PRODIGY GOLD NL — Capital/Financing Update 2003

Dec 11, 2003

12 December 2003

The Announcements Office Australian Stock Exchange Limited Level 3, 20 Bridge Street SYDNEY NSW 2000

Dear Sir

Placement to Institutional Investors Secures Raw Material for processing and will Fast Track R&D to Commercialise a New Metal Extraction Technology

The Board of Tantalum Australia NL ("Company" or "TAA") is pleased to announce that it has placed 20 million ordinary fully paid shares in the Company at an issue price of 8 cents per share. The issue to institutional clients was managed by Intersuisse Corporate.

The funds raised by the issue will enable the Company to finance tantalum concentrate procurements for treatment at its Balcatta Mineral Dressing Plant to meet increasing demand for export grade material. The Balcatta facility has the ability to convert low grade/cost material into a more valuable export product.

The Company's existing contracts for the supply of tantalum and niobium entered into in June 2003, will deliver revenues of \$56 million and have the potential to grow to \$123 million over the next three years. TAA has strategic relationships with global end users in the electronics and aerospace industries, including KEMET (a 10% shareholder in TAA) the worlds largest consumer of tantalum for electronics manufacture and one of the top two Aerospace component manufacturers in the US who supplies high temperature turbine components for the Aerospace industry.

The funding will also enable the Company to accelerate its R&D programme with Boston University. The Company has the rights to the Solid-Ion-Conduction Membrane SOM process developed in conjunction with Boston University to various rare metals including tantalum, niobium, nickel, titanium and magnesium. The SOM process has been successful in extracting metal directly from tantalum concentrate in a laboratory environment. The next stage of R&D will be a feasibility study for a downstream pilot plant which could be built as early as 2005.

The Company has commenced a production trial at its Gascoyne Tantalum Project located approximately 220 km east of Carnarvan. This follows the successful completion of mining activities at Dalgaranga.

The Board welcomes the support of Intersuisse Corporate who have confidence in the Company's strategy for the future growth of the Company.

Yours faithfully

Peter Farrah Company Secretary