Ngualla Project: Discovery to Development
- 1. COMMONWEALTH RESOURCES INVESTMENT FORUM Ngualla Project: Discovery to Development Ri h d Beazley – M Richard B l Managing Di t P k Resources i Director, Peak R IRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY, 22 MAY 2012 www.ObjectiveCapitalConferences.com
- 2. Ngualla Project discovery TO DEVELOPMENT a large NEW rare earth resource 17th April 2012
- 3. Disclaimer The information contained in this presentation is for information purposes only and has been extracted entirely from documents or materials publicly filed with the Australian Stock Exchange and/or the Australian Securities and Investments Commission. This presentation is not an offer or invitation to subscribe for or purchase securities in the Company. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions. The Company does not warrant that the information contained in this presentation is accurate or complete. The information has been prepared on a best endeavours basis. Recipients of this presentation assume all risk and liability resulting from the use of the information contained in this presentation including but not limited to consequential damages. To the extent that the presentation contains any projections or other forward looking statements, those statements involve a number of known and unknown risks, uncertainties and other facts that may cause actual performance to be materially different from those expressed or implied by those statements. These forward looking statements are not historical facts but rather are based on Peak’s current expectations, estimates, projections and beliefs and assumptions regarding future performance. Words such as “scenario”, “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “forecasts” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors. In providing this presentation, Peak Resources Limited has not considered the financial position or needs of the recipient. Persons needing advice should consult their stockbroker, bank, manager, solicitor, accountant or other independent financial and legal advisors. Recipients of this presentation must undertake their own due diligence and make their own assumptions in respect of the information contained in this presentation and should obtain independent professional advice before making any decision based on the information. Competent Person Statement The information in this presentation relates to Exploration Results based is based on information reviewed by David Hammond who is a Member of the Australasian Institute of Mining and Metallurgy, David Hammond is a Director and full time employee of the Company. He has sufficient experience which is relevant to the 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 ad Ore Reserves’. David Hammond consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Not for release or distribution in the United States. 2
- 4. Outline 1/ Corporate Details 2/ Rare Earth Markets 3/ Ngualla Rare Earth Project 4/ Maiden Resource 5/ Project Advantages 6/ Development Schedule
- 5. Investment Highlights Moving from Explorer to Developer • Maiden Resource – 29th February 2012 • th largest rare earth, highest grade of the 7th largest deposits 5 outside of China • Low market cap for size of resource – significant upside • 100% ownership • istinct project advantages support Peak’s aim to be in the lower D cost quartile of producers • Encouraging early stage metallurgical test results • Niobium – tantalum, phosphate and rare earth exploration upside • Scoping studies commencing 4
- 6. Corporate Details ASX: PEK 13th April 2012 Ordinary Shares on Issue: 207.1m Options outstanding: 11,191,667 Cash at 13th April: $4.9m Liquidity: 1.7 million shares per day (av. over 3 months) 52 week range: $0.26 - $0.87 IPO Date: 29 November 2006 Market Cap: $72.5m (at $0.35) Share Price (01 July 2010 – 13th April 2012) $0.89 – $0.79 – $0.69 – $0.59 – $0.49 – $0.39 – $0.29 – $0.19 – $0.09 – 01 July 2010 30 SEPT 2010 30 Dec 2010 31 mar 2011 30 JUNE 2011 29 SEPT 2011 29 Dec 2011 29 MAR 2012 Board and Senior Management Consultants Alastair Hunter Non-executive Chairman Resource consultants: Hellman Schofield Pty Ltd Richard Beazley Managing Director Metallurgical mineral processing: Bateman Engineering Pty Ltd Dave Hammond Technical Director Mineral processing test laboratory: Amdel Jonathan Murray Non-executive Director Legal representation: Australia: Steinepreis Paganin Linda Paini Company Secretary Tanzania: AKO Law Brian Lloyd Exploration Manager (Tanz) Auditor: Deloitte Touche Tohmatsu 5
- 7. The Rare Earth Market • rowth markets in renewable energy and advanced technologies G Digital technology Clean energy • hina controls 97% of supply, export restrictions, price increases, C the West is searching for alternative supply Global Rare Earth Metal Oxide Production (,000 tonnes) Rare Earth Metal Oxide Price ($US per tonne) 140 China 350,000 Nd Oxide USA Pr Oxide 300,000 120 Other La Oxide Ce Oxide 100 250,000 80 200,000 60 150,000 40 100,000 20 50,000 1956 1965 1985 2002 2010 2004 2005 2006 2007 2008 2009 2010 2011 Source: Metal – Pages Ltd 6
- 8. Location and Infrastructure • anzania – an established T mining culture Ngualla Project ANDA • hird largest gold producer T 56km in Africa Lake Victoria • Access to transportation KENYA B6 B363 147km T A N Z A N I A Dar Es Salaam Lake Rukwa La ke Ru Ngualla Project kw a Indian B345 Ocean ! Mbeya ZAMBIA N Lake 0 100 200 400km Dar Es Salaam Nya Port 750km sa • Onsite power required MALAWI A104 N • Good potential 0 10 25 50km Mbeya for groundwater 7
- 9. Resource and exploration drilling • irgin discovery – August 2010 • 26,700m drilling for the resource V Max DH REO %: A 1 to 2% A 2 to 3% Northern Niobium – Tantalum, A 3 to 5% Phosphate Zone A 5% Northern Niobium – Tantalum, Phosphate Zone Max DH REO %: ! 1% OPEN ! 1 – 2% ! 2 – 3% ! 3 – 5% ! 5% Southern Rare Earth Zone OPEN OPEN SW Alluvials 8
- 10. Maiden JORC Resource 29th February 2012 • Ngualla Mineral Resource – 1.0% and 3.0% cut off grades Classification of Mineral Resources for the Ngualla Rare Earth Project, 1.0% and 3.0% REO cut-off grades. Lower cut – off Resource Tonnage REO Contained grade Category (Mt) (%)* REO tonnes Measured 29 2.61 750,000 Indicated 69 2.43 1,700,000 1.0% REO Inferred 72 1.92 1,400,000 Total 170 2.24 3,800,000 Measured 11 3.99 430,000 Indicated 21 4.09 850,000 3.0% REO Inferred 8.7 4.11 360,000 Total 40 4.07 1,600,000 *REO (%) includes all the lanthanide elements plus yttrium oxides. 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. 9
- 11. Global top 5 Rare Earth Deposit • Ngualla is a large, high grade, globally significant rare earth deposit • It is the highest grade of the 7 largest deposits outside of China • hallow resource and outcropping high grade mineralisation positions Ngualla S as a potential low cost open pit mine Project Comparisons 12 9 REO grade % 375m 8 10 Contained REO (Mt) 300m 300m Depth to base of resource 7 Contained REO (Mt) 8 6 REO Grade (%) 600m 5 240m 6 155m 450m 4 4 3 126m 155m 2 2 1 0 0 c ld or ho el e s eld ift re e o rr ll k) e) Hi ak dg s e bb Ka tvi e Bo dr Eld ul ad Pa ob c W efj eL Lo ala igu Du on s (B Gr ra Ni rp ’s an ain nt M ng ch W No ar lla lan ko ou Kv h nt Be ra Ne ig ua nd M No ou St (H Za Ng M lla ua Ng Date: 3 April 2012 Source: Technology Metals Research and Company filings 10
- 12. Critical Rare Earths Neodymium Dysprosium 4 (high) Lithium Europium Terbium 5 rare earths are forecast to Critical Importance to clean energy 3 Tellurium Yttrium be in critical undersupply: Near-Critical Not Critical • Neodymium, Nickel Cerium Lanthanum Cobalt Manganese 2 Gallium Praseodymium • Dysprosium Indium • Europium Samarium 1 (low) • Terbium • Yttrium 1(low) Supply risk 2 3 4 (high) Critical REO as % of total 20.0 Eu 15% La 11% 19.8 20% – 17.0 Dy 3% 16.1 Pr 10% 15% – Gd 2% 12.2 10% – Ce 20% Sm 1% Y 1% 5% – Other 1% Nd 35% 0– Ngualla SREZ Ngualla SW Mountain Baiyunebo Mt Weld alluvials Pass Ngualla has a typical mix of critical 54% of the in ground value at Ngualla is rare earths and compares well with from these 5 critical RE’s. Neodymium other large deposits is the major contributor at 35% La2O3 27 11
- 13. Peer Comparison – Critical Rare Earths • Peak’s critical rare earth grades stand out from the ‘pack’ • Potential to add higher value per tonne mined and processed against the peers 2.0 Mount Weld Bubble size relative to contained REO 1.5 Average CREO Grade (%) Projects under Commissioning Strange Lake Nolan’s Bore 1.0 Kvanefjeld Zandkorpsdrift Bear Lodge Nechalacho Mountain Pass Eldor Ngualla (High Grade) 0.5 Ngualla (Bulk) Niobec Wigu Hill Nora Karr Montviel 0 0 2 4 6 8 10 12 Average REO Grade (%) Date: 3 April 2012 Source: Technology Metals Research Note: Neodymium, Europium, Terbium, Dysprosium and Yttrium were identified as critical rare earth elements (CREO) by the US Department of Energy in December 2011 12
- 14. Peer Comparison – Value Upside • Peak currently has a low market cap for the deposit size and quality • Potential to add value through advancing the Ngualla Project Market Capital per REO Contained Tonnes $1,400 $1,335.04 $1,267.24 Market Cap $1,200 118.0 Market Capitalisation (A$M) $1,000 Market Cap per REO tonne Room for growth $799.96 $800 n $600 io at lis ea eR $424.98 $400 l Valu ntia $331.77 Pote $200 $108.44 $120.22 $102.42 $69.74 $72.35 $19.61 $29.89 0 Peak Greenland Avalon Quest Frontier Arafura Kimberley RE’s Rare Element Tasman Metals Alkane Lynas Molycorp ME Major Ngualla Kvanefjeld Nechalacho Strange Zandkorpsdrift Nolans Cummins Bear Norra Karr Dubbo Mount Mountain Project Lake Bore Range Lodge Weld Pass Date: 3 April 2012 Source: Technology Metals Research and Bloomberg 13
- 15. Mineralisation and Mining The consistent blanket of mineralisation at surface, on a hill suggests a shallow open pit with low strip ratios and low cost mining WEST 39m @ 4.39% EAST from surface 56m @ 5.83% from surface 1700mRL Alluvial and weathered 1 C04 39 52m @ 3.67% 08 2 C04 RC0 D0 NR from 62m bedrock mineralisation ND NR H N 3 H 7 C04 H C03 H NR NR 4 C03 H H 2 34m @ 4.36% NR C03 Alluvial and weathered NR H from surface bedrock mineralisation 0 H C03 NR H 1600mRL 4 C06 150m NR 6 C06 11 2m H NR 120 H m 120 m 12 0m 44m @ 1.50% 120 m 120 from 76m to EOH 12 m 0m 12 0m 88m @ 2.38% 1500mRL from 20m 20 0m Fresh rock mineralisation 10 1m 110m Fresh rock mineralisation 700m 0 50 100 200m 482000mE 482200mE 482400mE 482600mE SECTION 9,147,800mN Intersection labels REO%: Block Model REO %: Drill REO %: NGUALLA PROJECT A Weathered 1 to 2% 3 to 4% A 1 to 2% A 3 to 4% SOUTHERN RARE EARTH ZONE FEBRUARY 2012 A Fresh 2 to 3% 4% A 2 to 3% A 4% 14
- 16. Resource Upside Block Model OPEN OPEN Ngualla Hill OPEN SW Alluvials B Southern Rare Earth Zone A A 150m OPEN OPEN 700m 1km OPEN Southern Rare Earth Zone OPEN Mineralisation is open to the REO %: A 4% B north, south and with depth A 3 to 4% OPEN below 150m A 2 to 3% A 1 to 2% 15
- 17. Mineralogy and Metallurgy Rare earths occur as the carbonates synchysite and basnaesite with very low uranium and thorium levels –averaging just 21ppm U and 35ppm Th in the Southern Rare Earth Zone mineralisation above 1% REO. Iron Oxide Mineralisation Primary Carbonate Mineralisation • reliminary leach extraction rates P • imple gravity beneficiation shows S of 88% REO. promise in preliminary sighter tests. • est work in progress to evaluate T • ineralisation may be amenable M simple processing route to to conventional gravity / flotation concentrate production for near beneficiation for concentrate surface high grade mineralisation. production. NDD006-Tray4-Weathered-carbonatite 16
- 18. Northern Zone Exploration Upside Intersections up to: 119m at 0.71% Nb2O5 and 162ppm Ta2O5 from surface to EOH 58m at 21.2% P2O5 from 4m 66m at 1.56% REO from 10m NGUALLA PROJECT 3D Projection Max DH Nb2O5 % OPEN 0.50 – 0.75 0.75 Max DH Nb2O5 % Northern Niobium – Tantalum, ! 0.25 OPEN Phosphate Zone ! 0.25 – 0.50 ! 0.50 – 0.75 ! 0.75 1km OPEN OPEN Southern Rare Earth Zone 17
- 19. Ngualla – a Quality Rare Earth Project • perating environment – infrastructure close by, 100% ownership, O country mining savvy • th largest rare earth, highest grade of the seven largest deposits 5 outside of China • ighest grades at surface, bulk deposit on a hill (low strip open cut) H • ominant grades of critical rare earths D • ery low uranium and thorium levels V • eathered material may be amenable to simple acid leach W ... on the road to production 18
- 20. Development Program for Rare Earth Production Commenced Metallurgical Characterisation Supply Agreements Milestones Zari JV Aquisition Maiden Resource Statement Production Start Up Metallurgical Flow Sheet Development Pilot Plant Trials 1st Year Drill Program Resource Drilling RE Exploration 2nd Year Drill Program 3rd Year Drill Program 4th Year Drill Program 2010 2011 2012 2013 2014 2015 2016 Scoping Study Potential Pathway to RE Production Pre-Feasability Study Definitive Feasability Study Construction EXPLORER DEVELOPER MINER 19
- 21. What Next – 2012 Development Program 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Engage engineering group for Scoping Study Acid Leach process development Milestones Drilling contractor on site Drill assay results with regular updates to follow MET results updates 3rd Year Drill Program Resource Drilling Exploration Resource Upgrade Drilling 15,000m SREZ Resource Extension Drilling 4,000m SREZ Northern Zone Maiden Resource Drilling 11,000m (Nb-Ta, P ,RE) Diamond Drilling 2,000m Southern Northern Zone 2012 Scoping Study Technical Development • Risk analysis, permitting, licencing, logistics, supply, infrastructure, sustainability, social licence • Mining, rehabilitation • Market research – end users = direct link to metallurgical test work and studies Program Metallurgical Test Work • Direct acid leach weathered SREZ – further samples to improve validation of ore body representation, optimisation studies for leaching • Precipitation and solvent extraction studies for weathered SREZ • Beneficiation and flotation studies on fresh rock • Initial sighter test work on Northern Niobium – Tantalum, Phosphate REO Zone DEVELOPER 20
- 22. Peak Resources Limited Head Office: Level 2, 46 Ord St, West Perth WA 6872 Ph: +61 8 9200 5360 Fax:+61 8 9226 3831 www.peakresources.com.au ASX Code: PEK Richard Beazley Managing Director richard@peakresources.com.au David Hammond Technical Director dave@peakresources.com.au Alastair Hunter Non-executive Chairman alastair@peakresources.com.au