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Peak Resources Discovers Exceptional Rare Earth Mineralisation In The Heart Of Ngualla

Peak Resources (ASX: PEK, OTCQX: PKRLY) has yet again delivered some outstanding results from the Ngualla Rare Earth Project in southern Tanzania, which is already shaping up as a low cost, long term rare earth project.

The latest highlights from ten reverse circulation holes in the central bastnaesite core of the Southern Rare Earth Zone include:

- 180 metres at 3.94% REO from surface to end of hole;
- 130 metres at 4.29% REO from surface to end of hole;
- 140 metres at 5.21% REO from surface to end of hole;
- 20 metres at 4.01% REO from 28 metres, including, 14 metres at 5.16% REO from;
- 36 metres at 2.82% REO from surface; and
- 34 metres at 3.84% REO from 48 metres.

Peak said that the drilling intersected the predicted, deeply weathered carbonatite, which is typically enriched in rare earths in the 3% to 8% REO range.

Importantly, the drill intersections confirm the continuity of significant areas of high grade, weathered rare earth mineralisation from surface - which may be amendable to sulphuric acid leach processing.

The program will provide Peak samples to support the Scoping and Metallurgical Studies currently in progress on the Southern Rare Earth Zone.

Add to these new results the assays from a fortnight ago which included 151m at 5.15% REO from surface to end of hole; 32 metres at 4.62% REO from surface; and 100 metres at 3.99% REO from surface - and the sheer potential size of the project emerges.

Better still - these are only the first results from a 30,000 metre program which started after the wet season - which means over the coming weeks and months there will be a constant flow of new results. So far 52 holes for 5900 metres have been completed.

Ngualla currently has a Resource of 170 million tonnes at 2.24% REO, which hosts a highly weathered and near-surface zone estimated at 40 million tonnes at 4.07% REO - equivalent to 1.6 million tonnes of contained REO.

Comment and Analysis

Within just a few short years Ngualla has evolved from a greenfields discovery to the fifth largest rare earth deposit outside of China, and the highest grade of the top seven.

Considering the high grade near surface broad results from just the first 5900 metres of a 30,000 metre drilling campaign for 2012, the current resource of 170 million tonnes at 2.24% REO has the potential to substantially grow once the program is finalised and a new resource is calculated.

The Peak market cap. of just $35 million equates to a REO per tonne of under $20, placing Peak as well under-rated compared to peer averages - and providing the opportunity for investors to increase exposure pending a potential re-rating in the stock over the next 12 to 18 months.

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