SKY METALS LIMITED — Capital/Financing Update 2014

Sep 2, 2014

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3 September 2014

The Manager Companies ASX Limited 20 Bridge Street SYDNEY NSW 2000

(4 pages by email)

Dear Madam

COMMENCEMENT OF PEL 514 DRILLING PROGRAM COOPER BASIN, SOUTH AUSTRALIA

The Directors of Planet Gas Limited ('Planet Gas') are pleased to announce the commencement of a two well drilling program within PEL 514 in the South Australian Cooper Basin.

Subject to final approvals, the program includes the drilling of two wells Hathi-1 and Bagheera East-1 back to back, with Hathi-1 scheduled for spudding on or about 9 September 2014.

Hathi-1 exploration well

The Hathi-1 vertical exploration well is located in the northwest of PEL 514 situated approximately 19 kilometres northeast of the Tarragon Oil Field (see Figures 1 and 2).

The Hathi Prospect has been mapped as a four-way closure at multiple horizons using data from the recently recorded Dundinna 3D seismic survey.

The exploration well will be drilled to a total depth of approximately 2,530 metres to test the oil potential of the Tinchoo Formation with the Poolowanna and Birkhead Formations and the Hutton Sandstone as secondary targets.

Bagheera East-1 exploration well

The Bagheera East-1 vertical exploration well is also located in the northwest of PEL 514 situated approximately 10 kilometres northeast of Hathi-1. The Telopea Field and the Keleary Field are located 13 kilometres and 10 kilometres respectively southeast of Bagheera East (see Figures 1 and 2).

Planet Gas Limited[ ABN][ 46 098 952 035]

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Level 2, 66 Hunter Street Sydney NSW 2000 Australia T +61 2 9300 3322 F +61 2 9221 6333

W www.planetgas.com

From the Dundinna 3D seismic survey analysis, the Bagheera East prospect is a structural trap mapped as a four-way dip closure.

The exploration well will be drilled to a total depth of approximately 2,510 metres to test the oil potential of the Tinchoo Formation with the Poolowanna and Birkhead Formations and the Hutton Sandstone as secondary targets.

The drilling program forms part of a second farm-in agreement with Senex Energy Limited ('Senex') of May 2013. Planet Gas holds a 20% project interest in PEL 514 while Senex holds an 80% interest and is the operator. The Planet Gas project interest, including the drilling and completion of Hathi-1 and Bagheera East-1, is free carried by Senex.

For further information, contact Anthony McClure or Peter Nightingale on +61 2 9300 3322.

Yours sincerely

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Peter J. Nightingale Director

pjn7817

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Figure 1: Location of Hathi and Bagheera East Fields

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Figure 2: Location of Hathi-1 and Bagheera East-1 Wells

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