TITANIUM SANDS LIMITED — Share Issue/Capital Change 2006

Oct 8, 2006

ABN 65 009 131 533

9 October 2006

The Companies Announcement Office Australian Stock Exchange Limited Exchange Plaza Sherwood Court PERTH WA 6000

Dear Sir

Conversion of Options

Please find attached an Appendix 3B in respect to the conversion of 500,000 options by a director, Mr Michael Fry into fully paid ordinary shares in Precious Metals Australia Limited.

An updated Appendix 3Y has been lodged separately.

Yours sincerely PRECIOUS METALS AUSTRALIA LIMITED

MIKE DREW Company Secretary

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

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

Precious Metals Australia Limited (Entity)

ABN

65 009 131 533

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{I}$ ⁺Class of ⁺securities issued or to be Fully paid ordinary shares issued

• Number of 'securities issued or to $\overline{2}$ be issued (if known) or maximum number which may be issued
• Principal terms of the *securities 3 (eg, if options, exercise price and expiry date; if partly paid *securities, the amount outstanding and due dates for payment; if *convertible securities. the conversion price and dates for conversion)

500,000

Fully paid ordinary shares issued pursuant to exercise of options

⁺ See chapter 19 for defined terms.

4	Do the securities rank equally in all respects from the date of allotment with an existing class of quoted *securities? If the additional securities do not rank equally, please state: the date from which they do extent to which the. they for participate the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not ۰ rank equally, other than in relation to the next dividend, distribution or interest payment	yes
5.	Issue price or consideration	15 cents per share (Conversion of options)
6	Purpose of the issue (If issued as consideration for the acquisition οf assets, clearly identify those assets)	(PMAAI) by a Director Mr MJ Fry	Issued pursuant to conversion of 500,000 options
7	Dates of entering *securities into	9 October 2006
	uncertificated holdings or despatch of certificates
		Number	+ Class
8.	Number and class of all securities quoted on ASX (including the securities in clause 2 if applicable)	75,220,429	Ordinary fully paid (PMA)

⁺ See chapter 19 for defined terms.

	Number	$+C$ lass
Number and class of all securities not quoted on ASX (including the securities in clause 2 if applicable)	100,000	Employee Options Expiring 30 November 2006 exercisable at \$1.30 (PMAAK)
	100,000	Employee Options Expiring 3 August 2010 exercisable at \$1.30. (PMAAK)
	100,000	Employee Options Expiring 30 November 2006 exercisable at \$1.40. (PMAAAM)
	100,000	Employee Options Expiring 28 February 2011 exercisable at \$1.40. (PMAAAO)
	100,000	Employee Options Expiring 30 November 2006 exercisable at \$1.75. (PMAAAQ)
	100,000	Employee Options Expiring 28 August 2011 exercisable at \$2.00
	125,000	Employee Options Expiring 14 September 2011 exercisable at \$2.60
	100,000	Employee Options Expiring 4 September 2011 exercisable at \$2.60

	Number and + class of all + securities not quoted on ASX (including the securities in clause 2 if applicable)	125,000	Employee Options Expiring 26 September 2011 exercisable at \$1.50
		125,000	Employee Options Expiring 26 September 2011 exercisable at \$1.70
		325,000	Employee Options Expiring 26 September 2011 exercisable at \$1.50
		250,000	Employee Options Expiring 26 September 2011 exercisable at \$2.20
10 °	Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

$\mathbf{11}$	Is security holder approval required?	Not Applicable
12.	renounceable the issue Ιs Оf non- renounceable?
13.	Ratio in which the *securities will be offered
14	+ Class of +securities to which the offer relates
15.	*Record date to determine entitlements
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

⁺ See chapter 19 for defined terms.

$17$ Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has "security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7 $19$ Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of underwriting any fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to acceptances brokers $who$ lodge or renunciations on behalf of ⁺security holders 25 If the issue is contingent on "security holders' approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) Date rights trading will end (if applicable) 29 30 How do *security holders sell their entitlements in full through a broker? $31$ How do *security holders sell part of their entitlements through a broker and accept for the balance?

• $32$ How do *security holders dispose of their entitlements (except by sale through a broker)?
• 33 *Despatch date

1989 - Johann Stoff, deutscher Stoffen und der Stoffen und der Stoffen und der Stoffen und der Stoffen und der

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities $(iick one)$

$(b)$

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

$+$ See chapter 19 for defined terms.

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

additional +securities, and the number and percentage of additional +securities held by those holders 36 If the "securities are "equity securities, a distribution schedule of the additional "securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$ $10,001 - 100,000$ 100,001 and over

If the *securities are *equity securities, the names of the 20 largest holders of the

37

35

A copy of any trust deed for the additional *securities

Entities that have ticked box 34(b)

38	Number of securities for which + quotation is sought
39	Class of *securities for which quotation is sought
40	Do the + securities rank equally in all respects from the date of allotment with an existing "class of quoted *securities?
	If the additional securities do not rank equally, please state: the date from which they do extent to which they the i participate for the next dividend, (in the case of a trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
41	Reason for request for quotation now
	Example: In the case of restricted securities, end of restriction period on conversion of another security, clearly identify that other security)

$42$ Number and *class of all *securitie quoted on ASX (including the securities in clause 38)

Number	$\overline{\text{Class}}$

Ouotation agreement

• $+$ Ouotation of our additional $+$ securities is in ASX's absolute discretion. ASX may quote the $\mathbf{I}$ ⁺securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the $+$ securities to be quoted complies with the law and is not for an illegal purpose.
• There is no reason why those $+$ securities should not be granted $+$ quotation. $\bullet$
• An offer of the *securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any $+$ securities to be quoted and that noone has any right to return any $+$ securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the $+$ securities be quoted.
• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the $\pm$ securities to be quoted, it has been provided at the time that we request that the $+$ securities be quoted.
• If we are a trust, we warrant that no person has the right to return the $+$ securities to be quoted under section 1019B of the Corporations Act at the time that we request that the $+$ securities be quoted.
• $\overline{3}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{A}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before $\pm$ quotation of the $\pm$ securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 9 October 2006 Mike Drew Company Secretary

$+$ See chapter 19 for defined terms.