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Peak Resources Ltd: THE INVESTMENT CASE

Peak Resources Ltd’s Darren Townsend talks rare earths in Proactive Q&A Sessions™

Darren Townsend presented at Mines and Money Melbourne.
Peak Resources Ltd’s Darren Townsend talks rare earths in Proactive Q&A Sessions™
INVESTMENT OVERVIEW: PEK The Big Picture
Peak Resources' Ngualla deposit is located in Tanzania.

PROACTIVE INVESTORS: Welcome Darren.


First of all the rare earth market, what changes has it undertaken over the long term?

Darren Townsend: The rare earth market has really changed a lot over the last five years or so.

Basically, we've had a situation where we've had this massive growth in high strength magnets being the largest proportion of the rare earth market.

It's grown from 47% of the rare earth market by value to 79% of the rare earth market by value of these very high strength magnets, and they're used in lots of different applications.

Uses include the drive motors for electric and hybrid vehicles.

Over 90% of electric and hybrid vehicle drive motors are actually made out of these high strength rare earth magnets.

Most of that are two main rare earths, neodymium and praseodymium, so they're the key parts of the rare earth market.

 

How does Ngualla composition of rare earths compare to other deposits globally?

Darren Townsend: Ngualla is one of the world's highest grade undeveloped projects for neodymium and praseodymium.

Ngualla is a very large high-grade resource.

The mine life is looking at 31 years, but this is only using 22% of the global resource.

What we've done is we've picked out the most metallurgically favourable part of the ore body for our start-up 31 years of life.

That's important, because it's really all about the chemical processing with these deposits.

You've got to get itself in a favourable operating and capital cost position.

We're really lucky in that our deposit is really low in uranium and thorium, which can sometimes be an issue with rare earth deposits.

 

Can you take us through some of the metallurgical aspects at Ngualla?

Darren Townsend: Test work included multiple stages of flotation through a beneficiation process of doing a barite pre-float, and then a number of rare earth float stages.

We eventually produce a 45% rare earth mineral concentrate that we then look to ship that rare earth concentrate to a refinery.

Our base case is to build a refinery in a European location, but in parallel with that we're also evaluating other options for toll treatment.

But the base case is Europe, with the split of CAPEX a bit over US$200 million going to Tanzania, and about US$124 million going into Europe.

This is really low for a rare earth project.

Usually you're talking about CAPEX's closer to a billion dollars.

So we're really happy with the capital efficiency of the project and the operating cost efficiency, because not only are we not constrained by radioactivity issues to get our rare earth mineral concentrate grade up really high, but we also have worked out a way to do a calcination process where we can actually calcine the concentrate, and actually reject about 70% of the Cerium before we add any acid

There are 17 different rare earths, but cerium is 45% of the volume of rare earths.

Cerium is really a loss making rare earth, so it takes up just under half your volume but you don't make much money for, and we've worked out a way to leave 70% of the Cerium behind, before we even add any acid into the process, which is a pretty significant advantage - a really big advantage.

 

What news flow should investors look out for in the near-term from Peak?

Darren Townsend: We'll have the bankable numbers late first quarter, early second quarter of this coming year, so we're not too far away.

We've completed the pilot planning for all this, and spent $4 or $5 million dollars to conduct extensive pilot planting using the actual material from site.

Some of the mistakes that have been made from the previous western producers is not doing enough pilot planting. We've done lots.

We've also recruited a couple of key executives to the team, including Rocky Smith, who used to be the Managing Director of Molycorp's Mountain Pass Mine in the U.S.

He's a very experienced chemical and rare earth engineer and so he brings a hell of a lot of experience. That's all been fed into the bankable.

We are also making steady progress with our permitting and expect our environmental licence to be granted early in 2017.

This will be followed by work on our mining licences.


Finally, why should an investor considering adding Peak Resources to their portfolio?

Darren Townsend: If you are a believer in the e-mobility and green tech spaces I strongly suggest you get some exposure to neodymium and praseodymium which is used in 90% of the drive motors for electric/hybrid vehicles and also in wind turbines drive motors.

As a project with lowest quartile Opex and Capex, and one of the few projects funded to complete a Bankable Study, Peak are perfectly positioned to give exposure in this space with our 31 year life project.


PROACTIVE INVESTORS: Thank-you Darren.

Darren Townsend presented for Peak Resources at Mines and Money Melbourne in November 2016.


 





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January 30 2015
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October 23 2014

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