5 February 2015

Funding Update and Company

Outlook

Open Briefing interview with Managing Director

Darren Townsend

Peak Resources Limited Level 2, 46 Ord Street West Perth WA 6005

In this Open Briefing®, Managing Director Darren Townsend discusses:

 Appian and IFC Funding Agreement

 Ngualla High Grade Rare Earths Project

 Chinese RE Export Decision Impact

 Company Milestones and Outlook

Record of interview:

openbriefing.com

Peak Resources Limited (ASX: PEK, 'Peak') announced during the September quarter that it had entered into a financing arrangement with Appian Natural Resource Fund (Appian), a leading resources private equity group, to provide funding and technical expertise to complete the Bankable Feasibility Study (BFS) for the Ngualla Rare Earths Project, located in Tanzania. Subsequently, Appian introduced the World Bank's International Finance Corporation (IFC) who joined with Appian via a 20:80 split (IFC 20%) to provide approximately AUS$29.5 million which on closing will fully fund Peak through the BFS.
What is the significance of Appian and IFC making this investment into Peak and what will these groups bring to the development of the flagship Ngualla RE Project?

Managing Director Darren Townsend

Appian and the partners of Appian have an excellent reputation in the resources investment world for identifying, investing in and assisting with the development of highly attractive mining projects all over the world. They bring deep expertise in project development to the table and their investment and partnering with Peak gives us tremendous confidence that we have the right team and the right project to advance. Following the introduction by Appian of IFC, we are very pleased to have attracted an organization of the standing and reputation of IFC as they will work with us to ensure tier one environmental and social performance.
IFC is the largest source of loan and equity financing for the emerging markets private sector. It is AAA-rated by S&P and Moody's and holds a portfolio of US$49.6 billion through equity in over 810 companies worldwide in 118 countries.
The favourable technical aspects of the Ngualla Project together with the expertise and financial horsepower these strategic partners bring put Peak in a solid position to become one of the next new rare earth producers. With the signing of the formal agreements this week we are confident that Appian will likely play a key role in assisting Peak to attract full project funding as we advance the development of Ngualla.

ASX Announcement: 05 February 2015/Open Briefing®/Peak Resources Limited 1

Figure 1. Investment structure post-completion of the full 3 stage investment

4%

15.99%

62.5%

30.0%

7.5%

Peak African

Minerals

100%

PR NG Minerals

Limited

100%

Ngualla Rare Earth

Project

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The Ngualla Rare Earths Project, located in south west Tanzania, 150km north of the city of Mbeya, is one of the best of breed rare earths projects in the world today. With a total Mineral Resource1 of 195 million tonnes at 2.26% REO, for 4.4 million tonnes of contained REO including an Ore Reserve2 (at 3% cut-off grade) of 20.7 million tonnes at 4.54% REO,
for 941,000 tonnes of contained REO the Company's Pre-Feasibility Study3 states a planned annual production rate of 10,000 tonnes of separated high purity rare earth oxides.
What are some of the key aspects of why the study showed such good potential economics
with NPV's in excess of US $1Billion?

Managing Director Darren Townsend

The key drivers of the favourable economics for the Ngualla Project are the simple mineralogy and high grade. With the mineralogy we are very fortunate in that we have a large resource and we have been able to pick a portion of the Mineral Resource (the Ore Reserve represents only 22% of the resource contained metal) that is naturally very low in phosphate minerals and where mother nature has already completed a lot of the heavy lifting by removing the carbonate minerals. As a result, instead of having to deal with large quantities of three acid consuming minerals we are only dealing with a relatively small amount of one (iron).With regards to grade we are very fortunate to have both a high head grade and a high proportion of high value Neodymium and Praseodymium. Throw all this together and we have planned lower quartile operating costs and very low capital costs compared to other development projects.

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What was it about the project that was attractive to IFC, which is part of the World Bank and how will the ownership structure look with the funding completed and ratified?

Managing Director Darren Townsend

Ngualla is one of the highest grade and longest life rare earth development projects in the world. IFC has as mandate to invest in projects that must meet a high standard of technical as well as social and environmental standards. Their involvement with Peak is testament that Ngualla is a world class project and this is something investors can take as a real positive.

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China traditionally has controlled 95% of global production and until recently enforced a ban on export of Rare Earths, some of which are designated a "strategic mineral or metal". With China lifting this ban, the investment markets fear that there could be a glut of rare earths. What is your view on this opening of rare earth trade from China and how will it impact Peak's product market?

Managing Director Darren Townsend

The main point here is that China has not hit the export limits imposed for the last three years so as a result their abolition has no immediate effect.
We believe that the attractive economics of the Ngualla project has and will continue to attract investor interest, beyond any restructuring of the rare earth market. We believe that our position on the cost curve will protect us from price volatility and that the Ngualla Project will be competitive against peer projects in China. Ngualla is expected to be amongst the lowest cost producers in the world.
The rare earth market is broad (17 metals) and it is important to focus on specific specialty metals within this group, in particular the magnet metals. Too much focus has been on the low value Cerium and Lanthanum markets. Our latest thinking is we may not even produce Cerium and the high value high growth magnet metals Neodymium and Praseodymium will represent approximately 71% of Ngualla's planned revenues.
It is also important to look at the broader themes in the rare earth market as countries, for example in Europe and the US, are working to reduce their reliance on Chinese supply by building capacity outside of China, as we can see with the US Rare Earths Supply Chain Technology and Resources Transformation Act HR 1388.

openbriefing.com

Peak's differentiation from peer rare earths businesses is its weighting of the key magnet metals, Praseodymium and Neodymium Oxide that make up 71% of the Ngualla production value matrix. How does this set Peak aside from other rare earth producers and developers?

Managing Director Darren Townsend

There are many end uses for rare earths, but we see the most value in Neodymium and Praseodymium, which is driving our confidence in the Ngualla Project. These are highly specialist metals and this segment of the market is 50% of the total value of the rare earth market and has a very healthy projected 7 % compound annual market growth.
Demand for both Neodymium and Praseodymium is being driven by technological innovation in the standard automotive sector, electric and hybrid vehicles, alternative energy, electric bikes and electronics. Significant growth demand for the specialist metals, Neodymium and Praseodymium is expected in these areas, particularly with wind turbines and electric and hybrid vehicles expected to show 11% growth (CAGR) in the medium term.

ASX Announcement: 05 February 2015/Open Briefing®/Peak Resources Limited 3

Figure 2. Ngualla relative value contributors by product type (Pre-Feasibility Study)

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There seem to be some confusing metrics for the Rare Earth Market, can you please explain your views on this?

Managing Director Darren Townsend

You are correct and in fact this has been used by some Companies promoting marginal deposits. The classic terms used are heavy versus light rare earths, basket prices etc. The split between heavy and light rare earths is based on atomic weights rather than economic parameters.
Some Companies promote that a project must have to have a high percentage of its rare earth mix as heavy rare earths as these are higher value and that light rare earths are not valuable. The problem with this is the head grade of many so called heavy rare earth deposits are very low and the market size for some of the heavy rare earths is small so one or two new producers can be very disruptive to the market.
What is important is that the recoverable value (lights and/or heavies) per tonne of reserve needs to be high and you need to be entering the market at a size that is not disruptive.
I am pleased to be able to say that Ngualla ticks all the boxes with its high head grade, high proportion of valuable rare earths (Neodymium and Praseodymium), low capital cost and a planned entry point into the market that represents less than one year's demand growth.

ASX Announcement: 05 February 2015/Open Briefing®/Peak Resources Limited 4

openbriefing.com

What are the key operational activities and milestones that Peak has ahead of it this year?

Managing Director Darren Townsend

There are a number of very significant catalysts and milestones for Peak Resources coming up in 2015 and the formal Closing of Stage one of the Appian and IFC funding deal is the first of those as we continue to progress one of the highest grade rare earths projects in the world today.
As we progress our BFS there will also be further updates on capital cost efficiencies, marketing progress, Cerium stockpiling studies, optimisation studies and the build out of the Board and management team as we transition from explorer to developer of a major rare earths project.

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Thank you Darren.

For more information about Peak Resources Limited, visit www.peakresources.com or call Darren Townsend on
(+61) 8 9200 5360

1 For Mineral Resource details see Peak ASX announcement "Increased Resource Estimate To Improve Ngualla

Economics" of 4 April 2013

2 For Ore Reserve details and associated economic assumptions see Peak ASX announcement "Ngualla Rare

Earth Project Maiden Ore Reserve" of 19 March 2014

3 For details of Preliminary Feasibility Study see Peak ASX announcement "Peak Resources Delivers Robust

PFS for Ngualla" of 19 March 2014

The information in this report that relates to Mineral Resources is based on information compiled by Robert Spiers, who is a member of The Australasian Institute of Geoscientists. Robert Spiers is an employee of geological consultants H&S Consultants Pty Ltd. Robert Spiers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004. Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Robert Spiers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in the announcement that related to Ore Reserves is based on information compiled by Mr Ryan Locke, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Locke is a Principal Planner and is employed by Orelogy Group Pty Ltd, an independent consultant to Peak Resources. Mr Locke has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Ryan Locke consents to the inclusion in the report of the maters based on his information in the form and context in which it appears.

For previous Open Briefings by Peak Resources, or to receive future Open Briefings by email, visit openbriefing.com

DISCLAIMER: Orient Capital Pty Ltd has taken all reasonable care in publishing the information contained in this Open Briefing®; furthermore, the entirety of this Open Briefing® has been approved for release to the market by the participating company. It is information given in a summary form and does not purport to be complete. The information contained is not intended to be used as the basis for making any investment decision and you are solely responsible for any use you choose to make of the information. We strongly advise that you seek independent professional advice before making any investment decisions. Orient Capital Pty Ltd is not responsible for any consequences of the use you make of the information, including any loss or damage you or a third party might suffer as a result of that use.

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