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Developing a New Rare Earth Discovery
Ngualla Project Tanzania
INVESTOR PRESENTATION
PRESENTED BY RICHARD BEAZLEY MANAGING DIRECTOR PEAK RESOURCES
Ngualla Rare Earth Project September 2012
2
DisclaimerThe information in this document has been prepared as at 29th August, 2012. The document is for information purposes only and has been extracted entirely from documents or materials publicly filed with the Australian Stock Exchange and/or the Australian Securities and Investments Commission. This presentation is not an offer or invitation to subscribe for or purchase securities in the Company. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions.
Certain statements contained in this document constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward looking information under the provisions of Canadian provincial securities laws. When used in this document, the words “anticipate”, “expect”, “estimate”, “forecast”, “will”, “planned”, and similar expressions are intended to identify forward-looking statements or information. Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production, optimization efforts and sales; estimates of mine life; estimates of future internal rates of return, mining costs, cash costs, mine site costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company’s mine sites and statements and information regarding the sufficiency of the Company’s cash resources. Such statements and information reflect the Company’s views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; community protests; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company’s stock price; and risks associated with the Company’s byproduct metal derivative strategies. For a more detailed discussion of such risks and other factors that may affect the Company’s ability to achieve the expectations set forth in the forward looking statements contained in this document, see the Company’s Annual Report for the year ended 30 June 2011, as well as the Company’s other filings with the Australian Securities Exchange and the U.S. Securities and Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information.
competent Person StatementThe information in this presentation relates to Exploration Results based on information reviewed by David Hammond who is a Member of the Australasian Institute of Mining and Metallurgy, is also a Director and full time employee of the Company. He has sufficient experience which is relevant to the 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’. David Hammond consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information in this presentation that relates to Metallurgical Test Work Results based on information compiled and / or reviewed by Gavin Beer who is a Member of The Australasian Institute of Mining and Metallurgy. Gavin Beer is a Consulting Metallurgist with sufficient experience relevant to the activity which he is undertaking to be recognized as competent to compile and report such information. Gavin Beer consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Ngualla Rare Earth Project September 2012
3
Introduction
Moving from Developer to Miner of rare earths
• South West tanzania – 3rd largest producer of gold in africa
• Maiden resource Feb 2012 - 5th largest rare earth resource, and the highest grade of the seven largest deposits outside of china
• just completed a $7.5m capital raising
• Why we will succeed:
• Projecteconomics,and
• Timelinetoproduction
• Where we are:
• Resourcedrilling
• Scopingstudy
• Metallurgicaldevelopment
!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
Ngualla Rare Earth Project September 2012
4
The Team
Alastair Hunter Non-executive Chairman
MrHunterhasmorethan38years’experienceinthemanagementofresourceprojectsinaustralia,africaandnorthamerica.Hehasplayedasignificantroleinanumberofgoldandbasemetalsdiscoveries.MrHunterwasformerlyadirectorofPeninsularMineralsnL,andaformermanagingdirectorofMatlockMiningnLandangloResourcesnL.
MrHunterisresponsibleforprovidingstrategicadvicetotheexecutiveontheGroup’sTanzaniaexplorationprojectsandcoordinatingtheGroup’srelationshipwithzariExplorationLimited.
Dave Hammond Technical Director
WithanMScinMineralExplorationfromtheRoyalSchoolofMines,London,DaveHammondisageologistwithover23yearsoftechnicalandmanagementexperienceinafricaandaustralia,inarangeofcommoditiesandgeologicaldepositstyles.Mr.HammondwaspreviouslyExplorationManagerwithDeGreyMiningLimited,workingonprojectsinthePilbaraandnewprojectacquisitionsglobally.
HispreviousexperiencealsoincludesExplorationManagerforSonsofGwaliainthenEGoldfieldsofWesternaustraliaandProjectGeologistwithBillitoninSouthafricaandzambia.
Richard Beazley Managing Director
MrBeazleyisaminingengineerwithmorethan25years’experienceintheresourcessectorwhoholdsaBachelorofEngineering(Mining)fromtheUniversityofnewSouthWalesandaMasterofBusinessadministration.
MrBeazleyhaspreviouslyheldmanagementandexecutiveroleswitharangeofcompaniesoperatingthroughoutaustraliaincludingConsolidatedMinerals,St.BarbaraLimited,adityaBirlaMineralsLimited,HenryWalkerEltinContractingPtyLtdandSonsofGwalia.
Jonathan Murray Non-Executive Director
Mr.MurrayisapartneratindependentcorporatelawfirmSteinpreisPaganin,basedinPerth,Westernaustralia.Hespecializesinequitycapitalraisings,allformsofacquisitionsanddivestments,governanceandcorporatecompliance.
Mr.MurraygraduatedfromMurdochUniversityin1996withaBachelorofLawandCommerce(majoringinaccounting).HeisalsoamemberofFinSia(formerlytheSecuritiesinstituteofaustralia).Mr.Murrayiscurrentlyanon-executivedirectorofHannansRewardnL,LagunaResourcesnLandKalgoorlieMiningCompanyLimited.
Ngualla Rare Earth Project September 2012
5
The ResourceVirgin discovery – august 2010 – 26,700m drilling for the resource
Max DH REO %:
A 1 to 2%
A 2 to 3%
A 3 to 5%
A >5%
Max DH REO %:! <1%! 1 – 2%! 2 – 3%! 3 – 5%! > 5%
OPEN
OPENOPEN
Perim
ete
r of Carbonatite
550m
Mt Mapuma
SW Alluvials
Northern Zone
Southern Rare Earth Zone
Ngualla Rare Earth Project September 2012
6
Colluvium
100m
1600
1500
1400
Southern Rare Earth Zone (SREZ)
Fresh1.5 to 2% REO
1 to 2% REO
>2% REO
Weathered>4% REO
Ngualla Hill
Ultramafic Carbonatite
Bastnaesite Zone
(Bastnaesite and Monazite)
Monazite Zone
SW Alluvials
200m1000 50
600mREO mineralised carbonatite core
Fresh Fresh
Fresh
The Resource• ThenguallaMineralResourceat
1.0%REOcut-offgradeis170Mt at 2.24% reo containing 3.8Mt reo
• at3.0%REOcut-offgradeitis
40.0Mt @ 4.07% reo containing 1.6Mt reo
ReferappendixB
• Mainmineralisedzones:
–SWalluvials
–SREzFreshrock
– SreZ Weathered rock: –littleadditionalacidconsumingrock –nodeleteriousminerals –veryminoruraniumandthorium –noothereconomicminerals
Ngualla Rare Earth Project September 2012
7
The Ore Body and Miningthe consistent blanket of mineralisation at surface, on a hill suggests a shallow open pit with low strip ratios and low cost mining
ThenguallaRareEarthProject,BlockModel
• at10ktpacontainedREproducts,theminingratewillonlyhavetobeintheorderof350ktoreminedeveryyear
• itisprobablethatthestripratiointhefirstseveralyearswillbeeffectively0:1–nowastemining
Ngualla Hill
150m
700m
REO %:
A >4%
A 3 to 4%
A 2 to 3%
A 1 to 2%
SW Alluvials
OPEN
OPEN
OPEN
OPEN
Southern Rare Earth Zone
Ngualla Rare Earth Project September 2012
8
Global top 5 Rare Earth Deposit• nguallaisalarge,highgrade,globallysignificantrareearthdeposit
• itisthehighestgradeofthesevenlargestdepositsoutsideofChina
Cont
aine
d RE
O (M
t)
rare earth Project comparisons Date: 3 April 2012 Source: Technology Metals Research and Company filings
9
8
7
6
5
4
3
2
1
0
12
10
8
6
4
2
0
REO
Grad
e (%
)
REO grade %
Contained REO (Mt)
300m Depth to base of resource
375m
300m
240m
600m
155m
155m
450m
126m
Niobec
Kvane
fjeld
Necha
lacho
Eldor
Nguall
a (Bulk
)
Montvi
el
Strang
e Lak
e
Mounta
in Pa
ss
Nguall
a (High
Grade)
Mount
Weld
Zand
korps
drift
Nolan’s
Bore
Bear L
odge
Dubbo
Nora Karr
Wigu Hill
Ngualla Rare Earth Project September 2012
9
2.0
1.5
1.0
0.5
0
Aver
age
CREO
Gra
de (%
)
Average REO Grade (%)
Niobec
Kvanefjeld
Nechalacho
Eldor
Ngualla (Bulk)
Montviel
Strange Lake
Mountain Pass
Ngualla (High Grade)
Mount Weld
Zandkorpsdrift
Nolan’s Bore
Bear Lodge
Nora KarrWigu Hill
2 64 8 10 120
Bubble size relative to contained REO
Projects under Commissioning
Global top 5 Rare Earth Deposit – “Grade is King”• Criticalrareearthshavengualla‘outsidethepack’
rare earth Project comparisons Date: 3 april 2012 Source: technology Metals research
Ngualla Rare Earth Project September 2012
10
The rare earth market looking ahead – “Meeting Demand”
• growth markets in renewable energy and advanced technologies
• current re market 120kt pa by 2020 the market will expand to 215kt pa
• china controls 97% of raw material supply through to end products
• uSa/japan/South Korea/eu want an independent re supply chain to reduce strategic risk
• china recently has stated that they will be net importers by 2014
Clean energyEnergy efficiencyDigital technology
Source:iMCOa,Roskill
Ngualla Rare Earth Project September 2012
11
The Critical Rare Earths
Key Market Focus
Five rare earths are forecast to be in critical undersupply: • Neodymium• Dysprosium• europium• terbium• Yttrium
54% of the in-ground value at Ngualla is from these five critical rare earths.
Neodymium is the major contributor at 35% of the in-ground value.
Other 1%
Sm 1%
Y 1%
Gd 2%
Dy 3%
Nd 35%
Ce 20%
Eu 15% La 11%
Pr 10%
nguallain-groundvalueRE%
HE vehicles and wind turbines
Magnetsuseneodymium,PraseodymiumandDysprosiumforpermanentREmagnetsincleanenergyapplicationssuchasHEvehiclesandwindturbines.Magnetsrepresent30%oftheREmarketandgrowingat10-15%pa.
Lighting and screens
PhosphorsprovideagrowingmarketforEuropium,YttriumandGadoliniumwhichexhibitphosphorescence,emittinglightonexposuretoanexternalsourceofenergysuchaselectronsorultravioletlight.Demandinthissectorisforecasttobe6%-8%pa.
Polishing powders
PolishingPowdersuseCeriumoxide-basedpowdersareusedtocreateafinishedsurfaceforglassproductsandelectricalcomponentsincludingflatglass,opticalglass,liquidcrystaldisplays(LCDs),siliconwafersurfacesforintegratedcircuitstonameafew.Maximumforecastgrowthrateof5%pa.
Catalytic converters
CatalystsutilisingbothLanthanumandCeriumareusedinautomotivecatalyticconverters(autocatalysts)toreduceharmfulemissionsinexhaustgasesandfluidcatalyticcracking(FCC)catalyststoseparatepetroleumproductssuchaspetrol/gasolineanddieselfromcrudeoil.Catalystshavea16%shareoftheREmarketwithaforecastgrowthrateof4%pa.
Source:Roskillandarafura
Ngualla Rare Earth Project September 2012
12
The Metallurgy• Developed a low cost sulphuric acid leach process for SreZ – Proof of concept
• Developed a Process Flow Sheet
• Mixed re carbonate concentrate at 50.3% reo
• an overall process recovery of 87% was achieved
• Processoptimizationwillbecompletedinthethirdquarterof2012
• Orefeedmetallurgicalvariabilitycompleteearlyinquarterfourof2012
• nowfocussingonseparationtoproduceREproducts
• Commencepilotplantdesignandconstruction
• Pilotplantoperationandproductionofrareearthconcentratesforevaluationbyofftakecustomers
Simplified Sulphuric acid leach test Work
3.6% REO
LeachFeed
65% CeO 50% REO
Sulphuric Acid Leach
Primary Precipitation
Cerium Removal Purification Final
Precipitation
Cerium Concentrate
Rare Earth Carbonate Product
Ngualla Rare Earth Project September 2012
13
The Schedule to Rare Earth Production - Hitting milestones
Ngualla Project Development Schedule
Mile
ston
esRE
Exp
lora
tion
&
Reso
urce
Dril
ling
Pote
ntia
l Pat
hway
to
RE
Prod
uctio
n
EXPLORER MINERDEVELOPER
2010 2011 2012 2013 2014
Commenced Metallurgical Characterisation Discovery Supply Agreements Zari JV Aquisition
Maiden Resource Statement Production Start up Metallurgical Flow Sheet Development
Pilot Plant Trials commencing
Completion of acid leach test work Completion of separation test work
Exploration Drilling
Resource Definition & Extension
Scoping Study
Pre-Feasibility Study
Definitive Feasibility Study
Maiden Resource Drilling
Geotech - Extension
2015 2016
Construction
Ngualla Rare Earth Project September 2012
14
Ngualla – a summary• operating environment – infrastructure close by, country mining savvy, practical
mining legislation
• 5th largest rare earth resource, and the highest grade of the seven largest deposits outside of china
• Project economics:
• Tonnes–minelife
• Grade–verystrongcompetitiveadvantage
• Rareearthelementmix–54%criticalrareearths
• Metallurgy–‘relatively’simpleacidleach
• Lowcapexandlowopex–bottomquartileofcostofproduction
• Timelinetoproduction–early2016
• Where we are:
• Metallurgyprocessflowsheetandproofofconcept • Hittingmilestones–onschedule,onbudget–thedriversforcontinuedsuccess
Peak Resources Limited
Head Office: Level 2, 46 Ord St, West Perth Western Australia 6005
Ph: +61 8 9200 5360 Fax:+61 8 9226 3831
ASX Code: PEK OTCQX: PKRLY
Richard Beazley Managing Director [email protected]
David Hammond Technical Director [email protected]
Alastair Hunter Non-executive Chairman [email protected]
Jonathan Murray Non-executive Director
www.peakresources.com.au
Developing a New Rare Earth Discovery
NGUALLA PROJECT
15
Ngualla Rare Earth Project September 2012
16
Appendix A – Corporate DetailsaSX: PEK otcQX:PKRLY
ordinary Shares on Issue:207.1m
cash at 1st august 2012: $2m
52 week range:$0.16-$0.69
Share Price (01July2010–1staugust2012)
Board and Senior Management
alastair Hunter non-executiveChairmanrichard Beazley ManagingDirectorDave Hammond TechnicalDirectorjonathan Murray non-executiveDirectorFarlee Walker CFO/CompanySecretarylucas Stanfield ChiefDevelopmentOfficerBrian lloyd ExplorationManager(Tanz)
Consultants
resource consultants:Hellman&SchofieldProject managers:EmersonStewartMetallurgical & mineral processing: Hatch;Met-ChemConsultingMineral processing test laboratory:amdel&nagromlegal representation:australia:SteinepreisPaganin
Tanzania:aKOLawauditor:DeloitteToucheTohmatsu
$0.89 –
$0.79 –
$0.69 –
$0.59 –
$0.49 –
$0.39 –
$0.29 –
$0.19 –
$0.09 –18 NOV 2010 07 APR 2011 25 AUG 2011 12 JAN 2012 31 MAY 201201 JUlY 2010
Market cap: $36.2m(at$0.175)
options outstanding: 11,191,519
liquidity:0.4millionsharesperday(av.over3mths)
IPo Date: 29november2006
Note:Peakhascompleteda$5.5mprivateplacementandofferingaSPPcappedat$2.0mtoshareholderson29thJuly2012.ThiswillwashthroughinSeptember.
Ngualla Rare Earth Project September 2012
17
Appendix B – Maiden JORC Resource
TheinformationinthisreportthatrelatestoMineralResourcesisbasedoninformationcompiledbyRobSpiers,whoisamemberofTheaustralasianinstituteofGeoscientists.RobSpiersisanemployeeofgeologicalconsultantsHellmanandSchofieldPtyLtd.RobSpiershassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitywhichheisundertakingtoqualifyasaCompetentPersonasdefinedinthe2004Editionofthe‘australasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves’.RobSpiersconsentstotheinclusioninthereportofthemattersbasedonhisinformationintheformandcontextinwhichitappears.
• Ngualla Mineral resource – 1.0% and 3.0% cut off grades
classification of Mineral resources for the Ngualla rare earth Project, 1.0% and 3.0% reo cut-off grades.
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(%)includesallthelanthanideelementsplusyttriumoxides.
Ngualla Rare Earth Project September 2012
18
Ngualla Project
Lake Rukwa
147km
56km
B363
B345
B6
A104
Dar Es SalaamPort 750km
MbeyaN
50km0 10 25
Appendix C – Location and Infrastructure
•Tanzania–anestablishedminingculture
•Thirdlargestgoldproducerinafrica
•accesstotransportation
•Onsitepowerrequired
•Goodpotentialforgroundwater
!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
Ngualla Rare Earth Project September 2012
19
Appendix D – 2012 Development ProgramM
ilest
ones
Expl
orat
ion
&
Reso
urce
Dril
ling
Tech
nica
l Dev
elop
men
t Pr
ogra
m
Engage engineering group for Scoping Study Acid Leach process development Drilling contractor on site
Drill assay results with regular updates to follow MET results updates
3rd Year Drill Program
Scoping Study
Metallurgical Test Work
Resource Upgrade Drilling 15,000m SREZ
Resource Extension Drilling 4,000m SREZ
Northern Zone Maiden Resource Drilling 11,000m (Nb-Ta, P,RE)
Diamond Drilling 2,000m Southern & Northern Zone
1St Quarter 3rD Quarter2ND Quarter 4tH Quarter
• Risk analysis, permitting, licencing, logistics, supply, infrastructure, sustainability, social licence• Mining, rehabilitation• Market research – end users =>> direct link to metallurgical test work and studies
• Direct acid leach weathered SREZ – further samples to improve validation of ore body representation, optimisation studies for leaching• Precipitation and solvent extraction studies for weathered SREZ• Beneficiation and flotation studies on fresh rock• Initial sighter test work on Northern Niobium – Tantalum, Phosphate REO Zone• Development of acid leach process flowsheet plus alternatives
2012
DeVeloPereXPlorer