STREAMPLAY STUDIO LIMITED — Board/Management Information 2015

Jun 4, 2015

Suite 3, 11 Sheppard Way PO Box 2277 Marmion WA 6020 Marmion WA 6020 Australia Australia t: +61 8 6102 2609 e: info@gippslandltd.com w: www.gippslandltd.com

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Abu Dabbab Status Report

Release Date: 5 June 2015

The Board of Gippsland Ltd (ASX:GIP) (the “Company”) provides further information in regard to the tenure issue affecting its Egyptian investment, as most recently reported in the Gippsland Quarterly Report dated 30 April, 2015.

In summary, there have been no significant developments since that Report. The Company is receiving legal advice from its Australian and Egyptian legal counsel in relation to claims made by the Egyptian Company for Mineral Resources (“ECMR”), the Company’s 50% partner in the Abu Dabbab Tantalum-TinFeldspar Project (the “Project”), to the effect that the Company has abandoned its Egyptian operations. The Company disputes these claims.

ECMR is the investment vehicle of the Egyptian Government, and in light of the fundamental sovereign risks currently impacting the Company’s major asset, the Directors consider that the suspension of trading in the Company’s shares should continue.

The Company provides further information concerning the relationship between the Company and ECMR:

1. ECMR Dispute

1.1 Background

The Company announced a revised Project development strategy (the “400K Plan”), and a conditional financing arrangement for the Project, on 26 February 2015 (refer ASX announcement 26 February 2015: “Conditional Financing Agreement for Abu Dabbab”).

The 400K Plan and financing arrangements were presented to ECMR at meetings in Egypt in March 2015.

ECMR expressed concerns in relation to the time taken to commence the Project since the publication of the first feasibility study in 2004. In a letter to the Egyptian Minister of Petroleum and Mines, and the Chairman of ECMR, the Company committed to commence the Project works by mid-July 2015 or, failing that, the Company would relinquish its interest in the Project.

The 400K Plan is a staged development strategy, with first production of tantalum and tin achievable within 12 months of starting capital works by utilising the equipment, infrastructure, labour and service contracts from the alluvial tin operation situated on the Abu Dabbab site which ceased operations in September 2014 (“Stage 1”). The 400K Plan offers reduced execution risk, and was primarily developed to facilitate financing of the Project. It solicited financing and investment interest from several parties.

In conjunction with the presentation of the 400K Plan proposal to ECMR, the Company entered into a conditional financing arrangement, to finance the US$7 million capital expenditure for Stage 1, in return for a 50% interest in the Company’s 100% subsidiary, Tantalum International Pty Ltd (“TIPL”). TIPL holds the Company’s 50% interest in the Project, as illustrated in Figure 1.

This investment was subject to the satisfaction of customary conditions, including the receipt of confirmation, by way of letters, from each of ECMR, and the Egyptian Ministry of Investment

1 Status Report-FINAL

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(“GAFI”), that Tantalum Egypt JSC (“TE”) was in good standing. GAFI is the regulatory authority for TE, and TE holds the Exploitation Licences at Abu Dabbab, as illustrated in Figure 1.

GAFI has approved TE’s renewal of its work permit for the period 1 January 2015 to 31 December 2015, effectively satisfying the GAFI condition precedent.

As regards the ECMR condition precedent, the Company had received verbal assurances of support from ECMR representatives on the TE Board and from the ECMR Chairman, and anticipated the required support letter from ECMR would follow.

Despite ECMR’s verbal assurances, following a meeting between the Chairman of ECMR and the Chairman of TE (who was also the Company’s representative on the TE Board), the Company became aware, on 26 March 2015, that ECMR was seeking ways to dissolve TE, and to reissue the Exploitation Licences to a third party, although no formal notice to that effect has been received.

The Company requested urgent clarification of ECMR’s intentions from ECMR. ECMR did not respond to the Company’s request, and has not responded to the Company’s further requests to date, the latest on 11 May 2015.

As the result of ECMR’s unwillingness to engage with the Company, the Company suspended further funding into TE.

The Company considers (and ECMR has refused to deny) that Egypt, through ECMR and the Egyptian Mining and Resources Authority (“EMRA”), is taking measures to gain full control of TE’s Exploitation Licences and the Project.

These developments were completely unexpected in the context of meetings in Cairo through midMarch 2015 where the Company was able to present the Project as “the closest it has ever come to going into production”. Indeed, whilst there were clearly subsisting frustrations in ECMR concerning the long time-line to development, and the poor performance of the alluvial tin operation, the Company had been complimented by representatives of ECMR for the more consultative and collaborative approach adopted over the past 12 months in the joint venture relationship.

As noted above, the Company is seeking both international treaty based, and local Egyptian law, advice regarding the extent to which the Company may be entitled to claim in response to such actions. Given the potential consequences of not continuing to fund TE, the Directors requested a suspension of trading of the Company’s shares on the ASX pending some clarity or resolution of the matters threatening the Company’s ongoing interest in the Project.

1.2 Current Status

To date the Company has focussed on direct and confidential discussions with ECMR, EMRA and relevant Egyptian Government agencies to maximise the prospects of achieving a positive outcome on this dispute with ECMR. Without ECMR’s support, the Company is not able to procure the required investment funding. The current situation is that:

• the financier has reconsidered the investment, and the Company would need to make a fresh approach to this financing opportunity when the prevailing investment climate changes; and

• ECMR has not demonstrated any preparedness to either discuss, or resolve, the situation.

The Company considers ECMR’s present unwillingness to engage, and, accordingly, the Company’s ability to develop the Project, is the direct result of intense pressure on EMCR from a high sovereign authority in Egypt seeking to gain full control of TE’s Exploitation Licences and the Project. The Company has firsthand information to support this view.

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The Company and TIPL continue to conduct themselves and operate in a manner consistent with remaining in Egypt and committed to developing the Project.

ECMR has stated that it is unwilling to further consider the 400K Plan. It has put forward the view – despite having not seen or obviously considered the complete, detailed 400K Plan – that it does not meet international standards, and that the initial investment of US$7 million is too low.

Accordingly, the Company has on several occasions re-affirmed to ECMR:

• (a) that the 400K Plan meets international standards for an operation of this kind;

• (b) the initial investment of US$7 million is for Stage-1 only, and does not include expenditure on stages 2 and 3 of the 400K Plan; and

• (c) that the staged approach mitigates many technical risks and marketing risks associated with the tantalum concentrate and feldspar product.

The Company acknowledges the obligations of TE to its Egyptian employees and service providers during this period, however the Company is not prepared to contribute further shareholder funds until the dispute is resolved.

Resuming the Project development in accordance with the 400K Plan remains the Company’s preferred option, and the Company has invited ECMR to regularise their relationship accordingly. The Company is, in parallel, pursuing the protection of its investment through all available legal avenues.

The Board considers that the Company’s shares should remain suspended at this time.

2. Other Matters

The Board is focussed on a debt and capital restructuring process as the first step toward recapitalising the Company on a high priority basis. Additional funding, if forthcoming, would be largely directed toward new mineral opportunities. This will provide the Company’s shareholders other opportunities rather than just reliance on the outcome of a legal dispute in Egypt.

Discussions with key creditors and potential financiers are in progress.

The Company will provide further updates as new information comes to hand.

Michael Rosenstreich (Chairman) www.gippslandltd.com

• T: +61 8 9340 6000

• E: info@gippslandltd.com

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Figure 1. Abu Dabbab Project ownership structure

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