STREAMPLAY STUDIO LIMITED — Interim / Quarterly Report 2011

Jul 28, 2011

FOURTH QUARTER ACTIVITIES REPORT

Period: 1 APRIL – 30 JUNE 2011 Release Date: 29 JULY 2011

The Directors of Gippsland Limited ('Gippsland' or 'the Company') [ASX: GIP, FRA: GIX] provide the following Activities Report for the period April – June 2011, together with details of events up to the date of this report.

HIGHLIGHTS

• Abu Dabbab site visit by ECMR Chairman;
• Commencement of alluvial tin trial mining;
• a; ughput from 2Mtpa rate to 3Mtp Increase of base case Abu Dabbab project thro
• d mineral resources by 37%; Increase of Abu Dabbab ore reserves by 10% an
• s; Independent validation of project economic
• Approval of work program for Nuweibi Project;
• Commencement of VTEM survey in Eritrea;
• JV tin project; and Completion of scoping study for the Heemskirk
• Fully underwritten renounceable rights issue.

EGYPT ABU DABBAB TANTALUMTIN PROJECT

ECMR Chairman hairmanSite Visit

In mid‐May, Dr M Nashaat, the Chairman of the Egyptian Company for Mineral Resources ("ECMR"), conducted an inspection of the Abu Dabbab project area, including visiting the Abu Dabbab hard rock deposit, the Nuweibi deposit and, in particular, the Abu Dabbab alluvial tin trial mining operations.

Following his visit, Dr Nashaat on behalf of ECMR expressed his appreciation for the work thus far completed by Tantalum Egypt JSC ("TE") in relation to the Abu Dabbab project and praised the team led by TE's Chief Geologist, Dr Atef conducting the trial mining program.

Free Zone Walled Compound ompound

Work on the Free Zone at the Abu Dabbab project site is nearing completion. The brick walls on three f the boundaries are now complete, as is the customs house and most of the associated drainage orks. The wire fence (and gate) on the western boundary has also been completed. o w

Sea Water Intake and Feldspar eldspar Port Studies

Following consultation with the Company's Cairo‐based environmental consultants, Environics, it has een decided that the preferred means of sea water intake will take the form of an intake located o t r t b outside the fringing reef, connecting with a pipeline to shore m un ed on a jetty st uc ure.

The last remaining environmental compliance issue will be the approval of the design and construction of the jetty. As of the date of this report, such drawings are being prepared for inclusion in the Company's updated project EIS.

Project Debt Finance

The Company, together with Noah's Rule, is presently in discussions with a well known and respected global financial institution with a view to securing an offer for debt finance of the Abu Dabbab Project.

Subject to successful completion of these discussions and completion of project financing conditions precedent, the Company would be on track to announce project go‐ahead later this year.

Project ESIA

As previously advised, the announced project changes require the updating of the project ESIA to take account of the increased production rate, the elimination of the use of sea water as process water and the consequential changes to the tailings storage facility ("TSF") and sea water intake and brine discharge facilities. The Company's environmental consultant, Environics, is currently revising the ESIA and is now expected to deliver its report in the third quarter of 2011, following which the final environmental approvals for the project may be obtained. Environics is awaiting the jetty and bore fields design to complete their study. Approvals from the Shoreline Protection Authority ("SPA") on the jetty design and the Ministry of Water and Irrigation for the bore fields design are also required before submitting the final report to the EEAA.

At the end of the reporting period, meetings with Environics in Cairo revealed that the updated EIS is very close to completion.

Seabed Survey

The seabed survey, reported on last quarter, was passed to the Company's environmental consultants as part of th environment e al im act tudy update. p s

This work will facilitate the EIS update, particularly with regard to the proposed sea water desalination strategy.

Alluvial lluvial Tin Trial Mining

The HPC‐15 alluvial separator was successfully commissioned on ‐12.5 mm feed and the trial mining of material and on‐site processing has been under way since 10 April 2011, with sample feed being mined by excavator from six profiles. The six profiles selected represent the range of alluvial material and cassiterite grades expected to be encountered during full scale mining.

The trial mining to date has focussed on characterising the placer deposit material to determine etallurgical behaviour and to confirm the cassiterite content of the deposit, cassiterite content of the o m waste material and the mineralogy f the cassiterite in the concentrate and tailings.

By early June, a total of 127.81m3 of mineralised material had been processed for the recovery of 15.92t of rougher concentrate. Eight samples of rougher1 concentrate gave Tin (or "Sn") values of between 0.57% & 13.81% with a mean value of 4.29% Sn.

A further report will be prepared as results become available, along with an evaluation of a full scale alluvial mining proposal.

Change of Base Case Through ut hroughput Rate

Following detailed evaluation of alternative production profiles for the Abu Dabbab Project, the Company has proceeded with a change of scope for the Abu Dabbab Project from 2 million tonnes per annum ("Mtpa") of Run‐of‐Mine ore ("ROM") to 3 Mtpa of ROM.

1 First pass concentrate without any additional processing treatment.

2 ASX Quarterly Apr ‐ Jun 2011

At this rate of production, the average annual output of products is estimated to be approximately:

• 925,000 pounds of tantalum oxide (Ta 2O5) in slag;
• etal; and 2,200 tonnes of tin as tin m
• up to 2.4 Mtpa of feldspar.

Revised pit optimisation studies suggest a mine life of 13.5 years.

The Company has completed Whittle pit re‐optimisations at both 2 and 3 Mtpa based on both Measured and Indicated Mineral Resources and Measured, Indicated and Inferred Mineral Resources.

In each case a number of scenarios over a range of metal price assumptions were performed. The results indicate that the 3 Mtpa ROM option is superior to the 2 Mtpa ROM case on technical, economic and commercial (marketing) grounds.

Following review of process alternatives and corresponding forecast product specifications, the Company has decided not to proceed with the SynCon route for the production of high grade tantalum oxide for the Abu Dabbab Project.

The process flow sheet will comprise conventional gravity separation after crushing and grinding of the ROM to produce a primary gravity concentrate.

Increase ncreaseof Ore Reserves eserves

The original pit optimisation and open pit mine design for the bankable feasibility study for the Abu Dabbab project was based on prices of US$42.00 per lb for Ta O and US$7,000 per tonne for Sn. In ight of the recent significant lift in the prices for both commodities, the Company decided to re‐ 2 5 l optimise the open pit design with the aim of better utilising the total Abu Dabbab resource.

With this in mind, the pit re‐optimisations were run at both 2 Mtpa and 3 Mtpa production rates with the following metal prices: Ta2O5 US$75.00 per lb and Sn US$25,000 per tonne. The results of the re‐ optimisations pointed to improved overall project economics stemming both from the increased production rate and metal prices. Accordingly, an updated 3 Mtpa open pit mine design was prepared.

The revised open pit mine design and associated production schedule supports the following updated Ore Reserves statement, based on a 100 g/t Ta2O5 cut‐off.

Category	Mt	Ta2O5(%)	Sn(%)
Proven ore	15.20	0.0260	0.1695
Probable ore	17.98	0.0245	0.0989
TOTALORERESERVES	33.18	0.0252	0.1312
Inferred resource	8.21	0.021	0.040
TOTAL	41.37	0.0244	0.1130
Note: Totals may not match due to rounding

The immediate increase in the Ore Reserve is in the Probable category. The remaining 8.21 Mt of Inferred Resource is expected to be upgraded to an ore reserve category as the pit deepens and additional grade control drilling can be completed. Thus the increase in the Ore Reserves is 10%, and the corresponding increase in scheduled resources is 37%.

Independent ndependent Validation alidationof Abu Dabbab Project Economics conomics

On 8 July 2011, Gippsland announced the results of an independent calculation of project economic indicators and sensitivities for the Abu Dabbab tin‐tantalum‐feldspar project completed by the Company's financial advisers, Noah's Rule.

The economic performance indicators produced are the conventional Net Present Value ("NPV") and Internal Rate of Return ("IRR") methodologies for project evaluation utilising a core set of costs provided by the Company's engineering consultants and revenue assumptions related to product sales, market price and fuel costs set by Gippsland's management in consultation with Noah's Rule. The results are summarised in Table 2.

The key price assumptions upon which the Base Case performance indicators presented in Tables 2(a) (un‐geared) and 2 (b) (geared) were based are summarised in Table 3.

Table 2 (a) Base Case UnGeared Economic Performance Indicators (Capital costs 100% Equ ity Funded)

Performance Indicator	Units	Project	Gippsland Share
NPV @ 10% discount rate	US$ million	593.0	263.6
NPV @ 15% discount rate	US$ million	402.8	164.9
NPV@ 20% discount rate	US$ million	271.5	94.6
IRR	%	39.2	28.4

Table 2 (b) Base Case Geared Economic Performance Indicators (Capital costs 50:50 Deb t*:Equity Funded)

Performance Indicator	UnitsProject		Gippsland Share
NPV @ 10% discount rateNPV @ 15% discount rateNPV@ 20% discount rate	US$ millionUS$ millionUS$ million	583.8392.6260.7	268.8188.4132.3
IRR	%	37.8	42.5

*Interest on debt is assumed at 7% per annum

Table 3: Base Case Price Assumptions

Product		Unit	Product Price Assumptions
TinTa2O5		US$ per tonne	25,450
	Off‐Take Price	US$ per pound	perOff‐take Agreement
	Residual Sales	US$ per pound	110
Feldspar		US$ per tonne FOB	35
Diesel Price		US$ per litre	0.935

Whilst Noah's Rule has reviewed and held discussions around the mining inputs, throughput and costs in the financial model, these are primarily supplied by the Company and its consultants. Noah's Rule's primary input into the financial model relates to market price assumptions utilised for commodity sales, discount factors and currency exposures.

EGYPT NUWEIBI TANTALUMTIN PROJECT

A programme of work has been approved for the Nuweibi project with the specific aims of achieving the following:

• Increasing the identified mineral resources;
• Delineating zones of higher tantalum and tin grades;
• Determining the limits of the mineralisation; and •
• f the associated heavy mineral placer deposits. • Assessing the commercial parameters o

This work will include the following activities:

• Topographic survey;
• Infill RC drilling;
• Mineral resource estimation; and
• Bulk testing of the placer deposits.

A budget of $300,000 has been proposed to complete the various items of work.

Work is scheduled to commence in the third quarter of 2011 subject to the usual security permits being available for access to the field area.

ERITREA (ADOBHA PROJECT)

Gippsland's 100% owned subsidiary Adobha Resources (Eritrea) Pty Ltd (formerly Nubian Resources Pty Ltd) holds a 2,100km2 Exploration Licence plus three 100km2 Prospecting Licences ('Licences'), in the highly prospective Adobha region of The State of Eritrea .

The Licences cover 2,400km2 of the highly mineral endowed Nubian‐Arabian Shield in Eritrea that is regarded as very prospective for volcanogenic massive sulphide (VMS) mineralisation and structurally controlled gold mineralisation. Local examples of these types of deposits are the Bisha base metal deposit (1.44 million ounce gold and 0.39 million tonne copper) located some 174km to the south and the 0.760 million ounce Zara gold project (Koka deposit) located only 16km to the south of the Company's most southern Licence. The large area covered by the Licences forms part of the Precambrian Nubian‐Arabian Shield that also hosts the 13.7 million ounce Sukari gold deposit.

Under the terms of the Eritrean Mining Act, Prospecting Licences are granted for one year after which they may be converted to Exploration Licences or surrendered. Exploration Licences have tenure of three years be exten which can ded for a further two years.

During the quarter, a systematic drainage geochemical sampling programme of the previously identified Thematic Mapper satellite image anomalies and target areas identified from a geological interpretation was commenced. To date, all of the areas accessible by 4WD have been completed. A small number of areas are inaccessible and will be completed when a suitable helicopter is available.

In addition to the above geochemical sampling, a geophysical survey over the Adobha project tenements by Geotech Airborne Ltd commenced on 25 July 2011. This survey will record Versatile Time‐Domain Electromagnetic ("VTEM") and magnetic data for 3,000 line kilometres with the option to extend the survey to 5,069 km at the Company's discretion.

Adobha Resources (Eritrea) Pty Ltd has recently submitted applications to convert its three Prospecting Licences (Gerasi South, Hafta West and Romay) to Exploration Licences, however, there is no guarantee that the new Exploration Licences will be granted.

AUSTRALIA – HEEMSKIRK TIN DEPOSIT

The Heemskirk Tin Project (Gippsland: 40% free carried to BFS), at Zeehan Tasmania, collectively comprises Australia's largest known undeveloped hard rock tin deposit; the Queen Hill, Severn, and Montana deposits.

During the reporting period, Gippsland's joint venture partner Stellar Resources Ltd (ASX: Code SRZ, "Stellar") reported further progress on the project with the following key points:

• Stellar has drilled four exploration holes at Queen Hill since early March to test the potential for near‐surface lateral extensions of the mineralisation outside of the Mineral Resource envelope. Drill hole ZQ099 was located 40m south of the tin lode and ZQ100 and 101 were drilled on section 50m to the north.
• So far, the near‐surface tin mineralisation outside of the resource envelope has proven to be low level. However, as the assay results for ZQ100 and ZQ101 show, the hanging wall Clarkes Lode silver lead mineralisation is particularly rich on this section and has the potential to add considerable value to the project.
• Drilling is continuing 130m to the north of ZQ100 to test for mineralisation down plunge from the Stormsdown pit. Surface sampling along the southern wall of the pit provided an assay of 1.5% tin over 4m.
• Recent metallurgical test work focussed on reducing tin losses in the sulphide float circuit. Excellent results were achieved with a reduction in losses from 15% of tin in feed to 7%. Opportunities for further improvement are under investigation.
• The tin float circuit was tested under a wide range of chemical and physical conditions and using a range of reagents. The most recent tests have shown a significant improvement in tin recovery that augurs well for meeting grade and recovery targets. Work will continue on the tin float circuit to build on the progress achieved to date.
• The Stormsdown prospect, where a 4m channel chip sample of surface mineralisation graded 1.61% tin, is located 110m north of the Queen Hill deposit. Diamond holes ZQ102 and ZQ103 were drilled in a section to test for the down‐plunge extension of surface mineralisation and to determine the potential for a mineralised zone parallel to the Queen Hill deposit. The tonnage potential at Stormsdown is unknown and further drilling is required to determine its continuity and extent.
• ZM104 and ZM105 were drilled in section along the eastern edge of the Montana deposit to sample the main tin lode and determine whether mineralisation extends to the surface. Further drilling, particularly to the west, will be required to develop a greater understanding of its geological position. The Montana deposit remains open to the west and at depth where some of the best historical intersections were achieved.
• On 6 July 2011, Stellar announced the completion of the scoping study by Stellar for the Heemskirk Tin Project. According to Stellar, the study demonstrates a high return on investment is achievable and justifies rapidly moving the project into pre‐feasibility phase. Independent mining consultancy Mining One conducted the study and identified the following highlights:
  • 21% internal rate of return and 3.5 year payback at a long‐term tin price of US$25,000/t (US$22,500/t net of treatment charges) and 1.0A$/US$ exchange rate.

• US$12,780/t cash cost of tin in concentrate positions the project competitively on industry cost curve.
• Cash operating margin of US$9,720/t or 43% on revenue net of smelting and refining charges.
• Life of mine revenue of $673 million (100% basis) net of smelting and refining charges.
• 600,000 tpa throughput for 7.6 years provides economies of scale.
• 3,900 tonnes of annual tin production would rank the project second to Renison Bell in Australia.
• Scoping of project environmental parameters is now underway and should benefit from the fact that all planned operations are within a zone of historical mining.
• Stellar, as operator of the JV, has stated that the Heemskirk Tin Project remains on track for production in 2014 subject to the timing of government approvals a d inancin . n f g

Gippsland and Columbus Metals Limited ("Columbus"), a subsidiary of Stellar Resources, are participants in an unincorporated joint venture ("Heemskirk Joint Venture") in relation to retention licence 5/1997 located in Tasmania ("Licence"). Gippsland is the beneficial owner of a 40% interest in the Heemskirk Joint Venture ("JV Interest") and, under the terms of the JV Agreement, Gippsland's JV Interest is free carried by Columbus until the completion of a bankable feasibility study. Pursuant to the terms of the Heemskirk Agreement, upon completion of an Acceptable Feasibility Study (as defined in the Heemskirk Agreement), Gippsland's JV Interest will reduce to 30%. In addition, upon commencement of Commercial Mining Operations (as defined in the Heemskirk Agreement), Gippsland shall not be entitled to receive for its own benefit its share of the proceeds from mining operations until it has repaid to Columbus 75% of Expenditures contributed by Columbus on behalf of Gippsland, being 30% of all Expenditures incurred until the completion of the Acceptable Feasibility Study together with interest.

JORDAN

During the quarter, Gippsland held discussions with Jordanian state authorities about exploration opportunities in Jordan. On 22 June 2011, Gippsland announced it had withdrawn from these discussions.

CORPORATE

Termination ermination of Divestment ivestment of NonEgyptian gyptian Assets

During the period, the Board of Gippsland decided to retain the Company's interests in its non‐ Egyptian assets and decided not to proceed with the divestment of these interests to Adobha Resources Limited as had been previously announced.

The various legal agreements specific to the spin out transaction, including the agreement related to the sale of the Heemskirk JV interest and the agreement related to the subscription for shares in Adobha Resources (Eritrea) Pty Limited, which were referred to in the Company's announcement dated 21 April 2011, have now been terminated.

Fully Underwritten nderwrittenRenounceable enounceableRights Issue

On 12 July 2011, Gippsland announced a fully underwritten renounceable rights issue to shareholders at the record date of 21 July 2011 (5pm AWST) on the basis of three new shares for every ten existing shares to raise approximately $5,063,000 before costs at an issue price of 2.7 cents per new share ("Rights Issue").

The Rights Issue has been fully underwritten by Patersons Securities Limited and is sub‐underwritten by Gandel Metals Pty Ltd as trustee for the Gandel Metals Trust, a company controlled by Gippsland Chairman, Mr Ian Gandel. The Rights Issue price represents a discount of approximately 11% to the 30 day volume weighted average of Gippsland shares traded on ASX.

After meeting the expenses of the Rights Issue, the Funds raised from the Rights Issue will be applied to a comprehensive exploration program in Eritrea, drilling of the Nuweibi deposit in Egypt, repayment of loans and for working capital.

IJ Gandel Chairman ippsland Limited ww.gippslandltd.com G w

For further information, please contact:

Geoff Hawkins Gippsland Limited T: +61 8 9340 6000 E: info@gippslandltd.com

Note:

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