STREAMPLAY STUDIO LIMITED — Capital/Financing Update 2011

Jul 21, 2011

SUPPLEMENTARY PROSPECTUS

IMPORTANT NOTICE

This Supplementary Prospectus contains particulars of changes to and supplements the prospectus dated 12 July 2011 ("Prospectus") issued by Gippsland Limited (ABN 31 004 766 376). This Supplementary Prospectus is dated 22 July 2011 and was lodged with the Australian Securities and Investments Commission ("ASIC") on that date. Neither ASIC nor ASX take any responsibility for the contents of this Supplementary Prospectus.

The Supplementary Prospectus must be read together with the Prospectus. To the extent of any inconsistency between the Prospectus and this Supplementary Prospectus, the provisions of this Supplementary Prospectus will prevail. Unless otherwise indicated, terms defined and used in the Prospectus have the same meaning in this Supplementary Prospectus.

This Supplementary Prospectus and the Prospectus are important documents that should be read in their entirety. If you have any questions about the Shares being offered under the Prospectus or any other matter, you should consult your professional advisers.

SECTION 1 AMENDMENTS TO THE PROSPECTUS

The Company is issuing this Supplementary Prospectus to provide Shareholders with supplementary disclosure to clarify the obligations of the nominee. The Company wishes to clarify the obligations of Patersons as the nominee appointed by the Company pursuant to ASX Listing Rule 7.7 and section 615 of the Corporations Act, and subject to ASIC approval of such appointment being obtained, to arrange the sale of the Rights which would have been offered to Excluded Shareholders had they been entitled to participate in the Rights Issue.

The sub-section of Section 1.14 headed 'Nominee' is replaced with the following:

Nominee

For the purposes of ASX Listing Rule 7.7 and section 615 of the Corporations Act, and subject to ASIC approval of such appointment being obtained (and in the event that ASIC approval of the nominee appointment is not obtained, ASIC approval of a replacement nominee appointed by the Company), the Company has appointed Patersons as nominee to arrange the sale of the Rights which would have been offered to Excluded Shareholders had they been entitled to participate in the Rights Issue and to account to the Excluded Shareholders for their proportion of the sale proceeds net expenses.

SECTION 2 STATUS OF THE RIGHTS ISSUE, THE OFFER AND APPLICATIONS

All other details in relation to the Prospectus, the Rights Issue and the Offer remain unchanged and accordingly the Prospectus, which should be read in its entirety with this Supplementary Prospectus, and the Entitlement and Acceptance Form accompanying the Prospectus provide the basis for and the means by which Eligible Shareholders may accept all or part of their Entitlement under the Rights Issue. Please see the Prospectus for information on how Eligible Shareholders may participate in the Rights Issue.

This Supplementary Prospectus will be despatched to Shareholders with the Prospectus and accordingly the Entitlement and Acceptance Form accompanying the Prospectus should be used by Eligible Shareholders to accept all or part of their Entitlement under the Rights Issue.

The timetable set out on page 2 of the Prospectus remains unchanged.

The Supplementary Prospectus must be read together with the Prospectus dated 12 July 2011.

SECTION 3 DIRECTORS' RESPONSIBILITY STATEMENT & CONSENT

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Supplementary Prospectus are not misleading or deceptive and that in respect to any other statements made in this Supplementary Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Supplementary Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Supplementary Prospectus with the ASIC, or to the Directors' knowledge, before any issue of New Shares pursuant to the Prospectus or this Supplementary Prospectus. This Supplementary Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each Director has consented to the lodgement of this Supplementary Prospectus with the ASIC and has not withdrawn that consent.

Dated: 22 July 2011

________________________________ John Kenny

Director

Please note that all other details in relation to the Prospectus, the Rights Issue and the Offer remain unchanged. The Directors believe that the changes in this Supplementary Prospectus are not materially adverse from the point of view of an investor.

GIPPSLAND LIMITED

ABN 31 004 766 376

PROSPECTUS

For a pro-rata renounceable rights issue of approximately 187,540,415 New Shares on the basis of 3 New Shares for every 10 Shares held on the Record Date at an issue price of $0.027 per New Share, to raise approximately $5,063,591.

The Rights Issue closes at 5.00pm AWST on 11 August 2011.

THIS RIGHTS ISSUE IS UNDERWRITTEN BY PATERSONS SECURITIES LIMITED ABN 69 008 896 311

IMPORTANT NOTICE

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser. An investment in the securities offered by this Prospectus should be considered speculative.

If you sell or have sold or otherwise transferred all your Shares in Gippsland Limited on or before the Record Date, you should send this document, to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. However, this document should not be forwarded or transmitted in or into a country or jurisdiction outside of Australia, New Zealand or the United Kingdom. If you have sold or transferred only part of your holding of Shares you should retain this document.

INDEX

Section 1	DETAILS OF THE OFFER	8
Section 2	CAPITAL STRUCTURE & EFFECT OF THE OFFERS	21
Section 3	RISK FACTORS	28
Section 4	ADDITIONAL INFORMATION	41
Section 5	DEFINED TERMS	65
Section 6	DIRECTORS' RESPONSIBILITY STATEMENT & CONSENT	69
ANNEXURE A

Summary of Important Dates*

Announcement of Rights Issue	12 July 2011
Prospectus lodged with ASIC and ASX; Appendix 3B lodged with ASX	12 July 2011
Notice sent to Shareholders containing information required byAppendix 3B	14 July 2011
"Ex" Date (date Shares quoted ex-rights)	15 July 2011
Rights Trading Commences	15 July 2011
Record Date to determine Entitlements (5.00pm AWST)	21 July 2011
Opening Date/Despatch of Prospectus (9.00am AWST)	27 July 2011
Rights Trading Ends	4 August 2011
New Shares quoted on a deferred settlement basis	5 August 2011
Closing Date for acceptances and receipt of applications under theRights Issue (5.00pm AWST)	11 August 2011
Notification to ASX of Shortfall Shares	16 August 2011
Allotment of New Shares and despatch of holding statements	19 August 2011
Trading on ASX in the New Shares to commence	22 August 2011

*These dates are indicative only. The Directors reserve the right to vary the key dates, to cancel the Offer, to close the Offer early, or to accept late applications, either generally or in a particular case, without prior notice and subject to compliance with the Corporations Act, the Listing Rules and other applicable law..

Key Definitions

Throughout this Prospectus, for ease of reading, various words and phrases have been defined rather than used in full on each occasion and are set out in Section 5 of this Prospectus.

IMPORTANT NOTICE

Shareholders should read this Prospectus in its entirety and, if in doubt, should consult their professional advisers before deciding whether to accept their Entitlements. Shareholders resident in the United Kingdom are recommended to seek their own personal financial advice immediately from their stockbroker, bank manager, solicitor, accountant, fund manager or should consult a person or other independent adviser duly authorised under the United Kingdom's Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities before taking any action.

This Prospectus is dated 12 July 2011. A copy of this Prospectus was lodged with the ASIC on 12 July 2011. No responsibility for the contents of this Prospectus is taken by the ASIC or the ASX. No applications for New Shares will be accepted nor will New Shares be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. New Shares issued pursuant to this Prospectus will be issued on the terms and conditions set out in this Prospectus. An application for New Shares will only be accepted on the "Entitlement and Acceptance Form" accompanying this Prospectus.

This document does not constitute an approved prospectus for the purposes of the United Kingdom's prospectus rules of the United Kingdom's Financial Services Authority and contains no offer of transferable securities to the public within the meaning of sections 85 and 102B of the FSMA or otherwise. This document has not been, and will not be, approved or examined by or filed with the FSA or by any other authority which could be a competent authority for the purposes of the Prospectus Rules.

The Company will apply for the New Shares offered pursuant to this Prospectus to be listed for quotation on the ASX.It is expected that quotation of the New Shares on the ASX will commence on 22 August 2011.

In preparing this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and that certain matters may reasonably be expected to be known to investors and professional advisers who investors may consult. No person is authorised to give any information or to make any representation in connection with the Rights Issue described in this Prospectus. Any information or representation which is not contained in this Prospectus or disclosed by the Company pursuant to its continuous disclosure obligations may not be relied upon as having been authorised by the Company in connection with the issue of this Prospectus.

This Prospectus does not constitute an offer or invitation to acquire securities in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. Neither this document nor the New Shares have been, nor will be, registered under the United State Securities Act of 1933, as amended, or under the securities legislation of any state of the United States of America, or any applicable securities laws of a country or jurisdiction outside of Australia, New Zealand or the United Kingdom. Accordingly, subject to certain exceptions, the New Shares may not, directly or indirectly, be offered or sold within a country or jurisdiction outside of Australia, New Zealand or the United Kingdomor to or for the account or benefit of any national resident or citizen of, or any person located in a country or jurisdiction outside of Australia, New Zealand or the United Kingdom. The distribution of this Prospectus in jurisdictions outside of Australia, New Zealand or the United Kingdom may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

United Kingdom Notice

The offer of New Shares under the Rights Issue is only being made in the United Kingdom to persons who are of a kind described in Article 43(2) (members and creditors of certain bodies corporate) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

The offer of New Shares to Eligible Shareholders, in so far as such offer relates to any Shortfall Shares, is only being made in the United Kingdom to persons who are of a kind described in Article 43(2) (members and creditors of certain bodies corporate) of the Order.

The content of this document has not been approved by an authorised person for the purposes of section 21 of the FSMA. Any investment to which this document relates is available to (and any investment activity to which it relates will be engaged with) only those persons described above. Persons who do not fall within this category should not take any action upon this document, but should return it immediately.

This document and its contents must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person.

Any decision regarding any proposed investment in the Company's securities must be made on the basis of public information on the Company. Reliance solely on this communication for the purpose of engaging in investment activities may expose a person to a significant risk of losing all of the property or other assets invested.

The total consideration of the offer under the Rights Issue and offers made by the Company in the European Economic Area (in which area the Offer is only being made to Eligible Shareholders who have registered addresses in the United Kingdom) in the twelve month period preceding the Closing Date shall be less than €2,500,000 in aggregate. Any applications for Shortfall Shares made by Eligible Shareholders who have registered addresses in the United Kingdom may only be made on the condition that the Directors have a complete discretion to scale-back any such applications on a pro-rata basis to ensure that the total sum for which such Shareholders may subscribe for in Shortfall Shares when aggregated with the total sum for which such Shareholders have already subscribed under the Offer does not exceed a threshold of €2,500,000. Therefore, in accordance with Section 85 and schedule 11A of the FSMA, this document does not constitute an approved prospectus for the purposes of the Prospectus Rules in the United Kingdom and contains no offer of transferable securities to the public within the meaning of sections 85 and 102B of FSMA or otherwise. This document has not been, and will not be, approved or examined by or filed with the FSA or by any other authority which could be a competent authority for the purposes of the Prospectus Rules.

CORPORATE DIRECTORY

DIRECTORS

Ian Jeffrey Gandel Non Executive Chairman

Jon Starink Executive Director

John Stuart Ferguson Dunlop

Executive Director

John Damian Kenny Non Executive Director

SECRETARY

Rowan Caren

REGISTERED OFFICE

Suite 4, 207 Stirling Highway Claremont WA 6010 AUSTRALIA

PRINCIPAL OFFICE

Suite 4, 207 Stirling Highway Claremont WA 6010 AUSTRALIA Telephone: +61 8 9340 6000 Facsimile: +61 8 9340 6060 Website: www.gippslandltd.com Email: info@gippslandltd.com

AUSTRALIAN SOLICITORS

Gilbert + Tobin 1202 Hay Street West Perth WA 6005 AUSTRALIA

UNITED KINGDOM SOLICITORS

Cobbetts LLP 70 Gray's Inn Road London WC1X 8BT UNITED KINGDOM

AUDITORS

Deloitte Touche Tohmatsu Level 14, Woodside Plaza, 240 St Georges Terrace, Perth, 6000, AUSTRALIA Telephone: +61 8 9365 8000

SHARE REGISTRY

Security Transfer Registrars Pty Ltd* 770 Canning Hwy Applecross WA 6153 AUSTRALIA

Telephone: +61 8 9315 2333 Facsimile: +61 8 9315 2233

UNDERWRITER

Patersons Securities Limited Level 23, 2 The Esplanade Perth WA 6000 AUSTRALIA

Telephone: +61 8 9263 1111 Facsimile: +61 8 9325 5123

EXCHANGES

ASX: GIP

DEUTSCHE BORSE: GIX

* This entity has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus. Its name is included for information purposes only.

BRIEF INSTRUCTIONS

Participation in the Rights Issue is open to all Eligible Shareholders (i.e. Shareholders resident in Australia, New Zealand and the United Kingdom on the Record Date – refer to Section 1.14).

What You May Do

The number of New Shares to which you are entitled is shown on the accompanying Entitlement and Acceptance Form. You may:

• accept your Entitlement in full or part;
• sell your Entitlement in full or in part on ASX;
• transfer your Entitlement other than on-market on ASX; or
• allow the whole or part of your Entitlement to lapse.

If You Wish To Take Up All or Part Of Your Entitlement

Complete the accompanying Entitlement and Acceptance Form in accordance with the instructions set out on the Entitlement and Acceptance Form. Forward your completed Entitlement and Acceptance Form, together with your cheque or banker's draft drawn on an Australian bank (denominated in Australian currency) for the amount shown on the Entitlement and Acceptance Form or for such lesser amount as you wish to apply for, so as to reach the Company's Share Registry no later than 5.00pm AWST on 11 August 2011 (except where payment is via BPAY® in which case payment must be made by such earlier time that your own financial institution may implement the electronic payment prior to 5.00pm AWST on 11 August 2011). If you elect to pay via BPAY®, you must follow the instructions for BPAY® set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

If You Wish to Sell All or Part of Your Entitlement on ASX

Complete the accompanying Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of the Entitlement and Acceptance Form and liaise with your stockbroker (payment for your Entitlement, or part thereof, that you wish to sell must be provided to your stockbroker). Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder.

If You Wish to Transfer your Entitlement Other Than On-Market on ASX

Forward a completed standard renunciation or transfer form (obtainable from your stockbroker or the Company's Share Registry) completed by the buyer and yourself and an Entitlement and Acceptance Form completed by the buyer, together with the buyer's cheque or banker's draft drawn on an Australian bank (denominated in Australian currency) so as to reach the Company's Share Registry no later than 5.00pm AWST on 11 August 2011. Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder.

If You Wish to Apply for Shortfall Shares

Complete the accompanying Entitlement and Acceptance Form, including the section marked "Shortfall Shares", in accordance with the instructions set out on the Entitlement and Acceptance Form. Forward your completed Entitlement and Acceptance Form, together with payment for your Entitlement and a separate payment in respect of the Shortfall Shares applied for as a cheque or banker's draft drawn on an Australian bank (denominated in Australian currency), or if paying by BPAY®, the amount must equal the amount shown on your Entitlement and Acceptance Form plus the amount to pay for the Shortfall Shares you are applying for (ie number of Shortfall Shares applying for multiplied by $0.027 per Shortfall Share), so as to reach the Company's Share Registry no later than 5.00pm AWST on 11 August 2011. Please refer to Section 1.10 for further information in relation to Shortfall Shares.

Entitlements Not Taken Up

If you decide not to accept all or part of your Entitlement pursuant to the Rights Issue, you are not required to take any action. The New Shares not accepted will form part of the Shortfall Shares. Any Shortfall Shares not taken up by Eligible Shareholders, as set out in this Prospectus, will be dealt with in accordance with section 1.10 and the Underwriting Agreement (the material terms of which are summarised in Section 4.5).

Section 1 DETAILS OF THE OFFER

1.1 The Offer

This Prospectus is for a pro-rata renounceable rights issue of approximately 187,540,415 New Shares on the basis of 3 New Shares for every 10 Shares held by Eligible Shareholders on the Record Date at an issue price of $0.027 per New Share, to raise approximately $5,063,591 (less expenses of the Rights Issue estimated to be $361,528). In determining Entitlements, any fractional entitlement will be rounded up to the nearest whole number.

The total consideration of the Offer made by the Company in the European Economic Area, in which area the Offer is only being made in the United Kingdom, under the Rights Issue (including the the option for Eligible Shareholders with registered addresses in the United Kingdom to make applications for any Shortfall Shares) and offers made by the Company in the European Economic Area, including the United Kingdom, in the twelve month period preceding the Closing Date will be less than €2,500,000 in aggregate (assuming full subscription for New Shares by Eligible Shareholders and on the condition that any applications for Shortfall Shares made by Eligible Shareholders with registered addresses in the United Kingdom will be scaledback on a pro-rata basis to ensure that the €2,500,000 threshold is not exceeded – this condition has been set to ensure that the Company is not required to produce an approved prospectus in the UK pursuant to section 85 of FSMA).

As at the date of this Prospectus, 625,134,716 Shares are on issue.

Number	Exercise Price	Expiry Date
25,000,000	$0.135	26 May 2012
4,000,000	£0.0665	15 December 2011
17,000,000	$0.15	31 May 2012
10,000,000	$0.08	14 December 2011

The Company also has the following unquoted Options on issue:

Optionholders will not be entitled to participate in the Rights Issue without first exercising their Options and acquiring the resulting Shares, and having them registered in their name in the Share Register, prior to the Record Date.

If all of the Options currently on issue are exercised and the resulting Shares are issued prior to the Record Date, the number of Shares on issue will be 681,134,716 and the number of New Shares that are offered pursuant to this Prospectus will be approximately 204,340,415. If none of the Options are exercised prior to the Record Date, approximately 187,540,415 New Shares will be offered pursuant to this Prospectus.

Any New Shares not taken up by Eligible Shareholders under their Entitlement will form part of the Shortfall Shares (please refer to Section 1.10 for further details). Any Shortfall Shares not taken up will be dealt with in accordance with the Underwriting Agreement (please refer to Section 4.5 for further details).

1.2 Risks

The key risks to which the Company is subject are:

• sovereign and security of tenure risks in Egypt and Eritrea;
• material adverse movements in the commodity prices of tantalum, tin, feldspar and gold;
• determination of the viability of the Abu Dabbab Project; and
• determination of the viability of the Heemskirk Tin Project.

Further details of these and other risks to which the Company is subject can be found in Section 3.

1.3 Rights Trading

Entitlements to New Shares offered pursuant to the Rights Issue are renounceable. This enables Eligible Shareholders who do not wish to subscribe for some or all of the New Shares to which they are entitled under this Rights Issue to sell their respective Rights and also enables Eligible Shareholders and other persons resident in Australia and New Zealand, and certain categories of persons resident in the United Kingdom (Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder), to purchase additional Rights if they wish.

Trading of Rights will commence on ASX on 15 July 2011 and will cease trading on 4 August 2011.

1.4 Underwriting

The Rights Issue is fully underwritten by Patersons Securities Limited. Pursuant to the Underwriting Agreement, the Company will pay Patersons 5% of the total amount sought under the Rights Issue, being approximately $253,000, and a lead manager fee of $20,000.A summary of the material terms of the Underwriting Agreement, including rights of termination, is set out in Section 4.5.

The underwriting is sub-underwritten by Gandel Metals. Gandel Metals is controlled by Ian Gandel, a director of the Company. Pursuant to a sub-underwriting agreement entered into between Patersons and Gandel Metals, Patersons will pay Gandel Metals a fee of 4% of the total amount sought under the Rights Issue. Please refer to Sections 4.5 and 4.6 for further details in this regard

1.5 Purpose of the Rights Issue

The purpose of the Rights Issue is to raise funds for the following:

• exploration programs in Eritrea which are anticipated to include Geophysical Sampling, Versatile Time Domain Electro-Magnetics Airborne Geophysics Surveys, Ground Geophysical Surveys (Gravity and Induced Polarisation) and Reverse Circulation Drilling;
• exploration of the Nuweibi project which is anticipated to include Reverse Circulation Drilling;
• repayment of loan funds;
• working capital; and
• the expenses of the Rights Issue.

The following table summarises the proposed application of funds raised from the Rights Issue.

Item	Description	Amount ($)
1	Exploration of Nuweibi including Reverse Circulation	300,000
	Drilling
2	Loan Funds to Adobha Eritrea for Repayment by	160,000
	Adobha Eritrea of Loan Funds Received from Adobha
	to Partly Fund 2010/2011 Exploration Expenditure in
	Eritrea (see Note 1 below)
3	Repayment of Loan Funds to be Received from	640,000
	Abbotsleigh (see Note 2 below)
4	Eritrea – Balance of 2011/2012 Minimum Exploration	1,867,000
	Expenditure (see Note 3 below) including Ground
	GeophysicalSurveys(GravityandInduced
	Polarisation) and Reverse Circulation Drilling
5	Expenses of the Rights Issue (see Sections 4.7 and 4.8)	361,528
6	Working Capital (see Note 4 below)	1,735,063
Total		5,063,591

Note 1: In the transaction conducted by the Company in preparation for the proposed divestment of the Group's non-Egyptian assets to Adobha (to create a stand-alone entity owned by Shareholders with access to dedicated funding with a view to unlocking the value of the non-Egyptian assets – this divestment is no longer proceeding), Adobha provided loan funds, sourced from Abbotsleigh, to Adobha Eritrea to fund Adobha Eritrea's activities and expenses (in holding, exploring and developing its exploration and prospecting licences) prior to completion of the proposed divestment. The total loan funds available to Adobha from Abbotsleigh was $800,000 and, as at the date of this Prospectus, $400,000 has been drawn-down by Adobha and $160,000 of this amount has been lent to Adobha Eritrea by Adobha.

Note 2: The Company has entered into a loan agreement with Abbotsleigh to borrow $640,000 to assist the Company with funding its exploration activities in Eritrea and for working capital purposes ("New Abbotsleigh Loan"). As at the date of this Prospectus, no funds have been drawn-down by the Company but loan funds are expected to be drawn-down by the Company prior to the receipt of funds raised by this Rights Issue. The Company expects to expend the full amount of the New Abbotsleigh Loan of $640,000 (detailed in Section 4.6 of this Prospectus) on the minimum expenditure commitments with respect to the Company's Eritrean tenements for 2010/2011 (which totals $669,000) referred to in Item 3 of the above table and working capital before completion of the Rights Issue and the receipt of funds raised pursuant to this Rights Issue.

Note 3: This expenditure is the amount payable by Gippsland's 100% owned subsidiary, Adobha Eritrea, in accordance with the work programme for the second year of the Adobha Eritrea Exploration Licence and the estimated amount payable for the first year of a new exploration licence covering the area of the three Adobha Eritrea Prospecting Licences (Gerasi South, Hafta West and Romay) on the basis that this new exploration licence is granted to Adobha Eritrea by the Eritrean Government. If Adobha Eritrea fails to fulfil the minimum expenditure under the work programmes, the Eritrean Ministry of Energy and Mines requires Adobha Eritrea to pay an amount equal to such unfulfilled obligation to the Eritrean Government to satisfy the deficiency. The Eritrean Ministry of Energy and Mines also has the discretion to allow the Company to spend the unspent amount in the following year, or to extend the period for expenditure of the minimum expenditure commitment.

Note 4: Working capital expenditure will be applied towards operational and administration expenditure and costs associated with maintaining the prospecting and exploration licences in good standing. These costs include wages and salaries, occupancy costs, professional consultants' fees, compliance and other reporting costs associated with running an ASX listed company, as well as other typical administration type expenditure.

It is anticipated that these funds will be applied over the next 12 months. The above proposed use of funds is subject to ongoing review and evaluation by the Company and the actual use of funds raised under the Rights Issue may change depending on the outcome of the programs as they proceed.

The independent auditor's review report accompanying the consolidated entity's financial report for the half-year ended 31 December 2010 was unqualified but contained an emphasis of matter paragraph in respect of a material uncertainty regarding the consolidated entity's continuation as a going concern. The auditor drew attention to a note in the consolidated entity's half year financial report with respect to the consolidated entity's net losses after tax and cash outflows and the need for additional funding to be raised.

The note stated that "The Directors have prepared a cash flow forecast for the period ending 31 March 2012 which indicates that the consolidated entity's current cash resources may not meet expected cash outgoings, without additional capital and / or debt funding. The consolidated entity will require approximately $1,200,000 (net of costs) to be raised by no later than September 2011 to fund its current operations through to 31 March 2012. The consolidated entity is currently evaluating capital raising and/or debt funding opportunities." The Rights Issue will raise sufficient additional funding to meet the anticipated shortfall of funds referred to in the abovementioned note accompanying the consolidated entity's half year financial report for the half-year ended 31 December 2010. The Company's current cash resources and the additional capital proposed to be raised by the Rights Issue are sufficient to meet the Company's current and approved future activities. However, the Company will need to raise further additional capital and / or debt funding if it decides to progess other not yet approved activities and proposals (see Section 1.6 for more details in this regard).

1.6 Strategy Update

The Company is currently investigating and conducting preliminary discussions with a number of financial institutions in respect of seeking proposals for the provision of early stage 'bridging' debt project financing to develop the Company's Abu Dabbab Tantalum/Tin/Feldspar Project in Egypt. Such investigations and discussions are at an early and preliminary stage and no conclusions have been made by the Company. It is uncertain whether any proposal will be received by the Company which is commercially acceptable to the Company, or if a proposal will be accepted and executed by the Company in the near future or at all. It is possible that any proposal accepted and executed by the Company may be conditional on a further equity fundraising which may, if conducted, have a dilutive effect on the interests of Shareholders.

In the event that a finance proposal is accepted and executed by the Company, it will issue an announcement to ASX in fulfilment of its continuous disclosure obligations and will provide a further strategy update if appropriate. Please see the risk factor set out in Section 3.2(w) for more information on the risks to Shareholders of the Company raising additional equity or debt capital.

1.7 Opening and Closing Dates

The Rights Issue will open for receipt of acceptances at 9.00am AWST on 27 July 2011.

The Rights Issue will close at 5.00pm AWST on 11 August 2011 (except where payment is via BPAY® in which case payment must be made by such earlier time that your own financial institution may implement the electronic payment prior to 5.00pm AWST on 11 August 2011) or such later date as the Directors, in their absolute discretion and subject to compliance with the Listing Rules, may determine and provided that the Company gives ASX notice of such a change at least 6 Business Days prior to the Closing Date.

1.8 Brokerage and Commission

No brokerage or stamp duty will be payable by investors in respect of a subscription for New Shares under this Prospectus or in respect of the Company issuing New Shares under this Prospectus.

Shareholders should note that brokerage may be incurred upon the sale of Entitlements or the purchase of additional Entitlements. Shareholders should liaise with their stockbroker in this regard.

1.9 Entitlements and Acceptance

Participation in the Rights Issue is open to all Eligible Shareholders (ie Shareholders with a registered addressed in the Share Register in Australia, New Zealand or the United Kingdom on the Record Date – refer to Section 1.14 for further details). Eligible Shareholders who accept their Entitlement (in full or in part) acknowledge, warrant, represent and undertake to the Company in the terms set out in Annexure A to this Prospectus.

The number of New Shares to which you are entitled under the Rights Issue (ie your Entitlement) is shown in the Entitlement and Acceptance Form accompanying this Prospectus. In determining Entitlements, any fractional entitlement will be rounded up to the nearest whole number.

Acceptance of Entitlement in Full

If you are an Eligible Shareholder and wish to take up all or part of your Entitlement under the Rights Issue, please complete the Entitlement and Acceptance Form in accordance with the instructions set out on the Entitlement and Acceptance Form.

Partial Acceptance of Entitlement and Sell the Balance

If you are an Eligible Shareholder and wish to take up only part of your Entitlement and to sell the balance on ASX, please follow the instructions set out on the reverse of the Entitlement and Acceptance Form under the section marked "Sale of your Entitlement by your stockbroker in full or in part" and then liaise accordingly with your stockbroker. Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder.

Trading of Rights will commence on 15 July 2011. You must deal with that part of your Entitlement which you do not intend to accept by close of trading on the ASX on 4 August 2011, when Rights trading will cease. Brokerage fees may apply.

Non-Acceptance of Entitlement

If you do not wish to take up any part of your Entitlement under the Rights Issue, you are not required to take any action. If you decide not to accept all or part of your Entitlement, the New Shares not accepted will be dealt with as Shortfall Shares in accordance with Section 1.10.

Shortfall Shares Application

If you wish to take up more than your Entitlement under the Rights Issue, you may apply for Shortfall Shares that may arise under the Rights Issue. See Section 1.10 for more information about Shortfall Shares.

Sale of Your Full Entitlement on ASX

If you wish to sell all of your Entitlement on the ASX, please follow the instructions set out on the reverse of the Entitlement and Acceptance Form under the section marked "Sale of your Entitlement by your stockbroker in full or in part". Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder.

Trading of Rights will commence on 15 July 2011. You must deal with your Entitlement by close of trading on the ASX on 4 August 2011, when Rights trading will cease. Brokerage and registry transfer fees may apply.

Transfer of Entitlement other than On-Market on ASX

If you wish to transfer all or part of your Entitlement to another person or party other than on-market on the ASX, then you must forward the following documents:

• a completed standard renunciation or transfer form (obtainable from your stockbroker or the Company's Share Registry) completed by the buyer and yourself;
• a Entitlement and Acceptance Form completed by the buyer; and
• the buyer's cheque or banker's draft (drawn on an Australian bank and denominated in Australian currency) for the amount due in respect of the New Shares,

to the Company's Share Registry at:

Delivered to	Or by post to
Security Transfer Registrars Pty Ltd	Security Transfer Registrars Pty Ltd
770 Canning Highway	PO Box 535
Applecross WA 6153	Applecross WA 6953
AUSTRALIA	AUSTRALIA

not later than 5.00pm AWST on 11 August 2011 or such later date as the Directors advise. Cheques should be made payable to "Gippsland Limited – Share Issue Account" and crossed "Not Negotiable".

Eligible Shareholders who have registered addresses in the United Kingdom should obtain legal advice in respect of applicable United Kingdom laws if they intend to sell all or part of their Entitlement to a person who is not an Eligible Shareholder.

Acceptance of Terms

All applications for New Shares must be made on the Entitlement and Acceptance Form. Any application will be treated as an offer from the applicant to acquire New Shares on the terms and conditions set out in this Prospectus. The Directors reserve the sole right to reject any applications for New Shares.

(i) Australia or New Zealand

If you are an Eligible Shareholder with an address in Australia or New Zealand registered in the Share Register please ensure the completed Entitlement and Acceptance Form, together with your cheque or banker's draft drawn on an Australian bank (denominated in Australian currency) or BPAY® electronic payment (made pursuant to the instructions detailed on the back of the Entitlement and Acceptance Form), is received by the Company's Share Registry at:

Delivered to Or by post to Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 AUSTRALIA

Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 AUSTRALIA

not later than 5.00pm AWST on 11 August 2011 or such later date as the Directors advise. Cheques should be made payable to "Gippsland Limited – Share Issue Account" and crossed "Not Negotiable".

If paying via BPAY®, applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the applicant to ensure that funds are submitted through BPAY® so that the funds are received by the Company by the Closing Date of 5.00pm AWST on 11 August 2011 or such later date as the Directors advise. If you elect to pay via BPAY®, you must follow the instructions for BPAY® set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

(ii) United Kingdom

If you are an Eligible Shareholder with a registered address in the United Kingdom please ensure the completed Entitlement and Acceptance Form, together with a cheque or banker's draft drawn on an Australian bank (denominated in Australian currency) is received by the Company's Share Registry at:

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 AUSTRALIA

Delivered to Or by post to Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 AUSTRALIA

not later than 5.00pm AWST on 11 August 2011 or such later date as the Directors advise.

Taxation Implications

Shareholders should obtain independent advice on the taxation implications arising out of their participation in the Rights Issue.

Enquiries

If you have any queries regarding your Entitlement, please contact the Company's Share Registry by telephone on +61 8 9315 2333 or contact your stockbroker or professional adviser.

Please note if you do not accept your Entitlement in accordance with the instructions set out above, any Entitlement not accepted will form part of the Shortfall Shares.

1.10 Rights Issue Shortfall Shares

If as an Eligible Shareholder you decide not to accept all or part of your Entitlement pursuant to the Rights Issue, you are not required to take any action in respect of the part of your Entitlement that you are not accepting. Any New Shares not accepted will form part of the Shortfall Shares and will be dealt with in accordance with this Section 1.10 and the terms of the Underwriting Agreement (the material terms of which are summarised in Section 4.5). In these circumstances, Eligible Shareholders will receive no benefit. Accordingly, it is important that they take action to either accept or renounce their Entitlement in accordance with the above instructions.

Entitlements not taken up will become available as Shortfall Shares. Shareholders may, in addition to accepting all of their Entitlement, apply for Shortfall Shares regardless of the size of their present holding. Shareholders may only make an application for Shortfall Shares if they have accepted their maximum Entitlement under the Rights Issue. Eligible Shareholders with a registered address in the United Kingdom may apply for Shortfall Shares subject to the condition that any such applications will be scaled-back on a pro-rata basis to ensure that the maximum amount of the Offer being made under the Rights Issue to Shareholders with a registered address in the European Economic Area is less than the €2,500,000 threshold for the preceding 12 month period from the date of this Prospectus in the event that such applications will exceed the threshold.

It is intended that priority will be given to Eligible Shareholders when dealing with Shortfall applications prior to the Underwriter being allocated any New Shares. If more Shortfall Shares are applied for than are available from the number of New Shares not taken up under the Rights Issue, those Shortfall Applications will be scaled back on a proportional basis taking into consideration the size of the applicant's holding in the Company as at the Record Date (but for Eligible Shareholders with a registered address in the United Kingdom, subject to the scale-back mechanism referred to above), and allocated by the Underwriter following consultation with the Company and in accordance with the Underwriting Agreement. It is possible, particularly if there is an active Rights trading market, that there will be few or no Shortfall Shares available for issue. It is an express term of the Offer that applicants for Shortfall Shares will be bound to accept a lesser number of Shortfall Shares allocated to them than applied for. If a lesser number is allocated to them, excess Application Monies will be refunded without interest.

The Directors and other related parties of the Company may not apply for any Shortfall Shares. However, Gandel Metals, a company controlled by Ian Gandel, as the sub-underwriter to the Rights Issue, may acquire New Shares (following allocation of Entitlements and Shortfall Shares) under the sub-underwriting arrangements summarised in Section 4.6.

If you are an Eligible Shareholder and wish to apply for any Shortfall Shares that may arise under the Rights Issue you should, in addition to completing the section marked "Entitlement or Part Thereof", complete the section marked "Shortfall Shares" on the Entitlement and Acceptance Form in accordance with the instructions set out on the Entitlement and Acceptance Form.

Eligible Shareholders – Australia or New Zealand

Eligible Shareholders resident in Australia or New Zealand are invited to, in completing the Entitlement and Acceptance Form, complete the section marked "Shortfall Shares" in the Entitlement and Acceptance Form and return it, together with a separate cheque or banker's draft drawn on an Australian bank (denominated in Australian currency) in respect of the Shortfall Application, made payable to "Gippsland Limited – Share Issue Account" and crossed "Not Negotiable", to the Company's Share Registry at:

	Delivered to						Or by post to

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 AUSTRALIA

Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 AUSTRALIA

not later than 5.00pm AWST on 11 August 2011 or such later date as the Directors advise.

If paying via BPAY® (for Australian and New Zealand Eligible Shareholders only), applicants should be aware that their own financial institution may implement earlier cut-off times with regards to electronic payment and it is the responsibility of the applicant to ensure that funds are submitted through BPAY® by such earlier time that your own financial institution may implement the electronic payment prior to the Closing Date of 5.00pm AWST on 11 August 2011 or such later date as the Directors advise. If you elect to pay via BPAY®, you must follow the instructions for BPAY® set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

Eligible Shareholders – United Kingdom

Eligible Shareholders resident in the United Kingdom are invited to, in completing the Entitlement and Acceptance Form, complete the section marked "Additional New Shares" on the Entitlement and Acceptance Form and return it, together with a cheque or banker's draft drawn on an Australian bank (denominated in Australian currency), to the Company's Share Registry at:

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 AUSTRALIA

Delivered to Or by post to

Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 AUSTRALIA

not later than 5.00pm AWST on 11 August 2011 or such later date as the Directors advise.

If the total consideration from applications for Shortfall Shares from Eligible Shareholders with registered addresses in the UK would, when aggregated with the total consideration from initial applications for New Shares from Eligible Shareholders with registered addresses in the UK exceed the €2,500,000 threshold, then all such applications for Shortfall Shares will be scaled-back on a pro-rata basis to ensure that the €2,500,000 threshold is not exceeded.

The Offer has been structured such that the maximum amount that can be raised by the Company under the Offer will not exceed the sterling equivalent of €2,500,000. This maximum limit has been set to ensure that the Company is not required to produce an approved prospectus in the United Kingdom pursuant to section 85 of FSMA. The issue of a prospectus in the United Kingdom would considerably increase the costs of the Rights Issue and it would take much longer to complete, as any such prospectus would require the prior approval by the United Kingdom Listing Authority.

Any Shortfall Shares remaining after Shortfall Applications from Eligible Shareholders have been processed will be allocated to the Underwriter in accordance with the provisions of the Underwriting Agreement.

1.11 Issue and Allotment of New Shares

The New Shares are expected to be issued and allotted by no later than 22 August 2011. Until issue and allotment of the New Shares under this Prospectus and quotation of the New Shares on ASX, any Application Monies received by the Company will be held in trust in a separate bank account opened and maintained for that purpose only. Any interest earned on the Application Monies will be for the benefit of the Company and will be retained by it irrespective of whether allotment of the New Shares takes place.

1.12 ASX Listing

The Company will make application to ASX within seven days following the date of this Prospectus for official quotation of the New Shares offered pursuant to this Prospectus.

If approval for official quotation of the New Shares is not granted by ASX within three months after the date of this Prospectus, the Company will not allot or issue any New Shares and will repay all Application Monies (where applicable) as soon as practicable, without interest.

A decision by ASX to grant official quotation of the New Shares is not to be taken in any way as an indication of ASX's view as to the merits of the Company, or the New Shares now offered for subscription.

1.13 No Issue of New Shares after 13 months

No New Shares will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

1.14 Overseas Investors

The Company is of the view that it is unreasonable to make an offer under this Prospectus to Shareholders with a registered address outside of Australia, New Zealand and the United Kingdom ("Excluded Shareholders") having regard to:

• (a) the number of Shareholders registered outside of Australia, New Zealand and the United Kingdom;
• (b) the number and value of the New Shares to be offered to Shareholders registered outside of Australia, New Zealand and the United Kingdom; and
• (c) the cost of complying with the legal requirements and requirements of regulatory authorities in the other overseas jurisdictions.

Accordingly, only Eligible Shareholders are entitled to participate in the Rights Issue and the Company is not required to, and does not, make any offers under this Prospectus to Shareholders with a registered address outside of Australia, New Zealand and the United Kingdom.

The Offer contained in this Prospectus to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not Shareholders on the Record Date are not entitled to apply for any New Shares.

The offer of New Shares under the Rights Issue made in this Prospectus is only being made in the United Kingdom to persons who are of a kind described in Article 43(2) of the United Kingdom's Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (members and creditors of certain bodies corporate).

Nominee

The Company has appointed Patersons, on normal commercial terms, as the nominee, pursuant to ASX Listing Rule 7.7 and section 615 of the Corporations Act and subject to ASIC approval of such appointment being obtained (in the event that ASIC approval of the nominee appointment is not obtained, a replacement nominee approved by ASIC will be appointed by the Company.), for Excluded Shareholders and to arrange the sale of the Rights which would have been offered to Excluded Shareholders had they been entitled to participate in the Rights Issue. The Company will transfer the Entitlements of the Excluded Shareholders to the nominee who will account to those Excluded Shareholders for the net proceeds of the sale of the Entitlement (if any). The nominee will have the absolute and sole discretion, taking into account market conditions for Rights, to determine the timing and the price at which the Entitlement may be sold, to whom and the manner of any such sale. Patersons acknowledges that, pursuant to section 615 of the Act, it has an obligation to sell all the Entitlements transferred to it by Gippsland under the Rights Issue and distribute, through Gippsland or another party appointed by Gippsland, to each of the Excluded Shareholders their respective proportion of the sale net of expenses. Neither the Company nor the nominee will be subject to any liability for failure to sell the Rights or to sell them at a particular price. If, in the reasonable opinion of the nominee, there is no market, or no viable market, for the Rights, or a surplus of sale proceeds over the expenses of sale cannot be obtained for the Rights that would have been offered to the Excluded Shareholders, then such Rights will be allowed to lapse and they will form part of the Shortfall Shares.

1.15 Market Prices of Shares on ASX

The highest and lowest closing market sale prices of Shares on ASX during the three months immediately preceding the date of this Prospectus and the respective dates of those sales were $0.048 on 15 April 2011 and $0.027 on 30 May 2011. The latest available market sale price of Shares on ASX immediately before the date of this Prospectus was $0.030 on 11 July 2011.

1.16 Data Protection and Privacy

The Company collects information about each applicant from the Entitlement and Acceptance Form for the purposes of processing the application and, if the application is successful, to administer the applicant's security holding in the Company.

By submitting an Entitlement and Acceptance Form, each applicant agrees that the Company may use the information in the Entitlement and Acceptance Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Company's related bodies corporate, agents, contractors and third party service providers (including mailing houses), the ASX, ASIC and other regulatory authorities.

If an applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public registers. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's registers is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements. If you do not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process your application.

Section 2 CAPITAL STRUCTURE & EFFECT OF THE OFFERS

2.1 Principal Effects

The principal effects on the Company of the Rights Issue (which is fully underwritten by Patersons and sub-underwritten by Gandel Metals) are as follows:

• (a) the Company will issue 187,540,415 New Shares (assuming no Options currently on issue are exercised and resulting Shares issued and allotted before the Record Date) and the total number of Shares on issue will increase to 812,675,131 Shares;
• (b) following the issue of the New Shares, the Company's cash reserves will increase by approximately $5,063,591 less expenses of the Rights Issue, which are estimated to be approximately $361,528; and
• (c) the equity of Excluded Shareholders and Eligible Shareholders who do not participate in the Rights Issue will be diluted as is evidenced from the figures set out below.

2.2 Capital Structure and Unaudited Consolidated Statement of Financial Position

Capital Structure of the Company

The pro-forma capital structure of the Company following the Rights Issue (assuming no Options currently on issue are exercised) pursuant to this Prospectus is set out below:

Issued Capital – Shares	Number
Existing Shares on issue	625,134,716
New Shares offered for subscription pursuant tothis Prospectus	187,540,415
Total Shares on issue after completion of RightsIssue	812,675,131

The Company also has the following unquoted Options on issue:

Number	Exercise price	Expiry date
25,000,000	$0.135*	26 May 2012
4,000,000	£0.0665*	15 December 2011
17,000,000	$0.15*	31 May 2012
10,000,000	$0.08*	14 December 2011

*The exercise price of these options may be adjusted in accordance with the Listing Rules.

Unaudited Pro-Forma Consolidated Statement of Financial Position

The following is a reviewed consolidated statement of financial position of the Company and its controlled entities as at 31 December 2010, an unaudited consolidated statement of financial position of the Company and its controlled entities as at 31 May 2011 and an unaudited pro-forma consolidated statement of financial position of the Company as at 31 May 2011, adjusted to reflect:

• i. the Rights Issue of 187,540,415 New Shares to raise $5,063,591;
• ii. expenditure of $218,000 in respect of Eritrean expenditure commitments in July 2011;
• iii. the borrowing of $640,000 from Abbotsleigh Pty Limited;
• iv. the expenditure of $640,000 borrowed from Abbotsleigh Pty Limited, applied to Eritrean expenditure and working capital; and
• v. the expenses of the Rights Issue of $361,528.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION *

	31 December 2010HistoricalReviewedConsolidatedAccounts($)	31 May 2011UnauditedConsolidatedAccounts($)	31 May 2011UnauditedPro-formaConsolidatedAccounts($)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	2,695,264	1,118,474	5,602,537
Trade and other receivables	97,904	192	192
Other current assets	60,927	152,880	152,880
TOTAL CURRENT ASSETS	2,854,095	1,271,546	5,755,609
NON-CURRENT ASSETS
Property, plant and equipment	139,596	266,241	266,241
Exploration and evaluation	4,044,990	3,975,681	4,615,681
TOTAL NON-CURRENT ASSETS	4,184,586	4,241,922	4,881,922
TOTAL ASSETS	7,038,681	5,513,468	10,637,531
CURRENT LIABILITIES
Trade and other payables	1,002,231	1,024,284	1,664,284
Provisions	30,298	15,836	15,836
TOTAL CURRENT LIABILITIES	1,032,529	1,040,120	1,680,120
TOTAL LIABILITIES	1,032,529	1,040,120	1,680,120
NET ASSETS	6,006,152	4,473,348	8,957,411
EQUITY
Issued CapitalAccumulated Losses	38,588,181(32,539,840)	38,588,181(38,130,305)	43,290,244(38,348,305)
Other reserves	(42,189)	4,015,472	4,015,472
TOTAL EQUITY	6,006,152	4,473,348	8,957,411

* Accounting policies applied in preparation of the Pro Forma Consolidated Statement of Financial Position as at 31 May 2011 are consistent with those applied by the Company in its 2010 annual financial report as detailed in the Company's 2010 Annual Report.

NOTES TO THE PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Historical31 December2010($)	Unaudited31 May 2011($)	Pro-Forma31 May 2011($)
Cash and cash equivalents
Cash at bank and on hand	2,695,264	1,118,474	5,602,537
Adjustmentsarisinginthepreparationofthepro-formacash balance are summarised asfollows:
Actual balance as at 31 May 2011			1,118,474
Expenditureofexplorationmonies in July			(218,000)
Loan received from Abbotsleigh			640,000
Pty LimitedExpenditure of loan proceeds			(640,000)
Issue of 187,540,415 New Sharesat $0.027 per New Share			5,063,591
Capital raising costs			(361,528)
			5,602,537
Exploration and Evaluation
Exploration and evaluation	4,044,990	3,975,681	4,615,681
Adjustmentsarisinginthepreparationofthepro-formaexploration and evaluation balanceare summarised as follows:
Actual balance as at 31 May 2011			3,975,681
Expenditure of exploration monies inJuly			218,000
ExpenditureofAbbotsleighPtyLimited loan proceeds			422,000

4,615,681

Trade & Other Payables

Trade & Other Payables	1,002,231	1,024,284	1,664,284
Adjustmentsarisinginthepreparation of the pro-forma trade&otherpayablesbalancearesummarised as follows:
Actual balance as at 31 May 2011			1,024,284
Loan received from Abbotsleigh PtyLimited			640,000
			1,664,284
Issued Capital
Issued Capital	38,588,181	38,588,181	43,290,244
Adjustmentsarisinginthepreparation of the pro-forma issuedcapital balance are summarised asfollows:
Actual balance as at 31 May 2011			38,588,181
Issue of 187,540,415 New Shares at$0.027 per New ShareCapital raising costs			5,063,591(361,528)
			43,290,244
Accumulated Losses
Accumulated Losses	32,539,840	38,130,305	38,348,305
Adjustmentsarisinginthepreparationofthepro-formaaccumulatedlossesbalancearesummarised as follows:
Actual balance as at 31 May 2011			38,130,305
Expenditure of loan funds on workingcapital			218,000

38,348,305

The above reviewed consolidated statement of financial position of the Company and its controlled entities as at 31 December 2010 reflects all transactions from 1 July 2010 to 31 December 2010. The above unaudited consolidated statement of financial position of the Company and its controlled entities as at 31 May 2011 reflect all transactions from 1 January 2011 to 31 May 2011. The above unaudited pro-forma reflects the unaudited balances at 31 May 2011, adjusted for the pro forma events set out in Section 2.2.

Expenditure Commitments

The Group has office lease expenditure commitments in Australia, Egypt and Eritrea as follows;

Payable within one year	$75,579
Payable after one year but not more than five years	$12,000

Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. Failure to expend funds in accordance with a commitment may result in a liability to the Eritrean government to the extent of the unexpended portion of the expediture commitment, or forfeiture of the tenement/s (for further information on consequences see Section 3.2(t)). The Group is required to expend a further $451,000 on the tenements in Eritrea by no later than 23 July 2011, being the first anniversary of the Eritrean tenements' grant. The minimum expenditure commitments for years 2 and 3 are US$1,720,000 and US$3,440,000 respectively. The Group has recently submitted applications to convert its three existing Adobha Eritrea Prospecting Licences (Gerasi South, Hafta West and Romay) into exploration licences. The granting of the new exploration licences is not guaranteed, however, on the assumption that new exploration licences are granted, the additional minimum expenditure commitments for Years 1, 2 and 3 of the new exploration licences are estimated to be US$204,750, US$409,500 and US$819,000 respectively.

Capital Commitments

The Group is required to fund the construction of a wall around the "Free Trade Zone" area and a customs office at its Abu Dabbab Project. The estimated cost for this construction is EGP1,823,000 (approximately $296,000). As at 31 May 3011, the Group had incurred EGP1,651,500 (approximately $268,000) of the construction costs. Accordingly, it is anticipated that a further EGP171,500 (approximately $28,000) will be required to be spent by the Group in respect of this construction, subject to any further expenditure that may be incurred.

Subsequent Events

On 30 June 2011, Gippsland's 100% owned subsidiary, Adobha Eritrea entered into a contract in relation to a Versatile Time-Domain Electromagnetic (VTEM) survey on its tenements in Eritrea. Under the agreement, Adobha Eritrea is committed to expenditure of approximately US$464,000 of which US$232,000 (being approximately $218,000) has been paid out of existing funds (see Section 2.2ii) and has an option to extend the survey, at its discretion. If Adobha Eritrea elects to extend the survey, the total expenditure on the survey would be approximately US$713,000.

No other matters or circumstances have arisen since 31 May 2011 which significantly affect or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Section 3 RISK FACTORS

3.1 Introduction

This Section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company involves many risks which may be higher than the risks associated with an investment in other companies.

The risk factors which should be taken into account by investors in assessing the Company's activities and investment in the Company include, but are not necessarily limited to, those set out below. Investors should carefully consider the following factors, among others, affecting the proposed activities of the Company prior to making an investment in the Company, as well as other matters set out elsewhere in this Prospectus. The exploration and development of natural resources is a speculative activity that involves a high degree of financial risk. An investment in the Company may not be suitable for all investors.

The New Shares offered by this Prospectus carry no guarantee whatsoever with respect to return on capital investment, payment of dividends or the future value of the Shares. Intending subscribers should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which the Company intends to operate before any decision is made to subscribe for New Shares. Investors should carefully consider these factors in light of personal circumstances (including financial and taxation issues) and seek professional advice from an accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.

The New Shares offered by this Prospectus should be considered speculative.

3.2 Risk Factors

(a) Share Market Conditions

As Gippsland is a company listed on ASX and the Deutsche Bourse, its share price is subject to the numerous influences, which may affect both the trend in the share market and the share prices of individual companies.

The future success of ASX and the Deutsche Bourse and liquidity in the market for the Shares cannot be guaranteed. In particular, the market for the Shares may be, or may become, illiquid and therefore the Shares may be or may become difficult to sell.

The market price of the Shares may be subject to fluctuations in response to many factors, including variations in the operating results of the Company, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, general economic conditions, legislative changes in the Company's and other events and factors outside of the Company's control. In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for the Shares. Quotation on ASX and the Deutsche Bourse should not be taken as implying that there will be a liquid market for the Shares.

(b) Economic Conditions

Economic conditions, both domestic and global and in particular those in Australia, Egypt and Eritrea may affect the performance of the Company. Factors such as currency fluctuation, inflation, interest rates, supply and demand and industrial disruption, have an impact on operative costs, commodity prices (including tantalum, tin and feldspar prices) and share market prices. The Company's future possible revenue and share price can be affected by these factors all of which are beyond the control of the Company and the Directors. In addition, the Company's ability to raise additional capital, should it be required, may be affected.

(c) Government Policy

Resource industry profitability can be affected by changes in government policy in both Australia, Egypt and Eritrea relating to mineral exploration and production, all of which is beyond the control of the Company.

Tantalum concentrates usually contain varying quantities of radioactive U3O8 and ThO2. International Maritime Organisation ("IMO") regulations restrict the ocean shipment of tantalum concentrates having a content in combined U3O8 and ThO2 content excess of 0.1%. Metallurgical modelling and testwork has indicated that the Abu Dabbab product will not be classified as an IMO Class 7 radioactive material as the combined U3O8 and ThO2 content will be below the IMO maximum limit of 0.1%. There is no guarantee that the IMO 0.1% limit will not be lowered in the future.

The shipment of IMO Class 7 radioactive materials is highly restricted by international shipping regulations to the extent that entry into the European Economic Zone, Japan and certain numerous other countries is restricted unless shipped by a dedicated vessel. The road transportation of IMO Class 7 materials within Europe and certain numerous other jurisdictions is extremely difficult to the point of being impractical.

(d) Reliance on Key Personnel

The resource business in which Gippsland is involved is reliant upon a number of directors and key employees. The loss of any of these personnel could have a material adverse impact on the resources business of the Company.

(e) Contractual Risks

All agreements are subject to interpretation. There is no guarantee that the Company will be able to enforce all its rights under agreements it has with other parties.

(f) Financial Risks

The development of the Company's resource business including the Abu Dabbab tantalum, tin and feldspar project depends upon the Company's ability to obtain financing of its operations, private placement financing, public financing, sale of assets or other means. There is no assurance that the Company will be successful in obtaining finance to satisfy on-going requirements and operations.

(g) Operational Risk

By its nature, the business of exploration, mineral development and production which the Company undertakes contains risks. Prosperity depends on the successful exploration and/or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management and efficient financial management. For its part, exploration (particularly for tantalum, tin and feldspar) is a speculative endeavour, while mining operations can be hampered by force majeure circumstances and cost overruns from unforseen events.

(h) Environmental Risks

Exploration programmes impact on the environment. These impacts are minimised by the Company's application of best practice principles.

(i) Commodity Prices

The prices that the Company may obtain for mineral commodities (particularly tantalum, feldspar, tin, gold and base metals) may fluctuate due to market conditions. Commodity prices are affected by a number of factors which are beyond the control of the Company. Commodity prices have fluctuated widely in recent years, and future serious price declines could cause continued development of, and commercial production from, the Company's properties to be impracticable or uneconomic. Depending on the price of tantalum, tin and feldspar, projected cash flow from planned mining operations at Abu Dabbab and Heemskirk may not be sufficient and the Company could be forced to discontinue development and may lose its interest in, or may be forced to sell, some of its properties. Future production from the Company's Abu Dabbab and Heemskirk mining properties is dependent on tantalum, tin and feldspar prices that are adequate to make these properties economically viable.

Furthermore, reserve calculations and life-of-mine plans using significantly lower commodity prices could result in material write-downs of the Company's investment in mining properties and increased amortisation, reclamation and closure charges. In addition to adversely affecting the Company's mineral reserve estimates and its financial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.

(j) Viability of the Heemskirk Project

The development of Heemskirk Project into a commercially viable mine cannot be assured. The Company's Heemskirk Project has no operating history upon which to base estimates of future commercial viability. Estimates of mineral resources are, to a large extent, based on the interpretation of geological data obtained from drillholes and other sampling techniques and feasibility studies. There can be no assurance that the Company and its joint venture partner will be able to complete development of the project. If the project is not developed, it would have a material adverse effect on the Company's business, financial condition, results of operations and prospects.

(k) Viability of the Abu Dabbab Project

The development of the Abu Dabbab Project into a commercially viable mine cannot be assured. Development projects, such as Abu Dabbab, have no operating history upon which to base estimates of future commercial viability. Estimates of mineral resources and mineral reserves are, to a large extent, based on the interpretation of geological data obtained from drillholes and other sampling techniques and feasibility studies. This information is used to calculate estimates of the capital cost and operating costs based upon anticipated tonnage and grades of tantalum, tin and feldspar to be mined and processed, the configuration of the mineral resource, expected recovery rates, comparable facility and equipment operating costs, anticipated climatic conditions and other factors. As a result, it is possible that estimated results and actual results could differ and such difference could have a material adverse effect on the Company's business, financial condition, results of operations and prospects. There can be no assurance that the Company will be able to complete development of their mineral projects, or any of them, at all or on time or to budget due to, among other things, and in addition to those factors described above, changes in the economics of the mineral projects, the delivery and installation of plant and equipment and cost overruns, or that the current personnel, systems, procedures and controls being inadequate to support Gippsland's operations. Should any of these

events occur, it would have a material adverse effect on Gippsland's business, financial condition, results of operations and prospects.

The Abu Dabbab Project, which is the Company's prime asset, is also heavily reliant upon the offtake agreement with HC Starck GmbH ("Starck"). Risks associated with this agreement are detailed further below.

(l) Starck Offtake Agreement

On 13 November 2007, the Company announced that its 50% owned subsidiary, Tantalum Egypt JSC, had secured a 10 year offtake agreement with the German tantalum company Starck for the supply of tantalum pentoxide from its Abu Dabbab project in Egypt ("Starck Agreement"). The majority of the sales of tantalum pentoxide from the Abu Dabbab project heavily depend on Starck fulfilling its obligations under the Starck Agreement. The Starck Agreement provides for a floor price of Ta2O5 and price-escalation tied to production cost increases.

(m) Control Risk

Prior to the Offer, Abbotsleigh has lodged notices confirming that it had a relevant interest in 21.4% of Gippsland's issued capital. Abbotsleigh is an entity controlled by Ian Gandel, the Company's chairman. At completion of the Offer, Abbotsleigh will have an interest of between 21.4% and 16.5% (or 24.4% and 18.8% if Abbotsleigh acquires Shares prior to the Record Date or additional rights under the Rights Issue pursuant to the 3% Creep Exception described in Section 4.6 below) of Gippsland's issued capital depending on whether it subscribes for all or part of its Entitlement. In addition, Gandel Metals, which will sub-underwrite the Rights Offer, is also an entity controlled by Ian Gandel. The combined maximum interests of Abbotsleigh and Gandel Metals in Gippsland's issued capital will be between 21.4% and 39.5% (or 24.4% and 41.9% if Abbotsleigh acquires Shares prior to the Record Date or additional rights under the Rights Issue pursuant to the 3% Creep Exception described in Section 4.6 below), representing a controlling interest in Gippsland by Ian Gandel. Such a controlling interest has the potential to impinge upon the ability of the Board to run Gippsland in a fully independent manner. Ian Gandel's interest also means that he has the potential to prevent a special resolution from being passed by the Company (such resolution requiring at least 75% of the votes cast by members entitled to vote on the resolution). Special resolutions are required in relation to approve certain Company matters including amending the Company's constitution, approving the voluntary winding up of the Company and, if at any time the share capital of the Company is divided into different classes of shares, approving the variation of the rights attached to any such class. Please refer to Section 4.6 for further information regarding Ian Gandel's interests.

(n) Mining Operations

Mining operations are subject to all the hazards and risks normally encountered in the exploration for and development and production of minerals, including unusual and unexpected geological formations, seismic activity, rock bursts, cave-ins, flooding, variations in grade, deposit size, density and other geological problems, hydrological conditions, metallurgical and other processing problems, mechanical equipment performance problems, the unavailability of materials and equipment including fuel, labour force disruptions, unanticipated transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not limited to, petroleum, and adverse weather conditions and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Should any of these risks and hazards affect any of Gippsland's proposed mining operations, it may cause the cost of production to increase to a point where it would no longer be economic to produce tantalum, tin and/or feldspar from the Company's mineral reserves, which would have a material and adverse affect on the financial condition, results of operation and cash flows of the Company.

(o) Mineral Resource and Reserve Estimates

There is no certainty that the mineral resources or any future mineral reserve attributable to Gippsland will be realised. Until mineral reserves or minerals resources are actually mined and processed, the quantity of mineral resources and mineral reserve grades must be considered as estimates only. In addition, the quantity of mineral reserves and mineral resources may vary depending on, among other things, metal prices and currency exchange rates. Any material change in the quantity of mineral reserves, mineral resources, grade or stripping ratio may affect the economic viability of the properties. In addition, there can be no assurance that tantalum, tin and feldspar recoveries or other metal recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.

Results of drilling, metallurgical testing and production and the evaluation of mine plans subsequent to the date of any estimate may require revision of such estimates. The volume and grade of reserves mined and processed and recovery rates may not be the same as currently anticipated. Any material reductions in estimates of mineral reserves and mineral resources, or of the Company's ability to extract these mineral reserves, could have a material adverse effect on the Company's results of operations and financial condition. Also, a reduction in estimated reserves could require material write-downs in investment in the affected mining property and increased amortisation, reclamation and closure changes.

(p) Foreign Jurisdictions

Gippsland conducts mining, development and exploration activities in Egypt and Eritrea. Gippsland's foreign mining investments are subject to the risks normally associated with the conduct of business in foreign countries. The occurrence of one or more of these risks could have a material and adverse effect on Gippsland's profitability or the viability of its affected foreign operations, which could have a material and adverse effect on Gippsland's future cash flows, earnings, results of operations and financial condition.

Risks may include, among others, labour disputes, invalidation of governmental orders and permits, uncertain political and economic environments, sovereign risk, war (including in neighbouring states), civil disturbances and terrorist actions, arbitrary changes in laws or policies of particular countries, the failure of foreign parties to honour contractual relations or obligations, corruption, foreign taxation, delays in obtaining or the inability to obtain necessary governmental permits, opposition to mining from environmental or other non-governmental organisations, limitations on foreign ownership, limitations on the repatriation of earnings, limitations on mineral exports, instability due to economic under-development, inadequate infrastructure and increased financing costs. These risks may limit or disrupt Gippsland's operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalisation or expropriation without fair compensation.

(q) Political and Economic Stability in Egypt

Egypt had been politically stable for over 25 years until the popular uprising in the first half of 2011. The United States remains Egypt's chief ally and source of foreign aid and it is important that Egypt is able to maintain a balance between its relationship with the United States and with its Arab neighbours. The major identifiable threat to continued political stability is Islamic militancy. While this appears to be under control, there can be no guarantee that this will continue to be the case. There has been sporadic terrorist activity by militant Islamic organisations in Egypt. While the tourist industry has been the main target of such groups, it is possible that they may turn their attention to the assets of the extractive industries in Egypt. Increased tension in Israel may result in a less stable political situation in the Middle East which could have a material adverse effect on Gippsland.

Gippsland is conducting exploration and development activities in Egypt. Gippsland believes that the newly formed Government of Egypt supports the development of natural resources. There is no assurance that future political and economic conditions in Egypt will not result in the Government of Egypt adopting different policies respecting foreign development and ownership of mineral resources. Any such change in policy may result in changes in laws affecting ownership of assets, land tenure and mineral concessions, taxation, royalties, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, which may affect both Gippsland's ability to undertake exploration and development activities in respect of future properties as well as its ability to continue to explore and develop those properties in respect of which it has obtained mineral exploration rights to date.

(r) Eritrea and Political Risk

The Company's activities are subject to sovereign risks, which may impede the Company's activities or result in the impairment or loss of part or all of the Company's interest in the properties. These risks and uncertainties vary from time to time and include such matters as terrorism, hostage taking, military repression, extreme fluctuations in currency exchange rates, high rates of inflation, labour unrest, the risks of war or civil unrest, expropriation and nationalisation, renegotiation or nullification of existing concessions, licenses, permits and contracts, illegal mining, changes in taxation policies, restrictions on foreign exchange and repatriation, and changing political conditions, currency controls and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

The Company has significant interests situated in Eritrea, East Africa, which has historically been exposed to civil and political unrest. In particular, Eritrea has had a long ongoing border dispute with neighbouring Ethiopia, and more recently a border dispute with Djibouti. The Government of Eritrea does not recognise the internationally-backed Transitional Government of Somalia and has been accused of supplying weapons to Somali militant groups. In resolutions adopted in 2009, the Security Council imposed an arms embargo on Eritrea and a travel ban and an assets freeze on Eritrean political and military leaders.

Changes, if any, in mining or investment policies or shifts in political attitude in Eritrea or any other relevant jurisdiction in which the Company operates may adversely affect the Company's operations or profitability.

Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restriction on production, price controls, export controls, currency remittance, income and other taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. Failure to comply strictly with applicable laws, regulations and local practices relating to mineral right and tenure, could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners with carried or other interest. The occurrence of these various factors and uncertainties cannot be predicted and could have an adverse effect on the Company's operations or profitability in varying degrees.

(s) Eritrean Government Interest

Pursuant to Eritrean legislation, the Eritrean Government may acquire, without cost to it, a participation interest of up to 10% of any mining investment upon grant of the relevant mining licence.

The Eritrean Government can also acquire an additional equity participation interest not exceeding a total of 40% (including the initial 10% acquired) by mutual agreement with the holder of the investment. Such agreement will specify the price, percentage, timing, financing, resulting rights and obligations and other details of such participation. The Eritrean Government has been known to pay market value consideration for the acquisition of any further participation interest.

Any arrangements for acquisition of participating interests between the Company and the Eritrean Government will be made by mutual agreement however, other than the total interest the Eritrean Government will obtain, there can be no guarantee as to the consideration paid by the Eritrean Government nor the general terms of the Eritrean Government's participation.

The Eritrean Government's participation interest (if acquired) will be held by the corporate entity, the Eritrean National Mining Corporation (ENAMCO). A joint investment company will be a share company established in accordance with the relevant Eritrean laws including the Transitional Commercial Code of Eritrea, in which the shareholders will hold shares in the registered company to the extent of their respective participating interests and ENCAMO to the extent of its acquired interest. Depending on the rights, obligations and details of the Eritrean Government's participation, the Company may be exposed to the Eritrean Government's business risks. If these risks materialise it may impact upon the Company's ability to complete the project and may have adverse affects on the Company's financial performance.

(t) Title to Mineral Rights

The acquisition and retention of title to mineral rights is a detailed and time consuming process. Title to, and the area of, mineral resources claims may be disputed or challenged. The Company's right to explore for, mine, produce and sell tantalum from the Abu Dabbab Project is based on Exploitation Licences. Should Gippsland's rights under the Exploitation Licences not be honoured or be unenforceable for any reason, or if any material term of the Exploitation Licences is unilaterally changed or not honoured, including the boundaries, the Company's ability to explore and produce tantalum, tin and feldspar in the future would be materially and adversely affected, and this would have a material and adverse effect on the Company's financial performance and results of operations.

The Company's right to explore, develop, mine and sell tantalum and associated minerals under the Exploitation Licences may be terminated if the Government of Egypt determines that the Company has breached the terms of the Exploitation Licences. Any claim of such breach occurring could result in termination of the Exploitation Licences.

Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. If Adobha Eritrea fails to fulfil the minimum expenditure under the work programmes, the Eritrean government may require Adobha Eritrea to pay the underspent amount (minimum expenditure less actual expenditure) to the Government, or to forfeit the tenement/s. The Eritrean government also has the discretion to alternatively allow the company to spend the underspent amount in the succeeding year or to extend the period for expenditure of the minimum expenditure. The Group is required to expend a further $669,000 on the tenements in Eritrea by no later than 23 July 2011, being the first anniversary of the Eritrean tenement's grant. The minimum expenditure commitments for years 2 and 3 are US$1,720,000 and US$3,440,000 respectively. The Group has recently submitted applications to convert its three existing Adobha Eritrea Prospecting Licences (Gerasi South, Hafta West and Romay) into exploration licences. The granting of the new exploration licences is not guaranteed, however, on the assumption that new exploration licences are granted, the additional minimum expenditure commitments for Years 1, 2 and 3 of the new exploration licences are estimated to be US$204,750, $409,500 and US$819,000 respectively.

The Company's interests in Tasmania are also subject to security of title to mineral rights. If these rights are lost for any reason, the Company will suffer financial loss.

(u) Insurance

The Company's business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes or slowdowns, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment or laws, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company's properties or the properties of others, delays in development or mining, monetary losses and possible legal liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against such risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to the other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards which it may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

(v) History of Operating Losses

Gippsland's operations have sustained operating losses during recent fiscal years. There is no guarantee that the Company will ever be profitable.

(w) Additional Capital

The Company will require significant capital in order to develop the Abu Dabbab project and to fund its other operations. The Company currently has no revenues from operations and is currently wholly reliant upon external financing to fund all of its capital requirements. The Company will require additional financing from external sources to meet such requirements. There can be no assurance that such financing will be available to the Company or, if it is, that it will be offered on acceptable terms. If additional financing is raised through the issuance of equity or convertible debt securities of the Company, the interests of shareholders in the net assets of the Company may be diluted. Any failure of the Company to obtain required financing on acceptable terms could have a material adverse effect on the Company's financial condition, results of operations and liquidity and require the Company to cancel or postpone planned capital investments.

(x) Trading and Liquidity in the Company's Shares

An investment in the securities of the Company is highly speculative and subject to a high degree of risk and only those who can bear the risk of the entire loss of their investment should invest.

Each prospective investor should view his purchase of New Shares as a longterm investment and should not consider such purchase unless he is certain he will not have to liquidate his investment for an indefinite period of time.

Investors may realise less than their original investment, or sustain a total loss of their investment.

(y) Retention of Key Business Relationships

The Company relies significantly on strategic relationships with other entities and also on good relationships with regulatory and governmental departments. The Company also relies upon third parties to provide essential contracting services. There can be no assurance that its existing relationships will continue to be maintained or that new ones will be successfully formed and the Company could be adversely affected by changes to such relationships or difficulties in forming new ones. Any circumstance, which causes the early termination or non-renewal of one or more of these key business alliances or contracts, could adversely impact the Company, its business, operating results and prospects.

Various aspects of the Company's future performance and profitability are dependent on the outcome of future negotiations with third parties. The Company's interests may in future be held in a joint venture and, in some cases, a joint venture partner may be the manager of the joint venture. In these situations the joint venture decision may not accord with the Company's stated plan.

(z) Currency Risk

Any future income from mineral sales may be subject to exchange rate fluctuations and become subject to exchange control or similar restrictions. The Company expects to report its financial results in Australian dollars although part of its business may be conducted in other currencies. As a result, it will be subject to foreign currency exchange risk due to exchange rate movements which will affect the Company's transaction costs and the translation of its results.

(aa) Forward Looking Statements

This document contains forward looking statements, including, without limitation, statements containing the words "believe", "anticipated", "expected" and similar expressions. Such forward looking statements involve unknown risk, uncertainties and other factors which may cause the actual results, financial condition, performance or achievement of the Company, or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that might cause such a difference include, but are not limited to, those set out in this Section 4. Given these uncertainties, investors are cautioned not to place any undue reliance on such forward looking statements. To the extent lawfully permitted, the Company disclaims any obligations to update any such forward looking statements in this Prospectus to reflect future events or developments.

(bb) Legal Compliance

Some of the Group's businesses and operations are highly regulated and located in jurisdictions with complex and, in certain instances, ambiguous legal and regulatory requirements. Further, the interpretation of these requirements may be applied inconsistently, for example, because a body of precedent may not yet exist.

In the event that the Company is found to have not complied with applicable legal and regulatory requirements, it may be subject to the imposition of penalties which may have an adverse effect on the Company.

The Company could also be adversely affected by future changes in legal and regulatory requirements, particularly if these are subject to restrospective application. It is not possible to predict what, if any, future legal and regulatory changes may be made to the requirements under which the Company's businesses and operations operate.

3.3 Speculative Nature of Investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the New Shares offered under this Prospectus.

Therefore, the New Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends or return of capital and the New Shares carry no guarantee with respect to the market value of such New Shares.

Eligible Shareholders should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for New Shares in the Rights Issue.

Section 4 ADDITIONAL INFORMATION

4.1 Legal Framework of this Prospectus

The Company is a "disclosing entity" under the Corporations Act and is subject to the regime of continuous disclosure and periodic reporting requirements. Specifically, the Company is subject to the Listing Rules which require continuous disclosure to the market of any information possessed by the Company which a reasonable person would expect to have a material effect on the price or value of its securities.

4.2 Applicability of Corporations Act

As a "disclosing entity", the Company has issued this Prospectus in accordance with section 713 of the Corporations Act applicable to prospectuses for an offer of securities which are quoted enhanced disclosure ("ED") securities which are in a class of securities that were quoted ED securities at all times in the three months before the issue of this Prospectus.

Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the provisions of the Listing Rules as in force from time to time which apply to disclosing entities, and which require the Company to notify ASIC of information available to the stock market conducted by ASX, throughout the 12 months before the issue of this Prospectus.

The ASX maintains files containing publicly disclosed information about all listed companies. The Company's file is available for inspection at ASX in Perth during normal working hours. In addition, copies of documents lodged by, or in relation to, the Company with ASIC may be obtained from, or inspected at, any regional office of ASIC.

The New Shares to be issued under this Prospectus are in respect of a class of shares that were continuously quoted securities at all times in the 12 months before the issue of this Prospectus.

4.3 Information Available to Shareholders

The Company will provide a copy of each of the following documents, free of charge, to any investor who so requests during the relevant application period under this Prospectus:

• (a) the Annual Report (including annual financial report) for the Company for the period ending 30 June 2010;
• (b) the Half Yearly Report (including interim financial report) for the Company for the period ending 31 December 2010; and
• (c) the following documents used to notify ASX of information relating to the Company during the period after lodgement of the Annual Report of the

Company for the period ending 30 June 2010 and before the issue of this Prospectus:

Date	Description of ASX Announcement
26.10.2010	Appendix 3Y, Change of Director's Interest
29.10.2010	First Quarter Activities Report
29.10.2010	First Quarter Financial Report
26.11.2010	Director Appointment/Resignation
26.11.2010	Final Director's Interest Notice
26.11.2010	Termination of CEO
26.11.2010	Chairman's Address 2010 AGM
26.11.2010	Annual Report 2010 – JORC Statement
26.11.2010	Results of Meeting
30.11.2010	Appendix 3B
24.12.2010	SRZ: Tin Metallurgy Enhances Heemskirk Project
24.12.2010	Trading Policy
18.01.2011	Board Changes to Egyptian Entities, Progress at Abu Dabbab
25.01.2011	Heemskirk Tin Project Update
28.01.2011	Quarterly Activities Report
28.01.2011	Quarterly Cashflow Report
31.01.2011	Abu Dabbab Alluvial Tin Exploration
07.03.2011	High Grade JORC Mineral Resource for Heemskirk Tin Project
16.03.2011	Further Exploration Drilling on Heemskirk Tin Project
16.03.2011	Half Year Accounts
06.04.2011	Abu Dabbab Alluvial Tin Project – Trial Mining Commences
11.04.2011	Abu Dabbab, Project Update
15.04.2011	Eritrea Exploration Update
21.04.2011	Non-Egyptian Assets to be Divested
29.04.2011	Quarterly Activities Report
29.04.2011	Quarterly Cashflow Report
10.05.2011	Update – Heemskirk Tin Project
12.05.2011	Adobha Spin Out Update
18.05.2011	Bloomberg Article
18.05.2011	Review of Abu Dabbab Project and Project Update
31.05.2011	Abu Dabbab – Site Related Works Further Update
31.05.2011	Nuweibi Exploration Update
08.06.2011	Abu Dabbab Increases Ore Reserves
15.06.2011	Arabs Today Article
15.06.2011	AGS: Arabs Today Article
16.06.2011	Adobha Spin-Out Termination
22.06.2011	Jordan Government Exploration Negotiations Update
06.07.2011	SRZ: Scoping Study Green Light for Heemskirk Tin Project
06.07.2011	Heemskirk Scoping Study Completed
08.07.2011	Independent Calculation of Abu Dabbab Project Economics

4.4 Rights Attaching to New Shares

The New Shares to be issued pursuant to this Prospectus will rank equally in all respects with existing Shares in the Company.

The rights attached to Shares are governed by the Constitution (a copy of which can be inspected at the Company's registered office) and, in certain circumstances, will be regulated by the Corporations Act, the Listing Rules, the ASX Settlement Rules, ACH Clearing Rules and the general law.

The following is a summary of the principal rights which attach to the existing Shares:

(a) Voting Rights

Each member present in person or by proxy, representative or attorney has one vote on a show of hands and on a poll one vote for each fully paid share held in the capital of the Company. Each member is entitled to a notice of, and to attend and vote at, general meetings.

In the event of a breach of any escrow agreement entered into by the Company under the Listing Rules in relation to any Shares which are classified under the Listing Rules or by ASX as restricted securities, the member holding the Shares in question shall cease to be entitled to any voting rights in respect of those Shares for so long as the breach subsists.

(b) Dividend Rights

The profits of the Company, which the Directors from time to time determine to distribute by way of dividends, are divisible amongst the members in proportion to the number of Shares held by them irrespective of the amount paid or credited as paid on the Shares.

In the event of a breach of any escrow agreement entered into by the Company under the Listing Rules in relation to any Shares which are classified under the Listing Rules or by ASX as restricted securities, the member holding the Shares in question shall cease to be entitled to any dividends in respect of those Shares for so long as the breach subsists.

(c) Rights on Winding Up

If the Company is wound up, the liquidator may, with the authority of a special resolution:

• (i) divide among the members in kind the whole or any part of the property of the Company;
• (ii) and for that purpose, set such value as he considers fair upon any property to be so divided; and

(iii) may determine how the division is to be carried out as between the shareholder or different classes of members.

The liquidator may with the authority of a special resolution, vest the whole or any part of any such property in trustees to hold in trusts for the benefit of the Shareholders as the liquidator thinks fit. No Shareholder shall be compelled to accept any Shares or other securities in respect of which there is any liability. Subject to the rights of any Shareholders entitled to Shares with special rights in a winding up, all moneys and property that are to be distributed among members on a winding up will be distributed in proportion to the Shares held by them respectively irrespective of the amount paid up or credited as paid up on the Shares.

On the winding up of the company, the holders of any Shares which are classified under the Listing Rules or by ASX as restricted securities and which are subject to escrow restrictions at the commencement of the winding up shall rank on a return capital behind all other Shares in the Company.

(d) Transfer of Shares

Subject to the Constitution, the Corporations Act, any other laws and the Listing Rules, Shares in the Company are freely transferable.

(e) Future Increases in Capital

The Company may by ordinary resolution:

• increase its nominal Shares by the creation of new Shares of such amount as is specified in the resolution;
• consolidate and divide all or any of its nominal capital into Shares of a larger amount than its existing Shares;
• sub-divide all or any of its Shares into Shares of a smaller amount; and
• cancel Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person or have been forfeited and, reduce its nominal Share capital by the amount of the Shares so cancelled.

The allotment and issue of any new Shares is under the control of the Directors from time to time of the Company. Subject to restrictions on the allotment of Shares to Directors or their associates contained in the Listing Rules, the Constitution and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

(f) Variation of Rights

If at any time the Share capital of the Company is divided into different classes of Shares the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied whether or not the company is being wound up with the consent in writing of three quarters of the issued Shares of that class or if authorised by a special resolution at a separate meeting of the holders of Shares of that class.

Gippsland's Constitution is available for inspection by shareholders at Gippsland's registered office during normal business hours.

4.5 Material Contracts

Underwriting Agreement

Pursuant to an Underwriting Agreement dated 12 July 2011 between the Company and the Underwriter, the Underwriter has agreed to underwrite all of the Rights Issue pursuant to this Prospectus.

Pursuant to the Underwriting Agreement, the Company will pay the Underwriter an underwriting fee equal to 5% of the total amount to be raised under the Rights Issue, being approximately $253,000 and a corporate fee of $20,000, plus GST as applicable. In addition, the Company must indemnify the Underwriter, its officers, employees, agents and advisors ("Indemnified Parties") against any claim, loss, expense or liability incurred by the Indemnified Parties directly arising from the Rights Issue.

The Company has given warranties and covenants to the Underwriter which are usual in an agreement of this nature.

The Underwriting Agreement provides that the Underwriter may, in its absolute discretion and without cost or liability to the Underwriter, terminate its obligations under the Underwriting Agreement at any time prior to the date at which the allotment of the last of the New Shares occurs under this Prospectus, upon the occurrence of any one or more of the termination events ("Termination Event") after the date of the Underwriting Agreement, including:

• (a) (Indices fall): the S&P/ASX All Ordinaries Index is at any time after the date of the Underwriting Agreement 15% or more below its respective level as at the close of business on the Business Day prior to the date of this Agreement; or
• (b) (Prospectus): the Company does not lodge the Prospectus on the agreed proposed lodgement date or the Prospectus or the Offer is withdrawn by the Company; or
• (c) (No Official Quotation): Official quotation of the New Shares on ASX has not been granted by the agreed deadline date for the Company to give written

notification to the Underwriter of the Shortfall Shares or, having been granted, is subsequently withdrawn, withheld or qualified; or

(d) (Supplementary prospectus):

• (i) the Underwriter, having elected not to exercise its right to terminate its obligations under this Agreement as a result of an occurrence as described below, forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or

• (ii) the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter, such agreement not to be unreasonably withheld; or

• (e) (Non-compliance with disclosure requirements): it transpires that the Prospectus does not contain all the information that investors and their professional advisers would reasonably require to make an informed assessment of:

  • (i) the effect of the Offer on the Company; and
  • (ii) the rights and liabilities attaching to the New Shares; or

• (f) (Misleading Prospectus): it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from this Prospectus (having regard to the provisions of sections 711, 713 and 716 of the Corporations Act) or if any statement in the Prospectus becomes or misleading or deceptive or likely to mislead or deceive or if the issue of this Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;

• (g) (Restriction on allotment): the Company is prevented from allotting the New Shares within the time required by this Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority;

• (h) (Withdrawal of consent to Prospectus): any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in this Prospectus or to be named in this Prospectus, withdraws that consent;

• (i) (ASIC application): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the deadline date for the Company to give written notification to the Underwriter of the Shortfall has arrived, and that application has not been dismissed or withdrawn;

• (j) (ASIC hearing): ASIC gives notice of its intention to hold a hearing under section 739 or any other provision of the Corporations Act in relation to this Prospectus to determine if it should make a stop order in relation to this Prospectus or the ASIC makes an interim or final stop order in relation to this Prospectus under section 739 or any other provision of the Corporations Act;

• (k) (Takeovers Panel): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;

• (l) (Hostilities): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, or the Peoples Republic of China, or any member of the European Union, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world, such act having a Material Adverse Effect;

• (m) (Authorisation) any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

• (n) (Designated Sub-Underwriters): any designated sub-underwriters does not comply with their obligations under a sub-underwriting agreement or threaten not to comply with their respective obligations under a subunderwriting agreement;

• (o) (Indictable offence): a director or senior manager of a Relevant Company is charged with an indictable offence; and

• (p) (Termination Events): subject always to the Underwriter determining in its reasonable opinion that one or more of the following termination events, alone or together, has or is likely to have a Material Adverse Effect or could give rise to a liability of the Underwriter under the Corporations Act or otherwise, any of the following events occurs:

  • (i) (Default): default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;
  • (ii) (Incorrect or untrue representation): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;
  • (iii) (Contravention of constitution or Act): a contravention by a Relevant Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;

• (iv) (Adverse change): an event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company including, without limitation, if any forecast in this Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time;

• (v) (Error in Due Diligence Results): it transpires that any of the due diligence results or any part of the materials provided by the Company for verifying statements disclosed in this Prospectus was false, misleading or deceptive or that there was an omission from them;

• (vi) (Significant change): a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;

• (vii) (Public statements): without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer, the Rights Issue or this Prospectus, unless required by the Corporations Act or the Listing Rules;

• (viii) (Misleading information): any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Issue or the affairs of any Relevant Company is or becomes misleading or deceptive or likely to mislead or deceive;

• (ix) (Official Quotation qualified): the official quotation on ASX of the New Shares is qualified or conditional other than it being conditional on the allotment of the New Shares;

• (x) (Change in Act or policy): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;

• (xi) (Prescribed Occurrence):a Prescribed Occurrence occurs, other than as disclosed in this Prospectus;

• (xii) (Suspension of debt payments): the Company suspends payment of its debts generally;

• (xiii) (Event of Insolvency): an Event of Insolvency occurs in respect of a Relevant Company;

• (xiv) (Judgment against a Relevant Company): a judgment in an amount exceeding $100,000 is obtained against a Relevant Company and is not set aside or satisfied within 7 days;

• (xv) (Litigation): litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against any Relevant Company, other than any claims foreshadowed in the Prospectus;

• (xvi) (Board and senior management composition): there is a change in the composition of the Board or a material change in the senior management of the Company effected by the Board before allotment of the last of the New Shares without the prior written consent of the Underwriter (which consent is not to be unreasonably withheld or delayed);

• (xvii) (Change in shareholdings): there is a material change in the major or controlling shareholdings of a Relevant Company or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to a Relevant Company;

• (xviii) (Timetable): without the written consent of the Underwriter, there is a delay in any specified date in the agreed proposed timetable which is greater than 7 Business Days;

• (xix) (Force Majeure): a force majeure event affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of 7 Business Days occurs;

• (xx) (Certain resolutions passed): a Relevant Company passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter;

• (xxi) (Capital Structure): any Relevant Company alters its capital structure in any manner not contemplated by this Prospectus;

• (xxii) (Investigation): any person is appointed under any legislation in respect of companies to investigate the affairs of a Related Company; and

• (xxiii) (Market Conditions): a suspension or material limitation in trading generally on the ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets.

In this Section 4.5:

"Event of Insolvency" means

• (a) a receiver, manager, receiver and manager, trustee, administrator, controller or similar officer is appointed in respect of a person or any asset of a person;

• (b) a liquidator or provisional liquidator is appointed in respect of a corporation;

• (c) any application (not being an application withdrawn or dismissed within 7 days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of:

• (d) appointing a person referred to in paragraphs (a) or (b);

• (e) winding up a corporation; or

• (f) proposing or implementing a scheme of arrangement;

• (g) any event or conduct occurs which would enable a court to grant a petition, or an order is made, for the bankruptcy of an individual or his estate under any insolvency provision;

• (h) a moratorium of any debts of a person, or an official assignment, or a composition, or an arrangement (formal or informal) with a person's creditors, or any similar proceeding or arrangement by which the assets of a person are subjected conditionally or unconditionally to the control of that person's creditors or a trustee, is ordered, declared, or agreed to, or is applied for and the application is not withdrawn or dismissed within 7 days;

• (i) a person becomes, or admits in writing that it is, is declared to be, or is deemed under any applicable Act to be, insolvent or unable to pay its debts; or

• (j) any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to any asset of a person.

"Material Adverse Effect" means

• (a) a material adverse effect on the outcome of the Offer or on the subsequent market for the New Shares (including, without limitation, matters likely to have a material adverse effect on a decision of an investor to invest in New Shares); or
• (b) a material adverse effect on the assets, condition, trading or financial position, performance, profits and losses, results, prospects, business or operations of the Company and its Subsidiaries either individually or taken as a whole; or
• (c) the Underwriter's obligations under the Underwriting Agreement becoming significantly more onerous than those which exist at the date of the Underwriting Agreement; or
• (d) a material adverse effect on the tax position of either:

(i) the Company and its subsidiaries either individually or taken as a whole; or

(ii) an Australian resident shareholder in the Company.

"Prescribed Occurrence" means

• (a) a Relevant Company converting all or any of its shares into a larger or smaller number of shares;
• (b) a Relevant Company resolving to reduce its share capital in any way;
• (c) a Relevant Company:
  • (i) entering into a buy-back agreement or;
  • (ii) resolving to approve the terms of a buy-back agreement under section 257C or 257D of the Corporations Act;
• (d) a Relevant Company making an issue of, or granting an option to subscribe for, any of its shares, or agreeing to make such an issue or grant such an option, other than an issue or agreement to issue in accordance with the Offer or the terms of the Underwriting Agreement;
• (e) a Relevant Company issuing, or agreeing to issue, convertible notes;
• (f) a Relevant Company disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;
• (g) a Relevant Company charging, agreeing to charge, the whole, or a substantial part, of its business or property;
• (h) a Relevant Company resolving that it be wound up;
• (i) the appointment of a liquidator or provisional liquidator to a Relevant Company;
• (j) the making of an order by a court for the winding up of a Relevant Company;
• (k) an administrator of a Relevant Company, being appointed under section 436A, 436B or 436C of the Corporations Act;
• (l) a Relevant Company executing a deed of company arrangement; or
• (m) the appointment of a receiver, or a receiver and manager, in relation to the whole, or a substantial part, of the property of a Relevant Company.

4.6 Interests of Directors

(a) Directors' Holdings

At the date of this Prospectus the relevant interest of each of the Directors in the Shares of the Company are as follows:

Director	Shares			Options
	Direct	Indirect	Direct	Indirect
Ian Gandel		133,824,0731		-
Jon Starink		300,0002		2,000,0004
John SF Dunlop		-		2,000,0005
John D Kenny		2,892,8583		1,000,0006
Total		137,016,931		5,000,000

Notes:

• 1. 133,824,073 Shares are held by Abbotsleigh Proprietary Limited, an entity of which Ian Gandel is a director and shareholder, as trustee for the I Gandel Share Investment Trust, an entity of which Ian Gandel is a beneficiary;
• 1. 300,000 Shares are held by Lazarus Foundation Pty Ltd as trustee for the Rand Trust. Jon Starink is a director of the Lazarus Foundation Pty Ltd and a beneficiary of the Rand Trust.
• 1. 2,892,858 Shares are held by Ventureworks JDK Pty Ltd, an entity of which John Kenny is the sole director and sole shareholder.
• 1. 2,000,000 Options each exercisable at $0.15 on or before 31 May 2012 are held by Lazarus Foundation Pty Ltd as trustee for the Rand Trust. Jon Starink is a director of the Lazarus Foundation Pty Ltd and a beneficiary of the Rand Trust.
• 1. 2,000,000 Options each exercisable at $0.15 on or before 31 May 2012 are held by John S Dunlop Nominees Pty Ltd as trustee of the John S Dunlop Family Super Fund, an entity of which John Dunlop is a beneficiary
• 1. 1,000,000 Options each exercisable at $0.15 on or before 31 May 2012 are held by Ventureworks JDK Pty Ltd, an entity of which John Kenny is the sole director and sole shareholder.

It is the current intention of Ian Gandel, Jon Starink and John Kenny (the Directors with a direct or indirect holding of Shares) to take-up all of their respective Entitlements offered to them under this Prospectus. It is the current intention of Jon Starink and Ian Gandel, subject to market conditions, to purchase Rights during the Rights trading period pursuant to this Prospectus or additional Shares on-market (subject to compliance with the takeover provisions of the Corporations Act) prior to the Record Date. The other Directors may or may not purchase Rights during the Rights trading period pursuant to this Prospectus or additional Shares prior to the Record Date.

(b) Remuneration of Directors

The Constitution provides that the aggregate amount of non-executive Directors' fees shall from time to time be determined by the Company by a resolution of shareholders in general meeting. This amount is currently set at $150,000.

A Director may be paid fees or other amounts as the Directors determine where a Director performs extra services or otherwise makes special exertions on behalf of the Company outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for reasonable out of pocket expenses incurred as a result of their directorship.

Director	Fees/Salary/		Other		Total
	Bonus		Remuneration		Remuneration
	($)			($)	($)
	Year ended	Year ended	Year	Year
	30 June	30 June	ended	ended
	2010	2009	30 June	30 June
			2010	2009
Jon Starink	120,000	80,000	0	2,000	202,000
John SF Dunlop1	25,700	25,500	0	2,000	53,200
Ian Gandel2	50,000	0	0	0	50,000
John Kenny	25,000	18,750	0	1,000	44,750

Over the last two years, the total aggregate of the remuneration paid to and benefits in kind granted to the Directors by the Company was as follows:

Notes:

1. These fees were paid to John S Dunlop and Associates Pty Ltd, a company in which Mr Dunlop has an interest. Payments made were for consultancy fees as well as director fees. The total fees paid include consultancy fees for the year ended 30 June 2010 of $700 (2009: $10,500).

2. These fees were paid to Gandel Metals Pty Ltd, a company in which Ian Gandel has an interest. Ian Gandel was appointed as a Director on 24 June 2009.

Since 1 July 2010 the total aggregate of the remuneration paid to and benefits in kind granted to the Directors by the Company was as follows:

Director	Fees/Salary/	Other	Total
	Bonus	Remuneration	Remuneration
	($)	($)	($)
Ian Gandel	88,188	Nil	88,188
Jon Starink	135,000	Nil	135,000
John SF Dunlop	74,800	Nil	74,800
John Kenny	36,808	Nil	36,808

Except as disclosed in this Prospectus, no Director (whether individually or in consequence of a Director's association with any company or firm or in any material contract entered into by the Company) has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in:

• the formation or promotion of the Company; or
• property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or
• the Rights Issue.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or agreed to be paid to any Director or to any company or firm with which a Director is associated to induce him to become, or to qualify as, a Director, or otherwise for services rendered by him or his company or firm with which the Director is associated in connection with the formation or promotion of the Company or the Rights Issue.

(c) Other Interests

The Company has entered into Deeds of Indemnity, Access and Insurance on standard terms with each of its current directors, Messrs Starink, Dunlop, Gandel and Kenny and its most recent former director, Robert John (Jack) Telford. Those deeds indemnify these Directors in respect of certain liabilities and legal expenses incurred by them whilst acting as Directors and insures them against certain risks they are exposed to as Directors. The Company has paid insurance premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings while acting in the capacity of a Director.

Loan Agreements

As previously announced on 21 April 2011 and 12 May 2011, the Company entered into various transactions in relation to the Company's interests in its non-Egyptian assets with Adobha under which Adobha proposed to:

• (i) purchase the Company's joint venture interest in the Heemskirk Project;
• (ii) subscribe for shares in the Company's subsidiary, Adobha Eritrea, which holds the Company's Eritrean assets; and
• (iii) conduct an initial public offering and seek to list on ASX, and Shareholders would have a priority offer in the proposed initial public offering.

The proposed spin out ("Spin Out") was intended to create a stand-alone entity owned by Gippsland shareholders with access to dedicated funding with a view to unlocking the value of these non-Egyptian assets.

However, as announced on 16 June 2011, the Company decided to retain the Company's interests in its non-Egyptian assets and not to proceed with the divestment of these interests to Adobha and the agreements in relation to the purchase of the joint venture interest in the Heemskirk Project and the share subscription in Adobha Eritrea have been terminated.

As announced on 21 April 2011 in preparation for the Proposed Spin Out:

• Adobha provided Adobha Eritrea a non-binding letter of comfort, the Eritrea Loan as described further below; and
• Abbotsleigh, an entity controlled by Ian Gandel, made an $800,000 facility available to Adobha, the Abbotsleigh Loan as described further below.

New Loan Funds:

It is proposed that $160,000 of the funds raised under the Rights Issue will be used to make an intercompany loan from Gippsland to Adobha Eritrea ("New Loan Funds"). Gippsland understand that:

• Adobha Eritrea will use the New Loan Funds to repay the Eritrea Loan (as described below); and
• Adobha will use the funds from the repayment of the Eritrea Loan to repay the Abbotsleigh Loan (as described below).

When Adobha Eritrea entered into the Eritrea Loan, neither Gippsland nor Adobha Eritrea contemplated that Gippsland would be required to make the New Loan Funds available to enable Adobha Eritrea to repay the Eritrea Loan.

The relationship between the various parties can be summarised as follows:

• Abbotsleigh is a related party of Adobha because Ian Gandel controls Abbotsleigh and is a director of Adobha;
• Adobha was but is no longer a related party of Gippsland;
• Adobha is an unrelated party of Adobha Eritrea; and
• Adobha Eritrea is a wholly owned subsidiary of Gippsland.

Given it is anticipated that the New Loan Funds will ultimately (through a series of transactions between unrelated parties) be used to make repayment to Abbotsleigh, the Directors (in the absence of Ian Gandel) consider it prudent to advise Shareholders:

• of the terms of the series of transactions which have lead to the provision of the New Loan Funds (as set out below); and
• that they are of the view that the ultimate payment to Abbotsleigh is on terms less favourable to Abbotsleigh than arm's length commercial terms for the following reasons:
  • o the Eritrea Loan is unsecured and interest free;
  • o the Abbotsleigh Loan is unsecured; and
  • o the interest rate of 4% per annum for the Abbotsleigh Loan is less than commercial rate of interest for an unsecured loan.

For the reasons above, neither Adobha Eritrea in respect of the Eritrea Loan and Adobha in respect of the Abbotsleigh Loan were likely to source financing from any other source on comparable terms given Adobha and Adobha Eritrea's circumstances.

Letter of comfort – Eritrea Loan:

On 5 May 2011, Adobha provided a non binding letter of comfort to Adobha Eritrea in relation to a facility to fund the activities of Adobha Eritrea prior to completion of Adobha's initial public offer ("Eritrea Loan"). The facility limit of the Eritrea Loan is $800,000 and, as at the date of this Prospectus, $160,000 has been drawn-down under the Eritrea Loan.

The Eritrea Loan is to be used to meet the expenses of Adobha Eritrea in holding, exploring and developing its exploration and prospecting licences. The Eritrea Loan is unsecured and interest free.

On 4 July 2011, the Company agreed to extend the repayment date under the Eritrea Loan to 30 September 2011.

Gippsland understands that:

• Adobha and Adobha Eritrea are not related parties as defined in the Corporations Act;
• the directors of each of Adobha and Adobha Eritrea considered and noted at the time of entry into the letter of comfort that the terms of the Eritrea Loan was on arm's length commercial terms (or better).

Abbotsleigh Loan:

On 5 May 2011, Adobha and Abbotsleigh entered a loan agreement pursuant to which Abbotsleigh agreed to provide a loan to Adobha, the Abbotsleigh Loan. The facility limit of the Abbotsleigh Loan is $800,000 and, as at the date of this Prospectus, $400,000 has been drawn-down under the Abbotsleigh Loan. After the date of this Prospectus, the Company understands that Adobha will make a repayment of $240,000 to Abbotsleigh.

Interest will accrue on the outstanding balance of the Abbotsleigh Loan at a rate of 4% per annum with default interest of 18% per annum.

Abbotsleigh has extended the repayment date under the Abbotsleigh Loan for the balance to 30 September 2011.

The Abbotsleigh Loan will become repayable immediately upon demand by Abbotsleigh if a default event occurs. Default events include, amongst other things, a failure by Adobha to pay a sum owing under the Abbotsleigh Loan agreement, a breach by Adobha of the terms of the Abbotsleigh Loan agreement or Adobha entering into receivership, administration or winding up procedures.

Ian Gandel is a director of Adobha and controls Abbotsleigh, therefore, Adobha and Abbotsleigh are related parties (as defined in the Corporations Act).

Gippsland understands that the Abbotsleigh Loan was considered by the Adobha board (in the absence of Ian Gandel) to be made on terms less favourable to Abbotsleigh (who received the financial benefit through the payment of interest) than arm's length commercial terms for the following reasons:

• the Abbotsleigh Loan is unsecured; and
• the interest rate of 4% per annum for the Abbotsleigh Loan is less than commercial rate of interest for an unsecured loan.

Gippsland also understands that Abbotsleigh sought independent legal advice in respect of the Abbotsleigh Loan.

New Abbotsleigh Loan:

On 4 July 2011, the Company and Abbotsleigh entered a loan agreement pursuant to which Abbotsleigh agreed to provide a loan to the Company, the New Abbotsleigh Loan. The facility limit of the New Abbotsleigh Loan is $640,000 and, as at the date of this Prospectus, the Company has not drawn-down the New Abbotsleigh Loan.

Interest will accrue on the outstanding balance of the New Abbotsleigh Loan at a rate of 4% per annum with default interest of 18% per annum.

The repayment date under the New Abbotsleigh Loan is the earlier of 30 September 2011 or the date that is 5 business days after completion of the Rights Issue. The Company is entitled to repay the New Abbotsleigh Loan early, provided the Company gives Abbotsleigh four weeks written notice of the intention to repay early. Amounts which are prepaid cannot be re-borrowed.

The New Abbotsleigh Loan will become repayable immediately upon demand by Abbotsleigh if a default event occurs. Default events include, amongst other things, a failure by the Company to pay a sum owing under the New Abbotsleigh Loan agreement, a breach by the Company of the terms of the New Abbotsleigh Loan agreement or the Company entering into receivership, administration or winding up procedures.

Ian Gandel is a director of the Company and controls Abbotsleigh, therefore, the Company and Abbotsleigh are related parties (as defined in the Corporations Act). The board of Directors (in the absence of Ian Gandel) considers that the New Abbotsleigh Loan is made on terms less favourable to Abbotsleigh (who received the financial benefit through the payment of interest) than arm's length commercial terms for the following reasons:

• the New Abbotsleigh Loan is unsecured; and
• the interest rate of 4% per annum for the New Abbotsleigh Loan is less than commercial rate of interest for an unsecured loan.

The Company also understands that Abbotsleigh sought independent legal advice in respect of the New Abbotsleigh Loan.

Sub-Underwriting

As noted previously, Gandel Metals of which Ian Gandel is the sole director, has agreed to sub-underwrite the Rights Issue. Ian Gandel also controls Abbotsleigh, a major shareholder of the Company.

Patersons will pay Gandel Metals a fee of 4% of the total amount sought under the Rights Issue.

In the event of there being any Shortfall Shares, Gandel Metals is obligated to subscribe for New Shares not applied for by Eligible Shareholders as Shortfall Shares as determined by the Underwriter in consultation with the Company and in accordance with Section 1.10 of this Prospectus. Gandel Metals' obligations under the sub-underwriting agreement cease if the Rights Issue does not proceed or the Underwriting Agreement is terminated.

The Directors consider, having regard to all available options and the knowledge that Gandel Metals is an entity controlled by Ian Gandel and accordingly is a related party (under the Corporations Act) to the Company, that Patersons entering into a subunderwriting agreement with Gandel Metals to sub-underwrite the Rights Issue, provides the Company with the highest degree of certainty that the Rights Issue will be successful, in the time available and in what has been, and continues to be, a volatile and difficult market.

Ian Gandel Control Scenarios under the Rights Issue

As at the date of this Prospectus, the current relevant interest of Ian Gandel in the Company, through Abbotsleigh's shareholding, is 21.4%.

Abbotsleigh has confirmed to the Company that it presently intends to take up its Entitlement under the Rights Issue as an Eligible Shareholder with respect to its holding of 133,824,073 Shares. Ian Gandel has also indicated a current intention, subject to market conditions, to purchase Rights during the Rights trading period pursuant to this Prospectus or additional Shares on-market (subject to compliance with the takeover provisions of the Corporations Act) prior to the Record Date. The maximum increase in voting power pursuant to any such acquisition is 3% pursuant to section 611 item 9 of the Corporations Act ("3% Creep Exception").

The maximum increase in Ian Gandel's voting power by reason of:

• (a) Abbotsleigh's entitlement to subscribe for New Shares under the Rights Issue; and
• (b) any New Shares acquired under Gandel Metals' underwriting of the Rights Issue,

will be 18.1%, bringing Ian Gandel's voting power to approximately 39.5% (if no Eligible Shareholders take-up their Entitlements). If Ian Gandel acquires Shares prior to the Record Date or additional rights under the Rights Issue, pursuant to the 3% Creep Exception, the maximum number of New Shares that he would be entitled to acquire under the Rights Issue is 187,540,415 which would bring his total to 340,118,529 Shares or voting power of 41.9% upon completion of the Rights Issue.

The following table shows the number of Shares on issue at the date of this Prospectus and the total number of Shares on issue as at the close of the Rights Issue based on the maximum total Shares to be issued under the Rights Issue (assuming the existing Options are not exercised).

Shares	Number
Existing Shares	625,134,716
Maximum number of New Shares to be issued pursuant to theRights Issue (assuming no existing Options are exercised)	187,540,415
Total after completion of the Rights Issue	812,675,131

An analysis of the impact of the Rights Issue and underwriting on the effective control of the Company has been undertaken to indicate the effect on Ian Gandel's relevant interest in the Company under various scenarios. The results are detailed below. Each scenario below assumes that there is no exercise of existing Options by any party prior to completion of the Rights Issue.

Before Rights Issue

The following table shows the existing capital structure of the Company at the date of this Prospectus.

Shareholder	Shares	% of Total Shares
Ian Gandel/Abbotsleigh(1)	133,824,073	21.4
Others	491,310,643	78.6
TOTAL	625,134,716	100

Note 1: Ian Gandel's holding of Shares is held through Abbotsleigh, an entity that he controls. Gandel Metals, another entity controlled by Ian Gandel does not currently have an interest in any Shares but may acquire an interest in Shares through its sub-underwriting of the Rights Issue.

Scenario 1 – Maximum Entitlement take up by all Existing Eligible Shareholders

The following table shows the capital structure of the Company at the close of the Rights Issue if each Eligible Shareholder elects to take up each of their Entitlements to subscribe for Shares pursuant to the Rights Issue.

Shareholder	Shares	% of Total Shares
Ian Gandel/Abbotsleigh(1)	173,971,295(2)	21.4(2)
Others	638,703,836	78.6
TOTAL	812,675,131	100

Note 1: Ian Gandel's holding of Shares is held through Abbotsleigh, an entity that he controls. Gandel Metals, another entity controlled by Ian Gandel does not currently have an interest in any Shares but may acquire an interest in Shares through its sub-underwriting of the Rights Issue.

Note 2: If Ian Gandel acquires Shares prior to the Record Date or rights under the Rights Issue pursuant to the 3% Creep Exception provision described above, the maximum number of Shares that he may acquire pursuant to the Rights Issue under this scenario is 45,773,435 which would bring his total to 198,351,549 Shares or voting power of 24.4%.

Scenario 2 – Ian Gandel, through Abbotsleigh, takes up 100% of Abbotsleigh's Entitlement, all other Eligible Shareholders take up 50% of their Entitlement (and Ian Gandel, through Gandel Metals, takes up its commitment pursuant to the subunderwriting arrangements)

The following table shows the capital structure of the Company at the close of the Rights Issue in the event that other than Abbotsleigh, all Eligible Shareholders take up 50% of their Entitlement and Abbotsleigh elects to take up all of its Entitlement under the Rights Issue as an Eligible Shareholder.

Shareholder	Shares	% of Total Shares
Ian Gandel/Abbotsleigh(1)	247,667,891(2)	30.5(2)
Others	565,007,240	69.5
TOTAL	812,675,131	100

Note 1: Ian Gandel's holding of Shares is held through Abbotsleigh, an entity that he controls. Gandel Metals, another entity controlled by Ian Gandel does not currently have an interest in any Shares but may acquire an interest in Shares through its sub-underwriting of the Rights Issue.

Note 2: If Ian Gandel acquires Shares prior to the Record Date or rights under the Rights Issue pursuant to the 3% Creep Exception, the maximum number of Shares that he may acquire pursuant to the Rights Issue under this scenario is 116,656,925 which would bring his total to 269,235,039 Shares or voting power of 33.1%.

Scenario 3 – Ian Gandel, through Abbotsleigh takes up its Entitlement, nil take up by other Eligible Shareholders (and Ian Gandel, through Gandel Metals, takes up its commitment pursuant to the Underwriting Agreement)

The table below shows the capital structure of the Company at the close of the Rights Issue where all Existing Eligible Shareholders (other than Abbotsleigh) elect not to take up their Entitlement.

Shareholder	Shares	% of Total Shares
Ian Gandel/Abbotsleigh(1)	321,364,488(2)	39.5(2)
Others	491,310,643	60.5
TOTAL	812,675,131	100

Note 1: Ian Gandel's holding of Shares is held through Abbotsleigh, an entity that he controls. Gandel Metals, another entity controlled by Ian Gandel does not currently have an interest in any Shares but may acquire an interest in Shares through its sub-underwriting of the Rights Issue.

Note 2: If Ian Gandel acquires Shares prior to the Record Date or rights under the Rights Issue pursuant to the 3% Creep Exception, the maximum number of Shares that he may acquire pursuant to the Rights Issue under this scenario is 187,540,415 which would bring his total to 340,118,529 Shares or voting power of 41.9%.

Ian Gandel's Intentions for the Company

Given the potential increase in Ian Gandel's voting power in the Company as a result of Abbotsleigh's participation in the Offer and Gandel Metals' sub-underwriting of the Offer, there is also a requirement to provide details of Ian Gandel's current intentions for the Company in the event that he gains effective control of the Company.

Ian Gandel has informed the Company that if he were to gain effective control of the Company by virtue of Abbotsleigh's and Gandel Metals' shareholdings, including New Shares acquired under the Offer and the sub-underwriting of the Offer, the current intentions of Ian Gandel are that he will procure that the Company:

• generally continue the business of the Company;
• work closely with the Directors to raise the funds necessary to meet the Company's cash requirements;
• subject to any legal requirements, not make any major changes to the business of the Company nor redeploy any of the fixed assets of the Company; and
• subject to detailed internal review of the operations and budgetary constraints of the Company, continue the employment of the Company's present employees.

The intentions and statements of future conduct set out above must also be read as being subject to the legal obligation of the Directors at the time, including Ian Gandel (who is also a Director), to act in good faith in the best interests of the Company and for proper purposes and to have regard to the interests of the Shareholders.

The implementation of Ian Gandel's current intentions of his ownership of the Company will be subject to the law (including the Corporations Act), the Listing Rules and the Company's constitution.

In particular, the requirements of the Corporations Act and the Listing Rules in relation to conflicts of interest and "related party" transactions will apply as Ian Gandel is currently a related party of the Company by virtue of his Company directorship.

Ian Gandel would only make a decision on his courses of action in light of material facts and circumstances at the relevant time and after it receives appropriate legal and financial advice on such matters, where required, including in relation to any requirements for shareholder approval.

The statements above are of current intention only which may change as new information becomes available or circumstances change. The statements should be read in this context.

4.7 Interests of Named Persons

Except as disclosed in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in:

• the formation or promotion of the Company;
• property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or
• the Rights Issue.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or agreed to be paid to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, or to any firm in which any of those persons is or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in connection with the formation or promotion of the Company or the Rights Issue.

Gilbert+Tobin have acted as Australian solicitors to the Company in relation to the Rights Issue and this Prospectus. In respect of their work on this Prospectus, the Company will pay approximately $23,500 for these professional services. Gilbert+Tobin have provided other professional services to the Company during the last two years amounting to approximately $23,500.

Cobbetts LLP have acted as United Kingdom solicitors to the Company in relation to the Rights Issue and this Prospectus. In respect of their work on this Prospectus, the Company will pay approximately £6,000 for these professional services. Cobbetts LLP have provided other professional services to the Company during the last two years amounting to approximately $40,481.

Patersons Securities Limited has acted as Underwriter to the Offer. In respect of this underwriting, the Company will pay approximately $253,000 representing 5% of the total Offer plus a lead manager fee of $20,000. The Underwriting Agreement is summarised in Section 4.5.

The amounts disclosed above are exclusive of any amount of goods and services tax payable by the Company in respect of those amounts.

4.8 Expenses of the Rights Issue

The approximate total expenses of the Rights Issue, including legal fees, registration fees, underwriting fees, fees for other advisers, printing and mailing expenses, and other miscellaneous expenses, are $361,528 (exclusive of any GST which may be payable). These expenses have been paid or are payable by the Company.

4.9 Consents

Each of the parties referred to in this Section 4.9:

• (a) does not make, or purport to make, any statement in this Prospectus or on which a statement made in the Prospectus is based, other than as specified in this Section 4.9; and
• (b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section 4.9.

Deloitte Touche Tohmatsu has given its written consent to the inclusion in Section 1.5 of this Prospectus to reference to the independent auditor's review report accompanying the consolidated entity's half year financial report for the half-year ended 31 December 2010 containing an emphasis of matter paragraph in respect of a material uncertainty regarding the consolidated entity's continuation as a going concern and to all references to the auditor's review report in the form and context in which those references appear in this Prospectus and has not withdrawn such consents before lodgement of this Prospectus with the ASIC.

Ian Gandel has given his written consent to the inclusion in Section 4.6 of this Prospectus to the statement of his intentions in respect of his holding in the Company and the control that he may exercise over the Company and to all references to his statement in the form and context in which those references appear in this Prospectus and has not withdrawn such consents before lodgement of this Prospectus with ASIC.

Each of the following has consented to being named in this Prospectus in the capacity as noted below and has not withdrawn such consent prior to the lodgement of this Prospectus with the ASIC:

• (a) Gilbert+Tobin as the Australian solicitors to the Company;
• (b) Cobbetts LLP as the United Kingdom solicitors to the Company;
• (c) Patersons Securities Limited as the Underwriter of the Rights Issue;
• (d) Patersons Securities Limited as the nominee pursuant to section 615 of the Corporations Act in respect of dealing with Excluded Shareholders' Entitlements under the Rights Issue;
• (e) Gandel Metals as the sub-underwriter of the Rights Issue;
• (f) Ian Gandel as a substantial Shareholder of the Company; and
• (g) Deloitte Touche Tohmatsu as the auditor to the Company.

Security Transfer Registars Pty Ltd, as the Company's share registry, has not had involvement in the preparation of any part of this Prospectus other than being named as Share Registrar to the Company. Security Transfer Registars Pty Ltd has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for any part of the Prospectus.

Section 5 DEFINED TERMS

"$" means an Australian dollar;

"Abbotsleigh" means Abbotsleigh Proprietary Limited ACN 005 612 377 as trustee for the I. Gandel Share Investment Trust of Suite 3, 51-55 City Road, Southbank, Victoria;

"Abbotsleigh Loan" means the loan facility made available by Abbotsleigh (as lender) to Adobha (as borrower) on the terms and conditions set out in Section 4.6;

"Abu Dabbab Project" means the Company's tantalum/tin project in Egypt;

"ASX Clear" means the ASX Clear Pty Limited ABN 48 001 314 503;

"ASX Clear Rules" means the operating rules of ASX Clear;

"Adobha" means Adobha Resources Limited ABN 49 146 510 723;

"Adobha Eritrea" means Adobha Resources (Eritrea) Pty Ltd ABN 82 078 383 909;

"Adobha Project" means the Company's prospecting and exploration projects in Eritrea;

"Application Monies" means the monies received from Eligible Shareholders applying for New Shares pursuant to the terms of the Rights Issue;

"ASIC" means the Australian Securities & Investments Commission;

"ASX" means ASX Limited ABN 98 008 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited;

"ASX Settlement" means ASX Settlement Pty Ltd ACN 008 504 532;

"ASX Settlement Rules" means the settlement operating rules of ASX Settlement as amended from time to time;

"AWST" means Australian Western Standard Time;

"Board" means the board of Directors;

"Business Day" means every day other than a Saturday, Sunday, New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day;

"CHESS" means the Clearing House Electronic Subregister System;

"Closing Date" means 5.00pm AWST on 11 August 2011, or such later date as the Directors, in their absolute discretion and subject to compliance with the Listing Rules, may determine;

"Company" or "Gippsland" means Gippsland Limited ABN 31 004 766 376;

"Constitution" means the constitution of the Company, as amended from time to time;

"Corporations Act" means the Australian Corporations Act 2001 (Cth);

"Directors" means the directors of the Company at the date of this Prospectus;

"Eligible Shareholders" means those Shareholders with a registered address in the Share Register in Australia, New Zealand or the United Kingdom as at the Record Date;

"Entitlement" or "Right" means the entitlement of an Existing Eligible Shareholder to apply for New Shares under the Rights Issue;

"Entitlement and Acceptance Form" means the Entitlement and Acceptance Form accompanying this Prospectus for use in connection with the Rights Issue;

"Eritrea" means the State of Eritrea;

"Eritrea Loan" means the loan facility made available by Adobha (as lender) to Adobha Eritrea (as borrower) on the terms and conditions set out in Section 4.6;

"Ex Date" means 15 July 2011 being the date from which Shares trade without the Entitlement;

"Excluded Shareholder" means Existing Shareholders registered outside of Australia, New Zealand or the United Kingdom;

"Exploitation Licence" means exploration licence numbers 1658, 1659 and 1785, being licences issued by the Egyptian Mineral Resources Authority and which provide the right for the holder to explore, mine, process and sell mineral resources contained within the licence area;

"Exploration Licence" means the exploration licence for the Company's Adobha Project issued by the Eritrean Ministry of Energy and Mines in which the Company holds a 90% interest and which provides the right for the Company to explore, mine, process and sell mineral resources contained within the licence area;

"FSA" means the United Kingdom's Financial Services Authority;

"FSMA" means the United Kingdom's Financial Services and Markets Act 2000, including any statutory modification or re-enactment for the time being in force;

"Gandel Metals" means Gandel Metals Pty Ltd ABN 50 102 347 995 as trustee for the Gandel Metals Trust;

"Group" means the Company and is wholly owned subsidiaries, comprising the consolidated entity;

"Heemskirk Project" the Company's tin project in Australia;

"Listing Rules" means the official listing rules of ASX, as amended from time to time;

"New Shares" means the new Shares offered pursuant to the Rights Issue;

"Nuweibi Project" means the Company's Nuweibi tantalum project in Egypt;

"Offer" means the offer of New Shares to Eligible Shareholders made as the under the Rights Issue pursuant to this Prospectus;

"Option" means an option to acquire one Share;

"Order" means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;

"Prospecting Licences" means the three prospecting licences for the Company's Adobha Project issued by the Eritrean Ministry of Energy and Mines in each of which the Company holds a 90% interest and which provides the right for the Company to conduct prospecting activities within the licence area;

"Prospectus" means this prospectus dated 12 July 2011;

"Prospectus Rules" means the prospectus rules of the FSA made under Part VI of the FSMA;

"Record Date" means 5.00 pm AWST on 21 July 2011;

"Relevant Company" means the Company and each member company of the Group;

"Rights Issue" means the pro-rata renounceable rights issue pursuant to this Prospectus of approximately 187,540,415 New Shares on the basis of 3 New Shares for every 10 Shares held on the Record Date at an issue price of $0.027 per New Share, to raise approximately $5,063,591;

"Section" means a section of this Prospectus;

"Share" means a fully paid ordinary share in the issued capital of the Company;

"Shareholder" means a registered holder of a Share;

"Share Register" means the share register maintained on behalf of the Company by the Share Registry;

"Share Registry" means Security Transfer Registrars Pty Ltd ABN 95 008 894 488;

"Shortfall Shares" means the New Shares forming Entitlements, or parts of Entitlements, not accepted by Eligible Shareholders;

"Shortfall Application" means an application for Shortfall Shares;

"Underwriter" or "Patersons" means Patersons Securities Limited ABN 69 008 896 311 AFSL 239052;

"Underwriting Agreement" means the Underwriting Agreement dated 12 July 2011 between the Company and the Underwriter and summarised in Section 4.5 of this Prospectus; and

"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

Section 6 DIRECTORS' RESPONSIBILITY STATEMENT & CONSENT

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect to any other statements made in the Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC, or to the Directors knowledge, before any issue of New Shares pursuant to this Prospectus.

The Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each Director has consented to the lodgement of this Prospectus with the ASIC and has not withdrawn that consent.

Dated: ____________________________

John Kenny Director

ANNEXURE A

FURTHER TERMS AND CONDITIONS

By applying for New Shares under the Rights Issue:

• (a) your application will be irrevocable and unconditional;

• (b) you irrevocably confirm, warrant and undertake that your participation in the Rights Issue is made solely on the basis of the information contained in this Prospectus, the Application Form and the business and financial information published by the Company in accordance with the rules and practices of the ASX and on no other basis whatsoever;

• (c) you acknowledge that you are eligible to participate in the Rights Issue and if you are an Existing Eligible Shareholder resident in the United Kingdom, you irrevocably confirm, warrant and undertake that you are a person falling within Article 43(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended);

• (d) you irrevocably confirm, warrant and undertake that you were outside the United States of America at the time your acquisition of New Shares was originated and you were not at such time and are not a US person (and were not and are not acquiring on behalf of, or for the account of or benefit of, a US person) within the meaning of Regulation S promulgated under the United States Securities Act 1933 (as amended) and you will not offer, sell or deliver directly or indirectly any of the New Shares in the United States of America;

• (e) you irrevocably confirm, warrant and undertake that you are not a national or resident of a country or jurisdiction outside of Australia, New Zealand or the United Kingdom and that you will not offer, sell or deliver as principal or agent, directly or indirectly, any of the New Shares in or into a country or jurisdiction outside of Australia, New Zealand or the United Kingdom or to or for the benefit of any persons resident in a country or jurisdiction outside of Australia, New Zealand or the United Kingdom or to any person purchasing such shares or options for re-offer, sale or transfer in or into a country or jurisdiction outside of Australia, New Zealand or the United Kingdom;

• (f) you irrevocably confirm, warrant and undertake that you are entitled to subscribe for the New Shares under the laws of all relevant jurisdictions which apply to you and that you have fully observed such laws and obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and that you have not taken any action which will or may result in the Company or any of its directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Offer or your acceptance thereof;

• (g) you irrevocably authorise the Company (and its officers or agents) to correct any error in, or omission from, your Application Form and to complete the Application Form by the insertion of any missing details;

• (h) you irrevocably accept the risk associated with any refund that may be despatched to you by cheque to your address shown on the Share Register;

• (i) you irrevocably agree to indemnify the Company from, and to pay to the Company within 5 business days of demand, any dishonour fees or other costs the Company may incur in presenting a cheque for payment which is dishonoured;

• (j) you acknowledge that neither the Company nor the ASX nor any of the Company's advisers has provided you with investment advice or financial product advice, and that none of them has any obligation to provide this advice, concerning your decision to apply for and purchase the New Shares;

• (k) you irrevocably acknowledge that the Company and its directors, employees and agents are not liable for any exercise of its discretions referred to in this Prospectus; and

• (l) you irrevocably and unconditionally agree to the terms of this Prospectus and agree not to do any act or thing which would be contrary to the spirit, intention or purpose of the Rights Issue or the Prospectus.