PEEL MINING LIMITED

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SEPTEMBER 2012 QUARTERLY REPORT

31 October 2012

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: [email protected] Web: www.peelmining.com.au

Contact:

Rob Tyson Managing Director [email protected]

About Peel Mining Limited:

The Company’s six projects cover >2,000 km[2] 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.

Highlights for September quarter 2012

Mallee Bull farm-in agreement executed
with CBH Resources Limited

 Phase 2 exploration at Mallee Bull commenced in July, comprising:

– 4,500m diamond drilling programme targeting down-dip/plunge mineralisation;

Surface and downhole geophysics;
RAB drilling; and
Surface geochemical surveys.

 Strong drill results returned to date with better results including:

– MBDD002 – 41m @ 3.56% CuEq from 363m and 31m @ 3.45% CuEq from 415m;

– MBDD003 – 10m @ 2.47% CuEq from 367m, 12m @ 2.18% CuEq from 386m, 14m @ 2.85% CuEq from 409m and 22m @ 4.18% CuEq from 444m;

– MBDD004 – 42m @ 1.99% CuEq* from 356m; and

– MBDD006 – 7m @ 2.79% CuEq from 396m, 13m @ 2.4% CuEq from 405m and 31m @ 1.9% CuEq* from 444m

 Airborne EM at Gilgunnia South.

 Peel increases 100%-owned strategic footprint in Cobar district with acquisition of further new tenure and grant of Mundoe licence (subsequent to quarter’s end).

Rise and Shine project exhibits strong similarities to the muti-million ounce Macraes gold mine.
110 million shares on issue for $38.5m Market Capitalisation at 30 October 2012.

Plans for December quarter 2012

 Finalisation of Phase 2 exploration at Mallee Bull.

RC drilling at Mundoe.

Peel Mining Limited – Quarterly Report September 2012

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Exploration

Gilgunnia Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 100%, CBH earning up to 50%).

Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.

Exploration

During the quarter, drilling and exploration re-commenced at the Mallee Bull copper-polymetallic discovery, 100km south of Cobar in NSW. As announced in the previous quarter, Mallee Bull is subject to an $8.3m farm-in agreement with CBH Resources Ltd, whereby CBH has the right to earn an interest of up to 50% in the project over a three-year period. Importantly, Peel remains operator during the farm-in period.

Diamond Drilling

Drilling at Mallee Bull was planned to comprise about 4,500m of diamond drilling targeting downdip/plunge mineralisation and commenced in mid-July. Subsequent to the end of the September quarter, drilling of the last drillhole (MBDD009) was being undertaken. Peel is highly encouraged with results returned to date with all drillholes completed returning significant mineralisation.

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In early September, assay results subsequently showed MBDD001, drilled at the southern extent of Mallee Bull, had returned 5m at 0.85% Cu, 9 g/t Ag, 0.62 g/t Au and 248 g/t Co from 431m and 3m at 1.07% Cu, 30 g/t Ag, 2.09 g/t Au, and 49 g/t Co from 447m.

MBDD002 (80m north of MBDD001) intersected the broadest width of mineralisation encountered to date at Mallee Bull. A cumulative intercept of 72m at 3.51% CuEq* (2.11% Cu, 41 g/t Ag, 1.13 g/t Au, 384 g/t Co) comprising two broad zones of mineralisation – a massive sulphide zone of 41m at 1.71% Cu, 33 g/t Ag, 1.84 g/t Au, 616 g/t Co from 363m and a stringer/breccia sulphide zone of 31m at 2.65% Cu, 51 g/t Ag, 0.18 g/t Au, 78 g/t Co from 415m was returned.

Cross Section Peel Mining Limited – Quarterly Report September 2012

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MBDD003 (140m north of MBDD001) returned a cumulative intercept of 58m at 3.15% CuEq* (2.36% Cu, 44 g/t Ag, 0.30 g/t Au, 97 g/t Co) comprising four zones of mineralisation – 10m at 1.12% Cu, 47 g/t Ag, 0.95 g/t Au, 377 g/t Co from 367m; 12m at 1.58% Cu, 39 g/t Ag, 0.14 g/t Au, 39 g/t Co from 386m; 14m at 1.92% Cu, 56 g/t Ag, 0.30 g/t Au, 37 g/t Co from 409m; and 22m at 3.62% Cu, 38 g/t Ag, 0.09 g/t Au, 40 g/t Co from 444m.

MBDD004 (40m north of MBDD001) returned a thick zone of massive and stringer sulphide mineralisation comprising 42m at 1.99% CuEq* (1.01% Cu, 23 g/t Ag, 0.91 g/t Au, 250 g/t Co) from 356m .

MBDD005 (40m north of MDD001) was designed to test down dip of MBDD004 however, swung substantially off-section to the south. Several moderate zones of mineralisation were returned comprising – 5m at 1.75% Cu, 31 g/t Ag, 0.21 g/t Au, 110 g/t Co from 414m and 5m at 1.44% Cu, 68 g/t Ag, 0.34 g/t Au, 46 g/t Co from 421m.

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Long Section
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MBDD006 (100m north of

MBDD001) returned a cumulative intercept of 51m at 2.19% CuEq* (1.45% Cu, 26 g/t Ag, 0.54 g/t Au, 162 g/t Co) comprising three zones of mineralisation – 7m at 1.09% Cu, 29 g/t Ag, 1.74 g/t Au, 520 g/t Co from 396m; 13m at 1.91% Cu, 31 g/t Ag, 0.12 g/t Au, 44 g/t Co from 405m; and 31m at 1.90% 1.61% Cu, 13 g/t Ag, 0.17 g/t Au, 52 g/t Co from 444m.

MBDD007 (60m north of MBDD001) designed for downhole EM geophysics (see page 5) and as a platform for wedge drilling intersected strong alteration from ~580m below surface with moderate mineralisation returned – 4 m at 26 g/t Ag, 0.11 g/t Au, 0.98% Pb, 1.58% Zn from 584m; 4m at 75 g/t Ag, 0.91 g/t Au, 1.82% Pb from 617m; and 4m @ 1.55% Cu, 10 g/t Ag, 0.14 g/t Au, 132 g/t Co from 647m.

Peel Mining Limited – Quarterly Report September 2012

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Drill Location and Geology Plan

MBDD008 (140m north of MBDD001), designed to test down dip from MBDD003, intersected 35m of semimassive-to-massive sulphides from 374m followed by ~60m of weak-to-moderate stringer/breccia mineralisation from 442m. Assay results for MBDD008 remain outstanding at the time of reporting.

MBDD009 (drilled subsequent to end of quarter) was designed to test a very strong conductor centred at ~500m below surface as defined by a recently completed downhole EM survey (see more below), and at the time of reporting was still underway.

The true width of mineralisation intersected to date in Phase 2 drilling is estimated to be about 55-65% of the downhole intervals, except for MBDD007 where the true-width is estimated to be about 40% of the downhole intervals.

Drilling completed to date indicates that high-grade copper-dominant polymetallic sulphide mineralisation at Mallee Bull has a strike length of ~120m, comes to within 150m of surface, and now extends to at least 450m below surface and is open in multiple directions including at depth.

The styles of mineralisation present at Mallee Bull are similar to those found elsewhere in the Cobar district including at the world-class CSA mine, one of Australia’s highest grade copper mines. Cobarstyle deposits are typically short in strike length but long in the vertical plane.

RAB Drilling

During the quarter it was reported that several shallow RAB drillholes completed as part of the current exploration programme, had returned significant mineralisation. This RAB drilling, designed to test for oxide or supergene mineralisation, confirms that the Mallee Bull deposit comes to surface, albeit within a heavily leached regolith. Better results to date include:

MBRAB003 – 5m @ 0.2 g/t Au, 78 g/t Ag, 0.95% Cu, 5.20% Pb and 1.64% Zn from 42m.
MBRAB004 – 2m at 0.1 g/t Au, 40 g/t Ag, 0.43% Cu, 1.85% Pb, 2.16% Zn from 78m; and 1m at 0.08 g/t Au, 28 g/t Ag, 0.1% Cu, 1.15% Pb, 1.32% Zn from 83m.
MBRAB008 – 4m at 0.25 g/t Au, 4 g/t Ag, 1.80% Pb from 37m; and 4m at 0.15 g/t Au, 62 g/t Ag, 0.23% Pb, 0.38% Zn from 47m.

Peel Mining Limited – Quarterly Report September 2012

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Geophysics

During the quarter, downhole EM surveying was completed in drillholes MBDD001 and MBDD007. Both holes produced extremely strong EM responses that are consistent with each other and with the known mineralised horizon at Mallee Bull. The DHEM survey was completed by Outer Rim Exploration Pty Ltd and independently reviewed and modelled by specialist geophysical consultants Newexco Services Pty Ltd and Arctan Services Pty Ltd.

MBDD001 was drilled at the southern end of the Mallee Bull prospect to ~490m depth at -80 degrees towards the east. A strong inhole response was recorded at ~440m downhole depth that merged into a much stronger offhole response at later times, centred at a similar downhole depth. The time constant for the inhole part of this (these) response(s) is about 10 milliseconds while the time constant for the offhole part is about 60 milliseconds, implying that the conducting horizon becomes considerably more conductive and/or thicker away from the drillhole.

MBDD007 was drilled vertically, deviating to -85 degrees at its maximum depth of ~770m. This hole was drilled at an acute angle to the prospective horizon, which dips at around 70 degrees to the west, and intersected the Shume Formation, host to mineralisation at Mallee Bull, at 570m downhole with strong alteration however only relatively minor mineralisation was returned (minor semimassive and stringer pyrrhotite with lesser galena, sphalerite, arsenopyrite and chalcopyrite).

MBDD007 recorded a broad, late time offhole response centred at ~580m downhole depth. A narrower, offhole response is centred at 620 metres downhole, which is approximately the downhole location of minor mineralisation intersected in the hole. The time constant for the late time offhole response is 60 milliseconds. This is an extraordinarily high value for the Cobar region, indicating a very conducting and/or thick conducting zone. The similarity of this time constant with the very late time values calculated in MBDD001 implies that these are from the same source.

Modelling of the downhole EM data for MBDD001 and MBDD007 shows an extremely strong offhole conductor response to the east of MBDD007, i.e. updip, and with a plunge to the north. The inhole part of the response in MBDD001 is likely to be sourced by a part of this zone towards its southern edge while the mineralised intersection in MBDD007 is close to but below the conducting zone.

Interestingly, the northerly plunging geometry of the modelled conductor plates is consistent with 3D inversion modelling of total magnetic intensity (TMI) data collected during the VTEM survey of the 4- Mile area. 3D TMI inversion modelling shows the magnetic anomaly associated with the Mallee Bull prospect as a northerly plunging, horn-like feature extending out of the core of the very large Butcher’s Dog magnetic anomaly 1km north. In February 2012, Peel completed one deep drillhole targeting Butcher’s Dog. Drillhole BDRCDD001 was drilled as a vertical hole, however deviated to -78 degrees at its maximum depth of 680m. No satisfactory explanation for the magnetic anomaly was observed from geological logging or downhole geophysics. Further investigation is required.

Additionally during the quarter, a fixed-loop (surface) EM geophysical survey targeting prospective stratigraphy in close proximity to Mallee Bull was undertaken. No strong conductors were identified; however it is believed that the depth of penetration of the survey was likely impeded in places by the presence of conductive overburden. Future surface geophysics will test other methods for suitability.

Peel Mining Limited – Quarterly Report September 2012

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6415000 N 6414000 N 6413000 N
0m
Mallee Bull
60 ms plates
-500m
Butcher’s Dog
-1000m
-1500m
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Mallee Bull DHEM plates (red) with 3D TMI shell (yellow - 3 x 10[-3] SI) looking east

Background on Mallee Bull copper-polymetallic discovery and CBH farm-in

In March/April 2011, Peel began targeting a newly-recognised coincident EM and magnetic geophysical anomaly located within the historic 4-Mile goldfield. The 4-Mile goldfield comprises up to 60 shafts and workings spread over an area covering about 1,000m by 500m.

Initial drilling resulted in the discovery of significant silver-lead-zinc mineralisation. Follow-up drilling completed in July/August 2011 intersected massive sulphides containing strong Cu-Ag-Au-Pb-Zn-Co mineralisation within a broad zone of deformation and alteration .

The Mallee Bull prospect is located less than 10 kilometres east of the May Day gold-silver-lead-zinc deposit (ML1361), where drilling in 2010 confirmed the down-dip continuation of mineralisation to more than 200m below surface.

In May 2012, CBH Resources farmed-in to Mallee Bull whereby CBH has the right to earn an interest of up to 50% in the project over a three-year period through an $8.33m spend. Peel remains responsible for exploration activities through this period. CBH Resources is an Australian-based mineral resources company producing zinc, lead and silver from the Endeavour Mine north of Cobar, and the Rasp mine in Broken Hill. The company, which is 100%-owned by Tokyo Stock Exchangelisted Toho Zinc, recently opened the Rasp underground zinc, lead and silver mine at Broken Hill.

Peel Mining Limited – Quarterly Report September 2012

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Cobar Superbasin Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 100%).

Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.

During the quarter, Peel continued to add to its strategic position within the Cobar Superbasin by pegging additional tenure. In total, Peel now has nine new licences covering in excess of 1,650 km[2] .

Peel also completed a 350 line kilometre “HeliTEM” airborne EM survey covering part of EL7519 “Gilgunnia South”. Final results remain outstanding at the time of reporting.

Subsequent to the quarter, Peel reported that EL7976 - “Mundoe” - covering 270 km[2] of highly prospective stratigraphy within the Rast Trough region, the southern extension of the Cobar Superbasin, had been granted. Mundoe is located about 90 km west of Condoblin in NSW, or about 50 km south of Mallee Bull.

EL7976 is centred on the Mundoe prospect, which is defined by a 2km long multi-element geochemical anomaly, coincident geophysical anomalies, and encouraging historic drill results. Mundoe was first identified in the 1970s as a “bulls-eye” magnetic anomaly. Follow-up exploration in early 1980s included geological mapping, RAB drilling, IP and gravity geophysical surveys, and a single diamond drillhole where a best result of 3m @ 2.90% Zn, 0.87% Pb, 30 g/t Ag and 0.4 g/t Au from 88m was returned.

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Mundoe prospect geochemistry vs drilling plan

Exploration in the 1990s culminated in the discovery of strong copper-silver mineralisation in three separate drillholes covering 400m strike. Better results from this drilling included:

 6m at 1.66% Cu, 103 g/t Ag from 111m in MURP-2;

 3m at 122 /t Ag, 0.3 g/t Au from 42m and 6m at 0.42% Cu, 14 g/t Ag from 69m in MURP-3; and

 12m at 1.09% Cu, 60 g/t Ag in MURP-4.

A follow-up drilling programme in 2005 failed to return mineralisation. However, a data review by Peel indicates that mineralisation is likely to be dipping to the east presenting a significant possibility that this drilling (drilled from west to east) inadequately tested the previously intersected mineralisation. Accordingly, an RC drilling programme is planned for late November, subject to receiving regulatory approvals.

Peel Mining Limited – Quarterly Report September 2012

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Cobar Superbasin Project tenement location plan

Peel Mining Limited – Quarterly Report September 2012

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Apollo Hill Project: Gold; Northeastern Goldfields WA (PEX 100%).

Targets: Archaean gold deposits.

During the quarter, Peel completed an additional aboriginal heritage survey to clear mining licence M39/296 and regional exploration areas identified for follow-up exploration. Exploration planning was underway at the time of reporting.

Rise & Shine: Gold; Central Otago New Zealand (PEX 100%)

Targets: Orogenic gold mineralisation .

No fieldwork was undertaken during the quarter. Exploration planning commenced during the quarter with a programme of work expected to commence in the New Year.

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.

Attunga Project: Gold, Tungsten, Molybdenum, Copper; Northeastern NSW (PEX 100%).

Targets: Intrusive-Related Gold System and/or Orogenic gold mineralisation; skarn style tungstenmolybdenum mineralisation and skarn-style precious/base metals mineralisation.

No fieldwork was undertaken during the quarter.

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

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

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.

For further information, please contact Managing Director Rob Tyson on mobile 0420 234 020.

Competent Persons Statements

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.

Peel Mining Limited – Quarterly Report September 2012

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Information regarding drilling/assaying data

Drilling was completed as HQ or NQ diamond core or RAB.
Sample recoveries were considered adequate for all samples.
Drillcore/chips have been logged in detail based on lithology, mineralisation, and alteration.
Samples for analysis were collected by sawing core in half; or by hand-spearing for RAB.
Samples were submitted as 1m or 4m composite half-core intervals; or1m or 4m composite chip samples.
Samples were analysed at ALS Chemex utilising methods: Au‐AA25 for Au (fire assay); ME‐ICP41/61 for multi-element including Ag, Cu, Pb, Zn; Ag-OG46/62 for >100 g/t Ag; Cu-OG46/62 for >1% Cu; Pb-OG46/62 for >1% Pb; and Zn-OG46/62 for >1% Zn.
Drillhole collars were surveyed by DGPS (GDA94) and downhole gyroscopic surveys were run continuously in diamond drillholes.

* Copper Equivalent calculation explanation:

The copper equivalent (CuEq) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance is made for recovery losses that may occur should mining eventually result, nor metallurgical flowsheet considerations. The copper equivalent calculation is intended as an indicative value only. No metallurgical testwork has been completed to date however it is the Company’s opinion that all the elements included in the copper equivalent calculation have a reasonable potential to be recovered.

Copper equivalent conversion factors and long‐term price assumptions used follow:

Copper Equivalent Formula (CuEq) = (Cu (ppm) x 0.0075 + Ag (ppm) x 0.96 + Au (ppm) x 50.00 + Co (ppm) x 0.025)/0.0075; Price Assumptions ‐ Cu (US$7,500/t), Ag (US$30/oz), Au (US$1,500/oz), Co (US$25,000/t).

Pb and Zn have not been used in copper equivalent calculation.

Table 1 – Significant 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)	CuEq (%)	Pb (%)	Zn (%)
MBDD001	6413290	415162	090	-81	489.9	431	436	5	0.85	9	0.62	248	1.47	0.09	0.05
						447	450	3	1.07	30	2.09	49	2.86	0.46	0.37
MBDD002	6413370	415167	090	-77	468.8	363	404	41	1.71	33	1.84	616	3.56	0.15	0.06
including						381	383	2	2.31	38	2.09	605	4.38	0.15	0.08
and						391	404	13	3.11	52	1.59	829	5.11	0.18	0.08
						415	446	31	2.65	51	0.18	78	3.45	0.74	0.52
including						418	430	12	4.06	64	0.21	92	5.05	0.97	0.65
and						433	439	6	3.35	100	0.38	79	4.90	1.41	0.93
MBDD003	6413430	415172	090	-76	507.8	367	377	10	1.12	47	0.95	377	2.47	1.51	1.11
						386	398	12	1.58	39	0.14	38	2.18	0.77	0.50
						409	423	14	1.92	56	0.30	37	2.85	0.10	0.04
						444	466	22	3.62	38	0.09	40	4.18	0.40	0.04
including						453	464	11	5.40	55	0.11	39	6.19	0.49	0.06
MBDD004	6413330	415160	090	-76	453.9	356	398	42	1.01	23	0.91	250	1.99	0.20	0.10
including						384	398	14	2.53	30	0.38	265	3.26	0.16	0.08
MBDD005	6413330	415158	090	-81	474.8	414	419	5	1.75	31	0.21	110	2.33	0.10	0.10
						421	426	5	1.44	68	0.34	46	2.56	0.11	0.42
MBDD006	6413394	415165	090	-83	486.9	396	403	7	1.09	29	1.74	520	2.79	0.19	0.10
						405	418	13	1.91	31	0.12	44	2.40	0.25	0.15
						444	475	31	1.61	13	0.17	52	1.90	0.08	0.03
MBDD007	6413350	415162	090	-90	771.8	584	588	4	0.03	26	0.11	12	N.A.	0.98	1.58
						617	621	4	0.07	75	0.91	24	N.A.	1.82	0.02
						647	651	4	1.55	10	0.14	132	1.82	0.07	0.03

Table 2 - Mallee Bull RAB drilling details

Hole ID	Northing	Easting	Dip	Depth
MBRAB001	6413390	415416	-90	95
MBRAB002	6413388	415440	-90	88
MBRAB003	6413387	415479	-90	101
MBRAB004	6413393	415512	-90	92
MBRAB005	6413432	415488	-90	96
MBRAB006	6413431	415516	-90	95
MBRAB007	6413347	415514	-90	92
MBRAB008	6413347	415472	-90	100
MBRAB009	6413343	415441	-90	94

Peel Mining Limited – Quarterly Report September 2012

AI assistant

PEEL MINING LIMITED Interim / Quarterly Report 2012

65545_rns_2012-10-30_bb3a8497-eb98-499a-a544-9c1c103aca57.pdf

SEPTEMBER 2012 QUARTERLY REPORT

31 October 2012