Peel Mining Limited (ASX:PEX) Follow-Up Drilling Confirms Cobar-Style Discovery at Mallee Bull Prospect

Perth, Jan 11, 2012 AEST (ABN Newswire) - Perth-based explorer Peel Mining Limited (ASX:PEX) is pleased to report that follow-up RC/diamond drilling at the Mallee Bull prospect (previously known as 4-Mile), part of its 100%-owned May Day-Gilgunnia Project located about 100km south of Cobar in NSW, has intersected further high-grade Cobar-style polymetallic mineralisation.

Peel's Managing Director, Mr Rob Tyson, said the Company was highly encouraged and increasingly confident in the discovery following confirmation of Cobar-style polymetallic mineralisation at Mallee Bull.

"These results confirm that the Mallee Bull prospect is host to high-grade copper-dominant polymetallic mineralisation similar to that found at other major deposits located in the Cobar district. Given the early stage of exploration, Mallee Bull represents a possible game-changer for Peel," Mr Tyson said.

The Mallee Bull prospect, which was initially identified in early 2011 as a coincident electro-magnetic and magnetic geophysical anomaly, is located within the historic 4-Mile goldfield. Multiple phases of exploratory drilling culminated in the discovery of high-grade Cobar-style mineralisation in August 2011.

In late November 2011, Peel commenced a follow-up 5,000m RC/diamond drilling programme designed to test along strike and down dip of previously intersected mineralisation. Drilling is being carried out on an approximate 40m by 40m grid pattern and comprises a series of RC and RC pre-collar/diamond tail drillholes.

Multiple drillholes completed to date have intersected zones of polymetallic mineralisation comprising intervals of massive sulphide and/or stringer mineralisation, including visible chalcopyrite, sphalerite and galena with accessory sulphide minerals including pyrrhotite, pyrite, and arsenopyrite.

Drilling to date indicates that high-grade copper-dominant polymetallic mineralisation at Mallee Bull has a strike length of at least 120m, comes to within at least 160m of surface and is open in multiple directions including, importantly, at depth. Peel notes that the majority of planned deeper drillholes remain incomplete, and that Cobar-style deposits are typically short in strike length but long in the vertical plane.

Mineralisation occurs within a package of sheared and brecciated volcaniclastic sediments comprising siltstones and mudstones and is interpreted as occurring as a shoot-like structure dipping moderately to the west and plunging to south. Drill intercepts are construed as being close to true.

The Mallee Bull prospect is interpreted to be positioned in a favourable geological and structural position, sited on the "nose" of an anticline - a suitable high-stress environment, and occurring in a geological unit interpreted to be age equivalent of the Chesney and Great Cobar Slate Formations found in the immediate Cobar region.

Further drilling at Mallee Bull is set to commence later this week and Peel looks forward to releasing additional results when available.

Further Background on Peel's Mallee Bull discovery

In March/April 2011, Peel began targeting a newly-recognised coincident EM and magnetic geophysical anomaly located within the historic 4-Mile goldfield. The 4-Mile goldfield comprises up to 60 shafts and workings spread over an area covering about 1,000m by 500m.

Initial drilling resulted in the discovery of significant silver-lead-zinc mineralisation. Follow-up drilling completed in July/August 2011 confirmed the discovery of Cobar-style copper-silver-gold-lead-zinc-cobalt mineralisation with better intercepts including: 4MRCDD06 - 10m @ 0.14% Cu, 41 g/t Ag, 0.77 g/t Au, 9.01% Pb, 11.00% Zn from 253m and 6.65m @ 3.1% Cu, 34 g/t Ag, 0.93 g/t Au, 0.65% Pb, 0.13% Zn; and 4MRC007 - 8m @ 1.94% Cu, 55 g/t Ag, 0.3 g/t Au, 0.16% Pb, 0.29% Zn and 4m @ 1.49% Cu, 59 g/t Ag, 0.18 g/t Au, 0.26% Pb, 0.21% Zn.

The Mallee Bull prospect is located less than 10 kilometres east of Peel's 100%-owned May Day gold-silver-lead-zinc deposit (ML1361), where drilling in 2010 by Peel confirmed the down-dip continuation of mineralisation to more than 200m below surface.

For the complete announcement including figures and tables, please view:
http://media.abnnewswire.net/media/en/docs/ASX-PEX-573764.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