Uranium Discovery at Coppermine Bore

Significant results have been received that dramatically increase prospectivity of the Coppermine Bore project. Prairie Downs Metals ("PDZ") has received the results of a high definition airborne radiometric and magnetic survey; along with assay results for 18 rock chip samples collected from the historic copper workings at Coppermine Bore. The airborne survey has discovered a new, high amplitude uranium anomaly and the assay results have returned an anomalous suite of elements remarkably similar to that at Olympic Dam. This is a very encouraging start to exploration of this project.

Sample Results

The rock chip samples were collected from the historic workings ( see Figure 1 below) and analysed for a suite of 58 elements to determine the geochemical signature of the deposit. The objective was to allow comparison with Australian sediment-hosted granitoid-related copper-gold deposits such as Telfer and Ernest Henry, and copper-gold-uranium deposits such as Olympic Dam.

Olympic Dam is a very large copper-gold-uranium-silver-rare earth element ("REE") deposit. The principle REE elements are cerium and lanthanum and it is also anomalous in lead. Coppermine Bore is anomalous in all these elements, which is a remarkable correlation given the unusual suite of elements at Olympic Dam. The highest and average values for these elements in the samples from Coppermine Bore are shown below in Table 1.

TABLE 1

Uranium Radiometrics & Magnetics

Airborne radiometrics has identified a high amplitude uranium anomaly with a strike length of 1.2 kilometres (see Figure 2 below), along with a second, lesser anomaly over the historic Coppermine Bore workings to the southwest. These anomalies are substantial and indicate a significant uranium mineralising event.

The magnetics show that the uranium corresponds with a zone of structural complexity at the contact between granite and the overlying sequence of iron formations, basalt and sediments. Drainage and sand cover mask the area between the two anomalies, however it is likely that uranium mineralisation continues beneath this cover and is continuous over a total strike length of 2.5 kilometres.

There are magnetic highs in the immediate vicinity of the uranium anomalies, however the magnetic signature of the area is complex and will require further processing and interpretation.

Summary

Many of the exploration criteria have now been identified that are considered necessary for the emplacement of significant sediment-hosted granitoid-related copper-gold-uranium mineralisation. These features include; uranium mineralisation on or near a granite contact, a specific geochemical signature, structural complexity and an appropriate overlying rock sequence.

The next stage of exploration will comprise ground geophysics and geochemistry preparatory to drilling. Geophysics is expected to include scintillometer/spectrometer surveys to more closely define the uranium mineralisation and IP ("induced potential") surveys to identify metal accumulations.

Mark Hansen
Managing Director

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

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Mr Mark Hansen, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hansen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hansen consents to the inclusion in this report of the statements based on his information in the form and context in which they appear.

Background Information

The company's main project is Prairie Downs, where the primary focus is high grade zinc-lead-silver deposits, with secondary prospectivity for gold and nickel. The most advanced prospect at Prairie Downs, Zone 1, contains an Inferred Mineral Resource of 500,000 tonnes, within 100 metres of the surface, at a grade of 13.1% zinc, 3.7% lead and 35g/t silver. Mineralisation is open at depth and along strike, with the total potential at Zone 1 of the order of 2.4 million tonnes indicated by drilling and geophysics.

Coppermine Bore is considered to have potential to host sediment-hosted granitoid-related copper-gold deposits such as Telfer, Ernest Henry, and copper-gold-uranium deposits such as Olympic Dam. Exploration for uranium at the historic copper workings in 1977 returned a best drill result of 3 metres at 2.5% copper and 120ppm uranium and sampling completed in 1996 returned a best result of 2.4g/t gold, 19% copper and 295ppm uranium.

Longreach Well is a Mississippi Valley Type ("MVT") zinc-lead prospect where previous exploration has outlined a 4 kilometre zone of prospective stratigraphy with anomalous geochemistry and gossanous outcrops.

Perenjori is a Volcanic Hosted Massive Sulphide type ("VHMS") prospect. The best drilling results to date are 5 metres at 1.9% copper & 18.2g/t silver, 1 metre at 11.3% zinc & 4.1% lead and 1 metre at 5.3g/t gold. Exploration to date indicates that the main potential for economic mineralisation lies down dip from the known mineralisation.

Figure 1: Historic Workings at Coppermine Bore

(Click image to enlarge)

Figure 2: Uranium radiometrics

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