Peak Resources delivers Ngualla PFS

THE DRILL SERGEANT: Peak Resources (ASX: PEK) has finalised the Preliminary Feasibility Study (PFS) for the company’s 100 per cent-owned Ngualla rare earth project in Tanzania.

Peak said the PFS has confirmed Ngualla to be an economically robust project at a base case production rate of 10,000 tonnes per annum of separated high-purity rare earth oxides (REO).

The Study has concluded the Ngualla project to have a Net Present Value (NPV) of US41.310 billion pre-tax and royalties (US$1.005 billion NPV post tax and royalties) with a 39 per cent Internal Rate of Return (post tax and royalties).

The project could reach payback in its third year of production producing an average annual operating free cash flow of US$174 million per annum for 58 years pre-tax and royalties (US$116 million per annum post tax and royalties).

When leveraged to rare earth prices, 83 per cent of Ngualla’s forecast revenue will be derived from the high value, high demand neodymium – praseodymium and mid and heavy rare earth products the company anticipates producing.

According to Peak, the Study applied conservative price assumptions with an average product price for the Ngualla rare earth composition of US$29.29/kg for high purity separated REO.

The project is also well-leverage in regards to any further increases in rare earth prices with potential for after tax and royalty NPV to increase to US$ 1.608 billion for an additional 25 per cent increase in prices.

 

Source: Company announcement

 

The Study also came in with low capital and operating costs, reducing the cost predicted in a Scoping Study from last May by US$91 million to US$282 million.

Operating costs came in at US$11.74 per kilogram high purity separated rare earth oxide products over the life of mine, which is projected at 58 years.

“We are extremely happy with the results from the PFS,” Peak Resources managing director Darren Townsend said.

“These show the project to be robust with an extremely long mine life and attractive free cash generation.

“From the detailed work completed we have identified opportunities for potential further operating cost reductions through the optimisation of the processing circuits and additional reagent recycling.

“With the positive outcome of the study we will step up our discussions with a number of potential strategic financial partners with a view to rapidly progressing the development of the Ngualla project.”

Email: info@peakresources.com.au

Website: www.peakresources.com.au