Abu Dabbab Project Update

    RNS Number : 1168W
  Gippsland Limited
  06 June 2008
   



    6 June 2008
    ABU DABBAB PROJECT UPDATE

    *     Plantsite to relocate to within 1km of the open pit mine
    *     Relocation and use of seawater provides significant financial benefits - operating cost savings of approximately US$18 million
over the Abu Dabbab mine life     

    

    Gippsland Limited ("Gippsland" or "the Company") [ASX/AIM/Plus: GIP, DB: GIX] is pleased to provide the following update with respect to
the Company's 40 million tonne Abu Dabbab tantalum-tin project ("Project") which is expected to become a major supplier to the global
tantalum industry.

    PLANTSITE - RELOCATION

    In the original design, the Abu Dabbab plantsite was situated 5km from the Red Sea coast and 20km from the minesite. This design
entailed the installation of a large seawater desalination plant from which waste brine was to be injected into coastal saline aquifers at a
depth of approximately 200m.  As mentioned in the last announcement, the on-going review process has resulted in a number of significant
benefits to the project, including the use of raw seawater for the majority of the process flowsheet. Desalinated water is now only required
for the final stages of the process. 

    The use of seawater will result in a capital saving of approximately US$4 million and an operating cost savings of approximately
US$900,000 per year or US$18 million over the likely Abu Dabbab mine life.

    As a result of the recent decision to utilise seawater for the process plant, re-injection of waste brine becomes unnecessary which in
turn enables the plantsite to be relocated within 1km of the open pit mine.  This change will reduce the 2 million mill feed haulage
distance by some 18km,  thereby eliminating the need for a heavy haulage mill feed fleet whilst reducing haulage costs by approximately US$4
million per year. The access road between the mine and the coast will now become a light vehicle route that does not need to cater for use
by the project's heavy duty mill feed haulage vehicles.

    The new plant site will also shorten the mill feed distance from the Company's 98Mt Nuweibi tantalum deposit located some 16km to the
south of the Abu Dabbab plantsite.  However as Abu Dabbab will have a mine life of approximately 20 years, Nuweibi will not be utilised for
at lease a decade.  The relocation of the plantsite will not adversely affect the timing of the commencement of production in 2011.

    Jack Telford, Executive Chairman of Gippsland Ltd commented, "Our engineers have been working hard on optimising the process flow and we
are very pleased to announce this significant enhancement to the project which will reduce costs as well as improve time efficiency." 


    RJ (Jack) Telford
    Executive Chairman 
    Gippsland Limited
    www.gippslandltd.com 




    For further information please contact:

 Jack Telford
 Gippsland Limited
 T: [phone]
 E: [e-mail]  

 Jane Stacey                          Richard Hail
 Investor Relations                   Fox-Davies Capital
 M: [phone]                  T: [phone]
 E: [e-mail]                E: [e-mail] 

 Ed Portman                           Alexandra Carse
 Investor Relations                   Fox-Davies Capital
 M: [phone]               T: [phone]
 E: [e-mail]                  E: [e-mail] 

 Warrick Hazeldine                    Nandita Sahgal
 Investor Relations                   Seymour Pierce Limited
 M: [phone]                T: [phone]
 E: [e-mail]       E: [e-mail] 

 Matthew Thomas                       Asa Bridle
 Seymour Pierce Limited               Seymour Pierce Limited
 T: [phone]               T: [phone]
 E: [e-mail]   E: [e-mail] 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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