Peak Resources (ASX: PEK) is demonstrating the potential of its Ngualla Rare Earth Project in southern Tanzania to be a low cost, long term project, with metallurgical test work indicating a simple sulphuric acid leach process may be effective on the central Southern Rare Earth Zone.
Further upside is that the Ngualla Resource also contains the lowest levels of uranium and thorium of any major rare earth deposit.
Peak has so far completed 897 metres of the extensive 30,000 metre drilling program planned for 2012, intersecting deeply weathered carbonatite, which has shown it hosts high grade rare earth mineralisation from surface to depths of up to 130 metres.
This aggressive exploration program is designed to upgrade the highest grade, near surface portion of the current resource to the higher confidence Indicated and Measured categories.
Importantly, the higher data density will allow for the development of a Reserve once metallurgical and other economic parameters are determined through Scoping and Feasibility studies.
Richard Beazley, managing director commented on the positive results:
"We are very pleased that the drilling to date has intersected the deep zones of weathered carbonatite and that the metallurgical test work indicates a simple sulphuric acid leach process may be effective, as this will play an important role in Peak Resources expectations to be a low cost producer."
Peak is now ramping up drilling at the Ngualla project with the arrival of a second drill rig. A diamond drill rig is scheduled to join the two reverse circulation rigs in August.
The first assays from the 2012 drilling program are expected before the end of July.
Peak has moved the Ngualla Rare Earth Project forward rapidly over the last 19 months from discovery in August 2010 to the release of the maiden Resource in late February 2012.
Ngualla is a company maker, with the project already drawing comparisons to Lynas Corporations' (ASX: LYC) Mt Weld because of its rare earth enrichment in the deeply weathered regolith profile of a large carbonatite.
The project has been ranked as the fifth largest rare earth deposit globally outside of China and the highest grade of the top seven following the delivery of a maiden JORC Resource earlier this year.
From the Southern Rare Earth and South West Alluvial Zones the Resource is 170 million tonnes at 2.24% rare earth oxides for 3.8 million tonnes of contained rare earth oxides (1% lower grade cut-off).
Using a 3% lower grade cut-off, the total Resource includes a higher grade near surface zone of 40 million tonnes at 4.07% rare earth oxides for 1.6 million tonnes of contained rare earth oxides.
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