In the news: Peak Resources

2017-03-21 10:18:00

In the news: Peak Resources (ASX:PEK)

 

FROM THE BROKING DESK

Peak Resources†† has announced that it has received the Environmental Certificate for its Ngualla Rare Earths Project in Tanzania. This was needed for the company’s application for a mining licence, along with a completed BFS. The company notes that the BFS is on track and due for completion in April 2017. Below we provide a reminder about ASX-listed Peak’s extremely exciting project.

Peak is focused on delivering an integrated rare earths project. The company’s 75%-owned project combines the Ngualla rare earths deposit in western Tanzania with downstream processing at a solvent extraction separation plant in the UK, producing a range of rare earth products. Approximately 85% of the value of the final product is associated with a high-purity neodymium and praseodymium oxide.

Ngualla is one of the world’s largest neodymium and praseodymium (Nd/Pr) deposits. Peak is in the process of constructing a UK-based rare earths leach recovery and separation processing plant in Teesside, UK. The final products from the project are planned to include: 2,300tpa of Nd/Pr rare earth oxides; 250tpa of mixed samarium, europium and gadolinium rare earth oxide; and 5,900tpa of cerium/lanthanum carbonate (equivalent to 4,240tpa of contained REO).

Nd/Pr are exposed to the high-growth permanent magnet demand. Nd/Pr are used in combination to create the high-power permanent magnets that are integral in the construction of electrical motors and generators, specifically in the rapidly growing market for electric cars, bikes and wind turbine generators.

Prices of rare earths, including those for Nd/Pr oxides, peaked in 2011 and have since fallen back to pre-bubble levels. We note that Bloomberg’s Nd/Pr index now indicates that prices have increased 8% YTD in US$ terms.