TITANIUM SANDS LIMITED — Capital/Financing Update 2005

Dec 7, 2005

ARN 65.009.131.533

8 December 2005

Company Announcements Office Australian Stock Exchange Limited Exchange Plaza Sherwood Court PERTH WA 6000

Dear Sir.

PLACEMENT OF 9,680,000 SHARES AT \$1.44 PER SHARE

The Company has today made a placement of 9,680,000 ordinary shares at a price of \$1.44 to institutional and sophisticated investor clients of Mirabaud Securities Limited, a London based stockbroker, for a fee of 2.75% of the amount raised.

The funds raised of approximately \$14m bring the Company's cash resources to over \$45million which secures the likely equity funding requirements for the proposed Windimurra vanadium mine redevelopment, the cost of which is estimated to be \$100m.

The initial stage of the design engineering study being conducted by Hatch engineers is close to being completed at which time the Company will be in position to:

• Identify the required design changes to the previous Windimurra Plant which will improve $\bullet$ operability, throughput and operating costs.
• Confirm initial capital costs for the redevelopment of the mine.
• Estimate operating costs for a re-opened mine.
• Provide a timeline for construction and commissioning. $\bullet$

The Company will have 75,720,430 fully paid ordinary shares on issue inclusive of the shares which are the subject of this announcement.

Mirabaud Securities has strong natural resources research capacity in London, and has undertaken to produce and to publish detailed research on the Company.

Yours sincerely PRECIOUS METALS AUSTRALIA LIMITED

RODERICK SMITH Managing Director

Level 1, 30 Richardson Street West Perth Western Australia 6005

PO Box 620 West Perth Western Australia 6872

Telephone: +61 8 9423 1900 Facsimile: +61 8 9423 1999