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Peak time to pass baton

Pending changes to Tan- The recent price surge
zania’s mining legisla- has been attributed to Te-

tion failed to deter Peak sla announcing plans to

Resources Ltd from follow- incorporate a three-phase

ing through with long-held permanent magnet mo-

plans to implement a man- tor containing neodymium

agement restructure ahead and praseodymium in its

of the next phase of project new Model 3 electric car,

development. having used an induction

Darren Townsend of- motor which did not con-

ficially stepped down as tain those rare earths in

managing director in No- previous models.

vember, with chief operat- A recent report from

ing officer Rocky Smith tak- Swiss financial giants

ing over as chief executive. UBS also identified rare

The transition had been on earths as the third most

the cards since the release critical element in a func-

of a BFS on the company’s tioning Chevrolet Bolt bat-

Ngualla rare earths project tery behind lithium and

in April. cobalt.

Projects such as Ngualla “For the first time we’ve

have been clouded with un- New Peak chief executive Rocky Smith with former managing director actually seen one of the

certainty since the Tanza- Darren Townsend outside the company’s West Perth office big investment banks rec-

nian Government unveiled ognise rare earths are a

a new set of mining laws in July, although life, using lower pricing assumptions for very important part of the raw materials

the legislation is yet to be formally imple- neodymium and praseodymium. required for these vehicles,” Townsend

mented. Combined pre-production capex to de- said.

However, Peak is pushing ahead with velop the Ngualla mine and rare earths “Once that word gets out and is better

development plans for Ngualla in a bid refinery at Tees Valley in the UK was up understood – combined with the antici-

to take advantage of expected near-term slightly to $US365 million, but it still re- pated price increases for the oxides – we

demand for key magnet metals neodymi- mains one of the lowest capital intensive think it’s going to be game on again in the

um and praseodymium. rare earth projects in the world. equity markets for rare earths.”

“Now that we’ve come to the end of “Having come from Mountain Pass and Smith has accompanied Townsend

the BFS and we’ve just put in our min- some of the problems we experienced on most of the company’s investor road-

ing licence application, we don’t need as there as a high-cost operation, it was shows in the past 18 months and is ready

many people as we had for the BFS so it pretty obvious to me that keeping this to lead Peak’s quest to lock down project

was a logical time to trim the decks a little thing as low cost as we possibly could finance for Ngualla.

bit,” Townsend said. was very important,” Smith said. “We’ll look at what makes the most

“I saw a situation where we had more “We looked at any area where there sense for the group, but I have to say I

than enough experienced executives on was a cost that was higher than we ex- think it’s going to be a little bit hard to just

deck and so I thought now was a good pected and we found we had a very ex- go with traditional western bank finance,”

time to transition to a non-executive role pensive reagent, so we came in at the Smith said.

with the company. end of the BFS and did a series of tests “Once we go down the road of some

“Rocky has been with us two years and we were able to locate a much lower strategic equity and finance then we may

now and has actually built and operated cost, more effective reagent for the rare have some better options with western

a rare earths mine, whereas I haven’t, so earth collector which helped us reduce banks and other leads to follow up on.

it made perfect sense to hand the reins the overall operating cost. That’s one area we need to focus some

over to Rocky for this next phase.” “In the subsequent months after that attention on.

Smith was instrumental in the develop- we were able to do some additional work “Getting more off-take opportunities

ment of the processing flowsheet which on the flotation process and we were out there is another. We haven’t pursued

underpinned the robust economics of the able to increase the capacity of the exist- that as much with the low prices, but now

Ngualla BFS and subsequent optimisa- ing plant by about 16%. The net of that that prices have started to shift I think

tion studies, having joined Peak after a was a very small capital increase, but we’ll have an opportunity to set some off-

successful stint managing the Mountain a substantial decrease in the operating take agreements at a better price with

Pass rare earths operation in the US. costs.” some of those higher end strategic off-

A recent process optimisation study Neodymium and praseodymium ox- take partners.”

helped the company build on the posi- ide prices have risen 75% since Peak – Michael Washbourne
tive results from the BFS, including released the initial BFS results in April

lower operating costs of $US32.24/kg and were hovering above $US70/kg at

and a higher average annual EBITDA of the time of print. Peak’s target price is if

$US150 million over the 26 years of mine $US77.50/kg.

AUSTRALIA’S PAYDIRT DECEMBER 2017 - JANUARY 2018 PAGE 89