ASX-listed rare earths junior Peak Resources’ bankable feasibility study (BFS) has delivered significant reductions in operating costs and facilitated access to higher value markets.
Delivery of the project is well timed to benefit from the expected strong uplift in the demand for permanent magnet motors required by the rapidly expanding electric vehicle market, which has been the main catalyst for significant increases in the price of lithium and cobalt since late 2015.
Neodymium (Nd) and praseodymium (Pr) are expected to generate 90% of Ngualla’s future revenue.
Deliverability and operability
Completion of the BFS by Peak Resources’ team of rare earth industry experts in conjunction with global engineering firm Amec Foster Wheeler, including the extensive pilot planting of Ngualla ore, has delivered a study from which all stakeholders can have confidence in the deliverability and operability of the planned mining, beneficiation and refining processes.
The study envisages production over a 30 year mine life based on the weathered bastnaesite zone mineralisation, which comprises only 22% of the total Ngualla mineral resources’ estimate at a 1% rare earth oxide lower grade cut.
The annual output target is 2 420 t of neodymium and praseodymium rare earth oxide; 530 t of mixed samarium, europium and gadolinium rare earth carbonate; 3 005 t of cerium carbonate and 6 940 t of lanthanum carbonate.
“I would like to congratulate the Peak Resources and AMEC Foster Wheeler teams and our other consultants on the delivery of a robust and comprehensive BFS,” comments Peak Resources MD, Darren Townshend.
“Our stakeholders can take comfort that the study has been completed under the leadership of our COO, Rocky Smith and technical director, Dave Hammond, and is based on the Peak Resources team’s significant rare earth operating and marketing experience combined with extensive pilot planting.
“With the further US$14 million per annum reduction in operating cost compared to the project update and a total reduction in operating costs of $35 million per annum compared to the company’s preliminary feasibility study.
The Ngualla project has the potential to be one of the world’s lowest operating cost/kg NdPr fully integrated rare earth producers and we believe is perfectly positioned for the expected increase in magnet metal prices driven by the forecast enormous growth in e-mobility and low carbon technologies.”
“I would like to thank the Peak and AMEC Foster Wheeler teams for their professionalism in delivering this high quality study,” states AMEC Foster Wheeler director of mining Australasia, Greg Hayes.
“Peak Resources has taken advantage of perfect timing to complete the BFS during a period of depressed commodity prices and as a result were able to access some of the best talent in our organisation and within the various pilot plant laboratories.”
BFS highlights physicals drive economics
Ngualla’s favourable project economics are in part driven by the high NdPr grade and advantageous mineralogy of the rare earth deposit itself, together with the development of an extraction and purification process that targets the higher value rare earths whilst rejecting the majority of the lower value cerium.
The location of the refinery in proximity to sources of inexpensive bulk reagents and existing utilities is also a key driver of lower opex.
With the alignment of products and value drivers to the high demand magnet metal market the project is in a favourable position in terms of marketing and future demand for its products which will represent less than 5% of total world demand.
The next steps
The completion of the BFS and the recent receipt of the environmental certificate for Ngualla are important achievements in the development of the project.
With both these key milestones now complete the company is able to ramp up its discussions with potential offtake, debt financiers and strategic partners for the Ngualla project with an aim to move into front end engineering and design once appropriate funding partner(s) is/are identified.
The focus of discussions will be on strategic partners, export credit agencies, trading houses and NdPr customers with a particular focus on drive train manufacturers for e-mobility.
In parallel, the company will move forward with an application for a mining license at Ngualla. It is the company’s aim to have the project ready for execution in time to be exposed to the predicted increase in neodymium and praseodymium prices driven by e-mobility and low carbon technologies.
Feature image credit: Peak Resources