TITANIUM SANDS LIMITED — Capital/Financing Update 2005

Oct 5, 2005

ARN 65.009.131.533

6 October 2005

The Manager Company Announcement Office Australian Stock Exchange Exchange Plaza Sherwood Court Perth

Dear Sir.

Revised Employee Option Conditions

We refer to our previous announcements regarding the recruitment of Mr Mike Drew as Chief Financial Officer and Mr Brett Foster as Windimurra Project Manager. As part of their remuneration package each of the above key employee's was to be granted options, to acquire fully paid ordinary shares in 4 instalments over a 12 month period with the exercise price to be determined at the time of issue.

The Board has now determined that it will fix the issue price of the options and issue them progressively as detailed in the table below. The issue of options in this manner provides an on-going incentive to the employee as their efforts are realised in assisting the Company in achieving its target to re-open the Windimurra Vanadium mine. The Board believe the contribution of Mr Drew and Mr Foster has already been considerable and believes they bring great value to the company.

Timing and number of options to be issued to each of Mr M Drew and Mr B Foster to acquire fully paid ordinary shares in the Company.

Number	Issue Date	Exercise Price	Term
100,000	Completion of 3 months employment	\$1.30	5 years from issue
100,000	Completion of 6 months employment	\$1.40	5 years from issue
100,000	Completion of 9 months employment	\$1.75	5 years from issue
100,000	Completion of 12 months employment	\$2.00	5 years from issue
100,000	Completion of 15 months employment	\$2.25	5 years from issue

The total of all options to be issued if all conditions are met is 1,000,000

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