Peel Mining Limited (ASX:PEX) Announce Ag-Pb-Zn Discovery At 4-Mile Prospect And High Grade Ag-Au At Ruby Silver Project

Perth, May 6, 2011 AEST (ABN Newswire) - Peel Mining Limited (ASX:PEX) 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.

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-lead-zinc-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- for more information, see http://www.peelex.com.au/Projects/May-Day-Gilgunnia.aspx

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.

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 the complete Peel Mining announcement including figures and tables, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/540774.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