ngualla project: discovery to development
DESCRIPTION
Objective Capital's Commonwealth ResourcesInvestment Foum 2012Ironmongers' Hall, City of London22 May 2012Speaker: Richard Beazley, Peak ResourcesTRANSCRIPT
COMMONWEALTH RESOURCESINVESTMENT FORUM
Ngualla Project: Discovery to DevelopmentRi h d B l M i Di t P k RRichard Beazley – Managing Director, Peak Resources
IRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY, 22 MAY 2012www.ObjectiveCapitalConferences.com
Ngualla Projectdiscovery To deveLoPMeNT a large NeW rare earth resource
17th april 2012
2
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 StatementThe 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.
Disclaimer
1/ Corporate Details2/ Rare Earth Markets3/ Ngualla Rare Earth Project 4/ Maiden Resource5/ Project Advantages6/ Development Schedule
Outline
4
Investment Highlights
Moving from Explorer to Developer
• Maiden Resource – 29th February 2012
• 5th largest rare earth, highest grade of the 7th largest deposits outside of China
• Low market cap for size of resource – significant upside
• 100% ownership
• Distinct project advantages support Peak’s aim to be in the lower cost quartile of producers
• Encouraging early stage metallurgical test results
• Niobium – tantalum, phosphate and rare earth exploration upside
• Scoping studies commencing
5
Ordinary Shares on Issue: 207.1m Cash at 13th April: $4.9m52 week range: $0.26 - $0.87Market Cap: $72.5m (at $0.35)
Share Price (01 July 2010 – 13th April 2012)
Corporate Details
Board and Senior ManagementAlastair Hunter Non-executive Chairman
Richard Beazley Managing Director
Dave Hammond Technical Director
Jonathan Murray Non-executive Director
Linda Paini Company Secretary
Brian Lloyd Exploration Manager (Tanz)
ConsultantsResource consultants: Hellman & Schofield Pty Ltd
Metallurgical & mineral processing: Bateman Engineering Pty Ltd
Mineral processing test laboratory: Amdel
Legal representation: Australia: Steinepreis PaganinTanzania: AKO Law
Auditor: Deloitte Touche Tohmatsu
Options outstanding: 11,191,667Liquidity: 1.7 million shares per day (av. over 3 months)
IPO Date: 29 November 2006
ASX: PEK 13th April 2012
$0.89 –
$0.79 –
$0.69 –
$0.59 –
$0.49 –
$0.39 –
$0.29 –
$0.19 –
$0.09 –30 SEPT 2010 30 DEC 2010 31 MAR 2011 30 JUNE 2011 29 SEPT 2011 29 DEC 2011 29 MAR 201201 JULy 2010
6
The Rare Earth Market
• China controls 97% of supply, export restrictions, price increases, the West is searching for alternative supply
China USA Other
Global Rare Earth Metal Oxide Production (,000 tonnes)
140
1956 20101965 1985 2002
20
40
60
80
100
120
Nd Oxide Pr Oxide La Oxide Ce Oxide
Rare Earth Metal Oxide Price ($US per tonne)
350,000
2004 20112005 2006 2007 2008 20102009
50,000
100,000
150,000
200,000
250,000
300,000
Source: Metal – Pages Ltd
Clean energy Digital technology
• Growth markets in renewable energy and advanced technologies
7
!Mbeya
Dar Es Salaam
UGANDA
KENYA
ZAMBIA
MALAWI
Lake Victoria
Indian Ocean
Lake Rukwa
Ngualla Project
Lake Nyasa
T A N Z A N I A
N
400km0 100 200
• Tanzania – an established mining culture
• Third largest gold producer in Africa
• Access to transportation
Location and Infrastructure
Ngualla Project
Lake Rukwa
147km
56km
B363
B345
B6
A104
Dar Es SalaamPort 750km
MbeyaN
50km0 10 25
• Onsite power required
• Good potential for groundwater
8
• Virgin discovery – August 2010 • 26,700m drilling for the resource
Resource and exploration drilling
Northern Niobium – Tantalum, Phosphate Zone
Northern Niobium – Tantalum, Phosphate Zone
Southern Rare Earth Zone
SW Alluvials
Max DH REO %:
A 1 to 2%
A 2 to 3%
A 3 to 5%
A >5%
Max DH REO %:! <1%! 1 – 2%! 2 – 3%! 3 – 5%! > 5%
OPEN OPEN
OPEN
9
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.
• Ngualla Mineral Resource – 1.0% and 3.0% cut off grades
Maiden JORC Resource 29th February 2012
Classification of Mineral Resources for the Ngualla Rare Earth Project, 1.0% and 3.0% REO cut-off grades.
Lower cut – off grade
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.
10
9
8
7
6
5
4
3
2
1
0
12
10
8
6
4
2
0
REO
Grad
e (%
)
Cont
aine
d RE
O (M
t)
REO grade %
Contained REO (Mt)
300m Depth to base of resource
375m
300m
240m
600m
155m
155m
450m
126m
• Ngualla is a large, high grade, globally significant rare earth deposit
• It is the highest grade of the 7 largest deposits outside of China
• Shallow resource and outcropping high grade mineralisation positions Ngualla as a potential low cost open pit mine
Global top 5 Rare Earth Deposit
Niobec
Kvane
fjeld
Necha
lacho
Eldor
Nguall
a (Bulk
)
Montvi
el
Strang
e Lak
e
Mounta
in Pa
ss
Nguall
a (High
Grade)
Mount
Weld
Zand
korps
drift
Nolan’s
Bore
Bear L
odge
Dubbo
Nora Karr
Wigu Hill
Date: 3 April 2012 Source: Technology Metals Research and Company filings
Project Comparisons
11
5 rare earths are forecast to be in critical undersupply: • Neodymium, • Dysprosium • Europium • Terbium • yttrium
54% of the in ground value at Ngualla is from these 5 critical RE’s. Neodymium is the major contributor at 35%
Ngualla has a typical mix of critical rare earths and compares well with other large deposits
Critical Rare Earths
Imp
ort
ance
to
cle
an e
nerg
y
Supply risk
1 (lo
w)
2 3
4 (h
igh)
1(low) 2 3 4 (high)
CeriumCobaltGallium Indium
LanthanumManganesePraseodymium
Nickel
Neodymium
EuropiumLithium
YttriumTellurium
Dysprosium
Terbium
Samarium
Critical
Near-Critical
Not Critical
Critical REO as % of total
17.0
20.0
12.2
16.1
19.820% –
15% –
10% –
5% –
0 –Ngualla SREZ Ngualla SW
alluvialsMountain
PassBaiyunebo Mt Weld
La2O3 27.4%
Other 1%
Sm 1%
Y 1%
Gd 2%
Dy 3%
Nd 35%
Ce 20%
Eu 15% La 11%
Pr 10%
12
• Peak’s critical rare earth grades stand out from the ‘pack’
• Potential to add higher value per tonne mined and processed against the peers
Peer Comparison – Critical Rare Earths
2.0
1.5
1.0
0.5
0
Aver
age
CREO
Gra
de (%
)
Average REO Grade (%)
Niobec
Kvanefjeld
Nechalacho
Eldor
Ngualla (Bulk)
Montviel
Strange Lake
Mountain Pass
Ngualla (High Grade)
Mount Weld
Zandkorpsdrift
Nolan’s Bore
Bear Lodge
Nora KarrWigu Hill
Date: 3 April 2012 Source: Technology Metals ResearchNote: Neodymium, Europium, Terbium, Dysprosium and Yttrium were identified as critical rare earth elements (CREO) by the US Department of Energy in December 2011
2 64 8 10 120
Bubble size relative to contained REO
Projects under Commissioning
13
• Peak currently has a low market cap for the deposit size and quality
• Potential to add value through advancing the Ngualla Project
Peer Comparison – Value Upside
$1,400
$1,200
$1,000
$800
$600
$400
$200
0
Mar
ket C
ap p
er R
EO to
nne
Market Cap
118.0 Market Capitalisation (A$M)
Peak Frontier Tasman MetalsAvalon Kimberley RE’s Lynas Greenland M & E
Arafura AlkaneQuest Rare Element Molycorp
Ngualla Zandkorpsdrift Norra KarrNechalacho Cummins Range
Mount Weld
Kvanefjeld Nolans Bore
DubboStrange Lake
Bear Lodge
Mountain Pass
Major Project
Date: 3 April 2012 Source: Technology Metals Research and Bloomberg
Market Capital per REO Contained Tonnes
$1,335.04
$1,267.24
$799.96
$424.98
$331.77
$120.22$108.44$102.42$72.35$69.74
$29.89$19.61
POTENTIAL VALUE REALISATION
ROOM FOR GROwTH
14
The consistent blanket of mineralisation at surface, on a hill suggests a shallow open pit with low strip ratios and low cost mining
Mineralisation and Mining
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H NR
C030
H NR
C064
H NR
C066
H NR
C032
H NR
C034
H NR
C037 H NR
C039
H N
DD008
H NR
C041
H NR
C042
H NR
C043
120m
101m94m110m
120m120m
120m
200m
120m
112m
120m120m
1600mRL
1700mRL
1500mRL
482400mE 482600mE482200mE482000mE481800mE
44m @ 1.50% from 76m to EOH
88m @ 2.38% from 20m
34m @ 4.36% from surface
56m @ 5.83%from surface
39m @ 4.39%from surface
52m @ 3.67%from 62m
Alluvial and weatheredbedrock mineralisation
Fresh rock mineralisation
Fresh rock mineralisation
Alluvial and weatheredbedrock mineralisation
150m
700m
200m1000 50
SECTION 9,147,800mN NGUALLA PROJECT SOUTHERN RARE EARTH ZONEFEBRUARY 2012
Drill REO %:
A 1 to 2% A 2 to 3%
A 3 to 4%
A >4%
Block Model REO %:
1 to 2% 2 to 3%
3 to 4%
>4%
Intersection labels REO%:
A Weathered
A Fresh
EASTWEST
15
Resource Upside
Ngualla Hill
150m
700m
1km
A
B
REO %:
A >4%
A 3 to 4%
A 2 to 3%
A 1 to 2%
SW Alluvials
OPEN
OPEN
OPEN
OPEN
Mineralisation is open to the north, south and with depth below 150m
OPEN
OPEN
OPENOPEN
Southern Rare Earth Zone
B
A
Block Model
Southern Rare Earth Zone
16
Mineralogy and Metallurgy
Iron Oxide Mineralisation
• Preliminary leach extraction rates of 88% REO.
• Test work in progress to evaluate simple processing route to concentrate production for near surface high grade mineralisation.
Primary Carbonate Mineralisation
• Simple gravity beneficiation shows promise in preliminary sighter tests.
• Mineralisation may be amenable to conventional gravity / flotation beneficiation for concentrate production.
NDD006-Tray4-Weathered-carbonatite
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.
17
1km
Intersections up to: 119m at 0.71% Nb2O5 and 162ppm Ta2O5 from surface to EOH58m at 21.2% P2O5 from 4m66m at 1.56% REO from 10m
Northern Zone Exploration Upside
Northern Niobium – Tantalum, Phosphate Zone
Southern Rare Earth Zone
OPEN
OPEN
OPEN
OPEN
NGUALLA PROJECT
3D Projection
Max DH Nb2O5 %
0.50 – 0.75
>0.75
Max DH Nb2O5 %
! <0.25
! 0.25 – 0.50
! 0.50 – 0.75
! > 0.75
18
Ngualla – a Quality Rare Earth Project • Operating environment – infrastructure close by, 100% ownership,
country mining savvy
• 5th largest rare earth, highest grade of the seven largest deposits outside of China
• Highest grades at surface, bulk deposit on a hill (low strip open cut)
• Dominant grades of critical rare earths
• Very low uranium and thorium levels
• Weathered material may be amenable to simple acid leach
... on the road to production
19
Development Program for Rare Earth ProductionM
ilest
ones
RE E
xplo
ratio
n &
Re
sour
ce D
rillin
gPo
tent
ial P
athw
ay
to R
E Pr
oduc
tion
EXPLORER MINERDEVELOPER
2010 2011 2012 2013 2014
Commenced Metallurgical Characterisation Supply Agreements
Zari JV Aquisition
Maiden Resource Statement
Metallurgical Flow Sheet Development
Pilot Plant Trials
1st Year Drill Program
3rd Year Drill Program
Scoping Study
Pre-Feasability Study
Definitive Feasability Study
Construction
2nd Year Drill Program
4th Year Drill Program
2015 2016
Production Start Up
20
what Next – 2012 Development ProgramM
ilest
ones
Expl
orat
ion
&
Reso
urce
Dril
ling
Tech
nica
l Dev
elop
men
t Pr
ogra
m
Engage engineering group for Scoping Study Acid Leach process development Drilling contractor on site
Drill assay results with regular updates to follow MET results updates
3rd Year Drill Program
Scoping Study
Metallurgical Test Work
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
1ST QuARTER 3RD QuARTER2ND QuARTER 4TH QuARTER
• Risk analysis, permitting, licencing, logistics, supply, infrastructure, sustainability, social licence• Mining, rehabilitation• Market research – end users =>> direct link to metallurgical test work and studies
• 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
2012
DEVELOPER
Peak resources LimitedHead 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 [email protected]
David Hammond Technical Director [email protected]
Alastair Hunter Non-executive Chairman [email protected]