Peak Resources study flags lower cost mine

Peak Resources has released a revised scoping study for its Ngualla rare earth project in Tanzania, which flags significant reductions in costs and an option to double planned production from the mine.

The scoping study forecast an operating cost of $10.18 per kilogram of rare earth oxide equivalent product, down 8 per cent from the previous prediction, while the mine itself would cost $US373 million to develop, a 7 per cent reduction.

The report also revealed a higher mine grade of 5.35 per cent rare earth oxide for the initial 25-year mine life, up from 4.35 per cent previously.

The results of the study deliver a 13 per cent improvement in the project’s net present value to $US1.768 billion, while the option to double output from the mine would deliver an NPV of $US3.833 billion.

“This update to the scoping study and preliminary economic assessment quantifies the excellent results achieved from the improved resource model and beneficiation test work released in April this year,” Peak chairman Alastair Hunter said.

“The update further confirms Ngualla’s position as a low cost operation, with the lowest capital requirement of all emerging rare earth producers.”

A Peak spokesperson said discussions with a potential cornerstone investor, announced earlier this month, were continuing, but an agreement would not be forthcoming before the end of the month as promised.

Peak said it remained confident an agreement would be signed in the near-term.

At 1:30PM, Peak Resources shares were steady at 17 cents.