CODEIFAI LIMITED — Capital/Financing Update 2005

Mar 3, 2005

AUSTRALIS MINING CORPORATION

ABN 68 108 649 421 Level 29. Chifley Tower, Chifley Square, SYDNEY NSW 2000 Phone (02) 8256.0888 Fax (02) 8256.0899

NARDOO PROJECT UPDATE PRE-LISTING DISCLOSURE

Australis' key sapphire mining project is located near Sapphire, Central Queensland on a property known as "Nardoo". The company's leases over the Nardoo property cover an area of over 3,200 hectares. An area of approximately 200 hectares has a proven resource of 22 million grams of sapphire with an average gram of 8 grams/cubic meter of wash material.

Since November 2004 Australis' operations have been preparing the facilities and the plant site so as to enable the commencement of processing operations on the Nardoo leases. These works are nearing the final phase, with the key steps require to establish production being:

• the first mining cut of overburden has been commenced, with material $\bullet$ from this first cut is being used to level the site so as to position the wash plant;
• once the platform is completed some refinements will be made and then the major components of the plant can be moved into place and be reconnected for operation; and
• concurrently a water storage facility dam is being constructed next to the plant site as well to contain the water for circulation through the plant.

While the plant establishment has been underway, the work has also progressed on the first cut into the wash seam, located at drill hole number 45 (as referred to in the company's prospectus in Figure 6 on Page 56). The first 50m x 50m cut is almost completed with results ahead of expectation.

After stripping the first meter metre of topsoil, overburden was stripped to a level of 2 meters metres and exposed the sapphire bearing wash seam. In this first cut, the wash is running at an average thickness of 2 meters, a ratio of 1:1 to the overburden. Continuation of the wash to overburden ratio at this level will lead to improved costs of production. The company's prospectus forecasts were based on an average wash overburden ratio of 1:4.5.

The initial cut of 50 x 50m at an average depth of wash of 2 meters metres is expected to be completed within 1 week and thereafter a cut of this size can be completed within 1 to 2 days. A cut of this size provides sufficient material for 2 to 3 days processing within the wash plant. Initial shipments of sapphires are scheduled to occur during March 2005. For these reasons it is expected $\ddot{\phantom{0}}$

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that forecast production targets will be met, followed by sales and revenues expected to meet forecast figures.

For further information please contact:

Anthony M. Damianos Executive Director -CEO Australis Mining Corporation Limited Ph: + 612 8256 0888 Fax: +612 8256 0899 Email: a.damianos@australismining.com.au