford
Executive Chairman

For further information please contact:

Jack Telford
Gippsland Limited
Tel: +61 (0)418 911 928
jtelford@gippslandltd.com
www.gippslandltd.com.au

Bill Sharp
Hoodless Brennan & Partners Plc
Tel: +44 (0)20 7610 8565
Fax: +44 (0)20 7538 1625
bill.sharp@hoodlessbrennan.com

--------------------------
 Exchange Rate US$0.70 = A$1





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