EM1 8.00% 2.3¢ emerge gaming limited

gip quarterly activities out

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    ++++++++++++++++++++++++++++++++++++++++
    QUARTERLY ACTIVITIES REPORT
    ++++++++++++++++++++++++++++++++++++++++

    HIGHLIGHTS

    40MT ABU Dabbab TANTALUM PROJECT

    * Optimisation of flowsheet and mineral recoveries completed
    * Completion of Feasibility Study Update
    * Detailed project finance discussions in progress
    * High level of interest from tantalum consumers & project financiers

    WADI ALLAQI

    Drilling continues to yield significant gold values

    * Up to 18.65g/t Au in high grade shoots
    * 28m at 2.27g/t Au from surface
    * 800m long zone of gold mineralisation defined

    Phase 2 drilling commenced

    EXPANSION OF EXPERIENCED MANAGEMENT TEAM

    * Appointment of Chief Financial Officer
    * Appointment of Company Secretary

    ++++++++++++++++++++++++++++++++++++++++

    40MT ABU DABBAB TANTALUM PROJECT

    OPTIMISATION OF FLOWSHEET AND RECOVERIES

    During the quarter Gippsland completed metallurgical testwork as requested by
    the International Finance Corporation ("IFC") in relation to project finance for
    the Company's 40Mt Abu Dabbab tantalum project.

    The testwork, which was designed to ensure minimal over-grinding of the
    tantalite in the primary mill, was completed following considerable delay due to
    the non-availability of process design engineers. The Abu Dabbab flowsheet has
    been adjusted accordingly which the Directors recognise will provide project
    financiers and investors with an increased level of confidence in the project.

    The Abu Dabbab feasibility study was completed by Lycopodium Engineering Ltd
    during November 2004. Lycopodium is presently updating the feasibility study
    taking into account the findings of the optimisation testwork whilst also taking
    into account current-day costs.

    The Company expects to take delivery of the updated Abu Dabbab feasibility study
    during the first week of November 2006 when it will be presented the IFC which
    has been mandated as Lead Debt Arranger for the Abu Dabbab project.

    INTERNATIONAL EXPOSURE AND INTEREST IN ABU DABBAB

    During the quarter the Company made a presentation regarding Abu Dabbab in
    Beijing, China at the "Minor Metals" conference arranged by the London-based
    Metal-Pages group. Additionally, during October 2006 the Company attended the
    47th Annual Meeting of the Tantalum-Niobium International Study Center ("TIC")
    www.tanb.org which was attended by all major participants in the tantalum
    industry. Gippsland was admitted as a member to TIC during the gathering which
    was held in Innsbruck, Austria.

    The Abu Dabbab project generated a high degree of interest from both major and
    minor tantalum consumers attending both conferences. As a result of the high
    level of exposure at both events, it is increasingly apparent that the Abu
    Dabbab project has the potential to become a dominant player in the global
    tantalum market.

    WADI ALLAQI GOLD EXPLORATION

    During the quarter the Company's Wadi Allaqi gold exploration drilling programme
    continued to yield most encouraging results. Highlights of the drilling
    included:

    * High grade shoots of up to 18.65g/t Au
    * 800m long zone of mineralisation defined by drilling
    * 28m at 2.27g/t Au from surface in hole HRC034

    SEIGA

    At Seiga a number of the gold intersections identified by the 4m sampling were
    re-sampled at 1m intervals. The 1m sampling improved the resolution of the
    distribution of the gold and showed the presence of high-grade shoots (>10g/t
    Au) within wide zones of gold mineralisation. This improved understanding of the
    geometry of the mineralisation has assisted with the planning of the current
    Phase 2 drilling.

    The grade range for the 4m intervals in CRC012 was 1.06 to 16.40g/t Au between
    28-56m compared to 0.30 to 17.56g/t Au for the 1m samples over the same
    interval. Similar results were obtained from hole CRC013 for the interval
    48-72m. The 4m samples varied from 3.45 to 10.47g/t Au compared to 0.09 to
    18.65g/t Au for the 1m samples.

    The prospectivity of the deposit is enhanced as it is common for additional
    high-grade shoots to occur down-plunge as well as repetitions of mineralisation
    of this type to be located along shear zones.

    Phase 2 drilling is presently in progress at Seiga where mineralisation has been
    delineated over a strike length of greater than 800m and up to 75m wide. The
    Phase 2 drilling will include testing a 220m zone northwest of the ancient
    workings where Phase 1 drilling intersected 28m at 4.18g/t Au in hole CRC012 and
    24m at 5.21g/t Au in hole CRC013.

    The presence of high-grade shoots will require structural analysis of the shoots
    in order to predict the position of the down plunge extensions during subsequent
    drilling programs.

    A number of Phase 1 drill holes ended in mineralisation such as hole CRC040
    which intersected 28m at 1.14g/t Au and adjacent hole CRC041 containing 22m at
    1.74g/t Au. Follow-up drilling will test the depth and along strike extensions
    of this mineralisation which represents a second parallel zone of
    mineralisation. Drilling is also planned to test the shear beyond the 800m
    strike length of the Seiga shear drilled to date.

    SHASHOBA

    Shashoba is located 6km to the south-east of Seiga. The Company's recent
    exploration at Shashoba has delineated gold mineralized up to 50m wide over an
    open-ended strike length of 2.2km.

    As previously announced on 26 June 2006, Shashoba has wide intersections of 32m
    at 2.20g/t Au from 16m in hole SRC006, 48m at 1.93g/t Au from 12m in the
    adjacent hole SRC007 and 4m at 1.33g/t Au in SRC008. These three intersections
    adjacent to the main area of ancient workings, defined a 50m wide zone of
    mineralisation greater than 0.5g/t Au.

    During the quarter eight additional drill holes tested old workings in the north
    of the eastern trend, ancient workings at the southern end of the western trend
    and some small workings to the west. Seven of the holes intersected
    mineralisation with the best result being 4m at 4.60g/t Au from 28m in hole
    SRC040.

    Additional reconnaissance drilling (SRC023 to 038) testing geochemical targets
    at selected sites along the shear zone intersected anomalous gold values in
    seven of the RC drill holes.

    Table 1 Shashoba - best drilling results
    -------- ------- --------- ------- ------- -------- --------- --------
    Hole From Interval Gold Hole From Interval Gold
    (m) (m) (g/t) (m) (m) (g/t)
    -------- ------- --------- ------- ------- -------- --------- --------
    SRC001 12 4 4.65 SRC018 4 16 0.33
    SRC002 16 4 0.94 SRC023 0 4 2.11
    SRC003 8 4 0.72 SRC024 16 4 2.35
    SRC005 4 12 0.51 SRC025 32 4 2.62
    SRC006 16 32 2.20 SRC030 28 2 6.91
    SRC007 12 48 1.93 SRC032 8 12 0.26
    SRC008 40 4 1.33 SRC034 0 28 0.74
    SRC012 0 12 0.26 SRC035 20 13 0.94
    SRC014 8 20 0.94 SRC039 36 8 0.50
    SRC017 4 8 1.06 SRC040 28 4 4.60
    -------- ------- --------- ------- ------- -------- --------- --------

    The high proportion of holes containing significant gold values is indicative of
    the widespread mineralisation within the Shashoba shear system. Additional
    drilling will be required to follow-up the anomalous intersections and also to
    drill test the extensions to the shear zones. This additional drilling will
    commence during November 2006 following the completion of the Seiga drilling
    programme.

    HAIMUR

    During the quarter 46 holes totalling 1,387m were completed at Haimur. The
    majority of the holes tested geochemical targets identified from previously
    completed regolith and trenching programs. Five holes tested old workings at
    Haimur South and two holes at Haimur North.

    The best result was from hole HRC034 drilled below an ancient stope at Haimur
    North and adjacent to a shallow shaft sunk by the Nile Valley Company in the
    early 1900s. Hole HRC034 intersected 28m at 2.27g/t Au from the surface. Another
    hole (HRC030) located 30m to the west intersected 2m at 6.91g/t Au from 28m to
    the bottom of the hole and may represent the lateral continuation of the
    mineralisation in HRC034. At Haimur South significant mineralisation was
    intersected in two holes. Hole HRC043 intersected 20m at 0.71g/t Au from 4m and
    HRC044 intersected 20m at 0.55g/t Au from 4m.

    Testing of the regolith geochemical anomalies returned anomalous results in
    thirteen of the 39 holes drilled. These significant results show a
    north-easterly trending zone of anomalous drill results over a strike length of
    800m which is open to the south-west. The south-west part of the zone will
    require additional drilling.

    Table 2 Haimur - best drilling results
    ------- ------- -------- -------- --------- -------- -------- -------
    Hole From Interval Gold Hole From Interval Gold
    (m) (m) (g/t) (m) (m) (g/t)
    ------- ------- -------- -------- --------- -------- -------- -------
    HRC008 0 8 0.34 HRC023 16 8 0.26
    HRC009 12 8 0.35 HRC024 24 6 0.19
    HRC010 8 4 0.23 HRC025 28 2 * 0.89
    HRC012 0 4 0.19 HRC027 28 2 * 1.01
    HRC013 16 4 0.47 HRC030 28 2 * 6.91
    HRC016 8 4 0.11 HRC034 0 28 2.27
    HRC019 28 2 * 0.20 Including 8 20 3.71
    HRC020 12 8 0.23 HRC043 4 20 0.71
    HRC022 28 2 3.11 HRC044 4 20 0.55
    ------- ------- -------- -------- --------- -------- -------- -------
    * End of hole

    GARAYAT

    At Garayat 12 holes were completed for a total of 456m during the quarter. The
    drilling tested shear structures adjacent to old workings at the old Garayat
    mine, Block A and Wells Area E. The drilling intersected the shear structures
    which were weakly mineralised with a best intersection of 4m at 2.17g/t Au in
    hole GRC011 at the Wells Block E prospect. Not all of the proposed holes at
    Garayat were completed prior to the break in drilling.

    EXPANSION OF EXPERIENCED MANAGEMENT TEAM

    During the quarter the Company expanded the management team being put in to
    place capable of taking the Company's projects through to successful routine
    production.

    APPOINTMENT OF CHIEF FINANCIAL OFFICER

    During the quarter the Company appointed Mr Paul R Sims (aged 44) as the
    Company's Chief Financial Officer.

    Mr Sims has an established senior management background in financial and
    commercial functions within the resources sector and has held both operational
    and strategic roles in major international resource companies.

    Since his appointment it is has become clear that Mr Sims' strengths in relation
    to project finance plus the development and implementation of financial and
    commercial systems will contribute significantly to the development of the
    Company's growth.

    APPOINTMENT OF COMPANY SECRETARY

    On 16 August 2006 the Directors announced that Mr Rowan Caren has been appointed
    Company Secretary. Mr Caren is a Chartered Accountant who has over 10 years
    experience providing company secretarial services to listed companies
    predominantly involved in the resources sector.

    RJ (Jack) Telford
    Executive Chairman

    For further information please contact:

    Jack Telford
    Gippsland Limited
    www.gippslandltd.com
    Tel: +61 (0)8 93898611
    [email protected]
 
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