SKY METALS LIMITED — Capital/Financing Update 2004

Nov 22, 2004

23 November 2004

The Manager Companies Australian Stock Exchange Limited 20 Bridge Street Sydney NSW 2000

(2 pages by email)

Dear Madam

RE: FERGUSON RANCH 4-30 (SK 30-01) REACHES TOTAL DEPTH CHEROKEE BASIN KANSAS USA

Planet Gas Limited advises that its wholly owned subsidiary. Planet Gas Resources LLC. has completed its second of up to seven stratigraphic wells on its Skull Creek Project within the Cherokee Basin. Kansas USA.

The stratigraphic drilling program is designed to confirm previous total coal isopach (thickness) mapping and assess the in-situ gas of each coal horizon. Development drilling will follow a successful stratigraphic drilling program.

The Ferguson Ranch 4-30 (SK 30-01 on the attached map) has been drilled to a depth of 884 metres (2,902 feet). Preliminary evaluation of the electric logs and gas detection run is encouraging, indicating approximately 4.0 metres (13.1 feet) of gassy coal and carbonaceous shale intersections within the Cherokee Formation which is the primary coalbed methane target horizon as expected.

The Directors are highly encouraged by the first two Skull Creek Project stratigraphic wells (SK 30-01 and SK 31-01 which was reported as indicating 5.9 metres (19.5 feet) of gassy coal and carbonaceous shale on 15 November 2004). These two holes have intersected the principal CBM target coal seams that occur in the Cabaniss and Krebs Formations of the Cherokee Group at depths of approximately 600 metres.

It is anticipated that the third stratigraphic well (SK 19-01) will be spudded today.

For further information, contact Norman Seckold or Bruce Riederer on (61-2) 92475112.

Yours sincerely

Peter J. Nightingale Director

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