TITANIUM SANDS LIMITED — Capital/Financing Update 2006

Jan 5, 2006

6 January 2006

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

Dear Sir/Madam

Share placement and notice under section 708A (5) (e) of the Corporations Act

Further to our announcement on 8December 2005 with regard to a placement of shares, Precious Metals Australia Limited ("PMA") is pleased to confirm that 9,680,000 fully paid ordinary shares were issued on 20 December 2005 at a price of \$1.44 cents per share.

PMA gives notice that:

• it issued the above mentioned shares without disclosure to investors under Part 6D.2 of the Corporations Act; and
• this notice is being given under section $708A(5)(e)$ of the Corporations Act; and
• as at the date of this notice, PMA has complied with the provisions of Chapter 2M of the Corporations Act (as they apply to PMA) and has also complied with section 674 of the Corporations Act; and
• there is no information:
• that has been excluded from a continuous disclosure notice given to ASX in accordance with the $(a)$ ASX Listing Rules; and
• $(b)$ that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of the Company, or the rights and liabilities attaching to fully paid ordinary shares,

to the extent to which it would be reasonable for investors and their professional advisers to expect to find such information in a disclosure document.

Yours faithfully PRECIOUS METALS AUSTRALIA LTD

Michael Drew Chief Financial Officer

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