Peel Exploration Limited (ASX:PEX) Announces Encouraging Gold-Base Metals At May Day Deposit And Moly-Gold At Attunga Copper Mine

Perth, July 5, 2010 AEST (ABN Newswire) - Peel Exploration Limited (ASX:PEX) is pleased to announce that recent drilling at the Company's Attunga and May Day projects has yielded encouraging mineralisation. The Attunga project lies within EL6884, approximately 20 kilometres north of Tamworth, whilst the May Day project lies within ML1361, approximately 100 kilometres south of Cobar. Both projects are 100%-owned by Peel Exploration.

Results from recent drilling at May Day include the following intercepts:

- 16m at 1.78 g/t Au, 42 g/t Ag, 0.25% Cu, 0.95% Pb, 1.33% Zn from 159m in MDRC002;

- 24m at 0.96 g/t Au, 20 g/t Ag, 0.07% Cu, 0.70% Pb, 0.85% Zn from 120m in MDRC004;

- 27m at 2.12 g/t Au, 27 g/t Ag, 0.11% Cu, 0.43% Pb, 0.75% Zn from 120m in MDRC005;

- 3m at 1.33 g/t Au, 98 g/t Ag, 0.92% Cu, 7.29% Pb, 8.19% Zn from 140m in MDRC006, and;

- 10m at 2.15 g/t Au, 28 g/t Ag, 0.06% Cu, 0.34% Pb, 0.39% Zn from 213m in MDRC010.

Results from recent drilling at the Attunga Copper Mine include the following intercepts:

- 5.6m at 0.44% Mo, 0.70 g/t Au, 12 g/t Ag, 0.45% Cu, 1.9 g/t Re from 48m and 1.4m at 22.70 g/t Au, 13 g/t Ag, 0.70% Cu from 55m in ACMD008;

- 2m at 4.28 g/t Au, 15 g/t Ag, 0.68% Cu from 86m and 2.5m at 0.71 g/t Au, 48 g/t Ag, 2.48% Cu from 94m in ACMD011.

May Day Deposit

In early May, Peel completed a programme of 10 RC drillholes for 1,877m at the May Day gold-base metal deposit, located about 100km south of Cobar in central-western New South Wales. This drilling programme was primarily designed to test for down-dip extensions to known mineralisation.

Peel is encouraged by the results returned, which confirm down dip extensions containing several higher grade zones including a massive sulphide intercept. Several drillholes were abandoned prematurely due to adverse ground conditions.

The drilling at May Day confirms that mineralisation is shear-related and occurs as a sub-vertical lense/shoot. Mineralisation occurs at or near the interbedded contact of a fine-grained sedimentary hangingwall and a porphyritic volcanic footwall. Mineralisation at May Day is associated with silica/talc alteration and includes disseminated through to massive sphalerite-galena-pyrite-pyrrhotite-chalcopyrite sulphide mineralisation. The true width is estimated to be approximately 65% of the reported intercepted widths.

Peel believes that the May Day deposit, a structurally controlled-volcanogenic massive sulphide (VMS) system, is an analogue for Cobar-style precious and base metal mineralisation. Peel was attracted to the May Day prospect by its encouraging historic drilling results, geophysical signatures, and lack of modern exploration. Peel believes that the drilling results returned confirm the prospectivity of May Day.

Since acquiring May Day in late 2009, Peel has completed several geophysical surveys comprising a gravity survey, an Induced Polarisation (IP) survey and remodelling of regional airborne magnetic data. Interpretation shows that a moderate-to-strong chargeable IP anomaly and a deep magnetic anomaly are associated with the May Day deposit.

Peel believes that drill results support the Company's belief that the May Day deposit possibly represents "leakage" from a deeper mineralised system. Interpretation of the magnetic data indicates the source of the anomaly to be located at greater than 400m below surface. Drillhole MDRC010 intercepted mineralisation at about 185m below surface, with mineralisation remaining open at depth.

Peel also believes that good potential exists for the discovery of additional near-surface gold-base metal mineralisation along strike from the May Day deposit. Shallow historic RAB drilling completed to the west of May Day in the 1970s delineated near-surface geochemical lead-zinc anomalism in close proximity to several historic workings. No gold assays were undertaken at the time of drilling, and no follow-up drilling has ever been completed.

Peel plans to complete a review of all recently acquired and historic data, along with a shallow aircore/RAB drilling programme testing for near surface mineralisation.

Attunga Copper Mine

Between March and May, Peel completed a programme of six diamond drillholes for 944m at the Attunga Copper Mine prospect. This drilling was designed to test for up- and down-dip and along strike continuation of significant polymetallic mineralisation discovered in May 2009 (drillhole ACM004 intercepted 75m at 1.02 g/t Au, 0.87% Cu, 0.09% Mo, 0.06% Bi, and 22 g/t Ag from).

Peel is buoyed by the results with several drillholes returning high grade molybdenum and gold values. In April, Peel reported that ACMD008 had intercepted encouraging visible molybdenum-copper mineralisation over an approximate 8m zone. Final analysis confirmed a high grade molybdenum interval of 5.6m at 0.44% Mo, 0.70 g/t Au, 12 g/t Ag, 0.45% Cu, 1.9 g/t Re from 48m. ACMD008 also contained several other zones of encouraging mineralisation including a high-grade gold intercept of 1.4m at 22.70 g/t Au, 13 g/t Ag, 0.72% Cu from 55m.

Mineralisation at the Attunga Copper Mine is interpreted to be sub-vertical and occurs in garnet-rich calc-silicate skarn with sulphide minerals including chalcopyrite, bornite and molybdenite. The true width of the intervals reported is unknown due to the uneven geometry of the skarn alteration system, however the overall width of the system is assumed to be less than 8m.

The results from Attunga confirm the presence of significant molybdenum-gold-copper skarn mineralisation that remains open in several directions. Peel will review all drill results and is planning to complete an IP survey as part of future exploration work.

Current Activities

Peel is currently completing a shallow RAB drilling programme at Kensington targeting tungsten and gold mineralisation. Historic data indicates the presence of a large, shallow, low/mid grade tungsten occurrence. RAB drilling currently underway is designed to test for this occurrence, along with associated gold mineralisation.

For the complete Peel Exploration Limited announcement including assay result tables and figures, please view the following link:

http://www.abnnewswire.net/media/en/docs/63221-ASX-PEX-496428.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