EDITOR: | January 16th, 2013

Solvent Extraction Pilot Plant for Ngualla Rare Earth Project Commissioned

| January 16, 2013 | No Comments
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Peak-Resources-LtdJanuary 16, 2013 (Source: Company Website)  — Peak Resources Limited (Peak: ASX:PEK; OTCQX:PKRLY), is pleased to announce the appointment of leading Australian mineral process development facility, ANSTO Minerals (ANSTO), to construct and operate a solvent extraction (SX) pilot plant. The plant will take the mixed rare earth product from the simple acid leach process and produce four refined, high purity, higher value rare earth oxide products.

The production of the high purity rare earth oxide products from the SX pilot plant will:

  • Provide physical samples in sufficient quantities for assessment by off take customers;
  • Confirm final specifications of the high purity products; and
  • Provide valuable engineering data for the detailed design of the full scale SX plant.

The SX pilot plant is designed to extract and produce four separate high purity rare earth oxide products that will confirm the end to end process of Ngualla mineralisation to product significantly de-risking the project and is a major step toward achieving production in early 2016.

The SX process will use a rare earth chloride feed produced from a bulk sample of mineralisation from the Bastnaesite Zone at Ngualla using the proven simple sulphuric acid leach and purification route.

Peak Managing Director Richard Beazley said “The commencement of the SX pilot plant is a major step toward the Company achieving production in early 2016.

In the two years since discovering the Ngualla deposit and starting well behind the rest of the field of emerging rare earth producers, Peak has fast tracked its development and continues to differentiate itself as a Company and Project that delivers.

Peak in the past year has released a maiden Resource Statement in February 2012, demonstrated the ‘Proof of Concept’ for the metallurgical process in August 2012 and delivered a positive scoping study and preliminary economic assessment in early December 2012.

The commencement of a SX pilot plant in January 2013 sets Peak up to become one of the select few leading rare earth developers. This is another strong indication of just how robust and unique the Ngualla Rare Earth Project is.”

Background
Located in the south west of Tanzania the Ngualla Rare Earth Project is 100% owned by Peak. The deposit is a recent discovery with the maiden Mineral Resource of 170 million tonnes at 2.24% REO* announced on the 29th of February 2012 confirming Ngualla as one of the largest and highest grade rare earth deposits 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. (Click here to see a map)

The scoping study completed in December 2012 focused on a portion of the SREZ – the Bastnaesite Zone. This mineralisation has several fundamental geological aspects that offer distinct advantages for development over other rare earth projects. It is high grade, occurs at surface, has the lowest uranium – thorium contents of any major rare earth deposit in the world and is readily extracted using a simple sulphuric acid leach process.

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.

A total of 130 holes for 13,600m of reverse circulation (RC) and diamond drilling completed in 2012 after the maiden Mineral Resource 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. This revised Mineral Resource estimate is scheduled for completion by the end of March 2013.

The Company continues to fast track the development of the project with the aim of becoming a low cost, long term rare earth producer by Q1 2016.

Significant successive milestones have been met or surpassed since the maiden Mineral Resource in February 2012, including a ‘Proof of Concept’ for the metallurgical process, a breakthrough in beneficiation testwork, completion of targeted drilling in the high grade Bastnaesite Zone, positive results from the scoping study and preliminary economic assessment, and now the commencement of the SX pilot plant.

About ANSTO (Australian Nuclear Science and Technology Organisation)
ANSTO is the leading process development facility in Australia with significant expertise in the solvent extraction processing and purification of rare earth minerals.

The company has recently completed a major upgrade to its facilities at Lucas Heights in NSW, including an entirely new world class laboratory for its solvent extraction testwork in which Peak’s pilot plant will be completed.

ANSTO’s prior experience in this area includes the developing of process recoveries and pilot plants for the Mt Weld deposit in WA and the Nolans deposit in the Northern Territory.

Proof of Concept
Outside of China there are only a select few rare earth projects that have proven the ability to successfully separate rare earths into high purity oxides. ANSTO have been instrumental in proving the solvent extraction separation process for three of these projects. It is this prior experience that gives Peak confidence that ANSTO will be able to quickly and efficiently confirm the ‘Proof of Concept’ for the separation of the Ngualla rare earths.

Engineering Data
The SX pilot plant is the final development stage before moving into detailed design of the full scale process facility. It will provide the engineering team with a large amount of data including:
• Equipment design and sizing criteria
• Confirmation of recoveries and grades

Final Product Specification
The SX pilot plant will produce samples of high purity rare earth oxide products in sufficient quantity for evaluation by off take customers. This will allow Peak to work with consumers and negotiate on price and volumes using actual product specifications with a view to obtaining off take agreements to support the development of the project.

Chloride Feed Solution
In November 2012 ANSTO was commissioned to process a 1.6 tonne bulk sample of high grade rare earth oxide mineralisation from the Bastnaesite Zone using the proven simple sulphuric acid leach process (Figure 2) to produce the rare earth chloride solution which will be the feed stock for the SX pilot plant.

This work was successful in replicating and confirming the earlier work completed at Nagrom Laboratories in August 2012.

Work Program
As described above, work on preparing the feed stock for the SX pilot plant commenced at ANSTO in November 2012. The first stage of the SX pilot plant program is planned to commence operation in February 2013 with sample product availability for each of the respective three stages becoming available in March, April, and May respectively. The final engineering report on the SX pilot plant will be completed by July 2013.

Project Schedule
The Ngualla Rare Earth Project remains on track to achieve production in early 2016. The commencement of the SX pilot plant is a significant step to further de-risking the project and is scheduled to be complete in July this year well ahead of the aggressive schedule set by the company (Figure 3).

Richard Beazley Managing Director

Cautionary Statement
The scoping study referred to in this report is based on low level technical and economic assessments, and is insufficient to support estimation and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusion of the scoping study will be realized.

Competent Person Statement
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.

The information in this report that relates to metallurgical testwork results is based on information compiled and/or reviewed by Gavin Beer who is a Member of The Australasian Institute of Mining and Metallurgy. Gavin Beer a Consultant to the Company. He has sufficient experience which is relevant 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”. 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.


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