ASX-listed exploration company Peak Resources aims to complete the bankable feasibility study (BFS) for its Ngualla project, in Tanzania, by the end of 2016 to allow for a final development decision to be made in 2017.

The Ngualla project hosts one of the world’s highest-grade undeveloped neodymium and praseodymium deposits, the company says, noting that these rare-earth metals represent more than 70% of the value of the rare earths market.

Neodymium and praseodymium are used in high-powered magnets that can lift
1 000 times their weight and are used in automobiles, hybrid and electric cars and wind turbine applications.

“Our aim is to become a supplier of choice to magnet metal customers and to ensure success for all stakeholders in the project,” states Peak Resources MD Darren Townsend.

He states that demand for rare-earth magnets is strong, with yearly compound growth rates of about 7%. This demand is mainly driven by the automotive sector, where the magnets are used in electronics.

Most magnets are manufactured in China, and predominately used in China, Japan and Europe. The highest demand for hybrid cars is expected to be from China, while China and Europe are expected to be significant players in the wind turbine space.

The BFS has recently started and will investigate the feasibility of low strip-ratio opencut mining, followed by a multiple-stage beneficiation process to produce a mineral concentrate.

Once operational, the Ngualla project is expected to produce about 5% of the world’s supply of neodymium and praseodymium, which represents less than one year’s natural demand growth in the market.

The capital cost estimate for the project from the prefeasibility stage estimate is $367-million, including a 30% contingency.

“Given that we have continued to improve our flowsheet, this capital estimate will need to be re-estimated, and this will be done as part of the BFS. How the project will be funded has not yet been decided, but could include debt and equity or a potential sell-down of part of the project to a strategic partner,” Townsend explains.

Currently, 50 people are working on site, and key work programmes include two drill rigs for geotechnical and water drilling.

The number of people to be employed once full operations start will be determined as part of the BFS.

The company notes that a significant advantage for Ngualla is that it has a large mining reserve, which is focused on a part of the deposit that is extremely low in carbonate and phosphate minerals.

Project History
Peak Resources announced the maiden mineral resource, which is currently 21.6-million tonnes at 4.54% rare-earth oxide (REO), for a total of 982 000 t of REO, for Ngualla in February 2012, which ranked it as the fifth-largest rare earths deposit in the world.

Fundamental geological aspects offer distinct advantages for development over other rare earths projects. These include the large size of the deposit; outcropping, high-grade mineralisation amenable to opencut mining with low strip ratios; favourable mineralogy amenable to a relatively simple, low-cost processing route and extremely low uranium and thorium levels.

Located in southern Tanzania, 147 km from the city of Mbeya, on the edge of the East African Rift Valley, Peak’s Ngualla project is centred on the Ngualla carbonatite.