More good news from PEM

HOMEX - Perth

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Perilya Limited ("Perilya") advises that it has reached agreement on
the terms of a zinc sale and purchase agreement and associated
funding arrangement with Korea Zinc Company Ltd and its associated
company Young Poong Corporation Limited (together the "Korea Zinc
Group").

Perilya has, through its wholly owned subsidiary, Perilya Broken Hill
Limited, agreed to supply the Korea Zinc Group, the world's largest
producer of refined zinc metal, with approximately 50% of the zinc
concentrates from the Broken Hill mine on a long term basis.

The Korea Zinc Group has agreed to fund US$15 million towards meeting
the acquisition costs related to Perilya's acquisition of the Broken
Hill mine from Pasminco Limited (Administrators Appointed)
("Pasminco"). Key features of this funding arrangement are:

* US$15 million at a competitive market interest rate, repayable in
three years through a single bullet payment; and

* the issue to the Korea Zinc Group of fully redeemable convertible
notes with a face value of US$15 million, convertible at market
after 2 years subject to Perilya's prior right to redeem.

The funding will be secured by a first ranking security over the
Broken Hill mine assets and tenements and an accompanying corporate
guarantee by Perilya.

The arrangements made with the Korea Zinc Group provide Perilya with
substantial commercial and financial benefits including:

* the majority of planned zinc concentrate production until the end
of calendar year 2005 has now been firmly placed between Pasminco
and the Korea Zinc Group on competitive, arms-length terms;

* flexible financing arrangements that will enable Perilya to develop
a progressive hedging strategy to take account of changing market
conditions; and

* the establishment of a close relationship with a strong industry
participant in the Korea Zinc Group, laying the foundation for
future co-operation in developing further opportunities in the zinc
business.

The funding arrangement is subject to finalisation of documentation
with the Korea Zinc Group and Pasminco and meeting standard
conditions precedents for a funding facility of this nature.
Transaction completion is currently targeted for early June.

The issue of the convertible notes will be subject to the approval of
shareholders at a meeting to be scheduled during July 2002.

The funding arrangement has been approved by the Bank of Korea.

The Board and management of Perilya consider that the zinc sale and
purchase agreement and associated funding arrangement are the optimal
available to the Company, and looks forward to building upon and
expanding this relationship with the Korea Zinc Group.

T M Clifton
MANAGING DIRECTOR