GIP Gippsland

RNS Number:6029E
Gippsland Limited
29 October 2004


                                GIPPSLAND LIMITED

                            QUARTERLY ACTIVITY REPORT
                          Period: July - September 2004
                                29 October 2004

HIGHLIGHTS

Abu Dabbab 2Mtpa Bankable Feasibility Study
* Completion first week November 2005
* World's second largest tantalum producer - >650,000lb/yr Ta2O5

Establishment of Abu Dabbab Free Trade Zone
* Zero import duty
* Zero sales tax
* Zero profit tax

Additional Tantalum off-take agreements

Wadi Allaqi
* Encouraging copper/nickel values
* Initial exploration completed (gold, copper, nickel)


COMPLETION OF ABU DABBAB 2Mtpa BANKABLE FEASIBILITY STUDY

The Directors of Gippsland Limited "Gippsland" or "the Company") are most
pleased to advise that the expanded Abu Dabbab Bankable Feasibility Study
("BFS") undertaken by the international engineering group Lycopodium Pty Ltd is
due to be released during the first week of November 2005.

Based upon an annual mill feed-rate of 2 million tonnes per annum the Abu Dabbab
project is scheduled to produce in excess of 650,000 pounds of tantalum
pentoxide ("Ta2O5") per year which will firmly establish the operation as the
world's second largest tantalum producer. The project will also produce 1,530
tonnes of tin metal per year.

ABU DABBAB FREE TRADE ZONE

Following discussions with the Egyptian General Authority for Investment and
Free Zones ("GAFI") it has been determined that the 40Mt Abu Dabbab project will
operate under the umbrella of a specially established Free Trade Zone ("FTZ")
which will provide a number of significant long-term benefits to the project
including but not limited to the following:

* Zero import duty for plant & equipment plus Abu Dabbab project consumables;
* Zero sales tax; and
* Zero general and Company profit taxation.

The benefits provided by the FTZ will apply for the life of both the Abu Dabbab
and Nuweibi deposits.

GAFI is Egypt's "One Stop Shop" for investment, easing the way for investors
worldwide to take advantage of Egyptian investment opportunities with emphasis
being placed upon export oriented industries. GAFI is the primary governmental
authority concerned with facilitating foreign investment and assisting with a
range of services which are provided at no cost to the foreign investor.

The ability of Gippsland to reach this milestone agreement with GAFI to
establish a project specific FTZ (the first of its kind) provides clear evidence
that the Abu Dabbab project is enjoying a very high level of support from its
joint venture partner Egyptian Geological Survey & Mining Authority, and the
Egyptian Government.

The 2Mtpa Abu Dabbab BFS completed by Lycopodium has taken into account the
considerable benefits associated with the FTZ.

TANTALUM OFF-TAKE AGREEMENTS

The company has entered into tantalum off-take heads of agreement for a total of
420,000 pounds of Ta2O5 per year over a 4-year period. Negotiations are
presently under way to enter into similar agreements for the balance of the
Ta2O5 production.

ABU DABBAB PROJECT FINANCE

The Company is currently in negotiation with a number of leading banks in
relation to project finance. While a number of finance options are being
considered, it is anticipated that the Abu Dabbab project will enjoy a high
debt-to-equity ratio in the order of 4:1.

WADI ALLAQI EXPLORATION

During June 2004, the Egyptian Government granted Gippsland the rights to
explore eight gold areas and one copper-nickel area in the Wadi Allaqi district
located 160km southeast from Aswan in the south-western part of the Eastern
Desert of Egypt. Wadi Allaqi is considered to have been a significant source of
the gold produced within Egypt during the Pharaonic period.

Within the Wadi Allaqi district about 19 historical gold occurrences and
deposits are known, most of which were superficially mined by the ancient
Egyptians and Romans. A small number of the deposits were mined by the British
during the early 1900s. The historical mining was focused entirely on the
near-surface high grade quartz veins and alluvial gold.

The nine (9) Wadi Allaqi projects, each 16 sq km in area, awarded to Gippsland
are: Copper/Nickel - Abu Swayel and Gold - Umm Garayat, Koleit Umm Qurayyat,
Nile Valley Block A, Nile Valley Block E, Seiga, Umm El Tuyer, Haimur and Umm
Shashoba.

COPPER/NICKEL - ABU SWAYEL

During the quarter the Company's geologists completed a review of previous
exploration data for the Company's Abu Swayel Copper-Nickel project. The
previous exploration work comprises ten diamond drill holes and a shaft with a
single cross-cut all of which test an area of ancient workings.
Copper at Abu Swayel was mined by the ancient Egyptians from shallow open cut
workings which can be traced over a length of 180m. An ancient furnace, slag and
pottery remains are evidence that some on site processing of the copper ore was
completed. In the early part of the 1900s the Nile Valley Company sank a shallow
shaft with a cross-cut at the 22m level to test the vertical continuity of the
mineralisation.

In the early 1960s the shaft was deepened to 69m and ten diamond drill holes
were completed to test the down dip continuity of the mineralisation over a
strike length of 200m. Of the 1,205m of drilling completed, only 21 samples
ranging from 1-2m in length were assayed. Three of the holes returned
significant Cu and Ni values.

Abu Swayel - best Cu & Ni intersections
Location      From (m)     To (m)             Interval (m)   Cu (%)      Ni (%)
DH01           21.00       23.60                  2.6        1.16        0.24
DH02           25.70       29.95                 4.25        1.58        0.23
DH14           48.55       49.85                 1.30        2.23        0.20
Shaft          30.00       40.00                10.00        1.87        1.53
Cross-cut       7.50       15.50                 8.00        4.11        1.77

Except for geological mapping there has been no exploration outside of the
immediate vicinity of the ancient workings since the early 1960s. The results of
the previous exploration clearly show that mineralisation is present at grades
and over widths that would be readily detected by geophysical methods such as
electromagnetic ("EM") plus induced polarisation ("IP") techniques.

The Abu Swayel licence covers 16 sq km of favourable stratigraphy along strike
from the old workings which have not been tested for Cu-Ni mineralisation. Much
of the area is covered by thin wadi sediments which can be readily explored by
means of ground geophysical methods.

During September 2004, the company completed geological mapping and orientation
geochemical sampling in preparation for the proposed EM and IP exploration
programmes.

GOLD

During the quarter all of the historical and previous exploration data was
compiled into a GIS database and base plans prepared. Site inspections were
carried out on all of the areas which revealed that old alluvial and colluvial
gold workings were much more extensive than previously known. A number of
previously unknown shafts and adits were located during the inspection which
were mapped and sampled.

The mines at Wadi Allaqi were historically small tonnage, high-grade mines
easily exploited by the ancient miners. The recent field work has identified
some prospects for large tonnage, lower-grade mineralisation which were ignored
by the ancients. These prospects are at Haimur, Seiga, Umm El Tiur and Umm
Shashoba where extensive zones of argillic alteration are associated with the
old workings. Channel samples were collected from existing mine openings and the
wadi banks to obtain samples for geochemical analysis. All of the samples were
returned to Perth for analysis of gold, copper, nickel and platinoids.

Exploration programs for each project were prepared during the field inspection
to ensure that drill access was possible with minimum site preparation and that
the wadi sediments were not too thick to preclude regolith sampling methods.

CORPORATE

On Monday 25 October 2004, the Company held its Annual General Meeting in Perth,
Western Australia. All 5 Resolutions put to the Annual General Meeting were
passed.

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

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

Note: In accordance with Listing Rule 5.10 of the Australian Stock Exchange
Limited, the geological information in this report that relates to mineral
resources and ore reserves is based on information compiled by Gippsland
Director Dr John M Chisholm, who is a Fellow of the Australasian Institute of
Mining and Metallurgy, with over 25 years experience in the mining industry.




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

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