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Additional Information

Market:	ASX FRA
Sector:	General Mining
EPIC:	GIP
Latest Price:	0.02 (0.00%)
52-week High:	0.05
52-week Low:	0.01
Market Cap:	16.25M

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Gippsland Limited

Gippsland focuses on world-scale projects which have been over-looked by major resource groups. Projects which have undergone detailed exploration and which have the potential to be brought into production quickly are a prime target for the Company. Gippsland's success in this area is due in part to the Company's philosophy of entering into equitable joint venture arrangements with overseas nationals. The Company's prime assets are the 40 million tonne Abu Dabbab and the 98 million tonne Nuweibi tantalum-tin projects located in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea.

Gippsland foresees tantalum shortage, seeks more funding for Abu Dabbab

Friday, October 30, 2009

Perth-based resource company Gippsland Limited (ASX: GIP) said it was seeking to gear up for the impending shortfalls in tantalum supply, working to secure funding for its tantalum deposits, which are expected to be crucial to the long-term supply of the metal to the electronics and aviation industries and put the company in a strategically advantageous position.

Gippsland has two tantalum deposits in Egypt, the 44.5 million tonne Abu Dabbab and the nearly 98 million tonne Nuwebi. Fellow tantalum miner Noventa (AIM: NVTA) has said that nearly a third of global tantalum production has been withdrawn over the past nine months and the demand for metal is projected to outstrip the supply in 2010 and 2011.

A number of tantalum mines in Australia, Africa and Canada have been shut down recently, which Gippsland said enhanced the importance of its projects. The company cited the escalating costs of production, decreasing tantalum grades and lack of shipping space for radioactive IMO Class 7 tantalum concentrates as the primary reasons behind the closures.

Existing tantalum inventories held by ore and concentrate producers decline and are expected to be exhausted within 18 months, Gippsland said in its statement, also noting that analysts expected tantalum prices to rise significantly before the shut down operations are recomissioned.

The Abu Dabbab project is designed to produce a high-grade SynCon having a Ta2O3 content in excess of 050%.

The tantalum product will thus not be restricted as it will not be classified as IMO 7 material due to low uranium and thorium content. A recent bankable feasibility study at the Abu Dabbab determined it could produce in excess of 650,000 pounds of tantalum pentoxide per annum over 20 years. The company already has an agreement in place to sell 600,000 pounds of tantalum pentoxide annually to tantalum major HC Stark GmbH over 10 years.

The company raised A$3.9 million through a right issue during the quarter and another A$500,000 through a share placement to fund Abu Dabbab. Gippsland is also in discussions with German state owned KfW Bankengruppe to secure financing for the project.

Gippsland secured three prospecting licenses in Eritrea covering 300 kilometres in an area which is believed to have the potential to host high grade gold and metal deposits.

Gippsland added 4% on the Australian Securities Exchange on Friday.

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