Company Information for Prairie Downs Metals Ltd

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Company Statement

Prairie Downs Metals Limited (ASX:PDZ) main focus is its namesake project. The Prairie Downs Base Metal Project is located approximately 100 kilometres southwest of the mining town of Newman, where there is an airport, and just 45 kilometres from the main highway running through the East Pilbara region of Western Australia. A gas pipeline is on the property.

Since listing in October 2005, the Company has completed over 300 drill holes at the Project resulting in the definition of a total Global Resource of 4.7 million tonnes at a grade of 6.3% zinc, 18g/t silver and 1.8% lead at a nominal lower cut off grade of 1% zinc. It remains open at depth and along strike. This resource contains 295,000 tonnes of zinc, 2.6 million ounces of silver and 83,000 tonnes of lead. It includes a High Grade Resource of 1.6 million tonnes at a grade of 12.3% zinc, 36g/t silver and 3.7% lead. The silver grade appears to be under reported according to metallurgical testwork which will be confirmed by further analysis.

As at 1 March 2008 (LME 3mo prices), the Global Resource had an insitu value of USD1.14 billion.

A positive scoping study was completed in mid-2007 and Abesque Engineering & Construction Ltd completed the Bankable Feasibility Study to finance and develop a copper/lead/zinc/silver mine at Prairie Downs in July 2008. This Study is based on an operation treating 500,000 tonnes of ore per annum and covers the process plant and related supporting surface infrastructure.

Alternatives for development at Prairie Downs are currently being evaluated given current market conditions, the expected increase in total resources and the addition of copper. Standard project finance comprising debt and equity is an expensive way for junior companies to develop resource projects. Consequently, Prairie Downs Metals is seeking to use metal contained in its resource to assist in financing development. Alternatives include a joint venture with an end user or corporate partner, pre-payment from end user, off take with end users or traders, premium share issue tied to metal rights.

In the meantime, the Company continues drilling at Prairie Downs with the primary objective of increasing the high grade resource to approximately 2.5 million tonnes which would allow for five years of high grade production. Copper mineralisation in the footwall to the Main Lode will also be targeted, together with the other copper prospects, including Costean Seven and Kerrs Find, which cover a strike length of about 5 kilometres. The intention is to potentially define an inaugural copper resource. Success will dramatically facilitate project finance as diversification reduces risk and copper is popular.

Current Operations

Prairie Downs: Copper-Zinc-Lead-Silver
The focus is high grade copper-zinc-lead-silver deposits in the vicinity of the Prairie Downs Fault, which is a major regional structure. The Prairie Downs Base Metal Project is located approximately 100 kilometres southwest of Newman in the Eastern Pilbara region of Western Australia. It is in close proximity to substantial infrastructure and support services including a major highway, gas pipeline and airport.  

Current Resource
The project hosts a total Global Resource of 4.7 million tonnes at a grade of 6.3% zinc, 18g/t silver and 1.8% lead at a nominal lower cut off grade of 1% zinc. It remains open at depth and along strike. This resource contains 295,000 tonnes of zinc, 2.6 million ounces of silver and 83,000 tonnes of lead.  It includes a High Grade Resource of 1.6 million tonnes at a grade of 12.3% zinc, 36g/t silver and 3.7% lead. The silver grade appears to be under reported according to metallurgical testwork which will be confirmed by further analysis.

As at 1 March 2008 (LME 3mo prices), the Global Resource had an insitu value of USD1.14 billion.

This resource commences at or near surface and approximately 500,000 tonnes of the high grade resource is amenable to open cut mining. It is expected that the current resource will increase as strike and depth extensions are tested in the current drill program.
 
Exploration Upside
Prairie Downs Metals has a very high discovery rate. Drilling during 2006/07 increased resources by 840%.

The three lodes that host the current resource all remain open at depth and along strike. The maximum depth drilled to date is only 250 metres, whereas similar deposits can extend to 1,000 metres or more, and only 1.3 kilometres of a 6 kilometre ring structure has been drilled. Further, there are numerous other exploration targets, including the Costean Seven copper/lead prospect and the Kerr's Find copper prospect.

Resource Drilling
Resource drilling of the Main and Zed Lodes is expected to commence by the end of July 2008. The primary objective is to increase the high grade resource to approximately 2.5 million tonnes which would allow for five years of high grade production.

Coppermine Bore: Copper-Gold-Uranium-Ree
The Coppermine Bore project is in the northern Ashburton Basin about 1300km north of Perth and 45km north east of Nanutarra Roadhouse.

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.

The Company has previously reported copper results at Prairie Downs in the footwall to Main Lode.  Nineteen holes have intersected copper at greater than 0.5%, with the best results being: DDH6, 1.2 metres at 6.5% copper, 28g/t silver, DDH9, 1.5 metres at 2.7% copper,  and  PDD196 which intersected 3.4 metres at 2.8% copper, 12.2g/t silver, including 0.9 metres at 6.4% copper, 28.2g/t silver. This mineralisation will also be targeted with the objective of potentially defining an inaugural copper resource.

Copper
Detailed mapping and sampling at Prairie Downs this year has resulted in the discovery of copper. In April 2008 the Company discovered copper at the Costean Seven prospect.  A second copper discovery was made at Kerr's Find in May.

A total of five diamond drill holes have been completed at Costean Seven. The target was copper mineralisation outcropping at surface and in costeans and outcropping lead mineralisation. All holes intersected sporadic copper, zinc, lead and silver mineralisation, in some cases over substantial widths; however the source of the surface mineralisation has not yet been discovered. Assay results are not yet available.

Longreach Well: Zinc-Lead-Silver
The Longreach Well project is located 900km north of Perth. It covers a Mississippi Valley Type zinc-lead prospect on the eastern margin of the Carnarvon Basin. A direct analogy can be drawn to the zinc-lead deposits of the Lennard Shelf in the Kimberley region of Western Australia.

Exploration at Longreach Well is at an early stage. The main conclusion from previous exploration is that mineralising fluids have moved through the area. The next step is to locate the trap sites – open spaces such as fractures and solution cavities where significant sulphide accumulation has occurred.

There are three main opportunities requiring further exploration within the project area: structures at high-angle to basin margin; structures that parallel the basin margin; and facies contacts. An airborne magnetic survey is planned for the March quarter to better define these prospective structures.

A detailed literature search identified an obscure reference to gossans to the immediate north of the project area. An exploration licence has been applied for over these gossans.

Perenjori: Copper-Gold-Zinc-Lead-Silver
The Perenjori project is located in the Gullewa Greenstone belt, 270 kilometres northeast of Perth and 65 Km from the Golden Grove zinc-copper-gold deposits. Mineralisation occurs in a felsic volcanic unit which is the same unit that hosts the Golden Grove mine.

The project covers a 2km long gossan anomalous in base metals and gold. Drilling by previous explorers is wide spaced and shallow and most anomalous intercepts are open down dip and down plunge.

Amongst many anomalous intersections, the best previous drill results are: 1 metre @ 11.3% zinc & 4.1% lead; 1 metre @ 3.6% zinc & 1.2% lead; 5 metres @ 1.9% copper & 18g/t silver; 1 metre @ 5.3g/t gold. All intersections are within 100 metres of the surface.

Exploration to date indicates that the main potential for economic mineralisation lies down dip from the known mineralisation. In addition, a number of gossans, soil anomalies and geophysical anomalies have been inadequately tested, thus leaving potential for further discoveries.

The Perenjori project tenement covers the entire known surface and near surface base metal mineralisation of the greenstone belt in this district. The drilling to date is too shallow and wide spaced to be considered as anything other than an indication of the anomalism of the zone. By comparison to the exploration history of the nearby Golden Grove deposits, Perenjori should be regarded as positioned near the end of early phase exploration.


 

Geographical Spread

Western Australia

Board of Directors and Key Management

Broker/Analyst Reports

09/10/07 - Southern Cross Equities Research Report

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