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Quarterly ReportDecember 2012

DEVELOPING A NEW RARE EARTH DISCOVERY

Peak Resources Limited Level 2, 46 Ord Street, West Perth, Western Australia 6005. PO Box 603, West Perth, Western Australia 6872. ASX: PEK OTCQX: PKRLY ACN 112 546 700 Telephone: +61 8 9200 5360 [email protected] www.peakresources.com.au

Non-Executive Chairman: Alastair Hunter Managing Director: Richard Beazley Technical Director: Dave Hammond Non-Executive Director: Jonathan Murray Company Secretary: Jeff Dawkins

HighlightsPeak Resources Limited (Peak; ASX: PEK; OTCQX: PKRLY), is fast tracking the development of its large Ngualla Rare

Earth Project discovery in Tanzania. Ngualla has several fundamental natural advantages over other projects and is on

schedule to be a new, low cost, long term producer of rare earths.

Activity highlights this Quarter include:

Confirmation of strong project economics with the completion of the scoping study and preliminary economic assessment. Key indicators from the scoping study include:

• Pre-taxNPVofUS$1.571billion

• IRRof53%

• ModestcapitalcostofUS$400million

• LowoperatingcostofUS$10.09/kgREO

• AnnualrevenuesofUS$361million

• Paybackinside3years

Other factors that distinguish Ngualla from other rare earth projects and de-risk the development include:

• Provenbeneficiationandsimplemetallurgicalprocesses

• Mineralisationisnotradioactiveandhasthelowesturaniumandthoriumofanymajorrareearthdeposit

• Simpleopenpitminingwithlowstripratio

• Norequirementforacidbaking

• Significantopportunitytoupscaleproduction

Breakthrough in the identification of a beneficiation process that significantly reduces the plant size and reagent consumption (capital and operating costs).

Commissioning of a solvent extraction (SX) pilot plant (after Quarter end) to produce purified, high value rare earth products.

Completion of 2012 Ngualla drilling program. A series of intersections received from surface shows the potential to increase the amount of high grade mineralisation amenable to simple acid leach, further improving project economics, and also to extend the overall Mineral Resource to the south and west.

Commencement of the Ngualla Rare Earth Project pre-feasibility study.

Appointment of advisors (after Quarter end) to source strategic partners to assist with financing the development of the project and off take agreements.

Acquisition of four prospective new gold properties in the Lake Victoria Gold Fields region of northern Tanzania.

The Company had $4.23 million cash on hand at the end of the Quarter.

2

Quarterly Report December 2012

NGUALLA RARE EARTH PROJECT, TANZANIA

Rare Earths, Niobium – Tantalum, Phosphate. Peak Resources – 100%

About the Ngualla Rare Earth Project:TheNguallaRareEarthProjectinTanzaniaisarecentdiscoveryandisthehighestgrade

ofthelargeundevelopedrareearthdeposits.

Fundamentalgeologicalaspectsofferdistinctadvantagesfordevelopmentoverother

rareearthprojects.Theseincludethelargesizeofthedeposit,outcropping,highgrade

mineralisationamenabletoopencutminingwithlowstripratios,favourablemineralogy

amenabletoarelativelysimple,lowcostprocessingrouteandthelowesturaniumand

thoriumlevelsofanymajorrareearthdepositintheworld.

Usinga3.0%lowergradecut,thetotalMineralResource*includesahighergradezoneof40milliontonnesat4.07%REO

for1.6milliontonnesofcontainedREO,largelylocatednearsurfaceintheSouthernRareEarthZone(SREZ,seeFigure1).

*SeeAppendixTable1forMineralResourceclassificationdetailsandAppendixTable2forbreakdownofindividualREO’s

ThefavourablecharacteristicsofthecentralBastnaesiteZonetargetedforfirstproductiondistinguishNguallafromallother

rareearthdevelopmentprojectsandarereflectedintheresultsofthescopingstudyandpreliminaryeconomicassessment

releasedtotheASXon3rdDecember2012.Theseindicateverylowcapitalandoperatingcostscomparedtootherrareearth

projects.

ThescopingstudyconfirmedNguallaasaleadingrareearthprojectwithanestimatedNPVofUS$1.57billionandpre-taxIRR

of53%foraninitial25yearminelifeandminingofan8.2milliontonneportionoftheIndicatedandMeasuredMineralResource

withintheBastnaesiteZonewithanaveragegradeof4.35%REO.

Pre-feasibilitystudiesnowinprogressarescheduledforcompletionbyAugust2013andareexpectedtocontinuetosignificantly

enhancetheserobustprojecteconomicsthrough:

• Furtherbeneficiationandmetallurgicalprocessoptimisation

• ArevisedMineralResourcemodeltoincludehighgraderesultsfromthe2012drillingandscheduledforcompletionbyend

March2013

ArangeofhighpurityseparatedrareearthoxideproductsfromtheSXpilotplantwillbeavailableforassessmentbypotential

offtakecustomersfromMarchtoMay2013.

Peakhasappointedfinancialadvisors toworkwith theCompany in identifyingandsecuringstrategicpartners toassist in

funding theNguallaRareEarthProject through toproduction.Discussionshavecommencedand therehasbeenstrong

interestintheproject.

TheCompanycontinuestofasttrackthedevelopmentofNguallawiththeaimofbecomingalowcost,longtermrareearth

producerbyQ12016.

Scoping StudyTheCompanywaspleasedtoannouncetheresultsofthescopingstudyon3rdDecember2012.Thecomprehensivestudy

includesapreliminaryeconomicassessmentthatconfirmsNguallaasastandoutrareearthdevelopmentproject.

TheenvisagedprojectconsistsofasmallopenpitminingoperationfocussedontheBastnaesiteZoneportionoftheNgualla

deposit(Figure1)andhasaminelifeof25years.

LocationofNguallaProject,Tanzania

!Mbeya

Dar Es Salaam

UGANDA

KENYA

ZAMBIA

MALAWI

Lake Victoria

Indian Ocean

Lake Rukwa

Ngualla Project

Lake Nyasa

T A N Z A N I A

N

400km0 100 200

3


Rareearthrecoveryisachievedonsiteusingtheprovensimplesulphuricacidleachprocessbeforefurtherrefiningtoproduce

arangeofhighpurityrareearthoxideproductsviaasolventextraction(SX)plant.Onabasecaseofaninitialproductionof

10,000tonnesperannumofrareearthoxideproductiontheprojectsstrongeconomicandlowriskfundamentalsinclude:

• Pre-taxnetpresentvalueofUS$1.571billion

• Internalrateofreturnof53%

• ModestcapitalcostofUS$400million(excludingcontingency)

• LowoperatingcashcostsofUS$10.09perkgof rareearthoxideconcentrate for thefirst5yearsofproductionandan

averageU$11.05perkgoverthefirst25years

• AnnualrevenuesofUS$361million

• Paybackwithin3years

• Provenbeneficiationandmetallurgicalprocessinlaboratorytestworkwithpilotplantworkunderway

• ThescopingstudywasbasedsolelyontheIndicatedandMeasuredportionoftheMineralResource

• Mineralisationisnotradioactiveandhasthelowestlevelsofuranium(18ppm)andthorium(43ppm)ofanymajorrareearth

deposit

• Simpleopenpitminingwithlowstrippingratio

• Arelativelysimplemetallurgicalprocessutilisingsulphuricacid leachingwithnoinherentlytroublesomeacidcrackingor

bakingrequirementscontributestoalowriskprofilefortheproject

• Significantopportunitytoscaleupproductionandextendminelifeasthebasecasemineplanexploitslessthan10%ofthe

totalMineralResource

• OntargettobeginproductioninQ12016

Figure1:MaidenMineralResourceblockmodelcolouredbyREO%gradeanddrillholes(asatmaidenMineralResource,29thFebruary2012)onsatelliteimagedrapedovertopography,NguallaCarbonatite.

Block Model REO%

A 1 to 2%

A 2 to 3%

A >3%

! Drill holes A Bastnaesite Zone

OPEN OPEN

OPENPe

rimet

er of Carbonatite

Northern Zone

South West Alluvials

550m

Mt Mapuma

Bastnaesite Zone Southern Rare Earth Zone

Perim

eter

of C

arbo

natite

4


ThekeyphysicalandfinancialparametersthatdefinetheNguallaRareEarthProjectinthescopingstudyaresummarisedin

Table1below.

Table 1: Scoping Study Physical and Financial Summary

AverageAnnualMineProduction(afterrampup) 325,000tonnes

LifeofMine(LoM) 25years

AverageGrade(LoM) 4.35%REO

AverageGradeforfirst5years 4.64%REO

AverageStrippingRatio(LoM)Waste:Ore 3.34

AverageStrippingRatioforfirst5Years 0.73

TotalREORecovery 71%

Average Annual Equivalent REO Product (after Ramp-up)

SeparatedREO

CeO2Concentrate

TotalREOProduction

6,347tonnes

3,633tonnes

9,980tonnes

CapitalCosts(ExcludingContingency) US$400M

Average(LoM)CashCost(FOB),ExcludingAmortisation,

Depreciation,andRoyalties.(C1Cost)US$11.05/kg

Average(C1Cost)forfirst5yearsoffullproduction US$10.09/kg

Revenue (FOB)

SeparatedProducts“BasketPrice”

CeO2(concentrate)

US$52.34/kg

US$8/kg

DiscountRateApplied 10%

IRR (Pre-tax and Royalties) 53 %

NPV (Pre-tax and Royalties) US$ 1.571 billion

Paybackfromproductionstart-up In3rdYear

TheASXannouncement“Scopingstudydeliversverypositiveresults”of3December2012providesfurtherdetailsofthestudy.

Toreduceriskandfasttracktheproject,engineeringdesignandlaboratorytestworkinmostareasofthestudyexceedsthe

normforascopingstudylevel.ThecapitalcostestimateisconsistentwithanAACEClass4-typeestimatewithanaccuracy

of+/-30%.

5


Capital CostTotal project capital cost is estimated at US$400

millionincludingforfirstfillsandspares.Asummary

ofthecapitalcostbreakdownisshowninFigure2

opposite.

Operating CostOperatingcostsfortheNguallaProjectareestimated

at $10.09 / kgofproduct for the first five yearsof

productionandaverageUS$11.05/kgoverthelife

ofthemine.Abreakdownofoperatingcostsbyarea

isshowninTable2below:

US$8.48m2%

US$68.32m17%

US$59.03m15%

US$63.92m16%

US$28.28m7%

US$50.18m13%

US$121.77m30%

Construction Costs

Mining

Tailings

Site Infrastructure

Beneficiation and Rare Earth Recovery

Rare Earth Separation (SX)

Sulphuric Acid Plant

Table 2: Operating Costs by Area

AREA First 5 Years Full Production $US / kg product

Average (LoM) US$ / kg product

Mine 0.34 0.63

Beneficiation&Recovery 6.38 6.84

Separation 1.88 2.01

Tailings 0.20 0.22

Infrastructure 0.74 0.81

ProductTransport(FOB) 0.55 0.55

Total 10.09 11.05

IndividualstudiescontributingtothescopingstudywerecarriedoutbythespecialistconsultantssetoutinTable3below:

Table 3: Independent consultants contributing to the scoping study

Company Responsibility

AmdelB.V. Comminutiontestwork

EmersonStewartConsulting Scopingstudyprojectmanagement,infrastructure,tailings,services,environmental,civilengineering,logisticsandindependenttechnicalreportpreparation

Hatch MineralProcessengineering,includingsulphuricacidplant,comminutionandbeneficiationcircuits,rareearthrecoveryandsolventextractionplants

H&SConsultingPtyLtd IndependentspecialistsforMineralResourcemodelandestimation

IndependentMetallurgicalOperationsPtyLtd(IMO)

Beneficiationprocessdesignandtestwork

Met-ChemConsultingPtyLtd Beneficiationandhydrometallurgicalprocessflowsheetstudiesanddevelopment

Nagrom Beneficiationandmetallurgicaltestwork

Orelogy Mineengineering,geotechnical,pitoptimisationandscheduling

RadiationAdvice&SolutionsPtyLtd Assessmentofradiationlevelsinthemineralisationandprocess

RogerTownend Mineralogy

SGSAustraliaLaboratories Analyticallaboratoryfordrillsamples

DrWallyWitt Geologicalspecialistconsultant

Workisinprogresstofurtheroptimisethebeneficiationandmetallurgicalprocesses,whichhasthepotentialtosignificantly

lowercostsstillfurther.

Figure2:CapitalcostbreakdownfortheNguallaRareEarthProject

6


Drilling in 2012 identified continuous zones of high grade mineralisation at surface and, together with the results of acid

leachvariabilityworkcurrentlyinprogress,isexpectedtosubstantiallyincreasetheamountofmineralisationavailablethatis

amenabletothesimplesulphuricacidleachprocess.ThenewdatawillbeusedtocompleteanewMineralResourceestimate

andresourcemodel.

TheadditionalmetallurgicaltestworkandnewMineralResourcemodelwillbeusedinthepre-feasibilitystudiesnowunderway

andareexpectedtohaveapositiveimpactontheeconomicsoftheproject.Thepre-feasibilityisontargetforcompletionby

endAugust2013.

Metallurgical Process DevelopmentThe Quarter saw a significant breakthrough in the successful beneficiation of Ngualla weathered bastnaesite rare earth

mineralisationandconfirmationofthesuitabilityofthechosensimplesulphuricacidleachrecoveryprocessthroughtestwork

onalargernumberofmineralisedsamples.

Beneficiation test work

Thebeneficiationtestworkshowedthat38%oftheplantfeed(predominantlyunmineralisedbariteandsilica)canberejected

priortoacidleachingforonly5%lossintherareearthcontentusingacombinationofWetHighGradientMagneticSeparation

(WHGMS)followedbyaspecialisedflotationregime(Figure3).

Figure3:SimplifiedBeneficiationflowsheetforNguallaweatheredbastnaesitemineralisation

Mass 100%REO 100%

Mass 62%REO Rec 95%

Mass 38%REO Rec 5%

GROUND FEED

TAILS

CONCENTRATE

WET MAGNETIC SEPARATION

MAGNETICS

MAGNETICS

NON-MAGNETICS

FLOTATION CONCENTRATE

FLOTATION

Thesuccessfulprovingofaneffectivebeneficiationprocessthatremovesasignificantproportionoffeedmineralisationwith

minimallossofrareearthswillreducecapitalandoperatingcostsby:

• Reducingthesizeoftheonsitesulphuricacidplantandleachingcircuitoftheprocessingplant(lowercapitalcosts),and

• Lowersulphuricacidconsumption-themajorcontributortoreagentandoperatingcosts.

Workisalreadyinprogresstofurtheroptimisethisbeneficiationprocessforinputintopre-feasibilitystudiesduetocommence

inearly2013.

7


Acid leach variability test workFurtheracidleachvariabilitytestworkwascompletedonalargenumberofsamplesofrareearthmineralisationduringthe

Quarter.Rareearth leachextractionratesofupto96.5%andaveraging80%werereturnedfromweatheredmineralisation

acrosstheBastnaesiteZone.

Theresultsarebasedon130samplesthatareinclusiveoftheearliertestwork.Thebastnaesitemineralisationcangenerally

beidentifiedbyphosphatecontentsof<0.4%andoccurswithinacentralareaof675mx750m(Figure4)oftheSREZ.

9147

500

mN

9148

000

mN

9148

500

mN

482500 mE482000 mE481500 mE

D D

D

D

D

D

D

DD D D

D D D D

DD

D

D D

D

D D D

D

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!

New Results REO LER* %

! 73 – 100 (Ave. 83%)

! 58 – 72 (Ave. 65%)

! 0 – 57 (Ave. 43%)

Previous Results REO LER* %

N 73 – 100

N 58 – 72

N 0 – 57

Bastnaesite Zone Simple

Block Model REO%: A 3 to 4%A > 4%

*LER = leach extraction rate

Southern Rare Earth Zone

South West Alluvial Zone

500m2500 100

N

750m

Monazite rare earth zone

Monazite rare earth zone

Bastnaesite rare earth zone

Bastnaesite rare earth zone

Small area of monazite rich sediments

OPEN

OPEN

OPENOPEN

OPEN

Figure4:PlanofNguallaMineralResourceblockmodel(+3%REO)showinglocationofacidleachvariabilitytestsamples,acidleachextractionratesandzonationofrareearthmineralogyintheSouthernRareEarthZone.

Theremaining20samplescollectedoutsidetheBastnaesiteZoneareonlypartiallyrefractoryusingsulphuricacidandstill

average 54% rare earth leach extract rates. Mineralogical studies have shown that this is monazitic or mixed monazite –

bastnaesitemineralisation.Previousmetallurgicaltestworkonthesepartiallyrefractorysamples(ASXannouncementof11th

July2012)hasshown thatanacidbakeprocess (concentratedsulphuricacidat2500C)can increase recoveries to93%,

providingapossiblealternativeprocessingrouteforadditionalfutureproductionfromperipheralmonazitemineralisationlater

inthelifeoftheproject.

Thenewacidleachvariabilityresultsconfirmthesuitabilityofthechosensulphuricacidleachprocessingrouteonasignificant

nearsurface,highergradeportionofthedeposit.Thelargenumberofsamplesfromarangeofmaterialtypeswillallowahigh

confidencegeometallurgicalmodeltobeconstructedforuseinprojectpre-feasibilitystudiesnowinprogress.

8


Solvent Extraction Pilot PlantAftertheendoftheQuarter,theCompanyannouncedithadcommissionedtheAustralianNuclearScienceandTechnology

Organisation(ANSTOMinerals)toconstructandoperateasolventextraction(SX)pilotplant.

TheSXprocesswillusearareearthchloridefeedproducedfroma1.6tonnebulksampleofmineralisationfromtheBastnaesite

ZoneatNguallausingtheprovensimplesulphuricacidleachandpurificationroute(Figure5)toproducefourgreaterthan99%

purityearthoxideproductsof:

•HeavyREOMix(Sm,Eu,Gd,Tb,Dy,Ho,Er,Tm,Yb,LuandY)

•PraseodymiumandNeodymiumOxidemix

•CeriumOxide*

•LanthanumOxide

*Approximately 50% of the cerium has already been extracted early in the sulphuric acid leach circuit.

Figure5:SimplifiedflowsheetofsulphuricacidleachprocesstochloridefeedandsolventextractionforNguallabastnaesitemineralisationintofourproductstreams.

LeachFeed

Cerium Oxide

Solvent Extraction

Sulphuric Acid Leach

Primary Precipitation

Cerium Removal

PurificationOxidation

Chloride Feed Solution

Lanthanum Oxide

Cerium Oxide

Didymium Oxide

Heavy Rare Earth Oxide

TheproductionofthefinalrareearthoxideproductsfromtheSXpilotplantwill:

• ConfirmtheendtoendprocessofNguallamineralisationtohighpurityproduct

• Crovidephysicalsamplesinsufficientquantitiesforassessmentbyofftakecustomers

• Confirmfinalspecificationsofthehighpurityproducts

• ProvidedetailedengineeringdataforthedetaileddesignofthefullscaleSXplant

WorkonpreparingthefeedstockfortheSXpilotplantcommencedatANSTOinNovember2012.ThefirststageoftheSXpilot

plantprogramisplannedtocommenceoperationinFebruary2013withsampleproductavailabilityforeachoftherespective

threestagesbecomingavailableinMarch,April,andMayrespectively.ThefinalengineeringreportontheSXpilotplantwill

becompletedbyJuly2013.

Ngualla Drilling Program 2012TheNgualla2012drillingprogramthatcommenced inMaywascompletedduring theQuarter fora totalof130holes for

13,600mofreversecirculation(RC)anddiamonddrilling.

Theobjectivesofthedrillingprogramwereto:

• Define high grade weathered bastnaesite rare earth mineralisation in the SREZ sufficiently for the ‘Measured’ Mineral

ResourceJORCcategorythroughinfilldrilling

• Quantifytheamountofhighlyweathered,lowcarbonate,lowphosphatebastnaesiterareearthmineralisationinthecentral

SREZthatisamenabletomineralprocessingbythesulphuricacidroute

• Provide diamond core and RC samples for further beneficiation and detailed hydrometallurgical test work and to twin

RCholesforJORCresourcerequirements

• increasethecurrentNguallarareearthMineralResourcebytestingpotentialextensionstotheSREZmineralisation

9


ThemajorityoftheprogramwasdesignedtoincreasethedensityofdrillingintheBastnaesiteZonetoanaverageholespacingof

40mx50m toprovidedata fora revisedMineralResourceestimateand resourcemodel.Thenewdrilling isdesigned to

increasetheamountofmineralisationintheMeasuredMineralResourceclassification(seeTable1inAppendixforthemaiden

NguallaMineralResource).Itwillalsoprovidethedefinitionrequiredforadetailedmineplanandschedulefortheprojectto

supportthepre-feasibilitystudiesnowinprogress.

Aseriesofhighgraderareearthmineralisedintersectionswerereceivedfromtheinfilldrillingduringorjustaftertheendofthe

December2012QuarterandareinadditiontothosereportedintheSeptemberQuarter.Theseinclude:

DRILL hOLE InTERSECTIOn

nRC245: 112m at 5.16% REO fromsurfacetoendofhole

nDD013: 160m at 5.06% REO fromsurfacetoendofhole

nRC268: 134m at 4.45% REO fromsurface


nRC279: 162m at 3.24% REO fromsurface including

52m at 6.04% REO from surface

nRC283: 120m at 4.57% REO fromsurfacetoendofhole including

60m at 6.60% REO from surface*REO=TotalRareEarthOxide.SeeAppendixTable3fordrillintersectiondetailsandAppendixTable2forindividualrareearthdistributionintheSREZ.

Figure6:SouthernRareEarthZonedrillplanshowingnewcontinuouszoneofdeepweatheringcontaininghighgraderareearthenrichment(2012intersectionsshowninyellow)and2012intersectionsdefininga300mextensiontotheSouthernRareEarthZone.

9147

500

mN

9148

000

mN

9148

500

mN

482500 mE482000 mE

750m

South West Alluvial Zone

OPEN

OPEN

250m0 100

N

Drill holes max REO %:! 0 to 1! 1 to 2! 2 to 3 ! 3 to 5 ! >5! 2012 Drill program

Bastnaesite Zone

Bastnaesite Zone

Zone of deep continuoushigh-grade mineralisationZone of deep continuous

high-grade mineralisation

Southern ExtensionSouthern Extension

WesternExtension

Block Model REO%: A 3 to 4%A > 4%

Intercept Labels:A 2011 Drill ProgramA 2012 Q1 highlightsA 2012 Q2 highlights

NRC262

NRC272

NRC245

NRC167

NRC280

NDD010

NRC279

NRC237

NRC176NRC185

NRC027

NRC283

NAC545

NRC234

NRC262

NRC272

NRC245

36m @ 4.05% from 42m

38m @ 4.50% from surface

NRC167

NRC280

NDD010

NRC279

NRC237

NRC176NRC195

NRC027

NRC283

NAC545

NRC234




120m @ 4.57% from surface to EOH








Southern Rare Earth Zone

77.8m @ 4.53% from surface

10


Theinfilldrillingcompletedin2012hasidentifiedorextendedzonesofdeeplyweathered,highgrademineralisationthatwere

notfullydefinedbythedrillingusedtocompletethemaidenMineralResourceannouncedinFebruary2012.Theidentification

ofthesezonesisexpectedtoleadtoanincreaseintheamountofhighgrademineralisationintherevisedMineralResource

that isamenable to thechosensimplesulphuricacid leachprocessandhaveapositive impacton theeconomicsof the

project.

ModestextensionstotheSREZmineralisationwereconfirmedbyresultsreceivedduringtheQuarter.Inthesouth,mineralisation

wasextendedafurther300mwithintersectionsincluding:



nRC237: 31m at 2.66% REO fromsurfacetoendofhole

Similarly,theSREZwasextendedtothewestoveradistanceof300m(Figure6)bynewhighgradeintersectionsfromsurface

thatinclude:


nRC167: 64m at 2.83% REO fromsurface including

20m at 5.20% REO from surface

nRC262: 36m at 4.05% REO from42m

nRC272: 38m at 4.50% REO*fromsurfaceand

10m at 6.02% REO from64m


TherevisedMineralResourceestimateisonscheduleforcompletionbytheendofthefirstQuarter2013.

Development scheduleTheCompanyhasanaccelerateddevelopmentscheduleforNguallacomparedtomanyotherrareearthprojectswithfirst

productionofrareearthconcentrateproductplannedforearly2016.Keyindicativemilestonesinclude:

RevisedMineralResourceestimate March2013

CompletionofSXpilotplanthighpurityproducts May2013

CompletePre-FeasibilityStudy Quarter32013

CommenceDefinitiveFeasibilityStudy Quarter42013

Engineeringanddesigncommences mid2014

Commencemineandprocessingplantconstruction 2015

Firstproduction Early2016

11


TheNguallaRareEarthProjectremainsontracktoachieveproductioninearly2016.

Mile

ston

esRE

Exp

lora

tion

&

Reso

urce

Dril

ling

Pote

ntia

l Pat

hway

to

RE

Prod

uctio

n

EXPLORER MINERDEVELOPER

2010 2011 2012 2013 2014

Commenced Metallurgical Characterisation Discovery Supply Agreements

Zari JV Aquisition

Maiden Resource Statement

Production Start up Metallurgical Flow Sheet Development

Pilot Plant Trials commencing

Completion of acid leach test work

Exploration Drilling

Resource Definition & Extension

Scoping Study

Pre-Feasibility Study

Definitive Feasibility Study

Maiden Resource Drilling

Geotech - Extension

2015 2016

Engineering & Design

Commence Construction

Completion of separation test work

Figure7:NguallaRareEarthProjectDevelopmentSchedule.

Above:Regional,EducationDepartment,villageofficialsandPeakpersonnelatastonelayingceremonyforhousesbeingbuiltbyPeakforschoolteachersfromtheNguallavillagePrimarySchool,November2013.

Community ResponsibilityPeak Resources is committed to improving

the communities in which it operates whilst

maintaining best practice environmental

management. Through the provision of

employmentopportunities,training,purchase

oflocalproductsandfundingforlocalbuilding

andeducationprojects,win-winrelationships

arebeingforgedwiththelocalcommunity.

Work continued during the Quarter on the

building of two teacher’s houses in Ngualla

village.Astone layingceremonywasheld in

November to commemorate the building of

the houses for the Ngualla Primary School,

whicharenownearingcompletion.

12


TANZANIAN GOLD PROJECTS – (Lake Victoria Gold Field)

Peak Resources – Options to acquire 100%

TheCompany ispleased toannounce thatagreementsweresignedduring theQuarter toacquire rights to fournewand

strategicallylocatedgoldlicencesinthehighlyprospectiveLakeVictoriaGoldFieldregionofnorthernTanzania.

PeakmaintainsanexplorationbaseandteamatMwanzainthenorthofthecountrytoprogresstheCompany’sstrategyof

growingaportfolioofgoldpropertiesandtoaddvaluetotheseprojectsthroughexploration.

Thefourlicences(Figure8)coveratotalareaof248km2andincludeeitherexcisedhistoricgoldworkingsorliealongstrike

fromrecentartisanalgoldminingactivity.

Shinyanga

Geita

Buckreef

Tulawaka

Nyanzaga

Golden Ridge

Nyakafura

Buzwagi

Golden Pride

MusomaNorth Mara

Bulyanhulu

Lake Victoria

KENYA

Kitarungu

Fort Ikoma

Muhange

Lunguya

Mwanza

TANZANIA

Location of Lake Victoria Goldfield

!Dar Es Salaam

Ngualla Project

NORTH

150km0 50 100

Peak Resources Gold Project

Mine or Resource > 1 Moz Au

Mine or Resource < 1Moz Au

Gold Prospect (Barth)

Major Population Centre

DCW Major Internal Roads

Archaen Greenstone

SoilsamplingprogramshavealreadycommencedontheKitarunguProjectinthenorthandfieldprogramsaresettoaccelerate

inFebruarywiththeapplicationofpersonnelfromtheNguallaexplorationteamtothegoldprojectswhilst therainseason

precludesfieldworkintheNguallaregion.

InitialexplorationresultsareexpectedduringtheMarch2013Quarter.

Additionalgoldandother projects are currently under assessment with theaimof expanding theCompany’s exploration

portfolioinTanzania.

Figure8:Peak’sgoldprojects(orange)andmajorminesintheLakeVictoriaGoldField,Tanzania.

13


CORPORATE

Appointment of financial advisorsSubsequenttotheendofQuarteron17thJanuary2013,theCompanyannouncedtheappointmentoftwogroupsinAsiawho

aremandatedtoassistinidentifyingandsecuringstrategicpartnerstoassistinfundingtheNguallaRareEarthProjectthrough

toproduction.

CITICSecuritiesfortheChineseregionandMoserCapitalLtdforSouthKoreaandJapanwillalsoprovideadvisoryservices

regardingoff-takepartnersandagreementsforNgualla’sfutureproduction.

PeakisalsoindirectdiscussionswithseveralinterestedpartiesandinstitutionsinNorthAmerica,EuropeandHongKong.

SeveralgroupshaveshownastronginterestintheprojectandtheCompanywillcontinuetoprovideupdatesasthevarious

discussionsprogress.

Corporate Structure and Cash on HandThecurrentcorporatestructureasatthe31stDecember2012was:

ASX:PEK

OTCQX:PKRLY

Ordinary Shares on Issue:254.7million

Cash at hand:$4.23million

52 week range:14.5c–62.5c*

*From01-Jan-12to31-Dec-12**Averagefrom01-Oct-12to31-Dec-12

Richard BeazleyManagingDirector

Enquiries:

Company Media

Richard Beazley Ben KnowlesManagingDirector WalbrookInvestorRelationsT:+61(0)89205360 T:+61(0)861892230E:[email protected] M:+61426277760W:www.peakresources.com.au E:[email protected]

Derek Gradwell,SVP,NaturalResourcesMZGroup–NorthAmericaT:+19492594995E:[email protected]:www.mzgroup.us

The information in this report that relates to Exploration Results is based on information compiled and/or reviewed by Dave Hammond who is a Member of The Australasian Institute of Mining and Metallurgy. Dave Hammond is the Technical Director of the Company. He 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”. Dave Hammond 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 this report that relates to Mineral Resources is based on information compiled by Rob Spiers, who is a member of The Australasian Institute of Geoscientists. Rob Spiers is an employee of geological consultants H&S Consulting Pty Ltd. Rob 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’. Rob Spiers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Market Cap:$39.5million(at15.5c)

Listed Options outstanding:47.7million

Unlisted Options outstanding:11.2million

Liquidity: 0.6millionsharesperday(av.over3mths**)

14


Appendix:

Table 1: Classification of Mineral Resources for the Ngualla Rare Earth Project, 1.0% and 3.0% REO cut-off grades (February 2012).

Lower cut – off grade

JORC Resource Category

Tonnage (Mt)

REO (%)*

Contained REO tonnes

1.0% REO

Measured 29 2.61 750,000

Indicated 69 2.43 1,700,000

Inferred 72 1.92 1,400,000

TOTAL 170 2.24 3,800,000

3.0% REO

Measured 11 3.99 430,000

Indicated 21 4.09 850,000

Inferred 8.7 4.11 360,000

TOTAL 40 4.07 1,600,000

REO(%)includesallthelanthanideelementsplusyttriumoxides.Figuresabovemaynotsumpreciselyduetorounding.Thenumberofsignificantfiguresdoesnotimplyanaddedlevelofprecision.

Table 2: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for the Ngualla Southern Rare Earth and Northern Zones (>1% REO).

OXIDE % OF TOTAL REO*

Lig

ht

R

are

Ear

ths

Lanthanum La2O3 27.1

Cerium CeO2 48.3

Praseodymium Pr6O11 4.74

•Neodymium Nd2O3 16.3

Samarium Sm2O3 1.65

hea

vy

Rar

e E

arth

s

•Europium Eu2O3 0.35

Gadolinium Gd2O3 0.78

•Terbium Tb4O7 0.07

•Dysprosium Dy2O3 0.17

Holmium Ho2O3 0.02

Erbium Er2O3 0.06

Thulium Tm2O3 0.00

Ytterbium Yb2O3 0.02

Lutetium Lu2O3 0.00

Other •Yttrium Y2O3 0.52

Total % 100

(*=MineralResourceblockmodelat1%REOcut)

Thebluemarkers(•)denotethefive“criticalrareearths”,whicharepredictedtobeinundersupplyintheyearsaheadandpredicted

tocommandsignificantlyhighervaluethanotherrareearths.(USDoE,‘CriticalMaterialsStrategy’report,December2011).

ThecriticalrareearthscontributethemajorityofthevaluefromNguallaat56%oftheingroundvalue.Ofthese,neodymiumisthe

mainsinglerareearthvaluedriver,contributing34%,(relativerareearthoxideprices:MetalPages,11thSeptember2012).

15


Table 3: Drill hole and intersection details for intersection highlights received in December Quarter referred to in report. Southern Rare Earth Zone – rare earth RC drill intersections +1 % REO

Selectedintersections+2%REOinitalics

Hole ID East North Hole Depth (m) From (m) To (m) Interval (m) REO %

nRC234 482,153 9,147,498 46 0 41 41 2.96

nRC237 482,080 9,147,505 31 0 31 31* 2.66

nRC245 482,400 9,148,147 112 0 112 112* 5.16

nRC262 481,954 9,148,237 120 0 4 4 2.90

14 36 22 1.89

42 78 36 4.05

96 102 6 1.55

106 110 4 2.13

nRC268 482,098 9,148,107 135 0 134 134 4.45

(incl. 0 28 28 5.23

and 38 64 26 5.73

and 68 106 38 5.25)

nRC272 481,948 9,148,104 158 0 38 38 4.50

42 76 34 3.01

(incl. 64 74 10 6.02)

86 90 4 1.88

100 104 4 1.66

110 122 12 1.87

nRC278 482,039 9,147,848 115 0 113 113 4.22

nRC279 482,039 9,147,914 180 0 162 162 3.24

(incl. 0 52 52 6.04)

nRC280 481,964 9,147,894 53 0 49 49 4.08

nRC283 482,046 9,147,915 120 0 120 120* 4.57

(incl. 0 60 60 6.60)

nDD013 482,240 9,147,968 160 0 160 160* 5.06

(incl. 0 81.77 81.77 5.81)

Note:REO=totalrareearthoxidesincludingyttrium.SeeTable3forrelativedistributionofindividualrareearthoxidesintheSREZ.Samplesare2mcompositesfromangled-60°westRCdrillingexceptforholeNRC279whichisdrilled-60°northandNDD013whichisaPQdiamondholefromsurface.Intersectionscalculatedusing1%REOlowercutandamaximumof2minternaldilution.AnalysisbySGSlaboratory,Perth,by4aciddigestandICPorXRF.Co-ordinatesystemisArc1960UTMzone36S.*=holeendedinmineralisation.

16


Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity Peak Resources Limited

ABN Quarter ended (“current quarter”) 72 112 546 700 December 2012

Consolidated statement of cash f lows

Cash f lows related to operating activi t ies

Current quarter $A’000

Year to date (6 months) $A’000

1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(2,590)

(1,327)

(4,542)

(2,431) 1.3 Dividends received 1.4 Interest and other items of a similar nature

received 37

79

1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material)

Net Operating Cash Flows (3,880) (6,894)

Cash f lows related to investing activi t ies

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

(50)

(54) 1.9 Proceeds from sale of: (a) prospects

(b) equity investments (c) other fixed assets

1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)

Net investing cash f lows (50) (54)

1.13 Total operating and investing cash flows (carried forward)

(3,930) (6,948)

17



+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001

1.13 Total operating and investing cash flows

(brought forward) (3,930) (6,948)

Cash f lows related to f inancing activi t ies

1.14 Proceeds from issues of shares, options, etc.

-

8,102

1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) (187) (467) Net f inancing cash f lows (187) 7,635

Net increase (decrease) in cash held

(4,117)

687

1.20 Cash at beginning of quarter/year to date 8,349 3,545 1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter 4,232 4,232

Payments to directors of the entity and associates of the directors Payments to related entit ies of the entity and associates of the related entit ies

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2

213

1.24

Aggregate amount of loans to the parties included in item 1.10

1.25

Explanation necessary for an understanding of the transactions

1.23 includes gross salaries including superannuation and fees to directors and legal fees

paid to Steinepreis Paganin Lawyers & Consultants, an entity related to Jonathan Murray

Non-cash financing and investing activit ies 2.1 Details of financing and investing transactions which have had a material effect on

consolidated assets and liabilities but did not involve cash flows

18




2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facil i t ies available Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

3.1 Loan facilities

3.2 Credit standby arrangements

Estimated cash outf lows for next quarter

$A’000 4.1 Exploration and evaluation

359

4.2 Development

1,771

4.3 Production

4.4 Administration

1,072

Total

3,202

Reconcil iat ion of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 1,078 5,695

5.2 Deposits at call 3,154 2,654

5.3 Bank overdraft

5.4 Other (provide details)

Total: cash at end of quarter (item 1.22)

4,232 8,349

19




Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

Kitarungu PL6987/2011 Muhange PL6955/2011 Lunguya PL6679/2010 Fort Ikoma PL7941/2012

Option to acquire 100% Option to acquire 100% Option to acquire 100% Option to acquire 100%

0% 0% 0% 0%

0% 0% 0% 0%

20




Issued and quoted securit ies at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per

security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securit ies (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securit ies

254,723,553 254,723,533 Fully Paid

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

7.5 +Convert ible debt securit ies (description)

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

500,000 500,000

1,000,000 750,000 750,000 750,000

6,250,000 541,667 150,000

47,659,251

- - - - - - - - -

47,659,251

Exercise price $0.60 $1.00 $1.50 $0.60 $0.90 $1.20 $0.55 $0.75 $0.55 $0.25

Expiry date 16 May 2013 26 May 2013 26 May 2014 16 May 2015 16 May 2015 16 May 2015

20 February 2017 24 February 2014

3 March 2018 31 July 2014

7.8 Issued during quarter

7.9 Exercised during quarter

21




7.10 Expired during quarter

7.11 Debentures (totals only)

7.12 Unsecured notes (totals only)

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

2 This statement does give a true and fair view of the matters disclosed.

Sign here: Date: 23 January 2013

(CFO/Company Secretary) Print name: Jeff Dawkins Notes 1 The quarterly report provides a basis for informing the market how the entity’s

activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in

mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securit ies The issue price and amount paid up is not required

in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries

and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International

Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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