PERTH (miningweekly.com) – Explorer Peak Resources was set to start a prefeasibility study (PFS) on its Ngualla rare earths project, in Tanzania, after an increase in the resource estimate improved the project’s economics.

The ASX-listed Peak on Thursday reported that the new estimate for the Ngualla project incorporated some 13 600 m of additional drilling, and took the resource estimate to some 21.6-million tons, grading 4.54% rare earths, for 982 000 t of contained rare-earth oxide (REO).

This was a significant increase over the previous estimate of 8.2-million tons, at 4.35% REOs, which underpinned a scoping study for a 25-year life-of-mine operation, delivering some 10 000 t/y of REOs.

Meanwhile, metallurgical testwork had shown that mineralisation outside of the Bastnaesite zone could be processed using other conventional beneficiation and leach processing routes.

The long mine life supported by the Bastnaesite zone provided Peak with the opportunity and time to optimise these processes, the company said, which could be brought in at a later stage in the operation’s life.

Peak said in a statement that the increased mineralisation, and the option to increase the production rate of the Ngualla project, coupled with enhanced beneficiation ability, as indicated by recent testwork, would lower the cash costs of the project and improve on the already-strong net present value and internal rate of return, as estimated by the scoping study.

“The new estimate illustrates the quality of the Ngualla resource, the economic upside and the options available to Peak to expand production once the initial low-cost, low-risk operation has been established,” said Peak MD Richard Beazley.

The PFS and revised economic assessment would likely be completed by the third quarter of this year, and was expected to further enhance the project’s economics.

Peak had meanwhile appointed a financial adviser to assist in identifying and securing strategic partners to assist in funding the Ngualla project through to production.

The company was hoping to start production at Ngualla by the first quarter of 2016.