Investment and Offtake Proposal

Prairie Downs Zinc Project

Prairie Downs Metals Limited ("the Company") is pleased to announce it has accepted an outstanding proposal from Sempra Metals & Concentrates Corp ("Sempra"). Sempra has agreed to invest two million dollars in the Company, as well as enter into an offtake and marketing agreement for the purchase of all base metal concentrate production from the Prairie Downs Zinc Project. This relationship is a key to the realisation of the potential of the project.

Sempra's investment of $2,000,000 in the Company will be by way of share placement at a minimum price of $0.60 (or 120% of the five day weighted average sale price over a designated period prior to the issue, whichever is the greater). Sempra may also invest up to $6,000,000 in the Company by way of convertible notes, conditional on the Company achieving certain milestones.

The offtake agreement, which is subject to due diligence, will see Sempra purchase all base metal concentrate production from the Prairie Downs Zinc Project on commercial terms. Upon execution of the offtake agreement, the Company will issue Sempra 4,000,000 options with a minimum strike price of $0.80 per share (or an issue price of 140% of the 5 day weighted average sale price over a designated period prior to the issue, whichever is the greater).

Sempra Metals & Concentrates Corp is a subsidiary of Sempra Energy, a Fortune 500 company that provides gas and electricity services to 23 million consumers in southern California. It also has a wide range of global businesses that include metals trading.

The Company welcomes Sempra as a shareholder. The funds raised will be applied to the ongoing exploration and development of the Prairie Downs Zinc Project, with the objective of commencing production at the earliest opportunity.

The development drilling programme that commenced in March is now complete. Final assay results will be released shortly, with an updated resource statement expected by the end of the month.

Mark Hansen
Managing Director

For further information contact:
Elissa Samuel
Investor Relations Manager
esamuel@prairiedownsmetals.com.au