TITANIUM SANDS LIMITED — Capital/Financing Update 2004

Jan 6, 2004

7^th January 2004

The Manager Company Announcements Office Australian Stock Exchange Ltd Exchange Centre Level 4, 20 Bridge Street SYDNEY NSW 2000

Dear Sir

PURCHASE OF MINING INTERESTS

Chameleon Mining NL wishes to announce that it has reached an agreement in principal with Precious Metals Australia Limited to purchase its retained interest in the Palm Springs gold mine for a consideration of \$220,000 payable:

• 1. By way of a deposit of \$20,000;
• 1. By three equal instalments of \$25,000 each; and
• 1. By issue of fully paid shares in Chameleon Mining NL to a value of \$125,000 based on the average price for the last five days of the quoted Australian Stock Exchange price as at the date of issue.

Chameleon also has to complete any remaining rehabilitation requirements and take over responsibility for any bond requirements.

The non-refundable deposit has been paid and the company is currently assessing all the available data. The licences cover several other mining prospects besides Palm Springs these include Butcher's Creek, Zig Zig, Sam's and Mt Bradley.

The company is currently assessing all the company data on these projects. The Palm Springs licence adjoins and is along strike from the company's Ruby Queen licence and
as such the Palm Springs licences offer at the very least the potential for additional ore to that at the Ruby Queen.

Yours faithfully

GREG BARNES MANAGING DIRECTOR