For Personal Use Only Use Personal for 53M at 2.37% Rare Earth Oxide (“REO”)
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Quarterly Activities Report and Appendix 5B March 2017 HIGHLIGHTS: NGUALLA PROJECT BANKABLE FEASIBILITY STUDY • Post Quarter end, Peak was pleased to report the results of the Bankable Feasibility Study* (the “Study” or “BFS”) for the Ngualla Rare Earth Project in Tanzania and the proposed Tees Valley refinery in the UK. Developing the Ngualla • The BFS confirms that Ngualla has the potential to become one of the lowest cost Project into an and highest quality rare earth projects worldwide after delivering further significant operating cost savings. Key highlights include: – ethically sustainable – 30 year life low operating cost open pit, processing plant and refinery project to – long term deliver US $104 million cashflow per annum (post tax and royalties) – high quality supplier – Annual operating costs reduced by US $35 million per annum, or 30%, from PFS of choice to the global high technology rare – Pre tax NPV10 of US $676 million and pre tax IRR of 25% – Production aligned to magnet metal demand through cerium rejection leach earth market process, with 90% of Ngualla’s future revenue to be derived from neodymium and praseodymium (“NdPr”) MOUNTAIN PASS DIRECTORS • Post Quarter end on 26 April Peak was pleased to announce the Company’s participation Non-Executive Chairman: in a Consortium that has the aim of acquiring and re-starting the Mountain Pass rare earth Peter Harold operation in California, USA. Managing Director: ORE RESERVE ESTIMATE Darren Townsend • Announced simultaneously with the BFS, a revised Ore Reserve estimate* confirms Technical Director: Ngualla as one of the highest grade NdPr rare earth deposits in the world. Dave Hammond • The Ore Reserve estimate is high confidence with 91% in the highest Proved JORC 2012 Non-Executive Directors: category. Jonathan Murray NdPr PRICES RISE John Jetter • NdPr prices had an exceptional start to 2017 after several years of decline, with a Company Secretary: 9% rise after the largest producer – the Chinese company Northern Rare Earth Group Graeme Scott (Baotou) – announced and implemented three consecutive price increases from February. CORPORATE ENVIRONMENTAL CERTIFICATE RECEIVED FOR NGUALLA DETAILS • The Environmental Certificate for the Ngualla Rare Earth Project in Tanzania was granted in March following the successful completion of wide ranging environmental and social AS AT 31 MARCH 2017: studies and stakeholder engagement. The Certificate is a pre-requisite for the granting of a mining licence and is a major milestone in the permitting of the project. Ordinary Shares on issue: 477.5m WIDE ZONES OF HIGH GRADE FLUORSPAR AND RARE EARTH 52 week range: MINERALISATION DISCOVERED AT NGUALLA 4.2c – 13.0c • Continuous wide zones of high grade fluorspar up to 78m at 37% CaF2 were returned from Market Cap: surface trench sampling results received in February from a previously untested area of $46.3m (at 9.7c) the Ngualla Carbonatite complex. • Trenching also identified a new area of rare earth mineralisation with widths of up to ASX: PEK For personal use only 53m at 2.37% rare earth oxide (“REO”). BARITE INCLUDED IN NGUALLA MINERAL RESOURCE ESTIMATE Peak Resources Limited Ground Floor, 5 Ord Street, • The potential for a future barite by-product from Ngualla on completion of further studies West Perth, Western Australia 6005. lead to the re-issue of the Mineral Resource estimate to include barite, with no change to PO Box 603, West Perth 6872. rare earth estimates. ASX: PEK ACN: 112 546 700 * The BFS and Ore Reserve estimate are detailed in the ASX Announcements “BFS positions Ngualla as one of the world’s lowest Telephone: +61 8 9200 5360 cost rare earth projects” and “Ngualla Rare Earth Project - Updated Ore Reserve” of 12 April 2017. The material assumptions and [email protected] estimates in these studies have not changed and continue to apply. www.peakresources.com.au ENABLING LOW CARBON TECHNOLOGIES Quarterly Activities Report March 2017 Peak Resources Limited... ACHIEVING MAJOR MILESTONES IN 2017: BFS delivered on schedule... …demonstrating one of the world’s highest quality, low cost and long life NdPr projects 90% of Ngualla’s future revenue to be from NdPr Annual cash flow of US $104 million over a 30 year project life Revised high confidence Ore Reserve estimate completed Project permitting advanced with the grant of an Environmental Certificate for Ngualla Potential for additional commodities from Ngualla highlighted by the discovery of wide new zones of fluorspar and new style of rare earth mineralisation as well as the inclusion of barite in the Mineral Resource estimates AND AT THE RIGHT TIME NdPr rises 9% from February 2017 as China increases pricing Demand for NdPr widely predicted to grow further due to rising demand from electric and hybrid vehicles Increasing recognition that NdPr is linked to the increasing demand for battery raw materials lithium, graphite and cobalt through its use in the permanent magnet motors that are the preferred powertrain technology for electric and hybrid vehicles. Peak is perfectly positioned with the rising market for NdPr driven by e-mobility and other low carbon technologies. For personal use only Ngualla is a large, high quality project with a comprehensive BFS showing lowest quartile Capex and Opex in this exciting sector. PEAK RESOURCES: NUMBER 1 AMONGST ITS PEERS 2 ENABLING LOW CARBON TECHNOLOGIES Quarterly Activities Report March 2017 BANKABLE FEASIBILITY STUDY Post Quarter end, on 12 April 2017, the Company was pleased to report the results of the Bankable Feasibility Study for its 75% owned Ngualla Rare Earth Project. The Study components consist of a mine and multi-stage processing plant on-site at Ngualla in Tanzania and a proposed refinery in Tees Valley in the UK. The BFS is based on detailed engineering studies and extensive pilot planting of the three stage extraction process which was successfully demonstrated using bulk samples of Ngualla’s unique bastnaesite mineralisation. The in depth Study was also guided by real world experience of Peak’s team of rare earth industry mining, processing and marketing specialists in conjunction with global engineering firm Amec Foster Wheeler. The BFS has delivered significant reductions in operating costs and facilitated access to higher value markets as compared to the Company’s project update ASX announcement “Ngualla Project Study delivers substantial Capex and Opex savings” dated 16 March 2016. The results of the BFS confirm that the Ngualla Project has the potential to become one of the lowest cost and highest quality rare earth projects worldwide. Final products from the project planned Relative value contributors to be produced annually are: 2% 7% 2,420 tonnes of neodymium Ce Carbonate La Carbonate and praseodymium oxide 1% (2N min 75% Nd2O3) Mid-Heavy Carbonate 6,940 tonnes lanthanum carbonate (equivalent to 3,650tpa oxide) 3,005 tonnes cerium carbonate (equivalent to 1,660tpa oxide) 90% NdPr Mixed Oxide 530 tonnes of mixed SEG and Heavy rare earth carbonate (equivalent to 280tpa oxide) Figure 1: Relative value* contributors by product Neodymium and praseodymium type and constituent REO’s. * Relative value of contained REO equivalent product mix based on are expected to generate 90% prices assumed in the BFS for individual rare earth oxide of Ngualla’s future revenue For personal use only 3 ENABLING LOW CARBON TECHNOLOGIES Quarterly Activities Report March 2017 PHYSICALS DRIVE NGUALLA’S FAVOURABLE ECONOMICS Ngualla’s low operating costs and favourable project economics are driven by a unique combination of qualities including the high NdPr grade and advantageous mineralogy of the rare earth deposit itself, together with the development of an extraction and purification process that targets the higher value rare earths whilst rejecting impurities and the majority of lower value cerium. The location of the refinery in proximity to sources of inexpensive bulk reagents and existing utilities is also a key driver of lower Opex. With the alignment of products and value drivers to the high demand magnet metal market the project is in a favourable position in terms of marketing and future demand for its products, which will represent less than 5% of total world demand. NGUALLA MINE AND NGUALLA ORE BODY PROCESS PLANT TEES VALLEY REFINERY • High Grade – 4.80% • Soft, free dig Ore • Selective leach process • Large deposit • Simple, small open pit mine • Low strength acids - no acid roast • Bastnaesite mineralogy • Low Waste:Ore strip ratio (1:77) • Modular plastic tanks • Mineralisation from surface • Zero offsite discharge • Small SX separation plant • Very low U and Th (14 and 55ppm) + water recycle • Bulk, low-cost reagents available • Thick blanket morphology • High Grade (45% REO), • Pre-existing utilities • Low in reagent consuming minerals low mass concentrate • Existing waste • Proven, piloted process management facilities Low Cost Project Long life - 30 years Ethically sustainable High value, separated Rare Earth Products NdPr product drives 90% of Revenue Aligned to expanding Permanent Magnet Market Figure 2: A unique combination of physical attributes and selected processes drive Ngualla low costs and ethically sustainable credentials 1 2 3 3 4 For personal use only 5 Figure 3: A portion of the Ngualla multi stage processing plant: 1. SAG & ball milling. 2. Barite pre-float circuit. 3. Rare earth flotation circuits. 4. Regrind circuit. 5. Concentrate & tailings de-watering 4 ENABLING LOW CARBON TECHNOLOGIES Quarterly Activities Report March 2017