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PEEL MINING LIMITED Interim / Quarterly Report 2020
65545_rns_2020-07-30_19f9b837-dd90-46fc-8043-c75243cc47e0.pdf
Interim / Quarterly Report
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JUNE 2020 QUARTERLY REPORT 31 JULY 2020
Key Points
- Subsequent to the quarters end, the Company announced its intention to acquire CBH Resources Limited's 50% share of the Mallee Bull Joint Venture, taking Peel's ownership in the project to 100%, by exercising its pre-emptive right, matching a third party's unconditional cash offer of $17 million
- 100% control of the high-grade Mallee Bull copper deposit and the gold-polymetallic May Day deposit, in adjunct to the Company's Southern Nights-Wagga Tank zinc-leadsilver project, delivers the potential critical mass of resources to support Peel's strategy of establishing a robust standalone operation in the Southern Cobar Basin
- To fund the acquisition, the Company is undertaking a capital raising of $17.1 million comprising:
- o a placement to institutional, sophisticated and professional investors which has raised $10.5 million (before costs); and
- o a fully underwritten 1:8 pro-rata non-renounceable entitlement offer at $0.175 per Share to raise up to an additional $6.6 million (before costs)
- Strong financial position at quarter's end with $8.2m cash following sale of 16m shares in Saturn Metals; remaining holding worth $3m
- During the June quarter, desktop work included scoping study work on Wagga Tank-Southern Nights whilst relatively low-level field work continued to define new targets for future testing
Plans for September Quarter 2020
- Drilling at Siegals prospect targeting strong geophysical anomalies proximal to strong geochemical anomalies; drilling is supported by NSW New Frontiers Cooperative Drilling grant of up to $200k
- Drilling at Southern Nights to test for southerly extensions to the mineral system to follow-up previously intersected gold-rich mineralisation
- Complete Southern Nights-Wagga Tank concept study as the first integral part towards supporting a stand-alone processing concept
- Undertake negotiations for access to drill a near surface gold target at Wagga Tank
- Complete an in-pit inferred resource for the May Day deposit based on existing drill data and metallurgical testing
- Drilling, metallurgical testwork and pit optimisation studies at May Day targeting a predominantly indicated classified mineable resource for December 2020
- Engage with engineering firms to commence conceptual polymetallic mill design to process ~1.2Mtpa
Corporate
Acquisition of the Mallee Bull Joint Venture Interest
Subsequent to the quarter's end, the Company advised that it had received an Initial Transfer Notice (ITN) from CBH after CBH received an unconditional cash offer of $17,000,000 from a third party (Third-Party Offer) for its 50% share of the Joint Venture. Peel has had independent confirmation of the validity of the ITN and Third-Party Offer per the conditions of the Joint Venture Agreement. The Joint Venture consists of two tenements, being EL7461 and ML1361, and contains the namesake Mallee Bull copperpolymetallic deposit as well as the May Day gold-polymetallic deposit.
CBH has advised Peel that it intends to accept the Third-Party Offer, subject to Peel not exercising its preemptive right. Pursuant to the Joint Venture agreement between CBH and Peel, Peel has a pre-emptive right to acquire the Joint Venture interest on the same terms. Peel intends to submit an offer to acquire the Joint Venture interest, as soon as possible, within its pre-emptive right period which is 30 business days from receipt of the ITN.
It is anticipated that settlement, which is subject to execution of a sale agreement and to Ministerial approval for the transfer of title, may take 3-6 months.
To fund the acquisition, the Company is undertaking a capital raising of $17.1 million comprising:
- a placement to institutional, sophisticated and professional investors which has raised $10.5 million (before costs); and
- a fully underwritten 1:8 pro-rata non-renounceable entitlement offer at $0.175 per Share to raise up to an additional $6.6 million (before costs).
The Company proposes to use the proceeds of the capital raising, in conjunction with existing cash and liquid investments of ~$11 million, for the acquisition of CBH's joint venture interest, the costs of the capital raising, and for ongoing working capital and general corporate purposes.
Further information regarding the fully underwritten 1:8 pro-rata non-renounceable entitlement offer will be announced in due course.
The Impact of Mallee Bull Consolidation on Corporate Strategy
The impending acquisition of CBH's share of the Mallee Bull interest will bring to an end the Mallee Bull Joint Venture after more than 8 years of congruous partnership. The acquisition also concludes a dialogue between the two companies dating back to late 2019 when Peel initially sought to consolidate ownership of the project.
The decision by Peel to pursue full ownership was borne primarily from Peel's decision to seek to consolidate its asset base following the definition of a maiden resource at Wagga Tank-Southern Nights; and also CBH's announcement in late 2019 of the impending closure of the Endeavour mine, north of Cobar, and with this the opportunity to utilise any spare milling capacity.
Owning 100% of Mallee Bull establishes full control and delivers potential critical mass of resources for Peel in the southern Cobar Basin, in the process transforming Peel's metal exposure to predominantly copper, and strengthening the Company's principal strategy to establish a robust stand-alone processing operation supported by multiple mines.
100%-ownership of the Mallee Bull deposit consolidates Peel's global resource base to more than 10Mt,
whilst the the May Day deposit, located within ML1361, presents Peel with a relatively low-cost opportunity to establish potential shallow gold-dominant mineable resources. Mallee Bull contains a JORC Resource of 6.76Mt @ 1.8% Cu, 31g/t Ag, 0.4g/t Au, 0.6% Pb, 0.6% Zn. (See ASX Announcement release 6th July 2017 "Mallee Bull Resource Grows by 65% to 175,000t CuEq" for full detail.)
The ability to consolidate ownership of Mallee Bull at a transaction cost of $5 per resource tonne is an attractive opportunity, and importantly allows Peel to advance development scenarios for Mallee Bull, Wagga Tank-Southern Nights, and potentially May Day.
Peel's experienced team is now moving to improve and grow the Company's resources, for establishment of ore reserve and mining inventory, to form the basis of a robust stand-alone processing operation supported by multiple mines. Peel has now commenced planning ofsignificant resource drilling programs at both May Day and Mallee Bull, in an effort to establish mineable resources.
Advancement of Peel's Assets towards Development
Conceptual Mill Design
The company intends to engage with engineering firms to commence conceptual polymetallic mill design to process ~1.2Mtpa, with the mill envisaged to be centrally located amongst Peel's projects. The conceptual plant will be capable of processing gold, silver, copper, lead and zinc, the primary metals associated with Peel's key deposits (as listed below).
Southern Night-Wagga Tank Concept Study and Metallurgical Testwork
During the quarter, significant internal concept study work on the Southern Nights-Wagga Tank project was completed. Key components that were considered during the quarter included conceptual mine design covering mining method inclusive of development, bench and fill stoping, ventilation, pump stations and electrical sub-stations, and emergency egress. Consideration was also given to potential mine scheduling and production targets, metallurgical flowsheet and other surface and underground infrastructure.
Historic drilling points to the potential for a shallow gold target at Wagga Tank, which offers significant upside for a development. A conceptual small open pit could potentially provide early mill feed along with easier access to any conceptual underground mining scenario at Wagga Tank. In this regard, Peel has commenced access negotiations to enable follow-up of the significant historic drill intercepts.
Further metallurgical testwork commenced during the quarter with key areas to be investigated including: grind size establishment; targeted mineralogy on Au and Ag occurence and mineral species; gravity Au recovery on lower grade samples; and upgrading Pb and Zn separation.
The Southern Nights and Wagga Tank deposits remain open along strike and down dip with drilling planned for the next quarter to follow-up previously intersected gold-rich mineralisation on the southern boundary of the Southern Nights deposit. It is anticipated that the scoping study will be completed during the current quarter. Metallurgical testwork remained ongoing at the end of the quarter.
May Day and Mallee Bull Work Programmes
At May Day, the Company plans to complete an in-pit inferred resource for the deposit based on existing drill data and previous preliminary metallurgical testwork. This will be followed by resource infill drilling, further metallurgical testwork and pit optimisations in an effort to produce a mineable resource which
will then form the basis for concept study work. It is envisaged that May Day has the potential to supply initial feed for the conceptual stand-alone mill.
At Mallee Bull, the Company plans to undertake infill resource drilling in an effort to define a predominantly indicated classified mineable resource. Existing internal scoping study for Mallee Bull will then be updated to reflect its potential contribution to a conceptual stand-alone mill.
Wirlong
During the quarter, a high level conceptual underground mining assessment was completed providing insight into the potential economics of the Wirlong deposit, and to assist with future work programme planning.
COVID-19
During quarter, in response to the COVID-19 pandemic, the Company implemented a series of precautionary measures as part of its OHS policies to ensure that risk around COVID-19 was minimised for all employees and contractors. These measures include restrictions on non-essential travel, as well as social distancing and increased awareness around hygiene.
As a result, Peel's field presence was reduced and no drilling was undertaken during the quarter with New South Wales-based staff performing only relatively low-level field activities. Desktop reviews were undertaken on all projects, with tenement rationalisation a focus. With restrictions now easing, the Company has, subsequent to the quarter's end, restarted drilling at Siegals and has significant work planned across its Cobar projects for the remainder of the year.
The Company will continue to monitor the situation and the government's advice around the pandemic, and will seek to act in accordance with this advice.
Saturn Metals Investment
On 9th June 2020, the Company sold down its holding in Saturn Metals Limited by 16,000,000 shares (19.0%). The sale was completed at A$0.45 per share with the block trade corner-stoned by large North American Institutional Investors and high net worth individuals. The sale raised gross proceeds of A$7.2m placing the Company in a strong financial position. Peel retains a significant holding of 4,000,001 shares (4.54%) in Saturn Metals Limited (worth about A$3m at the time of reporting), and has undertaken to place this holding into voluntary escrow for a period of 3 months from the sale date.
New Frontiers Co-operative Drilling
During the quarter, the company was successful in being awarded a grant under the New Frontiers Cooperative Drilling initiative, managed by the Geological Survey of NSW as part of NSW's Mineral Strategy commitment promoting investment in NSW. The funding is to be used on the Company's Double Peak and Siegals prospects and is up to a maximum total amount of $200,000 (GST exclusive). Drilling at Siegals targeting strong geophysical anomalies proximal to strong geochemical anomalies is planned for mid-late July 2020 and will be eligible for the funding assistance.
Research and Development
The Company received a $215,448.54 Research and Development (R&D) Tax Incentive Refund for activities during 2018/2019 year. The Company continued its R&D project during the current year.
Exploration
Wagga Tank Project: Zinc, Lead, Silver, Copper, Gold; Western NSW (PEX 100%). Targets**:** Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
The Wagga Tank project is located on the western edge of the Cobar Superbasin, ~130 km south of Cobar or ~30km northwest of Mount Hope and is host to the namesake polymetallic VMS-type deposit. Mineralisation straddles a broad zone of intense tectonic brecciation and hydrothermal alteration (sericite-chlorite with local silicification) and occur as sub-vertical elongate shoots/lenses. Drilling by Peel to date has focused on defining the geometry and extent of large-scale Zn-rich mineralisation at Wagga Tank-Southern Nights.
Mineral Resource Estimate
During the previous quarter Peel completed a Mineral Resource Estimate ("MRE") upgrade at the Southern Nights and Wagga Tank deposits located in the Cobar Basin of western NSW. An Indicated and Inferred MRE of 4.95Mt @ 5.0% Zn, 2.0% Pb, 78 g/t Ag, 0.3% Cu, and 0.4 g/t Au has been reported within AU$80/t NSR mineable shapes, a 31.5% increase in Indicated and Inferred resource tonnage from the previous MRE of 3.8Mt @ 5.5% Zn, 2.1% Pb, 75 g/t Ag, 0.27% Cu and 0.31 g/t Au. For full details see announcement dated 26th March 2020 – "Substantial Resource Upgrade for Southern Nights".
Next Steps
The Southern Nights and Wagga Tank deposits remain open along strike and down dip with drilling planned for the next quarter to follow-up previously intersected gold-rich mineralisation on the southern boundary of the Southern Nights deposit. It is anticipated that the scoping study will be completed during the current quarter. Metallurgical testwork remained ongoing at the end of the quarter.
Mallee Bull Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 50% manager, CBH 50%). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
The Mallee Bull project is a 50:50 Joint Venture with CBH Resources Limited (CBH). The project has a JORC compliant Mineral Resource of 6.76 million tonnes at 1.8% copper, 31 g/t silver, 0.4 g/t gold, 0.6% lead and 0.6% zinc (2.6% copper equivalent) containing approximately 119,000 tonnes of copper, 6.6 million ounces silver, 83,000 ounces gold, 38,000 tonnes of lead and 38,000 tonnes of zinc (175,000t copper equivalent) (using a 1% copper equivalent cut-off). Details of the resource can be found in the announcement released 6 July 2017 – "Mallee Bull Resource Grows 65% to 175,000 CuEq".
Acquisition of the Mallee Bull Joint Venture Interest
As previously mentioned, subsequent to the quarter's end, the Company advised that it had received an Initial Transfer Notice (ITN) from CBH after CBH received an unconditional cash offer of $17m from a third party for its 50% share of the Joint Venture. Peel has had independent confirmation of the validity of the ITN and Third-Party Offer per the conditions of the Joint Venture Agreement. The Joint Venture consists of two tenements, being EL7461 and ML1361, and contains the namesake Mallee Bull copperpolymetallic deposit as well as the May Day gold-polymetallic deposit.
CBH has advised Peel that it intends to accept the Third-Party Offer, subject to Peel not exercising its pre-
emptive right. Pursuant to the Joint Venture agreement between CBH and Peel, Peel has a pre-emptive right to acquire the Joint Venture interest on the same terms. Peel intends to submit an offer to acquire the Joint Venture interest, as soon as possible, within its pre-emptive right period which is 30 business days from receipt of the ITN.
Mallee Bull field activities during the quarter
Work continued on compiling and lodging all necessary documentation required to obtain regulatory approval for the establishment of an exploration decline. The NSW Resources Regulator has advised they require additional information from various other NSW Government departments/agencies and the Cobar Shire in relation to the Review of Environmental Factors (REF) documentation and for Notification of High-Risk Activity application. The Company and its consultants are assessing the requirements in advance of a further submission to the Resources Regulator.
A broader review of the prospects surrounding Mallee Bull, within the EL7461 area (including the Mallee Bull, Crucible and Gilgunnia areas) has been completed during the quarter. The review involved conducting a 400m x 400m rock chip grid of the areas (infilling with soil samples in areas with no outcrop) and assaying for ME-MS61. Re-assaying of previously collected rock-chip and grab samples was undertaken using the same method as well as a review of all of the surface geochemical data available.
The returned assays identified a number of areas of interest: South-East of Mallee Bull had anomalous rock chip samples with better results in sample 50318 – 4.01g/t Ag and 0.16% Zn and 50319 – 5.46g/t Ag, 0.12g/t Au and 0.21% Zn. Southern Mallee Bull with sample 49963 – 0.37g/t Au, 3550ppm As and 119ppm Sb (collected in 2012, reassayed this quarter), sample 49953 – 4.8g/t Au, 0.7g/t Ag (collected in 2012 , reassayed this quarter) and sample 49958 – 6.27g/t Au, 0.37g/t Ag (collected in 2012 , reassayed this quarter). West of the Mallee Bull Area with sample 49967 – 0.26g/t Ag, 0.11% Cu, 0.22% Zn and 10% Mn (collected and initially assayed in 2012). The Gilgunnia area also highlighted some areas of interest which includes West of the Gilgunnia area sample Rcgil1 – 0.66g/t Ag, 0.05% Cu, 0. 0.22% Pb and 249ppm Bi (2010) and Central Gilgunnia 690-rock – 2.47g/t Ag, 0.79g/t Au, 0.07% Cu and 4.41% Mn (2010).
Figure 2. Bi (ppm), Au (ppm), Ag (ppm) and Cu (ppm) geochemical contours over the Mallee Bull tenement highlighting the anomalous areas for further testing
Mallee Bull Next steps
Peel has now commenced planning of significant resource drilling programs at both May Day and Mallee Bull, in an effort to establish mineable resources.
A review of the recent geochemical results and their geological implications and affiliations is also currently underway, with the areas highlighted above supporting further exploration in the future.
Cobar Superbasin Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 100%, JOGMEC earn-in complete). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation.
The Cobar Superbasin Project is subject to a Memorandum of Agreement (MoA) with Japan Oil, Gas, and Metals National Corporation (JOGMEC). Details of the JOGMEC MoA can be found in the Company's ASX Announcement released on 30 September 2014. During the quarter, JOGMEC was granted a 3-month extension to the vesting deadline of the MoA (from 7 November, 2020 to 7 February, 2021) due to the extenuating circumstances caused by COVID-19. Exploration activities undertaken during the quarter mainly focused on the Armageddon prospect.
Armageddon
The Armageddon prospect is located 30km southeast of the Mallee Bull deposit and is defined by anomalous Cu/Pb/As gossanous rocks and a strong N-S magnetic low. A pXRF surface geochemistry program was completed at the Armageddon prospect in late May/early June. A total of 764 samples were taken as infill and extension of previous pXRF soil, -80mesh soil and rock chip sampling programs.
The combined data has defined 3 strong lead anomalies of 200-400m width across a 2km strike. Anomalous zones correlate strongly where the rock (predominantly Ordovician quartz-veined, ferruginous sediments) outcrops and subsequently disappears under cover of colluvium and soil. Anomalous Pb samples include results up to 241ppm in pXRF soils, and 854ppm in lab assayed rock chip samples.
Cobar Superbasin Project Next Steps
An induced polarization (IP) geophyisical survey is proposed over the anomalous areas for later in the calendar year. The Company has also planned a IP geophysicial survey and drill program at the Wirlong Copper Project, to follow up the results released in early April.
Figure 1. Pb (ppm) geochemical contours over the Armageddon prospect highlighting the anomalous areas.
Scrubby Valley JV: Gold, Silver, Zinc, Lead; Western NSW (Jamie Peter Pty Ltd 100%; Peel earning in)
Scrubby Valley JV is located on EL8707 covering an area 18km2 and is situated ~10km east of the town of Cobar, NSW. The tenement is held by Jamie Peters Pty Ltd with whom Peel Mining Limited has a farm-in agreement and is considered prospective for gold mineralisation. The tenement is bisected by the Barrier Highway which runs east through the northern section of the tenement. Limited historic exploration has been carried out over the EL and includes 1:50,000 geological mapping, aeromagnetic surveying, soil sampling and 41 RAB holes drilled by Newmont in 1991 which returned anomalous arsenic values that have not been followed up. A further 161-sample portable XRF soil geochemistry survey was completed by Jamie Peters in 2018. A rock chip sample containing visible gold was also collected during the same period.
During the quarter, reconnaissance work was completed over the EL that comprised geological mapping, rock chip, soil and pXRF sampling. A soil sampling program was carried out on a 200 x 400m grid for a total of 160 samples. The samples were assayed using ME-MS61 and delineated a weak, semi-coincident As-Bi-Pb anomaly over an area previously identified as prospective called Basil's Hill (see Figure 1). An additional 359 portable XRF sample sites were collected that confirmed the presence of a semi-coincident As-Pb anomaly at Basil's Hill. In addition to soil and portable XRF sampling, 40 rock chip samples were collected over the prospect and assayed using ME-MS61 and Au-AA26 with the most notable result returning 3.89g/t Ag, 0.18 g/t Au & 354ppm As from a rock-chip sample (SV048) located proximal to Basil's Hill.
Reconnaissance mapping was carried out to establish the structure and stratigraphy of the prospect. Topography across the tenement is undulating and consists of topographic highs and lows incised by several small creeks that cross the tenement which are sporadic in their drainage pattern. Outcrop exposure over the tenement is generally good and is dominated by meta-sandstones and cherts of the Girilambone Group and fine-grained sandstone and siltstone of the Meryula Formation. All rocks exhibit signs of silica, sericite and chlorite alteration in addition to hosting abundant Fe oxides indicative of the presence of sulphides. Alteration and shearing is most abundant over Basil's Hill which is a clear target for follow up work in the future.
Figure 3. As (ppm) 20.2ppm high, Bi (ppm) 1.08ppm high and Pb (ppm) 30.7ppm high soil anomalies
This announcement has been authorised by the Board of Directors of the Company.
For further information, please contact: Rob Tyson – Peel Mining, Managing Director +61 (0)420 234 020.
Competent Persons Statements and Mineral Resource Estimates
The information in this report that relates to Exploration Results is based on information compiled by Mr Rob Tyson, who is a fulltime employee of the company. Mr Tyson is a member of the Australasian Institute of Mining and Metallurgy. Mr Tyson has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) 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 information in the form and context in which it appears. Exploration results are based on standard industry practices, including sampling, assay methods, and appropriate quality assurance quality control (QAQC) measures.
Mallee Bull
| ResourceClassification | Kt | CuEq % | Cu % | Ag g/t | Au g/t | Pb % | Zn % |
|---|---|---|---|---|---|---|---|
| Indicated | 1,340 | 2.15 | 0.91 | 30 | 0.4 | 0.96 | 1.23 |
| Inferred | 5,420 | 2.7 | 2 | 31 | 0.4 | 0.5 | 0.4 |
| Total Resource | 6,760 | 2.6 | 1.8 | 31 | 0.4 | 0.6 | 0.6 |
The information referred to in this announcement in relation to the Mallee Bull Resource Estimate is based on information compiled by Jonathon Abbott, a Competent Person who is a Member of the Australian Institute of Geoscientists. At the time of calculating the Resource Estimate Mr Abbott was a full-time employee of MPR Geological Consultants Pty Ltd and is an independent consultant to Peel Mining Ltd. Mr Abbott has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code of Reporting of Mineral Resources and Ore Reserves'. Mr Abbott consented to the release of the matters based on his information in the form and context in which it appears.
Wagga Tank – Southern Nights
| Southern Nights Mineral Resource Estimate | |||||||
|---|---|---|---|---|---|---|---|
| ResourceClassification | Tonnes(Kt) | NSR$/t | Zn(%) | Pb(%) | Ag(g/t) | Cu(%) | Au(g/t) |
| Indicated | 2,540 | 173 | 5.90 | 2.30 | 88.9 | 0.19 | 0.33 |
| Inferred | 1,600 | 120 | 3.7 | 1.4 | 59 | 0.3 | 0.3 |
| Total Resource | 4,140 | 150 | 5.0 | 2.0 | 77 | 0.2 | 0.3 |
| Wagga Tank Mineral Resource Estimate | |||||||
| ResourceClassification | Tonnes(Kt) | NSR$/t | Zn(%) | Pb(%) | Ag(g/t) | Cu(%) | Au(g/t) |
| Indicated | 410 | 169 | 4.67 | 2.52 | 64.3 | 0.50 | 0.53 |
| Inferred | 400 | 180 | 5.3 | 2.3 | 98 | 0.3 | 0.5 |
| Total Resource | 810 | 170 | 5.0 | 2.4 | 81 | 0.4 | 0.5 |
| Combined Southern Nights-Wagga Tank Mineral Resource Estimate | |||||||
| ResourceClassification | Tonnes(Kt) | NSR$/t | Zn(%) | Pb(%) | Ag(g/t) | Cu(%) | Au(g/t) |
| Indicated | 2,950 | 172 | 5.73 | 2.33 | 85.5 | 0.23 | 0.36 |
| Inferred | 2,000 | 130 | 4.0 | 1.6 | 67 | 0.3 | 0.3 |
| Total Resource | 4,950 | 160 | 5.0 | 2.0 | 78 | 0.3 | 0.4 |
The information in this report that relates to Exploration Results and sampling information is based on information compiled by Mr Jason McNamara who is a fulltime employee of the company. Mr McNamara is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr McNamara has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr McNamara consents to the inclusion in this report of the matters based on information in the form and context in which it appears. Exploration results are based on standard industry practices, including sampling, assay methods, and appropriate quality assurance quality control (QAQC) measures.
The information in this announcement that relates to grade estimation and Mineral Resource estimates for Southern Nights-Wagga Tank is based on information compiled by Mr Jonathon Abbott, who is a Member of The Australian Institute of Geoscientists. Mr Abbott is a full time employee of MPR Geological Consultants Pty Ltd and 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 2012 edition of the "Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves". Mr Abbott consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
This release may include aspirational targets. These targets are based on management's expectations and beliefs concerning future events as of the time of the release of this document. Targets are necessarily subject to risks, uncertainties and other factors, some of which are outside the control of Peel Mining that could cause actual results to differ materially from such statements. Peel Mining makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release.
Figure 4: Cobar Superbasin Project Tenements and Prospects
Peel Mining Limited ACN 119 343 734 Unit 1, 34 Kings Park Rd, West Perth, WA 6005. Ph: (08) 9382 3955. E: [email protected] www.peelmining.com.au ASX: PEX
Scrubby Valley Surface Sampling Lab Assay Results
| SAMPLE ID | EASTING | NORTHING | Ag (ppm) | Au (ppm) | As (ppm) | Cu (ppm) | Pb (ppm) |
|---|---|---|---|---|---|---|---|
| SV048 | 401378.52 | 6511498.49 | 3.89 | 0.18 | 354 | 16.7 | 38.2 |
| SV056 | 401567.94 | 6511188.57 | 1.51 | 0.04 | 2010 | 153.5 | 909 |
| SAMPLE | EASTING | NORTHING | Zn | Pb | Cu | Ag | Au | As | Sb | Bi | Mn |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ID | (ppm) | (ppm) | (ppm) | (ppm) | (ppm) | (ppm) | (ppm) | (ppm) | (ppm) | ||
| 49953 | 415396.93 | 6413299.75 | 314 | 193.5 | 74.9 | 0.7 | 4.8 | 10.2 | 5.58 | 3.71 | 1590 |
| 49958 | 415656.61 | 6413126.77 | 23 | 33.1 | 7.1 | 0.37 | 6.27 | 51.5 | 7.5 | 0.75 | 422 |
| 49963 | 415747.54 | 6412981.97 | 338 | 212 | 125 | 0.11 | 0.37 | 3550 | 119 | 1.12 | 192 |
| 50318 | 416378.77 | 6413597.21 | 1640 | 16.2 | 263 | 4.01 | 0.01 | 152 | 14.25 | 0.11 | 2550 |
| 50319 | 416382.67 | 6413602.68 | 2110 | 22.7 | 381 | 5.46 | 0.12 | 109.5 | 6.19 | 0.17 | 2770 |
| 690-rock | 409719 | 6413893 | 718 | 829 | 711 | 2.47 | 0.79 | 21.9 | 3.58 | 15.85 | 44100 |
| Rcgil1 | 408795 | 6413407 | 577 | 2230 | 592 | 0.66 | 0.01 | 1655 | 6 | 249 | 112 |
| 49967* | 415163.65 | 6415024.93 | 2170 | 86.1 | 1055 | 0.26 | -0.01 | 13 | 1.29 | 0.08 | 100000 |
Mallee Bull Surface Sampling Lab Assay Results
*Sample collected and assayed in 2012 by Peel Mining Limited.
Table 1 - Section 1: Sampling Techniques and Data for Mallee Bull/Cobar Superbasin/Wagga Tank Projects
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Samplingtechniques | •Nature and quality of sampling (eg cut channels,random chips, or specific specialised industrystandard measurement tools appropriate to theminerals under investigation, such as down holegamma sondes, or handheld XRF instruments, etc).These examples should not be taken as limiting thebroad meaning of sampling.•Include reference to measures taken to ensuresamplerepresentivityandtheappropriatecalibration of any measurement tools or systemsused.•Aspects of the determination of mineralisation thatare Material to the Public Report.•In cases where 'industry standard' work has beendone this would be relatively simple (eg 'reversecirculation drilling was used to obtain 1 m samplesfrom which 3 kg was pulverised to produce a 30 gcharge for fire assay'). In other cases moreexplanation may be required, such as where there iscoarse gold that has inherent sampling problems.Unusual commodities or mineralisation types (egsubmarine nodules) may warrant disclosure ofdetailed information. | •Diamond and reverse circulation (RC)drilling were used to obtain samples forgeological logging and assaying.•Diamond core was cut and sampled at 1mintervals. RC drill holes were sampled at1m intervals and split using a cone splitterattached to the cyclone to generate a splitof 2-4kg to ensure sample representivity.•Multi-element readings were taken of thediamond core and RC drill chips using anOlympusDeltaInnov-XportableXRFmachine or an Olympus Vanta portableXRF machine. Portable XRF machines areroutinely serviced, calibrated and checkedagainst blanks/standards. |
| Drillingtechniques | •Drill type (eg core, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic, etc)and details (eg core diameter, triple or standardtube, depth of diamond tails, face-sampling bit orother type, whether core is oriented and if so, bywhat method, etc). | •Drilling to date has been a combination ofdiamond, reverse circulation and rotary airblast. Reverse circulation drilling utilised a5 1/2 inch diameter hammer. A blade bitwas predominantly used for RAB drilling.NQ and HQ coring was used for diamonddrilling. |
| Drillsamplerecovery | •Method of recording and assessing core and chipsample recoveries and results assessed.•Measures taken to maximise sample recovery andensure representative nature of the samples.•Whether a relationship exists between samplerecovery and grade and whether sample bias mayhave occurred due to preferential loss/gain offine/coarse material. | •Core recoveries are recorded by the drillersin the field at the time of drilling andchecked by a geologist or technician•RC and RAB samples are not weighed on aregular basis due to the exploration natureofdrillingbutnosignificantsamplerecovery issues have been encountered ina drilling program to date.•Diamondcoreisreconstructedintocontinuous runs on an angle iron cradle fororientationmarkinganddepthsarechecked against the depths recorded oncore blocks. Rod counts are routinelyundertaken by drillers.•Whenpoorsamplerecoveryisencountered during drilling, the geologistand driller have endeavoured to rectify theproblem to ensure maximum samplerecovery.•Sample recoveries at Wirlong and MalleeBull to date have generally been high. |
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| •Sample recoveries at Wagga Tank havebeenvariablewithbrokengroundoccurring in places and poorer samplerecoveries encountered. Insufficient datais available at present to determine if arelationship exists between recovery andgrade. This will be assessed once astatisticallyvalidamountofdataisavailable to make a determination.•Sample recoveries at Southern Nights havebeen generally high to date. | ||
| Logging | •Whethercoreandchipsampleshavebeengeologically and geotechnically logged to a level ofdetail to support appropriate Mineral Resourceestimation,miningstudiesandmetallurgicalstudies.•Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc) photography.•The total length and percentage of the relevantintersections logged. | •Allcoreanddrillchipsamplesaregeologically logged. Core samples areorientated and logged for geotechnicalinformation. Drill chip samples are loggedat 1m intervals from surface to the bottomof each individual hole to a level that willsupportappropriatefutureMineralResource studies.•Logging of diamond core, RC and RABsamples records lithology, mineralogy,mineralisation,structure(DDHonly),weathering, colour and other features ofthe samples. Core is photographed as bothwet and dry.•All diamond, RC drill holes in the currentprogram were geologically logged in fullexcept at Wagga Tank where logging is stillunderway. |
| Sub-samplingtechniquesandsamplepreparation | •If core, whether cut or sawn and whether quarter,half or all core taken.•If non-core, whether riffled, tube sampled, rotarysplit, etc and whether sampled wet or dry.•For all sample types, the nature, quality andappropriatenessofthesamplepreparationtechnique.•Quality control procedures adopted for all subsampling stages to maximise representivity ofsamples.•Measures taken to ensure that the sampling isrepresentative of the in-situ material collected,includingforinstanceresultsforfieldduplicate/second-half sampling.•Whether sample sizes are appropriate to the grainsize of the material being sampled. | •Drill core was cut with a core saw and halfcore taken.•The RC drilling rigs were equipped with anin-built cyclone and splitting system, whichprovidedonebulksampleofapproximately 20kg and a sub-sample of 2-4kg per metre drilled.•All samples were split using the systemdescribed above to maximise and maintainconsistent representivity. The majority ofsamples were dry.•Bulk samples were placed in green plasticbags, with the sub-samples collectedplaced in calico sample bags•Field duplicates were collected by resplitting the bulk samples from largeplasticbags.Theseduplicatesweredesigned for lab checks.•A sample size of 2-4kg was collected andconsideredappropriateandrepresentative for the grain size and styleof mineralisation. |
| Qualityofassaydataand | •The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial or total. | •ALS Laboratory Services were used for Auand multi-element analysis work carriedon out on 3m to 6m composite samples |
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| laboratorytestsVerification ofsampling andassaying | •For geophysical tools, spectrometers, handheld XRFinstruments,etc,theparametersusedindetermining the analysis including instrument makeand model, reading times, calibrations factorsapplied and their derivation, etc.•Nature of quality control procedures adopted (egstandards, blanks, duplicates, external laboratorychecks) and whether acceptable levels of accuracy(ie lack of bias) and precision have been established.•The verification of significant intersections by eitherindependent or alternative company personnel.•The use of twinned holes.•Documentationofprimarydata,dataentryprocedures, data verification, data storage (physical | and 1m split samples.The laboratory techniques below are for allsamplessubmittedtoALSandareconsidered appropriate for the style ofmineralisation defined at Mallee Bull,CobarSuperbasinandWaggaTankProjects:oPUL-23 (Sample preparationcode)oAu-AA25 Ore Grade Au 30gFA AA Finish, Au-AA26 OreGrade Au 50g FA AA FinishoME-ICP41 35 element aquaregiaICP-AES,withanappropriate Ore Grade basemetal AA finishoME-ICP61 33 element 4 aciddigestICP-AES,withanappropriate Ore Grade basemetal AA finishoME-MS61 48 element 4 aciddigest ICP-MS and ICP-AES,with an appropriate OreGrade base metal AA finish•Assaying of samples in the field was byportable XRF instruments: Olympus DeltaInnov-X or Olympus Vanta Analysers.Reading time for Innov-X was 20 secondsper reading with a total 3 readings persample. Reading time for Vanta was 10 &20 seconds per reading with 2 readings persample.•TheQA/QCdataincludesstandards,duplicatesandlaboratorychecks.Duplicates for drill core are collected bythe lab every 30 samples after the coresampleispulverised.Duplicatesforpercussion drilling are collected directlyfrom the drill rig or the metre sample bagusing a half round section of pipe. In-houseQA/QC tests are conducted by the lab oneach batch of samples with standardssupplied by the same companies thatsupply our own.•Allgeologicalloggingandsamplinginformation is completed in spreadsheets,which are then transferred to a databasefor validation and compilation at the Peelheadoffice.Electroniccopiesofall |
| and electronic) protocols. | information are backed up periodically. | |
| •Discuss any adjustment to assay data. | •Noadjustmentsofassaydataareconsidered necessary. | |
| Locationof | •Accuracy and quality of surveys used to locate drill | •A Garmin hand-held GPS is used to define |
| data points | holes (collar and down-hole surveys), trenches, mine | the location of the samples.Standard |
Unit 1, 34 Kings Park Rd, West Perth, WA 6005. Ph: (08) 9382 3955. E: [email protected] www.peelmining.com.au ASX: PEX
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| workings and other locations used in MineralResource estimation.•Specification of the grid system used.•Quality and adequacy of topographic control. | practice is for the GPS to be left at the siteof the collar for a period of 5 minutes toobtainasteadyreading.Collarsareroutinely picked up after by DGPS. Downhole surveys are conducted by the drillcontractorsusingeitheraReflexgyroscopic tool with readings every 10mafter drill hole completion or a Reflexelectronic multi-shot camera will be usedwithreadingsfordipandmagneticazimuth taken every 30m down-hole.QA/QC in the field involves calibrationusing a test stand. The instrument ispositioned with a stainless steel drill rod soas not to affect the magnetic azimuth.•Grid system used is MGA 94 (Zone 55). Alldown-holemagneticsurveyswereconverted to MGA94 grid. | |
| Data spacinganddistributionOrientation ofdatain | •Data spacing for reporting of Exploration Results.•Whether the data spacing and distribution issufficient to establish the degree of geological andgrade continuity appropriate for the MineralResource and Ore Reserve estimation procedure(s)and classifications applied.•Whether sample compositing has been applied.•Whether the orientation of sampling achievesunbiased sampling of possible structures and the | •Data/drill hole spacing is variable andappropriate to the geology and historicaldrilling.•3m to 6m sample compositing has beenapplied to RC drilling at Mallee Bull for goldand/or multi-element assay.•Most drillholes are planned to intersect theinterpreted mineralised structures/lodes |
| relationtogeologicalstructure | extent to which this is known, considering thedeposit type.•If the relationship between the drilling orientationand the orientation of key mineralised structures isconsidered to have introduced a sampling bias, thisshould be assessed and reported if material. | as near to a perpendicular angle aspossible (subject to access to the preferredcollar position). |
| Samplesecurity | •The measures taken to ensure sample security. | •The chain of custody is managed by theproject geologist who places calico samplebags in polyweave sacks. Up to 5 calicosample bags are placed in each sack. Eachsack is clearly labelled with:oPeel Mining LtdoAddress of LaboratoryoSample range•Detailed records are kept of all samplesthat are dispatched, including details ofchain of custody. |
| Auditsorreviews | •The results of any audits or reviews of samplingtechniques and data. | •Data is validated when loading into thedatabase. No formal external audit hasbeen conducted. |
Table 1 - Section 2 - Reporting of Exploration Results for Mallee Bull/Cobar Superbasin/Wagga Tank Projects
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Mineral | •Type,referencename/number,locationand | •The Mallee Bull prospect is wholly located |
| tenement and | ownership including agreements or material issues | withinExplorationLicenceEL7461 |
| withthirdpartiessuchasjointventures, | "Gilgunnia". The tenement is subject to a |
Peel Mining Limited ACN 119 343 734 Unit 1, 34 Kings Park Rd, West Perth, WA 6005. Ph: (08) 9382 3955. E: [email protected] www.peelmining.com.au ASX: PEX
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| landtenurestatus | partnerships,overridingroyalties,nativetitleinterests, historical sites, wilderness or nationalpark and environmental settings.•The security of the tenure held at the time ofreporting along with any known impediments toobtaining a licence to operate in the area. | 50:50 Joint Venture with CBH ResourcesLtd, a wholly owned subsidiary of TohoZinc Co Ltd.•The Cobar Superbasin Project comprises ofmultiple exploration licences that aresubject to a farm-in agreement withJOGMEC where JOGMEC has earned a 50%interest.•The Wagga Tank Project comprises ofEL6695, EL7226, EL7484 and EL7581 andare 100%-owned by Peel Mining Ltd.•The tenements are in good standing and noknown impediments exist. |
| Explorationdone by otherparties | •Acknowledgment and appraisal of exploration byother parties. | •Work at Mallee Bull was completed in thearea by several former tenement holdersincluding Triako Resources between 2003and 2009; it included diamond drilling, IPsurveys,geologicalmappingandreconnaissancegeochemicalsamplingaround the historic Four Mile Goldfieldarea. Prior to Triako Resources, PasmincoExploration explored the Cobar Basin areafor a "Cobar-type" or "Elura-type" zinclead-silverorcopper-gold-lead-zincdeposit.•Work at Wagga Tank was completed bymultiplepreviousexplorersincludingNewmont, Homestake, Amoco, Cyprus,Arimco,GoldenCross,PasmincoandMMG. Minimalexploration has beencompleted at the Wagga Tank area since1989. |
| Geology | •Deposit type, geological setting and style ofmineralisation. | •The Mallee Bull prospect area lies withintheCobar-MtHopeSiluro-Devoniansedimentaryandvolcanicunits.ThenorthernCobarregionconsistsofpredominantly sedimentary units withtuffaceous member, whilst the southernMt Hope region consists of predominantlyfelsic volcanic rocks; the Mallee Bullprospect seems to be located in an area ofoverlapbetweenthesetworegions.Mineralisation at the Mallee Bull discoveryfeatures the Cobar-style attributes of shortstrike lengths (<200m), narrow widths (5-20m) and vertical continuity, and occurs asa shoot-like structure dipping moderatelyto the west.•Wagga Tank, is believed to be a volcanichosted massive sulphide (VHMS) or Cobarstyle deposit, and is located ~130 km southof Cobar on the western edge of the CobarSuperbasin. The deposit is positioned atthe western-most exposure of the Mt. |
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Keenan Volcanics (Mt. Hope Group) whereit is conformably overlain by a poorlyoutcropping, distal turbidite sequence ofcarbonaceousslateandsiltstone.Mineralisation is hosted in a sequence ofrhyodaciticvolcanicandassociatedvolcaniclastic rocks comprising polymicticconglomerate, sandstone, slate, crystallithic tuff and crystal tuff. This sequencefacesnorthweststrikesnortheastsouthwest and dips range from moderatewesterly,tovertical,andlocallyoverturned to the east. Mineralisationstraddlesthecontactbetweenthevolcaniclastic facies and the siltstone-slatefacies where there is a broad zone ofintensetectonicbrecciationandhydrothermal alteration (sericite-chloritewith local silicification). | ||
| DrillholeInformation | •A summary of all information material to theunderstanding of the exploration results including atabulation of the following information for allMaterial drill holes:oeasting and northing of the drill hole collaroelevation or RL (Reduced Level – elevation abovesea level in metres) of the drill hole collarodip and azimuth of the holeodown hole length and interception depthohole length.•If the exclusion of this information is justified on thebasis that the information is not Material and thisexclusion does not detract from the understandingof the report, the Competent Person should clearlyexplain why this is the case. | •All relevant information material to theunderstanding of exploration results hasbeen included within the body of theannouncement or as appendices.•No information has been excluded. |
| Dataaggregationmethods | •InreportingExplorationResults,weightingaveraging techniques, maximum and/or minimumgrade truncations (eg cutting of high grades) andcut-off grades are usually Material and should bestated.•Where aggregate intercepts incorporate shortlengths of high grade results and longer lengths oflow grade results, the procedure used for suchaggregation should be stated and some typicalexamples of such aggregations should be shown indetail.•The assumptions used for any reporting of metalequivalent values should be clearly stated. | •No length weighting or top-cuts have beenapplied.•No metal equivalent values are used forreporting exploration results. |
| Relationshipbetweenmineralisationwidthsandinterceptlengths | •These relationships are particularly important in thereporting of Exploration Results.•If the geometry of the mineralisation with respectto the drill hole angle is known, its nature should bereported.•If it is not known and only the down hole lengths arereported, there should be a clear statement to this | •True widths are generally estimated to beabout 90-100% of the downhole widthunless otherwise indicated.•Southern Nights (part of the Wagga Tankproject) true widths are unknown at thispoint due to the early stage nature ofinvestigation. |
Unit 1, 34 Kings Park Rd, West Perth, WA 6005. Ph: (08) 9382 3955. E: [email protected] www.peelmining.com.au ASX: PEX
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| effect (eg 'down hole length, true width notknown'). | ||
| Diagrams | •Appropriate maps and sections (with scales) andtabulations of intercepts should be included for anysignificant discovery being reported These shouldinclude, but not be limited to a plan view of drill holecollar locations and appropriate sectional views. | •Refer to Figures in the body of text. |
| Balancedreporting | •Where comprehensive reporting of all ExplorationResults is not practicable, representative reportingof both low and high grades and/or widths shouldbe practiced toavoid misleading reporting ofExploration Results. | •All results are reported. |
| Othersubstantiveexplorationdata | •Other exploration data, if meaningful and material,should be reported including (but not limited to):geological observations; geophysical survey results;geochemical survey results; bulk samples – size andmethod of treatment; metallurgical test results;bulk density, groundwater, geotechnical and rockcharacteristics;potentialdeleteriousorcontaminating substances. | •No other substantive exploration data areavailable. |
| Further work | •The nature and scale of planned further work (egtests for lateral extensions or depth extensions orlarge-scale step-out drilling).•Diagrams clearly highlighting the areas of possibleextensions,includingthemaingeologicalinterpretations and future drilling areas, providedthis information is not commercially sensitive. | •Future work at Mallee Bull and CobarSuperbasin Project will include geophysicalsurveying and RC/diamond drilling tofurther define the extent of mineralisationattheprospects.Downholeelectromagnetic (DHEM) surveys will beused to identify potential conductivesourcesthatmayberelatedtomineralisation.•Further drilling and geophysical surveysare planned at Southern Nights/WaggaTank. |
NSW Granted Tenements
| TENEMENT | PROJECT | LOCATION | OWNERSHIP | CHANGE IN |
|---|---|---|---|---|
| QUARTER | ||||
| EL7519 | Gilgunnia South | Cobar, NSW | 100% | |
| EL7976 | Mundoe | Cobar, NSW | 100% | |
| EL8070 | Tara | Cobar, NSW | 100% | |
| EL8071 | Manuka | Cobar, NSW | 100% | |
| EL8105 | Mirrabooka | Cobar, NSW | 100% | |
| EL8112 | Yackerboon | Cobar, NSW | 100% | |
| EL8113 | Iris Vale | Cobar, NSW | 100% | |
| EL8114 | Yara | Cobar, NSW | 100% | |
| EL8117 | Illewong | Cobar, NSW | 100% | |
| EL8125 | Hillview | Cobar, NSW | 100% | |
| EL8126 | Norma Vale | Cobar, NSW | 100% | |
| EL8201 | Mundoe North | Cobar, NSW | 100% | |
| EL8307 | Sandy Creek | Cobar, NSW | 100% | |
| EL8314 | Glenwood | Cobar, NSW | 100% | |
| EL8345 | Pine Ridge | Cobar, NSW | 100% | |
| EL8534 | Burthong | Cobar, NSW | 100% | |
| EL7461 | Gilgunnia | Cobar, NSW | 50% | |
| ML1361 | May Day | Cobar, NSW | 50% | |
| EL6695 | Wagga Tank | Cobar, NSW | 100% | |
| EL7226 | Wongawood | Cobar, NSW | 100% | |
| EL7484 | Mt View | Cobar, NSW | 100% | |
| EL8414 | Mt Walton | Cobar, NSW | 100% | |
| EL8447 | Linera | Cobar, NSW | 100% | |
| EL8751 | Nombinnie | Cobar, NSW | 100% | |
| EL7711 | Ruby Silver | Armidale, NSW | 100% | |
| EL8326 | Attunga | Attunga, NSW | 100% | |
| EL8450 | Beanbah | Cobar, NSW | 100% | |
| EL8451 | Michelago | Cooma, NSW | 100% | |
| EL8656 | Marigold | Cobar, NSW | 100% | |
| EL8655 | Brambah | Cobar, NSW | 100% | |
| EL8872 | Gromit | Cobar, NSW | 100% | |
| EL8900 | Florida | Cobar, NSW | 100% | |
| EL8721 | Bilpa | Broken Hill, NSW | 100% | |
| EL8722 | Cymbric Vale | Broken Hill, NSW | 100% | |
| EL8790 | Comarto | Broken Hill, NSW | 100% | |
| EL8791 | Devon | Broken Hill, NSW | 100% | |
| EL8877 | Thunderdome | Broken Hill, NSW | 100% | |
| EL8909 | Grassmere North | Broken Hill, NSW | 100% |