The presentation discusses the plans of Peak Resources; a rare earth element developer and compares it to its peers on the ASX .

1. Analysis of
Peak
Resources
A rare earth element
company with a very
large project in
Tanzania
Created by Chris Suttie

2. Contents:
Rare Earth Elements:
• An Introduction to Rare Earth Elements
• Rare Earth Element Supply and Geopolitics
• Rare Earth Elements’ Price
Peak Resources
• Peak Resources’ (PEK’s) Share Information
• PEK’s Recent Share Price Movement
• Peak Resources’ Deposit: Comparison to Peers
• Ngualla: Characteristics
• A Comparison of Peak Resources’ Feasibility Study to Peers
• Peak’s Plans: Ngualla and Teesside
• PEK’s Downstream Processing plans in Teesside UK
• Political Stability and Ease of Doing Business in Tanzania
• Peak Resources’ Cash, Debt and Project Funding
• Summary
• Appendix
2

3. An Introduction to Rare Earth Elements
• There are 17 rare earth elements which generally occur together
in ore deposits. They are regularly found with other commodities
such as uranium, thorium, niobium and phosphate.
• They are found in 2 main types of deposits; clays which are lower
grade but cheaper to mine and process, and hard rock which is
higher grade but more difficult to mine and process.
• Rare earth elements are often divided into heavy and light
varieties. Although they occur together, a deposit will usually
contain more of either heavy or light rare earth elements.
• When concentrating the ore for transport, some methods favour
heavy and others light rare earth elements, where 70-90% of the
favoured variety and as little as 30% of the non-favoured variety is
extracted from ore into concentrate.
• Processing and separating rare earth element ores into individual
components is a difficult and highly specialized undertaking.
• They have a wide range of uses described in the chart. Rare earth
elements vary dramatically in price, because of this; the relatively
expensive “permanent magnet” elements made up 39% of the
volume consumed, but 92% of the cost in 2019.
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2019 Rare Earth Element Use

4. Rare Earth Element Supply and Geopolitics
• By the early 2000s China had increased rare earth element
production to such an extent that prices fell, and foreign
producers were squeezed out of the market.
• In 2010, China halted the export of rare earths to Japan for two
months following a territorial dispute over the Senkaku Islands.
• Rare earth elements are vital to the production of many products,
the most sensitive applications being military devices such as F35
fighter jets and missile guidance and defense systems. Because
of this, a steady, reliable supply is considered a matter of national
security by many governments.
• In 2012 an ASX listed company called Lynas began mining and
concentrating rare earth elements ore from its Mt Weld deposit in
WA, in 2013 they began separating the concentrate in their
Malaysian facilities. In January 2021, Lynas signed a contract with
the US Department of Defense to build a light rare earth element
separation facility in Texas.
• Rare earth element supply chain security remains a key issue for
governments around the world as they work to reduce their
reliance on supply from China.
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Mt Weld Mine F35 Fighter Jet

5. Rare Earth Elements’ Price
• Neodymium (left) and the similarly priced Praseodymium
(together=NdPr) are the most economically significant rare earth
elements for the majority of ASX listed miners and explorers. Where
the combination of quite high grades of 0.2-2% and a very high price
of 300,000-1,000,000 yuan or US$47,000-160,000 /t cause them to
make up more than 50% of the value in many rare earth element
deposits.
• NdPr is used to make magnets which are needed for electric engines
and wind turbines, both vital to the green energy transition.
• The cheapest rare earth elements are Cerium and Lanthanum which
cost US$1,500-5,500/t and the most expensive are Lutetium, Terbium
and Scandium which cost US$600,000-6,000,000/t.
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Neodymium Price (Chinese Yuan/t)
Analysis of Value/t of Rare Earth
Element Deposits Owned by ASX
Listed Companies • % Total rare earth oxides (%TREO) is the standard way a company refers to the grade of their
deposit. In cases where companies have lower %TREO grades, they often try to improve
perceptions by pointing out that it’s made up of higher quantities of expensive and lower
quantities of cheap rare earth elements relative to their peers. Analysing the value/t of most ASX
listed companies’ deposits, looking at individual components of their rare earth ore, as opposed to
the more general %TREO figure shows that the companies with the highest %TREO, usually have
the highest value/t of ore (despite companies with low %TREO trying to indicate otherwise). By
double clicking the icon to the left, you can see the analysis.

6. Peak Resources’ (PEK’s) Share Information
• The earliest time on the PEK chart is December 2006 when the price was 16c.
• The high of 85c/share in February 2011 likely occurred as a result of rare earth element supply panic after China cut
exports to Japan in 2010.
• PEK has no P/E ratio or dividend yield, this is because they haven’t started mining yet and have just been spending
money on exploration, feasibility studies and other planning activities.
• PEK’s market cap of A$131M is currently on the lower end of ASX listed rare earth element explorers and developers.
The combination of one of the lowest market caps in the industry and geologically best resources in the world is the
reason PEK has been chosen as the topic for this report.
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Peak Resources Historic Chart (AUD）
China cuts off
rare earth supply
to Japan

7. PEK’s Recent Share Price Movement
• The low for the last 5 years was 2c, reached at the start of the pandemic in 2020. The highest share price reached in the last
5 years was 14c in July 2021 when they received cabinet approval for their special mining license in Tanzania.
• Since receiving their special mining license, PEK has fallen to 6.8c. The events which might explain the fall are the successful
A$30M placement to institutional and sophisticated investors at 9c which was a 18.2% discount to the price prior to the
announcement on the 6th of August. This was followed by a share purchase plan open to all shareholders at the same price
which aimed to raise A$4M, but fell short at A$1.7M. Just under US$10M of the funds were used to repay a royalty
agreement which removed their requirement to pay 2% of gross life of mine revenue to a 3rd party. The remaining funds
will be used to advance their project.
• 2 discounted capital raisings have negatively impacted their share price. Raising capital isn’t unusual for explorers and
developers, if a project is fundamentally sound, a poorly received capital raise can provide an excellent buying
opportunity to a value investor.
• Their current share price of 6.8c represents an 11 month low. In the same period their main commodity present;
neodymium has nearly doubled in price.
7
Peak Resources 5 Year Chart

8. Peak Resources’ Deposit: Ngualla comparison to peers
• The only operational mine in the chart is LYC’s Mt Weld where 560kt of ore was mined in FY2020, to supply approximately
10% of the world’s REE demand. At that rate, LYC’s reserve which is only the 3rd largest on the list is about 37 years of
supply. This indicates that very large reserves and resources aren’t the most important characteristics for REE ore
bodies.
• REEs are difficult to process, and grade is very important, LYC ore is 8.5% TREO, the second highest grade on the list is
PEK’s Ngualla reserve at 4.8% REE, 66% higher than the next highest grade and more than double the rest.
• In terms of “resource” which is less certain to be profitably mined than “reserve”, Ngualla is the 2nd largest and 3rd highest
grade in the list. 84% of Ngualla’s resource and reserve figures were given in the chart as that’s how much PEK owns.
• PEK’s resource is the 2nd largest on the list at 180Mt, the only larger deposit is Kjenfield with a much lower grade and
which has recently encountered regulation changes in Greenland which are likely prohibitive.
8
ASX Rare Earth Element (REE) Companies’ Resources

9. Ngualla: characteristics
• The Ngualla resource is uniform and
contains consistent high-grade
mineralization up to 150m deep
from the surface which is
advantageous when compared to
many of its peers with discontinuous
ore and significant overburden to
remove.
• Most of the companies in the list on
the previous page have found other
resources nearby or with the REEs in
their deposit. Nearby Ngualla, PEK
has found phosphate, barite,
fluorite and niobium.
9
Cross Section of Ngualla Resource
Overhead View of Ngualla Tenements

10. Comparison of Peak Resources’ Feasibility Study to peers
The Tanzanian government owns 16% of the Ngualla project on a “freehold” basis. The NdPr and TREO production figures as well as costs given above haven’t accounted for this.
Simply multiplying the production by 84% for PEK’s ownership isn’t accurate, see slide 13 for further discussion of the JV.
• The above figures for PEK were taken from a feasibility study completed in 2017, the updated feasibility study due June
2022 will consider mill throughput of 800kt/year and 3000-3500t/year NdPr production. PEK has stated that they intend
to commence construction of the Ngualla mine and concentrator “by the end of September 2022”.
• PEK’s Ngualla project has the 2nd lowest planned operating costs/ Kg TREO and lowest/ Kg NdPr.
• Feasibility studies are less certain than realised results, the above chart contains predictions for operating parameters in all
cases besides Lynas. Considering that Lynas’ ore is 8.5% TREO, PEK’s grade is just 56% of LYC’s, the next highest grade is just
33% of LYC’s grade, one might find their predicted superior operating costs /Kg TREO and /Kg NdPr to be questionable.
Due to the complexity in concentrating REO ore, the realised results are also likely to favour 2nd highest grade PEK deposit
more than shown on the chart.
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11. Peak’s Plans: Ngualla and Teesside
• PEK plan to concentrate their rare earth element
ore to 45% TREO (Total Rare Earth Oxides) on site,
then send it to their planned Teesside refinery in
the UK for downstream processing. The US$365M
CAPEX figure includes construction of the Teesside
facilities, which the Tanzanian government gets no
“free carry” stake in. PEK’s CAPEX is the lowest on
the list of any projects which include separation
facilities.
• The lower CAPEX is partly because PEK’s plan is
relatively small in scale, even after increasing
throughput to 800Kt/year and 3000-3500t/year
NdPr, they’ll still have the 2nd or 3rd smallest
project of the 7 companies listed. Low CAPEX
reduces debt (=risk) or capital raisings (=dilution),
and the major disadvantage is lower production
which reduces income. Considering the size of
Peak’s deposit, it’s reasonable to expect
production increases in the future.
11
Map Showing Peak Project Locations

12. PEK’s Downstream Processing plans in Teesside UK
• In May 2021, PEK exercised a £1.8M option to take a 250-
year lease on a 19-hectare piece of industrial land in
Teesside UK, where PEK plan to build their downstream
processing refinery. The rent rates are described as “nominal
peppercorn payment” from a government looking to
enhance local supply chains.
• Teesside has reliable supplies of everything needed to refine
rare earth elements such as reagents and electricity.
• The Teesside Refinery is expected to cost US$160M.
• The site is located within an Enterprise Zone with Enhanced
Capital Allowance status. Companies located at this site can
apply to receive a first-year capital allowance of 100% on
qualifying plant and machinery currently set to a maximum
of €125 million.
• The current corporate tax rate in the UK is 19%.
• The Teesside refinery will produce:
NdPr oxide Combined mid-heavy rare earth carbonate
Lanthanum carbonate Cerium carbonate
12
Teesside Refinery Site

13. Political Stability and Ease of Doing Business in Tanzania
• PEK owns 84% of the Ngualla project and the Tanzanian
Government owns the other 16%. The Tanzanian
Government’s 16% stake is a “free carried”, non-dilutable
interest which means that PEK must provide 100% of the
upfront capital for 84% of the mining and concentration
project (US$200M CAPEX). “The government would
receive dividends in profit-making periods of a mining
project”. The final details of the JV are still being negotiated.
• The government royalty for industrial minerals such as
REEs in Tanzania is 3%. For comparison; in WA REE
royalties are 2.5-7.5%.
• In 2020, Tanzania ranked 141/190 countries in “ease of doing
business”.
• Based on the Tanzania’s Development Vision 2025 Plan, the
government plans to grow the mining sector to account for
10% of the country’s GDP, versus 3.5% in in 2020 when the
announcement was made. With such high hopes for the
mining sector, it’s likely that Tanzania will be
accommodative to potential miners like PEK.
• Political stability in Tanzania isn’t a major issue, they’ve had
a stable democracy since independence in 1961 and
have a “legal system is based on English common law”.
13
Ngualla Project

14. Peak Resources’ Cash, Debt and Project Funding
• None of the projects have very high % cash coverage, at 6% PEK is equal to 2 others with the second lowest
coverage.
• PEK’s CAPEX as a % of market cap is the second highest at 243%, after accounting for their cash, PEK would have to
raise 229% of their market cap to fund their project. PEK’s share price has fallen lately for reasons discussed in
slide 7, reducing their market cap and inflating this figure.
• PEK hasn’t yet said much about project funding, with intentions to start constructing their project in September
2022, there should be news about that soon.
• Considering that another rare earth element developer Pensana Metals with a mine in Angola, Africa (too) and a
refinery planed in the UK (the same as PEK), listed on the London stock exchange to acquire more capital, PEK is
likely to do the same.
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15. Summary
Upside:
• PEK’s REE deposit has the 2nd highest reserve grade and 3rd highest resource grade among 9 of it’s ASX peers, this will
contribute to lower costs when the mine is operational.
• Even after accounting for 84% ownership, PEK’s ore resource is the 2nd largest among 9 of it’s ASX peers.
• Despite the resource and reserve being superior to a majority of it’s ASX peers, PEK’s market cap is the lowest of the 7
companies with advanced projects. This could indicate that the stock is good value.
• PEK has been granted a mining license by the Tanzanian government and plans to begin construction in September 2022.
PEK has further acquired land in the UK to construct a downstream processing plant.
• PEK could be eligible for a first-year capital allowance on qualifying plant and machinery up to 125 million Euros to build
their refinery in the UK, besides the grant the UK government is likely to be supportive due to their desire to attract
critical material supply chains.
Downside:
• PEK has to give the Tanzanian government a 16% stake in it’s mine and concentration facility, this stake will be free
carried meaning that PEK will need to fund the governments share of the development. Details are still being negotiated.
• Tanzania isn’t the most stable country in the world for business, as a counter to this point, the Tanzanian government
presumably wouldn’t want to hurt the project in which it has a 16% stake, especially not while trying to expand their
mining industry.
• As with its peers, PEK will need to raise quite a large amount of capital before its project can produce REEs.
15

16. Appendix:
Slide 3:
https://massivesci.com/articles/rare-earth-elements-metals-not-really-that-rare/
https://www.powertransmission.com/newsletter/0212/rare.htm
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02449709-
6A1061854?access_token=83ff96335c2d45a094df02a206a39ff4
Slide 4:
https://oxford.universitypressscholarship.com/view/10.1093/oso/9780190670931.001.0001/oso-
9780190670931-chapter-5
https://www.japantimes.co.jp/opinion/2019/08/09/commentary/japan-commentary/mideast-oil-china-
rare-earths/
https://www.ft.com/content/d3ed83f4-19bc-4d16-b510-415749c032c1
https://www.nsenergybusiness.com/projects/mt-weld-rare-earths-mine/
Slide 5
https://tradingeconomics.com/commodity/neodymium
https://en.institut-seltene-erden.de/aktuelle-preise-von-seltenen-erden/
Slide 6:
https://www.google.com/search?q=asx+pek&oq=asx+pek&aqs=chrome.0.69i59j69i60l2j69i65l3j69i60l2.133
9j0j9&sourceid=chrome&ie=UTF-8
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17. Slide 7:
https://www.google.com/search?q=asx+pek&oq=asx+pek&aqs=chrome.0.69i59j69i60l2j69i65l3j69i60l2.13
39j0j9&sourceid=chrome&ie=UTF-8
Slide 8:
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02416173-
6A1048385?access_token=83ff96335c2d45a094df02a206a39ff4
The chart was made using ASX announcements from the listed companies (see complete chart set in Excel):
Slide 9:
https://wcsecure.weblink.com.au/pdf/PEK/02446285.pdf
Slide 10:
The chart was made using ASX announcements from the listed companies (see complete chart set in Excel):
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02397921-
6A1041848?access_token=83ff96335c2d45a094df02a206a39ff4
Slide 11:
The chart was made using ASX announcements from the listed companies (see complete chart set in Excel):
https://wcsecure.weblink.com.au/pdf/PEK/02446285.pdf
Slide 12:
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02379216-
6A1034734?access_token=83ff96335c2d45a094df02a206a39ff4
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18. Slide 13:
https://www.rvo.nl/sites/default/files/2020/09/Doing-Business-in-Tanzania-2020.pdf
https://www.dlapiper.com/en/africa/insights/publications/2020/08/africa-connected-issue-4/6tanzania-mining-legal-framework-overhaul/
https://www.tanzaniainvest.com/mining/mining-gdp-2025-plan
https://www.bbc.com/news/world-africa-14095776
https://oxfordbusinessgroup.com/overview/clearing-hurdles-country-stable-political-ground
https://en.wikipedia.org/wiki/Tanzania#Politics
https://www.google.com/maps
Slide 14:
The chart was made using ASX announcements from the listed companies.
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