Ngualla

completed

Peak Resources Limited (“Peak” or the “company”) is a junior exploration company listed on the Australian Stock Exchange, with its head office in Perth, Australia. The company has completed a Preliminary Feasibility Study (PFS) and economic assessment for its Ngualla Project (the “project”). The focus of the PFS was to evaluate the potential for the development of a mine and associated beneficiation, recovery and separation plants to produce 10 000 tonnes per annum of >99% purity, separated rare earth oxide products. The PFS was based on extensive drilling and metallurgical testwork completed by the company since discovery in August 2010. A total of 781 holes for 40 400m were drilled during Peak’s drilling exploration program conducted between 2010 and 2012. There are currently no drilling activities at the project site though grade control and infill drilling campaigns will be undertaken as part of the planned Definitive Feasibility Study (DFS) described below. However, trenching for bulk sample for pilot plant is currently in progress and is nearing completion.The project comprises two prospecting licenses and is located in Chunya District, south west Tanzania, 55km west of the main north-south trunk road. The village of Ngwala, with a current population of 5 614 (up from 3 017 three years ago) and 538 households (figures provided by the village executive committee), lies 4.5 kilometers south of the deposit whilst the Ngwala prison is located about 2km south-west of the deposit. According to the village executive committee the recent population increase is due to people moving into the area to undertake agricultural activities. The project area is unoccupied, uninhabited and is not farmed or grazed. There are no national parks or reserves within at least a 30 km radius from the prospecting licenses. However, wild animals such as kudu and impala (regularly) and leopard, lion and Cape buffalo (occasionally) have been sighted in the area. Agriculture is the main livelihood activity of the Ngwala local community with crops such as maize, beans, groundnuts, sesame seeds, and tobacco being produced. The local community also undertakes bee keeping with about 72 tons of honey reportedly produced per annum. Based on preliminary findings of the ongoing socio-economic baseline studies and discussion with the rural medical officer HIV/AIDS is a significant issue in the Ngwala village community with an estimated infection rate of about 11% compared with a national average of 5%.Based on the positive outcome of the PFS the project is moving into full (DFS). The DFS, which is scheduled for 2014 and 2015, is a fundamental and key part of the process of development of the mining project. One of its main purposes is to define the project, its scope, quality, cost and schedule. Main activities planned on site during the DFS include: trenching for bulk sample for pilot plant; test reverse circulation (RC) drilling grade control pattern (small scale program approximately 1 250m total, 26 shallow holes); infill RC drilling program (estimate of 3 000m RC, 25 holes); hydrological studies including drilling about 1 000m RC for groundwater evaluation; geotechnical investigations in the area of the open pit (resource) and tailings, plant site and water dam; carbonatite drilling (estimate 320m RC, 16 holes); and the completion of an Environmental and Social Impact Assessment (ESIA). Beneficiation and recovery circuit pilot plants will also be constructed during the DFS phase in Perth at laboratories yet to be identified and will complement the successful operation of the separation pilot plant completed during the PFS. This will allow for further optimization of the Ngualla Project. An IFC equity investment is proposed to support Peak to complete the (DFS) by mid 2016. Successful completion of the DFS will be followed by: project funding & decision to proceed/not proceed; engineering design & procurement; and construction and production. Any IFC investment post DFS, i.e. potential future mine development undertaken by the company will be assessed as a new project and its categorization would be determined after the necessary due diligence.