TITANIUM SANDS LIMITED — Capital/Financing Update 2007

May 16, 2007

17 May 2007

ABN 65 009 131 533

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

Dear Sir / Madam

Cancellation of Employee Options

Pursuant to the terms of the Company's Executive and Employee Option Plan the following employee options have been cancelled:

• 100,000 employee options expiring 28 May 2011 exercisable at \$1.75; $\bullet$
• 100,000 employee options expiring 28 August 2011 exercisable at \$2.00.

Yours sincerely PRECIOUS METALS AUSTRALIA LIMITED

RODERICK SMITH Managing Director

Level 4, 76 Kings Park Road West Perth Western Australia 6005 PO Box 620 West Perth Western Australia 6872 Telephone: +61 8 9423 1900 Facsimile: +61 8 9423 1999