PEAK RESOURCES LIMITED (ASX: PEK) Major Rare Earth Project advancing rapidly 22 July 2013 Peak Resources has defined a world class Rare Earth project that we think has outstanding strategic appeal. Rare Earths are critical metals Recommendation in modern technology and China dominates world supply. There has been a scramble around the world to develop new independent Spec. BUY suppliers. We believe Peak‘s Ngualla project in Tanzania is one of the standout projects currently identified. Major Rare Earth discovery just gets better Company Data The Ngualla deposit has a total resource reported of 195 million tonnes Market Cap $38m grading 2.26%REO with a high grade core zone of 42 million tonnes grading Shares on issue 275.6m 4.19% REO. Ngualla has become progressively better since the first holes were drilled in mid-2010. The identification of a large resource was a good start. Price $0.14 Then the high grade zone with low uranium and thorium content suggested Sector Materials real commercial potential. More recently the definition of a central high grade 12mth Price Range $0.25-$0.11 oxide cap of 21.6 million tonnes grading 4.54%REO, which is acid leachable and could be easily mined in a modest open pit, confirms this project as a standout. Scoping Study highly encouraging Extensive metallurgical testing and flow sheet development demonstrated that Analyst Rex Adams the mineralisation can be beneficiated by flotation and magnetic separation, Authorisation Brent Potts before a simple low temperature, atmospheric pressure sulphuric acid leach to produce an intermediate Rare Earth carbonate or progressing to separation of a number of high purity RE products. The updated Scoping Study in May 2013, evaluated an annual production of 10,000 tpa of REO’s with a capital cost of $U373 million and operating costs averaging $US 10.18/kg. Using October 2012 prices the study suggested a pre- tax IRR of 60% and an NPV of $US1.7 billion. This looks like a robust project even if recent lower prices are assumed. PEK Shareprice Ongoing optimisation has improved the beneficiation circuit and a pilot plant at ANSTO Minerals has confirmed the leaching process and has demonstrated production of ultra- high purity oxides of the high value Rare Earths. Attractive Risk/Reward potential Peak Resources is capitalized at $A38 million and yet has one of the potentially most economically viable, undeveloped Rare Earth deposits outside of China. The metallurgy looks straightforward, capital and operating cost estimates suggest a robust project and Peak is seeking potential partners. A partnership/funding agreement would be a price catalyst and a successful development should see a share price at multiples of its current level. Peak Resources Limited (PEK) – May 2013 Contents Ngualla Rare Earth Resource ......................................................................................................... 4 Metallurgical Testing ..................................................................................................................... 7 The Market for Rare Earths ........................................................................................................... 8 Commercialising the Project .......................................................................................................... 9 Scoping Study............................................................................................................................... 10 Pilot Plant Studies ........................................................................................................................ 13 Scoping Study Economics ............................................................................................................ 14 Valuation and Funding ................................................................................................................. 16 Conclusions .................................................................................................................................. 18 Board and Management .............................................................................................................. 19 Page | 2 Peak Resources Limited (PEK) – May 2013 Major Rare Earth project with focus now on high grade core zone Peak Resources have confirmed the discovery of a world class Rare Earth deposit at its 100 % owned Ngualla project in Tanzania. The broad resource independently calculated by H&S Consulting is: 195 million tonnes @ 2.26% REO containing 4.4million tonnes REO with a higher grade core zone of 42million tonnes @ 4.19% REO containing 1.8 million tonnes REO. Recent infill drilling has defined a central high grade oxide cap of bastnasite mineralization of 21.6 million tonnes grading 4.54% REO. This zone is acid leachable and could be mined in a modest sized open pit. This is one of the largest and highest grade undeveloped REO resources outside of China. Chemical composition compares well The mix of Rare Earths is similar to other developing projects such as Mt Weld (Lynas Corp). Uranium and thorium levels are very low which is of critical importance in product acceptance. Located in a mining country The project is located in East Africa in Tanzania, a country with an established mining industry, being the fourth largest gold producer in Africa. Ngualla is located 150 km from airport, road and rail links to the port of Dar es Salaam, some 750 km away. Metallurgy is better than most Rare Earth deposits Comprehensive metallurgical testing has demonstrated that the exciting potential is in the oxidized high grade core zone where it has shown sulphuric acid leaching extracts 70-90% of the contained Rare Earths. Beneficiation by magnetic separation and flotation upgrades the feed before the acid leach circuit which then produces intermediate RE concentrates on site. These could be sold at this stage or refined into individual RE products. Scoping Study highly encouraging Peak moved quickly to a scoping study conducted using respected consultants, and supported by extensive metallurgical testing and flow sheet development which was released in Dec 2012 and updated in May 2013. This study focused on mining in the central high grade core, with an initial production of 10,000 tpa REO as a base case. Capital cost was estimated at $US373 M and operating costs at US 10.18/kg over the mine life. An estimated 60% IRR and an NPV of $US 1.7 B at late 2012 REO price levels, looks very attractive. Even at recent, lower REO prices this project would still be very robust. Process Optimisation and Pilot plant Optimisation of the beneficiation circuit improves mass rejection giving a higher grade concentrate, potentially reducing the size of the leach plant with lower operating costs. A pilot plant at ANSTO Minerals commissioned to confirm the recovery process and provide refined product samples is already improving on the scoping study and has demonstrated that high purity intermediate RE carbonates and ultra high purity RE oxides can be readily produced. Should become a significant Rare Earth producer The Ngualla project Scoping Study envisages shallow open pit mining at 330,000 tpa ROM grading about 5.35% REO to produce about 10,000 tpa REO in concentrate, with an initial mine life of >50 years. The latest upgrade of the central high grade resource suggests ample scope for future expansion. Peak Resources is planning for a project development timetable which could see production commencing by 2016. We believe there is only room in the small Rare Earth market for a handfull of new projects but the Ngualla project should be at the forefront. Funding a critical task Peak Resources, like most explorers has funded its development via equity issues. The project has now reached the point where substantial spending is required on project engineering and Feasibility Studies to advance towards development. The company has begun talking to potential end users and strategic investors who may wish to be involved in the project development. Page | 3 Peak Resources Limited (PEK) – May 2013 Ngualla Rare Earth Resource The Ngualla project is located in western Tanzania about 750 km WSW of the port of Dar es Salaam and some 150 km north of the city of Mbeya with access via 100 km of paved roads and 56 km of gravel road. Peak Resources owns 100% of the exploration tenement covering the Ngualla discovery after acquiring 20% partner Zari exploration in February 2012. The Ngualla deposit is part of a carbonatite complex which are unusual carbonate rich alkaline igneous rocks often occurring as sub-volcanic plugs along regions of continental rifting. The Ngualla carbonatite is roughly oval in shape 3.5 km by 2.5 km, Proterozoic in age and intruding older Pre-Cambrian gneisses, quartzites and volcanics. This carbonatite is fairly typical showing an overall circular zoning pattern. It has a central core of ferro carbonatite (mostly iron rich dolomite) enriched in Rare Earths, surrounded by a calcite carbonatite with associated phosphate. Ngualla is unusually rich in Rare Earth elements particularly in the designated Southern Rare Earth core zone where drilling has been focused. This higher grade zone has been overprinted by weathering giving a central, high grade enriched cap zone, which is depleted in carbonates and relatively enriched in Rare Earths. This is the immediate focus of the project. Source: Peak Resources presentation Page | 4 Peak Resources Limited (PEK) – May 2013 Schematic Section through Southern Rare Earth Zone Source Peak Resources