FIRST QUARTER ACTIVITIES REPORT

Period: 1 JULY – 30 SEPTEMBER 2013 Release Date: 31 OCTOBER 2013

The Directors of Gippsland Limited ("Gippsland" or "the Company") [ASX: GIP, FRA: GIX] provide the following Activities Report for the period July to September 2013, together with details of events up to the date of this report.

HIGHLIGHTS

Consortium of Egyptian banks appoints Coffey International as the Independent Technical Advisor;
the Project has no fatal flaws; Preliminary draft report from Coffey concludes
Loan facility from Gandel Metals of up to $1m.

EGYPT ABU DABBAB TANTALUMTIN PROJECT

Project Debt Finance

A Consortium of Egyptian banks comprised of Bank Audi, Banque Misr, Commercial International Bank and Banque Du Caire was formed to jointly support Tantalum Egypt JSC ("TE JSC") in raising the required senior debt financing (the "Transaction") for the development of the initial phase of the Project. Banque Du Caire has withdrawn from the Consortium however the remaining three banks have elected to fill the void left by the departure of Banque Du Caire internally rather than seek a replacement bank.

The Consortium had previously appointed Wardell Armstrong International to act as an Independent Technical Advisor ("ITA") to assist it in the Transaction. However the banks withdrew their instructions to Wardell Armstrong and have now appointed Coffey International ("Coffey") in its place. Coffey is a specialist professional services consultancy with expertise in geosciences, international development and project management. Coffey has previously provided independent technical assessments of the Project.

Subject to a satisfactory outcome of this high level review, the Consortium intends to proceed to obtaining credit committee approval for the Transaction and to the final negotiation and execution of a definitive term sheet, which the Company expects to contain some conditions precedent that will need to be fulfilled prior to the first drawdown. Coffey has provided a preliminary draft report to the Consortium which concludes that the Project has no fatal flaws.

Abu Dabbab Alluvial Project

The demountable modular gravity separation plant comprising of rougher and cleaner spiral separators with a nominal treatment capacity of 50 tonnes per hour (tph) of ‐2 mm alluvial material (the "Spiral Plant") continued operations during the quarter.

During the quarter, the Spiral Plant consistently achieved an average feed rate of between 30 to 50 tph, however, the output from the plant indicated that recovered grades of cassiterite were low. An extensive sampling and analysis program has been undertaken and further improvements to the Spiral Plant operations have been made to improve recovery.

The Company believes that this work has been effective as it has maintained the level of cassiterite production from a reduced average feed rate of between 20 and 30 tph. The focus will now be on increasing feed rate while maintaining the level of recovery.

Stockpiles of tailings from the initial operations where recovery was low will be reprocessed through the Spiral Plant to recover the cassiterite contain d in the ta e ilings.

The Directors have determined that the use of the HPC‐30 units to process the ‐4/+2 mm material would not be economic and have been investigating alternatives to recover the tin from the +2 mm material. The Company is currently evaluating an option of purchasing a crushing plant which would crush the ‐4/+2 mm material to ‐2 mm which would then be processed through the Spiral Plant.

From 1 October 2013, the Company has taken control over the mining and screening operations and has agreed to directly hire the equipment and operators from the mining contractor. The Company believes that this will deliver some cost savings and also ensure that the overall operations of the project will be conducted in the most efficient manner.

During the quarter the Company introduced the use of a flocculant to improve the quality of the return process water, in order to reduce the volume and thereby the cost of water used in production. The flocculant assists with settling the solids in the water and results to date indicate that it has been effective in improving the water quality. In addition to cost savings from the re‐use of water, by increasing the settling density of the slimes it will reduce the frequency of settling pond cleaning and reduce the water lost with settled slimes when the settling ponds are cleaned out.

The political events in Egypt during the period did not impact the Company's operations at the Abu Dabbab alluvial tin project. The Company's Cairo office was closed for approximately a week during the upheaval, with Cairo staff operating from home without significant disruption to activities.

Ramadan started on 10 July 2013 for a four week period and operations at Abu Dabbab were curtailed during daylight hours to the extent of 6 hours shutdown per day. This reduced processing rates and resulted in lower production during this period. Also, during October 2013 the alluvial project was shutdown for 4 days for the Eid al‐Adha public holidays in Egypt.

During the quarter, the Company made six shipments (shipments #14 to #19) of cassiterite. The sale of shipments #11 to #16 were finalised during the quarter, as shown in the summary of tin sales made from 1 July 2013 to 30 September 2013 below:

Shipment	Date of Sale	Final Grade	Contained Tin	Sale Price of Tin	Total Gross
Number	to Smelter	(Sn)	(tonnes)	(USDper tonne)	Proceeds (USD)
					(refer Note1)
11	1/7/13	44.525%	4.89	19,450	95,260
12	15/7/13	43.890%	7.11	20,450	145,500
13	24/7/13	40.295%	4.01	22,000	88,319
14	6/8/13	41.125%	5.27	21,950	115,757
15	26/8/13	41.365%	3.69	23,000	84,895
16	23/9/13	41.000%	8.19	23,400	191,717
			33.16		721,448

Table 1: Tin S tem quar ales for Sep ber 2013 ter

Note:

Total Gross Proceeds is calculated prior to the deduction of toll treatment charges.

As at the date of this report, shipment #17 had been finalised, two shipments (shipments #18 and #19) had been received at Malaysia Smelting Corporation ("MSC") in Penang, Malaysia and were undergoing weighing and sampling procedures, and a further shipment (shipment #20) had departed Egypt and was in transit to MSC.

ERITREA (A OBHA PROJECT) D

Gippsland's 100% owned subsidiary Adobha Resources (Eritrea) Pty Ltd holds the Adobha Exploration Licence and the Gerasi South Exploration Licence in the highly prospective Adobha region in the State of Eritrea. In compliance with the third year of the tenure of the Adobha Exploration icence, the area was reduced by 50% to a retained area of 1,056 km 2 L . The area of the Gerasi South Exploration Licence remains at 100 km2.

xploration was reduced to a minimum during the quarter as the Company's focus is currently on the gyptian projects. E E

CORPORATE

Loan from Gandel Metals

Gandel Metals Pty Ltd, a company related to the Company's Chairman, Mr Ian Gandel, has provided an unsecured loan facility to the Company for up to $1 million. No fees are payable to Gandel Metals in relation to the facility and interest on the facility levied by the Bank will be reimbursed to Gandel Metals at cost. The loan is repayable by 1 July 2014.

RIU Explorers Conference

The Company attended and presented at the RIU Resources Roundup Conference in Melbourne, Victoria, from 25 to 26 September, 2013. The presentation delivered by Mr Ian Gandel, Chairman, is available on the Company's website.

Annual Report

Gippsland's Annual Report for the 2013 financial year was released on 23 October 2013. The document is available on the Company's website.

Annual General Meeting

On 23 October 2013 the Company's Notice of Annual General Meeting was released to the market and posted to shareholders. The meeting will be held at 12:30pm (WST) on 27 November 2013 at Gippsland's corporate headquarters located in Claremont, Western Australia.

Ian Gandel Chairman Gippsland Limited www.gippslandltd.com

For further inform Geoff Hawkins ation, please contact: Gippsland Limited T: +61 8 9340 6000 E: [email protected]

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.