SOURCE: Peak Resources Limited

Peak Resources Limited

July 27, 2012 09:00 ET

Peak Resources Announces $5.5 Million Private Placement

Placement Was Oversubscribed

WEST PERTH, AUSTRALIA--(Marketwire - Jul 27, 2012) -  Peak Resources Limited ("Peak") (ASX: PEK) (OTCQX: PKRLY) (PINKSHEETS: PKRLY) today announced that the Company has received commitments from institutional and accredited investors to raise $5.5 million through a private placement ("Placement"). Proceeds from the placement will be used for exploration, scoping studies and metallurgical test work at its Ngualla rare earth project, as well as general working capital needs.

Peak Resources sold approximately 32.3 million units at $0.17 per share, with each unit representing one share of the Company's common stock and an option to purchase one share of the Company's common stock at an exercise price of $0.25 on or before July 31, 2014. The placement will be completed in two tranches as follows:

  • Tranche One - Approximately 15.5 million shares (approximately $2.64 million) will be issued under the Company's 15% issuance capacity; and
  • Tranche Two - Approximately 16.8 million shares (approximately $2.86 million) will be issued following shareholder approval at a general meeting of the Company to be held towards the end of August 2012. Options relating to the second tranche of the Placement shares will also be subject to shareholder approval.

The Placement was oversubscribed. Certain Directors of the Company intend to participate in Tranche Two of the Placement, subject to shareholder approval. Existing shareholders in Peak will be provided with the opportunity to subscribe for up to $15,000 worth of shares under a Share Purchase Plan ("SPP"), capped at $2.0 million, on the same terms as the Placement. Options to be issued to subscribers under the SPP will also be subject to shareholder approval. Participation in the SPP will be open to shareholders who were holders of Peak shares on the register at 7.00 pm ET on July 26, 2012, being the record date.

Richard Beazley, Managing Director of Peak Resources, said, "We are pleased with the strong interest in this private placement financing. Once we complete this transaction, which we expect no later than September 2012, we will have sufficient capital to fund our development programs into 2013."

Ngualla is the world's fifth largest rare earth deposit outside of China and the highest grade of the top seven. Ngualla is potentially a low-cost, long term rare earth project located in Tanzania.

Safe Harbor Statement

The information in this document has been prepared as at July 26th, 2012. Certain statements contained in this document constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information under the provisions of Canadian provincial securities laws. When used in this document, the words "anticipate", "expect", "estimate", "forecast", "will", "planned", and similar expressions are intended to identify forward-looking statements or information.

Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production, optimization efforts and sales; estimates of mine life; estimates of future internal rates of return, mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company's minesites and statements and information regarding the sufficiency of the Company's cash resources. Such statements and information reflect the Company's views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward-looking statements and information. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; community protests; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's by-product metal derivative strategies. For a more detailed discussion of such risks and other factors that may affect the Company's ability to achieve the expectations set forth in the forward-looking statements contained in this document, see the Company's Annual Report on Form 20-F for the year ended December 31, 2011, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information. Marc Legault, a Qualified Person and the Company's Vice-President, Project Development, reviewed the technical information disclosed herein. For a detailed breakdown of the Company's reserve and resource position see the July 26th, 2012 press release on the Company's website. That press release also lists the Qualified Persons for each project.

About Peak Resources

Peak is developing the Ngualla Project, a potentially low-cost, long term rare earth project located in south west Tanzania. Ngualla has been ranked as the fifth largest deposit in the world outside China, and the highest grade of the top seven.

Ngualla has a Mineral Resource of 170 million tonnes grading 2.24% of rare earth oxides (REO). Within the resource there is a highly weathered and near-surface zone estimated at 40 million tonnes at 4.07% REO, equivalent to 1.6 million tonnes of contained REO (see Table 1 below for resource classifications). Ngualla is also a bulk deposit which is largely outcropping. These attributes place the project among the world's most notable rare earth discoveries of recent years.

Ngualla is a potential low cost open pit mine due to its shallow outcropping high grade mineralisation. The initial sighter metallurgical test work to date has been completed using a sulphuric acid leach process route suggesting a relatively less complex, potentially cheaper capital outlay and shorter time to production.

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