PEEL MINING LIMITED — Interim / Quarterly Report 2007

Jul 22, 2007

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JUNE 2007 QUARTERLY REPORT

20 July 2007

Peel Exploration Limited

ASX code: PEX ACN: 119 343 734

Level 1, 79 Hay St Subiaco, WA 6008

Ph: (08) 9382 3955 Fax: (08) 9388 1025 E: info@peelex.com.au Web: www.peelex.com.au

Contact:

Rob Tyson Executive Director rtyson@peelex.com.au

Highlights for the quarter

• Peel Exploration successfully listed on the Australian Stock Exchange on 17[th] May 2007. The Company raised $3 million through the issue of 15 million shares at a subscription price of 20 cents each.

• Appointment of Geos Mining Mineral Consultants Pty Ltd to manage the exploration of the Company’s 700 km[2 ] of tenements in NSW.

• Commencement of office studies and field exploration.

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About Peel Exploration Limited

• The company has four 100%-owned projects covering 700km[2] in the New England Fold Belt region of northern New South Wales.

• These projects comprise the Dungowan, Barry, Waverley, and Armidale tenements and are host to numerous historic mines and workings.

• The project areas are under-explored with only minimal modern exploration reported.

• Peel believes its projects offer excellent potential for the discovery of economic precious, base and exotic metals mineralisation.

• The Company plans to conduct exploration in a logical and systematic manner with a focus on maximising the return for each dollar spent.

• Lodgement of applications for exploration licences covering the historic Attunga-Kensington goldtungsten-molybdenum mineral fields.

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Plans for September quarter 2008

• Aeromagnetic-radiometric surveys of Dungowan, Barry and Waverley areas scheduled for September.

• Mapping and surface geochem trip planned for Dungowan and Barry areas.

• Independent review of AttungaKensington prospectivity.

• Lodgement of short form prospectus for non-renounceable rights issue of one (1) option for every two (2) shares held by shareholders at an issue price of 1 cent per option, exercisable at 20 cents on or before 30 November 2010.

Peel Exploration Limited – Quarterly Report June 2007

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Corporate

Peel Exploration successfully listed on the Australian Stock Exchange on 17[th] May 2007. The Company raised $3 million through the issue of 15 million shares at a subscription price of 20 cents per share. Peel Exploration plans to systematically explore its portfolio of 100%-owned tenure and believes the Company’s projects offer excellent potential for the discovery of economic precious, base and exotic metals deposits.

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Peel Exploration Limited – Quarterly Report June 2007

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Exploration

Engagement of Geos Mining Mineral Consultants Pty Ltd

Immediately following listing in late May 2007, Peel Exploration announced the engagement of Geos Mining Mineral Consultants Pty Ltd to manage the exploration of the Company’s 700km[2 ] of tenements in NSW.

Geos Mining, a specialist geology consultancy firm based in Sydney, will be responsible for the day-to-day management and exploration of Peel Exploration’s existing licences for an initial 12month period. Geos Mining has proven expertise in providing world's best practice exploration and management services in a cost effective and transparent manner. Geos Mining is headed by geologist Sue Border, who has more than 30 years experience in the minerals sector.

The appointment of Geos Mining will help Peel Exploration preserve shareholder capital and obtain maximum return for each dollar spent.

Dungowan Project

The Dungowan Project (EL6613) covers an area of about 252km[2] and is located about 15 km east of Tamworth, in the New England Fold Belt region of NSW.

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Dungowan Project Location and Magnetics

Peel Exploration Limited – Quarterly Report June 2007

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Within the Dungowan Project are two specific areas of interest:

• numerous historic copper mines/workings in the vicinity of Dungowan;

• numerous historic gold workings in the vicinity of Limbri.

The licence area is considered prospective for polymetallic VHMS mineralisation, syngenetic (volcanic-related), exhalative gold mineralisation, and epigenetic structurally controlled gold mineralisation related to regional deformation, metamorphism and granite-intrusive phases.

During the June quarter GIS compilation of historic exploration data was undertaken along with a field visit to the Dungowan Project in preparation for follow-up mapping and geochemistry surveys scheduled for August 2007. Other upcoming work at Dungowan will include a highresolution airborne geophysical survey currently scheduled for September 2007.

Barry Project

The Barry Project (EL6614) covers an area of about 48km[2] and is located about 25km southeast of Nundle in the New England Fold Belt region of NSW.

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Barry Project Location and Magnetics

Peel Exploration Limited – Quarterly Report June 2007

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The Barry project is centred on a cluster of copper and molybdenum workings. Exploration in the 1970’s returned copper values averaging some 1.7%, however no follow-up work has ever been reported.

Peel Exploration considers the area to be prospective for polymetallic VHMS mineralisation and intrusive-related precious/base metal mineralisation.

During the June quarter GIS compilation of historic exploration data was undertaken in preparation for follow-up mapping and geochemistry surveys. Other upcoming work at Barry will include a high-resolution airborne geophysical survey currently scheduled for September 2007.

Waverley Project

The Waverley Project (EL6719) covers an area of about 100 km[2] and is located about 40km northeast of Scone in the New England Fold Belt region of NSW.

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Waverley Project Location and Magnetics

The licence encompasses the historic Waverley silver-lead-zinc workings and a large untested magnetic anomaly proximal to the Waverley workings. Prospecting in the mid 1990’s returned anomalous values of up to 739 ppm silver, 14.6% zinc and 9.4% lead.

Peel Exploration Limited – Quarterly Report June 2007

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The Waverley Project is considered prospective for intrusive-related precious/base metal mineralisation.

No exploration activity was completed at Waverley during the quarter. Upcoming exploration activity will see the GIS compilation of historic exploration data commence along with the acquisition of an airborne geophysical survey currently scheduled for September 2007.

Armidale Project

The Armidale Project (EL6722) covers an area of about 300 km[2] and is located about 5km north of Armidale in the New England Fold Belt region of NSW.

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Armidale Project Location and Gravity

The licence encompasses numerous historic precious and exotic metals mines and workings, including three regionally-significant silver mines. The area also abuts Straits Resources Ltd’s Hillgrove gold-antimony mine’s regional exploration tenure.

The Armidale project is considered prospective for precious metals deposits.

No exploration activity was completed at Armidale during the quarter. Upcoming exploration activity will see the GIS compilation of historic exploration data commence.

Peel Exploration Limited – Quarterly Report June 2007

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Other Activity

Attunga Project ELAs

During the quarter, Peel Exploration lodged applications for exploration licences covering the historic Attunga-Kensington gold-tungsten-molybdenum mineral fields, about 20km north of Tamworth. ELA3177 and ELA3182, referred to as the Attunga Project, cover a combined area of about 250km[2] .

The area under application contains numerous historic mines, prospects and workings and initial investigations utilising historic exploration reports coupled with modern datasets indicate that the Attunga-Kensington mineralising structure bears the hallmarks of an Intrusive-Related Gold System.

It should be noted that Intrusive-Related Gold Systems are an under-recognised and economically important class of gold deposit. Examples of Intrusive-Related Gold Systems (IRGS) include Fort Knox in Alaska, Kidston in north Queensland, and Timbarra in northern New South Wales.

Other important aspects of the Attunga-Kensington mineral fields include:

• only minor modern exploration;

• several historic non-JORC compliant resources reported by previous explorers;

• numerous untested surface geochemical gold-tungsten anomalies.

Peel has since engaged Dr Tim Baker, who is widely regarded as an expert in the study of Intrusive-Related Gold Systems, to complete an independent review of the Attunga project’s prospectivity with a view to fast-tracking exploration upon the grant of licences.

The Attunga Project will be given exploration priority and with this in mind, the Company has further engaged the services of Geos Mining Mineral Consultants to manage the exploration of the licences.

The immediate exploration priority upon the successful grant of exploration licences will be to test the validity of certain historic exploration results, and if confirmed, move quickly to drill test some of the most obvious gold-tungsten anomalies.

For further information, please contact:

Rob Tyson Executive Director – Peel Exploration Tel: 08 9382 3955

Warrick Hazeldine Purple Communications Tel: 08 9485 1254 Mob: 0417 944 616

The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Tyson and Mrs Sue Border, both of whom are Members of the Australasian Institute of Mining and Metallurgy. Mr Tyson and Mrs Border each have sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Tyson, and Mrs Border each consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

Peel Exploration Limited – Quarterly Report June 2007