viewPeak Resources Ltd.

Peak Resources raises $3.5M through oversubscribed entitlement offer

With shareholders demonstrating their confidence in the Ngualla Rare Earth Project in Tanzania by oversubscribing for the $3.3 million one for five entitlement offer, Peak Resources now has the mandate to complete the Pre-Feasibility Study and further progress the project towards development.


Peak Resources (ASX: PEK) has received a strong vote of confidence in its Ngualla Rare Earth Project in Tanzania with shareholders oversubscribing for its $3.3 million entitlement offer.

Subscriptions for shares under the one for five offer priced at $0.06 each – including the shortfall to existing shareholders – totalled $3.52 million.

Peak will issue all shares available under the original entitlement offer and will also issue the additional shares under its 15% placement capacity.

Proceeds from the entitlement offer will fund completion of the Preliminary Feasibility Study and Reserve estimate on the Ngualla Project.

It will also be used to continue discussions with a number of potential cornerstone investors and off take customers; fund commencement of a Definitive Feasibility Study; and provide additional working capital.

Preliminary Feasibility Study

The company remains on track to complete the Preliminary Feasibility Study in the first quarter of 2014.

Notably, this will include a revised economic assessment that is likely to reflect the benefit that rising prices for the key high value rare earths will have on projected annual revenue.

The PFS will be followed by a maiden Reserve estimate in the same quarter.

Ngualla Rare Earth Project

Ngualla hosts a globally significant resource on the basis of grade and tonnes, with thick zones of high grade >5% REO at surface. Importantly the resource is well defined, with 85% in the Measured JORC category.

It currently hosts: 195Mt at 2.26% REO containing 4.4Mt REO including: Bastnaesite Zone weathered: 21.6Mt at 4.54% REO for 982,000t contained REO.

Ngualla also has the ability to be open pit mining with a low strip ratio.

Peak has also stated that Ngualla is now significantly de-risked with a proven, low cost metallurgical process demonstrated ‘end-to end’ from mineralisation to high purity separated rare earth oxide products.

Ngualla has estimated NPV of US$1.768 billion and IRR of 60%, on the December 2012 10,000 tonne per annum base case scenario, capital costs of US$373 million and operating costs of US$10.18 per kilogram of rare earth oxides.

The project remains on track to achieve rare earth production in 2016.

This has not gone unnoticed by the market with the company signing a Memorandum of Understanding with a Chinese rare earth producer for the objective of developing Peak's wholly-owned Ngualla Rare Earth Project in Tanzania.

The as yet unnamed company is an established rare earth producer based in a port city in northeast Jiangsu Province, with facilities and technical expertise in the beneficiation, processing and separation of rare earths into high purity rare earth products and an established marketing network.

While the MoU is non-binding, it provides the agreed framework to formalise arrangements for a long term strategic partnership to develop the project.


The oversubscription of Peak Resources’ one for five entitlement issue will not only bring in the funding to complete the Preliminary Feasibility Study for the Ngualla Rare Earth Project, it also highlights the growing momentum the company has built.

Testwork by ANSTO Minerals has successfully demonstrated the end to end metallurgical process from mineralisation to high purity separated rare earth oxide products while the agreement with the Chinese company to develop the project is a clear sign that Peak’s progress has not gone unnoticed.

Share price catalysts ahead include the release of the Preliminary Feasibility Study due to be released in the first quarter of 2014 to be followed by the maiden Reserve estimate prior to the end of the same quarter.

The Ngualla Project remains on track to achieve rare earth production in 2016.


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Quick facts: Peak Resources Ltd.

Price: 0.033 AUD

Market: ASX
Market Cap: $43.08 m

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