TITANIUM SANDS LIMITED — Capital/Financing Update 2007

Oct 1, 2007

PMA

PRECIOUS METALS AUSTRALIA LIMITED

MEDIA RELEASE

DATE 2 October 2007

PMA APPOINTS MERRILL LYNCH FOR DEBT FINANCING

PMA has appointed leading financier Merrill Lynch (Asia Pacific) Limited (“Merrill Lynch”) to arrange debt financing of approximately A$200 million for its flagship Windimurra vanadium project in WA’s Mid West.

The financing will complete funding arrangements for the Windimurra vanadium project without diluting equity for shareholders. The project is expected to commence production in the second half of 2008.

PMA Chairman Michael Kiernan said this was an important milestone and a further vote of confidence for the Windimurra project.

The Board considered a number of proposals from international banking groups, and after comprehensive analysis, was pleased to appoint Merrill Lynch.

PMA believes Merrill Lynch has superior marketing and distribution capability, a strong presence in Australia and good relationships with long term investors.

PMA considers that completion of funding by year end is achievable because of Merrill Lynch’s detailed knowledge of the Windimurra project.

“Merrill Lynch has invested in similar projects recently where it has been mandated as arranger and this track record was a factor in the Board’s selection” Mr Kiernan said.

“The appointment of Merrill Lynch to assist in this debt financing is another significant step forward for this world class project,” Mr. Kiernan said.

Windimurra, located 600km north east of Perth, is based on one of the largest proven vanadium reserves in the world. Global demand for vanadium is expanding, driven by growth in steel consumption, increasing intensity of vanadium use in developing economies and expanding use of vanadium-titanium alloy in aerospace applications.

Windimurra is an outstanding project which has the potential to make PMA one of the world’s lowest cost vanadium producers. Windimurra has made considerable progress toward production, with major infrastructure components secured and marketing arrangement in place.

In addition, the company has announced a significant increase in reserves, the appointment of key senior staff and the negotiation of critical service contracts are at an advanced stage.

“We have also added considerable skills and experience to our Board and management, and when funding is complete, are well-placed to take this project into production and generate value for our shareholders,” Mr Kiernan said.

For further enquiries call:

Dr Iain Scott Managing Director Tel: +61 (0) 8 9423 1900

Warrick Hazeldine

Purple Communications Tel +61 (0) 89485 1254 Mob: 0417 944 616

PMA

PRECIOUS METALS AUSTRALIA LIMITED

Background

Precious Metals Australia (PMA) is a ferro-alloys company based in Perth, Western Australia and is listed on the Australian Stock Exchange (ASX:PMA). PMA’s focus is the development of the Windimurra Vanadium Mine, located 600km north east of Perth in WA’s Mid-West region.

PMA has a strategic alliance and off-take agreement with leading global supply chain manager, Noble Group Limited, based in Hong Kong. Noble has agreed to purchase the total vanadium output of the Windimurra mine, at prevailing market prices for the life of the mine.

Originally discovered by PMA in 1985, Windimurra contains one of the largest reported proven vanadium Ore Reserves in the world with current mineable reserves of 98.2 million tonnes at a bulk grade of 0.40% V205 (vanadium pentoxide), which will underpin an initial mine life of 25 years at the proposed mining rate of 3.9mtpa. A total of 148 million tonnes of resources have been modelled at a bulk grade of 0.46%.

The Windimurra mine was originally built by PMA with a joint venture partner in 1999, and, whilst operating, was the world’s largest primary vanadium mine, gaining recognition as one of the highestquality sources of vanadium in the world market.

Since 2003, world demand for vanadium and the price of the commodity have increased strongly, largely driven by growth in Chinese steel production. Marketing studies commissioned by PMA forecast that vanadium demand will continue to increase through 2015 at a compound annual growth rate of 7.8%.

For more information, please visit www.pmal.com.au