Resource Upgrade & New Discoveries

Prairie Downs Zinc Project

Prairie Downs Metals Limited has recently completed a highly successful drilling program at the Prairie Downs Zinc Project. The results strongly suggest a substantial increase in grade, and perhaps tonnage, for the resource at the Main Lode. The program also intersected a new lode, the East Lode, which shows excellent grades and provides further potential to significantly increase tonnage at the Project. And, perhaps the most noteworthy result from the program was diamond drill hole, PDP117. This drill hole intersected a 50 metre wide zone of alteration and mineralisation at depth, which appears to be primary in nature and could be a major breakthrough for the Project.

The exploration and development drilling program commenced in March with the objectives being to upgrade all of the Main Lode to Indicated Resource status and to commence exploring for additional lodes. The program was successful on both counts. Best intersections at the Main Lode were 8 metres at 10.1% zinc, 2.8% lead, 20g/t silver; 7 metres at 11.1% zinc, 2.6% lead, 32g/t silver; 8 metres at 10.5% zinc, 2.1% lead, 25g/t silver; 9 metres at 8.2% zinc, 1.5% lead, 22g/t silver ( all significant results are shown in the attached table).

The total open pittable resource at the Main Lode prior to this drilling program was 820,000 tonnes at 6.8% zinc, 1.7% lead and 17g/t silver. These latest results strongly suggest that the updated resource statement will show a substantial increase in grade, and an increase in tonnage.

Additionally, geology and geophysics indicate that the Main Lode continues for up to a further 500 metres to the west. This extension may again lead to an increase in tonnage and will be tested during the next drill program. The Main Lode has now been closed to the east, where it gives way to the East Lode.

The East Lode is a new discovery beneath surface cover. It commences to the east of the Main Lode and remains open down dip and along strike. The start of the lode has only been intersected in four drill holes and yet it already shows excellent grades. The best results are 2 metres at 17.1% zinc, 4.7% lead and 77g/t silver, 1 metre at 25.8% zinc, 5.9% lead and 97g/t silver and 3 metres at 10.6% zinc, 1.5% lead and 23g/t silver.

Geology and geophysics show the East Lode could extend for another kilometre to the east along the Prairie Downs Fault. This discovery is particularly meaningful as it dramatically improves the prospectivity of the remaining 15 kilometres of the fault that has yet to be tested, and the overall potential of the Project.

Also notably impacting project potential is diamond drill hole PDP117. This hole appears to have intersected mineralisation that is primary in nature and may prove to be the most significant intersection on the Project to date.

Diamond drill hole PDP117 intersected a 50 metre wide zone (true width about 20 metres) of alteration and zinc mineralisation in a completely different geological setting to the Main and East lodes. The zinc in PDP117 occurs within a sedimentary sequence adjacent to a mafic, footwall intrusive. This mineralisation and its setting appear to be primary in nature, meaning it may be the source of zinc mineralisation in the area.

Clearly this could be a major breakthrough for the Project, changing its potential dramatically. Primary zinc mineralisation in this geological setting can be very extensive, which could therefore lead to an exponential increase in tonnes at the Project.

The next drill program, scheduled for August, will test this system to determine whether Prairie Downs Metals Ltd has discovered the primary source. It will also test the Main Lode to the west and the newly discovered East Lode. An updated resource statement is expected within the next few weeks and will be released as soon as it is available.

Mark Hansen
Managing Director

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

About the Drill Program

The program comprised 74 RC drill holes for 8,223 metres and 6 diamond drill holes for 581.5 metres. The majority of RC drilling was directed at resource development, with the balance being exploration drill holes and pre-collars for diamond drill holes. Exploration results were released in the March Quarterly Report.

Significant intersections are shown in the table below. The preliminary results for drill holes PDP80 through PDP104 were released in the March Quarterly Report and diamond drill core (which is currently being cut) results will be released once available.

All RC drill holes were sampled at one metre intervals and three metre composite samples were submitted for the entire length of all drill holes. One metre samples were initially submitted where visible zinc mineralisation has been observed, and a final series of one metre samples were submitted where the three metre composite samples returned elevated zinc values.

The Company uses "Metal Content" as measure of the contained metal in a drill intersection, as shown in the attached table. Metal Content equates to the width of the drill intersection multiplied by the combined value for zinc and lead and is a useful guide to the relative significance of the intersection.

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Mr David Broomfield and Mr Mark Hansen, who are Members 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 Broomfield and Mr Hansen consent to the inclusion in this report of the statements based on their information in the form and context in which it appears.