2008 ANNUAL REPORT

ABN 31 004 766 376

Corporate Directory	2
Highlights	4
Chairman's Report	5
Review Of Operations	6
Abu Dabbab – Egypt	7
Nuweibi – Egypt	12
Wadi Allaqi – Egypt	13
Adobha Base Metal Gold Project – Eritrea	16
Heemskirk Tin Project – Australia	18
Financial Statements	21
Directors' Report	22
Auditor's Independence Declaration	29
Corporate Governance Statement	30
Income Statement	33
Balance Sheet	34
Cash Flow Statement	35
Statement Of Changes In Equity	36
Notes To The Financial Statements	37
Directors' Declaration	71
Independent Audit Report	72
Asx Additional Information	74

annual Report 2008

Gippsland Limited Annual Report 2008

Corporate Directory

Directors	Robert John (Jack) Telford – Executive Chairman & Chief Executive OfficerJohn Morrison Chisholm – Executive DirectorJon Starink – Executive DirectorJohn Stuart Ferguson Dunlop – Non–Executive DirectorJohn Damian Kenny – Non–Executive Director
Company Secretary	Rowan St John Caren
RegisteredOffice	207 Stirling HighwayClaremont WA 6010Australia
Postal Address	PO Box 352Nedlands WA 6909Australia
Telephone	+61 (08) 9340 6000
Facsimile	+61 (08) 9340 6060
E–mail	[email protected]
Website	www.gippslandltd.com
Auditors	PKFLevel 7, BGC Centre28 The EsplanadePerth WA 6000Australia
NominatedAdvisor (NOMAD)	Seymour Pierce LimitedBucklersbury House3 Queen Victoria StreetLondon EC4N 8ELUnited Kingdom
Solicitors	Blakiston and Crabb1202 Hay StreetWest Perth WA 6005Australia	Trowers & Hamlins3rd Floor, 1 El Gabalaya Street,Zamalek, CairoArab Republic of Egypt
	CobbettsShip Canal HouseKing StreetManchester M2 4WBUnited Kingdom	Ahmed MahrousNo 3, New Marwa TowersAhmed Taysser StreetArd El GolfHeliopolis, CairoArab Republic of Egypt

Share Registries	Security Transfer Registrars Pty LtdSuite 1, Alexandrea House770 Canning HwyApplecross WA 6153Australia	PO BOX 535Applecross WA 6953Australia
Website	www.securitytransfer.com.au
Phone Number	+61 8 9315 2333
	Computershare LimitedP O Box 82The Pavilions, Bridgwater RoadBristol BS99 7NHUnited Kingdom
Website	www.computershare.com
Phone Number	+44 (0)870 703-6190
Australian Stock Exchange	The Company's securities are quoted on the official list of the ASX Ltd (ASX),the home exchange being:The ASX (Perth) Ltd2 The EsplanadePerth WA 6000Australia
ASXCodes	GIP
London Stock Exchange	The Company's securities are quoted on the London Stock Exchange Plc'sAIM Market (AIM):10 Paternoster SquareLondon, EC4M 7LSUnited Kingdom
LSE– AIMCodes	GIP
plus market	The Company's securities are quoted on Plus Market Group Plc's PLUSMarket (PLUS)
	21 Mansell StreetLondon, E1 8AAUnited Kingdon
PLUSCODES	GIP
Frankfurt Stock Exchange(Deutsche Borse)	The Company's securities are quoted on the Frankfurt Stock ExchangeNeue Börsenstrasse 160487 Frankfurt / MainGermany
FSECODES	GIX

Abu Dabbab (tantalum-tin-feldspar)

• 10 year tantalum sale contract
• Feasibility study upgrade
• Optimisation of plant site location
• Highly successful drilling programme completed
• 11% Mineral Resource upgrade
• 107% Ore Reserve upgrade
• Detailed satellite survey completed

Wadi Allaqi (gold, copper-nickel)

• Drilling intersects high grade copper-nickel mineralisation

Heemskirk (tin)

• Joint venture with Stellar Resources Limited
• Proposed ASX listing of Columbus Metals Ltd

The past year has been one of considerable achievement for Gippsland Limited and its shareholders. Major successes have been achieved in advancing the Abu Dabbab tantalum-tin project and the Wadi Allaqi goldcopper-nickel project, both of which are located in Egypt. The most advanced of these is the 44.5 million tonne world class Abu Dabbab tantalum-tin project located on the western shore of the Red Sea. Combining Abu Dabbab with the Nuweibi tantalum deposits, Gippsland has a resource base of 142.5 million tonnes which includes 30.2 million tonnes of Ore Reserve, which will enable Gippsland to become a leading global producer for several decades. The company is also exploring new tenement applications over prospective ground in Eritrea.

operations – abu Dabbab

Off-take Agreement

A pivotal event during 2008, was the announcement of a ten year Off-take Agreement with the German tantalum major HC Starck GmbH for the supply of six million pounds of tantalum pentoxide from the Abu Dabbab project. This Agreement represents 92% of the project's initial projected annual tantalum pentoxide production.

Recent increases in the price of tin metal further enhance the project with tin production likely to approach tantalum pentoxide in terms of cash value. Additionally tin can be sold on the spot metal market.

Reserves & Resources

An infi ll reverse circulation (RC) and diamond drilling programme was completed at Abu Dabbab, which resulted in a large quantity of the Inferred Resources being promoted to the higher category of Indicated and Measured Resources. This was very signifi cant as the higher category resources were subsequently converted to Ore Reserves, resulting in the total reserves more than doubling.

Process improvements

One major improvement in the fl owsheet process has been the identifi cation that the plant process can be successfully operated using raw seawater. The utilisation of seawater eliminates the need to produce 6,000 cubic metres per day of potable water by way of a reverse osmosis (RO) plant and enables the plant site to be conveniently relocated to within one kilometre of the open pit mine. This change will reduce the distance by some 19km over which 2 million tonnes per year of ore will need to be hauled. This will result in a capital cost saving of approximately US$4 million and an operating cost saving of approximately US$900,000 per year, equating to US$18 million over the likely 20 year Abu Dabbab mine life.

The relocation of the plant site will also shorten the ore haul distance from the Company's 98 million tonne Nuweibi tantalum deposit, located some 16km to the south of the Abu Dabbab plantsite, by approximately 16km.

exploration

Wadi Allaqi

Exploration within the Company's Wadi Allaqi project continued to produce encouraging results with the extensions of the previously identifi ed mineralised zones as well as the identifi cation of new targets. The most exciting results, recorded during RC drilling, were from the Abu Swayel prospect where high grade copper and nickel were intersected.

Eritrea

The Company's has applied for three prospecting licences in the northern part of Eritrea, in an area which is along strike and geologically similar to where a number of large base metal and gold deposits have recently be discovered. These include the world class Bisha VMS deposit located in south-western Eritrea and the Zara gold project located immediately to the south of the three application areas.

abu Dabbab project finance

Discussions with the German KfW Bankengruppe have been on-going during the year. The Directors believe that the Company is well placed to fi nalise project fi nance arrangements before the end of 2008. The Directors are confi dent that Abu Dabbab project fi nance will be secured on an attractive 80% debt and 20% equity basis.

Once again, the Company acknowledges the high level of support it enjoys from our Egyptian partners. In particular, I wish to acknowledge and thank His Excellency Eng Sameh Fahmy, Minister of the Egyptian Ministry of Petroleum and Mineral Resources, First Undersecretary Eng Amgd Ghoneim of the same ministry and Dr Hussein Hamoodeh Chairman of Egyptian Mineral Resources Authority, for their substantial support and assistance during the past year.

Despite the present international fi nancial environment, the Directors fi rmly believe that 2008-09 will see signifi cant progress in the development of the world class Abu Dabbab project. The project's tantalum output will be of crucial importance to the global tantalum industry. We look forward to addressing the challenges ahead in ensuring that this project comes to fruition in the shortest possible time frame.

Gippsland Limited Annual Report 2008 RJ Telford Executive Chairman September 2008

Gippsland has a controlling 50% interest in the Egyptian Abu Dabbab and Nuweibi tantalum-tin-feldspar deposits located on the western shore of the Red Sea coast in Egypt. These two deposits have combined JORC compliant Mineral Resources of 142.5 million tonnes. The Company also has a similar interest in eight gold prospects and one copper-nickel prospect located in the Wadi Allaqi region situated to the south-east of Aswan in Egypt. Drilling on the Wadi Allaqi prospects has identified a number of mineralised zones including the delineation of an Inferred gold resource totalling 85,000oz at Seiga. Significant copper and nickel mineralisation has been intersected by RC drilling on the Abu Swayel prospect.

In Australia, the Company has a 40% free-carried interest in the Heemskirk tin project located at Zeehan in Tasmania with joint venture partner Stellar Resources Limited. Subject to certain conditions precedent, Stellar and Gippsland have agreed to merge their respective joint venture interests in the Heemksirk tin project into Columbus Metals Limited which is scheduled to be listed on ASX Ltd by way of an Initial Public Offering.

Review of Operations

Abu Dabbab –Tantalum Tin Project Infrastructre

Abu Dabbab - Egypt

Introduction

The Abu Dabbab tantalum-tin-feldspar deposit is covered by Exploitation Licences 1658 & 1659 granted in the name of Tantalum Egypt JSC, a company incorporated in Egypt and held 50% by the Egyptian government owned Egyptian Mineral Resources Authority and 50% by Tantalum International Pty Ltd, a wholly owned Gippsland subsidiary.

Ten year tantalum Off-take agreement

On 12 November 2007, the company announced that its 50% owned subsidiary Tantalum Egypt, had secured a 10 year Off-take Agreement with the German tantalum major HC Starck GmbH for the supply of six million pounds of tantalum pentoxide (Ta2 O5 ) from its 44.5 million tonne Abu Dabbab project in Egypt.

This milestone Off-take Agreement covers the delivery of a minimum of 600,000 pounds of Ta2 O5 per annum – almost the entire expected initial annual production of 650,000 pounds of Ta2 O5 from the project. As is traditional for the tantalum industry, the Ta2 O5 Off-take Agreement prices are confidential, however based upon present Ta2 O5 spot prices the Abu Dabbab project is expected to generate Ta2 O5 revenue in excess of US$280 million over the initial 10 years of its estimated 20 year mine life. The Off-take Agreement signed on 12 November 2007 replaces the smaller Ta2 O5 off-take agreement between Gippsland and HC Starck announced on 13 January 2005 for the supply of 480,000 pounds of Ta2 O5 per annum for a period of 5 years.

Importantly, the Ta2 O5 Off-take Agreement contains price escalation clauses tied to production cost increases and a floor Ta2 O5 price which will largely underpin the on-going viability of the project.

The Off-take Agreement also contains a formula for the Ta2 O5 Off-take price to be varied to reflect a premium to spot market prices. The Off-take Agreement largely protects Gippsland shareholders from production cost escalations, significantly reducing the market risk.

In addition to Ta2 O5 , the Abu Dabbab project will produce approximately 1,530 tonnes of tin metal per annum which will be sold on the open market or via the London Metal Exchange (LME). Based upon the present LME tin price, the Abu Dabbab project is expected to generate tin revenue of approximately US$300 million over the initial 10 years of its estimated 20 year mine life.

Project finance

Discussions with the German KfW Bankengruppe have been on-going during the year. The Directors believe that the Company is well placed to finalise project finance arrangements before the end of 2008. The capital cost for the project including financing during construction is expected to be funded on an attractive 80% debt and 20% equity basis.

Feasibility Study Up-date

An addendum to the Feasibility Study Update was received during October 2007, documenting additional work that had been conducted since the previous feasibility study document in April 2007.

As a result of the on-going optimisation of the flowsheet process, it has been determined that the majority of the plant process can be successfully operated using raw seawater which provides direct and very important benefits to the project.

The utilisation of seawater in the majority of the plant process eliminates the need to produce 6,000 cubic metres per day of potable water by way of a reverse osmosis (RO) plant. It has been calculated that the modified process route will consume less than 600 cubic metres per day of potable water which will be used in the final stages of the process.

The reduced size of the RO plant will result in a capital cost saving of approximately US$4 million and an operating cost saving of approximately US$900,000 per year or US$18 million over the likely 20 year Abu Dabbab mine life.

The use of seawater eliminates the need to inject waste RO brine into 200m deep saline aquifers immediately adjacent to the Red Sea, which in turn enables the plant site to be conveniently relocated to within one kilometre of the open pit mine.

This change will reduce the distance by some 19km over which 2 million tonnes per year of ore will need to be hauled, thereby eliminating the need for a heavy haulage road fleet, whilst reducing haulage costs by approximately US$4 million per year. The road between the mine and the Red Sea coast will now become an access road that does not need to be engineered for use by heavy ore haulage vehicles.

The relocation of the plant site will also shorten the ore haul distance from the Company's 98Mt Nuweibi tantalum deposit located some 16km to the south of the Abu Dabbab plantsite. However, as Abu Dabbab will have a mine life of approximately 20 years, Nuweibi will not be utilised in the immediate future.

Site access and road construction

Some site preparation, earthworks and access roads were undertaken during the year in order to provide heavy equipment access to the site for the drilling programmes. An access track to the north side of the deposit was extended around the deposit. This work is preliminary to the site engineering work on the plant site and preparing the first mining benches at 455RL.

A programme of geotechnical testing over the plant and tailing storage facility areas was completed during late May 2008 by the international geotechnical consulting firm Knight Piesold Pty Ltd.

Tantalum resource up-grade drilling

A programme of ten RC drill holes totalling 1,438m was completed during October and November 2007 as part of an in-fill programme to obtain drill intercepts between the more widely spaced Soviet drill holes. This increased drilling density allowed a general promotion of the resource categories and more importantly, the Inferred Resources to be upgraded to the higher Indicated category and hence be converted to a Reserve category under the JORC Code. The majority of the previous Inferred Resources were located below the 314RL. The diamond tails extended to depths below the previous planned pit shell allowing a bigger pit to be designed resulting in a larger reserve component.

Abu Dabbab Project Mine Area

An update of the Resources was completed in July 2008, from RC and diamond drilling using the Ordinary Kriging method. These results are summarised in Table 1 below.

The drilling programme was successful despite delays caused by the industry-wide problem of assay laboratory back-logs. It produced an 11% resource increase with 73% of the Mineral Resource now categorised as Measured and Indicated, while the global Ta2 O5 grade has increased from 243g/t to 250g/t.

• The new diamond drilling has resulted in an 11% global Resource increase from 40 million tonnes to 44.5 million tonnes, of which 32.5 million tonnes are now in the Measured and Indicated categories.

Table 1: Abu Dabbab Mineral Resource update July 2008 (100g/t Ta2 O5 cut-off)

Category	MillionTonnes	Ta2O5grade	Sngrade
Measured	15.2	290g/t	0.143%
Indicated	17.3	250g/t	0.078%
Inferred	12	200g/t	0.03%
Total	44.5	250g/t	0.09%

Note: Numbers in table may not total exactly due to rounding

The diamond drilling comprised 60-90m long tails to five of the RC holes drilled during late 2007. By providing data from greater vertical depth, the diamond tails have given greater confidence in the understanding of the ore body's grade distribution and geometry. The combined Measured and Indicated Resources of 32.5 million tonnes extend down to 225RL with the Inferred Resources being confined to the lower part of the deposit below the 225RL.

Pit optimisation and Ore Reserve up-grade

Subsequent to the highly successful RC and diamond drilling programme described above, the Abu Dabbab Ore Reserves were increased from 14.60 million tonnes to 30.24 million tonnes, grading 255g/t Ta2 O5 and 0.109% Sn, an overall 107% increase in total Ore Reserves.

The new Ore Reserves were based on a number of Whittle open pit optimisation runs using the wireframe constrained Mineral Resources for a range of tin prices to test the sensitivity of the optimisation. The pit optimisation showed little sensitivity to the tin price. The tantalum price used in the optimisation is determined by an Off-take Agreement, the terms of which stipulate that the price is confidential.

Abu Dabbab Geological Map

The optimal 15 year pit shell contained an undiluted mineral resource of 29.09 million tonnes grading 270g/t Ta2 O5 and 0.113% Sn, with 22.8 million tonnes of waste. From this Whittle shell, the revised open pit mine design included no ore loss and 5% dilution at zero grade at a production rate of 2 million tonnes per year. There were no Inferred Resources contained in the open pit mine design.

Table 2: Abu Dabbab Ore Reserves as at August 2008

Category	MillionTonnes	Ta2O5(g/t)	Sn(%)
Proven	15.201	260	0.133
Probable	15.038	250	0.084
Total	30.240	255	0.109

Note: Numbers in table may not correlate exactly due to rounding

The Ore Reserve was converted from the total Mineral Resource and some additional mineral resources remain outside of the designed pit limits and hence are additional to the Ore Reserves. These include the following:

Table 3: Remaining Mineral Resources exclusive of the Ore Reserve

Category	MillionTonnes	Ta2O5(g/t)	Sn(%)
Measured	0.012	290	0.115
Indicated	2.971	230	0.047
Inferred	10.532	210	0.032
Total	13.515	220	0.035

Note: Numbers in table may not correlate exactly due to rounding

The new pit shell highlighted a most favourable mining waste : ore strip ratio of 0.83 : 1.0.

Mine survey grid

The project area and its environs were surveyed during the year to obtain topographic control at an accuracy suitable for mine planning and plant engineering design. This was completed using 3D satellite data, covering a 125km2 belt from the Abu Dabbab mine site through to the Red Sea Coast.

This Ikonos satellite stereo data was processed to produce 3D contours and topographic contours to an accuracy of approximately 1 metre. When used in conjunction with high resolution Quickbird, this imagery is ideally suited for the detailed engineering design of the open pit mine, plant site and the tailings storage facility.

Abu Dabbab 3D Topographic Image showing ore block, waste dump, Haulage road and final pit outline

Review of Operations

Nuweibi project - drill hole location

NUWEIBI - Egypt

The Exploitation Licence No.1785 covering the Nuweibi tantalum-niobium deposit was issued to Tantalum Egypt by Ministerial Decree No. 5 of 2008 on the 13 July 2008. The Nuweibi deposit is located 17km to the south-southwest of the Abu Dabbab deposit and 30km inland from the Red Sea.

Tin mineralisation was first discovered at Nuweibi in 1944 and it was not until 1970 that the more valuable tantalum mineralisation was recognised. The deposit was the subject of detailed exploration by the same joint Soviet-Egyptian team that explored Abu Dabbab. The previous work has included 23 diamond drill holes totalling 2,746m, four surface trenches and four bulk samples which were used for metallurgical testwork.

Resources

The resources at Nuweibi have been estimated by Gippsland using the ore block modelling (inverse distance squared) method at a 0.01% Ta2 O5 cut-off.

Table 3: Nuweibi mineral resources

	Million
Category	Tonnes	Ta2O5(%)
Indicated	48	0.0147
Inferred	50	0.0138
Total all categories	98	0.0143

There is the potential for a significant increase in Nuweibi resources as the deposit is open at depth as well as to the east and the west. There is also a small placer resource containing tin and tantalum.

Wadi Allaqi project - Abu Swayel Seiga Shashoba Access Track Map

Wadi Allaqi - Egypt

A small amount of RC drilling was completed at the Seiga and Abu Swayel prospects during the year. The drilling operations were severely disrupted by the failure of the drill rig air compressor which restricted drilling operations for several weeks.

Seiga prospect

A total of eight RC holes (CRC136 – 143) totalling 495m were drilled. A short diamond tail was drilled on the end of CRC143. Six of the holes tested rock-chip geochemical anomalies. One hole was abandoned at 12m, with the last hole testing the depth extension of the main zone of mineralisation.

All of the six holes testing the rock-chip geochemical anomalies intersected zones of mineralisation with the best result in hole CRC138 which intersected 32m at 2.18g/t Au from 20m depth including 8m at 5.35g/t Au.

Hole CRC143 was drilled to test the depth potential of the main zone of mineralisation where previous work

has defined a resource of 85,000oz. A pre-collar was RC drilled to 120m depth where the drilling method was changed to diamond to a programmed depth of 280m. The hole was terminated at 149m due to mechanical problems with the drilling rig.

Abu Swayel

A programme of thirteen holes totalling 776m were RC drilled at the Abu Swayel copper-nickel prospect during September 2007. The drilling tested a transient electromagnetic (TEM) conductor which was delineated by a survey completed during the previous August. The relatively low amplitude conductor was modelled as having a westerly dip which was contrary to the easterly dip of the mineralisation in the ancient workings located 100m to the southeast. Thick wadi sands with interbedded conglomeratic sands made collaring the holes very difficult thus requiring excavations to be made to sufficient depth where more consolidated sediments were encountered. Two holes were drilled through the projected position of the conductor with only minor sulphides (pyrite) noted in the drill chips.

Review of Operations

Drilling Operations at Abu Swayel

Abu Swayel Prospect - Drill Plan

More encouraging results were obtained from the drilling closer to and beneath the ancient workings. Four metres of massive sulphide containing visible chalcopyrite (copper sulphide) were intersected in hole ASRC004. Ten metres of copper mineralisation comprised of oxide and sulphide minerals were intersected beneath the old workings in hole AS009. Copper mineralisation was also intersected in holes ASRC011 and 013.

The best results were obtained from holes ASRC004, 6 and 9 which were drilled below the ancient workings. Hole ASRC0011 which was drilled along strike from the ancient workings intersected 18m at 0.96% Cu and 0.57% Ni including 4m at 2.73% Cu and 1.33% Ni.

Abu Swayel Prospect - Section 50460N

The results are consistent with some earlier sampling from a shaft and crosscut and some diamond drilling completed during the early 1960s. These results included 10m at 1.87% Cu and 1.53% Ni in a shaft and 8m at 4.11% Cu and 1.77% Ni from a crosscut off the shaft at the 22m level.

Hole	From(m)	To(m)	Interval(m)	Cu(%)	Ni(%)
ASRC004	24	42	18	1.55	0.54
including	37	42	5	5.25	1.42
ASRC005	35	40	5	0.68	0.23
ASRC006	40	48	8	0.99	0.32
ASRC008	52	56	4	0.76	0.27
ASRC009	20	36	16	2.25	0.64
including	21	28	7	4.41	1.17
ASRC011	24	42	18	0.96	0.57
including	31	35	4	2.73	1.33
including	39	42	3	1.16	0.94
ASRC012	11	36	25	low	0.16
ASRC013	8	20	12	0.24	0.19

		Table 5: Abu Swayel RC drilling - best results
--	--	------------------------------------------------	--

The two holes drilled to test the TEM conductor contained minor sulphides (pyrite) in the drill cuttings and returned anomalous results (Table 6) but did not adequately explain the conductor.

Table 6: Abu Swayel - anomalous results from TEM conductor

Hole	From(m)	To(m)	Interval(m)	Cu(ppm)	Ni(ppm)
ASRC003	56	60	4	926	311
ASRC010	24	72	48	215	528
including	74	72	8	446	1387

Two drill holes (ASRC011 & 012) drilled close to the TEM conductor intersected mineralisation down plunge from the ancient workings and confirmed the easterly dip of the mineralisation in the ancient workings located to the southeast. The easterly dip is contrary to the interpreted dip of the relatively low amplitude conductor which was modelled as having a westerly dip.

The results are most encouraging and a programme of geological mapping, rock-chip sampling and ground magnetics has been proposed to search for along-strike repetitions of the Abu Swayel Cu-Ni mineralisation during the next phase of exploration to be undertaken during 2008/9.

Adobha Base Metal Gold Project - Eritrea

During the year the Company's 100% owned subsidiary Nubian Resources plc applied for three prospecting licences in the northern part of Eritrea. These licences each of 100km2 cover alteration targets identified from satellite interpretation and are prospective for base metal mineralisation similar to the world class Bisha VMS deposit located in southwestern Eritrea and also for gold similar to the Zara project located immediately to the south of the three application areas.

The Company has been actively evaluating the regional mineral potential of the Arabian-Nubian Shield which is the host of the Abu Dabbab, Nuweibi and Wadi Allaqi projects in Egypt. The Arabian-Nubian Shield extends from eastern Egypt, Sudan, Ethiopia and Eritrea to western Saudi Arabia and to Jordan. In Eritrea a number of large base metal and gold deposits have recently been discovered. Nevsun's Bisha base metal-gold deposit is due to commence production in 2009 and expected to produce around 1Moz of gold, 340kt of copper and 499kt of zinc over a ten year life. The Emba Derho project managed by Sunridge Gold Corporation near the capital Asmara is emerging as a 51 million tonne base metal-gold deposit containing 0.87Moz of gold, 453kt of copper and 1.043kt of zinc. Further north and to the immediate south of the Gippsland applications the Zara project contains slightly in excess of 1Moz of gold at a grade of 6.31g/t.

The Gippsland applications are in the same structural corridor as the Zara project gold deposits and a similar volcanic setting as that hosting the Bisha deposit. Following the granting of the tenements the Company plans to conduct a helicopter borne sampling and mapping programme to identify targets for follow-up sampling, geophysical surveys and drilling.

Adobha Project Eritrea - Tenement Applications on Thematic Mapper Image

Heemskirk tin project - Tasmania

The Heemskirk tin project (previously referred to as the Zeehan tin project) is located within a major tin province in the northwest of Tasmania approximately 15km from the large Renison tin deposit.

During the year, Stellar Resources Limited signed an agreement with Western Metals Limited for the purchase of Western Metal's 60% interest in the Zeehan tin deposit. The balance of 40% is held by Gippsland.

Under the terms of the Joint Venture Agreement, Stellar has the right to increase its equity from 60% to 70% by completing a banked feasibility study, at which time Gippsland's interest will reduce to 30%. Gippsland enjoys a free-carried interest in the project until the point at which Stellar completes a banked feasibility study.

There has been no drilling on the project over the last 25 years due mainly to low tin prices. However, the recent recovery in the tin price to near record levels and the lack of exploration at depth provide the opportunity to confirm and expand the historical mineral resources.

Past drilling totalling 23,000m has established the presence of a substantial tin resource. The Severn deposit, the largest of the four, is located approximately 120m below the surface and is considered to be open at depth. The Inferred Resources include 5.1 million tonnes at 0.6% Sn within the 0.1% mineralised envelope, to a depth of 500m below surface. At the 0.3% cut-off the resource is 2.37Mt at 1.115% Sn. At Queen Hill the mineralisation outcrops on a hill approximately 300m due west of the Severn deposit and contains Indicated Resources of 1.8 million tonnes at 0.82% Sn (including 0.93Mt at 1.39% Sn at a 0.3% cut-off). The mineralisation includes minor amounts of copper, lead, zinc and silver.

The Zeehan deposit is covered by the Mineral Resources Tasmania Retention Licence No. 5/1997.

On 25 July 2008, Gippsland concluded an agreement with Stellar whereby Stellar and Gippsland will merge their respective Joint Venture interests in the Heemksirk Tin project into Stellar's subsidiary Columbus Metals Limited which is scheduled to be listed on the ASX Ltd by way of an Initial Public Offering (IPO). The Agreement is conditional upon Columbus raising a minimum of A$10 million and being admitted to the official list of the ASX on or before 31 December 2008 or such later date as may be agreed.

The Agreement prescribes that Gippsland will be issued with 15 million fully paid ordinary Columbus shares at an IPO price of A$0.25 each, the same number of fully paid ordinary Columbus shares that Stellar will hold in Columbus, at the time of its admission to the ASX.

Gippsland Directors believe this transaction has potential to significantly benefit Gippsland shareholders by giving a market value for this asset.

EXPLORATION TARGET AT HEEMSKIRK

Mineral Resource and Ore Reserve inventory – August 2008

TOTAL MINERAL RESOURCES - EGYPT
Category	Measured	Indicated	Inferred	Total	Cut-off
Abu Dabbab (Gippsland 50%)
Million tonnes	15.2	17.3	12	44.5	100g/t Ta2O5
Ta2O5(g/t)	290	250	200	250
Sn (%)	0.143	0.078	0.03	0.09
Nuweibi (Gippsland 50%)
Million tonnes	-	48	50	98	100g/t Ta2O5
Ta2O5(g/t)	-	147	138	143
Seiga (Gippsland 50%)
Million tonnes			1.1	1.1	0.7g/t Au
Gold (g/t)			2.3	2.3

TOTAL MINERAL RESOURCES - AUSTRALIA

Heemskirk– Tasmania (Gippsland 40% free carried interest)

Queen Hill
Million tonnes	1.8		1.8	0.1% Sn
Sn (%)	0.82		0.82
Severn
Million tonnes		5.1	5.1	0.1% Sn
Sn (%)		0.6	0.6
Montana
Million tonnes		0.4	0.4	0.1% Sn
Sn (%)		1.22	1.22

TOTAL ORE RESERVES – EGYPT (inclusive of Mineral Resources)

Category	Proved	Probable	Total
Abu Dabbab (Gippsland 50%)
Million tonnes	15.201	15.038	30.240
Ta2O5(g/t)	260	250	255
Sn (%)	0.133	0.084	0.109

Note: Numbers in table may not add correctly due to rounding

In accordance with Listing Rule 5.6 of the Australian Stock Exchange Limited and Part 2 of the AIM Guidance Notes for Mining, Oil and Gas Companies, the geological information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves is based on data compiled by Dr John Chisholm, a Fellow of The Australasian Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientists. Dr Chisholm who is an Executive Director of Gippsland Limited with over 25 years experience in the mineral industry including the evaluation of exploration data, mineral resources and ore reserves, has consented to the issue of the information in this report in the form and context in which it appears.

Financial Statements

Financial statements

Gippsland Limited Annual Report 2008

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

Your directors submit their report on the company and its controlled entities for the financial year ended 30 June 2008.

DIRECTORS

The names of the directors in office at any time during or since the end of the year are as below. Directors were in office for this entire period unless otherwise stated.

Mr Robert John Telford Dr John Morrison Chisholm Mr John Stuart Ferguson Dunlop Mr John Damian Kenny Mr Jon Starink

COMPANY SECRETARY

The following person held the position of company secretary at the end of the financial year:

Mr Rowan Caren – Bachelor of Commerce, Chartered Accountant. Mr Caren was employed by the chartered accountancy firm Price Waterhouse Coopers in Australia and overseas for six years and has been directly involved in the minerals exploration industry for a further ten years. Mr Caren also provides company secretarial and corporate advisory services to several exploration companies and is a member of the Institute of Chartered Accountants in Australia.

PRINCIPAL ACTIVITIES

The principal activities of the economic entity during the financial year were:

• exploration and development of commercially and economically viable mineral resources.

There were no significant changes in the nature of the consolidated group's principal activity during the financial year.

OPERATING RESULTS

The loss of the consolidated group after providing for income tax and eliminating minority equity interests amounted to $3,425,133 (2007: $4,191,218).

Dividends

No dividend was paid or declared during the financial year and the directors do not recommend the payment of a dividend for the financial year ended 30 June 2008.

Review of Operations

During the year the company continued to focus on the development of the Abu Dabbab tin/tantalum project in Egypt and the exploration for gold and base metals in the Wadi Allaqi region of Egypt. A detailed review of the company and the consolidated group's activities is set out in the review of operations.

Financial Position

The net assets of the consolidated group have increased by $1,722,113 to $4,134,098 at 30 June 2008. The increase has largely resulted from the following factors:

• proceeds from the share issue and option conversion raising $4,140,715
• following a review of the expenditure on the Abu Dabbab project, some costs were reclassified as operating expenses and the impairment of the project development expenditure was removed resulting in a net increase in value of $2,184,129 offset by:
- • exploration expenditure of $1,064,693
- • administration expenditure of $2,051,916 and
- • employee benefits of $1,247,101

The directors believe that the company is in a sound financial position to be able to continue with the development of the Abu Dabbab project, undertake further exploration at the Wadi Allaqi leases and to take advantage of further opportunities to grow the company, should they arise.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

The following significant changes in the state of affairs of the parent entity occurred during the financial year:

a) Completed the issue and allotment of 33,674,180 shares pursuant to the conversion of listed options having an exercise price of A$ 0.09 which expired on 31 December 2007.
b) Completed the issue and allotment of 12,655,553 shares at a placement price of £0.045 (A$ 0.093) on 26 June 2008.

AFTER BALANCE DATE EVENTS

On 25 July 2008, Gippsland Limited ("Gippsland") and Stellar Resources Limited ("Columbus") announced that they will merge their respective interests in the Tasmanian Heemksirk Tin project (formerly known as the Zeehan Tin project) into Stellar's subsidiary Columbus Metals Limited ("Columbus"). The agreement is conditional upon Columbus raising a minimum of A$10 million and being admitted to the official list of the ASX on or before 31 December 2008.

Gippsland will be issued with 15 million A$0.25 fully paid ordinary shares or the same number of shares that Stellar will hold in Columbus at the time of its admission to the official list of the ASX, if that number is greater than 15 million shares. Upon listing, Columbus will also invite a nominee from Gippsland to join the board of Columbus as a non-executive director.

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

Information as to likely developments in the operations of the Company and the consolidated group and the expected results of those operations in future financial years has not been included in this report because, in the opinion of the Directors, it would prejudice the interests of the Company and the consolidated group.

ENVIRONMENTAL ISSUES

The consolidated group's operations are not currently subject to any significant environmental regulations under either Australian or Egyptian legislation. However, the board is committed to achieving a high standard of environmental performance, and regular monitoring of potential environmental exposures is undertaken by management. The board considers that the consolidated group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the consolidated group.

An environmental and social impact assessment was updated during the financial year for the Abu Dabbab project in Egypt.

The consolidated group is required to carry out its activities in accordance with the Mining Laws and regulations in the areas in which it undertakes its exploration activities.

INFORMATION ON DIRECTORS

Robert John Telford - Chairman (Executive) AWAIT (Chem), MRACI

Mr Telford holds an Associate degree in Pure Chemistry (Organic and Inorganic) having graduated from the Institute of Technology of Western Australia (now Curtin University) in 1967.

Mr Telford has been a major shareholder in technologybased industries for some 30 years in the capacity of Chief Executive Officer ("CEO"). He has been involved in the pharmaceutical industry having been a past chairman and major shareholder of the company Inovax Limited. Mr Telford has held the position of CEO in companies involved in inorganic and organic chemical manufacture for over 15 years. He has been involved in the international resource industry for some 20 years via private and public companies and in the main is responsible for securing the Company's interest in its Egyptian resource projects.

Mr Telford is a Member of the Royal Australian Chemical Institute.

He is not currently a director of any other listed company nor has he been within the last three years.

Interest in Shares and Options - 20,126,446 ordinary shares in Gippsland Limited.

John Morrison Chisholm - Director (Executive) BSc (Hons), PhD, FAusIMM, FAIG

Dr Chisholm is a geologist with wide experience in exploration geology and exploration management. His previous posts include lecturer at the University of Western Australia and Associate Professor at Curtin University. He has held senior positions with various mineral resource entities.

In 1984 Dr Chisholm joined Western United Mining Services Pty Ltd and as Managing Director he led a large group of geoscientists. He was involved in the discovery of the Transvaal and Bounty mines.

He is a Fellow of both the Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy with Chartered Practising status in Geology. Practising Chartered Status is the highest level of recognition that can be attained by professional geologists in Australia and Dr Chisholm was one of the fi rst geologists in Australia to have been awarded this honour.

He is not currently a director of any other listed company nor has he been within the last three years.

Interest in Shares and Options – 2,420,000 ordinary shares in Gippsland Limited.

Jon Starink – Director (Executive) BSc (Hons), BChemE(Hons), MApplSc, FAusIMM, FIEAust, FIChemE, MRACI, MTMS, CPEng, CChem, CSci

Mr Starink's qualifi cations include Bachelor of Science with First Class Honours (University of Sydney), a Bachelor of Chemical Engineering with First Class Honours (University of Sydney) and a Master of Applied Science (University of Sydney). His academic achievements include the Union Carbide Prize in Inorganic Chemistry, Western Mining Prize in Chemical Engineering and the Beckman Coulter Postgraduate Prize for Best Overall Performance in Molecular Biotechnology. He held the position of Deputy Head Department of Chemical Engineering at Curtin University of Technology during 1984-85 & 1987.

Based in London, Jon Starink is a Chartered Professional Engineer, a Chartered Scientist and a Chartered Industrial Chemist, a Fellow of the Institution of Engineers Australia, a Fellow of the Australasian Institute of Mining and Metallurgy, a Fellow of the Institution of Chemical Engineers, a Member of The Metallurgical Society and a Member of the Royal Australian Chemical Institute.

He has 30 years experience in the mining industry in the role of both Executive and Non-Executive director. His extensive practical and operational experience includes engineering design and project management; mining exploration management; science and engineering research & development and process innovation & development.

Mr Starink served in senior technical and engineering roles with the Sons of Gwalia Ltd Greenbushes tantalum-tin project for 10 years where he was directly responsible for process development, project design and construction management for the tin smelter and tantalum extraction projects.

Other than as noted below he is not currently a director of any other listed company nor has he been within the last three years:

• Director of Manaccom Corporation Limited until 22 November 2007

Interest in Shares and Options – 300,000 ordinary shares in Gippsland Limited.

John Stuart Ferguson Dunlop – Director (Non-executive) BE, M Eng Sc, P Cert Arb, CP, FAusIMM, FIMMM,

MSME, MCIMM, MMICA

Mr Dunlop holds a Bachelor and Masters Degree in Mining Engineering from the University of Melbourne. He is a certifi ed Mine Manager having approximately 40 years of international surface and underground mining experience in a variety of base metals, industrial and precious metals production.

He is a former Director of the Australasian Institute of Mining and Metallurgy (AusIMM) and remains Chairman of its affi liate, the Mineral Industry Consultants Association (MICA). He is also Chairman of Alliance Resources Ltd, Drummond Gold Ltd and Alkane Resources Ltd.

Mr Dunlop is a highly experienced mining professional having been involved in the design, construction and on-going operation of a number of major resource projects throughout the world. He has a detailed knowledge of the Company's 40Mt Abu Dabbab tantalum project in Egypt with his ongoing involvement in the preparation of the project's original Bankable Feasibility Study, and subsequent updates to the BFS.

He has operated his own mining consulting fi rm based in Perth since 1992 and was previously a senior executive with BHP's (now BHP Billiton) Minerals Division, before becoming General Manager Operations for Aztec Mining Co Ltd until this company's takeover by Normandy Mining Ltd.

Interest in Shares and Options - Nil.

John Damian Kenny – Director (Non-executive) B Com (Hons), LLB

Mr Kenny is a corporate and resources lawyer and has a specialised interest in venture capital, initial public offerings and mergers and acquisitions. He has extensive experience in public equity fundraisings and the pricing of equity, debt and derivative securities. He is a Director of The Ark Fund Limited.

Interest in Shares and Options - 2,250,000 ordinary shares in Gippsland Limited.

remuneration report (auDiteD)

This report details the nature and amount of remuneration for each director of Gippsland Limited, and for the executives receiving the highest remuneration.

Remuneration Policy

The remuneration policy of Gippsland Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fi xed remuneration component and offering specifi c long-term incentives. The board of Gippsland Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the consolidated group, as well as create goal congruence between directors, executives and shareholders.

The board's policy for determining the nature and amount of remuneration for board members and senior executives of the consolidated group is as follows:

• The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the board after seeking professional advice from independent external consultants.
• All executives receive a base salary (which is based on factors such as length of service and experience).
• The board reviews executive packages annually by reference to the consolidated group's performance, executive performance and comparable information from industry sectors.

All remuneration paid to directors and executives is valued at the cost to the company and expensed.

The board policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the consolidated group. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the company and are able to participate in the option plan.

Directors' Report

KEY MANAGEMENT PERSONNEL REMUNERATION

2008

Key ManagementPerson	Position	Short-term BenefitsCash, salary andcommissions$	Share-basedPaymentOptions$	Post-employmentBenefitsSuperannuation$	Total$
Mr RJ Telford	Executive Chairman	260,211	-	-	260,211
Dr JM Chisholm	Executive Director	237,500	-	-	237,500
Mr JSF Dunlop	Non-executive Director	60,412	-	-	60,412
Mr JD Kenny	Non-executive Director	38,750	-	-	38,750
Mr J Starink	Executive Director	120,000	-	-	120,000
Mr PR Sims	Chief Financial Officer	230,303	-	23,030	253,333
Mr RS Caren	Company Secretary	60,000	-	-	60,000
		1,007,176	-	23,030	1,030,206

2007

Key ManagementPerson	Position	Short-term BenefitsCash, salary andcommissions$	Share-basedPaymentOptions$	Post-employmentBenefitsSuperannuation$	Total$
Mr RJ Telford	Executive Chairman	207,069	-	-	207,069
Dr JM Chisholm	Executive Director	177,917	-	-	177,917
Mr JSF Dunlop	Non-executive Director	44,648	-	-	44,648
Mr JD Kenny	Non-executive Director	38,333	-	-	38,333
Mr J Starink	Executive Director	17,742	-	-	17,742
Mr PR Sims	Chief Financial Officer	188,294	60,975	18,827	268,096
Mr RS Caren	Company Secretary	52,500	-	-	52,500
Mr RS Middlemas	Company Secretary	4,580	-	-	4,580
		731,083	60,975	18,827	810,885

Options issued as part of remuneration for the year ended 30 June 2007

Options were issued to an executive as part of his remuneration. The options were not issued based on performance criteria, but are issued to the majority of directors and executives of Gippsland Limited and its subsidiaries to increase goal congruence between executives, directors and shareholders.

Options Granted As Remuneration

2007

			Terms & Conditions for Each Grant
Key Management Personnel	Granted No.	Grant Date	Value per Optionat Grant Date$	Exercise Price$	Exercise Date
PR Sims	2,250,000	15.09.2006	0.03	0.15	31.12.2007

Meetings of Directors

During the financial year, 12 meetings of directors were held. Attendances by each director during the year were as follows:

		Directors' Meetings	Remuneration Committee
	Number eligibleto attend	Number attended	Number eligibleto attend	Number attended
RJ Telford	12	12	1	1
JM Chisholm	12	10	-	-
JSF Dunlop	12	11	1	1
JD Kenny	12	6	1	-
J Starink	12	6	-	-

Indemnifying Officers or Auditor

During or since the end of the financial year the company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay an insurance premium as follows:

The company has paid premiums to ensure any director or officer of Gippsland Limited against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the company, other than conduct involving a wilful breach of duty in relation to the company. The amount of the premium is $14,616.

Options

At the date of this report, the unissued ordinary shares of Gippsland Limited under option are as follows:

Grant Date	Date of Expiry		Number under Option
16.05.2006	16.05.2012	$0.135	25,000,000
05.02.2008	15.12.2011	£0.07	4,000,000

During the year ended 30 June 2008, the following ordinary shares of Gippsland Limited were issued on the exercise of options granted. No amounts are unpaid on any of the shares.

Grant Date	Exercise Price	Number of Shares Issued
31.12.2007	$0.09	33,674,180

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.

Proceedings on Behalf of Company

No person has applied for leave of the Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to such proceedings during the year.

Non-audit Services

The board of directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed in Note 20 did not compromise the external auditor's independence for the following reasons:

• The nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees for non-audit services were paid / payable to the external auditors during the year ended 30 June 2008:

	$
Taxation Services	2,992
Corporate Advisory Fees	22,697

Auditors Independence Declaration

The lead auditor's independence declaration for the year ended 30 June 2008 has been received and can be found on page 29 of the directors' report.

Signed in accordance with a resolution of the Board of Directors.

R J TELFORD, Director Dated this 30th day of September 2008.

Auditors' Independence Declaration

AUDITOR'S INDEPENDENCE DECLARATION

As lead engagement partner for the audit of Gippsland Limited and its controlled entities for the year ended 30 June 2008, I declare that, to the best of my knowledge and belief, there have been:

(i) no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Gippsland Limited and the entities it controlled during the year.

PKF Chartered Accountants

Neil Smith Partner

Dated at Perth, Western Australia this 30th day of September 2008.

PKF is a national association of independent chartered accounting and consulting firms, each trading as PKF. PKF Australia Ltd is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

The directors of Gippsland Limited believe firmly that benefits will flow from the maintenance of the highest possible standards of corporate governance and strive for compliance with best corporate governance practice where practicable.

Trading Policy

The company's policy regarding directors and employees trading in its securities is set by the board. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security's prices. Additionally directors and employees are restricted from trading in the Company's securities during close periods preceding periodic lodgement dates.

Website Disclosure of Corporate Governance Practices and Policies

Further information relating to the company's corporate governance practices and policies has been made publicly available on the company's web site at www.gippslandltd.com

Period of Office Held by each director in office at the date of the Annual Report

Robert John Telford – appointed 14 January 1992, tenure 16 years John Morrison Chisholm – appointed 18 October 1994, tenure 13 years John Damian Kenny – appointed 2 September 1999, tenure 9 years John Stuart Ferguson Dunlop – appointed 1 July 2005, tenure 3 years Jon Starink –

appointed 8 May 2007, tenure 1 year

Skills, Experience and Expertise of Directors

The skills, experience and expertise relevant to the position held by each director is disclosed in the Directors' Report.

Independent Professional Advice

The Board has determined that individual Directors have the right in connection with their duties and responsibilities as Directors, to seek independent professional advice at the Company's expense. The engagement of an outside adviser is subject to prior approval of the Chairman and this will not be withheld unreasonably. If appropriate, any advice so received will be made available to all Board members.

Performance Evaluation

The performance evaluation of board members occurs by way of an annual review by the whole board. The evaluation was carried out in accordance with this policy during the year.

A review of senior executive performance was completed in accordance with company policy in March 2008.

Management Assurance in accordance with Section 295A of the Corporations Act

The board has received assurance from the chief executive officer and the chief financial officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

Remuneration Committee

The names of the members of the remuneration committee and their attendance at meetings of the committee are disclosed in the Directors' Report.

Retirement Schemes/Equity Based Remuneration Schemes for Directors

The Company currently has no schemes for retirement benefits, other than superannuation, for directors. The company does not have an equity based remuneration scheme.

Commentary on Departures from Best Practice Recommendations

The ASX Corporate Governance Council released the 2nd edition of the Corporate Governance Principles and Recommendations in August 2007. The Company has elected to early adopt the revised Principles and Recommendations. During the financial year the company has complied with the majority of the eight essential corporate governance principles and the corresponding best practice recommendations as published by the ASX Corporate Governance Council except as detailed below:

Council Recommendation 2.1

A majority of the Board should be independent directors.

The Board comprises two independent directors and three non-independent directors. Therefore a majority of the Board is not independent.

While the Board strongly endorses the position that boards need to exercise independence of judgment, it also recognises that the need for independence is to be balanced with the need for skills, commitment and a workable board size. The Board believes it has recruited members with the skills, experience and character to discharge its duties and that any greater emphasis on independence would be at the expense of the Board's effectiveness.

Messrs Kenny and Dunlop are Non-Executive Directors of the Company. Both Non-Executive Directors are considered independent within the ASX Corporate Governance Council's guidelines.

Mr Dunlop is a principal at John Dunlop & Associates Pty Ltd, engineering service providers for the Company. Mr Dunlop has been directly involved in the provision of the engineering services by John Dunlop & Associates Pty Ltd, however the undertaking of this role does not constitute Mr Dunlop or John Dunlop & Associates Pty Ltd as being material service providers to the Company. Where required, Mr Dunlop does not participate in the discussions regarding the provision of engineering services.

At present the Company believes that the individuals on the Board can make, and do make, quality and independent judgments in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves from the Board Meeting before commencement of discussion on the topic.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of appointing additional independent Non-Executive Directors.

Council Recommendation 2.2

The chair should be an independent director.

The company's chairman, Mr Robert John Telford, is considered by the board not to be independent in terms of the ASX Corporate Governance Council's definition of independent director. However the board believes that the chairman is able and does bring quality and independent judgement to all relevant issues falling within the scope of the role of chairman.

The board considers that the company is not currently of a size, nor are its affairs of such complexity to necessitate the appointment of an independent non-executive chair.

Council Recommendation 2.3

The roles of chair and chief executive officer should not be exercised by the same individual.

The company's chairman Mr Robert John Telford currently holds the position of both chairperson and chief executive officer. The board recognises the importance of independence in decisionmaking, however it believes that Mr Telford is the most appropriate person for the position due to his extensive industry experience and previous record as chairman. The board recognises that Mr Telford has been a major force in the company's success and that as the company enters its next growth stage, Mr Telford's industrial experience and strong and effective leadership will be beneficial.

Council Recommendation 2.4

The board should establish a nomination committee.

The Board does not have a nomination committee. The Board considers that the Company is not currently of a size to justify the formation of a nomination committee. The Board as a whole undertakes the process of reviewing the skill base and experience of existing Directors to enable identification or attributes required in new Directors. Independent consultants are engaged to identify possible new candidates for the Board, when appropriate.

The Board acknowledges this does not comply with Recommendation 2.4. If the Company's activities increase in size, scope and nature, the appointment of a nomination committee will be reviewed by the Board and implemented if appropriate.

Council Recommendation 4.1

The board should establish an audit committee.

The Board does not have an audit committee. The Board considers that the Company is not of a size, nor are its financial affairs of such complexity to justify the formation of an audit committee. The Board as a whole undertakes the selection and proper application of accounting policies, the identification and management of risk and the review of the operation of the internal control systems.

The Board acknowledges this does not comply with Recommendation 4.1. If the Company's activities increase in size, scope and nature, the appointment of an audit committee will be reviewed by the Board and implemented if appropriate.

Council Recommendation 4.2

The audit committee Structure should be structured so that it:

• consists only of non-executive directors;
• consists of a majority of independent directors;
• is chaired by an independent chair, who is not chair of the board;
• has at least three members.

Refer comments on council recommendation 4.1

Council Recommendation 4.3

The audit committee should have a formal charter.

Refer comments on council recommendation 4.1

Council Recommendation 7.2

The board should require management to design and implement the risk management and internal control system to manage the Company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the Company's management of its material business risks.

The Chief Executive Officer and the Chief Financial Officer are currently reviewing the risk management and internal control systems and will report to the Board in due course. Given the nature and size of the company and the Board's ultimate responsibility to manage the risks of the Company this delay is not considered critical.

Council Recommendation 8.1

The board should establish a remuneration committee.

The Board did not have a remuneration committee until March this year and a formal charter was not adopted until August 2008. Until March 2008, the Board considered that the Company was not of a size, nor its financial affairs of such complexity to justify the formation of a remuneration committee.

In setting the remuneration levels the Board took into consideration the group's financial and operating performance and undertook a comparison of remuneration levels utilising industry benchmarks.

Income Statement FOR THE YEAR ENDED 30 JUNE 2008

		CONSOLIDATED		PARENT
	Notes	2008$	2007$	2008$	2007$
Continuing OperationsRevenue
Finance income	5(b)	77,542	125,262	74,152	125,226
		77,542	125,262	74,152	125,226
Other Income	5(a)	3,338	10,168	1,835	1,935
Foreign exchange losses		(935,947)	(53,429)	(5,189)	(38,262)
Exploration expense		(59,515)	(287,516)	(59,515)	(34,061)
Project development expense		(211,937)	(35,526)	-	-
Impairment reversal of exploration expenditure	3	2,184,129	-	-	-
Depreciation and amortisation expense		(70,353)	(41,119)	(22,216)	(23,536)
Impairment of intercompany loans	10	-	-	(3,219,534)	(2,768,260)
Impairment of exploration and evaluationexpenditure	12	(1,109,807)	(2,236,564)	-	-
Employee benefits expense	5(d)	(1,247,101)	(671,932)	(806,986)	(579,374)
Administration expense	5(c)	(2,051,916)	(1,000,497)	(1,292,517)	(955,541)
Finance costs	5(b)	(3,566)	(65)	(56)	(65)
Loss from continuing operations before tax		(3,425,133)	(4,191,218)	(5,330,026)	(4,271,808)
Income tax expense	6	-	-	-	-
Loss after tax from continuing operations		(3,425,133)	(4,191,218)	(5,330,026)	(4,271,808)
Loss attributable to minority interest		-	-	-	-
Loss attributable to members of the parent	7	(3,425,133)	(4,191,218)	(5,330,026)	(4,271,808)

Earnings per share (cents per share)	7
- basic for loss for the year		(1.24)	(1.77)
- basic for loss from continuing operations		(1.24)	(1.77)
- diluted for loss for the year		(1.24)	(1.77)
- diluted for loss from continuing operations- dividends paid per share		(1.24)-	(1.77)-

		CONSOLIDATED			PARENT
	Note	2008$	2007$	2008$	2007$
ASSETS
Current Assets
Cash and cash equivalents	8	1,592,840	2,611,219	1,328,816	2,315,359
Trade and other receivables	9	47,941	122,806	47,941	121,255
Prepayments		46,095	19,530	35,051	19,530
Total Current Assets		1,686,876	2,753,555	1,411,808	2,456,144
Non-Current Assets
Other financial assets	10	-	-	27,688	305
Property, plant and equipment	11	199,747	154,908	68,253	88,136
Exploration and evaluation expenditure	12	3,105,666	-	-	-
Total Non-Current assets		3,305,413	154,908	95,941	88,441
TOTAL ASSETS		4,992,289	2,908,463	1,507,749	2,544,585
LIABILITIES
Current Liabilities
Trade and other payables	14	799,863	458,177	150,622	201,514
Provisions	15	58,328	38,301	21,243	11,476
Total Current Liabilities		858,191	496,478	171,865	212,990
TOTAL LIABILITIES		858,191	496,478	171,865	212,990
NET ASSETS		4,134,098	2,411,985	1,335,884	2,331,595
EQUITY
Equity attributable to equity holders of theparent
Issued capital	16	29,550,495	25,409,780	29,550,495	25,409,780
Retained earnings / (Accumulated losses)		(26,561,730)	(23,136,597)	(28,547,013)	(23,216,987)
Other reserves	16	1,145,333	138,802	332,402	138,802
Parent interests		4,134,098	2,411,985	1,335,884	2,331,595
Minority interests		-	-	-	-
TOTAL EQUITY		4,134,098	2,411,985	1,335,884	2,331,595

Gippsland Limited Annual Report 2008

Cash Flow Statement FOR YEAR ENDED 30 JUNE 2008

		CONSOLIDATED		PARENT
	Notes	2008$	2007$	2008$	2007$
Cash flows from operating activities
Payments to suppliers and employeesOther		(2,918,308)3,338	(1,559,832)-	(1,951,685)1,835	(1,615,754)-
Net cash flows used in operating activities	8	(2,914,970)	(1,559,832)	(1,949,850)	(1,615,754)
Cash flows from investing activities
Interest received		80,423	132,549	77,032	124,280
Purchase of property, plant and equipment		(46,130)	(160,342)	(2,333)	(67,459)
Increase in investment in subsidiary		-	-	(27,383)	-
Purchase of exploration and evaluationexpenditure		(2,155,401)	(2,437,175)	-	-
Other		-	-	(3,219,535)	(2,773,570)
Net cash flows used in investing activities		(2,121,108)	(2,464,968)	(3,172,219)	(2,716,749)
Cash flows from financing activities
Proceeds from issue of shares (net of issuecosts)	16	4,140,715	2,751,505	4,140,715	2,751,505
Net cash flows from financing activities		4,140,715	2,751,505	4,140,715	2,751,505

Net decrease in cash and cash equivalents		(895,363)	(1,273,295)	(981,354)	(1,580,998)
Net foreign exchange differences		(123,016)	(53,429)	(5,189)	(38,263)
Cash and cash equivalents at beginning ofperiod		2,611,219	3,937,943	2,315,359	3,934,620
Cash and cash equivalents at end of period	8	1,592,840	2,611,219	1,328,816	2,315,359

		Attributable to equityholders of the parent	Minorityinterest	Total equity
	Issuedcapital$	Retainedearnings$	OtherReserves$	Total$	$	$
CONSOLIDATED
At 1 July 2006		22,658,274 (18,945,379)	77,827	3,790,722	-	3,790,722
Loss for the year	-	(4,191,218)	-	(4,191,218)	-	(4,191,218)
Total income/expense for the year	-	(4,191,218)	-	(4,191,218)	-	(4,191,218)
Issue of Share Capital	2,896,294	-	-	2,896,294	-	2,896,294
Transaction Costs	(144,788)	-	-	(144,788)	-	(144,788)
Cost of share-based payments	-	-	60,975	60,975	-	60,975
At 30 June 2007		25,409,780 (23,136,597)	138,802	2,411,985	-	2,411,985
Currency translation differences	-	-	812,931	812,931	-	812,931
Loss for the year	-	(3,425,133)	-	(3,425,133)	-	(3,425,133)
Total income/expense for the year	-	(3,425,133)	-	(3,425,133)	-	(3,425,133)
Issue of share capital	1,181,290	-	-	1,181,290	-	1,181,290
Transaction Costs	(71,251)	-	-	(71,251)	-	(71,251)
Exercise of options	3,030,676	-	-	3,030,676	-	3,030,676
Cost of share-based payments	-	-	193,600	193,600	-	193,600
At 30 June 2008		29,550,495 (26,561,730)	1,145,333	4,134,098	-	4,134,098

PARENT
At 1 July 2006		22,658,274 (18,945,179)	77,827	3,790,922	-	3,790,922
Loss for the year	-	(4,271,808)	-	(4,271,808)	-	(4,271,808)
Total income/expense for the year	-	(4,271,808)	-	(4,271,808)	-	(4,271,808)
Issue of share capital	2,896,294	-	-	2,896,294	-	2,896,294
Transaction costs	(144,788)	-	-	(144,788)	-	(144,788)
Cost of share-based payments	-	-	60,975	60,975	-	60,975
At 30 June 2007		25,409,780 (23,216,987)	138,802	2,331,595	-	2,331,595
Loss for the year	-	(5,330,026)	-	(5,330,026)	-	(5,330,026)
Total income/expense for the year	-	(5,330,026)	-	(5,330,026)	-	(5,330,026)
Issue of share capital	1,181,290	-	-	1,181,290	-	1,181,290
Transaction costs	(71,251)	-	-	(71,251)	-	(71,251)
Exercise of options	3,030,676	-	-	3,030,676	-	3,030,676
Cost of share-based payments	-	-	193,600	193,600	-	193,600
At 30 June 2008		29,550,495 (28,547,013)	332,402	1,335,884	-	1,335,884

1. CORPORATE INFORMATION

The financial report of Gippsland Limited for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the directors on 30 September 2008.

Gippsland Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities exchange.

The nature of the operations and principal activities of the Group are described in note 4.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and applicable Australian Accounting Standards. The financial report has also been prepared on a historical cost basis, except for investment properties, land and buildings, derivative financial instruments and available-for-sale financial assets that have been measured at fair value.

The financial report is presented in Australian dollars.

Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report complies with International Financial Report Standards ('IFRS').

(b) Going concern

The consolidated entity and the parent entity incurred a net loss of $3,425,133 and $5,330,026, respectively for the year then ended 30 June 2008. As at that date, the cash resources of the group totalled $1,592,840. The directors have prepared a cash flow forecast for the year ending 30 June 2009 which indicates that the current cash resources may not meet expected cash outgoings.

The directors are currently seeking to raise additional equity funds to provide sufficient working capital for the company to continue through to finalising a loan agreement and further capital raising for the construction of the Abu Dabbab project in Egypt. The outcome of this pre project equity raising is not yet concluded.

These conditions indicate a material uncertainty that may cast significant doubt about the consolidated entity's and parent entity's ability to continue as going concerns.

The directors are well advanced in negotiations for project financing with Kfw Bankengruppe which is owned 80% by the German Federal Government and 20% by the German federal states (Bundeslander).

The directors have prepared cash flow forecasts that indicate the amount and type of funding the consolidated entity and the parent entity will require to construct the Abu Dabbab project. This forecast assumes that a loan agreement is finalised with a major bank and an equity component of the funding is raised from investors. The outcome of this debt and further equity raising is not yet confirmed or concluded.

The ability of the consolidated entity and the parent entity to continue as going concerns is principally dependent upon raising additional capital and / or debt finance to fund exploration and project development, funding the Abu Dabbab project, other commitments, other principal activities and working capital.

(b) Going concern (continued)

Should the consolidated entity and the parent entity be unable to continue as going concerns, they may be required to realise their assets and extinguish their liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements.

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the consolidated entity and parent entity be unable to continue as going concerns.

(c) Adoption of new accounting standards

The company has adopted AASB 7 'Financial Instruments; Disclosures' and all consequential amendments which became applicable on 1 January 2007. The adoption of this standard has only affected the disclosure in these financial statements. There has been no affect on profit and loss or the financial position of the entity.

(d) New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The Group's and the parent entity's assessment of the impact of these new standards and interpretations is set out below.

New or revised requirement	Effective for annualreporting periodsbeginning/ending onor after	More information	Impact on Group
New and revised Standards
AASB 101 Presentation of Financial Statements(Revised September 2007), AASB 2007-8Amendments to Australian Accounting Standards& Interpretations and AASB 2007-10 FurtherAmendments to AASBs arising from AASB 101The revised standard affects the presentation ofchanges in equity and comprehensive income. Itdoes not change the recognition, measurementor disclosure of specific transactions and other	Beginning1 January 2009	This will be adoptedfor the year ended30 June 2010	This is a disclosurestandard andtherefore does notaffect amountsrecognised in thefinancial statements.
events required by other AASB standards.
Australian issuers will need to make use in financialreports of the descriptions- Statement of Financial
Performance and Position rather than Balance
Sheet and Income Statement and use the term
"financial report" and not "financial statement." The
Amending Standard updates references in various
other pronouncements.

(d) New standards and interpretations not yet adopted (continued)

New or revised requirement	Effective for annualreporting periodsbeginning/ending onor after	More information	Impact on Group
New and revised Standards
BeginningAASB 123 Borrowing Costs (Revised), AASB 2007-6Amendments to Australian Accounting Standards 1,1 January 2009101, 107, 111, 116, 138 and Interpretations 1 & 12		This will be adoptedfor the year ended30 June 2010	To date thecompany has notbeen involved in
This revision eliminates the option to expenseborrowing costs on qualifying assets and requiresthat they be capitalised. The transitional provisionprovided allows for prospective application of thisrevision from either application date or adoptiondate if prior to 1 January 2009. The AmendingStandard eliminates reference to the expensingoption in various other pronouncements.			such transactions,therefore the impactis not expected tobe material.
AASB 3 Business Combinations (Revised),AASB 127 Consolidated and SeparateFinancial Statements (Amended), AASB 2008-3Amendments to AASBs arising from AASB 3 andAASB 127	Beginning1 July 2009	This will be adoptedfor the year ended30 June 2010	If the groupundertakes suchtransactions,this needs to beconsidered.
This revision changes the application of acquisitionaccounting for business combinations andaccounting for non-controlling interests. The revisedand amended standards incorporate many changeswhich will have a significant impact on the profit andloss for entities entering into business combinations.
AASB 8 Operating Segments, AASB 2007-3Amendments to Australian Accounting Standards5, 6, 102, 107, 119, 127, 134, 136, 1023 & 1038arising from AASB 8	Beginning1 January 2009	This will be adoptedfor the year ended30 June 2010	This is a disclosurestandard andtherefore does notaffect amountsrecognised in the
This standard supersedes AASB 114 SegmentReporting introducing a US GAAP approach ofmanagement reporting as part of the convergenceproject with FASB.			financial statements.
AASB 2008- 1 – Amendments to AASB 2"Share Based Payments	Beginning1 January 2009	This will be adoptedfor the year ended30 June 2010	The impact of thisstandard will affectthe valuation of
The amendment clarifies that vesting conditionsare restricted to:•service conditions; and•Performance conditions only.Other features of a share-based payment are notvesting conditions. This means that all other terms			options issued bythe company butis not consideredto be material.
and conditions are accounted for in the value of theshare or option at grant date.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Gippsland Limited and its subsidiaries as at 30 June each year ('the Group').

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the Group.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Gippsland Limited has control.

(f) Interest in joint venture operation

The Group's interest in its joint venture operation is accounted for by recognising the Group's assets and liabilities from the joint venture, as well as expenses incurred by the Group and the Group's share of income earned from the joint venture, in the consolidated financial statements.

(g) Foreign currency translation

Both the functional and presentation currency of Gippsland Limited and its Australian subsidiaries is Australian dollars ($AUD).

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All differences in the consolidated financial report are taken to the income statement with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in the income statement.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The functional currency of the overseas subsidiaries Tantalum Egypt JSC, Nubian Resources JSC and Nubian Resources PLC is Egyptian pounds (EGP).

As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Gippsland Limited at the rate of exchange ruling at the balance sheet date and the income statements are translated at the weighted average exchange rates for the year.

The exchange differences arising on the retranslation are taken directly to a separate component of equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income statement.

(h) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Leasehold Improvements - over 2 to 5 years Plant and equipment - over 3 to 10 years

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses are recognised in the income statement.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued used of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the item is derecognised.

(i) Exploration and evaluation expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

(j) Recoverable amount of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

(j) Recoverable amount of assets (continued)

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(k) Investments

All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

After initial recognition, investments are measured as fair value. Gains or losses on investments are recognised in the income statement.

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as heldto-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification.

For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

Purchases and sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place are recognised on the trade date i.e. the date that the Group commits to purchase the asset.

(l) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

An estimate for impairment loss is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

(m) Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(n) Trade and other payables

Trade and other payables are carried at amortised cost due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

(o) Provisions (continued)

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(p) Share-based payment transactions

The Group provides remuneration to employees (including directors) of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Gippsland Limited ('market conditions').

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date').

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 7).

(q) Leases

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as the lease income.

Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

(q) Leases (continued)

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

(r) Income tax

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

• except where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.

(s) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the Cash Flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(t) Derecognition of financial instruments

The derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

(u) Critical accounting judgements and key sources of estimation uncertainty

In the application of AIFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Judgments made by management that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, these relate to impairment of inter-company loans and exploration and evaluation expenditure. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

(v) Financial risk management objectives and policies

The Group's principal financial instruments comprise receivables, payables, cash and short-term deposits.

The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the Group's financial risk management policy. The objective of the policy is to support the delivery of the Group's financial targets whilst protecting future financial security.

The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.

(v) Financial risk management objectives and policies (continued)

The Board reviews and agrees policies for managing each of these risks as summarised below.

Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below, including the setting of limits for credit allowances and future cash flow forecast projections.

Risk Exposures and Responses

Interest rate risk

The Group's has no long-term debt obligations. The Group's exposure to market interest rates primarily relate to cash and cash equivalents.

At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk that are not designated in cash flow hedges:

	Consolidated		Parent
	2008	2007	2008	2007
Financial Assets
Cash and cash equivalents	1,592,840	2,611,219	1,328,816	2,315,359
	1,592,840	2,611,219	1,328,816	2,315,359

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis is performed on the same basis for 2007.

2008		Profit or Loss		Equity
	Carrying Value$	100bpincrease$	100bpdecrease$	100bpincrease$	100bpdecrease$
Cash and cash equivalents	1,592,840	13,813	(13,813)	13,813	(13,813)
Trade receivables	47,941	-	-	-	-
Cash flow sensitivity (net)		13,813	(13,813)	13,813	(13,813)

2007		Profit or Loss		Equity
	Carrying Value$	100bpincrease$	100bpdecrease$	100bpincrease$	100bpdecrease$
Cash and cash equivalents	2,611,219	23,034	(23,034)	23,034	(23,034)
Trade receivables	122,806	-	-	-	-
Cash flow sensitivity (net)		23,034	(23,034)	23,034	(23,034)

Foreign currency risk

As a result of operations in Egypt, the Group's balance sheet can be affected significantly by movements in the EGP/A$ exchange rates. The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the functional currency. Approximately 58% of costs are denominated in the unit's functional currency.

Risk Exposures and Responses (continued)

At 30 June 2008, the Group had the following exposure to foreign currency that is not designated in cash flow hedges:

	Consolidated		Parent
	2008	2007	2008	2007
Financial Assets
US$
Cash and cash equivalentsEGP	229,733	284,511	-	-
Cash and cash equivalents	34,291	11,347	-	-
Trade and other receivables	-	1,551	-	-
GBP
Cash and cash equivalents	1,120,056	-	1,120,056	-
	1,384,080	297,409	1,120,056	-

Financial Liabilities
US$
Trade and other payables	55,645	52,966	-	-
EGP
Trade and other payables	6,375	28,340	-	-
Euro
Trade and other payables	57,528	8,430	-	-
GBP
Trade and other payables	118,860	-	41,145
	238,408	89,736	41,145	-
Net exposure	1,145,672	207,673	1,078,911	-

The following sensitivity is based on the foreign currency risk exposures in existence at the balance sheet date:

At 30 June 2008, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements:

	Post Tax Loss (Higher)/Lower		Equity Higher/(Lower)
2008$	2007$	2008$	2007$

561,219	637,183	(1,650,637)	(630,467)
(685,934)	(778,779)	2,017,445	770,571

-	-	-	-
-	-	-	-

The movements in equity in 2008 are more sensitive than in 2007 due to the higher level of EGP payables at balance date.

Management believe the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.

Risk Exposures and Responses (continued) Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, and trade and other receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group does not hold any credit derivatives to offset its credit exposure.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group.

Liquidity risk

The Group's objective is to maintain a continuity of funding to ensure sufficient working capital is available to meet the companies exploration and development commitments.

The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and interest resulting from recognised financial assets and liabilities as of 30 June 2008. The values presented are the respective undiscounted cash flows for the respective upcoming fiscal years. Cash flows for financial assets and liabilities without fixed amount or timing are based on the conditions existing at 30 June 2008.

The remaining contractual maturities of the Group's and parent entity's financial liabilities are:

Consolidated		Parent
2008	2007	2008	2007
836,948	458,177	150,622	201,514
-	-	-	-
-	-	-	-
-	-	-	-
836,948	458,177	150,622	201,514

Maturity analysis of financial assets and liability based on management's expectation.

The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. These assets are considered in the Group's overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks.

Risk Exposures and Responses (continued)

Year ended 30 June 2008	<6 months$	6-12 months$	1-5 years$	>5 years$	Total$
Consolidated Financial Assets
Cash and cash equivalents	1,592,840	-	-	-	1,592,840
Trade and other receivables	47,941	-	-	-	47,941
	1,640,781	-	-	-	1,640,781
Consolidated Financial Liabilities
Trade and other payables	799,863	-	-	-	799,863
	799,863	-	-	-	799,863
Net maturity	840,918	-	-	-	840,918
Year ended 30 June 2008	<6 months$	6-12 months$	1-5 years$	>5 years$	Total$
Parent Financial Assets
Cash and cash equivalents	1,328,816	-	-	-	1,328,816
Trade and other receivables	47,941	-	-	-	47,941
	1,376,757	-	-	-	1,376,757
Parent Financial Liabilities
Trade and other payables	150,622	-	-	-	150,622
	150,622	-	-	-	150,622
Net maturity	1,226,135	-	-	-	1,226,135

	<6 months	6-12 months	1-5 years	>5 years	Total
Year ended 30 June 2007	$	$	$	$	$
Consolidated Financial Assets
Cash and cash equivalents	2,611,219	-	-	-	2,611,219
Trade and other receivables	122,806	-	-	-	122,806
	2,734,025	-	-	-	2,734,025
Consolidated Financial Liabilities
Trade and other payables	458,177	-	-	-	458,177
	458,177	-	-	-	458,177
Net maturity	2,275,848<6 months	-6-12 months	-1-5 years	->5 years	2,275,848Total
Year ended 30 June 2007	$	$	$	$	$
Parent Financial Assets
Cash and cash equivalents	2,315,359	-	-	-	2,315,359
Trade and other receivables	121,255	-	-	-	121,255
	2,436,614	-	-	-	2,436,614
Parent Financial Liabilities
Trade and other payables	201,514	-	-	-	201,514
Net maturity	201,5142,235,100	--	--	--	201,5142,235,100

3. REVERSAL OF IMPAIRMENT LOSS

In the current period, the company has reversed the exploration and evaluation impairment losses previously recognised amounting to $2,184,129 in relation to the Abu Dabbab tantalite, tin and feldspar project.

The main events and circumstances that led to the reversal of these impairment losses are as follows:

• A 10 year off take agreement was signed with the German company HC Starck GmbH for the supply of 600,000 pounds of tantalum per annum.
• Bankable Feasibility Study on the Abu Dabbab project has been completed.
• Detailed negotiations with the German Bank, Kfw Bankengruppe, to secure the debt portion of the project finance have commenced. The bank is continuing with its due diligence process.
• An in fill drilling program at Abu Dabbab has been completed resulting in an increase in the project reserves.
• A major equity raising is planned following the completion of the bank due diligence.

4. SEGMENT INFORMATION

The Group's primary reporting format is business segments and its secondary format is geographical segments.

The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

Transfer prices between business segments are set at an arms length basis in a manner similar to transactions with third parties.

4. SEGMENT INFORMATION (continued)

Business segments

The following tables present revenue and profit information and certain asset and liability information regarding business segments for the years ended 30 June 2008 and 2007.

	Continuing Operations	TotalOperations
Year ended 30 June 2008	Tantalum$	Gold$	Corporate$	$
Revenue
Other revenues from external customers	1,966	1,425	77,489	80,880
Inter-segment sales	-	23,934	-	23,934
Total segment revenue	1,966	25,359	77,489	104,814
Inter-segment elimination				(23,934)
Total consolidated revenue				80,880
Result
Segment result	(679,232)	1,995,375	2,108,990	3,425,133
Loss before income tax and minority interest				3,425,133
Income tax expense				-
Net loss for the year				3,425,133
Assets and liabilities
Segment assets	3,215,400	296,828	1,480,061	4,992,289
Total assets				4,992,289
Segment liabilities	465,755	220,571	171,865	858,191
Total liabilities				858,191
Other segment information
Capital expenditure	7,967	-	2,333	10,300
Depreciation	13,868	34,268	22,217	70,353
Impairment losses	-	1,109,807	-	1,109,807
Reversal of impairment	2,184,129	-	-	2,184,129

4. SEGMENT INFORMATION (continued)

	Continuing Operations	TotalOperations
Year ended 30 June 2007	Tantalum	Gold	Corporate
Revenue
Other revenues from external customers	-	8,269	127,161	135,430
Total segment revenue	-	8,269	127,161	135,430
Inter-segment elimination				-
Total consolidated revenue				135,430

Result
Segment result	825,198	1,862,473	1,503,548	4,191,219
Loss before income tax and minority interest				4,191,219
Income tax expense				-
Net profit for the year				4,191,219

Assets and liabilities
Segment assets	235,388	128,793	2,544,282	2,908,463
Total assets				2,908,463
Segment liabilities	58,578	224,910	212,990	496,478
Total liabilities				496,478

Other segment information
Capital expenditure	-	66,635	93,707	160,342
Depreciation	-	17,583	23,536	41,119
Impairment losses	742,670	1,493,894	-	2,235,564

4. SEGMENT INFORMATION (continued)

Geographical segments

The Group's geographical segments are determined by the location of the Group's assets and operations.

The following tables present revenue, expenditure and certain asset information regarding geographical segments for the years ended 30 June 2008 and 2007

	Australia	Egypt	Total
Year ended 30 June 2008
Revenue
Other revenues from external customers	77,490	3,390	80,880
Less revenue attributable to discontinued operation	-	-	-
Revenue from continuing operations	77,490	3,390	80,880
Inter-segment sales	-	-	-
Segment revenue	77,490	3,390	80,880
Other segment information
Segment assets	1,480,061	3,512,228	4,992,289
Total assets			4,992,289

Capital expenditure	2,333	7,967	10,300
Year ended 30 June 2007
Revenue
Other revenues from external customers	127,161	8,269	135,430
Less revenue attributable to discontinued operation	-	-	-
Revenue from continuing operations	127,161	8,269	135,430
Inter-segment sales	-	-	-
Segment revenue	127,161	8,269	135,430
Other segment information
Segment assets	2,544,282	364,181	2,908,463
Total assets			2,908,463

Capital expenditure	93,707	66,635	160,342

5. REVENUES AND EXPENSES

		CONSOLIDATED		PARENT
		2008$	2007$	2008$	2007$
(a)	Other income
	Other income	3,338	10,168	1,835	1,935
		3,338	10,168	1,835	1,935
	(b) Finance (costs)/income
	Bank loans and overdrafts	(3,566)	(65)	(56)	(65)
	Total finance costs	(3,566)	(65)	(56)	(65)

	Bank interest receivable	77,542	125,262	74,152	125,226
	Total finance income	77,542	125,262	74,152	125,226
(c)	Lease payments and other expenses includedin income statement
	Included in administrative expenses:
	Minimum lease payments - operating lease	123,328	63,449	106,654	55,425
	Option expense	193,600	60,975	193,600	60,975
	Consultancy expense	140,953	117,169	57,405	105,202
	(d) Employee benefits expense
	Wages and Salaries	1,217,380	589,554	778,916	496,996
	Superannuation costs	29,721	21,403	28,069	21,403
	Expense of share-based payments	-	60,975	-	60,975
		1,247,101	671,932	806,985	579,374

6. INCOME TAX

Major components of income tax expense for the years ended 30 June 2008 and 2007 are:

Income Statement
Current income
Current income tax charge	-	-	-	-
Adjustments in respect of current incometax of previous years	-	-	-	-
Deferred income tax
Relating to origination and reversal oftemporary differences	-	-	-	-
Benefit from previously unrecognised tax lossused to reduce deferred tax expense	-	-	-	-
Income tax expense reported in incomestatement	-	-	-	-

6. INCOME TAX (continued)

	CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Statement of changes in equity

	-	-	-	-
Income tax expense reported in equity	-	-	-	-

A reconciliation of income tax expense (benefit) applicable to accounting profit before income tax at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the years ended 30 June 2008 and 2007 is as follows:

Accounting profit (loss) before tax from continuingoperations	(3,425,133)	(4,191,218)	(5,330,027)	(4,271,808)
Loss before tax from discontinued operations	-	-	-	-
Accounting profit (loss) before income tax	(3,425,133)	(4,191,218)	(5,330,027)	(4,271,808)
At the statutory income tax rate of 30% (2007: 30%)	(1,027,540)	(1,257,366)	(1,599,008)	(1,281,542)
Provision for non-recovery of loans	-	832,071	-	832,071
Exploration expenditure incurred in relation to aforeign permanent establishment	17,855	10,218	17,855	10,218
Non-deductible expenses	62,389	73,918	62,389	73,918
Temporary differences not recognised	947,296	341,159	1,518,764	365,335
Income tax expense	-	-	-	-
Income tax expense reported in income statement	-	-	-	-
Income tax attributable to discontinued operation	-	-	-	-
	-	-	-	-
Effective income tax rate	0%	0%	0%	0%

Unrecognised deferred tax assets and liabilities

Deferred tax assets and liabilities have not been recognised in respect of the following items:

Interest receivable	-	(864)	-	(864)
Business related costs	105,744	125,382	105,744	125,382
Accrued superannuation	-	523	-	523
Accrued audit fees	8,724	6,000	4,989	6,000
Accrued directors fees	-	5,000	-	5,000
Employee entitlements	6,373	4,665	6,373	3,443
Borrowing costs	1,454	2,181	1,454	2,181
Foreign exchange	110,695	12,078	1,557	11,118
Tax losses (domestic)	3,321,947	2,699,047	2,704,603	2,097,658
Trade and other receivables	-	-	4,062,664	3,096,804
Potential unrecognised tax benefit @ 30%	3,554,937	2,854,012	6,887,384	5,347,245

The deductible temporary differences and tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the company can utilise benefits.

7. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary shareholders (after deducting interest on the convertible redeemable preference shares) by the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options and dilutive convertible non-cumulative redeemable preference shares).

The following reflects the income and share data used in the total operations basic and diluted earnings per share computations:

Net loss attributable to ordinary shareholders for diluted earnings per share (3,425,133) (4,191,218)

Weighted average number of ordinary shares for basic earnings per share 276,638,760 237,310,914 Adjusted weighted average number of ordinary shares for diluted earnings per share 276,638,760 237,310,914

The consolidated entity's options over ordinary shares could potentially dilute basic earnings per share in the future, however they have been excluded from the calculations of diluted earnings per share because they are anti-dilutive for the years presented.

There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements.

To calculate earnings per share, the weighted average number of ordinary shares for both basic and diluted is as per the table above. The following table provides the profit figure used as the numerator:

	2008cents	2007cents
Net loss attributable to ordinary shareholders from discontinued operations:
- for basic earnings per share	(1.24)	(1.77)
- for diluted earnings per share	(1.24)	(1.77)

CONSOLIDATED
2008$	2007$

Shares	Shares

8. CASH AND CASH EQUIVALENTS

	CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Cash at bank and in hand	1,551,516	338,362	1,328,816	42,502
Short term deposits	41,324	2,272,857	-	2,272,857
	1,592,840	2,611,219	1,328,816	2,315,359

Cash at bank and in hand earns interest at floating rates based on daily bank rates.

Short-term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

The fair value of cash and cash equivalents is $1,592,840 (2007: $2,611,219).

Reconciliation of cash

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following at 30 June:

Cash at bank and in hand	1,551,516	338,362	1,328,816	42,502
Short-term deposits	41,324	2,272,857	-	2,272,857
	1,592,840	2,611,219	1,328,816	2,325,359

Reconciliation from the net profit after tax to

the net cash flows from operations
Net Loss	(3,425,133)	(4,191,218)	(5,330,026)	(4,271,808)
Adjustments for:
Depreciation and amortisation	70,353	41,119	22,216	23,536
Impairment losses	(802,869)	2,236,564	3,219,535	2,768,260
Expenses capitalised	(104,892)	-	-	-
Foreign exchange loss (gain)	935,947	53,429	5,189	38,262
Interest received	(80,423)	(132,549)	(77,032)	(124,280)
Share options expensed	193,600	60,975	193,600	60,975
Changes in assets and liabilities
(increase)/decrease in trade and other receivables	74,864	(73,594)	73,314	(72,042)
(increase)/decrease in prepayments	(26,565)	(18,614)	(15,521)	(18,615)
(decrease)/increase in provisions	20,027	13,378	9,767	(13,447)
(decrease)/increase in trade and other payables	230,121	450,678	(50,892)	(6,595)
Net cash from operating activities	(2,914,970)	(1,559,832)	(1,949,850)	(1,615,754)

9. TRADE AND OTHER RECEIVABLES (CURRENT)

CONSOLIDATED		PARENT
2008$	2007$	2008$	2007$
47,941	122,806	47,941	121,255

Trade receivables are non-interest bearing and are generally on 60-day terms.

At 30 June, the ageing analysis of trade receivables is as follows:

		Total	0-30Days	31-60Days	61-90Days	61-90Days	+91Days	+91Days
					PDNI*	CI*	PDNI*	CI*
2008	Consolidated	47,941	47,941	-	-	-	-	-
	Parent	47,941	47,941	-	-	-	-	-
2007	Consolidated	122,806	122,806	-	-	-	-	-
	Parent	121,255	121,255	-	-	-	-	-

* Past due not impaired ('PDNI') Considered impaired ('CI')

The balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

(a) Fair value and credit risk

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the Group's policy to transfer (on-sell) receivables to special purpose entities.

(b) Foreign exchange and interest rate risk

Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 2 (v).

10. OTHER FINANCIAL ASSETS (NON-CURRENT)

		CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Loans receivable from controlled entities (a)	-		-13,542,214	10,322,679
Provision for impairment of receivables	-		-(13,542,214)	(10,322,679)
Investments in controlled entities (note 18)	-		-27,688	305
			27,688	305

The impairment of loans to subsidiaries was $3,219,534 (2007: $ 2,768,260).

All amounts are receivable in Australian Dollars.

(a) Loans receivable from controlled entities

The loans to controlled entities are advanced interest free, are unsecured and will be repaid when the respective subsidiary is generating sufficient funds and has the financial capacity to meet the loan commitment.

(b) Fair values

The fair values and carrying values of non-current receivables of the Group are as follows:

	Consolidated		Parent
2008$	2007$	2008$	2007$
-	-	-	-

(c) Interest rate risk

Details regarding interest rate risk exposure are disclosed in note 2 (v).

(d) Credit risk

The maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair value of each class of receivables. No collateral is held as security.

11. PROPERTY, PLANT AND EQUIPMENT

	CONSOLIDATED			PARENT
	LeaseholdImprovements$	Plant andequipment$	Total$	LeaseholdImprovements$	Plant andequipment$	Total$
Year ended
30 June 2008
At 1 July 2007,
Net of accumulated
depreciation	31,055	123,853	154,908	16,552	71,584	88,136
Additions	-	10,300	10,300	-	2,333	2,333
Disposals	-	-	-	-	-	-
Transfers	(14,503)	119,395	104,892	-	-	-
Depreciation charge
for the year	(3,650)	(66,703)	(70,353)	(3,650)	(18,566)	(22,216)
At 30 June 2008,
Net of accumulateddepreciation	12,902	186,845	199,747	12,902	55,351	68,253

At 1 July 2007
Cost or fair value	33,385	225,697	259,082	18,251	143,379	161,630
Accumulated
depreciation and
impairment	(2,330)	(101,844)	(104,174)	(1,699)	(71,795)	(73,494)
Net carrying amount	31,055	123,853	154,908	16,552	71,584	88,136

At 30 June 2008
Cost or fair value	18,251	316,165	334,416	18,251	110,104	128,355
Accumulated
depreciation and
impairment	(5,349)	(129,320)	(134,669)	(5,349)	(54,753)	(60,102)
Net carrying amount	12,902	186,845	199,747	12,902	55,351	68,253

11. PROPERTY, PLANT AND EQUIPMENT (continued)

	CONSOLIDATED			PARENT
	LeaseholdImprovements$	Plant andequipment$	Total$	LeaseholdImprovements$	Plant andequipment$	Total$
Year ended30 June 2007
At 1 July 2006,
Net of accumulated
depreciation	-	35,685	35,685	-	35,685	35,685
Additions	33,385	126,957	160,342	18,251	75,456	93,707
Transfers	-	-	-	-	(17,720)	(17,720)
Depreciation charge
for the year	(2,330)	(38,789)	(41,119)	(1,699)	(21,837)	(23,536)
At 30 June 2007,
Net of accumulated
depreciation	31,055	123,853	154,908	16,552	71,584	88,136

At 1 July 2006
Cost or fair value	-	195,502	195,502	-	195,502	195,502
Accumulated
depreciation and
impairment	-	(159,817)	(159,817)	-	(159,817)	(159,817)
Net carrying amount	-	35,685	35,685	-	35,685	35,685

At 30 June 2007
Cost or fair value	33,385	225,697	259,082	18,251	143,379	161,630
Accumulated
depreciation and
impairment	(2,330)	(101,844)	(104,174)	(1,699)	(71,795)	(73,494)
Net carrying amount	31,055	123,853	154,908	16,552	71,584	88,136

12. EXPLORATION AND EVALUATION EXPENDITURE

	CONSOLIDATED			PARENT
	Evaluationexpenditure$	Explorationcosts$	Total$	Evaluationexpenditure$	Explorationcosts$	Total$
Year ended
30 June 2008
At 1 July 2007,
net of accumulated
amortisation	-	-	-	-	-	-
Additions	1,204,358	1,064,693	2,269,051	-	-	-
Impairment	2,184,129	(1,109,807)	1,074,322	-	-	-
Exchangeadjustment	(282,821)	45,114	(237,707)	-	-	-
At 30 June 2008,
net of accumulated
amortisation	3,105,666	-	3,105,666	-	-	-
At 1 July 2007
Cost (gross carrying
amount)	3,784,660	2,809,451	6,594,111	-	-	-
Accumulated
amortisation and
impairment	(3,784,660)	(2,809,451)	(6,594,111)	-	-	-
Net carrying amount	-	-	-	-	-	-

At 30 June 2008Cost (gross carrying
amount)	3,105,666	3,664,199	6,769,865	-	-	-
Accumulated
amortisation and
impairment	-	(3,664,199)	(3,664,199)	-	-	-
Net carrying amount	3,105,666	-	3,105,666	-	-	-

For the year ended 30 June 2008, evaluation expenditure is capitalised at cost. This project cost will be amortised over the life of the Abu Dabbab operation once production has commenced.

This asset is tested for impairment where an indicator of impairment arises.

The exploration costs represent the expenditure on the Wadi Allaqi leases in Egypt.

The exploration asset has been impaired because, at this stage of the project, there is insufficient resource to justify a project and hence the recovery of the asset.

The impairment loss of $1,109,807 was charged in the 2008 financial year. A previous impairment on the Abu Dabbab project was reversed as per note 3.

13. EMPLOYEE BENEFITS

(a) Key management personnel

Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are:

Key Management Person	Position
Mr RJ Telford	Chairman – Executive
Dr JM Chisholm	Director – Executive
Mr JSF Dunlop	Director – Non-executive
Mr JD Kenny	Director – Non-executive
Mr J Starink	Director – Executive
Mr PR Sims	Chief Financial Officer
Mr RS Caren	Company Secretary

Key management personnel remuneration has been included in the Remuneration Report section of the Directors Report.

(b) Options and Rights Holdings

The Group had an option plan for the granting of non-transferable options to certain directors and senior executives.

The relevant terms and conditions applicable to options granted under the option plan include:

a) The exercise price of the options was set at an agreed price at the date of granting the options;

b) Any options that are unvested on the 31 December 2007 lapsed.

On 30 June 2008, Nil (2007: 15,568,322) options were held by key management personnel.

Number of Options held by Key Management Personnel

	Balance1.7.2007	Granted asCompensation	OptionsExercised	OptionsLapsed	Balance30.6.2008
Mr RJ Telford	6,558,322	-	6,558,322	-	-
Dr JM Chisholm	2,260,000	-	2,260,000	-	-
Mr JSF Dunlop	2,250,000	-	-	2,250,000	-
Mr JD Kenny	2,250,000	-	2,250,000	-	-
Mr J Starink	-	-	-	-	-
Mr PR Sims	2,250,000	-	-	2,250,000	-
Mr RS Caren	-	-	-	-	-
	15,568,322	-	11,068,322	4,500,000	-

	Balance1.7.2006	Granted asCompensation	OptionsExercised	OptionsLapsed	Balance30.6.2007
Mr RJ Telford	6,558,322	-	-	-	6,558,322
Dr JM Chisholm	2,260,000	-	-	-	2,260,000
Mr JSF Dunlop	2,250,000	-	-	-	2,250,000
Mr JD Kenny	2,250,000	-	-	-	2,250,000
Mr J Starink	-	-	-	-	-
Mr PR Sims	-	2,250,000	-	-	2,250,000
Mr RS Caren	-	-	-	-	-
	13,318,322	2,250,000	-	-	15,568,322

13. EMPLOYEE BENEFITS (continued)

(c) Shareholdings

Number of Shares held by Key Management Personnel

	Balance1.7.2007	Received asCompensation	OptionsExercised	Net ChangeOther*	Balance30.6.2008
Mr RJ Telford	13,568,124	-	6,558,322	-	20,126,446
Dr JM Chisholm	160,000	-	2,260,000	-	2,420,000
Mr JSF Dunlop	-	-	-	-	-
Mr JD Kenny	-	-	2,250,000	-	2,250,000
Mr J Starink	-	-	-	300,000	300,000
Mr PR Sims	-	-	-	-	-
Mr RS Caren	-	-	-	-	-
	13,728,124	-	11,068,322	300,000	25,096,446

	Balance1.7.2006	Received asCompensation	OptionsExercised	Net ChangeOther*	Balance30.6.2007
Mr RJ Telford	13,568,124	-	-	-	13,568,124
Dr JM Chisholm	60,000	-	-	100,000	160,000
Mr JSF Dunlop	-	-	-	-	-
Mr JD Kenny	-	-	-	-	-
Mr J Starink	-	-	-	-	-
Mr PR Sims	-	-	-	-	-
Mr RS Caren	-	-	-	-	-
	13,628,124	-	-	100,000	13,728,124

* Net change refers to shares purchased or sold during the financial year.

14. TRADE AND OTHER PAYABLES (CURRENT)

		CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Other payables	799,863	396,193	150,622	139,530
Related party payables ( b) :
Other related parties	-	61,984	-	61,984
	799,863	458,177	150,622	201,514

(a) Fair value

Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

(b) Related party payables

For terms and conditions relating to related party payables refer to note 18.

(c) Interest rate, foreign exchange and liquidity risk Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in note 2(v).

15. PROVISIONS

	Annual leave$	Total$
CONSOLIDATED
At 1 July 2007	38,301	38,301
Arising during the year	35,823	35,823
Utilised	(15,796)	(15,796)
At 30 June 2008	58,328	58,328
Current 2008	58,328	58,328
Non-current 2008	-	-
	58,328	58,328
Current 2007	38,301	38,301
Non-current 2007	-	-
	38,301	38,301
PARENT
At 1 July 2007	11,476	11,476
Arising during the year	25,324	25,324
Utilised	(15,557)	(15,557)
At 30 June 2008	21,243	21,243
Current 2008	21,243	21,243
Non-current 2008	-	-
	21,243	21,243
Current 2007	11,476	11,476
Non-current 2007	-	-
	11,476	11,476

16. ISSUED CAPITAL AND RESERVES

	CONSOLIDATED		PARENT
Ordinary Shares	2008$	2007$	2008$	2007$
Issued and fully paid	29,550,495	25,409,780	29,550,495	25,409,780

	CONSOLIDATED		PARENT
	Shares	$	Shares	$
Movement in ordinary shares on the issue
At 1 July 2006	232,851,926	22,658,274	232,851,926	22,658,274
Issued on 7 February 2007 for cash on exercise ofshare options at 9 cents each	6,000	540	6,000	540
Issued on 1 May 2007 for cash at 10.9 cents each	26,666,666	2,895,754	26,666,666	2,895,754
Issue costs associated with capital raising	-	(144,788)	-	(144,788)
At 1 July 2007	259,524,592	25,409,780	259,524,592	25,409,780
Issued on 31 December 2007 for cash on exerciseof share options at 9 cents each	33,674,180	3,030,676	33,674,180	3,030,676
Issued on 26 February 2008 in accordance with anemployment contract for nil consideration	500,000	-	500,000	-
Issued on 27 June 2008 for cash at 9.3 cents each	12,655,553	1,181,290	12,655,553	1,181,290
Issue costs associated with capital raising	-	(71,251)	-	(71,251)
At 30 June 2008	306,354,325	29,550,495	306,354,325	29,550,495

Options	2008 Number	2008 WAEP*	2007 Number	2007 WAEP
Outstanding at the beginning of the year	83,232,393	0.11	80,988,393	0.11
Granted during the year	4,000,000	0.16	2,250,000	0.15
Exercised during the year	(33,674,180)	(0.09)	(6,000)	(0.09)
Expired during the year	(24,558,213)	(0.10)	-	-
Outstanding at the end of the year	29,000,000	0.14	83,232,393	0.11

* WAEP refers to weighted average exercise price

(a) Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

There were no changes in the Group's approach to capital management during the year.

Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.

16. ISSUED CAPITAL AND RESERVES (continued)

(b) Share-based payments

On 5 February 2008, the company stockbrokers Fox Davies Holdings Limited and Seymour Pierce Limited were granted 2,000,000 options each with an exercise price of £0.07 on or before 15 December 2011.

Using the Binomial Tree option valuation, the fair value of the options was calculated. The model takes into account share price volatilities. The following inputs were used:

Strike price	A$ 0.15
Stock price	A$ 0.10
Valuation date	05/02/2008
Expiry date	15/12/2011
Volatility	70%
Risk free rate	6.75%
Value per option	A$ 0.0484
Number of options	4,000,000
Value of options	A$ 193,600

The value of options issued was fully expensed at 30 June 2008.

Other Reserves		CONSOLIDATED		PARENT
	Option reserve$	Foreigncurrencytranslation$	Total$	Option reserve$	Foreigncurrencytranslation$	Total$
At 1 July 2006	77,827	-	77,827	77,827	-	77,827
Share based
payment	60,975	-	60,975	60,975	-	60,975
At 30 June 2007	138,802	-	138,802	138,802	-	138,802
Currency translation
differences	-	812,931	812,931	-	-	-
Share based
payment	193,600	-	193,600	193,600	-	193,600
As at 30 June 2008	332,402	812,931	1,145,333	332,402	-	332,402

Nature and purpose of reserves

Option reserve

The option reserve is used to record items recognised as expenses on valuation of share options.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the net investment hedged in these subsidiaries.

17. COMMITMENTS AND CONTINGENCIES

Operating lease commitments - Group as lessee

The Group has entered into commercial leases for office accommodation in Perth, Australia and Cairo Egypt.

Perth Office Lease

The property lease is a non-cancellable lease with a five year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by the lower of CPI or 5% per annum. An option exists to renew the lease at the end of the five year term for an additional five years.

Cairo Office Lease

The property lease is a non-cancellable lease with a two year term, with rent payable monthly in advance.

Operating Lease Commitments

	CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Within one year	140,925	114,612	123,704	96,000
After one year but not more than five years	281,327	328,282	281,327	314,323
More than five years	-	-	-	-
	422,252	442,894	405,031	410,323

Capital commitments

There were no capital commitments at reporting date.

18. RELATED PARTY DISCLOSURE

The consolidated financial statements include the financial statements of Gippsland Limited and the subsidiaries listed in the following table:

	Country of	Equity interest (%)		Investment ($)
	incorporation	2008	2007	2008	2007
Abutan Pty Ltd	Australia	100	100	100	100
Tantalum International Pty Ltd	Australia	100	100	100	100
Here2win.com Pty Ltd	Australia	100	100	100	100
Nubian Resources plc	United Kingdom	100	100	27,388	5
Tantalum Egypt JSC	Egypt	50	50	-	-
Nubian Resources JSC	Egypt	100	-	-	-
				27,688	305

Gippsland Limited is the ultimate Australian parent entity and ultimate parent of the Group.

18. RELATED PARTY DISCLOSURE (continued)

The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year:

	CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Eco International Pty Ltd – a company controlled
by Mr RJ Telford received management fees.	260,211	207,069	260,211	207,069
Mandu Pty Ltd – a company controlled by
Dr JM Chisholm received geological consulting fees.	237,500	211,054	237,500	211,054
John S Dunlop and Associates Pty Ltd – a
company controlled by Mr JSF Dunlop received
directors and mining consulting fees.	60,412	45,640	60,412	45,640
Ventureworks Pty Ltd – a company controlled by
Mr JD Kenny received director's fees.	38,750	38,333	38,750	38,333
The parent entity, Gippsland Limited, has made
loans to its controlled entities. These loans are
interest free, unsecured and at call.	-	-	3,219,535	7,054,347

19. EVENTS AFTER THE BALANCE SHEET DATE

On 25 July 2008, Gippsland Limited ("Gippsland") and Stellar Resources Limited "Stellar" announced that they will merge their respective interests in the Tasmanian Heemksirk Tin project (formerly known as the Zeehan Tin project) into Stellar's subsidiary Columbus Metals Limited ("Columbus"). The agreement is conditional upon Columbus raising a minimum of A$10 million and being admitted to the official list of the ASX on or before 31 December 2008.

20. AUDITORS' REMUNERATION

	CONSOLIDATED		PARENT
	2008$	2007$	2008$	2007$
Amounts received or due and receivable byPKF Australia for:
• an audit or review of the financial report of theentity and any other entity in the consolidatedentity	42,834	-	42,834	-
• other services in relation to the entity and anyother entity in the consolidated entity
(a) tax compliance	2,992	-	500	-
(b) corporate advisory fees	22,697	-	10,902	-
	68,523	-	54,236	-
Amounts received or due and receivable byauditors other than PKF Australia for:
• an audit or review of the financial reportof subsidiary entities	89,037	29,670	12,422	29,670
	157,560	29,670	66,658	29,670

21. JOINT VENTURE

At 30 June 2008, the company has interests in the following joint ventures whose principal activities are the exploration for gold, precious metals and base metals.

Name of Project	Interests		Other Parties
	2008	2007
Heemskirk Tin Deposit – Tasmania, Australia	40%	40%	Stellar Resources Limited – 60%
Seiga – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Um Shashoba – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Haimur – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Nile Valley Block E – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Nile Valley Block A – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Um Garayat – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Koleit – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Um Tiur – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%
Abu Swayel – Wadi Allaqi, Egypt	50%	50%	Egyptian Mineral Resources Authority – 50%

The joint ventures are of the type where initially one party contributes tenements with the other party earning a specified percentage by funding exploration activities. The Joint Venture does not hold any assets and accordingly the Company's share of exploration expenditure is accounted for in accordance with the policy set out in Note 2 (f).

The directors of Gippsland Limited declare that:

a) in the directors' opinion the financial statements and notes on pages 33 to 70, and the remuneration disclosures that are contained in the Directors' report, set out on pages 25 to 28, are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company's and the consolidated entity's financial position as at 30 June 2008 and of their performance, for the year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.
b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a); and
c) the remuneration disclosures that are contained in the Remuneration report in the Directors' report comply with Australian Accounting Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001; and
d) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

At the date of this declaration there are reasonable grounds to believe that the company and the group entities identified in note 18 will be able to meet any obligations or liabilities to which they are or may have become subject to by virtue of the Deed of Cross Guarantee between the company and those group entities pursuant to ASIC Class Order 98/1418.

The directors have been given the declarations by the chief executive officer and chief financial officer for the financial year ended 30 June 2008, required by Section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors.

Dated 30th day of September 2008.

R J Telford Director

Report on the financial report

We have audited the accompanying financial report of Gippsland Limited which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors' declaration for both Gippsland Limited (the company) and the consolidated entity. The consolidated entity comprises both the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor's Opinion

In our opinion:

(a) the financial report of Gippsland Limited is in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2008 and of its performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 2 (b) in the financial report which indicates that the consolidated entity and the parent entity have incurred net losses of $3,425,133 and $5,330,026, respectively during the year ended 30 June 2008. These conditions, along with other matters as set forth in Note 2(b), indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity's and parent entity's ability to continue as going concerns and therefore whether they will realise their assets and extinguish their liabilities in the ordinary course of business, and at amounts that differ from those stated in the financial statements.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 25 to 28 of the directors' report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor's Opinion

In our opinion the Remuneration Report of Gippsland Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Act 2001.

PKF Chartered Accountants

Neil Smith Partner

Dated at Perth, Western Australia this 30th day of September 2008.

ASX ADDITIONAL INFORMATION

Shareholder Information set out as at 17 September 2008

A	TOTAL EQUITY SECURITIES	Shares	Options ex26/5/2012 at13.5 cents	Options ex15/12/2011 at7 pence
	Totals on Issue	306,354,325	25,000,000	4,000,000
B	DISTRIBUTION OF EQUITY SECURITIES
	1 - 1,000	68
	1,001 – 5,000	164
	5,001 – 10,000	246
	10,001 – 100,000	626
	100,001 and over	260	1	2
		1,364	1	2

No of shareholders holding an unmarketable parcel 240

TOP 20 SHAREHOLDERS	Number	%
1 International Finance Corporation	25,000,000	8.16
2 ANZ Nominees Limited	17,735,143	5.79
3 Taveroam Pty Ltd	16,600,000	5.42
4 Situate Pty Ltd	14,750,000	4.81
5 Eco International Pty Ltd	13,256,985	4.33
6 King Town Holdings Pty Ltd	12,000,000	3.92
7 Barclayshare Nominees Limited	7,668,971	2.50
8 L R Nominees Limited	7,667,682	2.50
9 Smith & Williamson Nominees Limited	7,200,000	2.35
10 Mr Robert John Telford & Robin K Telford	6,869,461	2.24
11 TD Waterhouse Nominees (Europe) Limited	6,390,188	2.09
12 Alsanto Nominees Pty Ltd	6,390,000	2.09
13 Pershing Nominees Limited	5,834,444	1.90
14 Starvest PLC	4,500,000	1.47
15 HSBC Custody Nominees	4,329,600	1.41
16 Sunvest Corporation Limited	4,266,665	1.39
17 The Bank of New York (Nominees) Limited	3,522,222	1.15
18 HSBC Marking Name Nominee (UK) Limited	2,611,111	0.85
19 HSBC Global Custody Nominee (UK) Limited	2,331,166	0.76
20 Mandu Superannuation Fund Pty Ltd	2,320,000	0.76
	171,243,638	55.90

ASX ADDITIONAL INFORMATION

D	UNLISTED OPTION HOLDERS	Number	Exercise Price	Expiry
	International Finance Corporation	25,000,000	13.5 cents	26/05/2012
	FD Holdings Ltd	2,000,000	7 pence	15/12/2011
	Seymour Pierce Limited	2,000,000	7 pence	15/12/2011

E	SUBSTANTIAL SHAREHOLDERS		Number	%
	Situate Pty Ltd, Taveroam Pty Ltd and RW Beale		31,500,000	10.28
	International Finance Corporation		25,000,000	8.16
	Eco International Pty Ltd and Mr Robert John Telford & Robin KTelford		20,126,446	6.57
	ANZ Nominees Pty Ltd		17,735,143	5.79

F VOTING RIGHTS

Under the Company's constitution, all ordinary shares carry one vote per share without restriction. Options over ordinary shares do not carry any voting rights.

G EXPLORATION INTERESTS

As at 25 September, the company has an interest in the following tenements:

Country	Project	Tenement	Status	Interest
Egypt	Abu Dabbab	Exploitation Licence 1658	Granted	50%
Egypt	Abu Dabbab	Exploitation Licence 1659	Granted	50%
Egypt	Nuweibi	Exploitation Licence 1785	Granted	50%
Egypt	Wadi Allaqi - Seiga	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi - Shashoba	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Haimur	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Garayat	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Koleit	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Nile Valley A	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Nile Valley E	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Abu Swayel	Exploration Licence1	Granted	50%
Egypt	Wadi Allaqi – Um Tiur	Exploration Licence1	Granted	50%
Eritrea	Adobha	Application2	Pending	90%
Eritrea	Adobha	Application2	Pending	90%
Eritrea	Adobha	Application2	Pending	90%
Australia	Heemskirk (Tasmania)	Retention Licence No.5/1997	Granted	40%

Notes:

1 Tenements granted subject to an agreement with the Egyptian Government (EMRA) dated 21 June 2004.

2 Applications submitted 20 February 2008.

Notes

OFFICE ADDRESS 207 Stirling Highway, Claremont WA 6010, Australia POSTAL ADDRESS PO Box 352, Nedlands WA 6909, Australia TELEPHONE +61 8 9340 6000 | FACSIMILE +61 8 9340 6060 | EMAIL [email protected]

AI assistant

STREAMPLAY STUDIO LIMITED — Annual Report 2008

65841_rns_2008-10-14_9871311a-a658-429a-b4c0-eea895439a63.pdf

2008 ANNUAL REPORT

ABN 31 004 766 376

Contents

annual Report 2008

Corporate Directory

Abu Dabbab (tantalum-tin-feldspar)

Wadi Allaqi (gold, copper-nickel)

Heemskirk (tin)

operations – abu Dabbab

Off-take Agreement

Reserves & Resources

Process improvements

exploration

Wadi Allaqi

Eritrea

abu Dabbab project finance

Review of Operations

Abu Dabbab - Egypt

Introduction

Ten year tantalum Off-take agreement

Project finance

Feasibility Study Up-date

Site access and road construction

Tantalum resource up-grade drilling

Table 1: Abu Dabbab Mineral Resource update July 2008 (100g/t Ta2 O5 cut-off)

Pit optimisation and Ore Reserve up-grade

Table 2: Abu Dabbab Ore Reserves as at August 2008

Table 3: Remaining Mineral Resources exclusive of the Ore Reserve

Mine survey grid

Review of Operations

NUWEIBI - Egypt

Resources

Table 3: Nuweibi mineral resources

Wadi Allaqi - Egypt

Seiga prospect

Abu Swayel

Review of Operations

Table 6: Abu Swayel - anomalous results from TEM conductor

Adobha Base Metal Gold Project - Eritrea

Heemskirk tin project - Tasmania

TOTAL MINERAL RESOURCES - AUSTRALIA

Heemskirk– Tasmania (Gippsland 40% free carried interest)

TOTAL ORE RESERVES – EGYPT (inclusive of Mineral Resources)

Financial statements

GIPPSLAND LIMITED AND CONTROLLED ENTITIES ABN 31 004 766 376

DIRECTORS

COMPANY SECRETARY

PRINCIPAL ACTIVITIES

OPERATING RESULTS

Dividends

Review of Operations

Financial Position

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

AFTER BALANCE DATE EVENTS

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

ENVIRONMENTAL ISSUES

INFORMATION ON DIRECTORS

Robert John Telford - Chairman (Executive) AWAIT (Chem), MRACI

John Morrison Chisholm - Director (Executive) BSc (Hons), PhD, FAusIMM, FAIG

Jon Starink – Director (Executive) BSc (Hons), BChemE(Hons), MApplSc, FAusIMM, FIEAust, FIChemE, MRACI, MTMS, CPEng, CChem, CSci

John Stuart Ferguson Dunlop – Director (Non-executive) BE, M Eng Sc, P Cert Arb, CP, FAusIMM, FIMMM,

MSME, MCIMM, MMICA

John Damian Kenny – Director (Non-executive) B Com (Hons), LLB

remuneration report (auDiteD)

Remuneration Policy

Directors' Report

KEY MANAGEMENT PERSONNEL REMUNERATION

2008

2007

Options issued as part of remuneration for the year ended 30 June 2007

Options Granted As Remuneration

2007

Meetings of Directors

Indemnifying Officers or Auditor

Options

Proceedings on Behalf of Company

Non-audit Services

STREAMPLAY STUDIO LIMITED Annual Report 2008