Gippsland Ltd. (Gippsland or the company) is an Australian junior exploration company listed on both the Australian Stock Exchange (ASX) and the London Alternative Investment Market (AIM) and has a market capitalization of about $25 million. The shares of the company are widely held by both institutional investors and individual shareholders. The Chairman owns about 7% of the company’s shares. The Chairman also has 6 million options outstanding.

The total cost of the investment program to finalize the flow sheet and to conduct gold exploration activities is estimated at $4 million. The proposed IFC investment is $2 million equity investment with matching warrants.

4.28 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	4.28

* These investment figures are indicative

The Abu Dabbab tantalum-tin project is the construction of a greenfield open pit tantalum and tin mine and associated facilities in Abu Dabbab, which is in the central part of the Eastern Desert of Egypt, about 15km north of Marsa Alam or 75km south of the Red Sea port of Quesir. Gippland’s gold properties are located in the Wadi Allaqi area, south east of Aswan.

Fit with World Bank Group Strategy:

The World Bank Group’s (WBG) Country Assistance Strategy (CAS) for Egypt for FY2006-2009 (Report no. 32190-EG) proposes to support the GOE twin goals of achieving high and sustainable growth and alleviating poverty and income disparity via the three key strategic objectives. These are facilitating private sector development, enhancing the provision of public services and promoting equity. Within this framework, IFC’s focus is to:

- catalyze new private sector investments in manufacturing, extractive industries and social sectors;
- assist in developing new financial sector institutions and instruments for the private sector,
- support SME initiatives, and
- support PPI initiatives through provision of guarantee, capital or advisory services.

IFC’s involvement with Gippsland will promote private sector participation and foreign direct investment in Egypt’s untapped mining sector. At the development phase of any of Gippsland’s projects, IFC will assist to mobilise equity and debt financing, in support of IFC’s strategy for the country. IFC’s PEP-MENA and SME department will be involved at the development phases of the potential projects to support local small and medium-sized businesses participation in project activities.

- Development Impact:

Positive impacts which may arise out of potential development of the tantalum and gold projects include: setting benchmarks on good governance and sustainable mining development in Egypt; creation of temporary and permanent employment opportunities, linkages with local suppliers of goods and services; and local community development.

- IFC Role and Expected Contribution:

IFC continues to assist Gippsland on additional technical testwork required to bring the Abu Dabbab feasibility study to a bankable level. Gippsland has already completed the Environmental and Social Assessment Study (“ESIA”) for Abu Dabbab with the assistance of IFC. On finalization of the optimization of the feasibility study, IFC will assist in mobilizing project finance. IFC will provide similar assistance to Gippsland should Wad Allaqi proceed to a feasibility study/development phase.

IFC is also supporting Gippsland’s potential transition from a mining exploration junior to a mining operation company by providing advice on its corporate governance reforms of the Company. Gippsland acknowledges that these initiatives are important for potential equity and debt financing for Abu Dabbab.

Project Issues:

This is a category ‘B’ project according to IFC''s Environmental and Social Review Procedure. The project will include a drilling program focused on gold plus finalization of desk studies to complete feasibility on a green-field tantalum mining operation. Environmentally, the areas in which the company has concessions are in the sparsely vegetated and sparsely habituated eastern desert regions. Such areas can have sensitive ecosystems and at all stages of mine exploration the company will assess environmental and social impacts through a framework which is outlined in the HSEC Policy.

- Abu Dabbab Tantalum-Tin Deposits

The IFC investment will only fund completion of desk studies leading to finalization of the feasibility study for development of Abu Dabbab, no site work is required. As such there are no impacts. If IFC proceeds with an additional investment at Abu Dabbab, it would be proposed to the IFC Board as a new project with appropriate environmental and social documentation. An Environmental and Social Impact Assessment (ESIA) has already been prepared by the sponsor but may require updating following completion of the feasibility studies.

- Wadi Allaqi Gold Exploration Areas

Environmental issues which are likely to be associated with the gold exploration activities and which will be managed through the company’s HSEC Policy include: protection of ancient archaeological remains, airborne dust emissions, water resources and water quality and liquid effluents, solid and liquid waste management, and rehabilitation of exploration sites. Health and safety issues include employee training, occupational health and safety and general housekeeping.

- Mitigants

The company has agreed in to develop a Health, Safety, Environment and Community Policy (HSEC) with commitments on how it intends to operate. The company will comply with Government of Egypt requirements, applicable international treaties and IFC Environmental & Social Performance Standards. The company has contracted an E&S consultancy to assist in developing the documentation and consultations with communities for the Abu Dabbab project. The company will prepare Guidelines (in line with its stated Policy) for use by its staff and contractors covering HSEC management of exploration work.

The IFC investment requires no mitigation measures for the Abu Dabbab project at this stage.

Specifically for the gold exploration activities, the key mitigation measures are listed below:

- EIA’s appropriate to work planned for each exploration site
- Exploration plans will be formulated in consultation with all relevant stakeholders
- Protection of archaeological remains which will be through a Chance Finds Policy and in collaboration with the appropriate Egyptian Authorities.
- Existing roads and camps will be used
- All fuels and lubricants will be appropriately stored with liners and berms
- All equipment, litter and waste will be removed on completion of exploration activities
- All exploration sites will be rehabilitated including smoothing and repair of disturbed areas and in-filling of trenches (when no longer required)

IFC will also require the company to prepare a Public Consultation Disclosure Plans (PCDP) to ensure proper stakeholder relationships, monitor community support and identify needs and priorities for sustainable development in each area of activity.
Location of environmental documents In locally affected community
Environmental documents will be made available at the following locations:

Egyptian Mineral Resources Authority
KIMA
Industrial City Road
EMRA Abu Swayel Rest House
Aswan

Egyptian Mineral Resources Authority
EMRA Mining Centre
Marsa Alam