Tantalum Egypt

completed

Gippsland Ltd. (“Gippsland” or the company) is an Australian junior exploration company listed on both the Australian Stock Exchange (“ASX”) and the London Stock Exchange AIM. Gippsland’s main asset is a 50% stake in Tantalum Egypt Limited (“Tantalum”) which owns the undeveloped Abu Dabbab tantalum-tin deposit which has 25 million tonnes of reserves. Gippsland also owns 100% of Nubian Resources Plc which has exclusive exploration rights to eight areas of known gold mineralization plus one copper-nickel deposit in the Wadi Allaqi region, situated to the south-east of Aswan in the Arab Republic of Egypt. The project is an early-stage equity investment of US$2 million to facilitate completion of feasibility studies of the Abu Dabbab deposit, and early stages of Gippsland’s gold exploration activities. The $2 million equity will be represented by 25 million share to be issued at $0.08 (A$0.108) per share. Each IFC share will have an attaching free unlisted option with an exercise price of A$0.135 and a life of six years. IFC may be forced to exercise 12.5 million of these options in the event that Gippsland shares trade a weighted average price equal to or greater than A$0.20 for a period of 20 trading days, or relinquish the 12.5 million options. Pending finalization of feasibility studies, Gippsland have estimated a capital cost of US$91 million for development of a mine and processing plant at Abu Dabbab and IFC may consider financing this with:- IFC A and B Loans up to US$55 million; and - an a further equity investment in Gippsland of up to an additional $3 million. If IFC proceeds with these additional investments they would be proposed to the IFC Board as a new project with appropriate environmental and social documentation. Any development of the gold or copper-nickel deposits would likewise be proposed as a new project. - Abu Dabbab Tantalum-Tin DepositsGippsland is considering the development of a greenfield open pit tantalum and tin mine and associated facilities at Abu Dabbab, which is in the central part of the Eastern Desert of Egypt, 27 km inland from the Red Sea Coast, the turn off to the mine is 32km north of Marsa Alam and 75km south of the port of Quseir. Currently planned production would be approximately 650,000 lbs of tantalite and 1,500 tons of tin metal per annum over a period of 13 years. Gippsland owns 50% of the Project while the Government of Egypt (“GOE”), through the Egyptian Mineral Resources Authority (“EMRA”) will have a free carried interest of 50%. Feasibility studies are currently being completed.The IFC project will not fund any site work at this stage, only completion of desk studies to finalise the feasibility study.- Wadi Allaqi Gold Exploration AreasGippsland’s eight gold properties and one copper-nickel property (each 16 km2) are located in the Wadi Allaqi area, south east of Aswan. A contract to complete 14,000m of drilling has been signed with Wallis Drilling of Perth Australia. A small trailer mounted drill rig will be used, this requires a small footprint and can be taken to drill sites using existing tracks. A detailed drilling program has been prepared to test eleven historical gold workings plus some geochemical targets identified by recent exploration. The historical workings mostly date from the late 1800s to the 1920s period and were undertaken by British interests, however there is also evidence of ancient Pharaonic workings older than 2000 years in some areas. Priority is to be given to the Seiga prospect where 12 profiles will be drilled. Other high priority targets will include 8 profiles at the nearby Um Shashoba prospect, sampling of wall rocks adjacent to ancient workings and at Haimur where sampling from ancient underground workings showed promising results. The program is expected to take three months. A further 2,260m of drilling will be allocated on the basis of the results obtained in the field. Small numbers of holes will be drilled at other prospects such as Um Garayat where drilling will test the shear north and south of the main historical workings as well as historical workings located to the east of Um Garayat. At “Block A”, holes along four lines will test the mineralised horizon. Depending upon time, a further two lines of holes may be drilled further to the south of the “Block A” historical workings to test an area of shallow pits. At “Block E”, holes will be drilled along three lines across the line of historical workings. Some localized minor drill pad preparation will be required to facilitate drilling operations. At “Wells Area E”, holes will be drilled along three profiles to test an area of historical workings whilst at “Wells Area F”, holes will be drilled to test some minor workings. Finally at Um Tiur it is proposed to drill along nine profiles. While each of the nine properties is located on a tenement of 1600 hectares (ha), exploration of each tenement will be mainly focused within areas not exceeding 200 ha for each site. The tenements are accessed by existing sand tracks.Maps showing the location of project activities form supporting documentation to this ERS.Gippsland is committed to IFC objectives on environmental, social, and governance issues and will comply with the IFC Policy and Performance Standards on Social and Environmental Sustainability. The Company has committed to these objectives in a Corporate Health, Safety, Environment and Community (HSEC) Policy Document which includes guidelines for exploration.