Adelaide, June 22, 2006 AEST (ABN Newswire) - Sphere Investments (ASX: SPH) announce that the Stage 2B of the bankable feasibility study (BFS) on the 7Mt/a Guelb el Aouj DR pellet project in Mauritania, commenced in February 2006. The BFS is focussed solely on the Guelb el Aouj East Deposit. The Stage 2B work program is being conducted by Sphere as operator of the Joint Venture with SNIM. Progress on key BFS activities is as follows:

- Resource Definition - 22,000m of the planned 29,000m RC drilling program, to define Indicated and Measured Resources at East Deposit, have been drilled. The drilling program is due to be completed by the end of July, and an Indicated Resource Statement issued by the 30th September 2006. Results from the drilling have been in line with expectations, and encouragingly additional resource has been identified along the eastern limb of the deposit closer to surface as a result of shallower depth of oxidation/overburden.

- Geotechnical Drilling & Bulk Sample Drilling - Boart Longyear (Canada) is conducting a 2,000m diamond drilling program for the purpose of mine design, and a separate wide diameter (PQ) diamond drilling program for the purpose of collecting a 65t bulk sample for pilot scale metallurgical testwork required for detailed engineering design. Drilling commenced in early June and is proceeding as planned. The bulk sample is expected to be shipped to Germany in October 2006, with the process flowsheet testwork program scheduled to take three months thereafter.

- Hydrogeology - the water exploration strategy is proceeding as planned. All ground surveys and geophysics has been completed and initial drill hole targets in the Touajil area have been identified. Water drilling will be conducted by Foraco (France) and is scheduled to commence in the last week of June 2006. The 15-hole drill program is due to be completed by the end of October 2006. Long term pumping tests, to confirm a sustainable supply of water, are expected to continue into Q1 2007.

- Engineering - MAN AG (Germany) is conducting pre-feasibility engineering on two primary project configuration options. These two primary options are:

1. Sufficient water identified at the mining area - all processing done on site.

2. Insufficient water identified at the mining area - processing at the port.

Initial capital and operating cost estimates on these options will be available in July 2006. The final project configuration will be determined once the outcome of water exploration and metallurgical testwork is known.

- Environment - Scott Wilson Mining (UK) have commenced work on the Environment and Social Impact Assessment (ESIA) for the project, as well as the option analysis and cost estimates for tailings disposal. Work is proceeding as scheduled.

Guelb el Aouj Iron Ore Project - Financing Update

With SNIM's assistance, Sphere has established relationships with the two largest steel companies in the Gulf - Saudi Iron and Steel Company (Hadeed) and the Qatar Steel Company (QASCO). Both Hadeed and QASCO are keen to support the development of the 7Mt/a Guelb el Aouj DR pellet project to provide an alternative and reliable source of DR pellets as feed for their primary steel businesses which are experiencing unprecedented growth. This support has seen their participation in recent share placements by Sphere to finance the completion of a bankable feasibility study expected in April 2007.

Hadeed and QASCO now own 17.2% of Sphere between them and have expressed strong interest in more direct equity participation at the project level as the feasibility moves towards its completion. As joint owners and developers of the Guelb el Aouj project, Sphere and SNIM will explore the possibility of issuing direct project equity to strategic partners, including Hadeed and QASCO, before the completion of the feasibility study in order to finance their equity portion of the development costs.

Sphere and SNIM expect debt providers will require equity capital of between US$300 million and US$400 million to support project finance of approximately US$600 million, assuming a capital cost in the range of US$900 million - US$1 billion. On that basis, and subject to a successful outcome on the BFS, Sphere believes it may be possible to finance its share of the equity contribution through the issue of equity in the project to strategic partners, whilst at the same time maintaining a significant equity stake in the project.

If this approach is successful, Sphere would not need to raise additional equity capital between now and financial closure of the project in the second half of 2007. Both Hadeed and QASCO, as Sphere's largest shareholders and significant end users of its planned DR pellet output, will be key participants in those discussions that will commence in the third quarter of 2006. SNIM is independently considering their position in relation to finance.

Further Iron Ore Exploration in JV Area

Given the strong demand for DR pellets from the Gulf region, and the interest expressed by Hadeed and QASCO in expanding the resource base within the Joint Venture Area (JVA), Sphere will shortly commence a reconnaissance diamond drilling program on the two southern deposits in the JVA. The reconnaissance drilling will determine which of Bou Derga or Tintekrate should be drilled first to Inferred Resource status. The detailed geological mapping work done in 2005 suggested that both deposits are approximately similar in size and have comparable surface characteristics to the Guelb el Auoj East Deposit. The resource definition drilling is expected to take place from November, 2006 to March, 2007, and will be designed on a similar basis to the Guelb el Aouj programs.

New Gold and Base Metals Company to be spun off - CEO Appointed

Sphere Investments Limited is pleased to announce the proposed distribution in specie and ASX listing of the company's Mauritanian gold and base metals exploration portfolio as Shield Mining Limited ("Shield" - formerly Mauritanian Metals Limited). The timing and other details for the proposed spin off will be sent to Sphere shareholders shortly.

Shield has appointed David Netherway as its Managing Director. Mr. Netherway is a mining engineer with nearly 30 years of experience in the mining industry. From April 2002 until the completion of its takeover by Eldorado Gold Corporation in 2005, Mr. Netherway served as the President and Chief Executive Officer of Toronto listed Afcan Mining Corporation, a China focused gold mining company which was constructing a gold mine in western China.

Prior to joining Afcan, Mr. Netherway held senior management positions in a number of mining companies, including Golden Shamrock Mines, Ashanti Goldfields and Semafo Inc. Mr. Netherway is a mine developer and operator who was involved in the construction and development of the Iduapriem, Siguiri, Samira Hill and Kiniero gold mines in West Africa and has mining experience in Australia, India, Nepal, Oman and Malaysia. Mr Netherway is a Non-Executive Director of Equigold NL, KazakhGold Group Limited, Orezone Resources Inc and GMA Resources plc.

Shield currently holds five permits that cover an area of 7,381km2 in the northern region of the country. Another six Group 2 permit applications currently under application cover a total area of 8,210km2. All of the target areas identified by Shield have significant exploration potential, with various sampling programmes returning anomalous results considered prospective for a range of deposit styles including mesothermal gold and base metals and iron oxide copper gold.

In addition to the proposed Shield spin off, it is also planned that Sphere's oil and gas interests in Mali will be spun off into a separate listed vehicle in the medium term, with the new oil and gas company's primary focus being the acquisition of oil and gas exploration acreage throughout West Africa. It is our view that shareholders will receive better value for these assets in separate entities, enabling the Company to focus solely on its Guelb el Aouj iron ore project and other substantial iron ore assets.

About Sphere Investments Limited

Sphere Investments Ltd (ASX:SPH) is an iron-ore exploration and development company. The Company’s principal project is the Guelb el Aouj Iron Ore (magnetite) Project in Mauritania, West Africa.



Kevin Skinner
Senior Consultant

231 South Road
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631

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