Second Drill Program Underway at Prairie Downs

Highly significant results from a recently completed ground geophysical survey, supported by a successful first drill program in October, will be tested by a second drill program at Prairie Downs. This drill program is underway now. It is designed to confirm the geological model, explore for extensions to known mineralisation along strike and down dip and commence testing the geophysical targets.

The first drill program in October showed that the inferred resource at Zone 1 (500,000 tonnes at a grade of 13.1% zinc, 3.7% lead and 35g/t silver) remains open at depth and along strike.

The induced potential ("IP") geophysical survey has identified eleven anomalies at Zone 1 of which three have been previously drill tested. The inferred resource correlates with anomalies IP-1 and IP-4.

All three tested anomalies host high grade zinc mineralisation and it is logical to assume that several of the eight untested IP anomalies will also host significant zinc mineralisation.

Importantly, this first IP survey has only tested 1.3 kilometres out of a total prospective strike length of 20 kilometres. Further surveys are planned for later this year and early 2006.

IP Survey

Two arrays of gradient array IP were completed over a strike length of 1.3 kilometres and width of 0.8 kilometres at Zone 1 on the Prairie Downs Fault ("PDF"). Gradient array produces plan chargeability and resistivity data.

The main zinc mineral at Prairie Downs is sphalerite which is resistive, while the main lead mineral is galena which is chargeable. Thus mineralisation may be represented by zones of high chargeability, high resistivity or a combination of the two.

Resistivity data also show that the PDF is offset by a series of cross-cutting faults which correlate well with observations made during drilling and surface mapping.

Gradient array IP appears to be an excellent, cost-effective technique for the discovery of additional mineralisation at Prairie Downs.

Final Assay Results - October 2005 Drilling

Final results have been received for 3 metre composites from the first drill program completed in October. This has identified two significant intersections not previously assayed.

Drill hole PDP52 returned 3 metres from 93 metres down hole @ 7.8% zinc, 0.7% lead and 12g/t silver and drill hole PDP54 returned 3 metres from 66 metres down hole @ 12.5% zinc, 2.7% lead and 19g/t silver. These results are important as they confirm that the zinc mineralisation remains open down dip on every drill line.

Summary

Exploration progress since quotation last month has been outstanding and has advanced the company's immediate objective of defining sufficient resources at Zone 1 to support an initial "start-up" operation producing zinc concentrate.

Results also support the contention that the PDF has potential to host up to 10 million tonnes of Zone 1 type mineralisation, both at Zone 1 and elsewhere along the fault zone.

Zinc mineralisation is of a different and more significant type to that expected, it is a coarse-grained black sphalerite known as marmatite. It is noteworthy that marmatite is a typical zinc ore at Broken Hill.

This is important because it is unlikely that zinc of this type has moved far from its source, which is the ultimate exploration target at Prairie Downs.

Forthcoming exploration will comprise a further 4 gradient arrays to be completed this month along with a high definition airborne radiometric and magnetic survey. Construction of a detailed 3D model will also commence in December and will provide the basis for ongoing resource definition and for targeting future drilling. Metallurgical testwork is also scheduled for commencement this year.

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.

About Prairie Downs Metals Limited

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.

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. Exploration completed in 2005 has discovered a new, high amplitude uranium anomaly and assay results form rock chip samples have returned an anomalous suite of elements remarkably similar to that at Olympic Dam.

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.