STREAMPLAY STUDIO LIMITED — Interim / Quarterly Report 2003

Oct 29, 2003

Suite 34, 18 Stirling Highway, Nedlands WA 6009 PO Box 352, Nedlands WA 6909, Australia ABN 31 004 766 376 Tel: (08) 9389 8611 Fax: (08) 9389 8612 E-mail: itelford@gippslandltd.com.au www.gippslandltd.com.au

OUARTERLY ACTIVITY REPORT

Period: July - September 2003 30 October 2003

SUMMARY

• Abu Dabbab Project (tantalum, tin, feldspar)
  • $\bullet$ Feldspar offtake agreement
  • 3-fold increase in tantalum resources
  • Pilot plant testwork results ×
  • Discussions with international project development banks $\ddot{\phantom{1}}$
• Completion of fundraising
• New projects

ABU DABBAB - FELDSPAR OFF-TAKE AGREEMENT

During the July - September 2003 quarter the Directors of Gippsland Limited ("Gippsland" or "the Company") announced that Gippsland had entered into a heads of agreement ("Agreement") with a major European group of companies ("the Group") for the off-take of 2.65Mt of micronised ceramic grade feldspar to be produced at the Company's 40Mt Abu Dabbab tantalum-feldspar project ("Abu Dabbab") located in Eqypt.

The Group is a major blue chip international industrial operation involved in the feldspar industry having an annual revenue in excess of US$400 million.

Under the five year Agreement, the Group's feldspar off-take will commence at 250,000 tonnes during 2005 increasing to 900,000 tonnes during 2009. Based upon current market prices for feldspar, the Agreement is scheduled to generate sales revenue in excess of US$80 million (A$120M) over the five year period.

The Agreement provides the Group with the option to increase feldspar off-take tonnages during the five year period.

The Agreement is non-exclusive and only pertains to the Italian market. The off-take Agreement is subject to a number of standard but material commercial conditions precedent such as that the Abu Dabbab feldspar specification must comply with the requirements of the Italian ceramic industry. As previously announced however, in-plant testwork undertaken in Italian ceramic tile factories has confirmed that the Abu Dabbab feldspar is eminently suitable for this purpose.

Gippsland is continuing to evaluate the feldspar markets in Spain, Portugal, France, Germany, South East Asia and the Middle East which have a combined market potential in excess of 5Mtpa. Accordingly, Gippsland is presently in negotiation with companies based in Spain, France and Germany with the view to concluding additional feldspar off-take agreements.

The Agreement highlights the distinct potential for the Abu Dabbab project to become one of the World's foremost feldspar producers as Abu Dabbab's 40 Mt resource base would readily support a 2 to 3Mtpa open pit operation producing 1.6 to 2.4Mtpa of ceramic grade feldspar. Additionally this scale of operation would produce between 800,000 to 1,600,000 pounds per annum of $Ta_2O_5$ which would rank Abu Dabbab as the World's number 2 tantalum producer.

Based upon the Scoping Study undertaken by the international engineering group Lycopodium Pty Ltd ("Lycopodium") in March 2003, the Abu Dabbab operating cost of Ta2O5 production net of tin and feldspar credits is less than US$5/lb.

The Abu Dabbab project is the subject of a 50:50 joint venture agreement between Gippsland and the Egyptian Geological Survey & Mining Authority, (a state agency of the Egyptian Government). Lycopodium is presently undertaking the Abu Dabbab Bankable Feasibility Study ("BFS") which is expected to be completed during the first quarter of 2004.

NUWEIBI PROJECT - THREE-FOLD TANTALUM RESOURCE INCREASE - 122 MILLION TONNES

During the quarter Gippsland Directors announced that the Company's 50%-owned joint venture company Tantalum Egypt had been granted an Exploration Licence over a 16km2 area of land in Egypt which includes the 82Mt Nuweibi tantalum-feldspar deposit which is located 15km from Abu Dabbab.

The Egyptian Minister for Industry and Technology, His Excellency Dr Ali Fahmi Al Sa'aidi, announced the award of the Exploration Licence at a specially convened press conference held in Cairo on 17 September 2003. A number of senior Egyptian dignitaries along with approximately 25 domestic and international press and television representatives attended the function which received widespread media coverage in both Arabic and English languages.

Tantalum Egypt has the sole right to convert the Exploration Licence to a Mining Licence at any time during the four year life of the tenement.

The Nuweibi deposit was discovered during the 1970s by joint Egyptian-Soviet geological expeditions whose members subsequently explored the deposit in detail. The deposit is comprised of tantalum-niobium-tin mineralisation within a porphyritic microcline-quartz-albite granite. There has been extensive exploration completed on the area including 23 diamond drill holes totalling 2.746m, trenching, surface sampling and metallurgical testwork. As a result of this exploration it was determined that the Nuweibi deposit contains 82Mt at a grade of 156g/t tantalum pentoxide ("Ta2O5") at a cut-off of 120g/t. The mineralisation was assigned to the C1 and C2 categories according to the Soviet system. These categories are approximately equivalent to the JORC indicated and inferred resources respectively.

Gippsland is presently undertaking a review of all available Nuweibi data with the view to converting the Soviet resource figures to JORC Code compliant resources. Having had considerable experience with Soviet resource methodologies, the Company is confident that the JORC Code compliant resources will not differ greatly from the Russian estimates.

Following the detailed 1970s exploration programs, the Nuweibi deposit was mothballed due to the then low Ta2O5 price and a lack of suitable technologies capable of processing fine-grained tantalum ores. During the 1990s, significant metallurgical advances were achieved, particularly with respect to enhanced gravity separation techniques, with the result that Nuweibi and Abu Dabbab style ores are now successfully and routinely processed in a number of mining operations both within Australia and overseas. Gippsland's previous Abu Dabbab metallurgical test-work, and the pilot-plant programme currently being undertaken in Australia have demonstrated high levels of tantalum recovery. Like the Abu Dabbab deposit, the Nuweibi deposit is also expected to yield high quality ceramic grade feldspar.

As is the case with the Abu Dabbab deposit, the mineralogy of the Nuweibi deposit is relatively simple in that it does not contain high levels of detrimental contaminants or minerals associated with uranium and thorium which plaque a number of tantalum deposits throughout the world preventing commercial development.

The Nuweibi mineralisation is exposed as a hill of up to 115m in height above the wadi floor while diamond drilling programmes determined that the mineralisation extends to 200m below the wadi floor. The deposit is well suited to open-pit mining at an expected waste/ore strip ratio of less than 1.5:1. It is anticipated that the use of one processing plant for both the Abu Dabbab and Nuweibi deposits will greatly enhance the project's economics.

The Directors believe that the award of the Exploration Licence over a world-scale 82Mt deposit reflects the excellent working relationship that has been forged between Gippsland and its Egyptian partners. The acquisition of the Nuweibi Exploration Licence greatly increases the likelihood of an early expansion of the project mill-feed to 2Mtpa and beyond.

The Nuweibi and Abu Dabbab are connected by a hard dirt road and are located adjacent to the extensive infrastructure associated with the Eqyptian Red Sea tourist industry, one of the country's prime sources of foreign income. Both deposits are within close proximity to the Marsa Alam International Airport, major highways and the proposed extension to the national electric power grid. No recognised archaeological sites exist within or near the Abu Dabbab and Nuweibi licence areas or the assess road linking the deposits and the Red Sea coast.

Like Abu Dabbab, the Nuweibi project will be developed under the umbrella of Egyptian Law No. 8/1997 -Investment Guarantees and Incentives, which was established specifically to encourage foreign investment in Eqypt. Law No 8/1997 provides numerous benefits including protection against nationalisation, free export trade of products, a maximum of 5% customs import duty, and exemption from a number of taxes, including stamp duty and land tax. The provisions of Law No 8/1997 will also enable Tantalum Egypt to enjoy a twenty (20) year exemption from taxation of profits.

PILOT PLANT TESTWORK

The Abu Dabbab pilot plant testwork being undertaken in Australia is proceeding to plan with the first phase of tantalum recovery having been achieved at a recovery rate of 68%. This first pass recovery level is most encouraging and is likely to be optimised as further testwork proceeds.

The tantalum recovery from the tails section of the process is now underway and is expected to be completed within four weeks.

Feldspar flotation testwork has commenced and is expected to yield several tonnes of product for in-plant testing in Italy.

PROJECT FINANCE

The Company is currently in discussion with a number of project finance companies and international development banks which have expressed interest in providing Abu Dabbab project finance. These preliminary discussions are progressing well and are expected to move to a higher level at the conclusion of the BFS during the first quarter of 2004.

COMPLETION OF FUNDRAISING

The Directors announced on 8 September 2003 that the Placement Prospectus Gippsland lodged with the ASIC and the ASX on 5 August 2003 has been completed in full thus raising the sum of $560,000.00 for the Company.

NEW PROJECTS

In addition to tantalum projects, Gippsland is currently reviewing a number of gold and base metals projects with the aim to diversify the Company's activities and asset base. While projects having the capacity to produce early cash-flows are of particular interest, the prime focus is directed towards potentially world-scale projects.

RJ (Jack) Telford Executive Chairman

Note: In accordance with Listing Rule 5.10 of the Australian Stock Exchange Limited, the geological information in this report that relates to mineral resources and ore reserves is based on information compiled by Gippsland Director Dr John Chisholm, who is a Fellow of the Australasian Institute of Mining and Metallurgy, with over 30 years experience in the mining industry.