Prairie Mining Ltd. — Capital/Financing Update 2008

ASX RELEASE

7 February 2008

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Geological Breakthrough at Prairie Downs

Prairie Downs Metals Limited has had an exciting breakthrough in understanding the geology at the Prairie Downs Zinc Project. Resulting from the interpretation of all assay data received from its extensive 2007 drill program, the breakthrough shows that the Main Lode comprises a series of high grade shoots and all commence near surface and remain open at depth.

High grade, near surface mineralisation offers a number of competitive advantages: it maximises initial cashflow; minimises capital required for development; decreases capital payback period; lessens the impact of a lower zinc price while maximising revenue from a higher price.

The Main Lode has three sub vertical high grade shoots and a fourth horizontal shoot defined by 108 drill holes, as shown on the attached longitudinal projection. The geology indicates that mineralisation may extend to considerable depth and further horizontal shoots can be expected.

The shoots can be very thick: PDP60, 12 metres at 12.6% zinc, 2.0% lead and 26g/t silver; or very high grade: PD187, 1 metre at 35.2% zinc, 9.1% lead and 76g/t silver. The average intercept width is 5.9 metres with a metal content of 54%m (combined zinc and lead multiplied by intersect width). Ten drill holes have a metal content greater than 90%m.

The Zed Lode also comprises three high grade shoots. It lies in the footwall of the Main Lode and remains open at depth and along strike. The Gabbro Lode lies in the footwall of the Zed Lode. It is less well known than the Main and Zed Lodes due to lack of drilling, but is expected to have comparable dimensions.

Stacked lodes also bode well for mine development. They allow an increase in tonnes per vertical metre resulting in a lower unit operating costs. This is illustrated in the attached schematic cross section where it can be seen that potential development required to mine the Main Lode would also provide access to the Zed and Gabbro Lodes.

The breakthrough in understanding the mineralisation at Prairie Downs positions the Company for a substantial uplift in its resource base with ongoing drilling in 2008 and beyond. The three known lodes will be targeted to depths of 500 metres and potential new lodes will be tested along strike and in the footwall.

A new resource model is now in preparation based on all results from the 2007 drill program. It is expected that the current global resource will increase in tonnes and the high grade subset will show a substantial increase in grade. It will be modeled upon the high grade shoots as discussed herein and will be the basis for reserve definition and mine development. The updated resource statement is expected by mid-February.

Mark Hansen Managing Director

MAIN LODE LONGITUDINAL PROJECTION

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For further information contact: Elissa Samuel Investor Relations Manager [email protected]

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Mr Luke Kerr and by Mr Mark Hansen, both of whom are Members of The Australasian Institute of Mining and Metallurgy. Mr Hansen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Kerr and Mr Hansen consent to the inclusion in this report of the statements based on their information in the form and context in which it appears

ASX Release – 7 February 2008

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