Peak Resources (ASX: PEK, OTCQX: PKRLY) continues to impress from the wholly owned Ngualla Rare Earth Project in Tanzania with another round of exceptional drilling results.
Ngualla continues to shape up as a low cost, long term rare earth project and is the fifth largest rare earth project outside of China.
Drilling in the Southern Rare Earth Zone continues to intersect wide zones of deeply weathered carbonatite, containing long intersections of above 5 percent REO mineralisation.
New highlights from the area, which incredibly all start from the surface to end of hole include; 102 metres at 5.51 percent REO; 94 metres at 3.86 percent REO; 120 metres at 4.08 percent REO; 127 metres at 5.15 percent REO; 87 metres at 5.08 percent REO; and 103 metres at 5.25 percent REO.
Mineralisation still remains open at depth and to the south, with the latest intersections define a 200 metre wide zone of deep weathering that is enriched in rare earth mineralisation from surface to vertical depths of over 90 metres.
The importance of these intersections is that they continuity and consistency of the rare earth mineralisation in the heart of the deposit – which is targeted for first development and production.
Ngualla is already the fifth largest rare earth project in the world outside of China, and the continued string of high grade results will further galvanise the projects importance on a global scale.
New assays pending
Peak has planned 30,000 metres of drilling in 2012 which will deliver investors a constant flow of news in the coming months.
So far in the campaign 86 holes for 7000 metres have been completed within the Southern Rare Earth Zone, with assays from 35 of these holes currently pending.
The drilling programme will deliver Peak information and samples to support the Scoping and Metallurgical Studies currently in progress, with the company forecast to update the market on metallurgical results by the end of August.
Ngualla has a number of attributes which place the project among the world’s most notable rare earth discoveries of recent years.
With a resource a Resource of 170 million tonnes at 2.24 percent REO, which hosts a highly weathered and near-surface zone estimated at 40 million tonnes at 4.07 percent REO – equivalent to 1.6 million tonnes of contained REO – the project is the fifth largest rare earth resource, and the highest grade of the seven largest deposits outside of China.
With additional results to be delivered within weeks, at least another 20,000 metres of drilling and a Scoping Study by the end of the year – investors have a strong news flow to look forward to over the next four to six months.
Now considering the Peak market cap. of just $35 million equates to a REO per tonne of under $20, the company is well under-rated compared to peer averages.
The pullback in the share price to $0.16 therefore provides investors with a potential low re-entry price before the news flow ramps up for the company in the second half of 2012.