PRODIGY GOLD NL — Proxy Solicitation & Information Statement 2004

Jun 3, 2004

4 June 2004

Dear Shareholder

Overview

During the past 3 years the Company has actively pursued its objective of developing an integrated tantalum business and has successfully achieved the following:

• Secured / developed an indicated and inferred tantalum resource base of approximately 7.5m lbs of contained tantalum pentoxide at its Binneringie. Mt Deans and Brockman projects in Western Australia.
• Designed and commissioned a tantalum dressing plant at its head office premises in Balcatta, Western Australia, capable of producing up to 500,000 lbs of contained tantalum pentoxide per annum. The plant will be used to upgrade tantalum concentrates, sourced from its own mining operations or other producers, to meet the required specifications of its customers.
• Entered into a contract with an African mining and marketing company to purchase tantalum concentrate to complement its Australian resource base.
• Signed two vear agreements to sell tantalum concentrate to two Chinese refiners.
• Secured a three year contract to supply tantalum metal to one of the world's largest suppliers of metal alloys to the aerospace and energy generation industries.
• Produced high grade tantalum metal during stage 1 of a 3 stage R&D program in conjunction with Boston University to produce tantalum metal from a patented, environmentally friendly, low cost process.

The tantalum market is now emerging from a severe downturn, which occurred throughout the industry in 2001. Increasing demand is being driven by growth in the electronics industry, particularly the mobile phone and personal computer markets.

Independent analysts are forecasting the tantalum market to now experience a sustained period of growing demand and higher prices.

Capital Raising - Non-Renounceable Rights Issue

To assist the Company to further develop and grow its current operations the Board has resolved to conduct a capital raising via a Non-Renounceable Rights Issue to shareholders of the Company.

Enclosed with this letter is an Advice to Shareholders setting out the details of the issue. A full prospectus relating to the issue will be sent to all shareholders eligible to participate in the issue.

Listing of the Company's Shares on the London Stock Exchange's AIM Exchange

The Board has also resolved to apply to have the Company's shares listed on the London Stock Exchange's Alternative Investment Market (AIM).

AIM is the London Stock Exchange's global market for smaller, growing companies. The AIM exchange opened in June 1995. More than 1200 companies are now listed on AIM. Collectively these companies have raised more than 14 billion US dollars whilst on AIM.

The Board considers the key benefits for the Company of being listed on AIM will be:

• an increased profile and recognition with international customers and investors within the $\bullet$ global tantalum Industry, and
• access to a bigger pool of capital to fund future growth.

The Company's shares will continue to be listed and traded on the Australian Stock Exchange.

The listing of the Company's shares on the AIM exchange is expected to be completed during the September quarter this year.

Notice of a General Meeting of Shareholders

Also enclosed with this letter is a Notice of a General Meeting of shareholders of the Company together with an Explanatory Memorandum and Proxy Form. The purpose of the meeting is to seek shareholder approval to amend the Company's constitution to comply with the AIM Rules. In addition the Board is seeking ratification by shareholders of the recent issues of ordinary shares in the Company.

I encourage you to attend the meeting and vote in favour of the proposed resolutions. If you are unable to attend the meeting I encourage you to complete the enclosed proxy form in order to register your vote.

If you have any queries or would like to discuss any matters prior to the meeting, please contact myself or the Managing Director, Michael Fotios on (08) 6241 1888.

Yours faithfully

Timothy King Chairman

13 Mumford Place, Balcatta, WA 6021 Telephone: 08 6241 1888 Fax: 08 6241 1818

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of the Shareholders of Tantalum Australia NL. ABN 58 009 127 020, (the "Company") will be held at the Sutherland Room, City West Function Centre, 45 Plaistowe Mews, West Perth on Tuesday 20 July 2004 at 11.00am WST, to consider and if thought fit to pass the resolutions set out below.

If you are unable to attend the meeting, we encourage you to complete and return the enclosed Proxy Form. The completed Proxy Form must be received by the Company by 11.00am WST on Sunday 18 July 2004.

AGENDA ITEMS:

To consider and, if thought fit, to pass, with or without amendment, the following resolutions:

Note: Shareholders are directed to the attached Explanatory Memorandum which contains important information with regard to the following resolutions.

RESOLUTION 1: SPECIAL RESOLUTION

ALTERATION OF CONSTITUTION TO COMPLY WITH THE AIM RULES

"That, for the purposes of section 136(2) of the Corporations Act and for all other purposes, the amendments to the constitution set out in Schedule A to the Explanatory Memorandum be approved."

RESOLUTION 2: ORDINARY RESOLUTION

RATIFICATION OF SHARE ISSUE ON 1 NOVEMBER 2003

"That, pursuant to Listing Rule 7.4 of the Australian Stock Exchange Limited, the issue of 2,996,669 fully paid ordinary shares issued on 1 November 2003 at 10 cents per share, to the former shareholders of Rare Resources NL ACN 009 260 566 as consideration for the acquisition of all of the issued capital of Rare Resources NL, be ratified"

Note: The Company will disregard any votes cast on this resolution by:

• any shareholder of Rare Resources NL who received allotments; and
  • any associate of those allottees.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in $\bullet$ accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is $\bullet$ entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

RESOLUTION 3: ORDINARY RESOLUTION

RATIFICATION OF SHARE ISSUE ON 12 DECEMBER 2003

"That, pursuant to Listing Rule 7.4 of the Australian Stock Exchange Limited, the issue of 20.000.000 fully paid ordinary shares issued on 12 December 2003 at 8 cents per share to provide additional working capital for the Company, to the allottees listed below be ratified:"

Allottee	Shares
Bruce Birnie Pty Ltd	1,000,000
C Hoffman & N Hoffman	1,250,000
Commodity Traders (NZ) Ltd	1,000,000
CVC Limited	2,500,000
Dixtru Pty Ltd	2,050,000
G&G Marketing Pty Ltd	1,000,000
Intersuisse (Nominees) Pty Ltd	1,200,000
Intersuisse (Issues) Nominee Pty Ltd	3,925,000
Karari Australia Pty Ltd	1,000,000
Mulgara Pty Ltd	2,000,000
PATA Nominees Pty Ltd	625,000
Permanent Trustee Australia Ltd
(Kaplan Master Trust Trading Fund KAP0003 A/C)	1,000,000
Permanent Trustee Australia Ltd
(Kaplan Master Trust Equities Fund KAP0001 A/C)	750,000
Vagg Investment Management Services Pty Ltd	700.000
	20,000,000

Note: The Company will disregard any votes cast on this resolution by:

• the allottees listed above; and
• $\bullet$ . any associate of those allottees. However, the Company need not disregard a vote if:
• $\bullet$ . it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled $\bullet$ to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

RESOLUTION 4: ORDINARY RESOLUTION

RATIFICATION OF SHARE ISSUE ON 16 JANUARY 2004

"That, pursuant to Listing Rule 7.4 of the Australian Stock Exchange Limited, the issue of 6.287.500 fully paid ordinary shares issued on 16 January 2004 at 8 cents per share, to provide additional working capital for the Company and (in the case of shares issued to Boston University Trust) as consideration pursuant to a Licensing Agreement entered into with Boston University, to the allottees listed below, be ratified:"

Allottee	Shares
Tricom Noninees Pty Ltd	2,000,000
Vista Blue Limited	130,000
Valdrew nominees Pty Ltd	537,500
Cascade Holdings Pty Ltd	437,500
Boston University Trust	750,000
Sydney Douglas Corser	937,500
SDC Pty Ltd	1,232,500
McSweeney Partners Pty Ltd	125,000
Ausvaal Limited	137,500
	6,287,500

Note: The Company will disregard any votes cast on this resolution by:

• the allottees listed above: and
• any associate of those allottees.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

SNAPSHOT DATE

For the purposes of Regulation 7.11.37 of the Corporations Regulations, the Directors have set a snapshot date to determine the identity of those persons eligible to vote at the General Meeting. The snapshot date is 12 noon WST on Monday 19 July 2004.

Dated this 4th day of June 2004.

By order of the Board

Peter Farrah Company Secretary

TANTALUM AUSTRALIA NL ABN 58 009 127 020 APPOINTMENT OF PROXY FORM

To∶	Tantalum Australia NL
	13 Mumford Place
	BALCATTA WA 6021

I/We---------------------------------------
of_______________________________________
being member/members of TANTALUM AUSTRALIA NL and holding_______________________________________
ordinary shares
HEREBY APPOINT_______________________________________
οf_______________________________________
(or failing him)_______________________________________
оf_______________________________________

(or failing proxy(ies) listed above, the Chairman of the Meeting) as my/our proxy to vote for me/us and on my/our behalf at a General Meeting of the Company to be held on Tuesday 20 July 2004 and at any adjournment thereof.

This form may, if wished, be used to direct the proxy to vote in respect of the resolutions by marking with a "X" the appropriate box "For" or "Against", otherwise the proxy may vote as he or she thinks fit or abstain from voting.

RESOLUTIONS
--------------------	--

AGAINSTFOR

1.	To amend the Constitution to comply with the AIM Rules
2.	To ratify an issue of shares made on 1 November 2003
3.	To ratify an issue of shares made on 12 December 2003
4.	To ratify an issue of shares made on 16 January 2004

If you do not wish to direct your proxy how to vote, please place a mark in this box $\parallel$

By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of the interest. The Chairman will vote in favour of all of the resolutions if no directions are given.

Dated this....................................

Signature of member

Signature of joint member

Or. if a Company

(affix common seal if appropriate or otherwise execute in accordance with Section 127 of the Corporations Act)

THE COMMON SEAL ofwas affixed in accordance withits Constitutionin the presence of:
Director/Secretary	Director
Name of Director/Secretary(BLOCK LETTERS)	Name of Director(BLOCK LETTERS)

Please Note:

• $\ddagger$ A member entitled to attend and vote at the meeting may appoint one proxy, and if the member is entitled to cast two or more votes, the member may appoint two proxies.
• $2.$ Where more than one proxy is appointed each proxy must be appointed on a separate form. An additional proxy form will be supplied by the Company on request.
• 3 A member may specify the proportion or number of votes that the proxy may exercise. If the member appoints two proxies and the appointment does not specify the proportion or number of the member's votes each proxy may exercise, each proxy may exercise half of the votes.
• $\overline{4}$ . A proxy who is one of two proxies appointed by a member is not entitled to vote on a show of hands.
• 1. A proxy need not be a member of the Company.
• 1. To be valid, proxy forms must be deposited at the address of the Company at 13 Mumford Place Balcatta WA 6021 or sent by facsimile to the Company on facsimile number (08) 6241 1811 no later than 11.00am WST on Sunday 18 July 2004.
• $71$ If this proxy form is executed under Power of Attorney, the Power of Attorney (or a certified copy of it) must accompany the proxy form.
• 1. Any instrument of proxy in which the name of the appointee is not filled in shall be deemed to be given in favour of the Chairman of the meeting.

EXPLANATORY MEMORANDUM

RESOLUTION 1: SPECIAL RESOLUTION

ALTERATION OF CONSTITUTION TO COMPLY WITH AIM LISTING RULES

General

This Special Resolution proposes an amendment to the Company's constitution ("Constitution") to incorporate the provisions set out in Schedule A to this Explanatory Memorandum ("Proposed Amendment").

A copy of the Constitution incorporating the Proposed Amendment will be sent to any Shareholder upon request. A copy of the Constitution incorporating the Proposed Amendment will also be available for inspection during normal business hours at the Company's registered office in Australia.

Background

Tantalum is a company incorporated in Australia and listed on Australian Stock Exchange Limited ("ASX"). The Directors of the Company have decided to apply for all of the ordinary shares in the Company to be admitted to trading on the Alternative Investment Market of London Stock Exchange plc ("AIM") and for the Company to be admitted to AIM.

Companies that are admitted to AIM are required to comply with the AIM Rules for Companies ("AIM Rules") as in force from time to time. The Proposed Amendment contains various amendments designed to reflect that the Company may be admitted to AIM as well as (or, potentially, instead of) ASX and to ensure that, whilst the Company is admitted to AIM, its Constitution is compliant with the AIM Rules.

Purpose and effect of the Proposed Amendment

The following is a summary of the purpose and the more significant effects of the Proposed Amendment. This summary is not exhaustive. For a comprehensive understanding of the Proposed Amendment, Shareholders should refer to Schedule A which sets out the Proposed Amendment in full or should otherwise inspect the consolidated Constitution which is available for inspection as set out above.

Purpose of Proposed Amendment

The primary purpose of the Proposed Amendment is to ensure, as far as possible, that for so long as the Company is admitted to AIM, the Constitution is compliant with the AIM Rules.

Consequential amendments

The Proposed Amendment involves the following consequential changes being made to the Constitution to reflect the primary purpose stated in (a) above:

new definitions of "AIM" and "AIM Rules" have been included in clause 1.1; and

the definition of "Listed" in clause 1.5 has been amended to include the admission of the Company to AIM.

Amendments concerning transferability of shares

The AIM Rules require that shares in a company that is admitted to AIM must be capable of being freely transferable. Accordingly, the following changes are proposed to be made to the Constitution:

the insertion of new words in clauses 6, 7 and 9 to provide that matters relating to the transfer of shares in the Company will generally be subject to the AIM Rules; and

the deletion of clause 9.12 and Schedule 4 of the Constitution, which collectively provide that the Board has power in certain circumstances to sell or otherwise dispose of unmarketable parcels of shares (including shares held jointly as between Company members).

The definition of "Market Transfer" in clause 1.1 is also proposed to be amended to apply to transfers of shares that take place on AIM (in addition to transfers taking place on ASX).

Advantages and disadvantages of the Proposed Amendment

The approval of the Proposed Amendment will result in the provisions set out in Schedule A being incorporated into the Constitution. This will have the effect of ensuring that the Company is able to comply with the AIM Rules for so long as it is admitted to AIM. A failure to adopt such provisions may mean that the Company's shares will not be admitted to trading on AIM.

The main disadvantage associated with the adoption of the Proposed Amendment is that the Directors will be unable to utilise the procedure set out in Schedule 4 permitting them (in certain circumstances) to sell or dispose of shares constituting less than a marketable parcel. This is not considered by the Directors to be a material disadvantage.

Recommendation of the Board

As noted above, the primary objective of the Directors in proposing the Proposed Amendment is to ensure that the Constitution is AIM compliant. The Directors believe that the admission of the Company to AIM is in the best interests of Shareholders and will create significant advantages for the Company in enabling it to have access to capital necessary for the development of the Company's business. A failure to adopt the Proposed Amendment may result in the Company being prevented from being admitted to AIM.

Accordingly, the Board considers that it is in the best interests of Shareholders as a whole for the Company to incorporate into its Constitution provisions to ensure compliance with the AIM Rules, in the form of the Proposed Amendment.

The Board unanimously recommends that Shareholders vote in favour of this Special Resolution in the Notice. Each Director, being Michael Fotios, Timothy King, David Reynolds and Sasya Sebi, intends to vote in favour of the Resolution in respect of the Shares which he or she may control.

RESOLUTIONS 2, 3 AND 4: ORDINARY RESOLUTIONS

RATIFICATION OF PREVIOUS SHARE ISSUES

The Resolutions included in this Notice of Meeting to ratify the issue of shares by the Company on 1 November 2003, 12 December 2003 and 16 January 2004 seek to ratify issues that have been made pursuant to Listing Rule 7.1 of the Listing Rules of the Australian Stock Exchange Limited. The effect of these resolutions is to reinstate the capacity of the Company to issue shares pursuant to Listing Rule 7.1.

Schedule A

Proposed Amendments to Constitution

$11$ Insert the following new definitions in clause 1.1:

"AIM" means the Alternative Investment Market of London Stock Exchange plc:

"AIM Rules" means the Rules governing the admission to and operation of AIM as published by the London Stock Exchange plc from time to time;

Amend the definition of "Market Transfer" in clause 1.1 to read as follows: $\overline{2}$ .

"Market Transfer" means a transfer of uncertificated Shares traded on the Exchange or on AIM:

1. Amend the definition of "Listed" in clause 1.5 to read as follows:

The Company is "Listed" while, and only while, it is admitted to an official list of the Exchange, is admitted to AIM, or both.

Schedule 1 applies while, and only while, the Company is Listed on the Exchange.

In this constitution, a reference to the AIM Rules, the Listing Rules or the SCH Business Rules has effect if, and only if, at the relevant time, the Company is Listed on the Exchange or admitted to AIM (as the case may be) and is otherwise to be disregarded.

• $\overline{4}$ Insert the words "the AIM Rules or" in the following places in clauses 6 and 9:
  • after the word "to" in line 4 of clause 6.1(b); $(a)$
  • after the word "and" in line 1 of clause 9.6; and $(b)$
  • $(c)$ after the word "time" in line 1 of clause 9.8(a).
• 1. Insert the words "the AIM Rules," in the following places in clauses 7 and 9:
  • $(a)$ after the word "Law," in line 1 of clause 7.2(c);
  • after the word "by" in line 2 of clause $9.1(a)$ ; $(b)$
  • after the word "by" in line 3 of clause 9.2; $(c)$
  • after the word "contravene" in line 2 of clause 9.5; $(d)$
  • after the word "of" in line 3 of clause 9.10; and $(e)$
  • $(f)$ after the word "Law," in lines 1 and 4 of clause 9.13.
• Delete clause 9.12 and Schedule 4. 6.