The Investment Proposition

Peak performance across all categories

The outstanding quality of Ngualla Rare Earth project clearly becomes visible when you compare the project with its peers based on a set of KPI’s. The bucket diagrams below show 4 KPI’s that represent the KPI’s which we believe are required for such an exercise. Peak proves its superior position among his peers by achieving the highest overall ranking. This exceptional position has been also reflected in the results of the Bankable Feasibility Study which was published on April 12, 2017 and  the Project update which was published on October 12, 2017 materialising  in following results:

  • Average Annual Post Tax Cash flow US$ 108 million
  • NPV8 – Pre Tax and Royalties US$ 914
  • NPV8 – Post Tax and Royalties US$ 612 million
  • NPV10 – Post Tax and Royalties US$ 444 million
  • IRR – Post Tax and Royalties 22%
  • Unit operating cost NdPr/kg US$ 32.24

At today’s NdPr market price of domestic China  375 RMB/ US$ 56.87 (02.11.17) Peak would deliver USD 69.21 Million positive cash only from the projected 2,810t p.a. NdPr sales

Peak Resources is the leading global development project with one of the world’s lowest operating costs of NdPr oxide.

Peak Resources #1 Choice among its Peers - Set to become one of the lowest cost Producer of NdPr

Below benchmarking exercise has been performed together with Adamas Intelligence and their database. Initially, we started with 58 global junior rare earth projects and this number was reduced to 29 projects due to the availability of quality data to be able to perform a detailed, comprehensive and professional comparison.

The following methodology has been applied. The White indicator shows for the specific KPI the closest perceived competitor of Peak Resources. This competitor is a light rare earth project, has low or moderate radioactivity levels in its ore body, does full separation to produce separated oxides and has either a project status of PFS (Pre-Feasibility Study), DFS (Definite Feasibility Study) or with a BFS (Bankable Feasibility Study).

The ghost indicator shows all the projects which are not perceived as a direct competitor due to disqualifying elements such as:

  • Projects with PEA status ( Preliminary Economic Assessment) which have immature cost, data and information which is not comparable with the quality of a PFS or DFS project status
  • Heavy Rare earth projects which are by nature not comparable with Light Rare Earth projects
  • Projects with high radioactivity levels in their ore body
  • Projects which aim to sell a lower value intermediate product/mixture and do not plan to produce a final purified product that is readily tradeable on the world’s rare earth markets

Legend

Peak Resources
Closest Competitor
Non direct competitor

OPEX INTENSITY
(USD/KG NdPr Oxide)

32.24 USD/kg NdPr Is Peak’s breakeven point for positive cash flow (OCBRITDA). Considering a NdPr price of  Domestic China US$71.55/kg (26.09.2017) and Peaks target volume of 2.810tpa NdPr. Peak would generate only from NdPr sales alone USD 110.4m positive cash.

CAPEX INTENSITY
(USD/KG NdPr Oxide over LoM)

US$ 5.00 per produced kg NdPr over life of mine is CAPEX intensity of Peak! Ngualla has the lowest capex intensity per unit output of NdPr of all comparable projects.

CAPEX (US million)

365 million total CAPEX for Peak . This is the lowest Capex among its peers for a fully integrated rare earth producer.

LIFE OF MINE (LoM) IN YEARS

26 Years LOM based on an Ore Reserve of 18.5Mt grading 4.80% REO, containing 887,000t REO, of which 92% is the highest Proved JORC category (8% being Probable). This combination makes Ngualla the best NdPr investment proposition and deposit worldwide.

Data provided by: Adamas Intelligence

Filtering Through to the #1 Project

58 RARE EARTH PROJECTS GLOBALLY

FILTER 1:

Does the company have an ore reserves?

The first filter asks the question:

“Does the project have a bankable Ore Reserve?”

(Ore Reserve = Portion of Mineral Resource that has been deemed legally, technically, and economically feasible to extract)

If not, they fall out of the bucket.

FILTER 2:

Does the project have a commercially proven mineral?

The second filter asks:

“Are the project’s REEs hosted by a mineral that has been commercially produced and processed in the past (i.e. bastnaesite, monazite, or xenotime)”?

If not, they fall out of the bucket.

FILTER 3:

Does the project process their RE to a standard tradeable product?

The third filter asks:

“Does the project aim to separate and purify REE products to market-desired specifications in-house, or are they reliant on a third party to make their products useable?”

The latter option bears significant technical, economic, and market risks

If not, they fall out of the bucket.

FILTER 4:

Is the project CapEX below 400 million USD?

The fourth filter asks:

“Can the project be developed for less than US $500 million?” Projects with higher capital requirements are off-putting to investors and often require longer periods to ‘breakeven’ leading to higher risks for financiers and equity investors alike.

If not, they fall out of the bucket.

#1

Peak meets all of these criteria and will be a fully vertically integrated producer of oxides and carbonates.

Data provided by: Adamas Intelligence