TITANIUM SANDS LIMITED — Capital/Financing Update 2007

Jan 23, 2007

PMA COMPLETES \$48.5M SHARE PLACEMENT AFTER RECEIVING KEY SHAREHOLDER APPROVAL

Australian-based ferro-alloys company Precious Metals Australia Limited (ASX: PMA) today announced that it has today received shareholder approval for the second tranche of the recently announced A\$48.5 million institutional share placement. Together with the current Share Purchase Plan (SPP), which closes tomorrow (25 January), this amounts to a total capital raising of more than A\$50 million.

The substantial raising will be used for general working capital purposes and to accelerate the A\$200 million redevelopment of PMA's 90%-owned Windimurra Vanadium Project in Western Australia. The A\$50 million capital raising represents a key component of the overall finance package for the Windimurra Project, increasing PMA's available cash reserves to nearly A\$100 million.

At a shareholder meeting in Perth today (24 January 2007), approval was received for the issue of 13,543,731 ordinary shares at A\$1.95 each, to raise A\$26.4 million, representing the second tranche of the placement. The first tranche, comprising the issue of 11,328,064 ordinary shares at A\$1.95 each to raise \$22.1 million, was completed on 12 December 2006 under the Company's 15% placement capacity and in accordance with ASX Listing Rules.

The placement, which was heavily oversubscribed, was completed with a number of leading Australian and international institutional shareholders and clients of Australian broking firm, Patersons Securities Limited. Patersons acted as Lead Manager to the placement.

Speaking at the shareholder meeting today, PMA's Managing Director, Mr Roderick Smith, said the combination of the institutional placement and SPP had resulted in a significant expansion of PMA's investor base and the introduction of a number of new shareholders.

"We are delighted to welcome a number of new major long-term institutional shareholders, complementing our existing strong shareholder base," Mr Smith commented. "At the same time, there has been a very strong response to the SPP, which has provided existing and new shareholders with the opportunity to increase their exposure to the Company and has already received applications in excess of the underwritten amount of \$1.5 million. We will announce the results of the SPP early next week after it closes, but we anticipate that it will result in a significant expansion of our share register."

"Apart from effectively securing the equity component of the funding package for the redevelopment of Windimurra, this capital raising has broadened our investor base and we expect will significantly increase liquidity in the Company's shares," he added. "We regard this as particularly important at this critical stage in the Company's evolution as we embark on a major growth and development phase."

Mr Smith said the capital raising would enable important site pre-development works to continue at Windimurra while the remainder of the project finance package was completed. "We are currently in discussions with a number of parties to secure an appropriate debt funding arrangement for the remaining capital required," he said. "We anticipate having full funding in place before the end of March 2007."

First production at Windimurra is targeted for early 2008, and when operating at full capacity, the mine is expected to supply around 8% of the world's total vanadium output.

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Released by: Nicholas Read / Kate Bell Jan Hope & Partners Telephone: (+61-8) 9388-1474

On behalf of: Mr Roderick Smith Managing Director Telephone: (+61-8) 9423 1900 Mobile: +61 (0) 418 959 789 Web: www.pmal.com.au

Background Information - Precious Metals Australia

Precious Metals Australia Limited ("PMA") is an Australian ferro-alloys company based in Perth, Western Australia and listed on the Australian Stock Exchange (ASX: PMA). PMA's focus is the redevelopment of its 100%-owned Windimurra Vanadium Mine, located 600km north-east of Perth in Western Australia's Mid West region.

PMA has a strategic alliance and off-take agreement with leading global supply chain manager. Hong Kong-based Noble Group Limited, which has agreed to purchase the total vanadium output of the Windimurra mine, at prevailing market prices. During the first 7 years of production, Noble will pay the greater of market price or the cash cost of producing vanadium at Windimurra, providing a solid price floor for the project.

Originally discovered by PMA in 1985, Windimurra contains the largest reported vanadium Proven Ore Reserve in the world with current mineable reserves of 56 million tonnes at a bulk grade of 0.46% V2O5 (vanadium pentoxide), which will underpin an initial mine life of 16 years at the proposed mining rate of 3.4mtpa. A total of 148 million tonnes of resources have been modelled in order to meet at least the first 20 years of mining.

The current reserve/resource inventory is contained within just 5km of a total 25km strike length of a prospective ore horizon, with significant potential to increase production and/or extend the mine life in future.

The Windimurra mine was built by PMA with a joint venture partner in 1999, and, whilst operating, was the world's largest primary vanadium mine, producing some 30 million pounds of vanadium pentoxide during its 2.5 years of operation (approximately 10% of world production), and gaining recognition as one of the highest-quality sources of vanadium in the world market.

Following the mine's controversial closure in early 2003 and partial de-commissioning in 2004, PMA successfully fought to gain full ownership of the Windimurra mine in August 2005.

PMA has completed a Feasibility Study for the \$200 million redevelopment of the Windimurra mine, with commencement of construction scheduled for early 2007 and first production in early 2008.

It will be based on one of the simplest and most straightforward mining operations in Australia, with the ore commencing at surface. The production process is straightforward, comprising crushing, grinding and classification followed by roasting and leaching. PMA has upgraded the previous production flow-sheet and will now produce a value-added product, ferrovanadium (FeV80) from V2O3 rather than V2O5 like the previous operation. Ferrovanadium sells for approximately 60% more (per pound of pure vanadium), which will improve the economics of the operation.

Windimurra will produce 6,200 tonnes per annum of ferrovanadium. This represents annual production of approximately 20 million pounds of vanadium pentoxide equivalent, representing approximately 8% of world demand.

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