The Board of Sky Metals Limited advised of the identification and forthcoming drill testing of additional targets to explore for further REE mineralisation at the Doradilla Project, NSW. Last month, SKY reported the discovery of large-scale and widespread REE mineralisation at the Doradilla Project. Results were reported from assaying historic drill samples for REE.

All holes assayed for REE returned +0.1% TREO results and were from drillholes targeting tin along the Doradilla-Midway-3KEL (`DMK') Line. The REE results from the assaying of the historic holes showed the discovery of REE mineralisation at all three tin deposits along the DMK line and that REE grades where highest at the Midway deposit. Along the DMK Line, the Midway deposit is closest to the Midway Granite, the mineralising source at Doradilla.

This indicates that the REE grades are increasing with proximity to the Midway Granite. Previous exploration at Doradilla has been focussed on tin, however, with the discovery of REE mineralisation and the identification of the increasing REE grades with increasing proximity to the Midway Granite, other targets for REE mineralisation have been identified. Of the new REE targets identified, the priority is the outcropping and near surface Midway Granite itself.

Clay deposits successfully mined for REE in China are formed over weathered granites and, as such, the area identified to have the Midway Granite near surface shows strong similarities to these deposits (Sanematsu & Watanabe, 2016). This has been discovered through geological mapping as well as radiometric and magnetic geophysical data. The area where the granite outcrops also has a wide area around the outcrop where the granite is either more deeply weathered or is under a thin cover sequence, indicated from the magnetic geophysical data.

Therefore, this entire area of multiple square kilometres is prospective for REE mineralisation. The weathered Midway Granite shows strong geological similarities to the clay hosted REE mineralisation successfully mined for REE over the last few decades in China. The REE mineralogy and, therefore, metallurgy are more likely to be similar to these systems due to these geological similarities and, as such, is a very attractive target.

In addition to these possible advantages, the work to date at Doradilla shows TREO grades increase the closer the sampling gets to the Midway Granite. If this relationship continues, then it is possible that higher TREO grades will be discovered in the vicinity of this target area as it is within or immediately adjacent to the Midway Granite. Target Area 2 - DMK Line Between the Doradilla and Midway tin deposits, there is an approximately 4km gap with no drill testing.

Geological mapping and magnetic and radiometric geophysical data all strongly indicate that the DMK Line of strike continues between Doradilla and Midway, however, this has never been drill tested. This area presents an additional and extremely large area of potential strike extension for REE mineralisation and also for tin and polymetallic mineralisation. Drill data from the southwest of Midway also indicates that the Midway Granite is beginning to become shallower to the southwest towards the gap in drilling on the DMK Line in Target Area 2. This could indicate that REE grades may be higher in this area where the granite becomes closer to the surface and may also contain previously unknown but thinly covered weathered granite which would be also prospective for REE mineralisation.

Target Area 3 - Midway Granite & Quartz Porphyry Dykes North and northeast of the Doradilla deposit are a set of north-northeast striking quartz porphyry dykes. Geophysical data also indicates that the Midway Granite is near surface or shallow in this area. The quartz porphyry dykes are seen in the Doradilla tin deposit cross-cutting mineralisation.

In the target area there are a number of outcrops of these dykes, including at the historic Doradilla copper mine, which extracted copper mineralisation interpreted to have developed along the margins of one of these quartz porphyry dykes.