Peel Exploration Limited (ASX:PEX) Announces Maiden Resource Estimate of 341,000 Ounces For Apollo Hill And Ra Deposits

Perth, Dec 13, 2010 AEST (ABN Newswire) - Peel Exploration Limited (ASX:PEX) is pleased to announce a maiden resource estimate for the Apollo Hill and Ra deposits within its recently acquired Apollo Hill gold project in the North-Eastern Goldfields of Western Australia.

Highlights

- Maiden resource at Apollo Hill and Ra deposits estimated at 11.1 Mt at 1.0 g/t Au for 341,000 ounces of gold (using 0.5 g/t gold cut off).

- Maximum depth of the resource estimate is 150m below surface.

- At a 0.2 g/t gold cut off for scenario planning the estimated resource is 26.6 Mt at 0.6 g/t Au for 534,000 ounces of gold.

- The Apollo Hill deposit extends to surface and remains unexploited.

- Mineralisation at Apollo Hill and Ra deposits remains open at depth and along strike to the south of both deposits.

- Potential increase in resources with minimal further drilling.

- Exploration planning now underway, IP survey planned for January, infill and extensional drilling planned for March 2011.

The Apollo Hill resource consists of two deposits: the main Apollo Hill deposit and the Ra deposit to the south-east (Figure 2, see link at the bottom of the release). A breakdown of the inferred resources present at 0.5 g/t gold cut off for each deposit is shown in Table 1 (see link at the bottom of the release).

Peel Managing Director Rob Tyson commented:

"The maiden resource estimate of 341,000 oz gold confirms that Apollo Hill is a substantial gold deposit and represents a strongly value accretive acquisition by Peel at a cost of just A$3 per ounce. This resource estimate will also form the base for future work that is expected to add further value to the project. To this end, Peel is planning an exploration programme including IP geophysics, infill and extensional drilling, comprehensive metallurgical testwork and a preliminary scoping study."

Resource Estimate Details

The Apollo Hill Project, located 50 kilometres south-east of Leonora, comprises 16 mineral licences covering about 140 square kilometres within the highly mineralised North-Eastern Goldfields of Western Australia.

The resource estimate, completed by independent consultants Hellman & Schofield Pty Ltd, is based on 22,887 metres of historic drilling made up of 35 diamond, 214 reverse circulation and 136 aircore drill holes completed by a number of explorers since 1986. The resource estimate has been classified as Inferred under the JORC code (2004 edition). Work completed by Peel Exploration has included re-sampling and examination of diamond core, field visits, and compilation and validation of data. The current estimates assume densities of 2.3 and 1.8 t/bcm for oxidised Apollo Hill and Ra (previously known as Camp) mineralisation respectively, with a density of 2.6 t/bcm for fresh rock at both deposits.

Documentation of historic sampling details is variable, however approximately 35% of the sample data (metres drilled) used in the resource estimation has documentation covering details of the methodologies used.

Assaying was carried out at a number of laboratories in Perth and Kalgoorlie. About 75% of the samples used in the estimation were analysed by fire assay with AAS finish method with the remainder analysed using either aqua regia or LeachWell digests with AAS finish or unknown finish methodology. More than 15% of assay results have had repeat analysis carried out and further check analysis has also been carried out on a number of batches.

In addition, Peel Exploration submitted 100 quarter core samples from three drill holes to ALS Laboratory Group in Perth, WA for triple analysis by fire assay (50g) and AAS finish. Standard reference material was also submitted by Peel Exploration. ALS conducted duplicate sample checks, lab standard checks and blank sample checks. Pulps of these samples were the submitted to Standard Reference Laboratories in Perth, WA for analysis by fire assay as a further check. The results largely confirmed previous sampling and assaying results.

Location of drill hole collars was sourced from historic reports with variable survey methodologies completed. Down hole surveys were predominately conducted with a down hole camera. Structural studies in 2004 indicate that the predominate drilling direction previously used has the highest probability of intersecting the greatest number of mineralised features.

The topographic surface used was generated from all drill hole collar coordinate data, and 200 by 200 metre spaced spot heights from a ground gravity survey completed by Fugro Ground Geophysics in March 2004.

Hellman & Schofield estimated resources for the Apollo Hill gold project by using Multiple Indicator Kriging with block support correction methodology, to reflect open pit mining selectivity. The model estimates recoverable resources into panels sized 10 metres across strike by 30 metres along strike by 5 metres vertical. Although the model estimates extend to around 290 metres depth, the reported resources only include estimates to approximately 150 metres below surface to reflect realistic extraction depths.

Peel Exploration believes that the shallow and extensive nature of mineralisation at the Apollo Hill gold project suggests that the project has reasonable prospects for eventual economic extraction.

Apollo Hill deposit details

At Apollo Hill, two zones of mineralisation have been identified: West (or Main) Zone and the East Zone (Figures 2, 3 & 4, see link at the bottom of the release). The current resource extends for 600m in strike length and Peel Exploration expects to increase this to the south-east with further drilling. The gold mineralisation dips to the north-east at 45-60 degrees and is accompanied by quartz veins and carbonate-pyrite alteration associated with a structurally deformed mafic-felsic lithological contact. Mineralisation is present at surface.

The Apollo Hill mineralisation has been tested by generally 30 metre spaced, 45 degrees trending traverses of drill holes generally inclined towards the south-west. Across strike spacing is variable. For most traverses, the upper approximately 50 metres has been tested by holes spaced at around 20 metres. Below this depth the coverage is highly variable, ranging from around 20 metre spacing on some sections to commonly greater than 60 metres.

The western mineralised domain strikes 315 degrees and has an average width of approximately 95 metres. The eastern domain strikes 330 degrees and has an average width of approximately 115 metres.

Recent metallurgical testwork by Peel Exploration has been favourable showing gold extraction levels of over 80% by gravity separation alone and greater than 98% of gold extractable via gravity and cyanidation.

Ra deposit details

The Ra gold deposit is covered by a layer of transported material, with mineralisation hosted by dolerite rock and dipping 30-60 degrees to the east (Figure 5, see link at the bottom of the release). The current resource at Ra has a strike length of approximately 300m, with mineralisation open along strike and at depth.

Ra deposit mineralisation has been tested by generally 20 metre spaced, 45 degrees trending traverses of drill holes inclined towards the south-west. Across strike spacing is generally around 15 metres to a depth of approximately 60 metres below surface. Below this depth, sampling is limited to rare, broadly and irregularly spaced drill holes.

Further work

Planning of additional exploration at Apollo Hill is well advanced, with an IP geophysical survey scheduled to commence in January 2011, followed by infill and extensional drilling with the aim of increasing resources and providing sufficient material for comprehensive metallurgical testwork. A preliminary scoping study is also planned.

For the complete Peel Exploration announcement including project maps and tables, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64793-ASX-PEX-520146.pdf

Contact

Peel Mining Limited T: +61-8-9382-3955 F: +61-8-9388-1025 E: info@peelex.com.au WWW: www.peelex.com.au