The Board of Sky Metals Limited provided an update on exploration activities at the Caledonian Gold Project near Yass in NSW. A six hole RC percussion drilling program has recently been completed by SKY. The drilling program was enacted to test two parallel zones of gold mineralisation approximately 500m long and 50m wide delineated by a multi-element soil sampling survey recently completed by SKY over the historic Caledonian gold mine. Previous explorers had not detected the eastern zone which contains exceptional gold results up to 65.3g/t Au. Assay results (gold only) have been received for drillholes CARC001 & CARC002 only. Strong, shallow high-grade gold results have been recorded from the eastern gold soil zone. CARC002: 3m @ 13.6 g/t Au from 14m including, 1m @ 38.4 g/t Au from 15m. Results for drillholes CARC003-006 are expected in mid January. High grade gold mineralisation in drillhole CARC002 appears to be associated with a zone of intense quartz veining (up to 50%) hosted by a strongly weathered unit interpreted to be a skarn (Figure 2). Drillholes CARC003, 005 & 006 all intersected substantial downhole thicknesses of the targeted skarn alteration package albeit heavily weathered (Figure 2). Drillhole CARC001 intersected sediments and rhyolite only and is considered to have been collared too far to the east to have intersected the eastern skarn unit. PROJECT BACKGROUND: The Caledonian Project (EL8920) is located 30km southeast of Yass in the Southern Tablelands of New South Wales. The area contains the historic Caledonian Gold Mine. The distribution of multiple historic drill intersections at Caledonian Prospect indicate a potentially large and shallow mineralised gold system with discrete high-grade zones (e.g. 6m @ 8g/t Au recorded from the main lode, GSNSW. The deepest historical drillhole is 62m and most holes are 25m deep with a number of drillholes ending in mineralisation. These drillholes were mostly located within a coherent 600 x 100m soil gold anomaly (+0.1ppm) defined by a joint venture between Central West Gold NL/Mineral Management & Securities Pty Ltd. /Kennecott in 1985 (GSNSW Report GS1985/224 R0005615). Also, a number of costeans (13) were completed at the prospect by Central West Gold.