CODEIFAI LIMITED — Capital/Financing Update 2005

Sep 27, 2005

Company Announcements Office Australian Stock Exchange Limited 28 September 2005 Two Pages

ASX Code: AUV

Strategic Sales Agreement

The board of Australis Mining Corporation Limited ("Australis") is pleased to announce the signing of a Strategic Sales Agreement (the "Agreement") with Nikiticorp Limited ("Nikiticorp"), the majority shareholder of Australis. The Agreement provides for the purchase of all sapphire produced by Australis from its central Queensland mine at a price of \$4.50 per gram.

The Agreement has been prepared on terms favourable to Australis and will provide a platform for its future financial success.

Parties to the Agreement

Australis' main operating subsidiary, Australis Mining Operations Qld Pty Limited ("Australis Operations") is the signatory for the Australis group. Australis Operations has established a significant sapphire mining operation at Sapphire in Central Oueensland. Its activities and examples of sapphire recently produced can be viewed on the company's web site at www.australismining.com.au.

Nikiticorp is the 50.2% majority shareholder of Australis. Australis director Mr. Ted Tzovaras and his alternate director, Mr. Elias Christianos, are both directors and shareholders of Nikiticorp. Nikiticorp is based in Asia and is engaged in gemstone trading in that region as well as in the Middle East and Europe. Nikiticorp's substantial financial investment in Australis is an important part of its future growth strategy.

Nikiticorp will purchase sapphires from Australis Operations and undertake downstream processing, including cutting and heat treating (where necessary). These activities have not been part of the traditional business of Australis Operations and have different risks and returns compared to the mining and wholesaling of unprocessed sapphire. Nikiticorp will then sell the processed product to buyers in Asia and Europe via its established customer network.

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Key Terms of Agreement

• Sale price A price of \$4.50 per gram (\$0.90 per carat) will be paid for all shipments.
• Ouantity

The agreement allows for a maximum off-take of 1.4 tonnes of sapphire each month. There is no minimum amount specified.

• Payment

Australis will be paid via bank transfer prior to each shipment being exported from Australia (or via reduction of Nikiticorp's standby loan facility, refer below).

• Delivery

Australis is responsible for arranging delivery of shipment parcels to Nikiticorp's nominated port of export from Australia. This will normally be within Queensland or New South Wales.

• Term of Agreement The initial term of the Agreement is 12 months, and can be extended at Australis' option.

Benefits of Agreement

The board of Australis considers that the Agreement has been prepared on a basis very favourable to Australis shareholders and will bring considerable financial benefits through:

• assured customer for 100% of its sapphire production;
• effective payment for shipments upon delivery to an Australian port;
• removal of need to market and sell output, and elimination of the associated costs (which are estimated at least \$0.8 million per annum);
• assurance as to the average price achieved for its sapphire production, which is the same as the expected price per gram included in the financial forecast contained in Australis' December 2004 prospectus; and
• Australis has the ability to terminate the agreement in the event of nonperformance on the part of Nikiticorp.

In addition to the favourable nature of the Agreement, Nikiticorp will continue to provide financial support to Australis via a A\$2 million standby loan facility. The loan facility has been provided to assist Australis during its start-up phase.

Shareholder Approval

The Agreement will be subject to a meeting of Australis' shareholders in accordance with ASX listing rules and Corporations Act requirements. RSM Bird Cameron has been retained to prepare an independent report to shareholders.

It is anticipated that an appropriate resolution will be put to shareholders at the company's annual general meeting, to be held in late November.

For further information please contact:

Contact:	Anthony Damianos
	Executive Director & CEO
Telephone:	+612 8908 5988
Facsimile:	+612 8908 5977
Web:	www.australismining.com.au