(MENAFN - ProactiveInvestors - Australia) Peak Resources (ASX: PEK, OTCQX: PKRLY) has extended the current resource model a further 200 metres at its Ngualla Rare Earth Project in Tanzania in a recent successful drilling campaign.
Additional infill drilling has also confirmed the continuity of high grade rare earth mineralisation extending from surface to depths of over 100 metres.
New assays from recent drilling of the southern extension to the Southern Rare Earth Zone identify additional near surface mineralisation.
New intersections from this area include 28 metres at 2.57% rare earth oxide (REO) from surface, 46 metres at 2.29% REO from 50 metres, 41 metres at 2.96% REO from surface, and 31 metres at 2.66% REO from surface to end of hole.
These near surface mineralised intersections will extend the current resource model a further 200 metres to the south.
Meanwhile, new results confirming the continuity of high grade rare earth mineralisation from surface include:
- 24 metres at 5.64% REO from surface;
- 121 metres at 4.86% REO from surface to end of hole;
- 112 metres at 5.16% REO from surface to end of hole;
- 36 metres at 5.28% REO from surface; and
- 112 metres at 4.67% REO from surface.
Increasing news flow
Investors are likely to see a steady flow of news over the next few months.
The current field program is nearing completion with just eight holes remaining to complete the planned drilling.
Also a Scoping Study, which will include a preliminary economic assessment of the project, is on track for completion before the end of December 2012.
A revised resource estimate is scheduled for completion by end of the March quarter 2013 to support the project feasibility studies due to begin early in 2013.
Drilling is continuing onsite to infill the area of the Southern Rare Earth Zone, which is targeted for first production.
The Ngualla Rare Earth Project is a recent discovery hosting a resource of 170 million tonnes at 2.24% REO, ranking the project as the fifth largest rare earth deposit in the world outside of China.
The total resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.
Ngualla has several fundamental geological aspects that offer distinct advantages for development over other rare earth projects.
These include the large size of the deposit, the outcropping, high grade mineralisation amenable to open cut mining with low strip ratios, favourable mineralogy for processing and the lowest uranium and thorium levels of any major rare earth deposit in the world.
Peak has identified and proved a simple sulphuric acid leach processing route to produce a high grade, high purity rare earth concentrate and continues to make rapid progress towards developing Ngualla into a low cost producer.
Importantly, Peak has already commenced preliminary discussions with a number of interested parties regarding potential offtake agreements.
The base case for the Scoping Study assumes a range of rare earth products containing a total of 10,000 tonnes of REO equivalent will be produced from an estimated 300,000 tonnes of ore at an average grade of about 4.3% REO annually over an initial mine life of 25 years.
The resource has potential to support a significant increase to this base case production rate should offtake customers for additional product be secured.
The company remains well-funded to advance Ngualla with 8.35 million cash on hand at the end of the September quarter, following a successful oversubscribed share purchase plan that added A2.6 million.