MARCH 2013 QUARTERLY REPORT 30 April 2013

Peel Mining Limited 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 >2,500 km2 of highly prospective tenure in NSW, WA and NZ.

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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.
Rise and Shine project exhibits strong similarities to the multi-million ounce Macraes gold mine.
117 million shares on issue for $70m Market Capitalisation at 30 April 2013.

Highlights for March quarter 2013

Phase 3 exploration at Mallee Bull commenced in February with early drilling results returning strong copper mineralisation at deeper levels.

MBDD009W1 returned 53m @ 4.08% Cu, 42 g/t Ag, 0.22 g/t Au (4.77% Cu Eq*) from 470m including a higher grade zone of:

o 12m @ 9.13% Cu, 86 g/t Ag, 0.33 g/t Au (10.46% Cu Eq*) from 472m.

Drillhole MBDD009W2W1 targeting new strong DHEM anomaly centred at ~670m below surface intercepts a broad zone of stringer/breccia mineralisation from ~575m to ~659m downhole including an intense zone of chalcopyrite-dominant mineralisation intercepted from ~626m to ~652m downhole.

Mineralisation in MBDD009W2W1 is positioned ~40m north and ~80m down dip of mineralisation in MBDD009 (69m @ 3.48% Cu, 34 g/t Ag, 0.14 g/t Au [4.01% Cu Eq*])

Drillhole MBDD009W2 intercepts the deepest mineralisation to date at >700m below surface.

Mineralisation remains open in multiple directions including down-dip.

Peel exercises option to purchase 20,000 acre portion of Wirchilleba Station which includes the immediate footprint of the Mallee Bull deposit.

Cobar Superbasin Project exploration continuing with multiple new targets identified.

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Plans for June quarter 2013

Phase 3 Mallee Bull exploration to continue targeting down-dip below surface.

Metallurgical testwork including flotation trials to commence.
Cobar Superbasin Project exploration to continue with follow-up of new targets.

Exploration

Mallee Bull Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 85%, CBH earning up to 50%).

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

Phase 3 exploration

During the quarter, drilling and exploration continued at the Mallee Bull copper-polymetallic discovery, 100km south of Cobar in NSW. As previously announced, Mallee Bull is subject to an $8.3m farm-in agreement with CBH Resources Ltd.

During the quarter, Stage 2 of the Mallee Bull farm-in agreement commenced. Stage 2 of the agreement will see CBH spend a further $2.5 million on exploration to earn an additional 15% (for a total of 30%). Stage 3 of the farm-in agreement (assuming CBH elects to continue) will see CBH spend a further $3.33 million on exploration for an additional 20%, taking CBH's total interest in Mallee Bull to 50%. Peel remains operator throughout the farm-in process.

Diamond drilling

Drillhole MBDD009W1 summary

During the quarter, Peel reported that drillhole MBDD009W1 returned very strong copper mineralisation. This intercept was drilled as a wedge hole from drillhole MBDD009 and was designed to test a large gap in drillhole spacing, intersecting ~60m downdip from drillhole MBDD002. Hole MBDD009W1 confirms the continuation of high-grade copper mineralisation between holes MBDD002 and MBDD009 and implies a substantial volume of high grade material.

Assay results confirm important mineralisation occurring as a broad zone of stringer/breccia chalcopyrite-pyrrhotite sulphide mineralisation returning 53m @ 4.08% Cu, 42 g/t Ag, 0.22 g/t Au (4.77% Cu Eq*) from 470m. Within the stringer/breccia zone is an interval of intense chalcopyriterich sulphide mineralisation that returned 12m @ 9.13% Cu, 86 g/t Ag, 0.33 g/t Au (10.46% Cu Eq*) from 472. The true width of the mineralised zones in drillhole MBDD009W1 is interpreted to be ~50% of the downhole intercepts.

Drillhole MBDD009W2 summary

Hole MBDD009W2 was designed to test a strong DHEM response estimated to be centred ~50m to the north, and about 570m downhole of drillhole MBDD009. Drillhole MBDD009W2 intersected several zones of mineralisation: a 7m zone of semi-massive pyrite-pyrrhotite-dominant sulphide mineralisation from 484m; a 26m zone of massive pyrite-pyrrhotite-dominant sulphide mineralisation from 494m; and a 32m zone of variable chalcopyrite-pyrrhotite stringer/breccia mineralisation from 706m. Assay results are pending.

Whilst the intersection of stringer/breccia mineralisation occurred deeper than originally envisaged, Peel is encouraged as this intersection represents the deepest mineralised hit to date at more than 700m below surface. It should also be noted that drillhole MBDD009W2 intersected mineralisation at a more oblique angle than originally planned. The true width of the above mineralised zone is estimated to be ~40% of the downhole width.

Drillhole MBDD009W2W1 summary

Drillhole MBDD009W2W1 was drilled as a new wedge drillhole from drillhole MBDD009W2 and was designed to test a new, strong DHEM conductor and the presumed down-dip position of mineralisation. Drillhole MBDD009W2W1 intersected several zones of important mineralisation including: a 10m zone of pyrite-pyrrhotite-rich massive sulphides from 496m; a broad zone of variable chalcopyrite-pyrrhotite stringer/breccia sulphide mineralisation from ~575m to ~659m (84m) including an approximate 26m zone of intense chalcopyrite-dominant mineralisation from 626m; and a zone of quartz-healed breccia with lesser chalcopyrite-pyrrhotite sulphide mineralisation from ~666m to ~695m. The true width of these intercepts is estimated at about 40% of the downhole intercept.

The important intercept from ~575m is positioned ~40m north and ~80m down dip of mineralisation in drillhole MBDD009 (69m @ 3.48% Cu, 34 g/t Ag, 0.14 g/t Au [4.08% Cu Eq*]) and confirms the continuation of high-grade copper mineralisation down-dip of drillhole MBDD009 adding further to the potential for Mallee Bull to host a substantial volume of high grade material. Drillhole MBDD009W2W1 also represents the deepest significant intercept to date at Mallee Bull and shows that copper-dominant sulphide mineralisation now extends from about 150m below surface to about 700m below surface. Importantly mineralisation remains open in multiple directions including downdip.

Handheld XRF analysis and geological logging indicates the 26m zone from 626m to be strongly mineralised with chalcopyrite (copper). Comparable mineralisation seen in other drillholes has yielded individual metres grading up to 20% Cu and 250 g/t Ag. Assay results are pending.

Figure 1 – Higher Grade Copper Zone MBDD009W2W1

Drillhole MBDD010 summary

Drillhole MBDD010 was designed to test for a potential northerly plunge to the geometry of the Mallee Bull mineralised system. Drillhole MBDD010 intersected a 47m zone of variable pyrrhotitechalcopyrite stringer/breccia mineralisation from ~622m containing a stronger zone of chalcopyritedominant breccia/stringer mineralisation intersected from ~633m to ~664m. The true width of the above mineralised zones is estimated to be ~55% of the downhole width. Assay results are pending.

The intersection of stringer/breccia mineralisation in drillhole MBDD010 is positioned ~80m north and ~60m down dip of mineralisation in drillhole MBDD009 and confirms the continuation of strong copper mineralisation along strike and down-dip of drillhole MBDD009.

MBDD010W1 summary

Drillhole MBDD010W1 was designed to test for a potentially shallower northerly plunge to the geometry of the Mallee Bull mineralised system. Drillhole MBDD010W1 intersected a structurally deformed and altered zone containing weak pyrrhotite-chalcopyrite stringer/breccia mineralisation from ~686m to ~715m The true width of the above mineralised zones is estimated to be ~55% of the downhole width. Assay results are pending.

The intersection of the structurally deformed and altered zone in drillhole MBDD010W1 is positioned ~160m north and ~100m down-dip of mineralisation in drillhole MBDD009 and indicates that mineralisation at Mallee Bull is westerly dipping and sub-vertical with minimal plunge.

RC drilling

Subsequent to the quarter's end, a programme of 1,670m of RC drilling was completed. This drilling was directed at testing several chargeable newly identified IP anomalies and/or geochemical anomalies. Assay results remain pending at the time of reporting.

Geophysics

During the quarter DHEM surveying of drillholes MBDD009W2 and MBDD010W1 identified multiple offhole/onhole anomalies from ~400m downhole to ~700m downhole. The deeper anomalies' position is roughly coincident with the strong mineralisation returned from drillhole MBDD009W2W1 highlighting the importance of DHEM surveying.

Also during the quarter, an offset pole-dipole Induced Polarisation survey was completed across the Mallee Bull project area. A strong chargeable anomaly was identified in close proximity to Mallee Bull and drillhole MBDD011 was designed in part to test the source of this anomaly. Several lesser chargeable responses were identified and were to be followed up in due course.

Mineralogy/Metallurgy

Subsequent to the quarter's end, Peel received the results of a preliminary mineralogical investigation utilising QEMSCAN. Initial observations indicate that the gold and silver present in the massive sulphides is primarily occurring as an electrum alloy while the copper present in the stringer/breccia zone is primarily occurring as chalcopyrite. The liberation characteristics for copper present in the stringer zone are considered encouraging with ~80% of the contained copper free or liberated at a grind size 125 microns (P100).

Further metallurgical testwork is planned including initial flotation trials.

Forward programme

Drillhole MBDD011 (currently underway) is being drilled from a footwall position and is primarily designed to test for the down-dip continuation of Mallee Bull mineralisation. DHEM will be used as required to guide deeper drilling.

Wirchilleba Station purchase

Peel also advised during the quarter that it has exercised its option to purchase part of Wirchilleba Station which includes the immediate footprint of the Mallee Bull deposit. Under the terms of the sale agreement Peel will purchase a 20,000 acre portion of the historic Wirchilleba Station for $800,000. Peel originally paid a 12-month option fee of $80,000 which now becomes part of the purchase price. This will provide Peel with security of tenure and land access as development of Mallee Bull progresses.

Hole ID	Northing	Easting	Azi	Dip	FinalDepth(m)	From(m)	To(m)	Width(m)	Cu(%)	Ag(g/t)	Au(g/t)	Co(g/t)	CuEq(%)	Pb(%)	Zn(%)
MBDD009W1	6413370	415163	090	-87	567.8	470	523	53	4.08	42	0.22	-	4.77	0.30	0.05
including						472	484	12	9.13	86	0.34	-	10.46	0.54	0.05

Table 1 – Phase 3 Significant Drill Assay Results

Figure 2 – Cross Section 6413370N

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 advance its 100%-owned Cobar Superbasin Project. Peel now holds more than 2,500 km2 of granted tenements and tenements under application in the southern portion of the Cobar Superbasin. These tenements contain numerous prospects considered to be high-order exploration targets.

Peel commenced a programme of target generation and review during the quarter with the goal of prioritising targets for future exploration. This programme, which includes desktop reviews and geochemical sampling and geological mapping has identified multiple new prospects that are considered high-order targets. In addition, follow-up exploration at Mundoe continued during the quarter including relogging of historic drillcore and DHEM surveying of several recently completed RC drillholes although no anomalies were detected. Exploration is continuing.

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

Targets: Archaean gold deposits.

No fieldwork was undertaken during the quarter. A programme of work is planned for the June quarter 2013.