The Board of Sky Metals Limited provide an update on exploration activities at the Tallebung Project and the 3KEL Tin-Polymetallic Target at the Doradilla Tin-Polymetallic Project, both in NSW. A large diameter PQ diamond drillhole, TBD002, was completed at Tallebung to provide samples for further metallurgical test work. This hole was orientated perpendicular to previous drilling and subparallel to the mineralisation to intercept as much of the mineralisation as possible to provide as much sample as possible for bulk metallurgical test work.

Assay results have been received and include: The shallow high-grade tin mineralisation intercepted in TBD002 demonstrates the strong potential for near surface open pit tin mineralisation at Tallebung. Two possible post mineralisation faults were observed in the hole and SKY plans to drill additional diamond drillholes with orientated core to continue to further develop the geological and structural controls on the mineralisation at Tallebung Another six infill and extension RC drillholes, TBRC030-35, have now been completed at Tallebung to continue to expand the broad footprint of bulk tonnage mineralisation and to increase confidence in the bulk tonnage tin mineralisation intercepted in previous drilling. SKY completed three diamond drillholes at 3KEL in March, earlier this year.

Assays have previously been reported for two of the three holes with the assays now received for remaining hole, 3KDD017. 3KDD017 was drilled below the zinc mineralisation in 3KDD013 (11.2m @ 3.02% Zn from 123m) to confirm the geological interpretation that the zinc mineralisation in 3KDD013 was overlying further tin mineralisation at depth. The results from 3KDD017 have confirmed this geological model and established a 500m strike extension of the 3KEL Target, expanding the strike length of the 3KEL tin mineralisation to over 2.8km.

Results included: Deeper drilling under the mineralisation intercepted in 3KDD017 is being planned to further extend this mineralisation at depth. Based on the growing confidence of the geological model being developed at 3KEL, SKY anticipates that the tin grades will increase significantly at depth below 3KDD017. Most importantly, these results also demonstrate that the mineralisation at 3KEL remains open along strike to the northeast, as has been indicated by up to 0.7% tin rock chips collected by SKY previously to the northeast of 3KDD017.

Zinc mineralisation is common in these zoned large-scale tin systems and is associated with `high levels' above the tin mineralisation and mineralising granite. 3KDD013 likely intercepted this higher level, indicated by the very pale yellow/white sphalerite (zinc sulphide) which hosted the zinc mineralisation. 3KDD017 has also intercepted sphalerite, however, this sphalerite is a darker yellow-red and indicates that it is moving towards the deeper tin zone of the 3KEL system, as has now been confirmed with these recent assays and the tin mineralisation.

The large extension and infill RC drilling program planned for 3KEL has now commenced after significant delays due to wet conditions. The drill program is to continue the drilling of the large 3KEL Target, starting on the north-eastern end of the 3KEL Target before moving to the south-west, testing along the 2.8km strike. This RC program will aim to explore extensions to the large strike of tin mineralisation, extend the zinc mineralisation in 3KDD013 and also test underneath the rock chips results from the large 200m x 150m undrilled gossanous area 200m further to the northeast of 3DKK013.

Rock chips from this gossanous area assayed up to 0.7% tin and represent a +200m extension of the 3KEL Target. A camp is in place near the 3KEL Target to allow for better access for SKY staff and contractors for the ongoing drilling programs planned over at least the next 3 months.