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ASX Release19th December 2012
DEVELOPING A NEW RARE EARTH DISCOVERY
Peak Resources Limited Level 2, 46 Ord Street, West Perth, Western Australia 6005. PO Box 603, West Perth, Western Australia 6872. ASX: PEK OTCQX: PKRLY ACN 112 546 700 Telephone: +61 8 9200 5360 [email protected] www.peakresources.com.au
Non-Executive Chairman: Alastair Hunter Managing Director: Richard Beazley Technical Director: Dave Hammond Non-Executive Director: Jonathan Murray Company Secretary: Jeff Dawkins
Ngualla drilling program update and new high grade results
Peak Resources Limited (Peak; ASX: PEK; OTCQX: PKRLY), is pleased to provide an update on results received to date
from the 2012 drilling program and report additional new high grade drill results received from its 100%-owned Ngualla
Rare Earth Project in Tanzania.
The 2012 program of 13,600m of RC and diamond drilling in the priority area of the Southern Rare Earth Zone targeted for first
production is now complete and field activities have ceased until the end of the rains in April 2013.
The 2012 drilling will allow for the estimation of a large Measured Mineral Resource and provide the definition required for a
detailed mine plan and schedule for the project.
Drilling completed in 2012 defines a continuous zone of high grade mineralisation from surface defined by several holes
averaging over 5% REO down their entire length, extending to vertical depths of over 100m and including individual 2m
composite samples grading up to 9.53% REO. The high grade zone extends over a strike length of 350m and width of 100m or
more. This zone was not identified by drilling used to complete the maiden Mineral Resource in February 2012 and is expected
to increase the amount of high grade mineralisation within this part of the deposit.
Results received to date also extend the Southern Rare Earth Zone a further 300m to the south, and at depth in several areas.
Drill results highlights:
New assay results received from a further 25 drill holes of the 2012 program include:
NDD012: 140m at 4.66%REO* from surface to end of hole
NDD013: 160m at 5.06%REO from surface to end of hole
NDD017: 145.8m at 4.62%REO from 23.9m
NRC268: 134m at 4.45%REO from surface
NRC271: 80m at 4.40%REO from surface
Assay results for the remaining 13 holes are awaited and a revised Mineral Resource estimate is on schedule for completion
by the end of the first Quarter 2013.
*REO = Total Rare Earth Oxide. See Table 3 for drill intersection details and Table 2 for individual rare earth distribution.
2
ASX Release 19th December 2012
Background
The Ngualla Rare Earth Project in Tanzania is a recent discovery that ranks as the
fifth largest rare earth deposit* in the world outside of China. It is also the highest
grade of the large undeveloped deposits.
*See Table 2 for Mineral Resource classification details and Table 3 for breakdown of individual REO’s
Ngualla has several fundamental geological aspects that offer distinct advantages
for development over other rare earth projects. These include the large size of
the deposit, the outcropping, high grade mineralisation amenable to open cut
mining with low strip ratios, favourable mineralogy for processing and the lowest
uranium and thorium levels of any major rare earth deposit in the world.
These favourable aspects are reflected in the results of the scoping study and
preliminary economic assessment released to the ASX on 3rd December 2012,
which indicate very low capital and operating costs compared to other rare earth
projects.
The long mine life (+25 years), high net present value (US$1.57billion), high internal rate of return (53%) and a rapid payback
within three years represent an attractive investment proposition for the potential cornerstone investors and strategic partners
with whom Peak is currently in discussions.
Data from the drilling program just completed will support a revised Mineral Resource estimate and move more of the high
grade rare earth mineralisation in the priority area of the deposit targeted for first production from Inferred and Indicated into
the Measured Mineral Resource classification.
Further optimisation of the proven metallurgical process and the construction of a pilot plant will also contribute to the basis of
the feasibility studies. Production of high purity separated rare earth oxide products from solvent extraction test work by mid-
2013 for assessment by off take customers.
Figure 1: Maiden Mineral Resource block model coloured by REO % grade and drill holes (as at maiden Mineral Resource, 29th February 2012) on satellite image draped over topography, Ngualla Carbonatite.
Location of Peaks 100% owned Nguala Project, Tanzania
Block Model REO%
A 1 to 2%
A 2 to 3%
A >3%
! Drill holes A Bastnaesite Zone
OPEN OPEN
OPENPe
rimet
er of Carbonatite
Northern Zone
South West Alluvials
550m
Mt Mapuma
Bastnaesite Zone Southern Rare Earth Zone
Perim
eter
of C
arbo
natite
!Mbeya
Dar Es Salaam
UGANDA
KENYA
ZAMBIA
MALAWI
Lake Victoria
Indian Ocean
Lake Rukwa
Ngualla Project
Lake Nyasa
T A N Z A N I A
N
400km0 100 200
3
ASX Release 19th December 2012
9147
500
mN
9148
000
mN
9148
500
mN
482500 mE482000 mE
750m
D
D
DDDDDD
D
D
DDD
D
Southern Rare Earth Zone
South West Alluvial Zone
OPEN
OPENOPEN
OPEN
250m0 100
N
Drill holes max REO %:! 0 to 1! 1 to 2! 2 to 3 ! 3 to 5 ! >5! 2012 Drill program Completed hole, results awaited
Block Model REO%: A 3 to 4%A > 4%
Bastnaesite Zone
Bastnaesite Zone
NRC266
NRC267
NRC263
NRC262NRC252/253
NRC254
NRC265
NRC260
NRC259
NRC251
NRC257NRC258
NRC261
NRC270
NDD016
NRC264
NRC268
NRC255
NRC271
NDD012
NDD013
NDD017
NDD014
NRC256
NRC266
NRC267
NRC263
NRC262NRC252/253
NRC254
NRC265
NRC260
NRC259
NRC251
NRC257
NRC269
NRC258
NRC261
NRC270
NDD016
NRC264
NRC268
NRC255
NRC271
NDD012
NDD013
NDD017
NDD014
NRC256
140m @ 4.66% from surface to EOH
88.26m @ 5.21% from surface
145.8m @ 4.62% from 23.9m
62m @ 4.15% from surface
115m @ 3.27% from surface to EOH
106m @ 3.54% from surface
134m @ 4.45% from surface
160m @ 5.06% from surface to EOH
80m @ 4.40% from surface
Figure 2: Plan of new rare earth intersection highlights (new results hole numbers labelled) and drilling completed to date coloured by maximum down hole REO%, holes drilled and awaiting results and Ngualla Mineral Resource block model (+3% REO)
Drilling ProgramInfill and extension drilling that commenced in May 2012 in the priority area of the Southern Rare Earth Zone targeted for first
production has been successfully completed prior to the onset of rains for a total of 130 holes for 13,600m of reverse circulation
(RC) and diamond drilling.
Assay results from a further 25 drill holes of the 2012 drilling program have been received and include:
NDD012: 140m at 4.66%REO* from surface to end of holeincluding:
84m at 5.39%REO from surface
NDD013: 160m at 5.06%REO from surface to end of hole
NDD014: 155.5m at 3.71%REO from surface including:
88.26m at 5.21%REO from surface
NDD017: 145.8m at 4.62%REO from 23.9m
NRC255: 62m at 4.15%REO from surface
NRC256: 115m at 3.27%REO from surface
NRC264: 106m at 3.54%REO from surface
NRC268: 134m at 4.45%REO from surface
NRC271: 80m at 4.40%REO from surface
*REO = Total Rare Earth Oxide. See Table 3 for drill intersection details and Table 2 for individual rare earth distribution.
4
ASX Release 19th December 2012
9147
500
mN
9148
000
mN
9148
500
mN
482500 mE482000 mE
750m
D
D
DDDDDD
D
D
DDD
D
South West Alluvial Zone
OPEN
OPENOPEN
OPEN
250m0 100
N
Drill holes max REO %:! 0 to 1! 1 to 2! 2 to 3 ! 3 to 5 ! >5! 2012 Drill programA 2012 Drilling highlightsA 2011 Drilling highlights Completed hole, results awaited
Block Model REO%: A 3 to 4%A > 4%
Bastnaesite Zone
Bastnaesite Zone
Zone of deep continuoushigh-grade mineralisation
Extension ofmineralisation
Zone of deep continuoushigh-grade mineralisation
Extension ofmineralisation
NDD010
NRC245
NRC242
NRC183
NRC027
NRC185
NRC195
NRC228
NRC234
NAC545
NAC232NAC237
NRC168
NRC180
NRC176
151m @ 5.15% from surface to EOH
102m @ 5.51% from surface to EOH
140m @ 5.21% from surface to EOH
121m @ 4.86% from surface to EOH
16m @ 2.60% from 10m
46m @ 2.29% from 50m
127m @ 5.15% from surface to EOH
103m @ 5.25% from surface to EOH
160m @ 5.25% from surface to EOH
144m @ 5.14% from surface to EOH
112m @ 5.16% from surface to EOH
77.8m @ 4.53% from surface
31m @ 2.66% from surface to EOH
24m @ 2.43% from 26m
41m @ 2.96% from surface
50m @ 1.38% from surface
Southern Rare Earth Zone
Figure 3: Southern Rare Earth Zone drill plan showing new continuous zone of deep weathering containing high grade rare earth enrichment (2012 intersections shown in yellow) and 2012 intersections defining a 300m extension to the Southern Rare Earth Zone
The new results continue to confirm the robust nature and continuity of this enriched, near surface weathered mineralisation in
the heart of the bastnaesite zone targeted for first production.
Review of results from drilling completed in 2012 identifies a continuous zone of high grade mineralisation extending from
surface which contains several +5% ‘entire hole’ intersections to vertical depths of over 100m (Figure 3). This high grade zone
has a strike length of 350m and width of 100m or more.
The zone was not identified by the wider spaced drilling completed in 2011 that was used to complete the maiden Mineral
Resource of February 2012 and so it is expected to increase the amount of high grade mineralisation within this part of the
deposit.
The 2012 drilling results received to date also extend the Southern Rare Earth Zone a further 300m to the south, and at depth
in several areas through deeper drilling in the weathered zone (Figure 3).
Assay results for the remaining 13 holes are awaited and a revised Mineral Resource estimate following the JORC Code and
Guidelines is on schedule for completion by the end of the first Quarter 2013.
5
ASX Release 19th December 2012
This new resource model will include metallurgical recovery parameters and allow for the definition of a detailed mine plan and
production schedule for use in feasibility studies due to commence in early 2013.
Richard Beazley Managing Director
The information in this report that relates to Exploration Results is based on information compiled and/or reviewed by Dave Hammond who is a Member of The Australasian Institute of Mining and Metallurgy. Dave Hammond is the Technical Director of the Company. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dave Hammond consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Rob Spiers, who is a member of The Australasian Institute of Geoscientists. Rob Spiers is an employee of geological consultants H&S Consulting Pty Ltd. Rob Spiers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Rob Spiers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Enquiries:
Company Media
Richard Beazley Ben KnowlesManaging Director Walbrook Investor RelationsT: +61 (0) 8 920 5360 T: +61 (0) 8 6189 2230E: [email protected] M: +61 426 277 760W: www.peakresources.com.au E: [email protected]
Derek Gradwell, SVP, Natural ResourcesMZ Group – North AmericaT: +1 949 259 4995 E: [email protected] W: www.mzgroup.us
6
ASX Release 19th December 2012
Table1:SouthernRareEarthZone–diamondandRCrareearthdrillintersections,+1%REO
Selected intersections + 2% REO in italics and minimum 4m intersection width.
NDD* prefix = PQ3 diamond drill hole. NRC* prefix = RC drill hole
Hole ID East North Hole Depth (m) From (m) To (m) Interval (m) REO %
NDD012 482,396 9,148,049 140 0 140 140* 4.66(incl. 0 84 84 5.39)
NDD013 482,240 9,147,968 160 0 160 160* 5.06(incl. 0 81.77 81.77 5.81)
NDD014 482,258 9,147,912 160 0 155.5 155.5 3.71(incl. 0 88.26 88.26 5.21)
NDD016 482,155 9,147,741 67 10.7 43 32.3 4.2456.5 62 5.5 2.40
NDD017 482,160 9,147,705 180 0 20.4 20.4 2.5223.9 169.7 145.8 4.62
NRC251 482,280 9,148,241 74 0 70 70 2.67NRC252 482,324 9,148,241 37 0 33 33 3.16NRC253 482,321 9,148,241 51 0 26 26 2.15
29 51 22 2.04NRC254 482,360 9,148,241 24 0 20 20 2.98NRC255 482,356 9,148,246 120 0 62 62 4.15
66 98 32 1.59NRC256 482,398 9,148,241 115 0 115 115* 3.27NRC257 482,439 9,148,241 28 0 4 4 2.82
20 24 4 2.00NRC258 482,432 9,148,247 110 0 110 110* 2.89NRC259 482,248 9,148,415 73 10 14 4 2.56
38 42 4 1.2058 68 10 1.85
NRC260 482,212 9,148,451 120 0 75 75 2.3586 99 13 1.88
NRC261 482,079 9,148,156 120 0 32 32 4.5636 74 38 2.9584 88 4 1.1794 106 12 1.34110 114 4 1.04
NRC262 481,954 9,148,237 120 0 4 4 2.9014 36 22 1.8942 78 36 4.0596 102 6 1.55106 110 4 2.13
NRC263 481,997 9,148,246 120 0 30 30 2.4654 64 10 1.32108 118 10 1.39
NRC264 482,036 9,148,284 120 0 106 106 3.54NRC265 482,076 9,148,316 155 0 20 20 1.56
28 155 127* 3.37NRC266 482,036 9,148,321 120 0 26 26 4.18
30 34 4 2.1538 44 6 1.3248 120 72* 3.12
NRC267 482,122 9,148,280 133 0 4 4 2.498 14 6 1.5220 130 110 2.17
NRC268 482,098 9,148,107 135 0 134 134 4.45(incl. 0 28 28 5.23and 38 64 26 5.73and 68 106 38 5.25)
NRC270 482,283 9,148,101 180 0 32 32 2.5838 180 142* 2.61
NRC271 482,200 9,148,102 83 0 80 80 4.40Note: REO = total rare earth oxides including yttrium. See Table 2 for relative distribution of individual rare earth oxides. Samples are 2m composites from angled -60° west RC drilling except for NDD** holes which are PQ diamond from surface and RC holes NRC260 and NRC268 which are drilled at 90° azimuth (east). NDD014 was drilled at 0° azimuth (north). Intersections calculated using 1% REO lower cut and a maximum of 2m internal dilution. Analysis by SGS laboratory, Perth, by 4 acid digest and ICP or XRF. Co-ordinate system is Arc 1960 UTM zone 36S. * = hole ended in mineralisation.
7
ASX Release 19th December 2012
Table2:ClassificationofMineralResourcesfortheNguallaRareEarthProject,1.0%and3.0%REOcut-offgrades(February2012).
Lower cut – off grade
Resource Category
Tonnage (Mt)
REO (%)*
Contained REO tonnes
1.0%REO
Measured 29 2.61 750,000
Indicated 69 2.43 1,700,000
Inferred 72 1.92 1,400,000
TOTal 170 2.24 3,800,000
3.0%REO
Measured 11 3.99 430,000
Indicated 21 4.09 850,000
Inferred 8.7 4.11 360,000
TOTal 40 4.07 1,600,000
*REO (%) includes all the lanthanide elements plus yttrium oxides. Figures above may not sum precisely due to rounding. The number of significant figures does not imply an added level of precision.
Table3-Relativecomponentsofindividualrareearthelementoxides(includingyttrium)asapercentageoftotalREOfortheNguallaSouthernRareEarthandNorthernZones(>1%REO).
OxiDE %OFTOTalREO*
lig
ht
R
are
Ear
ths
Lanthanum La2O3 27.1
Cerium CeO2 48.3
Praseodymium Pr6O11 4.74
• Neodymium Nd2O3 16.3
Samarium Sm2O3 1.65
Hea
vy
Rar
eE
arth
s
• Europium Eu2O3 0.35
Gadolinium Gd2O3 0.78
• Terbium Tb4O7 0.07
• Dysprosium Dy2O3 0.17
Holmium Ho2O3 0.02
Erbium Er2O3 0.06
Thulium Tm2O3 0.00
Ytterbium Yb2O3 0.02
Lutetium Lu2O3 0.00
Other • Yttrium Y2O3 0.52
Total% 100
(*= Mineral Resource block model at 1% REO cut). Source: Arafura Website and *= Ngualla Mineral Resource >1% REO
The blue markers (•) denote the five “critical rare earths”, which are predicted to be in undersupply in the years ahead and predicted
to command significantly higher value than other rare earths. (US DoE, ‘Critical Materials Strategy’ report, December 2011).
The critical rare earths contribute the majority of the value from Ngualla at 56% of the in ground value. Of these, neodymium is the
main single rare earth value driver, contributing 34%, (relative rare earth oxide prices: Metal Pages, 11th September 2012).