Peak Resources to acquire full ownership of Ngualla Rare Earth Project

Peak Resources (ASX: PEK) has entered into a conditional agreement to acquire all the issued capital of Tanzanian Joint Venture partner Zari Exploration Ltd (Zari), giving Peak 100% ownership of the Ngualla Rare Earth Project in Tanzania.

Ngualla has potential to be one of the largest and better grade new rare earth discoveries in recent years. The deal will provide the company with greater flexibility of options in taking the project forward. A maiden JORC Resource is forecast by the end of the March quarter 2012.

Payment for the acquisition to Zari shareholders is through a combination of cash and shares consisting of US$6 million cash and the issuing of 24,266,475 million Peak shares.

As operator and manager Peak is currently earning 80% equity in the project by carrying Zari through to the completion of a Bankable Feasibility Study.

Alastair Hunter, Peak Resources executive chairman, said “we see that the proposed acquisition of the project at this stage in its development has the potential to add significant additional value for current shareholders.

"The acquisition of Zari affords Peak absolute control of the Ngualla Project and gives Peak much greater flexibility to advance the Ngualla Project, opening up new potential opportunities for future funding requirements”.

The company believes the next six to twelve months will be a very productive and exciting period in terms of exploration results and the advancement of the project to maiden rare earth resource status.

The acquisition is conditional upon Peak completing financial and legal due diligence of Zari to its satisfaction, becoming entitled to not less than 100% of the Zari shares, obtaining Peak shareholder approval and obtaining the requisite approvals from the relevant Tanzanian authorities.

Over the past 18 months Peak has aggressively explored the Ngualla Carbonatite and developed the project into a significant new rare earth discovery.

The project is highly prospective for niobium, tantalum and phosphate, with significant mineralised drill intersections returned from the limited reconnaissance work completed to date to the north of the Rare Earth Zone.

Peak is looking to complete the major drilling program now in progress at Ngualla, where recently released results have significantly extended the mineralised zones, and further confirm the encouraging grade and width of the mineralisation.

Earlier in the month Peak further revealed the vast potential of the Ngualla Project in southern Tanzania by drilling ten reverse circulation holes in the Southern Rare Earth Zone, extending the rare earth mineralisation by 250 metres.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19002/peak-resources-to-acquire-full-ownership-of-ngualla-rare-earth-project-19002.html