Peel Mining Limited (ASX: PEX) (Peel or the Company) is pleased to update the market on recently received studies regarding a central processing plant and ore-sorting testwork relevant to the Company's 100%-owned South Cobar Project, in western New South Wales.

GR Engineering recently completed a preliminary process plant technical report for Peel's South Cobar Project that considers crushing, grinding, gravity, flotation and cyanidation process stages for the recovery of gold, silver, copper, lead and zinc from the various mineralisation styles within Peel's deposits. Due to the preliminary nature of the report and ASX requirements, significant detail cannot be released at this time, however Peel's management view the report as highly informative, the detail of which will form the basis for future preliminary studies.

In addition to the process plant technical report, Peel has recently received positive preliminary ore sorting testwork results from work undertaken on diamond drilling samples. The ore-sorting testwork, completed in conjunction with ongoing metallurgical studies, was undertaken by expert materials sorting companies STEINERT and TOMRA, on Southern Nights and Mallee Bull mineralisation respectively.

STEINERT's testwork on Southern Nights mineralisation demonstrated strong recovery and upgrade potential: two size range samples returned on average 93% Zn, 91% Pb, 91% Ag, 87% Cu, and 82% Au recoveries to an average of 54% of the feed mass (46% of feed mass rejection) increasing the Pb and Zn grades by 61% and 64%, respectively. TOMRA's testwork on Mallee Bull mineralisation achieved significant waste mass reductions while maintaining very high copper recoveries (95% for the higher-grade Breccia Copper and Massive Sulphide Copper samples). A lower grade Breccia Copper sample upgraded from 0.59% Cu to 1.05% Cu with 77% Cu recovery and 56% mass rejection.

Positive results from ore-sorting at Southern Nights and Mallee Bull deposits provide encouragement for the inclusion of this pre-concentration technology into future process plant design and, as a result Peel has engaged GR Engineering to integrate ore-sorting technology into an updated processing plant technical report.

Executive Director of Mining Jim Simpson commented: 'The completion of the processing plant technical report by mineral processing solutions experts GR Engineering is a critical first step in understanding the potential composition of the milling infrastructure required for the Company's development plans.

The detail presented in the report by GR's is impressive and the report will form the basis for ongoing preliminary studies for the refinement and improvement of the processing plant design as new information comes to hand.

We are also very pleased with the potential of ore-sorting as part of any future South Cobar Project Hub's processing route with initial testwork pointing to the amenability of both Southern Nights and Mallee Bull mineralisation to separation using 3D-XRT ore-sorting technology, allowing for the simultaneous rejection of barren or waste material whilst retaining the bulk of contained metal, and in the process, upgrading the value of the ore.

Apart from reducing the overall feed mass by the rejection of waste at early stage, other benefits of ore-sorting include potentially upgrading lower-grade mineralisation and reducing the size of the processing plant offering potentially reduced capital, power, water and tailings storage needs. We now seek to improve our technical understanding of the Hub through refined metallurgical and ore-sorting testwork and preliminary engineering studies - we look forward to providing updates in the future.'

GR Engineering Process Plant Technical Report

In September quarter 2020, Peel commissioned industry experts GR Engineering Services to complete a technical report regarding a conceptual processing plant. The impetus for the report was driven by Peel's consolidation of ownership of the various polymetallic deposits within the Company's South Cobar Project. The South Cobar Project forms the basis for the Company's 'Hub & Spoke' strategy.

Process plant considerations included in GR Engineering's report comprised a processing plant featuring crushing, grinding, gravity, flotation and cyanidation process stages for the recovery of gold, silver, copper, lead and zinc from the various mineralisation styles within Peel's deposits. Due to the preliminary nature of the report and ASX requirements,significant detail cannot be released at this time, however the report is viewed as highly informative, the detail of which will form the basis for future preliminary studies.

Southern Nights - Wagga Tank Deposit Ore-sorting Testwork Summary

Preliminary ore-sorting testwork was recently undertaken by STEINERT for the Southern Nights deposit to investigate the potential for up-grading of feed to the process plant. The aim of the process is to reject low grade or barren gangue. Results of the sorting testwork demonstrate that 3D-XRT sorting is a promising avenue to ore upgrading. Peel provided STEINERT with two size fraction samples (49.38kg and 94.91kg for Sample 1 and 2 respectively), derived from a crushed and screened composite sample (at -31.5+10mm and -60 +31.5mm for Sample 1 and 2 respectively), to test on the STEINERT KSS FLI XT to assess the performance of sensor sorting in metal recovery (using 3D-XRT sorting to target sulphides).

The samples were derived from a composite sample (133kg) from Southern Nights drillhole WTRCDD239 assaying 0.3% Cu, 1.24% Pb, 5.67% Zn, 0.39g/t Au and 32g/t Ag. The -10mm size fraction was retained and its metal content added to the products from sorting the two size ranges to calculate the overall sorting performance.

Ore sorting programs were developed based on 3D laser and XRT sensor data, with programs developed to target 35, 50 and 70% cumulative yields to feed for both size fractions. The 3D-XRT programs were built to target rocks by peak density, by comparing maximum X-ray absorption versus particle height for each rock, which was presumed to correlate strongly with Pb and Zn grade. Three sorting passes were completed on both size fractions to generate yield-recovery and yield-grade curves from which a preliminary operating point was chosen.

Results of the sort indicate that 3D-XRT sorting is a promising avenue to a Pb/Zn upgrade and significant waste rejection.

Mallee Bull Deposit Ore-sorting Testwork Summary

Peel engaged TOMRA to conduct ore-sorting testwork, with selected sensing techniques, on three bulk mineralised samples from the Mallee Bull deposit. The samples were derived from three composite samples from Mallee Bull diamond drillhole MBDD017:

Sample 1 - Low-grade Breccia Copper (95.6kg) o 0.59% Cu, 0.19g/t Au, 8g/t Ag

Sample 2 - High-grade Breccia Copper (112.0kg) o 2.00% Cu, 0.13g/t Au, 14g/t Ag

Sample 3 - Massive Sulphide Copper (75.6kg) o 1.98% Cu, 1.2g/t Au, 30g/t Ag

To generate testwork samples, each of the three feeds were screened at 8-19mm and 19-50mm to provide the two size ranges for sorting. The metal content from the non-sorted -8mm material screened out as fines during preparation and the -6mm material generated by the pre-sorter dedusting screen was added to the products to calculate the overall sorting performance.

TOMRA specialises in sensor-based sorting techniques. To establish whether TOMRA sorting system was capable of sorting copper ore from waste material, TOMRA's engineers conducted performance testwork on a series of samples provided by Peel. For this material, TOMRA's COM XRT sorter was used.

To set up/train the sorter and to parameterize the software, X-ray images were taken of the samples.

All results generated from this set of testwork were successful. All product fractions were upgraded in terms of copper, but most importantly all of the waste fractions were very low-grade in terms of copper. In the 6 sorted runs, the highest recorded waste sample was 0.37% Cu with grade as low as 0.09% Cu for Sample 3 in Run 5. Copper recovery values were 95% for all sample 2 and 3 runs. This success can be attributed to the well-liberated nature of the sulphide bearing particles.

Although other metals for the most part are considered too low-grade to be of interest, it is worth noting that the samples that did contain significant gold values also upgraded successfully. For example, in Run 5, a feed grade of 1.2ppm Au resulted in a product grade of 1.34 ppm Au and a waste grade of 0.12ppm Au. In general, the fines material naturally upgraded or had similar grade to the feed.

Ore-sorting Discussion

The use of ore sorting is being investigated by Peel for potential upgrading of any future feeds processed through a centrally located processing plant. Ore-sorting assists in the rejection of low grade and barren material. The benefits that can be derived from implementation of ore sorting depend on the context in which it is applied however the rationale for applying ore-sorting can include:

Upgrade the value of mineralization

Increase operational margins with relatively low ore-sorting operating costs

Rejection of waste at a size that is easier to handle and dispose of

Reduce tailing storage requirements and associated water demand and loss

Opportunity to reduce mining cut-off grades potentially increasing overall Resources and Reserves, or upgrading low grade stockpiles

Reduce capital for processing plants

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