feasibility study

Gippsland's Abu Dabbab feasibility study completed, Egypt
Gippsland Limited (ASX & AIM: GIP) advises that the Abu Dabbab feasibility study completed by Lycopodium Engineering Ltd during November 2004 is presently being updated to reflect current-day costs.

The project cost estimate as of November, 2005, based on the Feasibility Study, was approximately US$90 million, including capital costs (2Mtpa processing plant, mining fleet, haul roads, power plant, and general infrastructure) and financing costs during the construction period.

The Directors are pleased to report that Lycopodium's work to date indicates that these project costs are likely to increase by less than 10% over the November 2005 estimate.

The feasibility study update will include the benefit of improved recoveries derived from the testwork and process flowsheet optimisation that have been on-going since the completion of the original study. The update will also incorporate certain process flow-sheet features as suggested by the International Finance Corporation (IFC) which has been granted a mandate to arrange Abu Dabbab project finance.

The 40 million tonne Egyptian Abu Dabbab project is scheduled to produce in excess of 650,000 pounds of tantalum concentrate per year. Gippsland has entered into a 5-year off-take agreement with a major tantalum concentrate processor for the majority of this tantalum. The tantalum customer has indicated a willingness to consider increasing the tantalum off-take price to take into account the capital and operating expense increases that have occurred since the 2004 feasibility study was completed.

The Directors advise that Abu Dabbab feasibility study update is well advanced and expected to be completed and presented to the IFC prior to 31 October 2006.