PRODIGY GOLD NL — Capital/Financing Update 2004

May 16, 2004

AUSTRALIA $N₁$

17 May 2004

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

By ASX Online Transmission

Dear Sir

Please find attached ASX/Media release regarding African tantalum supply.

Yours faithfully

Peter Farrah Company Secretary

$\mathbf{I}$

AUSTRAILA $N₁$

17 May 2004

ASX ANNOUNCEMENT/MEDIA RELEASE

TANTALUM AUSTRALIA ("TAA") SECURES AFRICAN CONCENTRATE SUPPLY

TAA has signed an exclusive long term contract with an African mining and marketing company to take delivery of a minimum 330,000 lbs $Ta_2O_5$ per annum. This material will be upgraded at TAA's mineral dressing plant at Balcatta and delivered into existing customer contracts.

The first shipment is now being prepared under the supervision of TAA's African Operations Manager and SGS, an internationally recognised independent assay company. Shipment of the first container of material is expected to commence in two weeks.

The securing of a long term source of material from Africa is the culmination of a two year due diligence process that TAA has undertaken as part of its strategic plan to build a coordinated African supply chain for $Ta_2O_5$ .

The African raw material compliments TAA's existing Australian resource base and accelerates TAA's plan to become the world's second largest tantalite procurement and supply company.

Historically the tantalite and columbite supply chain in Africa has been fragmented and uncoordinated. TAA is coordinating supply of material from Africa, for the benefit of TAA, its customers and the local African partners and suppliers. Africa represents approximately 20% of global tantalum supply.

Industry forecasts for electronics demand in 2004/5 are for sustained growth. Consumer electronics demand is strong with laptops, mobile phones and digital cameras all growing steadily from the later half of 2003 and forecast to continue through 2004/5. Corporate spending on IT strengthened in the first quarter of 2004 and is expected to fuel demand for $PC's$ .

For further information contact:

Michael Fotios Managing Director

$(08)$ 6241 1888

Imants Kins Manager Business Development

$\overline{2}$