GIP Gippsland

RNS Number:1702D
Gippsland Limited
22 September 2004



22 September 2004

Gippsland Limited ("Gippsland" or "The Company")

2MTPA BANKABLE FEASIBILITY STUDY EXTENSION

Further to Gippsland Limited's announcement dated 14 September 2004, the
Directors confirm that instructions have been issued to its consultants to
produce an Abu Dabbab Bankable Feasibility Study ("BFS") based upon a mill-feed
increase from 1.26Mpta to 2Mtpa.

The Directors are advised that a 2Mtpa BFS will be completed prior to the end of
October 2004. Requests from buyers of tantalum (in light of the current state of
the tantalum industry) are the reason for this 2Mtpa BFS.

While the 2Mtpa operation is expected to entail a modest increase in Capex,
preliminary evaluation indicates that the increased mill-feed will substantially
increase the economics of the project with the internal rate of return ("IRR")
rising to approximately 20%. While this IRR is calculated on the basis of 100%
equity Capex funding, it should be noted that the project is likely to enjoy a
high level of debt funding. Accordingly, the Company is currently in
negotiations with resource project banks with respect to the provision of
project finance.

The 2Mtpa BFS will be based upon tantalum and tin production alone and will not
take into account the possibility of also producing approximately 1.6Mtpa of
ceramic grade feldspar as a by-product to the tantalum and tin production.
Feldspar production, which will be considered as a separate exercise following
the commencement of tantalum and tin production, has the potential to materially
enhance the Abu Dabbab project's total IRR. Feldspar tailings produced during
the early stages of the project will be suitably contained to enable processing
at a later date.

Based upon 2Mtpa, the Abu Dabbab project will produce in excess of 650,000
pounds of tantalum pentoxide per year which will firmly establish it as the
world's second largest tantalum producer.

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




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