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Peak expects lower net present value at Ngualla as rare earth prices drop

Peak Resources Ltd. updated the bankable feasibility study for its Ngualla rare earth project in Tanzania based on a lower price deck for rare earths.

The update is based on prices for neodymium-praseodymium oxide at US$77.50 per kilogram, lanthanum oxide at US$3.70 per kilogram, cerium oxide at US$2.20 per kilogram, and SEG mixed heavy oxide equivalent at US$8.00 per kilogram.

At the current rare earth prices, the net present value, discounted at 10%, dropped to US$444 million with a 22% internal rate of return, the company said Oct. 12.

The process optimization work at the project completed in late August estimated net present value, discounted at 10%, of US$579 million with a 24% IRR.

The average annual operating margin is now expected at US$150 million, compared to US$174 million previously.

The total capital cost and average annual operating cost for the operation will remain the same at US$365 million and US$91 million, respectively.