PROSPECT RESOURCES LIMITED — Capital/Financing Update 2010

Oct 26, 2010

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----- Start of picture text ----- ASX Media Release27 October, 2010.----- End of picture text -----

ETHAN COMMISSIONS WORK PROPOSAL FOR MARY SPRINGS PROJECT

Following a recent Project Update, detailing the completion of a reverse circulation drilling program and the successful negotiation of exploration access to almost the entire Mary Springs region in Western Australia, Perth based explorer, Ethan Minerals Limited (ASX:ETH) is pleased to update the market on its proposed work program for its Mary Springs Project, in the Northampton district of WA.

HIGHLIGHTS

• This aim of Ethan’s work proposal is to capture all available grade control and geological data from the historic underground operations at Northampton

• The result will be the most comprehensive database ever constructed at one of Australia’s premier base metal deposits, which on completion will enable Ethan will be able to better understand the mineralisation of Mary Springs

• It is proposed the Work Program will begin in early November 2010 and be completed by early February 2011.

This Work Proposal was prepared at the request of Executive Director, Ken Fitzgerald on behalf of Ethan Minerals. The brief was to compile into Ethan’s existing digital database the available assay and geological data from the historic Mary Springs and other underground operations in the Northampton district of Western Australia. This data would be then used to create three dimensional paradigms and generate drilling targets for future work. As the data is all on hard copy original imperial mine plans, this exercise is largely a manual task. It is proposed to use mainly senior personnel on this task to increase the level of accuracy and reduce the time required.

In summary, this work will occupy a small team of people for approximately five weeks, and whilst a cost estimate is very difficult to make, due to the nature of the work, it is likely to be no more than approximately $75,000. This brief of this work proposal was to capture all available grade control and geological data from the historic underground operations at Northampton. This data was to be incorporated into a new Micromine Database for Ethan, and ultimately to be used in planning of further work, modelling geology and grade distributions, and possibly a reconciliation of tonnes and grade insitu versus mine production. The data is all contained in various historic mine plans and reports. These comprise survey, assay and geological plans, as well as historic and more recent drill holes. Examples of geology and assay plans are shown below. These old plans date from the 1950s and 1960s and are in surprisingly good condition. All are in imperial scales, with assays in % per tonne.

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----- Start of picture text ----- Figure- 1, Northampton Typicalunderground mine geology plan----- End of picture text -----

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----- Start of picture text ----- Figure-2,Northampton –segment oftypicalundergroundassay plan----- End of picture text -----

T: +61 8 9472 5502 F: +61 8 9362 2805 E: enquiries@ethanminerals.com.au

Suite 24, 443 Albany Highway Victoria Park WA 6100 Australia

ETHAN MINERALS Limited ACN 124 354 329

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----- Start of picture text ----- ASX Media Release27 October, 2010.----- End of picture text -----

The Work Program Proposal is as follows:

Geology

The geology is plotted directly onto the plans as mapped. These also show geological observations from various drillholes, and appear to be reliable, fact based records. A number of structural measurements are also plotted onto the plans.

Assay

The face samples from various development headings (drives and crosscuts) are plotted onto the plans, as are available drilling data. These are expressed as % Pb, Zn and/or Cu per tonne. The convention adopted was to plot the values at the midpoint of the face cut. Sampling was via horizontal chip sampling of exposed faces, across the entire width of the vein. Selected areas were also sampled along the walls of the drives. Very rarely areas were sampled more than once, permitting some duplicate assays to be examined.

Proposal

The work proposed will cover several stages. To avoid damaging the originals, scanning and copying would be conducted as a preliminary stage. All subsequent work would be carried out on the copies.

Geology

The mapped contacts will be digitised into micromine using the original mine coordinates. These will then be converted into Map Grid of Australia (MGA) coordinates using the known survey points and then wireframed into 3D solid shapes. The structural data will be used to guide this wireframing exercise. Additional data would be available from the surrounding drilling data. This could also be included if required for a more comprehensive interpretation.

Assay

The assay data will require a fairly manually intensive work program. Each face sample will be converted into a unique underground drillhole, with its own hole number, sample number, azimuth, dip, depth, and of course assay. Literally thousands of sample points are present.

This data will be captured in the original imperial, and converted into metric via standard Australian conversions, as advised by Standards Australia. As with the geology data modelling will be more complete when integrated with the available drilling data. A review of available geophysical data may also be warranted.

Discussion

This work, particularly the assay data will be fairly labour intensive. The result will be the most comprehensive database ever constructed at one of Australia’s premier base metal deposits. On completion Ethan will be able to understand the mineralisation better and especially the remnants. These occur both below the floor of the open pit and also buried in the waste dumps.

Recommendations

The following staged approach is recommended:

• 1. Digitisation of the underground sampling
• 1. Integration of underground data with existing drillhole database
• 1. Interpretation of grade distribution from this sampling set to generate mineralisation model
• 1. Digitisation of the geological plans
• 1. Integration of this 3D mapped observed geology with other observation from existing drillholes
• 1. Generation of 3D geological model to aid in any further pit development as well as drillhole targeting
• 1. Approximate reconciliation of tonnes of past production
• 1. Targeting: incorporating existing physical data and geophysical data.

T: +61 8 9472 5502 F: +61 8 9362 2805

Suite 24, 443 Albany Highway Victoria Park WA 6100 Australia

ETHAN MINERALS Limited ACN 124 354 329

E: enquiries@ethanminerals.com.au

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----- Start of picture text ----- ASX Media Release27 October, 2010.----- End of picture text -----

It is proposed the Work Program will begin in early November 2010 and be completed by early February 2011.

In commenting on the Work Program Proposal, Executive Director, Ken Fitzgerald, Ethan Minerals said,

“Ethan is very pleased to be formally proposing a Work Program for the Mary Springs Project. Following the completion of the Work Program, the results will potentially be the most comprehensive database ever constructed at one of Australia’s premier base metal deposits.”

“These results will enable Ethan to better understand the mineralisation and make further progress in the commercialisation of the Mary Springs Project.”

The information in this update pertaining to mineral resources and exploration results was compiled by Mr. M P Sullivan who is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Sullivan is a consultant to Ethan Minerals Limited and has sufficient experience which is relevant to the style of mineralization and the type of deposit that is under consideration and to the activity that 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. Sullivan consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

For more information please visit www.ethanminerals.com.au

Or contact: Mr Ken Fitzgerald Mr Rod North Executive Director Managing Director Ethan Minerals Limited Bourse Communications Pty Ltd Tel: +61 8 9472 5502 Tel: +61 3 9510 8309 Mob: +61 (0)417 099 167 Mob: +61 (0)408 670 706

About Ethan Minerals Limited

Ethan Minerals Limited (“Ethan”) successfully listed fully oversubscribed on the ASX on 4[th] December, 2009 having raised over $5 million dollars. Ethan is an Australian-based exploration company focused on the successful discovery and development of quality base and precious metals deposits in Western Australia, focussing initially on its Northampton Project, north of Geraldton. The Company’s strategy is to develop its lead project, the Mary Springs Project, where a JORC Compliant Inferred Resource of 145,000 MT at 11.5% Pb has been quoted by Independent Consultants, MineMap. Ethan will also look to secure projects that have attractive project economics or prior exploration activity, offering a robust exploration model and are thereby essentially ’drill ready’. Utilising advanced exploration models, coupled with proven analytical and geophysical techniques Ethan will identify and delineate additional drill targets within the Northampton Project in an effort to develop new, commercial base metal projects. Ethan is currently targeting additional prospective opportunities for investment in Africa and Indonesia.

T: +61 8 9472 5502 F: +61 8 9362 2805 E: enquiries@ethanminerals.com.au

Suite 24, 443 Albany Highway Victoria Park WA 6100 Australia

ETHAN MINERALS Limited ACN 124 354 329