Peel Mining : Drilling Underway on New Targets at Mallee Bull

Hole ID

Northing

Easting

Azi

Dip

Final Depth (m)

PSCDD002

6434943

414960

90

-65

600.2

Hole ID

From

(m)

To (m)

Width

(m)

Ag (g/t)

Cu (%)

Pb (%)

Zn (%)

PSCDD002

200

201

1

2.98

N.A.

0.32

0.59

203

204

1

3.92

N.A.

0.48

0.59

209

210

1

8.48

N.A.

0.39

0.86

432

434

2

0.81

N.A.

0.06

0.56

441

442

1

3.43

N.A.

0.15

0.44

478

479

1

33.7

0.18

0.85

0.25

486

487

1

4.24

N.A.

0.80

0.07

491

495

4

8.65

N.A.

0.76

1.36

499

504

5

25.02

0.39

2.87

2.81

including

499

500

1

82.3

1.48

9.16

5.36

and

502

503

1

25.4

N.A.

3.65

6.91

Criteria

JORC Code explanation

Commentary

Sampling

techniques

 Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry

standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

 Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems

used.

 Aspects of the determination of mineralisation that are Material to the Public Report.

 In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems.

 Diamond, reverse circulation (RC) and

Rotary Air Blast (RAB) drilling were used to

obtain samples for geological logging and assaying.

 Diamond core was cut and sampled at 1m intervals. RC and RAB drill holes were sampled at 1m intervals and split using a cone splitter attached to the cyclone to generate a split of 2-4kg to ensure sample representivity.

 Multi-element readings were taken of the RC and RAB drill chips using an Olympus Delta Innov-X portable XRF tool. The portable XRF was calibrated against standards after every 30 readings.

Criteria

JORC Code explanation

Commentary

Unusual commodities or mineralisation types (eg

submarine nodules) may warrant disclosure of detailed information.

Drilling

techniques

 Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard

tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

 Drilling to date has been a combination of diamond, reverse circulation and rotary air blast. Reverse circulation drilling utilised a

5 1/2 inch diameter hammer. A blade bit was predominantly used for RAB drilling. NQ and HQ coring was used for diamond drilling.

Drill sample

recovery

 Method of recording and assessing core and chip sample recoveries and results assessed.

 Measures taken to maximise sample recovery and ensure representative nature of the samples.

 Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

 Core recoveries are recorded by the drillers in the field at the time of drilling and checked by a geologist or technician.

 RC and RAB samples are not weighed on a regular basis due to the exploration nature of drilling but no significant sample recovery issues have been encountered in

drilling programs to date.

 Diamond core is reconstructed into continuous runs on an angle iron cradle for orientation marking and depths are checked against the depths recorded on core blocks. Rod counts are routinely undertaken by drillers.

 When poor sample recovery is encountered during drilling, the geologist and driller have endeavoured to rectify the

problem to ensure maximum sample recovery.

 Sample recoveries to date have generally been high. Insufficient data is available at

present to determine if a relationship exists between recovery and grade. This will be assessed once a statistically valid amount of data is available to make a determination.

Logging

 Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource

estimation, mining studies and metallurgical studies.

 Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

 The total length and percentage of the relevant intersections logged.

 All core and drill chip samples are geologically logged. Core samples are orientated and logged for geotechnical

information. Drill chip samples are logged at 1m intervals from surface to the bottom of each individual hole to a level that will support appropriate future Mineral Resource studies.

 Logging of diamond core, RC and RAB samples records lithology, mineralogy, mineralisation, structure (DDH only),

weathering, colour and other features of the samples. Core is photographed as both wet and dry.

 All diamond, RC and RAB drill holes in the current program were geologically logged in full.

Criteria

JORC Code explanation

Commentary

Sub-sampling

techniques and sample preparation

 If core, whether cut or sawn and whether quarter, half or all core taken.

 If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

 For all sample types, the nature, quality and appropriateness of the sample preparation technique.

 Quality control procedures adopted for all sub- sampling stages to maximise representivity of samples.

 Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

 Whether sample sizes are appropriate to the grain size of the material being sampled.

 Drill core was cut with a core saw and half core taken.

 The RC and RAB drilling rigs were equipped with an in-built cyclone and splitting system, which provided one bulk sample of approximately 20kg and a sub-sample of 2-

4kg per metre drilled.

 All samples were split using the system described above to maximise and maintain consistent representivity. The majority of samples were dry.

 Bulk samples were placed in green plastic bags, with the sub-samples collected placed in calico sample bags.

 Field duplicates were collected by re- splitting the bulk samples from large plastic bags. These duplicates were designed for lab checks.

 Early stage exploration sees composite sampling completed for Au only analysis, with samples hand speared using a half round piece of pipe with samples collected as 6m composites. Resampling is undertaken using split samples which are stored with the bulk samples at the time of drilling.

 Where pXRF sampling indicates significant base metals mineralisation, 1m split samples for those intervals are collected

and submitted for multi-element analysis.

 A sample size of 2-4kg was collected and considered appropriate and representative for the grain size and style of mineralisation.

Quality of

assay data and

laboratory

tests

 The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

 For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

 Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

 ALS Services was used for Au analysis work carried out on the 6m composite samples and 1m split samples. The laboratory techniques below are for all samples submitted to ALS and are considered appropriate for the style of mineralisation defined at Mundoe, Sandy Creek, Wirlong and Red Shaft:

o PUL-23 (Sample preparation code)

o ME-MS61 multi-element

o Or an appropriate Ore Grade base metal AA finish

o Au-AA26 Ore Grade Au 50g

FA AA Finish

 Assaying of soil samples in the field was by portable XRF instrument Olympus Delta Innov-X Analyser. Reading time was 20

seconds per filter with a total 3 filters per sample.

Criteria

JORC Code explanation

Commentary

 The QA/QC data includes standards, duplicates and laboratory checks. Duplicates for drill core are collected by the lab every 30 samples after the core sample is pulverised. Duplicates for

percussion drilling are collected directly from the drill rig or the metre sample bag using a half round section of pipe. In-house QA/QC tests are conducted by the lab on each batch of samples with standards supplied by the same companies that supply our own.

Verification of

sampling and assaying

 The verification of significant intersections by either independent or alternative company personnel.

 The use of twinned holes.

 Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

 Discuss any adjustment to assay data.

 All geological logging and sampling information is completed in spreadsheets, which are then transferred to a database

for validation and compilation at the Peel head office. Electronic copies of all information are backed up periodically.

 No adjustments of assay data are considered necessary.

Location of

data points

 Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine

workings and other locations used in Mineral

Resource estimation.

 Specification of the grid system used.

 Quality and adequacy of topographic control.

 A Garmin hand-held GPS is used to define the location of the drillholes and /or

samples. Standard practice is for the GPS to be left at the site of the collar for a period of 5 minutes to obtain a steady reading. Collars are picked up at a later date by DGPS. All collars at Mallee Bull have been picked up by DGPS. Down-hole surveys are conducted by the drill contractors using either a Reflex gyroscopic tool with readings every 10m after drill hole completion or a Reflex electronic multi-shot camera will be used with readings for dip and magnetic azimuth taken every 30m down-hole. QA/QC in the field involves calibration using a test stand. The instrument is positioned with a stainless steel drill rod so as not to affect the magnetic azimuth.

 Grid system used is MGA 94 (Zone 55). All down-hole magnetic surveys were converted to MGA94 grid.

Data spacing

and distribution

 Data spacing for reporting of Exploration Results.

 Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral

Resource and Ore Reserve estimation procedure(s)

and classifications applied.

 Whether sample compositing has been applied.

 Data/drill hole spacing is variable and appropriate to the geology and historical drilling.

 6m sample compositing has been applied to RC drilling at Red Shaft and Mundoe for gold assay, and to RAB drilling at Sandy Creek, Red Shaft and Wirlong.

Orientation of

data in relation to geological structure

 Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the

deposit type.

 If the relationship between the drilling orientation

 Most drillholes are planned to intersect the interpreted mineralised structures/lodes as near to a perpendicular angle as

possible (subject to access to the preferred collar position).

Criteria

JORC Code explanation

Commentary

and the orientation of key mineralised structures is

considered to have introduced a sampling bias, this should be assessed and reported if material.

Sample

security

 The measures taken to ensure sample security.

 The chain of custody is managed by the project geologist who places calico sample bags in polyweave sacks. Up to 5 calico

sample bags are placed in each sack. Each sack is clearly labelled with:

o Peel Mining Ltd

o Address of Laboratory

o Sample range

 Detailed records are kept of all samples

that are dispatched, including details of chain of custody.

Audits or

reviews

 The results of any audits or reviews of sampling techniques and data.

 Data is validated when loading into the database. No formal external audit has been conducted.

Criteria

JORC Code explanation

Commentary

Mineral

tenement and

land tenure status

 Type, reference name/number, location and ownership including agreements or material issues

with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

 The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

 The Mallee Bull prospect is wholly located within Exploration Licence EL7461

"Gilgunnia". The tenement is subject to a

50:50 Joint Venture with CBH Resources

Ltd, a wholly owned subsidiary of Toho

Zinc Co Ltd.

 The following tenements of the Cobar Superbasin Project are reported on in this report and are subject to a Farm-in agreement with Japan Oil, Gas and Metals National Corporation (JOGMEC):

o EL8307 "Sandy Creek"

 The tenements are in good standing and no known impediments exist.

Exploration

done by other parties

 Acknowledgment and appraisal of exploration by other parties.

 Work was completed in the area by former tenement holders including Triako Resources between 2003 and 2009; it included diamond drilling, IP surveys, geological mapping and reconnaissance geochemical sampling around the historic Four Mile Goldfield area. Prior to Triako Resources, Pasminco Exploration explored the Cobar Basin area for a "Cobar-type" or "Elura-type" zinc-lead-silver or copper- gold-lead-zinc deposit.

Geology

 Deposit type, geological setting and style of mineralisation.

 The prospect area lies within the Cobar-Mt

Hope Siluro-Devonian sedimentary and

volcanic units. The northern Cobar region consists of predominantly sedimentary units with tuffaceous member, whilst the southern Mt Hope region consists of predominantly felsic volcanic rocks; the Mallee Bull prospect seems to be located

Criteria

JORC Code explanation

Commentary

in an area of overlap between these two

regions. Mineralization at the Mallee Bull discovery features the Cobar-style attributes of short strike lengths (

Drill hole

Information

 A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all

Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above

sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

 If the exclusion of this information is justified on the basis that the information is not Material and this

exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

 All relevant information material to the understanding of exploration results has been included within the body of the

announcement or as appendices.

 No information has been excluded.

Data

aggregation methods

 In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

 Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

 The assumptions used for any reporting of metal equivalent values should be clearly stated.

 No length weighting or top-cuts have been applied.

 No metal equivalent values are used for reporting exploration results.

Relationship

between mineralisation widths and intercept lengths

 These relationships are particularly important in the reporting of Exploration Results.

 If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

 If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

 True widths are generally estimated to be about 60% of the downhole width.

Diagrams

 Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any

significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

 Refer to Figures in the body of text.

Balanced

reporting

 Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should

be practiced to avoid misleading reporting of

Exploration Results.

 All results are reported.

Criteria

JORC Code explanation

Commentary

Other

substantive exploration data

 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 and method of treatment; metallurgical test results;

bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

 No other substantive exploration data are available.

Further work

 The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or

large-scale step-out drilling).

 Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

 Future work at Mallee Bull will include geophysical surveying and RC/diamond

drilling to further define the extent of mineralization at the prospect. Down hole electromagnetic (DHEM) surveys will be used to identify potential conductive sources that may be related to mineralization.

 Future work within the Cobar Superbasin tenements will involve geophysical surveying and RC/diamond drilling to

target existing anomalies.