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Peel Mining retains speculative buy from Patersons as exploration news flow continues

Published: 23:50 12 Aug 2018 EDT

Peel mining worker
Multiple projects with potential to grow

Peel Mining Ltd’s (ASX:PEX) past three months have been dominated by a succession of drill results from the Wagga Tank / Southern Nights area in the Cobar basin of New South Wales.

Perth-based financial services firm Patersons is confident that there is more exploration success awaiting within Peel’s 4000 square kilometres of tenure in the Cobar region.

Patersons has retained its Speculative Buy rating for Peel. The following is an extract from Patersons’ research note:

Wagga Tank and Southern Nights: one large system?

The past three months have been dominated by a succession of drill results from the Wagga Tank / Southern Nights area.

On 7 May 2018, drill hole WTRCDD123 assays results were released.

READ: Peel Mining’s drilling reveals depth potential of zinc-rich polymetallic project in Cobar region

WTRCDD123 returned 14.45 metres grading 2.43% copper, 2.67 g/t gold, 123 g/t silver, 2.58% zinc, 0.87% lead from 435.55 metres.

Regional potential map of the Wagga Tank area with magnetics backdrop

WTRCDD123 was the missing link in the theory of Wagga Tank evolution.

From two prospects on their own, located 800 metres apart, hole WTRCDD123 essentially confirmed one large 2 kilometres long mineralised system.

Fenceline – The Bird: another mineralised system with potential to grow.

Fenceline is a prospect where base metals mineralisation similar to Wagga Tank is present. Historical drilling following surface sampling had returned lead and zinc results.

IP surveys conducted in the area show that Fenceline coincides with a chargeable IP anomaly. This anomaly extends to another prospect named “The Bird”.

Mallee Bull: Peel Mining 50% - CBH Resources 50% JV

Peek discovered the Mallee Bull deposit in 2011, drilled it and in 2017 released an updated inferred resource containing 119,000 tonnes of copper, 6.6 million ounces silver, 83,000 ounces gold, 38,000 tonnes lead and 38,000 tonnes zinc (175,000 tonnes copper equivalent).

Mallee Bull is a stack of lenses and breccia zones with short strike length, long depth extent, and metals zonation.

READ: Peel Mining returns strong polymetallic assays from Mallee Bull deposit in NSW

To make the whole Mallee Bull story better, Peel purchased the 20,000 acres of land surrounding the deposit.

This solves all access issues should the project become a mine. We can realistically see Mallee Bull evolving into a mine in the near future given the demand of ore from Peel’s JV partner and the quality of the project.

Cobar Superbasin JOGMEC earn-in

The Cobar Superbasin project is subject to a memorandum of agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC), signed in 2014.

JOGMEC has practically completed its earn-in of 50% of the project by funding exploration activities for the past three and a half years, although Peel retains 100% until JOGMEC elects to take up its interest.

Most of the exploration efforts were focussed on the Wirlong Copper prospect, another discovery by Peel. Wirlong is a large and deep high-grade hydrothermal copper system

Wirlong chalcopyrite mineralisation

Investment case

The best way to describe Peel is successful exploration company. And we all know that in the world of mineral exploration, success is not that common.

We can see now that Mallee Bull is getting closer and closer to mining. Wagga Tank – Southern Nights is evolving into a large high-grade deposit.

READ: Peel Mining continues to receive positive polymetallic assays from New South Wales

Fenceline (with The bird in tow) starts shaping up as another high-grade base metals story and even if we don’t know what is going to happen with JOGMEC and Wirlong, the project is still a high-grade copper story and Peel owns at least 50% of it.

We are confident that there is more exploration success awaiting within the 4000 square kilometres of tenure in the Cobar region and that the new projects might deliver more exciting news in the near future.

Disclosure: Patersons Securities Limited have acted on behalf of Peel Mining Limited within the past year and have received fees for these services.

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