ASX Release: 29 April 2010

• Prairie Downs Metals Ltd (“Prairie” or “the Company”) continues to seek and evaluate opportunities to complement existing assets and deliver long term growth to shareholders.

• High priority targets at the Prairie Downs Base Metal Project (“the Project”) have been confirmed by Geochemical soil survey data. These targets have excellent potential for new base metal discoveries.

• Resource consultants Optiro Pty Ltd (“Optiro”) have been engaged to complete an updated resource estimate for the Project.

• The Prairie Downs iron potential has been confirmed by reconnaissance mapping of a braided magnetic anomaly extending from known iron mineralisation.

• Equity Fee of 5 million shares and 5 million options received from Papillon Resources Ltd (ASX”PIR).

• New personnel and consultants employed to progress the Project and to guide the Company’s Project Acquisition and Due Diligence function.

• Ongoing discussions with potential Joint Venture partner interested in significant investment in the Project.

Project Acquisition Strategy

The Company continues to actively seek new assets to complement its current portfolio and capabilities. Prairie has developed an efficient project identification and due diligence function and is continually reviewing new investment opportunities designed to complement existing assets and deliver long-term growth to shareholders. The Company is considering assets in a number of commodities and jurisdictions and is confident that its disciplined approach will deliver positive outcomes for shareholders.

Prairie Downs Base Metals Project

Prairie has reviewed the interpreted results from ioGlobal Pty Ltd following the receipt of final assay results for the soil geochemical survey completed in December 2009. The survey covered an area of 23 km by 1.5 km over the prospective Prairie Downs Fault using a 400m line and 100m sample spacing grid. The program consisted of 922 samples which were analysed by the ALS Laboratories Group utilising an ionic leach analytical method that assayed a suite of 62 elements including lead isotopes Pb206 to Pb208 and gold. The survey identified 22 locations of relative anomalism of which 8 are considered high priority targets.

Figure 1: Batch and geology levelled colour contoured zinc image with
locations of interpreted anomalism outlined in red and high priority targets indicated by a yellow star.

Please click on the map for an enlarged view

A review of the existing Prairie Downs Base Metals Project data including consultants’ reports, geophysical and recent geochemical data and drill hole assay results has been completed. The review of data has been supplemented with a review of the mineralization styles of the Main, Gabbro and Zed lodes in diamond core and a field reconnaissance trip to the sites of the high priority geochemistry targets reported in March this year. The rationale of targeting the central area around the Prairie Downs Fault is based on surface geochemistry and the revised structural interpretation and aims to deliver additional resources proximal to the existing resource.

Gold Potential

The gold potential of the Prairie Downs project has to date received little attention. The target review detailed above has identified the prospectivity of the project area for this style of mineralization. This potential is currently being assessed in conjunction with the investigation of a possible intrusion related Porphyry Cu-Au and Epithermal Au-Ag system. This program will include an investigation of a possible VMS origin for the fault hosted mineralization in the existing resource.

Resource Update

The company has appointed Optiro to undertake a review and update of its mineral resources and technical databases.  Optiro is a specialist mining and geological consultancy with extensive experience in mine geology, geostatistics, resource estimation and database management. The update will allow the company to include all drilling undertaken on the deposit to date and to create a revised geological model.  The most appropriate resource estimation techniques will then be selected and applied.

Prairie Downs Iron Potential

During the period Dynasty Metals Australia Limited (ASX:DMA) (“Dynasty”) announced a maiden 453 million tonne JORC Compliant Resource at Dynasty’s Spearhole Detrital Channel Iron Deposit contained in their adjoining Prairie Downs tenement. Dynasty’s results confirm the exploration concept of very large tonnages of Detrital and Channel iron deposits in the Prairie Downs region. Further to the Company’s announcement dated 18 March 2010 a reconnaissance mapping exercise has been conducted across a 7 km long and 400 m wide braided magnetic anomaly has been completed and found encouraging ferruginous duricrust and hematite pebble lag (Figure 3). The magnetic anomaly is believed to represent the downstream extension of the palaeochannel hosted iron deposits identified by Dynasty.The Company will continue to monitor the progress of Dynasty’s exploration program while seeking the required approvals to enable a drilling campaign targeting the iron potential of the identified magnetic anomaly.

Figure 2: RTP_2VD magnetic image showing the braided magnetic
anomaly located downstream of the Dynasty Metals 450 Mt CID resource.

Please click on the map for an enlarged view

Equity Fee Received in Papillon Resources Limited

On 11 March 2010 Prairie was issued with 5 million ordinary shares and 5 million unlisted options in Papillon Resources Limited (ASX:PIR) (“Papillon”). The options have an exercise price of 15 cents and expire on 31 December 2011. Prairie is delighted the progress being made by Papillon as it seeks  to delineate additional resources and note that drilling has commenced at the Medinandi gold project in the Mali South project area.

The market value of Papillon securities held by the Company as at the close of trading on 28 April was $750,000.

Prairie recognizes Papillon’s strong strategic position to advance the significant potential of the Malian assets and looks forward to further progress.

Personnel

The Company has undergone a staffing restructure recognising the commencement of a new stage of project development and project generation activity. 

Matthew Rolfe has been appointed Senior Exploration Geologist. Matthew is familiar with the Prairie Downs Base Metal Project having been contracted to the Company in 2008. He has a strong background in base metal and gold exploration having previously worked for Teck Cominco, Sons of Gwalia, Normandy, and JML Resources Pty Ltd. Matthew is currently completing a PhD on the influence of syndepositional extensional tectonics on the sedimentology and stratigraphic architecture of the reef complexes of the Lennard Shelf, canning Basin.

Daniel Wojciechowicz has been contracted as a Project Geologist to assist with field work at the Project.

Cheryl Kannemeyer has been appointed Company Accountant.

In addition to these appointments the Company continues to engage technical consultants and contractors as required.  In this regard Optimum Capital Pty Ltd (“Optimum Capital”) has been retained to provide ongoing technical and commercial advisory services. Optimum Capital are an independent Perth based advisory house that focuses on the junior and mid tier mining sectors. The directors of Optimum include prominent corporate finance and resources executive John Fitzgerald and technical and operational analysis expert David Kelly.

Darren Bromley, former Chief Financial Officer, and Luke Kerr, former Chief Geologist are no longer employed by the Company.

On behalf of directors and shareholders I would like to welcome Matthew Rolfe, Daniel Wojciechowicz, Cheryl Kannemeyer and Optimum Capital.

Corporate

The Company’s cash balance as at 31 March 2010 was $3.157 million.

As at 22 April 2010 the Company had 2,301 shareholders and 72,890,598 ordinary fully paid shares on issue with the top 20 shareholders holding 27.03% of the total issued capital.

Prairie Downs Metals limited continues to explore potential joint venture opportunities. The Company’s preference in any potential joint venture is for an experienced and robust mining house to make a significant investment in the Project to rapidly advance the exploration and development of the Project and to drive positive growth for shareholders.

To view the accompanying Appendix 5B,  please click here 31.60 Kb

John Welborn
Managing Director

For further information contact:

John Welborn
Managing Director
Prairie Downs Metals Limited

Tel: (+6 18) 9225 5755
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