PEEL MINING LIMITED — Interim / Quarterly Report 2009

Apr 29, 2009

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MARCH 2009 QUARTERLY REPORT

30 April 2009

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

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About Peel Exploration Limited

• The company has six 100%-owned tenements covering approximately 600 km[2] predominantly in the New England Fold Belt region of northern New South Wales.

Highlights for March quarter 2009

• Metallurgical and mineralogical studies on Attunga Tungsten Deposit completed with encouraging results.

• Field visits to Attunga, Dungowan, Waverley, and Armidale.

• Exploration licence application lodged over historic Yerranderie silver field tailings.

• Subsequent to the quarter’s end surface geophysics at Attunga identified a moderate TEM anomaly next to the Attunga Copper Mine prospect.

• Also subsequent to the quarter’s end exploration drilling at Attunga commenced with a likely completion by mid-May 2009.

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• These projects comprise the Attunga, Dungowan, Barry, Waverley, Armidale and Mt Tennyson East 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.

Plans for June quarter 2009

• Extensional drilling at Attunga Tungsten Deposit, Attunga Copper Mine prospect and Kensington NW (now underway).

• Completion of in-house Conceptual Study on Attunga Tungsten Deposit.

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

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Peel Exploration Limited – Quarterly Report December 2008

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Exploration

Attunga Project: Gold, Tungsten, Molybdenum, Copper; NE NSW (PEX 100%). Tenements: EL6883 (Mt Patterson), EL6884 (Attunga).

Targets: Intrusive-Related Gold System style gold-tungsten mineralisation; skarn style tungsten-molybdenum mineralisation and skarn-style precious/base metals mineralisation.

During and subsequent to the quarter activity undertaken at the Attunga Project included:

• Metallurgical testwork on Attunga Tungsten Deposit mineralisation;

• Mineralogy studies on Attunga Tungsten Deposit mineralisation;

• Literature review and site visit at Attunga Copper Mine prospect;

• Drillhole planning for Attunga Tungsten Deposit, Attunga Copper Mine and Kensington NW (subsequently commenced April 27);

• Transient EM survey at Attunga Copper Mine prospect and IP survey at Kensington; and

• GIS data capture and desktop studies.

Attunga Tungsten Deposit (also known as Attunga Scheelite Deposit, Attunga Prospect 1)

The Attunga Tungsten Deposit was discovered in the late 1960s and has undergone minimal exploration since its discovery. In April 2008, Peel announced the completion of an independent inferred resource estimate for the Attunga Tungsten Deposit with results including 1.29 Mt grading 0.61% WO3 and 0.05% Mo for 9,400t contained WO3 equivalent using 0.2% WO3 equivalent cutoff.

Metallurgical testwork and mineralogy studies

In August 2008, Peel engaged NAGROM, metallurgical consultants, to complete Phase 1 metallurgical testwork. During the March quarter Phase 1 testwork results were finalised with high grade WO3 concentrate products derived. The key outcomes from the work done are:

• Scheelite grain size at Attunga is predominantly greater than 0.1 mm (100 micron).

• Grind size fraction of +75 to -125 micron yielded 80% recovery of WO3 to 16% of original circuit mass via conventional gravity (spirals) primary concentration.

• Magnetic properties of gangue material (garnet) offers additional simple primary concentration route. The grind size fraction +75 to -125 micron gravity (spirals) concentrates were successfully upgraded via magnetic rollers to a 47% WO3 grade concentrate with 79% overall recovery of WO3.

• Flotation testwork on tails and fines (-75 micron), and cleaner work/ore dressing of spiral concentrate/magnetic separation products yielded positive upgrade and recovery of WO3 content.

• Molybdenum is predominantly held chemically in scheelite, as powellite solid solution. Cursory leach work of fine ground concentrate product has shown potential for the separation of WO3 and molybdenum.

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Peel Exploration Limited – Quarterly Report December 2008

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It should be noted that the testwork completed to date was derived from RC drill cuttings which are not considered optimum for metallurgical work. Notwithstanding this fact, Peel is very encouraged by the results of Phase 1 testwork.

The process flow sheet envisaged would involve staged crushing and grinding, conventional gravity concentration (spirals), drying of gravity concentrates, removal of magnetic gangue material via magnetic circuit, and flotation of fine (-75 micron) spiral tails. Secondary processing/mineral dressing would involve further flotation work. See the attached simplified process flowsheet in Figure 1.

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Figure 1: Simplified Process Flowsheet for Attunga Tungsten Deposit

Mineralogy studies completed during the quarter confirmed that the majority of molybdenum is held chemically in scheelite, as powellite solid solution.

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Peel Exploration Limited – Quarterly Report December 2008

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Other work

Peel commenced an in-house Conceptual Study into development options for the Attunga Tungsten Deposit during the previous quarter. Pell envisages that this study will be completed in the June 2009 quarter.

Also completed during the quarter was additional drillhole planning targeting depth extensions to the existing Attunga Tungsten Deposit resource model.

Attunga Copper Mine Prospect

The Attunga Copper Mine, discovered in 1902 and worked over various periods up until World War 2, had been held under an historic prospecting licence by another company. In February 2009 the licence expired and the area subsequently reverted back to Peel’s tenure.

Total recorded production was about 1,600t ore grading ~6% copper, ~8 g/t gold and ~150 g/t silver. Other significant metals present include bismuth, molybdenum and tungsten. Workings comprised pits, shafts and levels and extended to about 80m below surface with sulphide mineralisation including chalcopyrite and chalcocite reported to occur in the deeper levels.

Mineralisation at the Attunga Copper Mine occurs in a garnet skarn similar to that at the Attunga Tungsten Deposit indicating that the deposits are genetically-related. Literature searches conducted during the quarter by Peel indicate that minimal modern exploration has been conducted, however an IP survey completed in the mid-1980s defined multiple anomalies, all of which remain untested. Only very shallow airtrac drilling (deepest hole = 14m) has ever been completed.

EM survey

Subsequent to the quarter’s end, Peel completed a TEM (transient electro-magnetics) geophysical survey in the Attunga Copper Mine area. Results point to the presence of a moderate, shallow conductor centred approximately 200m north of the historic Attunga Copper Mine workings. The TEM response occurs in close proximity to a reputed historic IP anomaly.

The anomalous TEM conductor is considered most likely to be due to a steeply easterly dipping conductor and the sharpness of the response indicates a source from less than 100m depth. Results also suggest that there are significant EM negative effects, probably from an IP response running further north of the anomalous conductor.

Peel is encouraged by the TEM results and plans to drill test the anomalous zones in the upcoming drill campaign. Drilling at the Attunga Copper Mine commenced subsequent to the quarter’s end (April 27).

Other work

Also completed during the quarter was drillhole planning targeting depth and strike extensions to known mineralisation, as well as several holes designed to test various geophysical targets.

Kensington Gold-Tungsten Prospect

The Kensington Gold-Tungsten Prospect located about 5km north-northwest of the Attunga Tungsten Deposit, represents a high-priority target within the Attunga Project area. RC drilling

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Peel Exploration Limited – Quarterly Report December 2008

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completed by Peel in mid-2008 encountered widespread gold mineralisation confirming that Kensington represents a significant gold-tungsten system.

IP survey

Subsequent to quarter’s end, Peel completed an IP survey over the Kensington prospect area to assist with geological modeling and future exploration purposes. Interpretation and modeling of the data was ongoing at the time of reporting.

Other work

Peel completed drillhole planning at the Kensington NW prospect targeting depth extensions to outcropping gold-anomalous breccia.

Also during the quarter Peel completed data packaging of the Kensington area to assist in the search for a JV partner for the area.

Dungowan Project: Copper, Zinc, Gold, Silver; NE NSW (PEX 100%).

Tenement: EL6613.

Targets: Polymetallic VHMS mineralisation; syngenetic exhalative gold mineralisation; and epigenetic structurally-controlled gold mineralisation.

During the quarter Peel completed follow-up ground assessment (including Niton sampling) of a significant airborne geophysical anomaly. Geological investigations indicate that the area in question represents a regional fold-nose, however only slightly elevated copper levels were detected from surface geochemical sampling via Niton XRF analyser.

Barry Project: Copper, Zinc, Gold, Silver; NE NSW (PEX 100%).

Tenement: EL6614.

Targets: Polymetallic VHMS mineralisation, intrusive-related precious/base metals mineralisation; and ultramafic-hosted nickel and PGEs.

No fieldwork was completed during the quarter.

Peel’s future workplan at Barry includes the investigation of several other copper prospects (subject to access).

Waverley Project: Silver, Lead, Zinc, Gold; NE NSW (PEX 100%).

Tenement: EL6719.

Targets: Intrusive-related precious-base metals mineralisation.

During the quarter Peel completed follow-up ground assessment (including Niton sampling) of the Waverley silver prospect and several airborne geophysical anomalies. The geophysical anomalies were determined to be either culturally derived (machinery, etc.) or caused by Tertiary basalt cover.

A geochemical sampling program utilising a Niton XRF analyser was also completed on a grid over the Waverley silver prospect area. Anomalous silver results were returned from a quartzbarite vein system confirming the presence of mineralisation over a strike length of up to 800m. The nature of the vein system appears to be poddy and narrow and further geological mapping is required.

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Peel Exploration Limited – Quarterly Report December 2008

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Armidale Project: Silver, Gold, Antimony, Tungsten; NE NSW (PEX 100%).

Tenement: EL6722.

Targets: Intrusive-related precious metals mineralisation.

During the quarter Peel completed follow-up ground assessment (including Niton sampling) of the Taits Gully silver prospect. Surface geochemical sampling via Niton XRF analyser outlined anomalous silver in the vicinity of historic workings.

Mt Tennyson East: Molybdenum, Tungsten; Central NSW (PEX 100%).

Tenement: EL7272.

Targets: Granite-hosted molybdenum and tin mineralisation.

During the quarter, Peel was granted the Mt Tennyson East exploration licence. Mt Tennyson East is located adjacent to the Mt Tennyson molybdenum deposit and a review of historic data indicates that similar mineralisation is present on Peel’s Mt Tennyson East prospect, possibly representing an extension to the known mineralisation.

Yerranderie: Silver, Lead, Gold; Central NSW (PEX 100%).

Tenement: ELA3647.

Targets: Silver-lead-gold mineralisation in surface waste and tailings dumps.

During the quarter, Peel lodged an exploration licence application over the historic Yerranderie silver field area. Literature searches indicate that substantial amounts of silver-lead-gold mineralisation remain present in surface waste and tailings dumps at Yerranderie. Peel plans to investigate the potential to retreat and remediate the Yerranderie environs.

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Peel Exploration Limited – Quarterly Report December 2008

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Peel Exploration Project Locations April 2009

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For further information, please contact:

Rob Tyson Executive Director – Peel Exploration Mob: 0420 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 styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Persons 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 their information in the form and context in which it appears.

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Peel Exploration Limited – Quarterly Report December 2008