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Proactive Investors:
Peak Resources raises $2.5M for Ngualla Pre-Feasibility Study
Monday, May 13, 2013 by Bevis Yeo


Peak Resources (ASX: PEK) has raised $2.5 million to advance the Pre-Feasibility Study for its Ngualla Rare Earth project in Tanzania while it continues negotiations with a potential cornerstone investor.

The funds were raised through a placement of about 20.8 million shares priced at $0.12 each to sophisticated or professional investors.

“This raising will allow us to maintain momentum on the Ngualla Project, in particular completing Pilot Plant work at ANSTO, producing refined products for customer verification and enabling us to continue to meet Pre-Feasibility Study milestones whilst we look to complete the funding agreement with the cornerstone investor,” executive chairman Alastair Hunter said.

Peak’s negotiations with the potential cornerstone investor are currently on track with further details expected to be released this month while the Pre-Feasibility Study has scheduled delivery date in the September quarter of 2013.

This will include a revised economic assessment for the project, and quantify these improved economic parameters.

Shaw Corporate Finance and Blue Ocean Equities were the joint lead managers to the placement.

Funding Memorandum of Understanding

Under the MoU with the investor, Peak will receive funding for Ngulla in three stages, with each stage to confirm the economic parameters as defined in Peak’s Scoping Study from December 2012, including:

- Stage 1: The Pre-Feasibility Study, which is in progress;
- Stage 2: The Definitive Feasibility Study; and
- Stage 3: Construction of the Project.

Resource

The Ngualla resource was recently updated, with the Resource for the Bastnaesite Zone weathered mineralisation, using a 3% lower grade cut-off, stands at 21.6 million tonnes at 4.54% rare earth oxides (REO) for 982,000 tonnes of contained REO.

Of the total Bastnaesite Zone Mineral Resource, 99.6% is classified in the high confidence Measured or Indicated category, with the majority (86%) being Measured.

The Measured and Indicated portions of the Bastnaesite Zone will form the basis for a maiden Reserve estimate for the project to be completed as part of the Pre-Feasibility Study which is now in progress.

The extremely low levels of uranium and thorium in the Bastnaesite Zone weathered Mineral Resource of 14ppm and 42ppm respectively are a distinct advantage over other rare earth projects.

Potential exists to support significantly increased production levels and an extended mine life, based on a simple sulphuric acid leach operation, compared to the 10,000 tonnes per annum REO estimated in the December 2012 Scoping Study.

An increased production rate and higher grades, combined with the enhanced beneficiation ability will significantly improve the strong economics and further reduce cash costs.

Analysis

The placement is a clear sign of investor support for Peak Resources and will provide the company with the funding to continue advancing the Ngualla Pre-Feasibility Study.

Peak had $2.25 million as in cash as of 31 March 2013.


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