PRODIGY GOLD NL — Capital/Financing Update 2004

Jun 3, 2004

4 June 2004

Dear Shareholder

Non-Renounceable Rights Issue

On 3 June 2004 the Company announced to Australian Stock Exchange (ASX) the details of a 1 for 10 non-renounceable rights issue at an issue price of 6 cents per share, to issue 25,352,955 new shares to raise approximately \$1,521,177.

The issue is underwritten by Intersuisse Limited.

The prospectus relating to the issue has been lodged with ASX and Australian Securities & Investment Commission (ASIC) and is available on the ASX website, www.asx.com.au and on the Company's website www.tantalumaustralia.com for inspection.

The timetable and important dates of the issue are set out below:

Lodgement of Prospectus with ASIC and ASX	03-June-2004
Record Date	15-June-2004
Opening Date and Dispatch of Prospectus	16-June-2004
Closing Date	30-June-2004
Securities quoted on deferred basis*	01-July-2004
Deferred settlement trading ends and dispatch date	08-July-2004
*The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. As such, the date the Shares are expected to commence

trading on ASX may vary with any change in the Closing Date

The purpose of the Issue is to raise up to \$1,521,177. The proceeds from the Issue will be used:

• $(a)$ to fund exploration and development activities on the Company's Binneringie and Mt Deans Tantalum Projects estimated at \$200,000;
• to fund further exploration activities and a feasibility study on the Company's $(b)$ Norseman Gold Project estimated at \$100,000;

• to fund an initial due diligence programme to assess the metallurgy of the Company's $(c)$ Brockman Tantalum / Niobium Project estimated at \$150,000;

• $(d)$ to fund research and development expenditure in conjunction with the Boston University relating to the SOM technology for the conversion of tantalum concentrate to tantalum metal estimated at \$150,000.

• $(e)$ to fund the procurement of tantalum concentrate from suppliers in Southern and Central Africa for processing at the Company's Balcatta mineral dressing facility for delivery to customers estimated at \$250,000;
• $(f)$ to fund the costs of the issue estimated at \$161,000; and
• to fund short term debt reduction and provide additional working capital for the $(q)$ Company of approximately \$510,177.

The use of Funds set out above is a "best estimate" only. It is important to recognize that the use of Funds may be subject to change in line with results, circumstances and other opportunities.

On allotment and issue the new shares will rank equally with the existing ordinary shares.

On completion of the issue there will be 278,882,502 ordinary shares on issue.

A full copy of the prospectus relating to the issue will be mailed on 16 June 2004 to all shareholders eligible to participate in the issue.

Yours faithfully

PA Farrah Company Secretary