STREAMPLAY STUDIO LIMITED — Capital/Financing Update 2011

Oct 6, 2011

7 October 2011

ORDERS PLACED FOR ABU DABBAB ALLUVIAL TREATMENT PLANT

The Directors of Gippsland Limited ('Gippsland' or 'the Company') [ASX: GIP, FRA: GIX] are pleased to announce that orders have now been placed for two modular IE‐TEC HPC‐30 units which will be utilised to process high grade alluvial material at the Abu Dabbab alluvial tin deposits (the "Abu Dabbab Alluvial Project").

In August the Board agreed to implement the project subject to approval by the Board of Tantalum Egypt JSC ("TE") and finalising financing arrangements. This followed completion of a comprehensive engineering study and economic evaluation of the opportunity and a program of trial mining.

Initially the Continuous Process route was selected with the Base Case scenario involving the gravity plant processing of only high grade feed stocks and the stockpiling of lower grade materials for later treatment or processing through the Abu Dabbab hard rock plant in due course. The Company has re‐visited the preferred processing route and decided that the Batch Process Option, being a gravity circuit which would involve single stage sequential batch processing using a single unit process with intermediate product stockpiling, provides the best option.

The entire mining and processing program will be financed out of the Company's existing cash reserves. The initial alluvial mining program will now target only the high grade portions of the Wadi Quaria deposit and to maximise efficient utilisation of available processing capacity, only the ‐6mm fraction will be processed, with rougher tailings stockpiled.

Mining and processing operations are scheduled to commence in March 2012.

Under the base case, processing operations will be completed within seventeen months from the start of operations.

Economic Analysis

The project is forecast to be cash flow positive one month after operations commence, that is April 2012 and is forecast to generate US$2.25 million, after costs, in the 6 months from April to September 2012 (US$3.5 million for the entire 17 month project life). Breakeven is anticipated approximately 10 weeks after the commencement of operations.

The capital and pre‐production mining costs are now estimated to total US$0.6 million. Orders have been placed and the units should be dispatched prior to the end of the year. Allowing for two months sea freight, the units are expected to be on site in February 2012.

For the purpose of calculating cash flow, the realised price for tin‐in‐concentrate was assumed to be US$14,700 per tonne of tin based on the prevailing price of US$20,000 per tonne of tin metal.

Revenue assumptions include:

• a US$1,500 per tonne concentrate smelter charge
• a 5% gross revenue grade discount
• concentrate sea transport to smelter of US$5,000 per container including packaging
• receipt of payment one month after dispatch

The key financial assumptions underpinning the economic evaluation are presented below. Should one or more of these assumptions not be achieved the project returns may differ from the estimates.

In arriving at the estimated project cash flow:

• no provision was included for residual plant value at project completion;
• no value was attributed to the opportunity to exploit other alluvial tin deposits already identified by the Company;
• no value has been ascribed to mineralised materials that will be stockpiled and which material is available for future treatment through the nearby Abu Dabbab hard rock plant; and
• no value has been ascribed to the stockpiled screened materials which are expected to be utilised as construction materials for the hard rock plant TSF.

Geology & Resource Estimates

A review of exploration of the Abu Dabbab alluvial deposits, resource estimation and a classification of the mineral resource estimate in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves, December 2004 (The JORC Code) has been previously published and is summarised in Table 1. Under the revised mining plan, the current intention is to mine only the Wadi Quaria deposit.

Table 1 Abu Dabbab Inferred Resource Summary

Area	Mineralised	Mineralised	Contained	Contained Tin**
	Overburden	Layer	Cassiterite in
			Mineralised
			Layer
	(BCM)	(BCM)	(t)	(kilograms)
Wadi Quaria	293,630	262,770	724	566,000

** tin contained in the mineralised layer. The resource summary was announced on 31 January 2011. Totals may not match due to rounding.

Selective Mining and Mine Schedule

All of the material to be mined is comprised of 'free‐dig' unconsolidated gravel. A sharp grade demarcation between the mineralised waste and scheduled plant feed zone in the profile indicates that selective mining could reduce the volume of material to be processed by approximately 50%. Accordingly it is proposed to selectively mine mineralised waste and scheduled plant feed with the

mineralised waste stockpiled for possible treatment in the latter stages of the Alluvial project or in due course as feed stock for the Abu Dabbab hard‐rock plant.

A mine schedule was developed within the overall criteria of a minimum project duration with priority given to mining of higher grade blocks.

Commencement of mining operations will coincide with the start of processing operations.

The proposed mine schedule is summarised in Figure 1 whilst production estimates for tin metal contained in the scheduled plant feed fraction are presented in Figure 2.

Figure 1 Project Mining Schedule

Figure 2 Monthly Production of Tin Contained in Plant Feed

In‐Field Contract Screening

The selective deportment of tin to finer size fractions provides a simple and effective approach for pre‐concentration of scheduled plant feed.

Operational Considerations

In‐field crushing will not be required as there is no intention to process the +6mm fraction at present. This will represent a significant saving as crushing operations impose significant demands on stockpile management.

The same item of equipment is used for each sequential stage of the process and available equipment can be configured to assume any of the duties as dictated by available feed stock. This permits available productive units to always be used to treat the highest available grade feed stock.

The gravity plant will comprise a series of modular mobile gravity plants which are similar in design and operation as the mobile gravity plant presently being used in the trial mining program. The ability for this equipment to recover cassiterite from the Abu Dabbab alluvials has been demonstrated. Nevertheless, the use of this equipment in the manner proposed is new. Such plants are available "off‐the‐shelf" at reasonable costs per module. As mentioned, orders have been made and the Company anticipates taking delivery on site in February 2012, with commencement of processing in March 2012.

Using modular, mobile plant considerably reduces equipment delivery times, eliminates the need for site preparation and obviates the cost and time for installation. It also provides the opportunity for capital cost recovery at the end of the project and facilitates the relocation of the process plant to other sites. Production rates can be varied at will by varying the number of production units employed. Routine maintenance simply involves taking an individual unit off‐line without impacting overall operations. In terms of future disposal, each unit could be sold separately. As the plant consists of a number of identical units, the variety and number of maintenance spares required is relatively low.

The existing trial mining plant will be used for cleaner and re‐cleaner operations.

Mining and Screening Operations

To reduce project capital cost, it is intended that mining, on‐site dry screening, stockpile management, load and haul to the processing plant and in‐plant stockpile retrieval as well as campaign crushing will be done by contractors. Quotations for this work have been sought from the contractor presently engaged by the Company.

As the plan is only to process a single size fraction, previously identified heightened sensitivities to contract load and haul rates have been reduced.

Water

Operations conducted in the field must use fresh water in order to avoid possible ground water contamination. Consistent with the driving concepts to minimise capital expense and maximise operational simplicity, it is intended to rely on external service providers to the extent possible. In that context, it is not intended to establish an on‐site desalination facility. Instead, it is intended to rely exclusively on purchased water.

For the purpose of estimating operating expense, it has been assumed that process tailings will retain 20% moisture by weight after dewatering and stockpile drainage. In view of the sandy nature of all of the material and the virtual absence of fine material, this is regarded as achievable.

Water consumption was calculated on the basis of total gravity plant throughput. The economic evaluation was based on water priced at US$3.50 per kilolitre delivered to site as per supplier quotation. Availability and capacity to supply the project has been confirmed. At full capacity under the preferred Option, the Gravity Plant requires 2,300 kilolitres of make‐up water per month.

Power

Power was priced assuming fuel consumption at a rate of 0.3 litres diesel/kWhr and a delivered diesel price of US$0.95 per litre (equivalent to US$0.285 per kWhr).

It should be noted that the fuel price assumption is particularly conservative as Egyptian fuel prices are presently subject to generous Government subsidies as a result of which the present price is approximately US$0.20 per litre. The significantly higher fuel price assumption was made in order to accommodate a possible change of policy as regards fuel subsidies for the mining and manufacturing sectors. Such changes have been mooted although not yet implemented.

Capital Cost Estimates

The capital cost estimates for process plant and equipment are based on current vendor quotations. The modular HPC‐30 units which comprise 78% of the total capital cost have been ordered and as such the prices are known.

As regards power generation, the overall power requirement is not high and it is intended to purchase a mobile generator for the wet plant. An allowance equal to US$1,000 per installed kilowatt has been included in the capital cost estimates.

Site preparation is not required and the only site works to be undertaken involves establishing a clean and a dirty process water pond with 4,000 cubic meter capacity each. These will be lined with plastic to minimise seepage loss.

For and on behalf of the Board

Ian Gandel Chairman

For further detail, contact info@gippslandltd.com

Suite 4, 207 Stirling Highway Claremont WA 6010 Australia Phone +61 8 9340 6000

Note:

In accordance with Listing Rule 5.6 of the Australian Stock Exchange Limited, 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. Dr Chisholm has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr Chisholm consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.