Peel Mining Limited

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Explores for Copper - Gold - Lead - Molybdenum - Silver - Tungsten
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Last updated on : 3/12/2010

2016 Annual Report to Shareholders

ACN 119 343 734

Annual Report 2016

Corporate Directory


Simon Hadfield Non-executive Chairman

Rob Tyson Managing Director

Graham Hardie Non-executive Director

Company Secretary Ryan Woodhouse

Registered Office

Unit 1, 34 Kings Park Road WEST PERTH WA 6005

Telephone: +61 8 9382 3955 Email: [email protected]

Stock Exchange Listing

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



119 343 734

Share Registry

Link Market Services Limited

Level 4

152 St Georges Tce PERTH WA 6000

Telephone: +61 1300 554 474

Facsimile: +61 8 9287 0303

Auditors PricewaterhouseCoopers Level 15

125 St Georges Terrace PERTH WA 6000



Chairman's report 1

Review of operations 2

Schedule of tenements 21

Directors' report 22

Consolidated statement of profit and loss and other comprehensive income 30

Consolidated statement of financial position 31

Consolidated statement of changes in equity 32

Consolidated statement of cash flows 33

Notes to the consolidated financial statements 34

Directors' declaration 54

Auditor's independence declaration 55

Independent auditor's report 56

Additional ASX information 58

Shareholder information 66


Chairman's Report

Dear Fellow Shareholders

In the past 12 months Peel Mining Limited has continued to enjoy success at its projects near Cobar in New South Wales. The Company now has the largest land holding in this proven mineral district and has continued to make new high grade discoveries within a 50km radius of its flagship Mallee Bull copper project, about 100km south of Cobar.

Recent drilling at Mallee Bull has discovered a new high-grade copper-rich lens about 300 metres north of the main ore body, enhancing the similarities between Mallee Bull and the rich CSA copper mine at Cobar. Mallee Bull is a joint venture between Peel and CBH Resources Limited, a wholly owned subsidiary of Toho Zinc of Japan. It is hoped that

continued investigation of this project in the current year will lead to a significant increase in the current inferred resource of 3.9 million tonnes at 2.7 per cent copper equivalent.

Drilling at the Company's Wirlong project, about 30km north of Mallee Bull, has also seen the discovery of broad copper intersections including very high grade mineralisation. Wirlong bears the hallmarks of a Cobar-style system and is part of the Cobar Superbasin Project. Exploration at Wirlong is being funded by a $7 million 50 per cent farm-in to Peel's Cobar Superbasin Project by Japan Oil, Gas and Metals National Corporation (JOGMEC), which is a state-owned enterprise of the Government of Japan. Drilling at Wirlong is expected to recommence in the near-term with the aim of expanding the scale of the mineralised system.

During the year the Company purchased several new tenements in the Cobar Basin, including the Wagga Tank prospect, about 50km southwest of Mallee Bull. Historical drilling at Wagga Tank in the 1970s and 80s returned high grade base and precious metals intersections. No drilling has occurred since 1989 despite mineralisation remaining open along strike and at depth. Your Company has high hopes for this project and drilling is expected to start soon.

Peel has now identified many highly prospective targets within the area surrounding Mallee Bull and is working hard towards its goal of building a camp of high-grade base and precious metals deposits in this southern part of the Cobar Basin.

Exploration has also continued at the Company's 100 per cent owned Apollo Hill gold project near Leonora in Western Australia. Step-out drilling to the southeast of the existing mineral resource has shown that high grade mineralisation remains present, and continues to be open along strike and down dip, offering excellent potential to increase the

scale of the deposit. New metallurgical testwork has also underlined the excellent metallurgical characteristics of Apollo Hill mineralisation.

Subsequent to the year's end, the Company completed a capital raising of approximately $3 million which together with cash on hand, positions the Company well to pursue its strategic objectives in the Cobar Basin.

On behalf of all shareholders, I would like to thank Peel's first-rate team for the excellent results achieved in the last year and their outstanding efforts in positioning the Company for future success.

Yours Sincerely,

Simon Hadfield


29th September 2016


Review of Operations

Company Assets Background

At September 2016, Peel held four key mineral projects comprising granted exploration licences and licences under application.

  • Gilgunnia (EL7461 and ML1361) is in a 50:50 joint venture with CBH Resources Limited, a wholly-owned subsidiary of Tokyo Stock Exchange-listed Toho Zinc, and contains the Mallee Bull copper-polymetallic discovery and the

    May Day polymetallic deposit. The tenure also hosts the historic Gilgunnia and 4-Mile goldfields. A maiden resource estimate at Mallee Bull was completed in May 2014, and drilling has since focused on extending the known areas of mineralisation.

  • Cobar Superbasin Project (CSP) is a package of granted tenements covering more than 2,100km2 of prospective

    stratigraphy within the Cobar Basin. The tenements are considered prospective for Cobar-style and VHMS polymetallic deposits. The package includes EL8307 located north of Mallee Bull, which contains the new copper- polymetallic discovery at the Wirlong prospect, along with the Sandy Creek and Red Shaft prospects. The tenure is covered by a farm-in agreement with Japan Oil, Gas and Metals National Corporation (JOGMEC) which was executed in November 2014. JOGMEC can earn up to 50% of certain tenements by funding up to $7 million of exploration expenditure.

  • Wagga Tank/Mount View Projects, also in the Cobar Basin, comprise of four newly acquired licences with notable

    prospects including the namesake Wagga Tank polymetallic deposit, Siegal's Shaft/MD-2, Boolahbone and the May Day Tails anomaly.

  • Apollo Hill Project contains two significant gold deposits - Apollo Hill and the Ra Zone - for an inferred resource

estimate of 505,000 oz gold. These deposits exhibit the hallmarks of a major mineralised Archean system, showing extensive hydrothermal alteration and deformation. Drilling has continued with the aim of updating the resource model at Apollo Hill with an increase in contained ounces and strengthening the potential for future economic extraction.

Broader regional exploration over Peel's WA tenure has also identified numerous additional areas of interest away from the main deposit.

Details on assets

Gilgunnia/Mallee Bull Project

The Gilgunnia/Mallee Bull project, located about 100km south of Cobar in western NSW, contains the Mallee Bull

copper-polymetallic discovery, the May Day polymetallic deposit and the historic Gilgunnia and 4-Mile goldfields. Peel and CBH Resources Limited are in a 50:50 Joint Venture over the project tenements EL7461 and ML1361.

Mallee Bull is interpreted to be located in a favourable geological and structural position; it is situated in the suitably

high-stress environment of the "nose" of an anticline, and occurs in a geological sequence of turbidite and volcaniclastic sediments which are thought to be age equivalent to the Chesney and Great Cobar Slate Formations found in the immediate Cobar region. Mineralisation occurs either as massive sulphide or breccia/stringer styles within a package of brecciated volcaniclastic and turbidite sediments comprising siltstones and mudstone, and is interpreted to occur as a shoot-like structure dipping moderately to the west.

Mallee Bull Discovery

In late 2010, an airborne electromagnetic geophysical survey (VTEM) was flown over the May Day and 4-Mile/Butchers Dog areas, resulting in the recognition of a coincident late time conducting anomaly and magnetic high. The Mallee Bull anomaly is proximal to the historic 4-Mile goldfield area; a series of surface and underground gold workings located about 10km east of the May Day deposit. A subsequent ground-based geophysical (fixed-loop TEM) survey confirmed the existence of a moderate-strong conductor and in March 2010, a programme of three RC drillholes for a total of 663m targeting the geophysical anomaly was completed. This drilling resulted in the discovery of strongly anomalous polymetallic (gold-silver-copper-lead-zinc) mineralisation in all three drillholes.

Systematic exploration followed involving several rounds of additional drilling (4 more RC drillholes plus a diamond tail) and several down-hole geophysical (DHEM) surveys. This work culminated in discovery drill hole 4MRC007 intersecting multiple zones of strong copper-dominated polymetallic mineralisation including massive sulphides. In late August 2011,