ASX / MEDIA RELEASE 6 MAY 2011 4-MILE SILVER-LEAD-ZINC DISCOVERY; HIGH GRADE SILVER-GOLD IN ROCK CHIPS AT RUBY SILVER Highlights: Silver-lead-zinc discovery at 4-Mile; mineralisation intersected in all three drillholes; open in all directions; follow-up drilling planned; better assays included: o 4MRC001 5m @ 21 g/t Ag, 0.15 g/t Au, 0.27 % Cu, 0.87% Pb, 1.88% Zn from 194m o 4MRC002 5m @ 11 g/t Ag 0.15 g/t Au, 1.28% Pb, 2.1% Zn from 138m o 4MRC003 10m @ 24 g/t Ag, 0.09 g/t Au, 1.17% Pb, 2.2% Zn from 110m High-grade silver and gold values in rock chip/dump samples at Ruby Silver project; better assays included: o PT01 25 g/t Au, 7 g/t Ag, 0.29% Cu o PT02 1370 g/t Ag, 0.75 g/t Au, 0.83% Pb, 0.37% Zn o PT03 483 g/t Ag, 4.32 g/t Au, 0.36% Pb o PT04 6.15 g/t Au, 192 g/t Ag, 2.27% Pb 4-Mile silver-lead-zinc discovery Peel Mining is pleased to report that recent exploration drilling at the 4-Mile prospect has resulted in the discovery of significant silver-lead-zinc mineralisation. 4-Mile is located within Peel s 100%- owned May Day-Gilgunnia project (EL7461), about 100 km south of the Cobar. The drilling consisted of an east-west line of three RC drillholes at approximately 40m spacing, for a total of 663m, targeting a newly-recognised coincident EM and magnetic geophysical anomaly located within the historic 4-Mile goldfield. Table 1 summarises significant drill assay results (see Appendix 1 for technical details): Table 1 4-Mile drill summary Hole ID Northing Easting Azimuth (true) Dip Final Depth From To Interval Ag (g/t) Au (g/t) Cu Pb Zn 4MRC001 6413351 415281 090-60 225 165 168 3 9 0.06 0.03 0.65 0.50 194 199 5 21 0.15 0.27 0.87 1.88 205 206 1 22 0.24 0.09 1.49 1.50 4MRC002 6413348 415326 090-60 219 138 143 5 11 0.15 0.04 1.28 2.10 164 165 1 4 0.82 0.01 0.10 0.15 173 174 1 7 0.18 0.03 0.32 0.59 213 214 1 20 0.05 0.15 0.95 1.23 4MRC003 6413352 415359 090-60 219 110 120 10 24 0.09 0.03 1.17 2.20 133 134 1 26 0.02 0.09 1.22 0.24 176 179 3 14 0.15 0.11 0.85 1.55 205 208 3 8 0.07 0.01 0.43 0.97 Visible sulphide mineralisation including sphalerite and galena was intersected in zones up to 10m wide, within all three drillholes. Other accessory sulphide minerals observed includes pyrrhotite, pyrite, arsenopyrite and chalcopyrite. The sulphides occur within a package of sediments comprising carbonaceous shales and siltstones. True width is unknown at this stage although it appears that mineralisation is shallowing to the east, possibly indicating a moderate westerly dip, in which case
the drill intercepts reported would be close to true. All drillholes remained anomalous in silver-leadzinc-arsenic at the bottom of holes. All mineralisation intersected to date is primary in nature and future exploration will test to the east of existing drilling for possible supergene enrichment. Planning of follow-up RC and RAB drillholes targeting potential up-dip and north-south extensions to the newly discovered mineralisation is now underway. Downhole and moving-loop EM geophysical surveys are also planned to further refine the EM conductor and to test the local area for additional targets. Peel is highly encouraged by the 4-Mile discovery and notes that the Cobar region is one of the world s great mining provinces. The 4-Mile prospect is located less than 10 kilometres east of Peel s 100%-owned May Day gold-silver-lead-zinc deposit (ML1361), where drilling last year by Peel confirmed the down-dip continuation of mineralisation to more than 200m below surface- see http:///projects/may-day-gilgunnia.aspx for more information. Ruby Silver project Peel Mining is also pleased to report that a first-pass reconnaissance mapping and rock chip/dump sampling programme at the Tulloch, G Reef, Happy Valley and Rockvale areas has returned very high silver and gold values. Samples were collected from shaft dumps at the Rockvale, G Grid and Happy Valley areas from rock chips along the line of lode at Rockvale. See Appendix 2 for technical details. Table 2 Ruby Silver rock chip summary Sample Northing Easting Ag Au As Cu Pb Zn Description ID (g/t) (g/t) PT01 6638345 401532 7.0 25.2 0.01 0.29 0.02 0.01 Tulloch mine dump - quartz vein and minor hornfels hosting fine to medium grained pyrite, chalcopyrite and minor galena. PT02 6638298 401421 1370 0.75 13.55 0.03 0.83 0.37 Tulloch mine dump - quartz veins with common breccia textures host massive to disseminated, fine to coarse grained chalcopyrite and sphalerite. PT03 6638057 399821 483 4.32 1.95 0.03 0.36 0.05 Happy Valley shaft dump - quartz veins with minor fine grained sulphides, minor scorodite. PT04 6637764 400167 192 6.15 4.54 <0.01 2.27 0.11 G Grid shaft dump - quartz veins hosting abundant coarse galena, sphalerite & arsenopyrite. PR01 6637752 403354 67.5 0.06 1.09 0.09 0.09 <0.01 Rockvale lode rockchip - quartz-arsenopyrite & arsenopyrite-pyrite in altered granite. PR02 6637332 403045 16.9 0.47 >15.0 0.02 0.07 <0.01 Rockvale lode rockchip - altered ferruginous granite with boxworks & scorodite. PR03 6637229 402966 185 0.28 2.29 0.11 0.17 0.3 Rockvale lode rockchip - goethite & scoroditestained altered granite with disseminated to massive arsenopyrite. PR04 6637696 403255 13.3 0.20 0.19 0.02 0.25 0.1 Rockvale lode rockchip - quartz veins with boxworks. In February 2011, Peel was granted EL7711 covering the historic Ruby-Tulloch-Rockvale silverfield located approximately 30 km east of Armidale, New South Wales. The area contains numerous historic silver mines, workings and prospects including: the Ruby silver mine which produced 350,000 ounces silver at 620 g/t silver; and the Tulloch silver mine which produced 50,000 ounces silver at 6,200 g/t silver. The area has been subject to limited modern exploration and drilling.
Peel recently completed a first-pass reconnaissance geological mapping and sampling programme over the Tulloch, G Reef/Happy Valley and Rockvale areas. This mapping delineated the Rockvale line of lode at surface for more than 750m, and on strike with the Ruby silver mine. Mapping and sampling currently underway has now identified that the G-Reef lode is traceable in outcrop for 700m in length. In places the lode zone is up to 5m wide and is associated with sericitised granite. Other activity now underway includes an approximately 15 line kilometre IP geophysical survey covering the Tulloch and Rockvale mine areas this work is nearing completion and is being completed to aid in the delineation of sulphide-bearing quartz-carbonate veins in preparation for follow-up drilling. Commenting on the results Peel Managing Director Rob Tyson said: The results from 4-Mile are very pleasing for such an early stage. Additional drilling will be completed as soon as practicable to further test this potentially significant mineralisation. The high grade gold and silver rock chip/dump samples from Ruby Silver project are also extremely satisfying and we are looking forward to seeing what the IP results contain. For further information, please contact Rob Tyson on 0420 234 020. The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Tyson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Tyson 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 2004 Edition of the 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 his information in the form and context in which it appears. Appendix 1 1. All drillholes were drilled reverse circulation using 5.5 face sampling hammer. 2. Drill chips were collected in plastic bags at 1m intervals. Sample recoveries were considered adequate for all samples. 3. Drillchips were logged in detail based on lithology, mineralisation, and alteration. 4. Samples for analysis were collected by hand spearing rock chip material. 5. Samples were submitted as 1m or 4m composite intervals. 6. Samples were analysed at ALS Chemex utilising methods: Au AA25 for Au (fire assay); ME ICP61 for multi-element including Ag, Cu, Pb, Zn; Pb-OG62 for >1% Pb; and Zn-OG62 for >1% Zn. 7. Standards for Au and base metals were routinely included (approximately 5% of all samples). Duplicates were also included (approximately 2% of all samples). 8. Drillhole collars were surveyed by handheld GPS (Garmin GPS72). 9. Downhole surveys were routinely run at approximately every 60m downhole and at the end of each hole. Appendix 2 1. Rock chips were collected from dump material or outcrop. 2. Samples were analysed at ALS Chemex utilising methods: Au AA25 for Au (fire assay); ME ICP61 for multi-element including Ag, Cu, Pb, Zn; Ag-OG62 for >100 ppm Ag; and Pb-OG62 for >1% Pb. 4. Sample locations were surveyed by handheld GPS.
Figure 1 4-Mile RTP Magnetics Figure 2 4-Mile VTEM late time (3-10 ms) Figure 3 Ruby silver - disseminated aggregates of coarse galena and minor sphalerite developed within a laminated quartz vein
Figure 4 Ruby silver outcropping virgin scorodite-boxworks lode