SOURCE: Peak Resources Limited

Peak Resources Limited

August 01, 2012 09:15 ET

Peak Resources Announces Wide High Grade Drill Results From Surface at Ngualla Rare Earth Project

WEST PERTH, AUSTRALIA--(Marketwire - Aug 1, 2012) - Peak Resources Limited (Peak) (ASX: PEK) (OTCQX: PKRLY) (PINKSHEETS: PKRLY), the developer of a potentially low cost, long term rare earth project in Tanzania, is pleased to announce several new high grade rare earth mineralised intersections from surface at its 100%-owned Ngualla Rare Earth Project, the fifth largest rare earth project in the world outside of China.

The drilling has intersected the predicted, deeply weathered carbonatite, which is typically enriched in rare earths in the 3 to 8% REO* range. Drill intersections confirm the continuity of significant areas of high grade, weathered rare earth mineralisation from surface that may be amendable to sulphuric acid leach processing.

Highlights
Ngualla Drilling Program 2012 (Southern Rare Earth Zone)
Assay results received from ten new drill holes in the central bastnaesite core of the Southern Rare Earth Zone include several high grade intersections mineralised from surface to the end of hole:

   
NRC169: 180m at 3.94% REO from surface to end of hole
NRC172: 130m at 4.29% REO from surface to end of hole
NRC176: 140m at 5.21% REO from surface to end of hole
NRC177: 20m at 4.01% REO from 28m including
  14m at 5.16% REO from 30m
NRC178: 36m at 2.82% REO from surface and
  34m at 3.84% REO from 48m
   

These wide intersections confirm the continuity and consistency of the rare earth mineralisation in the heart of the deposit. Mineralisation still remains open at depth and to the south.

*REO = Total Rare Earth Oxide. See Table 1 for drill intersection details and Table 2 for individual rare earth distribution.

Drilling operations are continuing with a total of 52 holes for 5,900m having been completed within the Southern Rare Earth Zone (Figures 1 and 2) by 31st July. Assay results have been received for 15 of these new holes.

The drilling program will provide information and samples to support the scoping and metallurgical studies currently in progress on the Southern Rare Earth Zone. This will take several more months to complete and the Company will provide regular updates regarding the progress of the drilling and assay results as they are received.

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 that 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 projecting 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 3). Ngualla is a bulk deposit which is largely outcropping.

Table 1: 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 %
  NRC169   482,369   9,148,002   180   0   180   180*   3.94
  NRC170   482,119   9,148,056   76   0
12
36
54
  4
20
40
66
  4
8
4
12
  2.31
1.75
1.17
1.92
  NRC171   482,167   9,148,064   4   0   4   4*   4.73
  NRC172   482,204   9,148,000   130   0   130   130*   4.29
  NRC173   482,429   9,148,001   8   0   8   8*   3.50
NRC174   482,427   9,147,999   118   0
14
82
96
  10
76
92
118
  10
62
10
22*
  2.39
2.73
1.19
2.44
  NRC175   482,159   9,148,065   101   0
60
82
  56
70
101
  56
10
19*
  2.65
1.38
1.41
  NRC176   482,200   9,147,947   140   0   140   140*   5.21
  NRC177   482,196   9,148,053   120
(incl.
  0
28
30
52
84
  24
48
44
58
102
  24
20
14
6
18
  1.69
4.01
5.16)
1.71
2.69
NRC178   482,238   9,148,054   120   0
48
  36
82
  36
34
  2.82
3.84
                             

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.

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
SREZ*
  Nolans
Bore
  Mountain
Pass
  Baiyunebo   Mt Weld
   
    %   %   %   %   %
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   12.0   15.4   18.6
Samarium   1.57   2.37   0.80   1.15   2.44
Heavy Rare Earths   Europium   0.31   0.40   0.12   0.19   0.55
Gadolinium   0.68   1.00   0.17   0.40   0.97
Terbium   0.06   0.08   -   -   0.09
Dysprosium   0.11   0.33   -   0.30   0.16
Other   0.08   0.21   0.16   0.03   0.04
Other   Yttrium   0.30   1.32   0.10   0.20   0.37
        100   100   100   100   100
                         

Table 3: 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.

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.

Contact Information