SEPTEMBER 2016
Quarterly Activities Report and Appendix 5B
Highlights:
Solid progress on Ngualla Project Bankable Feasibility Study Engineering
f Detailed engineering studies are well advanced with over 70% of the budgeted engineering work completed and the Bankable Feasibility Study (BFS) on track for completion early Q2 2017.
f Final flowsheets have been comprehensively demonstrated and incorporated into the BFS engineering design.
Final Pilot Plant operation completed
f The operation of the final Pilot Plant of the three stage process developed by Peak for Ngualla's high grade bastnaesite mineralisation has been completed at ANSTO's dedicated piloting facility.
f Final results from the Leach Purification stage are expected in October. Preliminary results from the first stage calciner and selective leach section indicate improved rare earth recoveries coupled with high Cerium rejection.
f The selective leach process is a key factor in Ngualla's low operating and capital costs and aligns the final products to the high demand magnet metal rare earth market.
Project Permitting Advances
f The permitting process in Tanzania continues to make positive progress with the lodgement of the Draft Environmental and Social Impact Assessment (ESIA) to National Environmental Management Council (NEMC).
European Rare Earth refinery sites in commercial negotiation
f The preferred location for the rare earth refinery in Europe has been agreed subject to the completion of commercial discussions to secure land and services.
Electrification of the automobile industry to drive demand
f Recent increased press coverage indicates a rising awareness of the importance of neodymium and praseodymium to the electrification of automobiles. Lithium provides the efficient energy storage. Rare earth permanent magnets in the electric motors provide superior energy efficiency, power and weight advantages and are used in 90 percent of new electric vehicle designs.
Engagement with potential offtake customers
f Continuing the Company's increased marketing engagement, meetings were attended during the Quarter to introduce the project to potential offtake customers and strategic business partners in Vietnam, China and Thailand. The unique technical merits and low operating and capital costs of project were presented and well received by the parties engaged.
Company fully funded for BFS
f Tanzanian regulatory approval was received for the ~A$3.1 million Stage 2 investment into PAM from the Appian Natural Resources Fund ("Appian") and International Finance Corporation ("IFC") during the Quarter. Together the drawdown of the approximately A$4.1 million Appian loan facility, and subsequent to the end of the Quarter the placement of $815,348 shortfall for the issue of 16,306,957 shares in Peak to Appian and IFC the Company is fully funded for completion of the BFS.
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Developing the Ngualla Project into an
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ethically sustainable
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long term
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high quality
supplier of choice to the global high technology rare earth market
DIRECTORS
Non-executive Chairman: Peter Harold
Managing Director: Darren Townsend
Technical Director: Dave Hammond
Non-Executive Directors: Jonathan Murray
John Jetter
Company Secretary: Graeme Scott
CORPORATE DETAILS AS AT 30 SEPT 2016:
Ordinary Shares on issue: 454.5million
52 week range: 4.2c - 9.0c
Market Cap:
$30.9m (at 6.8c) ASX: PEK
PEAK RESOURCES LIMITED
Ground Floor, 5 Ord St
West Perth, WA 6005. ACN 112 546 700
Tel: +61 8 9200 5360
[email protected] www.peakresources.com.au
Bankable Feasibility Study Engineering Status
Detailed engineering studies for the Ngualla Rare Earth Project BFS are now well advanced with the BFS on track for completion early second quarter of 2017.
Over 70% of the budgeted engineering work, under appointed Lead Engineer AMEC Foster Wheeler is complete.
The timing for completion of the BFS was delayed by 4 to 6 weeks, primarily due to the delay in receiving approval from the Fair Competition Commission for Stage 2 of the funding (refer ASX announcement: "Appian Stage 2 funding proceeds and convertible note funds received" of 30th December 2015).
With the Company now in receipt of these funds and the financing for the BFS agreed with partners Appian and IFC, engineering programs are rapidly moving forward on all fronts. The operation of the final Pilot Plant is now complete and final results expected shortly. Table 1 below provides a summary overview of progress on the various work streams (refer ASX Announcement "Investor Update" of 26 September 2016).
The completion of the BFS and project permitting will position Ngualla as one of the very few 'ready to go' rare earth projects able to meet the expected surge in demand for the magnet metals neodymium and praseodymium from electric vehicles and green energy applications.
Table 1: Progress status of major BFS engineering work streams
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Mineral Resource and Mine Engineering
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Status
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Revised Mineral Resource estimate.
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Geotechnical
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Hydrology
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Mine planning
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80%
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Ore blending
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75%
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Ngualla Multistage Processing Plant
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Status
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Access Road
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25%
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Site Layout
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90%
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Process Development
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90%
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Process Design
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80%
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Tailings Design
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75%
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European Rare Earth Refinery
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Status
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Leach/Calciner Piloting
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90%
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Leach Purification
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70%
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SX Process
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80%
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Ngualla Site BFS Engineering
Site field programs in support of the BFS were completed last year. Studies on the data and samples obtained have been completed in areas of a revised Mineral Resource, geotechnical evaluations for the Ngualla process plant, mine site and tailings storage facility and also hydrology.
The revised Mineral Resource estimate completed by SRK Consulting reported in ASX Announcement "Higher grade Mineral Resource contains nearly 1 million tonnes rare earth oxide" on 22 February 2016 is higher in grade due to the improved definition of higher grade areas. The new +1% REO Weathered Bastnaesite Zone Mineral Resource is 15% higher grade than the previous estimate and has 89% in the highest confidence JORC category.
Geotechnical drilling programs in areas of the planned open pit, processing plant and tailings storage facility collected important engineering information for rock quality designation, discontinuity characteristics and rock strength. Samples have been tested at geotechnical test facilities and the data used to create a geotechnical model and pit slope designs.
The total water supply for the project has been secured through over 1,000m of drilling and pump testing. Sufficient water supply can be sourced from a combination of bores, by the recycling of water from the tailings storage facility and surface water harvesting from within the project area.
For the main site at Ngualla, which will contain the mine and multistage processing plant, mine planning, optimisation and scheduling and ore blending strategies to optimise the performance of the plant are nearing completion. A general site layout including ROM pad location, accommodation village, site roads, storm water management infrastructure are 90% complete (Figure 1).
Figure 1: Ngualla Rare Earth Project: Mine and Multistage Processing Plant design layout.
Pilot Plant operation for the Ngualla onsite process has been successfully completed with concentrate grades exceeding expectations. The concentrate grade of 45% REO produced at Ngualla is higher than most projects can achieve and reduces downstream processing costs significantly. Additional process optimisation work is ongoing to drive for increased performance and reduced operating costs.
The design of the multistage processing plant is complete with all process flow diagrams, piping and instrumentation diagrams complete along with the mechanical equipment lists. Detailed estimates for the procurement and construction of the project are underway with engineering packages being sent to suppliers for indicative quotes.
A detailed study by Tanzania based engineering company COWI Tanzania Ltd, which included detailed site surveys have been undertaken to establish the preferred route for the main site access. The selected route is an 85km stretch joining the mine site with the main trunk road to the east. Following this decision, alignment surveys and geotechnical test work have been completed and final designs are underway.
The design of the tailings storage facility has been completed by Knight Piesold Consulting. The dam will be constructed primarily from mine waste and will be located adjacent to the main mine waste dump, reducing the overall footprint of the site as well as costs.
QUARTERLY ACTIVITIES REPORT SEPTEMBER 2016
Final Pilot Plant Operations Completed
The operation of the final Pilot Plant of Peak's three stage process was completed during the Quarter.
The Leach Recovery Pilot Plant uses the selective leach process developed by Peak summarised in Figure 2.
Concentrate
Roast and Water Wash
HCI selective leach
Solution Purification
Rare Earth Chloride Solution
Separation Plant
- Fluorine removal
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Cerium rejection
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Insoluble gangue
- Iron removal
Figure 2: Simplified overview of Peak's Leach Recovery flowsheet piloted at ANSTO.
The selective leach process is a key factor in Ngualla's low operating and capital costs and in aligning the final products to the high demand magnet metal rare earth market. The process effectively minimises the dissolution of impurities and low value cerium whilst maximising the recovery of the high value magnet metals neodymium and praseodymium. Reagent consumption in the leach and purification process and subsequent SX process is thereby minimised and the SX portion of the refinery is reduced in size.
The Pilot Plant at ANSTO's dedicated piloting facility near Sydney (Figures 3 and 4) treated two tonnes of concentrate with a grade of >40% rare earth oxide (REO) that was produced from the successful Beneficiation Pilot Plant program completed at the end of 2015.
Figures 3 and 4: Rotary calciner during roasting operations (left); and bulk calcium fluoride precipitation (right) at ANSTO's test facility with (left to right) Gavin Beer, Peak's General Manager, Metallurgy and AmecFW's Process Consultant Deon van Tonder in attendance.
Preliminary results from the calcine-leach portion of the Leach Recovery Pilot Plant indicate improved rare earth recoveries coupled with high cerium rejection. Final results from this and the subsequent leach purification stage are expected shortly.
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