Peel Mining Limited – Quarterly Report June 2013

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JUNE 2013 QUARTERLY REPORT 31 July 2013

Highlights for June quarter 2013

CBH Resource Limited completes Stage 2 of the Mallee Bull farm-in agreement and elects to proceed with Stage 3, which will see CBH spend a further $3.33 million to increase its interest to a total of 50%.

Drillhole MBDD009W2W1 returns 84m @ 4.42% Cu, 38g/t Ag, 0.14g/t Au from 575m, including a zone of intense chalcopyrite-dominant mineralisation returning 26m @ 11.39% Cu, 80g/t Ag, 0.20g/t Au from 626m. This intercept represents the highest grade mineralisation to date at Mallee Bull.

Drillhole MBDD009W3, designed to test for a southerly extension to mineralisation at ~500m below surface, intersected a zone of strong mineralisation: 10m @ 4.54% Cu, 31g/t Ag, 0.13g/t Au from 502m.

Phase 3 drill results indicate substantial volume of high-grade copper mineralisation at deeper levels of Mallee Bull.

Re-appraisal of DHEM survey data of Butchers Dog drillhole BDRCDD001 has identified a moderate-to-strong offhole anomaly which correlates well with the trend of magnetic anomalism at Mallee Bull.

Peel reaches agreement with private party Weddarla Pty Ltd to purchase exploration licence EL7403 ‘Sandy Creek’, where there are strong similarities to results yielded from early-stage exploration at Mallee Bull.

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Plans for September quarter 2013

Stage 3 exploration at Mallee Bull comprising further diamond drilling and additional geophysical surveys now underway.

Diamond drilling to start at newly acquired Sandy Creek prospect to investigate identified geophysical anomalies.

Peel Mining Limited ASX code: PEX ACN: 119 343 734 Unit 1, 34 Kings Park Rd West Perth, WA 6005 Ph: (08) 9382 3955 Fax: (08) 9388 1025 E: info@peelmining.com.au Web: www.peelmining.com.au Contact: Rob Tyson Managing Director info@peelmining.com.au _________________________________ About Peel Mining Limited:

The Company’s six projects cover >3,500 km2 of highly prospective tenure in NSW, WA and NZ.

Mallee Bull is an exciting, free-carried copper-polymetallic discovery.

New 100%-owned Cobar tenure offers highly-prospective greenfields exploration potential.

Apollo Hill hosts a major, protruding, shear-hosted, gold mineralised system that remains open down dip and along strike.

Ruby Silver project contains several historic high-grade silver mines.

Attunga Tungsten Deposit is a high grade tungsten deposit.

Rise and Shine project exhibits strong similarities to the multi-million ounce Macraes gold mine.

130 million shares on issue for $48m Market Capitalisation at 31 July 2013.

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Figure 1 - DDH1 night shift at Mallee Bull

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Exploration Mallee Bull Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 70%, CBH earning up to 50%). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation. Drilling and exploration continued at the Mallee Bull copper-polymetallic discovery, 100km south of Cobar in NSW. As previously announced, Mallee Bull is subject to an $8.3m farm-in agreement with CBH Resources Ltd. During the quarter, Stage 2 of the Mallee Bull farm-in agreement was completed. CBH Resource Limited has elected to proceed with Stage 3 of the agreement, which will see CBH spend a further $3.33 million on exploration at Mallee Bull to earn an additional 20%, taking CBH’s interest in Mallee Bull to 50%. Peel remains operator throughout the farm-in process. By late July, exploration field activities at Mallee Bull had recommenced, with drilling expected to restart in August 2013. Diamond drilling Drillhole MBDD009W2W1 summary MBDD009W2W1 which commenced in March was completed in this quarter. The hole, designed to test a new strong DHEM conductor, intersected several zones of important mineralisation: a zone of pyrite-pyrrhotite-rich massive sulphides returning 11m @ 0.55% Cu, 1.62 g/t Au, 24 g/t Ag and 124 g/t Co from 496m; a broad zone of variable stringer/breccia sulphide mineralisation returning 84m @ 4.42% Cu, 38 g/t Ag, 0.14 g/t Au from 575m including a zone of intense chalcopyrite-dominant mineralisation returning 26m @ 11.39% Cu, 80 g/t Ag, 0.20 g/t Au from 626m, and a zone of quartz-healed breccia with lesser chalcopyrite-dominant sulphide mineralisation from 666m which included 6m @ 0.7% Cu, 15 g/t Ag, 0.13 g/t Au from 669m. The zone of mineralisation at 575m represents the highest grade mineralisation intercepted at Mallee Bull to date, and is positioned ~60m down dip of mineralisation in MBDD009. The true width of the intercepts is estimated at about 35-40% of the downhole intercept. Drillhole MBDD009W3 summary Drillhole MBDD009W3 was designed to test for a southerly extension to mineralisation at ~500m below surface and intersected a 10m zone of strong mineralisation: 10m @ 4.54% Cu, 31 g/t Ag, 0.13 g/t Au from 502m, with the true width of the mineralised zone estimated to be ~6m. Drillhole MBDD009W3 is located about 40m south of MBDD009W1 which also returned very strong copper mineralisation. Drillholes MBDD011 and MBDD011W1 summary Drillholes MBDD011 and MBDD011W1 were drilled from a footwall position and were designed to test a broad strong chargeability anomaly located to the east of Mallee Bull and to test for mineralisation at deeper levels within Mallee Bull. Drillhole MBDD011 intersected a highly altered and sheared zone interpreted as a possible “feeder” structure. Peel is encouraged by the presence of such a zone and notes that Cobar-style depositst typically “pinch and swell” and generally occur as clustered and stacked bodies.

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Figure 2 – High Grade Mineralised Zone MBDD009W2W1

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RC drilling A 9 hole RC drilling programme for a total 1,621m was completed within EL7461 in April 2013, testing several newly discovered IP anomalies as well as several areas of anomalous geochemistry. Several drillholes returned anomalous geochemistry however results were generally not signiificant. Geophysics DHEM survey data collected from Butchers Dog drill hole BDRCDD001 was recently re-appraised, and a moderate-to strong offhole anomaly identified. BDRCDD001 was drilled early in 2012 and was designed to test the Butchers Dog prospect which is defined by a very large magnetic anomaly centred about 1km north of Mallee Bull. The newly identified DHEM anomaly is thought to be located within 200m of the bottom of hole and correlates well with the trend of magnetic anomalism. Peel believes that there is high potential for the Butchers Dog anomaly is associated with mineralisation akin to that at Mallee Bull; mineralisation associated with Mallee Bull produces both magnetic and electromagnetic anomalism and exploration efforts at Mallee Bull have been successfully guided by DHEM surveys. The identified conductor will have its geometry refined with additional DHEM surveying prior to drill testing in the September quarter.

Figure 3 – Mallee Bull and Butchers Dog DHEM 3D model (looking East)

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Mineralogy A mineralogical investigation of four samples (two massive sulphide samples, two stringer sulphide samples) from MBDD002 and MBDD009 at Mallee Bull was completed in May 2013 using QEMSCAN technology, with the aim of identifying the minerals in the samples and determining the mode of occurrence (grain size and liberation) of the Au, Cu, Ag, Pb, and Zn minerals. Conclusions from the investigation are as follows:

Massive sulphide samples were dominated by pyrite, lesser pyrrhotite and arsenopyrite.

Stringer sulphides samples were dominated by base metal sulphides with either chalcopyrite, sphalerite or galena as the dominant sulphide.

Gold occurs in an electrum alloy with silver and mercury, and also with antimony in aurostibite. In the massive sulphides the electrum is very silver rich; in the stringer sulphides the electrum is silver-poor.

Copper deports mostly to chalcopyrite.

Lead deports mostly to galena with minor trace amounts in boulangerite and bournonite.

Zinc deports only to sphalerite which shows good liberation where enriched.

Very good liberation of stringer sample chalcopyrite was noted. Cobar Superbasin Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 100%). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.

During the quarter exploration continued on Peel’s 100%-owned Cobar Superbasin Project tenure with work involving geological mapping and geochemical surveys to assist in prioritisation of targets for future work programmes. This work will continue in the coming quarter. Also during the quarter, Peel reached agreement with private party Weddarla Pty Ltd to purchase strategic exploration licence EL7403 ‘Sandy Creek’, located about 20km north of the Mallee Bull copper-polymetallic deposit, and about 80km south of Cobar NSW. A review of exploration data related to the namesake Sandy Creek prospect was completed and there are strong similarities to results yielded from early-stage exploration at Mallee Bull, including a similar geological and structural environment along with coincident magnetic and electromagnetic anomalies. Historically, a strong downhole electromagnetic (DHEM) anomaly has also been identified at the Sandy Creek prospect, as well as strong geochemical anomalism supported by high-grade polymetallic historic drilling results. Subsequent to the quarter, initial exploration of Sandy Creek by Peel utilising a high-powered DHEM survey confirmed the presence of a strong offhole anomaly that remains practically untested by drilling. Follow-up exploration including drilling is planned for the coming weeks. Apollo Hill Project: Gold; Northeastern Goldfields WA (PEX 100%). Targets: Archaean gold deposits. A programme of work was submitted for the Apollo Hill licences E39/1198 and M39/296 and subsequently approved by the WA Department of Mines and Petroleum. The programme of work is for up to 24 Aircore/RC holes and is designed to test for mineralised extensions to the main mineralised zone at Apollo Hill. Drilling is planned to commence in the September quarter. Attunga Project: Gold, Tungsten, Molybdenum, Copper; Northeastern NSW (PEX 100%) Targets: Intrusive-Related Gold System and/or Orogenic gold mineralisation; skarn type tungsten-molybdenum mineralisation and skarn-type precious/base metals mineralisation

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Two diamond drill holes have been planned for early August at the Attunga Tungsten deposit; these holes will follow up RC and diamond drilling completed in July and August 2008 where the following grades were intercepted; 2m @ 24.21% WO3 and 1.71% Mo from 22m downhole from RC drillhole ATP1-D, and 10m @ 0.27% WO3 and 0.04% Mo downhole from RC drillhole ATP1-G. Rise & Shine: Gold; Central Otago New Zealand (PEX 100%) Targets: Orogenic gold mineralisation. No fieldwork was undertaken during the quarter. Ruby Silver Project: Silver, Gold; Northeastern NSW (PEX 100%). Targets: Silver mineralisation associated with fracture-fill quartz-carbonate veining. No fieldwork was undertaken during the quarter. Morawa: Copper, Gold; Central West WA (PEX 100%) Targets: Volcanogenic Massive Sulphide mineralisation. No fieldwork was undertaken during the quarter. Yerranderie: Silver, Lead, Gold; Central NSW. During the quarter, tenement EL7356 ‘Yerranderie’ was relinquished following its expiry on 23rd June 2013.

Corporate During the quarter, Peel Mining finalised the terms of a share placement at a market price of 49 cents per share, predominantly to new and existing institutional investors, to raise ~$5.1 million before costs. Sydney-based investment company, Platypus Asset Management joined the share register of Peel, subscribing for 5,500,000 shares. Existing cornerstone investor Acorn Capital Limited also subscribed for an additional 2,500,000 shares. Several large existing shareholders subscribed for the balance of the placement. Proceeds from the issue will be used to fund Peel’s future share of costs at Mallee Bull once partner CBH Resources completes its earn-in at the project and will also be used to fund the purchase of a 20,000 acre portion of Wirchilleba Station (where Mallee Bull is located) and to advance exploration of the Company’s Cobar Superbasin (including Sandy Creek), Apollo Hill, Attunga and Rise and Shine Projects. Subsequent to the quarter’s end, a General Meeting of Shareholders was held. This meeting successfully ratified the January and June placements of shares enabling the completion of the acquisition of Sandy Creek. For further information, please contact Rob Tyson on +61 420 234 020.

The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Tyson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Tyson 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 Tyson consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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Table 1 – Phase 3 Drill Assay Results Hole ID Northing Easting Azi Dip Final

Depth (m)

From (m)

To (m)

Width (m)

Cu (%)

Ag (g/t)

Au (g/t)

Co (g/t)

Pb (%)

Zn (%)

MBDD009W1 6413369 415162 095 -87 567.8 470 523 53 4.08 42 0.22 - 0.30 0.05

including 472 484 12 9.13 86 0.34 - 0.54 0.05

MBDD009W2 6413369 415162 095 -87 852.7 484 487 3 0.08 18 0.85 257 0.35 0.31

494 518 24 0.39 33 1.39 310 0.32 0.22

706 727 21 2.22 40 0.11 - - -

MBDD009W2W1 6413369 415162 095 -87 760.7 496 507 11 0.55 24 1.62 124 0.29 0.23

575 659 84 4.42 38 0.14 - 0.1 -

including 626 652 26 11.39 80 0.20 - 0.11 -

669 675 6 0.7 15 0.13 - - -

MBDD009W3 6413369 415162 095 -87 610.1 456 461 5 - 25 0.11 - 0.8 1.60

502 512 10 4.53 31 0.13 - - -

MBDD010 6413626 415115 151 -77 735.8 512 515 3 0.11 24 - - 2.21 5.42

634 666 32 3.62 46 0.21 - - -

MBBDD010W1 6413626 415115 151 -77 736.3 709 714 5 1.12 10 - - - -

MBDD011 6413522 415815 244 -65 1195.8 996 1000 4 0.43 6 0.13 - - -

MBDD011W1 6413522 415815 244 -65 1192.8 - - - - - - - - -

MBRC-LOO 6412980 415335 0 -90 25 - - - - - - - - -

MBRC001 6413248 415495 0 -90 109 - - - - - - - - -

MBRC002 6412444 415281 0 -90 109 - - - - - - - - -

MBRC003 6413038 416172 0 -90 120 - - - - - - - - -

MBRCDD004 6413525 415401 90 -60 378.8 - - - - - - - - -

GRC001 6414819 416801 80 -60 250 - - - - - - - - -

GRC002 6414921 416832 90 -60 250 - - - - - - - - -

GRC003 6414939 415027 80 -60 250 - - - - - - - - -

GRC004 6415029 415088 79 -60 76 - - - - - - - - -

GRC005 6415102 415074 72 -60 250 - - - - - - - - -

GRC006 6415022 415090 90 -60 47 - - - - - - - - -

GRC007 6416090 415149 78 -60 250 - - - - - - - - -

GRC008 6415021 415050 80 -60 148 - - - - - - - - -

GRC009 6414940 415175 270 -60 100 - - - - - - - - -

MBWRC001 6411441 418442 0 -90 100 - - - - - - - - -

MBWRC002 6410979 419544 0 -90 64 - - - - - - - - -

Information regarding drilling/assaying data

1. Drilling was completed as HQ or NQ diamond core or RC downhole hammer. 2. Sample recoveries were considered adequate for all samples. 3. Drillcore and RC chips has been logged in detail based on lithology, mineralisation, and alteration. 4. Samples for analysis were collected by sample splitting or sawing core in half. 5. Samples were submitted as 1m or 4m composite half-core intervals, or 1m RC sample splits. 6. Samples were analysed at ALS Chemex utilising methods: Au‐AA25 for Au (fire assay); ME‐ICP41, ME-ICP61 or ME MS61 for multi-

element including Ag, Cu, Pb, Zn; Ag-OG46 for >100 g/t Ag; Cu-OG46 for >1% Cu; Pb-OG46 for >1% Pb; and Zn-OG46 for >1% Zn. 7. Drillhole collars were surveyed by DGPS (GDA94) and downhole gyroscopic surveys were run continuously in diamond drilling or

electronic multishot.

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