PEEL MINING LIMITED — Interim / Quarterly Report 2024

Feb 28, 2024

PEEL MINING LIMITED ABN 42 119 343 734

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HALF-YEAR FINANCIAL REPORT

31 DECEMBER 2023

Corporate Directory

Directors

Mark Okeby Non-executive Chairman James Simpson CEO & Managing Director Robert Tyson Executive Director – Technical Graham Hardie Non-executive Director

Share Registry

Link Market Services Limited Level 12, 250 St Georges Terrace PERTH WA 6000 Telephone +61 1300 554 474 Facsimile: +61 (0)2 9287 0303 Website: www.linkmarketservices.com

Company Secretary

Ryan Woodhouse

Registered Office

Unit 1, 34 Kings Park Road WEST PERTH WA 6005 Telephone: +61 (0)8 9382 3955 Email: info@peelmining.com.au

Stock Exchange Listing

Securities of Peel Mining Limited are listed on the Australian Securities Exchange (ASX)

ASX Code

Auditors

Ernst & Young Ernst & Young Building 11 Mounts Bay Rd PERTH WA 6000

PEX

ACN 119 343 734

Website

www.peelmining.com.au

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Contents

Corporate Directory ...................................................................................................................................................... 1 Directors’ Report ........................................................................................................................................................... 3 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half year ended 31 December 2023 ........................................................................................................................................... 9 Condensed Consolidated Statement of Financial Position as at 31 December 2023 ......................................... 10 Condensed Consolidated Statement of Changes in Equity for the half year ended 31 December 2023 ........ 11 Condensed Consolidated Statement of Cash Flows for the half year to 31 December 2023 ........................... 12 Notes to the Condensed Consolidated Financial Statements ............................................................................... 13 Directors’ Declaration ................................................................................................................................................. 17 Auditor’s Independence Declaration ........................................................................................................................ 18 Independent auditor’s review report to the members of Peel Mining Limited................................................... 19

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Directors’ Report

The directors present their report on the consolidated entity consisting of Peel Mining Limited (“the Company”) and the entities it controlled (“the Group”) at the end of the half-year ended 31 December 2023.

Directors

The following persons held office as directors throughout the entire financial period and up to the date of this report, unless otherwise indicated:

Mark Okeby	Non-executive Chairman
James Simpson	CEO & Managing Director
Robert Tyson	Executive Director – Technical
Graham Hardie	Non-executive Director

Company Secretary and Chief Financial Officer

Ryan Woodhouse

Results

The loss of the Group for the half-year ended 31 December 2023 amounted to $807,139 (2022: $944,686).

Review of Operations

Peel Mining Limited (“Peel” or “the Company”) is a base and precious metals Company focused on exploration and development of its projects in the Cobar Region of New South Wales, Australia. The Company has been active in the Cobar Superbasin since March 2010, and since that time, has established a reputation as one of NSW’s most successful minerals explorers, with one of the largest single company landholdings (~3,070km[2] ) in the Cobar Superbasin. The Company has made three major discoveries in this time; the Mallee Bull Copper dominant discovery, the Wirlong Copper discovery and the Wagga Tank-Southern Nights Lead-Zinc-Silver dominant discovery. These deposits, along with the May Day Gold dominant deposit, are the focus of the South Cobar Project (SCP), the objective of which is to establish a critical mass of high-quality copper dominant mineral resources to support a central processing operation. During the period the company continued to focus on a copper first strategy, undertaking Pre Feasibility Study work on developing its copperrich assets of Mallee Bull and Wirlong.

Review of Environmental Factors (REF)

The Review of Environmental Factors (REF) for the Mallee Bull exploration decline was approved by the NSW Resources Regulator and relevant government agencies during the half year. The approval allows for the development of an exploration decline, to a maximum depth of ~400 metres below ground level (mbgl), and associated infrastructure, to enable delineation drilling of the existing resource for mining purposes and to provide underground drilling sites for exploration of extensions to the current resource. Subsequent to the grant of the REF approval, the NSW Environmental Protection Agency advised that prior to commencement of any REF activities the Company would require an Environmental Protection Licence. The Company has commenced work in relation to obtaining this licence.

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Throughout the half year, study work was completed for the permitting processes associated with a REF for an exploration decline at Wirlong. The exploration decline will be to a maximum depth of ~400mbgl. Subsequent to the half year end, the REF for Wirlong was submitted to NSW Resources Regulator for review.

Pre-feasibility Study

During the half year, the Company continued feasibility studies as part of its copper first strategy. Processing plant, civil works, non processing infrastructure, water and power studies, and metals marketing studies have been undertaken on the Company’s South Cobar project as part of the feasibility assessment work.

Exploration

The Company has continued target generation work on its South Cobar tenure throughout the half year. From this work, the Ambergris prospect area was identified as a high priority target area. The greater Ambergris area is contained within Peel’s 100%-owned EL8655 and EL8656 tenements located ~100km SSE of Cobar, ~10km NE of Mallee Bull. The Ambergris area includes the Ambergris, Cachalot, Peel 10, Maloney’s Tank and Tigerland prospects covering ~4km of strike. Following on from extensive geochem sampling, IP, MLEM and gravity geophysical surveys, the company commenced a reconnaissance drill program in December, which was completed in January. Assays were received in February 2024 and released to the ASX on 27 February 2024. Planning of follow up exploration was underway at the time of reporting.

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Figure 1 – South Cobar Project

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Corporate Activities

DEREGISTRATION OF SUBSIDIARY COMPANIES

On 10 September 2023 Peel Environmental Services Ltd and Apollo Mining Pty Ltd were deregistered with ASIC as they were no longer required by Peel Mining due to inactivity.

VIVIGANI STATION

Peel Mining has signed a contract to purchase part of Vivigani Station, located ~150km south of Cobar, NSW. The area is 1,000 hectares of Western Lands Lease and importantly contains the immediate footprint of Peel’s 100%-owned Southern Nights-Wagga Tank zinc, lead, silver deposit.

Under the terms of the purchase and sale agreement, Peel has paid a deposit of $100,000 with the balance of $300,000 payable upon settlement for total consideration of $400,000. Settlement is subject to successful subdivision and is anticipated for first half of financial year 2025. The acquisition of the Vivigani subdivision land provides Peel with security of tenure and land access as Southern Nights-Wagga Tank progresses towards development.

Shares under options and performance rights

Grant Date Date Vested & Exercisable	Grant Date Date Vested & Exercisable	Expiry Date Exercise Price	Expiry Date Exercise Price	Value per Option at Grant Date
29 November 2021 29 November 2021 29 November 2021 29 November 2021 22 February 2022 4 November 2022 22 November 2023 29 November 2023	650,000 Executive Director Performance Rights Class D & E 31 December 2023 650,000 Executive Director Performance Rights Class F 31 December 2023 150,000 Employee Performance Rights Class D & E 31 December 2023 150,000 Employee Performance Rights Class F 31 December 2023 13,000,000 Director Options 22 February 20221 950,000 Employee Options 3 November 2023 (33.3%) 3 November 2024 (33.3%) 3 November 2025 (33.3%) 5,500,000 Director Options 21 November 2024 (33.3%) 21 November 2025 (33.3%) 21 November 2026 (33.3%) 1,430,000 Employee Options 28 November 2024 (33.3%) 28 November 2025 (33.3%) 28 November 2026 (33.3%)	28 May 2024 28 May 2024 28 May 2024 28 May 2024 21 February 2025 3 December 2025 22 December 2026 28 December 2026	0.0 cents 0.0 cents 0.0 cents 0.0 cents 23.6 cents 0.0 cents 0.0 cents 0.0 cents	22.5 cents 11.4 cents 22.5 cents 11.4 cents 11.4 cents 15.0 cents 12.0 cents 11.5 cents

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Events occurring after reporting period

Following the end of the period the performance conditions for Performance Rights Classes D, E & F were tested and it was concluded that they had not been met by the testing date (31 December 2023).

Prior year share based payments expenses that relate to Performance Rights Classes D & E were reversed through the P&L at 30 June 2023 and the remuneration report per AASB 2, due to their non-market based hurdles unlikely to be met. The expense recognised on these performance rights for the current period relates to Class F only, as all remaining expenses for D & E were reversed in the period.

The performance rights are due to expire within the current financial year.

The Company has no other events occurring after the reporting period to disclose.

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 18.

Signed in accordance with a resolution of the directors and on behalf of the Board by:

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J Simpson

CEO & Managing Director Perth, Western Australia 28th February 2024

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Competent Persons Statements

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.

Past Exploration results and Mineral Resource Estimates reported in this announcement have been previously prepared and disclosed by Peel Mining Ltd in accordance with JORC 2012. The Company confirms that it is not aware of any new information or data that materially affects the information included in these market announcements. The Company confirms that the form and content in which the Competent Person's findings are presented here have not been materially modified from the original market announcement, and all material assumptions and technical parameters underpinning Mineral Resource Estimates in the relevant market announcement continue to apply and have not materially changed. Refer to www.peelmining.com.au for details on past exploration results and Mineral Resource Estimates.

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.

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half year ended 31 December 2023

Consolidated	Consolidated
31 Dec 2023	31 Dec 2022
Note $	$
Revenues and other income 720 Interest income 244,368 Net gain or loss on disposal of assets - Revenue and other income 245,088	8,100 196,359 5,573
	210,032
Share-based remuneration to directors & employees 4 (110,323) Depreciation expense (68,141) Employee and directors’ benefit expenses (489,637) Administration expenses (384,126) Write-off of exploration expenditure 3 - Profit (loss) before income tax (807,139)	(220,734) (73,739) (535,363) (431,862) (138,970)
	(1,190,636)
Income tax benefit (expense) - Profit (loss) from continuing operations after income tax (807,139)	-
	(1,190,636)
Items that will not be classified to profit or loss Changes in the fair value of equity assets at fair value through other comprehensive income - Total comprehensive income (loss) for the year attributable to the members of Peel Mining Limited (807,139)	245,950
	(944,686)
Basic earnings (loss) per share for the year attributable to the members of Peel Mining Limited (0.001) Diluted earnings (loss) per share for the year attributable to the members of Peel Mining Limited (0.001)	(0.002) (0.002)

The above condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

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Condensed Consolidated Statement of Financial Position as at 31 December 2023

Consolidated	Consolidated
31 Dec 2023	30Jun 2023
Note $	$
Current Assets Cash and cash equivalents 9,278,478 Trade and other receivables 90,325 Total Current Assets 9,368,803	12,058,120 141,436
	12,199,556
Non-Current Assets Security deposits 459,927 Property 2,857,249 Plant & equipment 592,141 Exploration assets 3 100,036,362 Total Non-Current Assets 103,945,679	556,927 2,757,249 657,591 97,749,214
	101,720,981
Total Assets 113,314,482
	113,920,537
Current Liabilities Trade and other payables 915,025 Total Current Liabilities 915,025	824,264
	824,264
Non-Current Liabilities Deferred tax liability 1,618,090 Total Non-Current Liabilities 1,618,090	1,618,090
	1,618,090
Total Liabilities 2,533,115
	2,442,354
Net Assets 110,781,367	111,478,183
Equity Contributed equity 113,304,683 Accumulated losses (8,827,924) Share based payment reserve 6,304,608	113,304,683 (8,020,785) 6,194,285
Total Equity 110,781,367	111,478,183

The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.

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Condensed Consolidated Statement of Changes in Equity for the half year ended 31 December 2023

Consolidated		Contributed Equity	Accumulated losses	Fair value reserve of financial assets at FVOCI	Share based payment Reserve	Total Equity
		$	$	$	$	$
Balance at 1July 2023		113,304,683	(8,020,785)	-	6,194,285	111,478,183
Profit (loss) for the year Total comprehensive income (loss) Share based payments		-	(807,139)	-	-	(807,139)
		- -	(807,139) -	- -	- 110,323	(807,139) 110,323
Balance at 31 December 2023		113,304,683	(8,827,924)	-	6,304,608	110,781,367
As at 1 July 2022 Profit (loss) for the year Other comprehensive income – revaluation Transfer of other comprehensive income reserve to accumulated loss Total comprehensive income (loss) Share based payments		113,304,683 - - -	(5,682,750) (1,190,636) - (854,050)	(1,100,000) - 245,950 854,050	6,457,421 - - -	112,979,354 (1,190,636) 245,950 -
		- -	(2,044,686) -	1,100,000 -	- 220,734	(944,686) 220,734
Balance at 31 December 2022		113,304,683	(7,727,436)	-	6,678,155	112,255,402

The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Condensed Consolidated Statement of Cash Flows for the half year to 31 December 2023

Consolidated	Consolidated
31 Dec 2023	31 Dec 2022
Note $	$
Cash flows from operating activities Payments to suppliers and employees (961,904) Interest received 248,186 Net cash outflow from operating activities (713,718)	(797,253) 146,809
	(650,444)
Cash flows from investing activities Payments for exploration expenditure (2,235,232) Proceeds from sale of listed securities - Transfer to security deposits 97,000 Payments for purchase of property, plant and equipment (102,692) Critical Minerals & High-Tech Metals Activation Fund Grant - E&E Asset 175,000 Net cash outflow from investing activities (2,065,924)	(7,947,983) 895,950 20,000 (12,185) -
	(7,044,218)
Cash flows from financing activities Proceeds from issue of shares - Transaction costs of issue of shares - Net cash inflow from financing activities -	- -
	-
Net decrease in cash and cash equivalents (2,779,642) Cash and cash equivalents at the start of year 12,058,120 Cash and cash equivalents at the end of year 9,278,478	(7,694,662) 22,556,938
	14,862,276

The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes

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Notes to the Condensed Consolidated Financial Statements

1. Basis of preparation of Half Year Financial Statements

These condensed consolidated financial statements for the interim half-year reporting period ended 31 December 2023 have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial statement. Accordingly, this interim financial statement is to be read in conjunction with the annual financial statement for the year ended 30 June 2023 and any public announcements made by Peel Mining Limited during the interim reporting period in accordance with continuous disclosure requirements.

The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows to meet all commitments and working capital requirements for the twelve-month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, with the exception of the adoption of new and amended standards as set out below.

• (a) New and amended standards adopted by the Company and standards issued but not yet effective

Certain new accounting standards and interpretations have been published that are mandatory for the current reporting period. The Group has adopted all of these standards and they have not had a material impact on the Group’s balances, transactions or disclosures reported in these condensed financial statements.

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

2. Segment Reporting

Management has determined that the Group has only one reportable segment being mineral exploration and development in New South Wales.

The Group is focused on mineral exploration and development of the South Cobar Project, and the Board monitors the Group based on actual versus budgeted expenditure incurred. This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Group and its ongoing exploration and development activities, while also taking into consideration the results of exploration work that has been performed. The Board will review its position on the Company’s reportable segments as it progresses towards development.

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3. Exploration Assets

		Consolidated	Consolidated
		31 Dec 2023	30Jun 2023
		$	$
At cost		100,036,362	97,749,214
Opening balance		97,749,214	89,717,191
Exploration expenditure		2,462,148	8,420,993
Critical Minerals & High-Tech Metals Activation Fund Grant		(175,000)	(250,000)
Write-off of exploration expenditure		--	(138,970)
Closing balance		100,036,362	97,749,214

Recovery of the capitalised amount is dependent upon successful development and commercial exploitation, or alternatively, sale of the associated tenements.

4. Share based payments

During the period the Company granted zero exercise price options to its Directors with shareholder approval at its Annual General Meeting. Zero exercise price options were also granted to Key Management Personnel during this period through its employee share option plan (ESOP).

The fair value of options at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, share price at grant date, expected price volatility of the underlying share, expected dividend yield and the risk-free interest rate for the term of the option.

Total prorated expenses arising from share-based payments along with vesting of Director and employee options previously granted recognised in the profit and loss during the period were as follows:

		31 Dec 2023	31 Dec 2022
		$	$
Employee options expense1 Employee performance rights expense1 2 Director options expense Director performance rights expense1 2		45,205 4,129 43,096 17,893	13,619 34,902 - 172,213
		110,323	220,734

1. Totals include expenses from current and prior year issues prorated over vesting periods per AASB 2.

2. Prior year share based payments expenses that relate to Performance Rights Classes A, B, D & E were reversed through the P&L at 30 June 2023 and the remuneration report per AASB 2, due to their non-market based hurdles not being or unlikely to be met. The expense recognised on these performance rights for the current period relates to Class F only, as all remaining expenses for D & E were reversed in the period.

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(i) Director Options

Fair value of options granted

The model inputs and the assessed fair value at grant date of options granted to directors during the period ending 31 December 2023 is tabled below.

	Director Options
Options granted for nil consideration and vest accordingly	33.3% vest 21 November 2024 33.3% vest 21 November 2025 33.3% vest 21 November 2026
Valuation Model	Black Scholes
Number of options granted	5,500,000
Exercise Price	Nil
Grant Date	22 November 2023
Expiry Date	22 December 2026
Share Price at Grant Date	12.0 cents
Expected Price Volatility	65%
Expected Dividend Yield	0.00%
Risk-free interest rate	4.19%
Fair Value at Grant Date	12.0 cents

(ii) Employee Options

Fair value of options granted

The model inputs and the assessed fair value at grant date of options granted to employees during the period ending 31 December 2023 is tabled below.

	Employee Options
Options granted for nil consideration and vest accordingly	33.3% vest 28 November 2024 33.3% vest 28 November 2025 33.3% vest 28 November 2026
Valuation Model	Black Scholes
Number of options granted	1,430,000
Exercise Price	Nil
Grant Date	29 November 2023
Expiry Date	28 December 2026
Share Price at Grant Date	11.5 cents
Expected Price Volatility	65%
Expected Dividend Yield	0.00%
Risk-free interest rate	4.19%
Fair Value at Grant Date	11.5 cents

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5. Related Parties

Compensation of key management personnel

During the period, 5,500,000 zero exercise price options were granted to Peel Mining Limited’s directors. These were ratified at the company’s AGM on 22 November 2023. These options were divided into three vesting periods, expiring on 22 December 2026.

It has been determined that the fair value of the options at grant date is $0.12. The valuation was determined using a Black-Scholes option pricing model that takes into account the exercise price, share price at grant date, expected price volatility of the underlying share, expected dividend yield and the risk-free interest rate for the term of the option.

During the period, 700,000 zero exercise price options were granted to Ryan Woodhouse, the CFO/Company Secretary, through its employee share option plan (ESOP). These options were divided into three vesting periods, expiring on 28 December 2026.

It has been determined that the fair value of the options at grant date is $0.115. The valuation was determined using a Black-Scholes option pricing model that takes into account the exercise price, share price at grant date, expected price volatility of the underlying share, expected dividend yield and the risk-free interest rate for the term of the option.

The total value of related party share-based payment transactions at grant date is $740,500. The expense will be prorated over three years per the vesting conditions.

6. Events occurring after the Reporting date

Following the end of the period the performance conditions for Performance Rights Classes D, E & F were tested and it was concluded that they had not been met by the testing date (31 December 2023).

Prior year share based payments expenses that relate to Performance Rights Classes D & E were reversed through the P&L at 30 June 2023 and the remuneration report, due to their non-market based hurdles unlikely to be met. The expense recognised on these performance rights for the current period relates to Class F only, as all remaining expenses for D & E were reversed in the period.

The performance rights are due to expire within the current financial year.

The Company has no other events occurring after the reporting period to disclose.

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Directors’ Declaration

In the directors’ opinion:

• (a) the financial statements and notes set out on pages 9 to 16 are in accordance with the Corporations Act 2001, including:

• (i) complying with Accounting Standard AASB 134 Interim Financial Reporting , the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• (ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its performance for the period then ended; and

• (b) there are reasonable grounds to believe that Peel Mining Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors and signed for on behalf of the Board by:

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J Simpson

CEO & Managing Director Perth, Western Australia 28th February 2024

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Auditor’s Independence Declaration

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Independent auditor’s review report to the members of Peel Mining Limited

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