STOCK EXCHANGE ANNOUNCEMENT

SAMAG and NRG Flinders Agreement on Power to Underpin Magnesium Project

19 April 2002

The Directors of Pima Mining N.L. ("Pima") advise that the company’s wholly owned subsidiary, SAMAG Limited, has reached agreement with NRG Flinders Pty Limited ("NRGF") for the long term power supply to the proposed magnesium plant to be constructed at Port Pirie.

The agreement is for the annual supply of 170 Megawatts (MW) of power for a period of 15 years and satisfies SAMAG’s entire power needs for the initial stage of operations.

Under the Agreement, NRGF can interrupt 150 MW of SAMAG power supply and supply that power to the South Australian market during periods of peak demand and prices when power supplies may be constrained. The power purchase agreement incorporates a credit to SAMAG for this.

SAMAG’s use of the Dow Magnesium electrolytic cell technology provides for this interruptibility with no subsequent adverse effect on cell performance. This feature has been incorporated in the SAMAG cell house engineering design.

This agreement avoids the need for SAMAG to build a power station and some associated infrastructure, which simplifies and improves the financing of the project.

Pima Chairman, Pat Elliott said "The agreement with NRG Flinders is a significant milestone in the development of the SAMAG project at Port Pirie. The power supply arrangements agreed with NRG Flinders provide SAMAG with long term power at world competitive prices. This power supply underpins the SAMAG project and helps to ensure that SAMAG will become the lowest total cost magnesium producer in the world."

Bob Althoff, CEO of NRG Flinders said " the arrangements for power supply provide benefits to both parties. Upon achieving full commercial operation the interruptibility of the magnesium smelter will support delivery of a substantial demand side management capability and form an integral element of power supply management in the National Electricity Market within South Australia."

Mr Elliott added that "the SAMAG project can now proceed rapidly into the final financing stage as the Bankable Feasibility Study (BFS) is also complete and subject only to final reviews. The results of the BFS will be released on completion of these final reviews."

For further information:

Visit Pima’s website: www.pima.com.au

or NRG Flinders website: www.nrgflinders.com.au