Final drill results – Ngualla Rare Earth Project
January 22, 2013 (Source: Peak Resources) — Peak Resources Limited (Peak; ASX: PEK; OTCQX: PKRLY), is pleased to report the final assay results received from its 100%-owned Ngualla Rare Earth Project in Tanzania and provide a summary of the 2012 drilling program that is to support a revised Mineral Resource estimate.
Drill results highlights:
New results define continuous zones of high grade, near surface mineralisation within the Bastnaesite Zone. The latest assays will also extend the Mineral Resource to the west. Click here for tables and maps:
2012 Drilling Program Summary
The results of the 2012 drilling are expected to increase the amount of high grade mineralisation amenable to the chosen simple acid leach processing route, which will have a positive impact on the economics of the project.
The 13,600m of drilling completed in 2012 will allow for the estimation of a large Measured Mineral Resource and provide the definition required for a detailed mine plan and schedule for the project. Some newly defined high grade zones were not identified by drilling used to complete the maiden Mineral Resource announced in February 2012 and are therefore expected to increase the amount of high grade mineralisation within these parts of the deposit.
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Furthermore, drilling in the Southern Rare Earth Zone in 2012 has extended the mineralisation to the south and west in some areas, and is expected to support an increase in the size of the overall rare earth Mineral Resource for Ngualla.
The revised Mineral Resource estimate is on schedule for completion by the end of the first Quarter 2013.
New Drilling Results
Assay results from the remaining 13 holes of the 130 hole, 13,600m program of reverse circulation (RC) and diamond drilling completed in 2012 have now been received.
New high grade mineralised intersections include the following highlights:
NRC272: 38m at 4.50% REO* from surface and
10m at 6.02% REO from 64m
NRC273: 46m at 4.35% REO from surface
NRC277: 120m at 3.38% REO from surface to end of hole including
56m at 5.64% REO from surface
NRC278: 113m at 4.22% REO from surface
NRC279: 162m at 3.24% REO from surface including
52m at 6.04% REO from surface
NRC280: 49m at 4.08% REO from surface
NRC281: 115m at 3.64% REO from surface to end of hole including
32m at 5.60% REO from surface
NRC282: 91m at 4.06% REO from surface to end of hole
NRC283: 120m at 4.57% REO from surface to end of hole including
60m at 6.60% REO from surface
*REO = Total Rare Earth Oxide. See Table 1 for drill intersection details and Table 3 for individual rare earth distribution in the SREZ.
The new results include some of the highest grade intersections from surface received to date and continue to confirm the robust nature and continuity of the high grade, near surface weathered mineralisation in the heart of the Bastnaesite Zone that is targeted for first production. The results also extend the +1% REO Mineral Resource to the west over a strike length of approximately 300m (Figure 2).
2012 Drilling program review
The 2012 drilling program was completed provide data for a revised Mineral Resource estimate in the Bastnaesite Zone (Figure 1). A new resource model will feed into the pre-feasibility study currently in progress and scheduled for completion by end August 2013. The Bastnaesite Zone is the area of highly weathered, high grade rare earth mineralisation that is amenable to processing by the simple sulphuric acid leach process and is targeted for first production.
Drilling completed in 2012 defines continuous zones of high grade mineralisation containing many +5% REO ‘entire hole’ intersections that extend from surface to vertical depths of over 100m and over strike lengths of up to 350m. Some of these high grade zones were not defined by drilling used to complete the maiden Mineral Resource of February 2012 and are therefore expected to increase the amount of high grade mineralisation within these parts of the deposit amenable to the chosen processing route and have a positive impact on the economics of the project.
The 2012 drilling results also extend the Southern Rare Earth Zone a further 300m to the south, (see ASX announcement of 19th December 2012 ‘Ngualla drilling program update and new high grade results’), to the west over a distance of 300m (Figure 2) and at depth in several areas through deeper drilling. It is expected that this will support a modest increase in the size of the overall rare earth Mineral Resource for Ngualla.
A revised Mineral Resource estimate following the JORC Code and Guidelines is on schedule for completion by the end of the first Quarter 2013. This new resource model will include metallurgical recovery parameters and allow for the definition of a detailed mine plan and production schedule for use in pre-feasibility studies currently in progress.
About the Ngualla Rare Earth Project:
The Ngualla Rare Earth Project in Tanzania is a recent discovery and is the highest grade of the large undeveloped rare earth deposits.
Fundamental geological aspects offer distinct advantages for development over other rare earth projects. These include the large size of the deposit, outcropping, high grade mineralisation amenable to open cut mining with low strip ratios, favourable mineralogy amenable to a relatively simple, lower cost processing route and the lowest uranium and thorium levels of any major rare earth deposit in the world.
Using a 3.0% lower grade cut, the total Mineral Resource* includes a higher grade zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO, largely located near surface in the Southern Rare Earth Zone (SREZ, see Figure 1).*See Table 2 for Mineral Resource classification details and Table 3 for breakdown of individual REO’s
The favourable characteristics of the central Bastnaesite Zone targeted for first production distinguish Ngualla from all other rare earth development projects and are reflected in the results of the scoping study and preliminary economic assessment released to the ASX on 3rd December 2012. These indicate very low capital and operating costs compared to other rare earth projects.
The scoping study confirmed Ngualla as a leading rare earth project with an estimated NPV of US$1.57billion and pre-tax IRR of 53% for an initial 25 year mine life and mining of an 8.2 million tonne portion of the Indicated and Measured Mineral Resource within the Bastnaesite Zone with an average grade of 4.35% REO.
Pre-feasibility studies now in progress are scheduled for completion by August 2013 and are expected to continue to significantly enhance these robust project economics through:
• Further beneficiation and metallurgical process optimisation
• A revised Mineral Resource model to include high grade results from the 2012 drilling and scheduled for completion by end March 2013
A range of high purity separated rare earth oxide products from the SX pilot plant will be available for assessment by potential off take customers from March to May 2013.
Peak has appointed financial advisors to work with the Company in identifying and securing strategic partners to assist in funding the Ngualla Rare Earth Project through to production. Discussions have commenced and there has been some strong interest in the project.
The Company continues to fast track the development of Ngualla with the aim of becoming a low cost, long term rare earth producer by Q1 2016.
Richard Beazley, Managing Director
The information in this report that relates to Exploration Results is based on information compiled and/or reviewed by Dave Hammond who is a Member of The Australasian Institute of Mining and Metallurgy. Dave Hammond is the Technical Director of the Company. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dave Hammond consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Rob Spiers, who is a member of The Australasian Institute of Geoscientists. Rob Spiers is an employee of geological consultants H&S Consulting Pty Ltd. Rob Spiers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Rob Spiers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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