Peak Resources Limited (ASX:PEK) Commences Rare Earth Resource Definition Program At Ngualla

Perth, May 25, 2011 AEST (ABN Newswire) - Peak Resources Limited (ASX:PEK) is pleased to report the commencement of drilling at the Ngualla Rare Earth Project in Tanzania. The Company has rights to earn 80% of this project that has potential to host large, near surface deposits of rare earths, niobium - tantalum and phosphate.

A multi-purpose reverse circulation (RC) - diamond - aircore drill rig has commenced drilling. A second RC rig is also on site and is expected to commence drilling later this week.

The primary aim of the 2011 drilling program is to define an initial JORC compliant resource estimate for both the bedrock and alluvial zones of rare earth mineralisation discovered by Peak Resources in 2010. Diamond drilling will also provide core samples for ongoing beneficiation and metallurgical test work. Two wide spaced traverses of exploratory RC drill holes are also planned after the completion of the resource drilling program to test the extent of the niobium - tantalum - phosphate mineralisation to the north of Ngualla Hill.

Figure 2 (see link at the bottom of the release) illustrates the areas to be drill tested by the current phase of drilling, which consists of an estimated 115 RC holes for 15,000m, 8 diamond holes for 1,400m and 130 aircore holes for 3,000m.

Preparatory site works, expansion of the exploration camp and training of personnel commenced at Ngualla in early April.

Delays have been experienced in getting the drilling equipment to site as a result of poor road conditions in other parts of Tanzania. Ground conditions on site at Ngualla are dry and the rain season has ended.

Powerful, track mounted, multipurpose drilling rigs and associated equipment have been sourced with the aim of addressing sample recovery difficulties encountered in the December 2010 program.

Resource consultants Hellman and Schofield Pty Ltd have been appointed as geological consultants to assist with data validation, geological modelling and future resource estimation. Representatives from Hellman and Schofield Pty Ltd are expected to visit the Ngualla drilling operations in August as part of the audit process associated with the resource estimation.

The resource drilling component of the program will take several months to complete, the precise timing being dependant on drill productivity and the exact extent of the mineralisation in the Southern Rare Earth Zone, which is currently open to the north, south and west.

The Company will provide regular updates regarding the progress of the drilling and results as they come to hand.

The 2011 Drilling Program

The 2011 program can be considered in four parts based on mineralisation style, priority and geographic location.

The drilling program and geological target is summarised below for each of these four areas:

Southern Rare Earth Zone

The largely bedrock hosted rare earth mineralisation intersected in the Southern Rare Earth Zone of the Central Hills area of the carbonatite represents the priority target area because of its greater size potential and higher grade. The broad zones of mineralisation intersected in this area include the previously reported:

- NRC011: 64m at 5.48% REO from surface

- NRC015: 46m at 6.67% REO from surface

*REO = total rare earth oxide including yttrium. Full drill hole details are reported in the March 2011 Quarterly Report

In addition to previous drill intersections, the target area is defined and supported by a high tenor (+2% REO) geochemical anomalism in surface soil sampling coincident with the low-magnetic core of the carbonatite complex. Mineralisation is enriched in the weathered zone of the carbonatite, which extends to depths of at least 90m from surface in some areas. Rare earth carbonate minerals synchysite and bastnasite have been observed in samples of fresh, unweathered carbonatite beneath this weathered profile.

A 1km x 800m area will be tested by angled, 120m deep RC holes at a maximum spacing of 100m x 80m drill holes. The drill hole spacing will be closed to 50m x 40m in selected areas. Some drill holes will be extended to 180m to test interpreted fresh rock mineralisation. In addition to the RC drilling, a number of diamond drill holes will be completed to provide metallurgical samples for further test work, geological and density information and validation of RC sample assays.

SW Alluvials

Aircore drilling at a 200m x 40m spacing has already identified +2% REO mineralisation in unconsolidated surficial alluvial and colluvial deposits shedding down to the south west from Mt Ngualla. Mineralisation occurs from surface and includes the previously reported intersections:

- NAC082: 28m at 3.27% REO from surface

- NAC366: 12m at 3.72% REO from surface to end of hole

Full drill hole details are reported in the December 2010 Quarterly Report

The current program of 100m x 80m spaced blade refusal vertical aircore holes will test a 1km x 600m target area defined by +1.4% REO geochemical anomalism in surface soil sampling and consistent intersections greater than 8m at 1% REO in the previous aircore drilling.

NE Alluvials

Similar to the south west area, +1% REO mineralisation is hosted by unconsolidated surficial alluvial and colluvial sediments within and around a current surficial drainage. Previously reported intersections include:

- NAC256: 9m at 2.12% REO from surface to end of hole

- NAC283: 10m at 1.78% REO from surface

Full drill hole details are reported in the December 2010 Quarterly Report.

The current drilling program includes 100m x 80m spaced blade refusal vertical aircore holes to test an 800m x 350m target area defined by +1.4% REO geochemical anomalism in surface soil sampling and consistent intersections greater than 8m at 1% REO in the previous aircore drilling.

Northern Niobium - Tantalum Zone

Evaluation of an area of high tenor niobium - tantalum surface geochemical anomalism to the north of Ngualla Hill is still at an early stage with only seven holes completed to date in two small portions of the 900m x 500m target area. While drilling to date is sparse, encouraging intersections of niobium, tantalum and phosphate mineralisation have been returned including the previously reported:

- NRC021: 22m at 0.91% Nb2O5 and 213ppm Ta2O5 from surface to end of hole and 14m at 20.6% phosphate from 8m to end of hole

- NDD003: 62.3m at 0.70% Nb2O5 and 245ppm Ta2O5 from surface and 60.85m at 21.0% phosphate from 1.45m

Full drill hole details are reported in the March 2011 Quarterly Report.

Niobium, tantalum and phosphate mineralisation occur together within a thick sequence of iron rich clay and gravel deposits above fresh carbonatite bedrock.

Two 400m spaced drill traverses of 80m spaced angled RC holes are included in the current drill program as an initial test of this exploration target.

For the complete Peak Resources announcement including figures, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/542967.pdf

Contact

Alastair Hunter Chairman Tel: +61-8-9316-9599 Email: alastair@peakresources.com.au http://www.peakresources.com.au