PEEL MINING LIMITED - Capital/Financing Update 2011

PEEL MINING LIMITED ACN 119 343 734

OFFER DOCUMENT

For a pro rata non-renounceable offer to Eligible Shareholders on the basis of one (1) Share for every four (4) Shares held by Shareholders on the Record Date at an issue price of $0.12 per Share ( Offer ).

IMPORTANT NOTICE

This document is not a prospectus . It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser without delay.

This Offer opens on 21 October 2011 and closes at 5:00pm WST on 11 November 2011.

Valid acceptances must be received before that time.

Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

IMPORTANT NOTES

This Offer Document and enclosed personalised Entitlement and Acceptance Form have been prepared by Peel Mining Limited (ACN 119 343 734) ( PEX or the Company ). This Offer Document is dated 6 October 2011.

No party other than PEX has authorised or caused the issue of this Offer Document, or takes any responsibility for, or makes, any statements, omissions, representations or undertakings in this Offer Document.

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

Eligibility

Applications for New Shares by Eligible Shareholders can only be made on an original Entitlement and Acceptance Form, as sent with this Offer Document. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer.

Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Offer Document.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of the Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer.

Privacy Act

If you complete an application for Shares, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and uses that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Offer Document.

Collection, maintenance and disclosure of certain personal information is governed by

legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

1.	MANAGING DIRECTOR’S LETTER .................................................................................. 5
2.	DETAILS OF THE OFFER .................................................................................................. 6
3.	ACTION REQUIRED BY SHAREHOLDERS ..................................................................... 11
4.	RISK FACTORS ............................................................................................................ 13
5.	CAPITAL STRUCTURE AND FINANCIAL INFORMATION .............................................. 18
DEFINED	TERMS ......................................................................................................................... 20

1. MANAGING DIRECTOR’S LETTER

6 October 2011

Dear Shareholder

On behalf of Peel Mining Limited ( PEX or the Company ), I am pleased to invite you to participate in a one (1) for four (4) pro rata non-renounceable entitlement offer at an issue price of $0.12 per New Share to raise approximately $2,632,720 (the Offer ).

The Company intends to apply the funds raised from the Offer as set out in Section 2.2 of this Offer Document.

Under the Offer, eligible shareholders are being given the opportunity to subscribe for one (1) Share for every four (4) Shares held at 5.00pm (WST) on 17 October 2011 ( Record Date ) at the issue price of $0.12 per New Share.

The Entitlements are non-renounceable. Accordingly, a Shareholder may not sell or transfer all or part of their Entitlement.

This Offer Document contains important information about the Offer, including:

(a) details of the Offer, including key dates;
(b) actions required by Shareholders; and
(c) risk factors associated with the Offer.

A personalised Entitlement and Acceptance Form which details your Entitlement is to be completed in accordance with the instructions provided.

This Offer Document should be read carefully and in its entirety before deciding whether or not to participate in the Offer. In particular, you should consider the key risk factors included in Section 4 of this Offer Document.

Shareholders who have any queries about the Rights Issue should contact the Offer Information Line on telephone (within Australia) 1300 660 857 or (international) +61 3 9415 4683 at any time from 8:30am to 5:00pm (Perth time) during the Offer period.

On behalf of the Board of PEX, I invite you to consider this investment opportunity and thank you for your ongoing support of our company.

Yours faithfully,

==> picture [68 x 44] intentionally omitted <==

Rob Tyson Managing Director Peel Mining Limited

2. DETAILS OF THE OFFER

2.1 The Offer

The Company is making a pro rata non-renounceable offer of New Shares at an issue price of $0.12 each on the basis of one (1) New Share for every four (4) Shares held on the Record Date ( the Offer ) .

At the date this Offer Document is despatched to Shareholders, the Company will have 87,757,315 Shares and 300,000 Options on issue.

On the basis that no Options are exercised prior to the Record Date, the Offer is for 21,939,329 Shares.

Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of a New Share, such fraction will be rounded up to the nearest whole New Share.

2.2 Use of Funds

Completion of the Offer will result in an increase in cash in hand of up to approximately $2,632,720 (before the payment of costs associated with the Offer).

The Company intends to apply the funds raised from the Offer towards:

Item	$
May Day project (incl 4-Mile) drilling & exploration	$1,700,000
Ruby Silver project drilling & exploration	$300,000
Other projects exploration	$350,000
Working Capital	$250,000
Expenses of the Offer	$32,720
Total	$2,632,720

2.3 Indicative Timetable

Indicative Timetable
Event	Date
Announcement of Offer and Appendix 3B lodged on ASX	30 September 2011
Release of Offer Document and Cleansing Notice to ASX	6 October 2011
Notice sent to Security Holders	10 October 2011

Ex Date (date from which securities commence trading without the Entitlement to participate in the Rights Issue)	11 October 2011
Record Date 5pm (WST) (date for determining Entitlements of eligible Shareholders to participate in the Rights Issue)	17 October 2011
Offer Document Dispatched to Shareholders (expected date of dispatch of Offer Document, Entitlement and Acceptance Forms)	21 October 2011
Offer Opening Date	21 October 2011
*Offer Closing Date 5pm (WST)**	11 November 2011
Securities quoted on a deferred settlement basis**	14 November 2011
ASX notified of under subscriptions**	15 November 2011
Dispatch holding statements**	16 November 2011
Trading of New Shares expected to commence**	17 November 2011

Subject to the Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the New Shares.

** These dates are indicative only.

2.4 Entitlements and acceptance

The Entitlement of Eligible Shareholders to participate in the Offer will be determined on the Record Date. Your Entitlement is shown on the Entitlement and Acceptance form accompanying this Offer Document.

Acceptances must not exceed your maximum Entitlement (as shown on the Entitlement and Acceptance Form), although you may accept for a lesser number of New Shares should you wish to take up only part of your Entitlement. If your acceptance exceeds your Entitlement, acceptance will be deemed to be for your maximum Entitlement and any surplus application monies will be returned to you.

Shareholders who wish to apply for Shares above their Entitlement can do so through a separate offer, that being the Shortfall Offer, by completing the appropriate space on the Entitlement and Acceptance Form attached to the back of this Offer Document and returning it, together with a cheque for the value of those Shortfall Shares (at $0.12 per Share) to the Company.

2.5 Overseas Eligible Shareholders

No Offer will be made to Eligible Shareholders resident outside Australia and New Zealand.

New Shares to which any Eligible Shareholders who are not resident in Australia or New Zealand would otherwise be entitled will form part of the Shortfall and will be placed at the discretion of the Directors.

This Offer Document and accompanying Entitlement and Acceptance Form do not, nor are they intended to, constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

2.6 New Zealand Shareholders

The New Shares are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

In accordance with the Securities Act (Overseas Companies) Exemption Notice 2002 (NZ), a person who, on the Record Date was registered as a holder of Shares with a New Zealand address but who, as at the time of this Offer no longer holds Shares is not eligible to participate in this Offer.

2.7 Directors Interests and Participation

Each Director’s interest in the securities of the Company at the date of this Offer Document and their Entitlement is set out in the table below.

Director	Shares	Entitlement
Simon Hadfield	Direct: 1,447,883 Indirect: 2,362,168	Direct: 361,971 Indirect: 590,542
Robert Tyson	Direct: 4,227,625 Indirect: 932,389	Direct: 1,056,907 Indirect: 233,098
Graham Hardie	Direct: 0 Indirect: 12,023,276	Direct: 0 Indirect: 3,005,819
Craig McGown	Direct: 0 Indirect: 1,500,000	Direct: 0 Indirect: 375,000

In addition, each of the Directors has indicated that it is their intention to subscribe for their full Entitlement under the Offer.

2.8 Effect of the Rights Issue on Voting Power in the Company

The issue of New Shares under the Offer will not have an effect on the control of the Company.

2.9 Market Price of Shares

The highest and lowest market sale prices of the Company’s Shares on ASX during the three months immediately preceding the date of release of this Offer Document and the respective dates of those sales were:

Highest: $0.165 on 2 September 2011 Lowest: $0.091 on 2 August 2011

The latest available closing sale price of the Company’s Shares on ASX prior to the date of this Offer Document was $0.12 on 6 October 2011.

2.10 Opening and Closing Dates

The Offer opens on the Opening Date, being 21 October 2011, and closes on the Closing Date, being 11 November 2011. The Company will accept Entitlement and Acceptance Forms until the Closing Date or such other date as the Directors in their absolute discretion shall determine, subject to the Listing Rules.

2.11 Issue and despatch

The expected dates for issue of New Shares offered by this Offer Document and despatch of holding statements is expected to occur on the dates specified in the Timetable set out in Section 2.3.

It is the responsibility of applicants to determine the allocation prior to trading in the New Shares. Applicants who sell New Shares before they receive their holding statements will do so at their own risk.

2.12 Minimum Subscription

There is no minimum subscription.

2.13 Underwriting

The Offer is not underwritten.

2.14 ASX listing

Application for official quotation by ASX of the New Shares offered pursuant to this Offer Document will be made. If approval is not obtained from ASX before the expiration of 3 months after the date of this Offer Document (or such period as varied by the ASIC) the Company will not issue any New Shares and will repay all application monies for the New Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant official quotation to the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription.

2.15 CHESS

The Company is a participant in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of New Shares allotted to them under this Offer Document. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

2.16 Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for New Shares under this Offer Document. The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders.

Shareholders should consult their professional tax adviser in connection with subscribing for New Shares under this Offer Document.

2.17 Risk factors

An investment in New Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are described in Section 4.

2.18 Enquiries concerning Offer Document

Enquiries relating to this Offer Document should be directed to the Offer Information Line on telephone (within Australia) 1300 660 857 or (international) +61 3 9415 4683.

3. ACTION REQUIRED BY SHAREHOLDERS

3.1 How to Accept the Offer

Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Offer Document. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

You may participate in the Offer as follows:

Payment by Cheque/Bank Draft/Money Order

(a) if you wish to accept your Entitlement in full:
(i) complete the Entitlement and Acceptance Form, filling in the details in the spaces provided; and
(ii) attach your cheque, bank draft or money order for the amount indicated on the Entitlement and Acceptance Form; or
(b) if you only wish to accept part of your Entitlement:
(i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and
(ii) attach your cheque, bank draft or money order for the appropriate application monies (at $0.12 per New Share); or
(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “Peel Mining Offer Account” and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form and cheque must reach the Company no later than 5:00pm (WST) on the Closing Date.

Payment by BPAY®

For payment by BPAY, please follow the instructions on the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. Please note that should you choose to pay by BPAY®:

(a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and
(b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

If paying via BPAY, Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the Applicant to ensure that funds are submitted through BPAY by the date and time mentioned above. If you elect to pay via BPAY, you

must follow the instructions for BPAY set out in the Entitlement and Acceptance Form and you will not need to return the Entitlement and Acceptance Form.

The Offer is non-renounceable. Accordingly, a Shareholder may not sell or transfer all or part of their Entitlement.

3.2 Shortfall Offer

If you do not wish to take up any part of your Entitlement you are not required to take any action. That part of your Entitlement not taken up will form part of the Shortfall. Shareholders who wish to apply for Shares above their Entitlement can do so by completing the appropriate space on the Entitlement and Acceptance Form attached to the back of this Offer Document and returning it, together with a cheque for the value of those Shortfall Shares (at $0.12 per Share) to the Company.

The offer of the Shortfall is a separate offer pursuant to this Offer Document ( Shortfall Offer ). The issue price of any Shares offered pursuant to the Shortfall Offer shall be $0.12 being the price at which the Entitlement has been offered to Shareholders pursuant to this Offer Document. The Shortfall shall be placed at the discretion of the Company. The Company reserves the right to allot to an applicant a lesser number of Shortfall Shares than the number for which the applicant applies, or to reject an application, or to not proceed with placing the Shortfall.

3.3 Queries concerning your Entitlement

If you have any queries concerning your Entitlement please contact the Offer Information Line on telephone: (within Australia) 1300 660 857, (international) +61 3 9415 4683.

3.4 Refunds

Any refunds required will be refunded to you by cheque to the registered address on the Company’s register. You will be sent any applicable refunds after the allotment of New Shares. It is not practical to refund amounts of less than $2.00 and these will be retained. No interest will be paid on any refunded amount.

4. RISK FACTORS

4.1 General

The Shares offered under this Offer Document should be considered speculative because of the nature of the Company’s business.

There are numerous risk factors involved with the Company’s business. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which securities will trade.

The following is a summary of the more material matters to be considered. However, this summary is not exhaustive and potential investors should examine the contents of this Offer Document in its entirety and consult their professional advisors before deciding whether to apply for the Shares.

Based on the information available, a non-exhaustive list of risk factors which may affect the Company’s financial position, prospects and the price of its listed securities include the following.

4.2 Specific Company related Risks

Operating risks

The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of factors, including:

(a) adverse geological conditions;
(b) limitations on activities due to seasonal weather patterns and cyclone activity;
(c) unanticipated operational and technical difficulties encountered in geophysical surveys, drilling and production activities;
(d) mechanical failure of operating plant and equipment;
(e) industrial and environmental accidents, industrial disputes and other force majeure events;
(f) unavailability of aircraft or drilling equipment to undertake airborne electromagnetic and other geological and geophysical investigations;
(g) unexpected shortages or increases in the costs of labour, consumables, spare parts, plant and equipment; and
(h) inability to obtain necessary consents or approvals.

Environmental risks and regulations

The Company’s projects are subject to Commonwealth and State laws and regulations regarding environmental matters and the discharge of hazardous wastes and materials. As with all mining projects, these projects would be

expected to have a variety of environmental impacts should development proceed.

The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws and industry standards. Areas disturbed by the Company’s activities will be rehabilitated as required by the conditions attaching to the Tenements.

Title Risks and Native Title

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Tenure and Access

Mining and exploration tenements are subject to periodic renewal. There is no guarantee that current or future tenements or future applications for production tenements will be approved.

The Company’s tenements are subject to numerous State-specific legislation conditions. The renewal of the term of a granted tenement is also subject to the discretion of the relevant Minister. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements comprising the Company’s projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.

Compulsory Work Obligations

Each of the Company’s tenements is subject to expenditure and work commitments which must be met in order to keep such tenements in good standing. These commitments may be varied on application by the tenement holder but any such variation is at the sole discretion of the Minister administering the relevant mining legislation. If no variation is approved, and there is failure to meet the commitments, this could lead to forfeiture of the tenement.

4.3 General Risks

Exploration

Mining exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation a company brings to an

exploration project there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.

Exploration and Operating Costs

The proposed exploration expenditure of the Company is based on certain assumptions with respect to the method and timing of exploration and feasibility work. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice.

Estimates of Resources and Ore Reserves

The estimating of mineral resources and ore reserves is a subjective process and the accuracy of resource and reserve estimates is a function of the quantity and quality of availably data and the assumptions used and judgements made in interpreting engineering and geological information. There is significant uncertainty in any resource or reserve estimate and the actual deposits encountered and the economic viability of mining a deposit may differ materially from any future estimate of the Company. The exploration of mineral rights is speculative in nature.

Any future estimated mineral resources or ore reserves may have to be recalculated based on changes in resource prices, further exploration or development activity or actual production experience. This could have a material adverse effect on estimates of the volume or grade of mineralisation, estimated recover rates or other important factors that influence resource or reserve estimates.

Contractual Risks

The ability of the Company to achieve its objectives will depend on the performance by the counterparties to these agreements of their obligations. If any counterparty defaults in the performance of their obligations, it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms.

Competition Risk

The industry in which the Company will be involved is subject to domestic and global competition. While the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company’s projects and business.

Adequacy of Capital Raising

While the Directors believe that the Company will have sufficient funds to fund its activities in the medium term, there can be no assurance that the Company will not seek to exploit business opportunities of a kind which will require it to raise

additional capital from equity or debt sources. There can be no assurance that the Company will be able to raise such capital on favourable terms, or at all.

Any additional equity raising may dilute the interests of Shareholders, and any debt financing, if available, may involve financial covenants which limit the Company’s operations. There is no guarantee that acceptable sources of funds will be found in the future. If the Company is unable to obtain such additional capital, the Company may be required to reduce the scope of any expansion, which could adversely affect its business, operating results, and financial condition.

Economic Risks

Factors such as inflation, currency fluctuations, interest rates, supply and demand of capital and industrial disruption have an impact on business costs, commodity prices and stock market prices. The Company’s operating costs, possible future revenues and future profitability can be affected by these factors, which are beyond the control of the Company.

Market Conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as, general economic outlook, interest rates and inflation rates, currency fluctuations, changes in investor sentiment toward particular market sectors, the demand for, and supply of, capital and terrorism or other hostilities. Such events are unpredictable and their impact on the individual companies or markets is beyond control of the Company.

Reliance on Key Personnel

The Company’s prospects depend in part on the ability of its executive officers, senior management and key consultants to operate effectively, both independently and as a group. To manage its growth, the Company must attract and retain additional highly qualified management, technical, sales and marketing personnel and continue to implement and improve operational, financial and management information systems. Investors must be willing to rely to a significant extent on management’s discretion and judgement, as well as the expertise and competence of outside contractors.

Growth

The Company will continue to seek to grow the Company both organically and through new investment opportunities. There are always risks that the benefits, synergies or efficiencies expected from such investments or growth may take longer than expected to be achieved or may not be achieved at all. Any investments pursued could have a material adverse effect on the Company.

Growth also brings substantial demands on management. The Board of Directors applies its experience to the evaluation and financing of new opportunities to determine whether the expected risks and rewards of these opportunities meets the Company’s requirements and its strategies for diversification of risk and for capital. The operating results of the Company will largely depend on the ability of the Board of Directors to make sound investment decisions.

Insurance Risks

The Company intends to insure its operations in accordance with industry practice. However, in certain circumstances, the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

Insurance against all risks associated with mining exploration and production is not always available and where available the costs can be prohibitive.

Forward Looking Information

Certain information in this Offer Document constitutes forward looking information that is subject to risks and uncertainties and a number of assumptions, which may cause the actual expenditure of the Company to be different from the expectations expressed or implied in this Offer Document.

Liquidity Risk

There is no guarantee that there will be an ongoing liquid market for Shares. Accordingly, there is a risk that, should the market for Shares become illiquid, Shareholders will be unable to realise their investment in the Company.

Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered pursuant to this Offer Document. Therefore, the Shares to be issued pursuant to this Offer Document carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

Potential investors should consider that an investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Offer Document.

5. CAPITAL STRUCTURE AND FINANCIAL INFORMATION

5.1 Capital structure on completion of the Offer

Balance at the date of this Offer Document To be issued under the Offer(1) Balance after the Offer	Number of Shares Number of Options 87,757,315 300,000 21,939,329 -
	109,696,644 300,000

(1) The number of Shares to be issued under the Offer assumes that no Options are exercised before the Record Date.

5.2 Consolidated balance sheet

The Balance Sheet as at 30 June 2011 (audited) and the Pro Forma Balance Sheet as at 30 June 2011 (unaudited) shown on the following page have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. The Pro Forma Balance Sheet has been prepared on the assumption that all Shares pursuant to the Placement and Offer are issued.

The Balance Sheets have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

Consolidated Balance Sheet as at 30 June 2011 (audited) and Pro Forma Balance Sheet as at 30 June 2011 (unaudited)

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Total Current Assets NON-CURRENT ASSETS Security deposits Property, Plant & Equipment Exploration & Evaluation Expenditure Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Total Current Liabilities NON-CURRENT LIABILITIES Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Accumulated losses TOTAL EQUITY	30 June 2011 30 June 2011 Audited Pro-forma $ $ 1,532,413 4,132,413 74,045 74,045
	1,606,458 4,206,458
	115,000 115,000 17,860 17,860 4,291,595 4,291,595
	4,424,455 4,424,455
	6,030,913 8,630,913
	625,766 625,766
	625,766 625,766

	- -
	625,766 625,766
	5,405,147 8,005,147
	7,384,925 9,984,925 579,722 579,722 (2,559,500) (2,559,500)
	5,405,147 8,005,147

5.3 Dividend Policy

The Directors are not able to say when and if dividends will be paid in the future, as the payment of any dividends will depend on the future profitability, financial position and cash requirements of the Company.

DEFINED TERMS

Applicant refers to a person who submits an Entitlement and Acceptance Form.

Application refers to the submission of an Entitlement and Acceptance Form.

ASX means ASX Limited (ACN 008 624 691) or, where the context permits, the Australian Securities Exchange operated by ASX Limited.

Closing Date means the closing date set out in Section 2.3 or such other date as may be determined by the Directors.

Company means Peel Mining Limited (ACN 119 343 734).

Directors means the directors of the Company.

Eligible Shareholder means a Shareholder whose details appear on the Company's register of Shareholders as at the Record Date whose registered address is in Australia or New Zealand.

Entitlement means the entitlement to subscribe for one (1) New Share for every four (4) Shares held by an Eligible Shareholder on the Record Date and Entitlements has a corresponding meaning.

Entitlement and Acceptance Form means the Entitlement and Acceptance Form accompanying this Offer Document.

Foreign Holder means a holder of a Share whose address, as shown in the records of the Share Registry, is a place outside of Australia or New Zealand.

Listing Rules means the Listing Rules of the ASX.

New Share means a new Share proposed to be issued pursuant to this Offer.

Offer or Rights Issue means the pro rata non-renounceable offer of New Shares at an issue price of $0.12 each on the basis of one (1) New Share for every four (4) Shares held on the Record Date pursuant to this Offer Document.

Offer Document means this Offer Document dated 6 October 2011.

Opening Date means the opening date set out in Section 2.3.

Option means an option to acquire a Share.

Record Date means the record date set out in Section 2.3.

Section means a section of this Offer Document.

Share means an ordinary fully paid share in the capital of the Company.

Share Registry means Computershare Investor Services Pty Limited.

Shortfall means those New Shares under the Offer not applied for by the Closing Date .

Shortfall Offer Application means an application for Shortfall Shares made by an Eligible Shareholders in accordance with this Offer Document and instructions on the Entitlement and Acceptance Form.

Shareholder means a holder of Shares.

WST means Australian Western Standard Time.