PEEL MINING LIMITED — Governance Information 2007

May 14, 2007

PEEL EXPLORATION LIMITED (Company)

CORPORATE GOVERNANCE STATEMENT

This Corporate Governance Statement sets out the Company's current compliance with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (Best Practice Recommendations). The Best Practice Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the Best Practice Recommendations.

The Board of the Company currently has in place a corporate governance policy which is to be posted in a dedicated corporate governance information section of the Company's website at www.peelex.com.qu following admission to the ASX.

	BESTPRACTICERECOMMENDATION	COMMENT
1.	Laysolidfoundationsformanagement and oversight
1,1	Formaliseanddisclosethefunctions reserved to the boardandthosedelegatedtomanagement.	Company'sproposedTheCorporateGovernance Statement includes a BoardwhichCharter,disclosesthespecificresponsibilities of the Board and provides thatthe Board shall delegate responsibility for theday-to-day operations and administration ofthe Company to the CEO (or equivalent).
2,	Structure the board to add value
2.1	A majority of the board should beindependent directors.	Themajority$\circ$ itheBoardnot ioreindependent directors. However, given thesize and scope of the Company's operations,the Board considers that it has the relevantexperience in the exploration and miningindustry and is appropriately structured todischarge its duties in a manner that is in thebest interests of the Company and itsShareholders from both a long-term strategicand operational perspective.
2.2	The chairperson should be anindependent director.	The chairperson Mr Michael Kiernan is not anindependent director,
2.3	The roles of chairperson and chiefexecutive officer should not beexercised by the same individual.	The rolesof chairperson and CEOfor iequivalent) are not exercised by the sameindividual.
2,4	board should establishThe$\alpha$nomination committee.	Thewhole,Board,$\overline{a}$ s$\sigma$servesOSOnomination committee.Where necessary, the nomination committee
		adviceseeksexternal٥fadvisersin.connection with the suitability of applicants

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		for Board membership.
2,5	Provide the information indicatedin Guide to Reporting on Principle2.	The Company will provide details of eachdirector, such as their skills, experience andexpertise relevant to their position, togetherwith an explanation of any departures frombest practice recommendations 2.1, 2.2, 2.3,2.4 and 2.5 in its future annual reports.
		The Corporate Governance Statement is tobe posted on the Company's websitefollowing admission to the ASX.
3.	Promote ethical and responsibledecision-making
3.1	Establish a code of conduct toguide the directors, the chiefexecutive officer (or equivalent),the chief financial officer (orequivalent) and any other keyexecutives as to:	TheCompany'sproposedCorporateGovernance Statement includes a CorporateCode ofConduct, whichprovidesaframework for decisions and actionsinrelation to ethical conduct in employment.
	the practices necessary to${\Box}$maintain confidence in thecompany's integrity; and	The Corporate Governance Statement is tobe posted on the Company's websitefollowing admission to the ASX,
	(b)theresponsibilityandaccountability of individualsreportingforandinvestigating reportscfunethical practices.
3.2	Disclose the policy concerningtrading in company securities bydirectors, officers and employees.	TheCompany'scurrentcorporategovernance policy includes guidelines forbuying and selling securities in the Company.
		TheCorporateGovernanceStatement,which deals more comprehensively withtrading in Company securities, is to be postedtheCompany'sonwebsitefollowingadmission to the ASX.
3.3	Provide the information indicatedin Guide to Reporting on PrincipleЗ.	The Company will explain any departures (ifany) from best practice recommendations3.1, 3.2 and 3.3 in its future annual reports.
		The Corporate Governance Statement is tobe posted on the Company's websitefollowing admission to the ASX.
4.	Safeguard integrity in financialreporting
4.1	Requirethechiefexecutiveofficer (or equivalent) and thechieffinancialofficer(orequivalent) to state in writing tothe board that the company's	The Board requires the CEO and the CFO (ortheir equivalents) to make such a statementat the relevant time.

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	financial reports present a trueand fair view, inall materialrespects,ofthecompany'sfinancialconditionandoperational results and are inaccordancewithrelevantaccounting standards.
4.2	The board should establish anaudit committee.	TheBoarddoesnothaveauditan.committee. The Board considers that theCompany and the Board are currently not ofsufficient size to justify the establishment of anAudit Committee and all matters that wouldbe addressed by committees are usuallydealt with by the full board of Directors.
4.3	Structure the audit committee sothat it consists of:$\circ$only non-executivedirectors;	Not applicable.
	(b)a majority of independentdirectors:
	$\left( \circ \right)$an independentchairperson, who is notchairperson of the board;and
	at least three members.(d)
4,4	The audit committee should havea formal charter.	TheCompany'sproposedCorporateGovernance Statement includes a formalcharter for any audit committee establishedin the future.
4,5	Provide the information indicatedin Guide to Reporting on Principle4.	Should the Companyappoint an auditcommittee, the Company will provide detailsof the members of the audit committee, thenumber of meetings of the audit committeeand the names of the attendees, togetherwith an explanation of any departures frombest practice recommendations 4.1, 4.2, 4.3,4.4 and 4.5 (if any) in its future annual reports.The Corporate Governance Statement is tobe posted on the Company's website
		following admission to the ASX.
5.	Maketimelyandbalanceddisclosure
5.1	Establish iwrittenpoliciesandprocedures designed to ensurecompliance with ASX Listing Ruledisclosure requirements and toensure accountability at a seniormanagement level forthat	The Company has a continuous disclosureprogram in place designed to ensure thefactual presentation of the Company'sfinancial position,

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	compliance.
5.2	Provide the information indicatedin Guide to Reporting on Principle5.	The Company will provide an explanation ofdeparturesany.frombestpracticerecommendations 5.1 and 5.2 (if any) in itsfuture annual reports.The Corporate Governance Statement is tobe posted on the Company's websitefollowing admission to the ASX.
6.	Respect the rights of shareholders
6.1	Designanddisclosea	TheCompany's Corporate
	communicationsstrategy10promoteeffectivecommunication with shareholdersandencourageeffectiveparticipationatgeneralmeetings.	GovernanceStatementincludes$\blacksquare$shareholdercommunications strategy, which aims toensure that the shareholders are informed ofmajoralldevelopmentsaffectingtheCompany's state of affairs.
6.2	Request the external auditor toattendtheannualgeneralmeeting and be available toanswershareholderquestionsabout the conduct of the auditand the preparation and contentof the auditor's report.	The Board will request the external auditor toattend all future annual general meetings oftheCompanytoanswershareholderquestions about the conduct of the auditand the preparation and content of theauditor's report.
7.	Recognise and manage risk
7,1	The board or appropriate boardshouldcommitteeestablishpolicies on risk oversight andmanagement.	The Board determines the Company's "riskprofile" and is responsible for overseeing andapproving risk management strategy andpolicies, internal compliance and internalcontrol.
7.2	The chief executive officer (orequivalent)andthechief financial officer (or equivalent)should state to the board inwriting that:	TheBoardwillconsiderwhetherit.isappropriate to require the CEO and CFO (ortheirequivalents) to providesuch.- a -statement at the relevant time.
	thestatement(a)givenĪD.accordancewithbestpracticerecommendation4.1 (the integrity of financialstatements) is founded on asoundsystemofriskmanagement and internalcomplianceandcontrolwhichimplementsthepolicies adopted bytheboard; and
	(b)thecompany'sriskmanagement and internalcomplianceandcontrolsystem is operating efficiently

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	and effectively in all materialrespects.
7.3	Provide the information indicatedin Guide to Reporting on Principle7.	The Company will provide an explanation ofanydeparturesfromDestprocticerecommendations 7.1, 7.2 and 7.3 (if any) inits future annual reports.
		The Corporate Governance Statement is tobe posted on the Company's websitefollowing admission to the ASX.
8.	Encourageenhancedperformance
8.1	Disclosetheprocessforperformance evaluation of theitsboard.committeesandindividualdirectors,andkeyexecutives.	The Board has developed a formal processfor performance evaluation of the Board andthe committees.
9.	Remunerate fairly and responsibly
9,1	Provide disclosure in relation tothe.company's remunerationpolicies to enable investors tounderstandthe$\left( i\right)$costs andbenefits of those policies and (ii)the link between remunerationdirectorspaidtoandkeyexecutivesandcorporateperformance.	The Company has developed a formalremuneration policy which deals with thesematters.
9.2	should establishThe Iboard$\Box$remuneration committee.	TheCompany's remuneration committeecomprises the non-executive directors.
9.3	Clearly distinguish the structure ofnon-executivedirectors'remunerationthatfromofexecutives.	Non-executive directors are paid a set fee of$30,000inclusiveоfperannumsuperannuation). Non-executive directors donot receive performance based bonuses anddo not participate in employee-relatedequity schemes of the Company nor are theyentitled to retirement allowances. The non-executive chairman receives an addition$5,000 per annum.The Company's Constitution provides that theremuneration of non-executive Directors willbe not be more than the aggregate fixed
		sum determined by a general meeting. Theaggregate remuneration has been set at anamount of $300,000 per annum.
		The Board is responsible for determining theremuneration of the CEO (or equivalent) andsenior executives.
9.4	Ensure that payment of equitybased executive remuneration ismadeaccordancein.with	The Company has no intentions in relation topaymentequityofbasedexecutive

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	thresholds set in plans approvedby shareholders.	remuneration at this time.
9.5	Provide the information indicatedin Guide to Reporting on Principle9.	The Board will consider what information toinclude in the corporate governance sectionof the Company's annual report in respect ofremuneration policies at the relevant time.The Company does not currently have in
		existence any schemes for retirementbenefits.
		The Company will explain any departuresfrom best practice recommendations 9.1, 9.2.9.3 and 9.4 in its future annual reports.
10.	Recognise the legitimate interestsof stakeholders	The Company has established a code ofconduct to guide compliance with legal andother obligations to legitimate stakeholders.

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Class A Options:

The remaining terms and conditions of the Options are as follows:

• $\left( \bigcap \right)$ each Option entities the holder to one (1) Share in the Company:
• $(b)$ each Option is exercisable
• $\left( \circ \right)$ the Options are exercisable at any time on or prior to 5.00pm (WST) on 30 November 2010 (Expiry Date) by completing an option exercise form and delivering it together with payment of $0.20 per Option for the number of Shares in respect of which the Options are exercised to the registered office of the Company;
• $(d)$ an Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised;
• $(e)$ subject to the Corporations Act, the Listing Rules and the Company's Constitution, the Options are freely transferable;
• $(f)$ all Shares Issued upon exercise of the Options will rank parl passu in all respects with the Company's then Issued Shares. The Company will apply for quotation of the Options and all Shares issued upon exercise of the Options on ASX;
• there are no participating rights or entitlements inherent in the $\langle 0 \rangle$ Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the Issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue; and
• $(h)$ if at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the Listing Rules.

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Class B Options:

The remaining terms and conditions of the Options are as follows:

• $\left($ each Option entities the holder to one (1) Share in the Company;
• $\left($ i each Option is exercisable
• $\langle k \rangle$ the Options are exercisable at any time on or prior to 5.00pm (WST) on 30 November 2010 (Expiry Date) by completing an option exercise form and delivering it together with payment of $0,30 per Option for the number of Shares in respect of which the Options are exercised to the realstered office of the Company:
• $(1)$ an Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised;
• $(m)$ subject to the Corporations Act, the Listing Rules and the Company's Constitution, the Options are freely transferable;
• $(n)$ all Shares issued upon exercise of the Options will rank pari passu in all respects with the Company's then issued Shares. The Company will apply for quotation of all Shares issued upon exercise of the Options on ASX:
• $\langle \circ \rangle$ there are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the Issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue; and
• $\left( p\right)$ if at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed In a manner consistent with the Corporations Act and the Listing Rules.