STOCK EXCHANGE ANNOUNCEMENT

Pima Mining's Options Exercise Underwritten to Raise $8.7 Million

14 March 2002

The Directors of Pima Mining N.L. ("Pima") advise that the company has entered into an underwriting agreement with Bell Potter Corporate Finance Limited ("Bell Potter") under which Bell Potter underwrite the exercise of 43.7 million listed options at 20 cents each, which expire on 31 March 2002.

This underwriting ensures that Pima raises $8.3 million (after payment of the 5% underwriting fee) from the exercise of those options. The funds raised will augment the company's working capital position and be primarily used for the ongoing development of the wholly owned SAMAG magnesium project at Port Pirie in South Australia.

Pima’s Directors are pleased that Thiess Pty Ltd has participated as a major subunderwriter. Thiess, together with Kvaerner Engineering and Construction, have been preparing the engineering package and detailed capital cost estimates as part of the Bankable Feasibility Study ("BFS").

Directors are also delighted with the considerable support received from Australian and International Institutional Investors during this process.

The SAMAG Project is at an exciting stage of its development with plans proceeding for the first stage, 65,000 tonne per annum project. The work is progressing well and in accordance with timetable.

SAMAG will employ a tried and tested technology developed and utilised for many years by Dow Magnesium. SAMAG has worldwide exclusive rights to this technology.

SAMAG is currently finalising power supply arrangements, completing the final stages of the BFS and is on schedule to achieve in principle banking commitment by mid year.

For further information

In accordance with Australian Stock Exchange listing requirements, the geological information in this report has been based on information provided by geologists who are corporate members of the Australian Institute of Mining and Metallurgy or Australian Institute of Geoscientists and who have had in excess of 5 years experience in their field of activity.