PERTH-based explorer Peak Resources has delivered encouraging pre-feasibility results for its Tanzanian flagship project, declaring it “one of the world’s highest grade and largest rare earth deposits”. Ngualla Carbonatite, in southwestern Tanzania, was found by Peak’s independently contracted mining consultancy Orelogy Group to contain a maiden mineral resource of 170 million tonnes grading 2.24 per cent rare earth oxide (REO), and a maiden ore reserve of 20.7mt grading 4.54 per cent REO (total REO plus yttrium).

The study established an “economically robust project base case” at 10,000 tonnes per annum of high purity REO. The average operating cash flow was estimated at $116 million per annum post tax and royalties ($174 million pre-tax and royalties) across a 58-year mine life. Cash flow was calculated at $29.29 per kilogram estimated rare earth price.

Ngualla’s metallurgical advantages were also emphasised, particularly the presence of bastnasite mineralisation – a carbonate-fluoride mineral typically rich
in superconductor elements lanthanum, cerium and yttrium.

Peak managing director Darren Townsend said a highlight of the study was the discovery of low concentrations of uranium and thorium content, which would reduce processing and capital cost requirements.

“The highlight is just the quality of the resource, reserve, the 58-year mine life, spitting out about $121 million a year. Any sort of long life project like that is
pretty good,” Mr Townsend said. “I think the most important thing probably is the CAPEX [capital expenditure].

“In these challenging financing climates, to be able to get your initial CAPEX down is absolutely critical.” Mr Townsend said the rest of 2014 would be devoted to consolidating strategic partnerships with interested parties.

“The announcement of an ore reserve completes another important milestone in the development of the Ngualla project into a low-cost producer of high-quality separated rare earth products. The ore reserve is one of the world’s largest outside of China and is also high quality with over 86 per cent in the highest JORC proved category.

“We’ve got a [memorandum of understanding] already in place with a Chinese group, so we’re continuing with those discussions…We look forward to
opening other discussions to progress the project as rapidly as we can.”

Peak’s share price had a corresponding upswing following the mid-March release, with shares rising 81.8 per cent from $0.055 in early February to a high of $0.10.
REO production is expected to begin at Ngualla in mid-2017.