SOURCE: Peak Resources Limited

Peak Resources Limited

July 23, 2012 09:00 ET

Peak Resources Announces Initial Results From 2012 Drilling Program at Ngualla

WEST PERTH, AUSTRALIA--(Marketwire - Jul 23, 2012) - Peak Resources Limited ("Peak") (ASX: PEK) (OTCQX: PKRLY) (PINKSHEETS: PKRLY) today announced the first assay results from its 2012 drilling program at Ngualla in southern Tanzania.

Highlights:
Intersections returned from the first six holes within the Southern Rare Earth Zone indicate several wide, high grade intersections from surface, including:

NRC164: 32m at 4.62% REO from surface
NRC166: 100m at 3.99% REO from surface
NRC168: 151m at 5.15% REO from surface to EOH

Results received to date confirm the continuity of high grade, near surface weathered rare earth mineralisation in the Southern Rare Earth Zone that may be amenable to sulphuric acid leach processing.

Mount Mapuma Soil Sampling
A soil sampling program over Mount Mapuma (located two kilometres to the north east of the Southern Rare Earth Zone) has defined a coherent high tenor anomaly over an area of 550m x 500m above 2% REO in soils and up to 6.27%.

This new zone of rare earth mineralisation represents a high quality exploration target that has yet to be drill tested.

*REO = Total Rare Earth Oxide. EOH = end of hole. See Table 2 for individual rare earth distribution and Table 3 for drill intersection details.

The results from the first six reverse circulation (RC) holes drilled in the centre of the Southern Rare Earth Zone have intersected the predicted high grade rare earth mineralisation in deeply weathered carbonatite.

Background

Peak is developing the Ngualla Project, a potentially low-cost, long term rare earth project located in south west Tanzania. In two years the Company has advanced Ngualla from a grass roots exploration project to its current status as the fifth largest rare earth deposit in the world outside of China, and the highest grade of the top seven.

The Company continues to rapidly advance the project using the natural geological advantages of Ngualla's mineralisation to position it as a low cost mine.

Ngualla has a number of attributes which place the project among the world's most notable rare earth discoveries of recent years. A maiden Mineral Resource estimate was completed in February 2012 and is 170 million tonnes grading 2.24% of rare earth oxides for 3.8 million tonnes of contained REO. Within this resource there is a highly weathered and near surface zone estimated at 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO (see Table 1). Ngualla is a bulk deposit which is largely outcropping.

 
 
Table 1: Classification of Mineral Resources for the Ngualla Rare Earth Project, 1.0% and 3.0% REO cut-off grades.
Lower cut - off grade   JORC Resource Category   Tonnage (Mt)   REO (%)*   Contained REO tonnes
1.0% REO   Measured   29   2.61   750,000
Indicated   69   2.43   1,700,000
Inferred   72   1.92   1,400,000
Total   170   2.24   3,800,000
3.0% REO   Measured   11   3.99   430,000
Indicated   21   4.09   850,000
Inferred   8.7   4.11   360,000
Total   40   4.07   1,600,000
*REO (%) includes all the lanthanide elements plus yttrium oxides. Figures above may not sum precisely due to rounding. The number of significant figures does not imply an added level of precision.
 
 

Ngualla Drilling Program 2012

Peak commenced a major drilling program after the end of the rainy season, on 24th May 2012. An estimated 30,000m is planned during 2012 to provide information and samples to support the scoping and metallurgical studies currently in progress on the Southern Rare Earth Zone and add further value to the project by defining additional resources.

Holes drilled to date have targeted the priority areas of high grade rare earth mineralisation in the central Southern Rare Earth Zone and have intersected the predicted, deeply weathered carbonatite.

Assay results have been received for the first six RC holes (Figure 2) and include wide, high grade intersections from surface including:

Drill hole Intersection
NRC163: 51m at 2.70% REO from surface including
10m at 5.20% REO from surface
NRC164: 32m at 4.62% REO from surface
NRC166: 100m at 3.99% REO from surface including
50m at 5.34% REO from surface
NRC167: 64m at 2.83% from surface including
20m at 5.20% REO from surface
NRC168: 151m at 5.15% REO from surface to EOH

Intersection details included in Table 3. Distribution of individual REOs shown in Table 2.

The drill intersections received to date from the 2012 infill drilling program in the Southern Rare Earth Zone confirm the continuity of high grade, near surface weathered rare earth mineralisation that may be amenable to sulphuric acid leach processing.

Drilling Program 2012: Progress Update

Drilling operations are continuing with a total of 43 holes for 4,449m having been completed within the Southern Rare Earth Zone by July 18th.

A diamond rig is scheduled to join the two RC rigs currently on site during August. The program will take several months to complete and the Company will provide regular updates regarding the progress of the drilling and results as they come to hand.

Mount Mapuma Soil Sampling

The Mount Mapuma area is located within the Ngualla carbonatite two kilometres to the north east of the Southern Rare Earth Zone (Figure 1). Previous sparse reconnaissance soil and rock sampling in this area has identified rare earth mineralisation up to 3.39% REO in ankeritic carbonatite, the rock type that hosts mineralisation in the Southern Rare Earth Zone.

A detailed soil sampling program over a 1.4km x 900m area was completed over the Mount Mapuma area in June 2012 (Figure 4). A coherent high tenor rare earth anomaly extending over an area of 550m x 500m at +2% REO was defined by the soil sampling. The assay results include several high grade rare earth mineralised soil samples, including:

Sample ID REO% Easting Northing
I003885 6.27% 481,050 9,149,799
I003903 5.72% 481,049 9,149,700
I003904 5.79% 481,100 9,149,703
I003905 5.26% 481,152 9,149,696

Grid: UTM Arc 1960 36S.

This high tenor soil anomaly represents a high quality exploration target that will be drill tested after the current program is completed.

 
 
Table 2: Relative components of individual REO's (including Yttrium) as a percentage of total REO for some large rare earth deposits and the Ngualla Southern Rare Earth Zone ( > 1% REO).
 
 
  Ngualla Nolans Mountain Baiyunebo Mt Weld
SREZ*  Bore Pass
% % % % %
Light Rare Earths Lanthanum 27.7 19.7 33.2 27.1 25.6
Cerium 48.2 47.5 49.1 49.9 45.7
Praseodymium 4.71 5.82 4.34 5.15 5.42
Neodymium 16.3 21.2 12 15.4 18.6
Samarium 1.57 2.37 0.8 1.15 2.44
Heavy Rare Earths Europium 0.31 0.4 0.12 0.19 0.55
Gadolinium 0.68 1 0.17 0.4 0.97
Terbium 0.06 0.08 - - 0.09
Dysprosium 0.11 0.33 - 0.3 0.16
Other 0.08 0.21 0.16 0.03 0.04
Other Yttrium 0.3 1.32 0.1 0.2 0.37
    100 100 100 100 100
             
             
 
 
Table 3: Southern Rare Earth Zone - Rare earth RC drill intersections, +1% REO
Selected intersections + 2% REO in (italics) and minimum 4m intersection width.
Hole ID East North Hole Depth (m) From (m) To (m) Interval (m) REO %
NRC163 482,271 9,148,281 60
(incl.
0
0
56
51
10
60
51
10
4*
2.70
5.20)
2.29
NRC164 482,355 9,148,286 120 0
38
78
88
98
32
68
82
92
120
32
30
4
4
22*
4.62
2.29
1.69
1.02
2.11
NRC166 482,438 9,148,279 159
(incl.
0
0
122
100
50
148
100
50
26
3.99
5.34)
1.95
NRC167 481,960 9,147,995 120
(incl.
0
0
68
86
102
64
20
82
98
106
64
20
14
12
4
2.83
5.20)
1.51
1.26
1.89
NRC168 482,278 9,147,995 151 0 151 151* 5.15
Note: REO = Total Rare Earth Oxides including yttrium. See Table 1 for relative distribution of individual rare earth oxides. Samples are 2m composites from angled -60° west RC drilling. Intersections calculated using 1% REO lower cut and a maximum of 2m internal dilution. Analysis by SGS laboratory, Perth, by 4 acid digest and ICP or XRF. Co-ordinate system is Arc 1960 UTM zone 36S. * = hole ended in mineralisation.
 
 

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 Hellman and Schofield 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.

Safe Harbor Statement

The information in this document has been prepared as at July 18th, 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 18th, 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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