The 2012 program covered an extensive 13,600 metres of reverse circulation and diamond drilling in the priority area of the Southern Rare Earth Zone, which is targeted for first production.
The program is now complete and field activities have ceased until the end of the rains in April 2013, but the news will continue to flow, with assays for the remaining 13 holes currently pending.
New highlights received from a further 25 drill holes of the 2012 program include:
- 140 metres at 4.66% REO from surface to end of hole;
- 160 metres at 5.06% REO from surface to end of hole;
- 145.8 metres at 4.62% REO from 23.9 metres;
- 134 metres at 4.45% REO from surface; and
- 80 metres at 4.40% REO from surface.
Peak will now look to deliver a revised Mineral Resource estimate in the March quarter of 2013, which will build on the current resource of 170 million tonnes at 2.24% REO - ranking it as the fifth largest rare earth deposit in the world outside of China.
This resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.
2012 drilling success
Drilling completed in 2012 defines a continuous zone of high grade mineralisation from surface with several holes averaging over 5% REO down their entire length, extending to vertical depths of over 100 metres and including individual 2 metre composite samples grading up to 9.53% REO.
The high grade zone extends over a strike length of 350 metres and width of 100 metres or more. Peak said that this zone was not identified by drilling used to complete the maiden Mineral Resource in February 2012 and is expected to increase the amount of high grade mineralisation within this part of the deposit.
Results received to date also extend the Southern Rare Earth Zone a further 300m to the south, and at depth in several areas.
The potential of Peak's Ngualla is starting to be realised, with the project already boasting the fifth largest rare earth resource, and the highest grade of the seven largest deposits outside of China.
A resource upgrade will also be announced in the New Year, including the latest drilling data.
Credit must also be given to the board and senior management, who have taken a virgin discovery in August 2010 to the current position.
The recent Scoping Study has defined some impressive project economics of US$10.09/kg opex, US$ 400 million capex and US$1,571 million NPV.
Where Ngualla differentiates itself from other deposits is that 56% of the in-ground value is from the critical rare earths of Neodymium, Dysprosium, Europium, Terbium and Yttrium. Neodymium is the major contributor at 34% of the in-ground value.
With a market cap. or around $37 million, and $8.3 million in cash at the end of September 2012, the enterprise value for Peak is under $30 million - highlighting that Peak continues to be undervalued when compared to peers.
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