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 Metals Limited (ASX:PDZ) main focus is its namesake project. The Prairie Downs Base Metal Project is located approximately 100 kilometres southwest of Newman in the Eastern Pilbara region of Western Australia. At the current time 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. 

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.

Resource drilling of the Main and Zed Lodes is expected to commence by the end of July. 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.

The Gabbro Lode will also be targeted. The mineralisation here is of disseminated or replacement type rather than the vein style of the other lodes and therefore may be indicating the presence of stratiform mineralization at depth. Such mineralisation is likely to much more extensive that the vein style of the other lodes.

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.

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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