PRODIGY GOLD NL — Capital/Financing Update 2004

Jul 7, 2004

AUSTRALIA NL

8 July 2004

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

By ASX Online Transmission

Dear Sir,

Please find attached ASX/Media release regarding RC drilling progress at the Mt Deans Tantalum project project.

Yours faithfully

Peter Farrah Company Secretary

ASX ANNOUNCEMENT/MEDIA RELEASE

MT DEANS TANTALUM PROJECT STRONG DRILLING RESULTS - FEASIBILITY COMMENCES

Tantalum Australia NL is pleased to announce that it has intersected a significant zone of pegmatite in Reverse Circulation (RC) drilling currently being completed at its Mt Deans project. 7 kilometres south of Norseman in Western Australia. This 84 metre wide intersection confirms the extensions to the pegmatite intersected in RC drilling during April.

Inclined reverse circulation drill holes were completed in the Western Lode system ("WLS") at Mt Deans to follow-up a broad intersection of pegmatite that was made in MCD 162 (72 metres at 324 g/t Ta2O5 from 0-72metres down hole) the results of which were announced to the market on 5 May 2004.

A second broad pegmatite intersection 84 metres wide from 13m to 97m down-hole has been made in MDC 181 located approximately 60m northeast of MDC 162. Samples from the intersection have been sent to Perth for analysis. Visual inspection of the mineralized pegmatite has confirmed mineralization and alteration consistent with earlier drilling. Analysis has shown mineralization to be consistent in pegmatites previously intersected in the area during April.

Surface geological mapping of pegmatite outcrops in this southwest zone has confirmed two trends of pegmatite. One set oriented in a northwesterly direction and another set of veins that are almost at right angles trending northeasterly. It is the northeasterly trending set that has returned the recent broad intercepts and to date has only been tested by MCD 162 and 181. Similar NW/NE trending pegmatite veins occur in the main (Eastern Lode System) zone of Mt Deans giving the Company confidence in relation to consistency and scale of the mineralized system.

Follow up Drilling

RC drilling will recommence later in July to further test this new zone of mineralised pegmatite. The program will focus on testing the northern and southern strike extensions of the WLS and the depth extensions to about 100 metres vertical depth all of which remain open. Further infill drilling will also be completed to test the up and down dip extensions of the western and eastern lode systems. The mineralisation is hosted within numerous 2 to 20 metre wide zoned albitic pegmatites that cut a sequence of dolerite, basalt and minor sediments.

Feasibility Study

As part of progressing the Mt Deans project to production stage. Tantalum is undertaking a feasibility study based on utilising its significant existing plant at Norseman. The study should be completed by late October 2004 and includes:

• Further RC and diamond drilling $\bullet$
• A new resource estimate incorporating past and proposed drilling
• Preliminary pit optimisation. $\bullet$
• Metallurgical test work
• Engineering study and cost estimates of utilising the common infrastructure at the company's $\bullet$ 300,000 tpa Norseman CIP processing plant (currently on care and maintenance), which includes crushing, grinding, tailings storage facility, process water supply and dams.)

MT DEANS TANTALUM PROJECT - Location Plan

The availability of this infrastructure should enable a low cost and rapid start up of operations following a favourable feasibility. Field work during July will include the collection of bulk samples (100 - 500 kg) for detailed metallurgical test work at TAA's Balcatta metallurgical facility.