STOCK EXCHANGE ANNOUNCEMENT`

Letter sent to Shareholders re Shareholder Share Purchase Scheme

11 April 2002

Dear Shareholder

In the past week or so, you will have received details of our offer to shareholders to purchase Pima shares under the terms of our Shareholder Share Purchase Scheme (SSPS).

I am very pleased to be able to recommend your participation in the SSPS. I believe it is important to offer existing shareholders the ability to purchase additional shares at a discount to market and without incurring any fees. All to often shareholders miss out on acquiring shares at a discount, when they are offered as part of an institutional placement, so the SSPS provides an excellent opportunity to ensure that all shareholders have the opportunity to buy shares at a discount to market price. All funds raised from the SSPS will be used to continue the development of the Company’s SAMAG magnesium project.

Every shareholder listed on the share register as at the record date of 19 April 2002, is able to subscribe for any number of shares between the minimum of 2,942 shares, at a cost of $500.14 and the maximum of 17,647 shares at a total cost of $2,999.99. Each share costs 17 cents, which represents a discount of 8.6% to the average market price for the five business days prior to the offer being announced. This price also represents a discount of 12.8% to the closing price of the shares yesterday (10 April).

In previous correspondence, I have highlighted that we are approaching finalisation of our Bankable Feasibility Study and that we expect to achieve Financial Close later in the year. We are very pleased with progress, which is continuing to schedule. I believe however that it is important to stress the importance of this Project to South Australia and indeed to Australia as a whole. In addition to jobs that will be created directly by the SAMAG Project, there will be spin-off benefits in a number of other industries. Taxation revenue for the Australian Government will be substantial. We will also export most of our magnesium production, thereby generating significant export earnings. This truly is a project of enormous impact and advantage to the Australian community.

In the coming weeks we expect to be making announcements demonstrating the tangible progress we are making on this Project. We expect that the broader recognition of the progress we are achieving will help us generate wealth for our shareholders and bring market values closer to the valuation of 51 cents per share (for the first stage of the Project) placed on the Company by Bell Potter Securities Limited. The Bell Potter report is available on our website (www.pima.com.au).

If you have any queries about the SSPS, or about the Company’s progress, please contact our Company Secretary, Neil Hooper on (02) 9252 1505.

Yours faithfully,

Patrick Elliott

Chairman

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.