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Quarterly ReportDecember 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
HighlightsPeak Resources Limited (Peak; ASX: PEK; OTCQX: PKRLY), is fast tracking the development of its large Ngualla Rare
Earth Project discovery in Tanzania. Ngualla has several fundamental natural advantages over other projects and is on
schedule to be a new, low cost, long term producer of rare earths.
Activity highlights this Quarter include:
Confirmation of strong project economics with the completion of the scoping study and preliminary economic assessment. Key indicators from the scoping study include:
• Pre-taxNPVofUS$1.571billion
• IRRof53%
• ModestcapitalcostofUS$400million
• LowoperatingcostofUS$10.09/kgREO
• AnnualrevenuesofUS$361million
• Paybackinside3years
Other factors that distinguish Ngualla from other rare earth projects and de-risk the development include:
• Provenbeneficiationandsimplemetallurgicalprocesses
• Mineralisationisnotradioactiveandhasthelowesturaniumandthoriumofanymajorrareearthdeposit
• Simpleopenpitminingwithlowstripratio
• Norequirementforacidbaking
• Significantopportunitytoupscaleproduction
Breakthrough in the identification of a beneficiation process that significantly reduces the plant size and reagent consumption (capital and operating costs).
Commissioning of a solvent extraction (SX) pilot plant (after Quarter end) to produce purified, high value rare earth products.
Completion of 2012 Ngualla drilling program. A series of intersections received from surface shows the potential to increase the amount of high grade mineralisation amenable to simple acid leach, further improving project economics, and also to extend the overall Mineral Resource to the south and west.
Commencement of the Ngualla Rare Earth Project pre-feasibility study.
Appointment of advisors (after Quarter end) to source strategic partners to assist with financing the development of the project and off take agreements.
Acquisition of four prospective new gold properties in the Lake Victoria Gold Fields region of northern Tanzania.
The Company had $4.23 million cash on hand at the end of the Quarter.
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Quarterly Report December 2012
NGUALLA RARE EARTH PROJECT, TANZANIA
Rare Earths, Niobium – Tantalum, Phosphate. Peak Resources – 100%
About the Ngualla Rare Earth Project:TheNguallaRareEarthProjectinTanzaniaisarecentdiscoveryandisthehighestgrade
ofthelargeundevelopedrareearthdeposits.
Fundamentalgeologicalaspectsofferdistinctadvantagesfordevelopmentoverother
rareearthprojects.Theseincludethelargesizeofthedeposit,outcropping,highgrade
mineralisationamenabletoopencutminingwithlowstripratios,favourablemineralogy
amenabletoarelativelysimple,lowcostprocessingrouteandthelowesturaniumand
thoriumlevelsofanymajorrareearthdepositintheworld.
Usinga3.0%lowergradecut,thetotalMineralResource*includesahighergradezoneof40milliontonnesat4.07%REO
for1.6milliontonnesofcontainedREO,largelylocatednearsurfaceintheSouthernRareEarthZone(SREZ,seeFigure1).
*SeeAppendixTable1forMineralResourceclassificationdetailsandAppendixTable2forbreakdownofindividualREO’s
ThefavourablecharacteristicsofthecentralBastnaesiteZonetargetedforfirstproductiondistinguishNguallafromallother
rareearthdevelopmentprojectsandarereflectedintheresultsofthescopingstudyandpreliminaryeconomicassessment
releasedtotheASXon3rdDecember2012.Theseindicateverylowcapitalandoperatingcostscomparedtootherrareearth
projects.
ThescopingstudyconfirmedNguallaasaleadingrareearthprojectwithanestimatedNPVofUS$1.57billionandpre-taxIRR
of53%foraninitial25yearminelifeandminingofan8.2milliontonneportionoftheIndicatedandMeasuredMineralResource
withintheBastnaesiteZonewithanaveragegradeof4.35%REO.
Pre-feasibilitystudiesnowinprogressarescheduledforcompletionbyAugust2013andareexpectedtocontinuetosignificantly
enhancetheserobustprojecteconomicsthrough:
• Furtherbeneficiationandmetallurgicalprocessoptimisation
• ArevisedMineralResourcemodeltoincludehighgraderesultsfromthe2012drillingandscheduledforcompletionbyend
March2013
ArangeofhighpurityseparatedrareearthoxideproductsfromtheSXpilotplantwillbeavailableforassessmentbypotential
offtakecustomersfromMarchtoMay2013.
Peakhasappointedfinancialadvisors toworkwith theCompany in identifyingandsecuringstrategicpartners toassist in
funding theNguallaRareEarthProject through toproduction.Discussionshavecommencedand therehasbeenstrong
interestintheproject.
TheCompanycontinuestofasttrackthedevelopmentofNguallawiththeaimofbecomingalowcost,longtermrareearth
producerbyQ12016.
Scoping StudyTheCompanywaspleasedtoannouncetheresultsofthescopingstudyon3rdDecember2012.Thecomprehensivestudy
includesapreliminaryeconomicassessmentthatconfirmsNguallaasastandoutrareearthdevelopmentproject.
TheenvisagedprojectconsistsofasmallopenpitminingoperationfocussedontheBastnaesiteZoneportionoftheNgualla
deposit(Figure1)andhasaminelifeof25years.
LocationofNguallaProject,Tanzania
!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
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Quarterly Report December 2012
Rareearthrecoveryisachievedonsiteusingtheprovensimplesulphuricacidleachprocessbeforefurtherrefiningtoproduce
arangeofhighpurityrareearthoxideproductsviaasolventextraction(SX)plant.Onabasecaseofaninitialproductionof
10,000tonnesperannumofrareearthoxideproductiontheprojectsstrongeconomicandlowriskfundamentalsinclude:
• Pre-taxnetpresentvalueofUS$1.571billion
• Internalrateofreturnof53%
• ModestcapitalcostofUS$400million(excludingcontingency)
• LowoperatingcashcostsofUS$10.09perkgof rareearthoxideconcentrate for thefirst5yearsofproductionandan
averageU$11.05perkgoverthefirst25years
• AnnualrevenuesofUS$361million
• Paybackwithin3years
• Provenbeneficiationandmetallurgicalprocessinlaboratorytestworkwithpilotplantworkunderway
• ThescopingstudywasbasedsolelyontheIndicatedandMeasuredportionoftheMineralResource
• Mineralisationisnotradioactiveandhasthelowestlevelsofuranium(18ppm)andthorium(43ppm)ofanymajorrareearth
deposit
• Simpleopenpitminingwithlowstrippingratio
• Arelativelysimplemetallurgicalprocessutilisingsulphuricacid leachingwithnoinherentlytroublesomeacidcrackingor
bakingrequirementscontributestoalowriskprofilefortheproject
• Significantopportunitytoscaleupproductionandextendminelifeasthebasecasemineplanexploitslessthan10%ofthe
totalMineralResource
• OntargettobeginproductioninQ12016
Figure1:MaidenMineralResourceblockmodelcolouredbyREO%gradeanddrillholes(asatmaidenMineralResource,29thFebruary2012)onsatelliteimagedrapedovertopography,NguallaCarbonatite.
Block Model REO%
A 1 to 2%
A 2 to 3%
A >3%
! Drill holes A Bastnaesite Zone
OPEN OPEN
OPENPe
rimet
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Northern Zone
South West Alluvials
550m
Mt Mapuma
Bastnaesite Zone Southern Rare Earth Zone
Perim
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arbo
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Quarterly Report December 2012
ThekeyphysicalandfinancialparametersthatdefinetheNguallaRareEarthProjectinthescopingstudyaresummarisedin
Table1below.
Table 1: Scoping Study Physical and Financial Summary
AverageAnnualMineProduction(afterrampup) 325,000tonnes
LifeofMine(LoM) 25years
AverageGrade(LoM) 4.35%REO
AverageGradeforfirst5years 4.64%REO
AverageStrippingRatio(LoM)Waste:Ore 3.34
AverageStrippingRatioforfirst5Years 0.73
TotalREORecovery 71%
Average Annual Equivalent REO Product (after Ramp-up)
SeparatedREO
CeO2Concentrate
TotalREOProduction
6,347tonnes
3,633tonnes
9,980tonnes
CapitalCosts(ExcludingContingency) US$400M
Average(LoM)CashCost(FOB),ExcludingAmortisation,
Depreciation,andRoyalties.(C1Cost)US$11.05/kg
Average(C1Cost)forfirst5yearsoffullproduction US$10.09/kg
Revenue (FOB)
SeparatedProducts“BasketPrice”
CeO2(concentrate)
US$52.34/kg
US$8/kg
DiscountRateApplied 10%
IRR (Pre-tax and Royalties) 53 %
NPV (Pre-tax and Royalties) US$ 1.571 billion
Paybackfromproductionstart-up In3rdYear
TheASXannouncement“Scopingstudydeliversverypositiveresults”of3December2012providesfurtherdetailsofthestudy.
Toreduceriskandfasttracktheproject,engineeringdesignandlaboratorytestworkinmostareasofthestudyexceedsthe
normforascopingstudylevel.ThecapitalcostestimateisconsistentwithanAACEClass4-typeestimatewithanaccuracy
of+/-30%.
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Quarterly Report December 2012
Capital CostTotal project capital cost is estimated at US$400
millionincludingforfirstfillsandspares.Asummary
ofthecapitalcostbreakdownisshowninFigure2
opposite.
Operating CostOperatingcostsfortheNguallaProjectareestimated
at $10.09 / kgofproduct for the first five yearsof
productionandaverageUS$11.05/kgoverthelife
ofthemine.Abreakdownofoperatingcostsbyarea
isshowninTable2below:
US$8.48m2%
US$68.32m17%
US$59.03m15%
US$63.92m16%
US$28.28m7%
US$50.18m13%
US$121.77m30%
Construction Costs
Mining
Tailings
Site Infrastructure
Beneficiation and Rare Earth Recovery
Rare Earth Separation (SX)
Sulphuric Acid Plant
Table 2: Operating Costs by Area
AREA First 5 Years Full Production $US / kg product
Average (LoM) US$ / kg product
Mine 0.34 0.63
Beneficiation&Recovery 6.38 6.84
Separation 1.88 2.01
Tailings 0.20 0.22
Infrastructure 0.74 0.81
ProductTransport(FOB) 0.55 0.55
Total 10.09 11.05
IndividualstudiescontributingtothescopingstudywerecarriedoutbythespecialistconsultantssetoutinTable3below:
Table 3: Independent consultants contributing to the scoping study
Company Responsibility
AmdelB.V. Comminutiontestwork
EmersonStewartConsulting Scopingstudyprojectmanagement,infrastructure,tailings,services,environmental,civilengineering,logisticsandindependenttechnicalreportpreparation
Hatch MineralProcessengineering,includingsulphuricacidplant,comminutionandbeneficiationcircuits,rareearthrecoveryandsolventextractionplants
H&SConsultingPtyLtd IndependentspecialistsforMineralResourcemodelandestimation
IndependentMetallurgicalOperationsPtyLtd(IMO)
Beneficiationprocessdesignandtestwork
Met-ChemConsultingPtyLtd Beneficiationandhydrometallurgicalprocessflowsheetstudiesanddevelopment
Nagrom Beneficiationandmetallurgicaltestwork
Orelogy Mineengineering,geotechnical,pitoptimisationandscheduling
RadiationAdvice&SolutionsPtyLtd Assessmentofradiationlevelsinthemineralisationandprocess
RogerTownend Mineralogy
SGSAustraliaLaboratories Analyticallaboratoryfordrillsamples
DrWallyWitt Geologicalspecialistconsultant
Workisinprogresstofurtheroptimisethebeneficiationandmetallurgicalprocesses,whichhasthepotentialtosignificantly
lowercostsstillfurther.
Figure2:CapitalcostbreakdownfortheNguallaRareEarthProject
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Quarterly Report December 2012
Drilling in 2012 identified continuous zones of high grade mineralisation at surface and, together with the results of acid
leachvariabilityworkcurrentlyinprogress,isexpectedtosubstantiallyincreasetheamountofmineralisationavailablethatis
amenabletothesimplesulphuricacidleachprocess.ThenewdatawillbeusedtocompleteanewMineralResourceestimate
andresourcemodel.
TheadditionalmetallurgicaltestworkandnewMineralResourcemodelwillbeusedinthepre-feasibilitystudiesnowunderway
andareexpectedtohaveapositiveimpactontheeconomicsoftheproject.Thepre-feasibilityisontargetforcompletionby
endAugust2013.
Metallurgical Process DevelopmentThe Quarter saw a significant breakthrough in the successful beneficiation of Ngualla weathered bastnaesite rare earth
mineralisationandconfirmationofthesuitabilityofthechosensimplesulphuricacidleachrecoveryprocessthroughtestwork
onalargernumberofmineralisedsamples.
Beneficiation test work
Thebeneficiationtestworkshowedthat38%oftheplantfeed(predominantlyunmineralisedbariteandsilica)canberejected
priortoacidleachingforonly5%lossintherareearthcontentusingacombinationofWetHighGradientMagneticSeparation
(WHGMS)followedbyaspecialisedflotationregime(Figure3).
Figure3:SimplifiedBeneficiationflowsheetforNguallaweatheredbastnaesitemineralisation
Mass 100%REO 100%
Mass 62%REO Rec 95%
Mass 38%REO Rec 5%
GROUND FEED
TAILS
CONCENTRATE
WET MAGNETIC SEPARATION
MAGNETICS
MAGNETICS
NON-MAGNETICS
FLOTATION CONCENTRATE
FLOTATION
Thesuccessfulprovingofaneffectivebeneficiationprocessthatremovesasignificantproportionoffeedmineralisationwith
minimallossofrareearthswillreducecapitalandoperatingcostsby:
• Reducingthesizeoftheonsitesulphuricacidplantandleachingcircuitoftheprocessingplant(lowercapitalcosts),and
• Lowersulphuricacidconsumption-themajorcontributortoreagentandoperatingcosts.
Workisalreadyinprogresstofurtheroptimisethisbeneficiationprocessforinputintopre-feasibilitystudiesduetocommence
inearly2013.
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Quarterly Report December 2012
Acid leach variability test workFurtheracidleachvariabilitytestworkwascompletedonalargenumberofsamplesofrareearthmineralisationduringthe
Quarter.Rareearth leachextractionratesofupto96.5%andaveraging80%werereturnedfromweatheredmineralisation
acrosstheBastnaesiteZone.
Theresultsarebasedon130samplesthatareinclusiveoftheearliertestwork.Thebastnaesitemineralisationcangenerally
beidentifiedbyphosphatecontentsof<0.4%andoccurswithinacentralareaof675mx750m(Figure4)oftheSREZ.
9147
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9148
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482500 mE482000 mE481500 mE
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New Results REO LER* %
! 73 – 100 (Ave. 83%)
! 58 – 72 (Ave. 65%)
! 0 – 57 (Ave. 43%)
Previous Results REO LER* %
N 73 – 100
N 58 – 72
N 0 – 57
Bastnaesite Zone Simple
Block Model REO%: A 3 to 4%A > 4%
*LER = leach extraction rate
Southern Rare Earth Zone
South West Alluvial Zone
500m2500 100
N
750m
Monazite rare earth zone
Monazite rare earth zone
Bastnaesite rare earth zone
Bastnaesite rare earth zone
Small area of monazite rich sediments
OPEN
OPEN
OPENOPEN
OPEN
Figure4:PlanofNguallaMineralResourceblockmodel(+3%REO)showinglocationofacidleachvariabilitytestsamples,acidleachextractionratesandzonationofrareearthmineralogyintheSouthernRareEarthZone.
Theremaining20samplescollectedoutsidetheBastnaesiteZoneareonlypartiallyrefractoryusingsulphuricacidandstill
average 54% rare earth leach extract rates. Mineralogical studies have shown that this is monazitic or mixed monazite –
bastnaesitemineralisation.Previousmetallurgicaltestworkonthesepartiallyrefractorysamples(ASXannouncementof11th
July2012)hasshown thatanacidbakeprocess (concentratedsulphuricacidat2500C)can increase recoveries to93%,
providingapossiblealternativeprocessingrouteforadditionalfutureproductionfromperipheralmonazitemineralisationlater
inthelifeoftheproject.
Thenewacidleachvariabilityresultsconfirmthesuitabilityofthechosensulphuricacidleachprocessingrouteonasignificant
nearsurface,highergradeportionofthedeposit.Thelargenumberofsamplesfromarangeofmaterialtypeswillallowahigh
confidencegeometallurgicalmodeltobeconstructedforuseinprojectpre-feasibilitystudiesnowinprogress.
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Quarterly Report December 2012
Solvent Extraction Pilot PlantAftertheendoftheQuarter,theCompanyannouncedithadcommissionedtheAustralianNuclearScienceandTechnology
Organisation(ANSTOMinerals)toconstructandoperateasolventextraction(SX)pilotplant.
TheSXprocesswillusearareearthchloridefeedproducedfroma1.6tonnebulksampleofmineralisationfromtheBastnaesite
ZoneatNguallausingtheprovensimplesulphuricacidleachandpurificationroute(Figure5)toproducefourgreaterthan99%
purityearthoxideproductsof:
•HeavyREOMix(Sm,Eu,Gd,Tb,Dy,Ho,Er,Tm,Yb,LuandY)
•PraseodymiumandNeodymiumOxidemix
•CeriumOxide*
•LanthanumOxide
*Approximately 50% of the cerium has already been extracted early in the sulphuric acid leach circuit.
Figure5:SimplifiedflowsheetofsulphuricacidleachprocesstochloridefeedandsolventextractionforNguallabastnaesitemineralisationintofourproductstreams.
LeachFeed
Cerium Oxide
Solvent Extraction
Sulphuric Acid Leach
Primary Precipitation
Cerium Removal
PurificationOxidation
Chloride Feed Solution
Lanthanum Oxide
Cerium Oxide
Didymium Oxide
Heavy Rare Earth Oxide
TheproductionofthefinalrareearthoxideproductsfromtheSXpilotplantwill:
• ConfirmtheendtoendprocessofNguallamineralisationtohighpurityproduct
• Crovidephysicalsamplesinsufficientquantitiesforassessmentbyofftakecustomers
• Confirmfinalspecificationsofthehighpurityproducts
• ProvidedetailedengineeringdataforthedetaileddesignofthefullscaleSXplant
WorkonpreparingthefeedstockfortheSXpilotplantcommencedatANSTOinNovember2012.ThefirststageoftheSXpilot
plantprogramisplannedtocommenceoperationinFebruary2013withsampleproductavailabilityforeachoftherespective
threestagesbecomingavailableinMarch,April,andMayrespectively.ThefinalengineeringreportontheSXpilotplantwill
becompletedbyJuly2013.
Ngualla Drilling Program 2012TheNgualla2012drillingprogramthatcommenced inMaywascompletedduring theQuarter fora totalof130holes for
13,600mofreversecirculation(RC)anddiamonddrilling.
Theobjectivesofthedrillingprogramwereto:
• Define high grade weathered bastnaesite rare earth mineralisation in the SREZ sufficiently for the ‘Measured’ Mineral
ResourceJORCcategorythroughinfilldrilling
• Quantifytheamountofhighlyweathered,lowcarbonate,lowphosphatebastnaesiterareearthmineralisationinthecentral
SREZthatisamenabletomineralprocessingbythesulphuricacidroute
• Provide diamond core and RC samples for further beneficiation and detailed hydrometallurgical test work and to twin
RCholesforJORCresourcerequirements
• increasethecurrentNguallarareearthMineralResourcebytestingpotentialextensionstotheSREZmineralisation
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Quarterly Report December 2012
ThemajorityoftheprogramwasdesignedtoincreasethedensityofdrillingintheBastnaesiteZonetoanaverageholespacingof
40mx50m toprovidedata fora revisedMineralResourceestimateand resourcemodel.Thenewdrilling isdesigned to
increasetheamountofmineralisationintheMeasuredMineralResourceclassification(seeTable1inAppendixforthemaiden
NguallaMineralResource).Itwillalsoprovidethedefinitionrequiredforadetailedmineplanandschedulefortheprojectto
supportthepre-feasibilitystudiesnowinprogress.
Aseriesofhighgraderareearthmineralisedintersectionswerereceivedfromtheinfilldrillingduringorjustaftertheendofthe
December2012QuarterandareinadditiontothosereportedintheSeptemberQuarter.Theseinclude:
DRILL hOLE InTERSECTIOn
nRC245: 112m at 5.16% REO fromsurfacetoendofhole
nDD013: 160m at 5.06% REO fromsurfacetoendofhole
nRC268: 134m at 4.45% REO fromsurface
nRC278: 113m at 4.22% REO fromsurface
nRC279: 162m at 3.24% REO fromsurface including
52m at 6.04% REO from surface
nRC283: 120m at 4.57% REO fromsurfacetoendofhole including
60m at 6.60% REO from surface*REO=TotalRareEarthOxide.SeeAppendixTable3fordrillintersectiondetailsandAppendixTable2forindividualrareearthdistributionintheSREZ.
Figure6:SouthernRareEarthZonedrillplanshowingnewcontinuouszoneofdeepweatheringcontaininghighgraderareearthenrichment(2012intersectionsshowninyellow)and2012intersectionsdefininga300mextensiontotheSouthernRareEarthZone.
9147
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482500 mE482000 mE
750m
South West Alluvial Zone
OPEN
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250m0 100
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Drill holes max REO %:! 0 to 1! 1 to 2! 2 to 3 ! 3 to 5 ! >5! 2012 Drill program
Bastnaesite Zone
Bastnaesite Zone
Zone of deep continuoushigh-grade mineralisationZone of deep continuous
high-grade mineralisation
Southern ExtensionSouthern Extension
WesternExtension
Block Model REO%: A 3 to 4%A > 4%
Intercept Labels:A 2011 Drill ProgramA 2012 Q1 highlightsA 2012 Q2 highlights
NRC262
NRC272
NRC245
NRC167
NRC280
NDD010
NRC279
NRC237
NRC176NRC185
NRC027
NRC283
NAC545
NRC234
NRC262
NRC272
NRC245
36m @ 4.05% from 42m
38m @ 4.50% from surface
NRC167
NRC280
NDD010
NRC279
NRC237
NRC176NRC195
NRC027
NRC283
NAC545
NRC234
20m @ 5.20% from surface
49m @ 4.08% from surface
162m @ 3.24% from surface
120m @ 4.57% from surface to EOH
31m @ 2.66% from surface to EOH
50m @ 1.38% from surface
41m @ 2.96% from surface
140m @ 5.21% 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
Southern Rare Earth Zone
77.8m @ 4.53% from surface
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Quarterly Report December 2012
Theinfilldrillingcompletedin2012hasidentifiedorextendedzonesofdeeplyweathered,highgrademineralisationthatwere
notfullydefinedbythedrillingusedtocompletethemaidenMineralResourceannouncedinFebruary2012.Theidentification
ofthesezonesisexpectedtoleadtoanincreaseintheamountofhighgrademineralisationintherevisedMineralResource
that isamenable to thechosensimplesulphuricacid leachprocessandhaveapositive impacton theeconomicsof the
project.
ModestextensionstotheSREZmineralisationwereconfirmedbyresultsreceivedduringtheQuarter.Inthesouth,mineralisation
wasextendedafurther300mwithintersectionsincluding:
DRILL hOLE InTERSECTIOn
nRC234: 41m at 2.96% REO fromsurface
nRC237: 31m at 2.66% REO fromsurfacetoendofhole
Similarly,theSREZwasextendedtothewestoveradistanceof300m(Figure6)bynewhighgradeintersectionsfromsurface
thatinclude:
DRILL hOLE InTERSECTIOn
nRC167: 64m at 2.83% REO fromsurface including
20m at 5.20% REO from surface
nRC262: 36m at 4.05% REO from42m
nRC272: 38m at 4.50% REO*fromsurfaceand
10m at 6.02% REO from64m
nRC280: 49m at 4.08% REO fromsurface
TherevisedMineralResourceestimateisonscheduleforcompletionbytheendofthefirstQuarter2013.
Development scheduleTheCompanyhasanaccelerateddevelopmentscheduleforNguallacomparedtomanyotherrareearthprojectswithfirst
productionofrareearthconcentrateproductplannedforearly2016.Keyindicativemilestonesinclude:
RevisedMineralResourceestimate March2013
CompletionofSXpilotplanthighpurityproducts May2013
CompletePre-FeasibilityStudy Quarter32013
CommenceDefinitiveFeasibilityStudy Quarter42013
Engineeringanddesigncommences mid2014
Commencemineandprocessingplantconstruction 2015
Firstproduction Early2016
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Quarterly Report December 2012
TheNguallaRareEarthProjectremainsontracktoachieveproductioninearly2016.
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urce
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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
Exploration Drilling
Resource Definition & Extension
Scoping Study
Pre-Feasibility Study
Definitive Feasibility Study
Maiden Resource Drilling
Geotech - Extension
2015 2016
Engineering & Design
Commence Construction
Completion of separation test work
Figure7:NguallaRareEarthProjectDevelopmentSchedule.
Above:Regional,EducationDepartment,villageofficialsandPeakpersonnelatastonelayingceremonyforhousesbeingbuiltbyPeakforschoolteachersfromtheNguallavillagePrimarySchool,November2013.
Community ResponsibilityPeak Resources is committed to improving
the communities in which it operates whilst
maintaining best practice environmental
management. Through the provision of
employmentopportunities,training,purchase
oflocalproductsandfundingforlocalbuilding
andeducationprojects,win-winrelationships
arebeingforgedwiththelocalcommunity.
Work continued during the Quarter on the
building of two teacher’s houses in Ngualla
village.Astone layingceremonywasheld in
November to commemorate the building of
the houses for the Ngualla Primary School,
whicharenownearingcompletion.
12
Quarterly Report December 2012
TANZANIAN GOLD PROJECTS – (Lake Victoria Gold Field)
Peak Resources – Options to acquire 100%
TheCompany ispleased toannounce thatagreementsweresignedduring theQuarter toacquire rights to fournewand
strategicallylocatedgoldlicencesinthehighlyprospectiveLakeVictoriaGoldFieldregionofnorthernTanzania.
PeakmaintainsanexplorationbaseandteamatMwanzainthenorthofthecountrytoprogresstheCompany’sstrategyof
growingaportfolioofgoldpropertiesandtoaddvaluetotheseprojectsthroughexploration.
Thefourlicences(Figure8)coveratotalareaof248km2andincludeeitherexcisedhistoricgoldworkingsorliealongstrike
fromrecentartisanalgoldminingactivity.
Shinyanga
Geita
Buckreef
Tulawaka
Nyanzaga
Golden Ridge
Nyakafura
Buzwagi
Golden Pride
MusomaNorth Mara
Bulyanhulu
Lake Victoria
KENYA
Kitarungu
Fort Ikoma
Muhange
Lunguya
Mwanza
TANZANIA
Location of Lake Victoria Goldfield
!Dar Es Salaam
Ngualla Project
NORTH
150km0 50 100
Peak Resources Gold Project
Mine or Resource > 1 Moz Au
Mine or Resource < 1Moz Au
Gold Prospect (Barth)
Major Population Centre
DCW Major Internal Roads
Archaen Greenstone
SoilsamplingprogramshavealreadycommencedontheKitarunguProjectinthenorthandfieldprogramsaresettoaccelerate
inFebruarywiththeapplicationofpersonnelfromtheNguallaexplorationteamtothegoldprojectswhilst therainseason
precludesfieldworkintheNguallaregion.
InitialexplorationresultsareexpectedduringtheMarch2013Quarter.
Additionalgoldandother projects are currently under assessment with theaimof expanding theCompany’s exploration
portfolioinTanzania.
Figure8:Peak’sgoldprojects(orange)andmajorminesintheLakeVictoriaGoldField,Tanzania.
13
Quarterly Report December 2012
CORPORATE
Appointment of financial advisorsSubsequenttotheendofQuarteron17thJanuary2013,theCompanyannouncedtheappointmentoftwogroupsinAsiawho
aremandatedtoassistinidentifyingandsecuringstrategicpartnerstoassistinfundingtheNguallaRareEarthProjectthrough
toproduction.
CITICSecuritiesfortheChineseregionandMoserCapitalLtdforSouthKoreaandJapanwillalsoprovideadvisoryservices
regardingoff-takepartnersandagreementsforNgualla’sfutureproduction.
PeakisalsoindirectdiscussionswithseveralinterestedpartiesandinstitutionsinNorthAmerica,EuropeandHongKong.
SeveralgroupshaveshownastronginterestintheprojectandtheCompanywillcontinuetoprovideupdatesasthevarious
discussionsprogress.
Corporate Structure and Cash on HandThecurrentcorporatestructureasatthe31stDecember2012was:
ASX:PEK
OTCQX:PKRLY
Ordinary Shares on Issue:254.7million
Cash at hand:$4.23million
52 week range:14.5c–62.5c*
*From01-Jan-12to31-Dec-12**Averagefrom01-Oct-12to31-Dec-12
Richard BeazleyManagingDirector
Enquiries:
Company Media
Richard Beazley Ben KnowlesManagingDirector WalbrookInvestorRelationsT:+61(0)89205360 T:+61(0)861892230E:[email protected] M:+61426277760W:www.peakresources.com.au E:[email protected]
Derek Gradwell,SVP,NaturalResourcesMZGroup–NorthAmericaT:+19492594995E:[email protected]:www.mzgroup.us
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.
Market Cap:$39.5million(at15.5c)
Listed Options outstanding:47.7million
Unlisted Options outstanding:11.2million
Liquidity: 0.6millionsharesperday(av.over3mths**)
14
Quarterly Report December 2012
Appendix:
Table 1: Classification of Mineral Resources for the Ngualla Rare Earth Project, 1.0% and 3.0% REO cut-off grades (February 2012).
Lower cut – off grade
JORC 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.Figuresabovemaynotsumpreciselyduetorounding.Thenumberofsignificantfiguresdoesnotimplyanaddedlevelofprecision.
Table 2: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for the Ngualla Southern Rare Earth and Northern Zones (>1% REO).
OXIDE % OF TOTAL REO*
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
e E
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
(*=MineralResourceblockmodelat1%REOcut)
Thebluemarkers(•)denotethefive“criticalrareearths”,whicharepredictedtobeinundersupplyintheyearsaheadandpredicted
tocommandsignificantlyhighervaluethanotherrareearths.(USDoE,‘CriticalMaterialsStrategy’report,December2011).
ThecriticalrareearthscontributethemajorityofthevaluefromNguallaat56%oftheingroundvalue.Ofthese,neodymiumisthe
mainsinglerareearthvaluedriver,contributing34%,(relativerareearthoxideprices:MetalPages,11thSeptember2012).
15
Quarterly Report December 2012
Table 3: Drill hole and intersection details for intersection highlights received in December Quarter referred to in report. Southern Rare Earth Zone – rare earth RC drill intersections +1 % REO
Selectedintersections+2%REOinitalics
Hole ID East North Hole Depth (m) From (m) To (m) Interval (m) REO %
nRC234 482,153 9,147,498 46 0 41 41 2.96
nRC237 482,080 9,147,505 31 0 31 31* 2.66
nRC245 482,400 9,148,147 112 0 112 112* 5.16
nRC262 481,954 9,148,237 120 0 4 4 2.90
14 36 22 1.89
42 78 36 4.05
96 102 6 1.55
106 110 4 2.13
nRC268 482,098 9,148,107 135 0 134 134 4.45
(incl. 0 28 28 5.23
and 38 64 26 5.73
and 68 106 38 5.25)
nRC272 481,948 9,148,104 158 0 38 38 4.50
42 76 34 3.01
(incl. 64 74 10 6.02)
86 90 4 1.88
100 104 4 1.66
110 122 12 1.87
nRC278 482,039 9,147,848 115 0 113 113 4.22
nRC279 482,039 9,147,914 180 0 162 162 3.24
(incl. 0 52 52 6.04)
nRC280 481,964 9,147,894 53 0 49 49 4.08
nRC283 482,046 9,147,915 120 0 120 120* 4.57
(incl. 0 60 60 6.60)
nDD013 482,240 9,147,968 160 0 160 160* 5.06
(incl. 0 81.77 81.77 5.81)
Note:REO=totalrareearthoxidesincludingyttrium.SeeTable3forrelativedistributionofindividualrareearthoxidesintheSREZ.Samplesare2mcompositesfromangled-60°westRCdrillingexceptforholeNRC279whichisdrilled-60°northandNDD013whichisaPQdiamondholefromsurface.Intersectionscalculatedusing1%REOlowercutandamaximumof2minternaldilution.AnalysisbySGSlaboratory,Perth,by4aciddigestandICPorXRF.Co-ordinatesystemisArc1960UTMzone36S.*=holeendedinmineralisation.
16
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.
Name of entity Peak Resources Limited
ABN Quarter ended (“current quarter”) 72 112 546 700 December 2012
Consolidated statement of cash f lows
Cash f lows related to operating activi t ies
Current quarter $A’000
Year to date (6 months) $A’000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration
(2,590)
(1,327)
(4,542)
(2,431) 1.3 Dividends received 1.4 Interest and other items of a similar nature
received 37
79
1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material)
Net Operating Cash Flows (3,880) (6,894)
Cash f lows related to investing activi t ies
1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets
(50)
(54) 1.9 Proceeds from sale of: (a) prospects
(b) equity investments (c) other fixed assets
1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)
Net investing cash f lows (50) (54)
1.13 Total operating and investing cash flows (carried forward)
(3,930) (6,948)
17
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001
1.13 Total operating and investing cash flows
(brought forward) (3,930) (6,948)
Cash f lows related to f inancing activi t ies
1.14 Proceeds from issues of shares, options, etc.
-
8,102
1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) (187) (467) Net f inancing cash f lows (187) 7,635
Net increase (decrease) in cash held
(4,117)
687
1.20 Cash at beginning of quarter/year to date 8,349 3,545 1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter 4,232 4,232
Payments to directors of the entity and associates of the directors Payments to related entit ies of the entity and associates of the related entit ies
Current quarter $A'000
1.23
Aggregate amount of payments to the parties included in item 1.2
213
1.24
Aggregate amount of loans to the parties included in item 1.10
1.25
Explanation necessary for an understanding of the transactions
1.23 includes gross salaries including superannuation and fees to directors and legal fees
paid to Steinepreis Paganin Lawyers & Consultants, an entity related to Jonathan Murray
Non-cash financing and investing activit ies 2.1 Details of financing and investing transactions which have had a material effect on
consolidated assets and liabilities but did not involve cash flows
18
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 4 30/9/2001
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
Financing facil i t ies available Add notes as necessary for an understanding of the position.
Amount available $A’000
Amount used $A’000
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outf lows for next quarter
$A’000 4.1 Exploration and evaluation
359
4.2 Development
1,771
4.3 Production
4.4 Administration
1,072
Total
3,202
Reconcil iat ion of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Current quarter $A’000
Previous quarter $A’000
5.1 Cash on hand and at bank 1,078 5,695
5.2 Deposits at call 3,154 2,654
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22)
4,232 8,349
19
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 5
Changes in interests in mining tenements Tenement
reference Nature of interest (note (2))
Interest at beginning of quarter
Interest at end of quarter
6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased
Kitarungu PL6987/2011 Muhange PL6955/2011 Lunguya PL6679/2010 Fort Ikoma PL7941/2012
Option to acquire 100% Option to acquire 100% Option to acquire 100% Option to acquire 100%
0% 0% 0% 0%
0% 0% 0% 0%
20
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 6 30/9/2001
Issued and quoted securit ies at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per
security (see note 3) (cents)
Amount paid up per security (see note 3) (cents)
7.1 Preference +securit ies (description)
7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3 +Ordinary securit ies
254,723,553 254,723,533 Fully Paid
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs
7.5 +Convert ible debt securit ies (description)
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor)
500,000 500,000
1,000,000 750,000 750,000 750,000
6,250,000 541,667 150,000
47,659,251
- - - - - - - - -
47,659,251
Exercise price $0.60 $1.00 $1.50 $0.60 $0.90 $1.20 $0.55 $0.75 $0.55 $0.25
Expiry date 16 May 2013 26 May 2013 26 May 2014 16 May 2015 16 May 2015 16 May 2015
20 February 2017 24 February 2014
3 March 2018 31 July 2014
7.8 Issued during quarter
7.9 Exercised during quarter
21
Quarterly Report December 2012
Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 7
7.10 Expired during quarter
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)
Compliance statement 1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 23 January 2013
(CFO/Company Secretary) Print name: Jeff Dawkins Notes 1 The quarterly report provides a basis for informing the market how the entity’s
activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in
mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securit ies The issue price and amount paid up is not required
in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries
and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International
Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
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