2001-10-03 ASX Announcement

NEW PROJECT - EGYPT - TANTALITE DEPOSIT
48 million tonnes @ 274g/t Ta2O5

Gippsland is pleased to announce that it has secured a 50% ownership interest in the Abu Dabbab tantalite deposit located in Egypt.

Gippsland has secured the 50% ownership interest by entering into an incorporated joint venture with the Egyptian Government. Gippsland brings to the incorporated joint venture its exploration, production, technical, operational and most importantly, its mining technology skills. The Egyptian Government currently has 100% ownership of the Abu Dabbab tantalite deposit.

TRANSACTION
The Egyptian Geological Survey & Mining Authority ["EGSMA"] a statutory body of the Egyptian Government has agreed with Gippsland to form an incorporated joint venture for the exploitation and mining of the Abu Dabbab tantalite deposit ["Abu Dabbab"] located within the Central Eastern Desert of the Arab Republic of Egypt. The incorporated joint venture between EGSMA and Gippsland will lead to the establishment of a joint venture company, Tantalum Egypt, which shall be owned 50% by EGSMA and 50% by Tantalum International, a 100% owned subsidiary of Gippsland.

PAST EXPLORATION, RESOURCES
Abu Dabbab was explored in great detail during the 1970s by EGSMA and GIREDMET Geological Research Institute (Moscow) and again by a joint EGSMA-Geominera Italiana geological expedition during the early 1990s. These most thorough exploration programs included detailed mapping, sampling, drilling, trenching and the construction of 4 adits totalling 736 metres in length. The studies included comprehensive metallurgical testwork, which was undertaken in Italy and Moscow. The Italian work concluded with the preparation of a Feasibility Study, which was completed to international standards in 1992. Based upon present costs, past exploration expenditure would exceed A$6.0 million. The 1970's EGSMA-Soviet exploration programs determined that Abu Dabbab contained tantalum pentoxide ["Ta2O5"], niobium pentoxide ["Nb2O5"] and tin ["Sn"] as follows.

* The C1 category may be compared with the JORC classification Indicated Resource while the C2 is comparable to the JORC classification Inferred Resource.

The Abu Dabbab mineralisation is exposed as a hill some 130 metres in height with the portals of the 4 adits located at the base of the hill. The deposit is open at depth having been drilled to only 150 metres below adit level.

The EGSMA-Italian 1990's exploration program targeted mineralisation located above the adit level and determined that this section of the deposit contained an unclassified "Reserve" as follows:

As the Italian Reserve of 7.28 million tonnes is located above the level of the adits (within the 130 metre high hill), it is expected to yield a most favourable strip ratio of less than one.

Past Resource Determinations - (Schematic only & not to scale)


INFRASTRUCTURE

The deposit, which is located adjacent to the Western shore of the Red Sea, is readily accessible overland via a hard dirt road. It is conveniently located some 25km from a major national highway, 90km south from the Red Sea port of Quseir and 347km from the national railway network to the west.

Abu Dabbab is located 25km from a new international airport currently under construction at Marsa Alam to cater for international tourist trade.

Numerous modern hotel complexes are located along the west coast of the Red Sea, which is regarded as one of the world's premier scuba diving locations.

BANKABLE FEASIBILITY STUDY

Gippsland is currently undertaking a detailed review and computer generated synthesis of all data resulting from past exploration, which will lead to resource modelling, specialised metallurgical testwork and preliminary engineering studies.

Due to the quality and detail of the extensive past exploration work, it is anticipated that the project will quickly move to the preparation of a Bankable Feasibility Study. Gippsland's Bankable Feasibility Study will be greatly aided by the Feasibility Study undertaken by the Italians in 1992.

ADVANCED METALLURGICAL TECHNOLOGY

During the past decade, considerable advances have been achieved in gravity separation techniques, particularly with respect to the type of mineralisation found within the Abu Dabbab deposit. Such new technology, its development, its testing and the robustness of its application is only a few years old and in effective use by the most advanced and sophisticated tin and tantalite miners in the world.

The financial economics of this project improve dramatically as a consequence of the recently developed technology. Such technology will be brought to this incorporated joint venture and used in the exploitation of the Abu Dabbab deposit.

TANTALUM MARKET

Tantalum is a high-technology metal used in the production of miniature high-efficiency electronic capacitors and in a variety of specialty metal alloys used in the chemical and aerospace industries where its high capacitance per unit volume, strength and resistance to corrosion make it especially valuable. Tantalum capacitors are presently in particularly high demand, accounting for 60% of the world tantalum market, because they are now an essential component of military systems, cellular phones, pagers, computers, video game systems and numerous other popular electronic products. Spot prices for Ta2O5 are currently in the order of US$190/kg.

VALUE OF THE DEPOSIT

To understand the significance of the value of Abu Dabbab, based on the Egyptian-Italian above ground Resource evaluations (7.28 Mt) alone and current Ta2O5 market prices, Abu Dabbab contains Ta2O5 having an estimated in-situ value in the order of US$370 million (US$51 per tonne). This global estimate of the above adit mineralisation does not take into account the value of the Nb2O5, tin and ceramic grade feldspar contained within the deposit nor does it take into account the majority of the mineralisation which is situated below the adits.

As an added bonus, the Abu Dabbab mineralisation contains approximately 50-70% feldspar, which will be processed within the Ta2O5 stream to produce ceramic grade feldspar, which has a current market price of approximately US$70 per tonne. The demand for ceramic grade feldspar has shown strong and steady growth during the last decade with ready markets existing in Egypt and Europe.

INVESTMENT GUARANTEES AND INCENTIVES

The Abu Dabbab project will proceed under the banner of Egyptian Law No 8/1997 - Investment Guarantees and Incentives, which was established specifically to encourage foreign investment in Egypt. Law 8/1997 provides numerous benefits including protection against nationalisation, free export trade of products, maximum of 5% customs import duty, and exemption from a number of taxes including stamp duty and land tax. The provisions of Law No. 8/1997 will also enable Tantalum Egypt to enjoy a twenty (20) year exemption from profits taxation.

John (Jack) Telford
Executive Chairman
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 Chisholm, who is a Fellow of the Australasian Institute of Mining and Metallurgy, with over 25 years experience in the mining industry.

ASX 01.10.03