26th September 2016
Investor Update
Peak Resources Limited ("Peak") (ASX: PEK) or the ("Company") is pleased to report that the Bankable Feasibility Study ("BFS") is at an advanced stage with over 70% of the budgeted engineering work complete. Final flowsheets have been comprehensibly demonstrated and incorporated into the BFS design with the Leach Recovery pilot plant progressing well and final results expected in October 2016.
In addition, the permitting process in Tanzania is advancing with the project registration, scoping report and stakeholder meetings completed. Positive feedback for the project has been received from the local community during this process. The Draft Environmental and Social Impact Assessment ("ESIA") document was lodged in early September. The application for a Special Mining Licence is on track to be lodged before the end of 2016 with the granting of the licence expected in the first quarter of 2017 on receipt of an Environmental Certificate.
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 increase in magnet metal demand from electric vehicles and green energy applications.
Figure 1: Ngualla Rare Earth Project: Mine and Multistage Processing Plant design layout.
Peak Resources Limited Ground Floor, 5 Ord Street, West Perth, Western Australia 6005. PO Box 603, West Perth 6872. ASX: PEK ACN 112 546 700 Telephone: +61 8 9200 5360 info@peakresources.com.au www.peakresources.com.au Company Secretary: Graeme Scott
Non-executive Chairman: Peter Harold Managing Director: Darren Townsend Technical Director: Dave Hammond Non-Executive Directors: Jonathan Murray, John Jetter & Robin Mills
Table 1: Bankable Feasibility Study Progress.
The following table provides a summary overview of progress on the various individual work streams.
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Mineral Resource and Ngualla Mine
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Status
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Revised Mineral Resource Estimate - incorporates additional drilling from 2015 and was completed by SRK Consulting (reported in ASX Announcement "Higher grade Mineral Resource contains nearly 1 million tonnes rare earth oxide" in 22nd February 2016). The new +1% REO Weathered Bastnaesite Zone Mineral Resource is 15% higher grade than the previous estimate with 89% in the highest confidence JORC category.
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Geotechnical - a program of test holes was completed in 2015. Parameters assessed included a geotechnical description, rock quality designation, discontinuity characteristics, rock strength from field index tests and weathering. Soil material and weathered rock were logged according to the SAIEG Guidelines. From the test work undertaken a geotechnical model has been created and pit slop designs completed. These design parameters have been incorporated into the mine design and optimisation.
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Hydrology - Over 1,000 metres of drilling was completed as part of the hydrogeological drilling and pump testing investigation. Groundwater flows of sufficient volume to meet the project needs were intercepted and a bore field design has been developed from this information. The total water supply for the project will be provided from a combination of groundwater, recycled water from the tailings storage facility, surface water harvesting from within the project area.
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Mine Planning - Final optimisation of the mining schedule and Ore Reserve is on track and to be completed in conjunction with the BFS.
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80%
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Ore Blending - An ore Blending algorithm has been developed to optimise the performance of the Beneficiation Plant.
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75%
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Ngualla Multistage Processing Plant
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Status
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Access Road - A detailed study including site surveys has been undertaken to establish the preferred route for the main site access. The chosen route is an 85 km stretch joining the mine to main trunk road in the west of Tanzania. Following this decision, alignment surveys and geotechnical test work have been completed. Final designs are underway.
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25%
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Site Layout - General layout including ROM pad locations, accommodation village, site roads, storm water management infrastructure and geotechnical studies completed.
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90%
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Process Development - Pilot successfully completed. Additional process optimisation work is ongoing to drive for increased process performance and reduced costs.
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90%
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Process Design - The main plant design is complete with all process flow diagrams and piping and instrumentation diagrams complete along with the mechanical equipment lists. Detailed estimates for the procurement and construction of the project is underway with packages being sent to suppliers for indicative quotes.
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80%
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Tailings Design - The design of the tailings facility is complete. The dam will be constructed primarily from mine waste and will be located adjacent to the main mine waste dump. This design will reduce the overall footprint of disturbed land as well as reducing cost.
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75%
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European Rare Earth Refinery
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Status
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Leach/Calciner -This portion of the Leach Recovery piloting at ANSTO is complete with preliminary results indicating improved rare earth recoveries coupled with high cerium rejection.
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85%
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Leach Purification - Piloting of this process is complete with final results expected shortly. Equipment vendors have completed testing to select and size equipment (thickening/solid separation) for the Post Leach Purification process. Reports pending.
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70%
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SX Process - Piloting completed. Optimisation efforts included validation of circuit size, process control and process chemistry were completed. Consideration being given to include cerium/lanthanum separation and purification based on new marketing and sales opportunities.
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80%
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An extensive worldwide location search has been undertaken with input from Worley Parsons, Deloitte and AmecFW. The preferred location for the refinery in Europe has been agreed subject to finalisation of commercial discussions currently underway to secure the land and services for the site.
Peak is currently negotiating an option agreement for a parcel of land that will more than meet the needs of the refinery as well as any future expansions. Formal Agreements for the refinery utilities and services are also being negotiated.
A consultant has been appointed to assist with the preparation and submission of the planning application for the selected site. The consultant will also be able to assist with the full planning and licencing requirements for the refinery. As part of the Environmental Impact Assessment and the Company's due diligence an ecological survey was undertaken over the preferred site. No major ecological concerns were observed.
Figure 2: European Rare Earth Refinery Layout Plan.
The timing for completion of the BFS has been delayed 4to 6 weeks primarily due to the delay in receiving approval from the Fair Competition Commission for the Stage 2 of funding (refer ASX announcement titled "Appian Stage 2 funding proceeds and convertible note funds received". Dated 30th December 2015).
With the Company now in receipt of these funds and the full funding for the BFS agreed with our partners Appian Natural Resources Fund ("Appian") and International Finance Corporation ("IFC") the project is rapidly moving forward on all fronts with the BFS targeted for completion late Q1 or early Q2 2017.
For and on behalf of Peak Resources Limited.
Darren Townsend Managing Director
Mineral Resource Estimates
The information in this statement that relates to the Mineral Resource Estimates 2016 is based on work conducted by Rod Brown of SRK Consulting (Australasia) Pty Ltd, and the work conducted by Peak Resources, which SRK has reviewed. Rod Brown takes responsibility for the Mineral Resource Estimate. Rod Brown is a Member of The Australian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activities undertaken, to qualify as Competent Person in terms of the Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 edition).Rod Brown consents to the inclusion of such information in this report in the form and context in which it appears.
Metallurgy
The information in this report 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 and a Chartered Professional. Gavin Beer is the General Manager Metallurgy of the Company and has sufficient experience relevant to the activity which he is undertaking to be recognised 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.
Project Engineering and Cost Estimation
The information in this report that relates to infrastructure, project execution and cost estimating is based on information compiled and / or reviewed by Lucas Stanfield who is a Member of the Australian Institute of Mining and Metallurgy. Lucas Stanfield is the General Manager - Development for Peak Resources Limited and is a Mining Engineer with sufficient experience relevant to the activity which he is undertaking to be recognised as competent to compile and report. Lucas consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.