SKY METALS LIMITED — Interim / Quarterly Report 2012

Jul 25, 2012

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26 July 2012

The Manager Companies ASX Limited 20 Bridge Street SYDNEY NSW 2000

(3 pages by email)

Dear Madam,

REPORT ON ACTIVITIES FOR THE QUARTER ENDED 30 JUNE 2012

HIGHLIGHTS

• Cooper Basin PEL 514 commencement of 3D seismic survey

• Change in Management and Officer Holders

• New Project Acquisition Strategy Commenced

Cooper Basin, South Australia

During the quarter, the Company announced that as part of the Senex Energy Limited ('Senex') farm-in in the Cooper Basin, Senex will acquire 158.7 km² of 3D seismic data covering the Northern part of PEL 514. This forms part of a substantial seismic survey which also incorporates Senex's adjacent blocks.

PEL 514 covers an area of 1,972 km² and is located in the Cooper Basin, South Australia.

Senex awarded the survey contract to Perth based Terrex Pty Limited.

This Northern part of PEL 514 is considered to contain stratigraphic and structural traps within the Birkhead Formation capable of hosting oil plays similar to those at the proven Growler and Snatcher oil fields to the southwest. Discoveries of oil within the neighbouring permits support the potential of the survey area.

The 3D seismic expenditure is part of Senex’s farm-in to PEL 514, and will include the drilling of three exploration wells funded by Senex totalling approximately $10.5 million.

Participating interests held by the Company and Senex after the farm-in has been completed will be 50:50 in the Northern area and 30:70 in the Southern area.

Planet Gas Limited[ABN 46 098 952 035]

Level 2, 66 Hunter Street Sydney NSW 2000 Australia T +61 2 9300 3322 F +61 2 9221 6333 E pnightingale@planetgas.com W www.planetgas.com

New South Wales - Sydney and Gunnedah Basins

The Company’s objectives in New South Wales remain a high priority.

It is evident to the Government and industry that the development of the State’s gas resources is becoming increasingly important with the projected tightening of gas supplies in the immediate future. Such tightening could have a substantial impact on availability and pricing. The potential supply shortfall has been stressed by the NSW Government in its submission to the Commonwealth’s Government Draft Energy White Paper of April 2012.

The Company’s objectives for its projects in NSW involve development in a practical, timely and commercial manner. Under the current difficult operating environment in the State, developments must be facilitated not only by government and industry but include all stake holders from a point of education and consultation. With sound technical and environmental procedures the flow on commercial benefits are not just for industry but also all stakeholders and the wider community.

Corporate

During the quarter, Mr Anthony McClure, a Director of the Company, was appointed to the role of Managing Director.

Anthony McClure graduated with a Bachelor of Science (Geology) degree from Macquarie University in 1986. He has more than 25 years technical, management and financial experience in the resource sector worldwide in project management and executive development roles. Mr McClure is a previous Director of Bolnisi Gold NL and European Gas Limited and is a current Director of unlisted public companies Nickel Mines Limited and Mekong Minerals Limited.

With management changes, the Company is prioritising plans for the future development of the Company which, outside of its key asset in South Australia and New South Wales, involves new project generation both locally and abroad for the current phase of the Company’s strategy for development.

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

Yours sincerely

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Anthony J. McClure Director

pjn6801

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PLANET GAS PROJECT LIST

AUSTRALIA

State	Tenement	Resource	Project	Status	Granted	Expiry	Company	Area (km2)
SA	PEL 514	Petroleum	Cooper Basin	Granted	9-Nov-11	8-Nov-16	Planet Cooper Basin Pty Ltd	1,917
NSW	PEL 468	CSG	Bylong	Farm-in stage 2	NA	NA	Planet Gas & CBM Pty Ltd	1,736
NSW	PEL 469	CSG	Shoalhaven	Farm-in stage 2	NA	NA	Planet Gas & CBM Pty Ltd	3,173
NSW	PEL 470	CSG	Mooki	Farm-in stage 2	NA	NA	Planet Gas & CBM Pty Ltd	745
QLD	EPG 29	Geothermal	Innot	Granted	13-Apr-10	30-Apr-15	Gradient Energy Ltd	596

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