PRODIGY GOLD NL — Capital/Financing Update 2003

Dec 2, 2003

3 December 2003

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

Dear Sir

TAA SECURES GLOBAL RIGHTS FOR TITANIUM AND MAGNESIUM METAL PROCESSING TECHNOLOGY

Tantalum Australia NL (ASX: TAA) has laid the foundations for a future major expansion of its rare metals business, by today acquiring the worldwide exclusive rights to the solid oxygen-ion-conducting membranes processing technology ("SOM") for titanium and magnesium metal production.

The Perth-based Company has reached agreement with Boston University to acquire an option over the world rights to the process for titanium and magnesium. The total annual global market for both these metals exceeds US\$1.6 billion pa. (Titanium US \$550 million pa and Magnesium US\$1.1 billion pa) This adds to the existing SOM rights held by TAA to Tantalum, niobium, nickel, tungsten and four other rare metals.

This novel process, developed initially at MIT, uses SOM to directly extract (synthesize) the metal from oxide and/or concentrate form.

In work done to date on tantalum, it has achieved yields of up to 100% compared with yields of just 70% in the existing tantalum refinery process. TAA and Boston University expect that significant capital and operating cost savings can be achieved compared to existing plants.

Due to the outstanding success of the R&D in Phase I for tantalum and the potential to apply the Intellectual Property (IP) developed in that R&D across other metals, TAA has acquired an option over the rights to titanium and magnesium. TAA will be able to exploit synergies and cost savings in undertaking R&D across the suite of metals it controls. The SOM process has already been proven in a Phase I R&D program by Boston University in synthesizing magnesium metal from magnesium oxide and tantalum metal from both tantalum oxide and concentrates.

Importantly given the success in the tantalum R&D program of synthesizing metal from concentrates, the Titanium and Magnesium R&D will use oxides however it will focus on using concentrates (titanium) and calcined dolomite (magnesium) as feedstock.

TAA has been encouraged to secure the option over the rights to these metals by a major user of these metals. Discussions are proceeding with this interested party on the possibility of developing a strategic relationship. The existing processing technologies particularly for titanium are over 40 years old and a new green, energy and cost efficient process would have a major competitive advantage over these out dated processes.

TAA and Boston University have developed the next Phase of the R&D program for Tantalum, Titanium and Magnesium that is planned to commence in early 2004. Success in these programs could lead to the establishment of a semi-commercial pilot facility in Western Australia within three years. As part of the next Phase of R&D the cost advantages will be more closely defined

The SOM process has been developed by Professor Uday Pal and colleagues at the Boston University's Department of Manufacturing Engineering in the United States. Professor Pal will lead the TAA R&D Program.

The Option fee is US\$35,000 payable on execution of the Option Agreement. If the planned next Phase of the R&D is successful, this could lead to the addition of these metals to the existing License Agreement TAA has with Boston University to achieve full commercialisation of the technology.

Acquisition of the global rights to Titanium and Magnesium will expand TAA's opportunity to be producing not only low-cost tantalum metal but also titanium and magnesium within 3-5 years.

Boston University, the USA's $4^th$ largest independent university, is internationally recognized as one of the world's premier research universities, and has hundreds of millions of dollars pa in research grants.

For further information on this Release please contact either Mr Michael Fotios Managing Director 08 62411888 or Imants Kins Manager Business Development 08 6241 1806.

Yours faithfully

Peter Farrah Company Secretary

MEDIA RELEASE

3 DECEMBER 2003

TANTAUM AUSTRALIA EVES FUTURE TITANIUM AND MAGENSIUM METAL PRODUCTION AFTER ACQUIRING RIGHTS TO SOM PROCESS FOR THESE METALS

ACQUIRES WORLD RIGHTS TO EXCITING NEW PROCESS FOR METAL PRODUCTION

Tantalum Australia NL (ASX: TAA) has laid the foundations for a future major expansion of its rare metals business, today committing to a expanded downstream processing strategy. This involves the acquisition and development of the SOM processing technology for titanium and magnesium metal production. This SOM process has been developed by Professor Uday Pal and colleagues at the Boston University's Department of Manufacturing Engineering in the United States. It has been proven in Boston University R&D programs as a concept for tantalum and magnesium. Professor Pal will lead the TAA R&D Program.

The Perth-based Company has reached agreement with Boston University to acquire the world rights to the process for titanium and magnesium. These global markets based on annual production of these metals, are each valued at over. The total annual global market for both these metals exceeds US\$1.6 Billion pa. (Titanium US \$550Million pa and MagnesiumUS\$1.1 Billion pa) This adds to the SOM rights already held by Tantalum Australia to Tantalum, niobium, nickel, tungsten and four other rare metals. The tantalum metal market is very much smaller at an estimated US \$70 million pa.

TAA's Managing Director, Mr Michael Fotios, said the Company was expanding its objective to establish a vertically integrated tantalum business in Australia producing low-cost tantalum metal within 3-5 years.

Due to the outstanding success of the R&D in Phase I for tantalum and the potential to apply the Intellectual Property (IP) developed in that R&D across other metals, TAA has acquired the rights to titanium and magnesium. TAA will be able to exploit synergies and cost savings in undertaking R&D across the suite of metals it controls. The SOM process has already been proven in a Phase I R&D program by Boston University in synthesizing magnesium metal from magnesium oxide. Importantly given the success in the tantalum R&D program of synthesizing metal from concentrates, the Titanium and Magnesium R&D will both use oxides and

concentrates as a feedstock. For example in the Titanium program both Titanium concentrates and oxides will be sued. For Magnesium, a magnesium rich dolomite and oxide will be tested as feedstocks.

Further TAA has been encouraged to secure the rights to these metals by a major user of these metals. Discussions are proceeding with this interested party on the possibility of developing a strategic relationship. The existing processing technologies particularly for titanium are out dated and a new green, energy and cost efficient process would have a major competitive advantage over these out dated processes.

TAA and Boston University have developed the next Phase of the R&D program for Tantalum, Titanium and Magnesium that is planned to commence in early 2004. Success in these programs could lead to the establishment of a semi-commercial pilot facility in Western Australia within three years.

This novel process, developed by Professor Uday Pal initially at MIT, uses solid oxygen-ion-conducting membranes (known as the SOM process) to directly extract (synthesize) the metal from its oxides and/or concentrates. Boston University expects the process to have lower capital, energy, environmental and operating costs compared to traditional processes.

In work done to date on tantalum, it has achieved yields of up to 100% compared with yields of just 70% in the existing tantalum refinery process. As noted above, TAA and Boston University estimate that significant capital and operating cost savings can be achieved compared to existing plants.

As part of the next Phase of R&D these cost advantages will be more closely defined. "If successful, the development process could establish TAA as the world's lowest cost producer of tantalum and other metals to which it has rights, catapulting the Company into the world tantalum, titanium and magnesium metal industries with a potentially significant competitive advantage over existing plants," Mr Fotios said.

"This is a very exciting opportunity for TAA, which represents a logical extension of our growing tantalum and rare metals business in Australia," he added. TAA is already a growing producer of tantalum pentoxide for world markets.

TAA has reached agreement to enter into an Option Agreement for a fee of US\$35,000 with Boston University on the acquisition of the rights to SOM process in the field of use for Titanium and Magnesium. If the planned next Phase of the R&D is successful, this could lead to the addition of these metals to the existing License Agreement TAA has with Boston University to achieve full commercialisation of the technology.

Mr Fotios said TAA was exploring the possibility of obtaining Federal Government Research & Development grants to cover a maximum of 50% of these costs.

Boston University, the USA's $4^th$ largest independent university, is internationally recognized as one of the world's premier research universities, and has hundreds of millions of dollars pa in research grants.

$-$ ENDS $-$

For further information on this Release please contact

Either

Mr Michael Fotios Managing Director 08 624 11800

Or

Imants Kins Manager Business Development 08 624 11806