Ore Reserves and Mineral Resources

Mineral Resource Estimates

The Mineral Resources for Ngualla were reported in accordance with the JORC 2012 Code and Guidelines by independent resource consultants SRK Consulting (Australasia) Pty Ltd (SRK) in February 2016. The 2016 Mineral Resource estimation process and estimate at selected cut-off grades was reported in ASX announcement titled 'Higher grade Ngualla Mineral Resource contains nearly 1 million tonnes rare earth oxide' of 22 February 2016.

The total Mineral Resource estimate for the Ngualla Project above a 1% REO cut-off is:

214.4 million tonnes at 2.15% REO, for 4,620,000 tonnes of contained REO
(see Tables 1 and 3 for resource classification and individual rare earth distributions).

Included in the total Mineral Resource is the weathered Bastnaesite Zone which forms the core of the Bankable Feasibility Study (BFS) development. At a 1% REO lower grade cut-off the Mineral Resource estimate for the weathered Bastnaesite Zone is:
 
21.3 million tonnes at 4.75% REO, for 1,010,000 tonnes of contained REO
(see Tables 2 and 4 for resource classification and individual rare earth distributions).
 
The +1% REO weathered Bastnaesite Zone comprises 22% of the total Ngualla Mineral Resource at a 1% REO cut-off grade in terms of contained REO, and contains very low levels of uranium and thorium at 15ppm and 54ppm respectively. The weathered Bastnaesite Zone Mineral Resource is defined as weathered or colluvial mineralisation containing less than 10% calcium and very low phosphorous of less than 0.3%.
 
Metallurgical test work has shown that mineralisation outside the weathered Bastnaesite Zone may be processed using other conventional beneficiation and leach recovery processes. The long mine life supported by the weathered Bastnaesite Zone provides the Company with the opportunity and time to optimise these processes, which could be brought in at a later stage in the life of the operation.
 
The +1% weathered Bastnaesite Zone is a high confidence Mineral Resource, with 98% classified as Measured or Indicated, and the majority (89%) being Measured (see Table 2). The mining inventory and production schedule for the Study is based on the Measured and Indicated portions of the +1% REO weathered Bastnaesite Zone Mineral Resource.

Table 1: Classification of Total Mineral Resources for the Ngualla Rare Earth Project at 1.0% REO cut-off grade.

* REO (%) includes all the lanthanide elements plus yttrium oxides. See Table 3 for breakdown of individual REO’s. Figures above may not sum due to rounding. The number of significant figures does not imply an added level of precision. Reported according to the JORC 2012 Code and Guidelines. The Total Ngualla Mineral Resources includes and contains the +1% REO weathered Bastnaesite Zone Mineral Resource shown in Table 2.

Table 2: Classification of Mineral Resources for the Bastnaesite weathered mineralisation at 1.0% REO cut-off grade.
* REO (%) includes all the lanthanide elements plus yttrium oxides. See Table 3 for breakdown of individual REO’s. Figures above may not sum precisely due to rounding. The number of significant figures does not imply an added level of precision. The Bastnaesite Zone is a subset of and included within the Ngualla Rare Earth Project Mineral Resource in Table 1. Reported according to the JORC 2012 Code and Guidelines.
 
Table 3: Ngualla 2016 Total Mineral Resource ≥ 1% REO. Individual rare earth oxide grades and percentages of total REO.
* Figures may not sum due to rounding.

Table 4: Ngualla 2016 weathered Bastnaesite Zone Resource ≥ 1% REO. Individual rare earth oxide grades and percentages of total REO.
* Figures may not sum due to rounding.

Ore Reserve Estimate

The maiden Ore Reserve estimate for the Ngualla Project was announced on the 19th March 2014 and is:
 
20.7 million tonnes at 4.54% REO for 941,000 tonnes of contained REO


Ore Reserve classifications are shown in Table 5 below:

Table 5: Ngualla Project Ore Reserve Summary

See Table 6 for breakdown of individual rare earths.

The maiden Ore Reserve was completed using detailed mine planning work based on the Measured and Indicated categories of the +3% REO Mineral Resource for the weathered Bastnaesite Zone portion of the total Ngualla Mineral Resource released on the 4th April 2013. The Ore Reserve was completed by independent mining consultants, Orelogy, based in Perth, and is reported according to the JORC 2012 Code and Guidelines.

The Ore Reserve and supporting assumptions are reported in ASX release 'Ngualla Rare Earth Project - Maiden Reserve Estimate' of the 19th March 2014, which is accompanied by the 'Preliminary Feasibility Study and Executive Summary' also released on the 19th March 2014.
 
A revised Ore Reserve estimate will be announced soon and will be based on the latest Resource Estimate above (released on the 22nd February 2016) together with an improved metallurgical flowsheet and updated economic parameters from the BFS.
 
Table 6: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for the Ngualla Project Ore Reserve summarised in Table 5. Figures may not sum due to rounding.

Location

Peak Resources Ground Floor,
5 Ord Street, West Perth,
Western Australia.

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