Importantly, the ability to concentrate mineralisation at an early stage prior to acid leach recovery will have a significant and positive impact on costs and support Peak's aim to be a low cost producer.
Richard Beazley, managing director, commented: "Ngualla continues to improve with each milestone. We are already in the lower quartile in terms of operating costs, and also have one of the lowest capital costs of any rare earth project"
Peak's optimisation of the beneficiation process effectively reduces the mass of feed to be treated by the acid leach recovery process by 43% compared to the Scoping Study assumptions.
This reduction of material has a significant impact on operating costs by reducing sulphuric acid consumption - the major constituent of reagent costs.
Further supporting this is the latest test work that shows that conventional magnetic separation and flotation techniques reduce the mass of the feed mineralisation by 78% through the rejection of relatively un-mineralised barite and iron oxides.
A Scoping Study has already confirmed Ngualla as a leading rare earth project with an estimated NPV of US$1.57billion and pre-tax IRR of 53% for an initial 25 year mine life and mining of an 8.2 million tonne portion of the Indicated and Measured Mineral Resource within the Bastnaesite Zone with an average grade of 4.35% REO.
Contributing to these figures are already low operating costs of U$10.09/kg REO product and capital costs of US$400m excluding contingency for the baseline case production level of 10,000 tonnes of rare earth oxide per year.
The cost reductions will be quantified in a revision of the Scoping Study and economic assessment to be completed in the June quarter of 2013. This will also use a new optimised mine schedule based on the new resource estimate and model that is on schedule for completion by the end of March 2013.
The optimisation of the beneficiation process will lead to significantly lower capital and operating costs for the operation.
Reducing the volume treated will reduce capital costs as a smaller plant will be required for the same amount of product while reducing sulphuric acid consumption lowers operating costs.
The Scoping Study completed in early December 2012 estimated that the acid plant and acid leach recovery circuit make up 27% of total project capital costs and 53% of total operating costs
The beneficiation process also increases the grade of the feed over threefold from 5.3% total rare earth oxide to 16.9% total rare earth oxide for this composite sample.
Beazley added: "This new test work will allow us to reduce costs even further and supports our assertion that Ngualla is the most commercially attractive rare earth project around."
Peak has now further enhanced the economics showing the ability to concentrate mineralisation at an early stage prior to acid leach recovery will have a significant and positive impact on costs, supporting its goal of becoming a low cost producer.
Adding to the investment case, Peak is on track to deliver a revised resource model, including high grade results from 2012 drilling by the end of March 2013.
Cost reductions from optimisation of the beneficiation process will also be quantified in a revision of the Scoping Study and economic assessment to be completed in the June quarter of 2013.
This will be followed by Pre-Feasibility studies currently in progress and scheduled for completion in the September quarter of 2013.
These factors are expected to continue to significantly enhance the already robust project economics - and have the potential to be price re-rating catalysts.
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