Peak Attracts IFC as Potential Cornerstone Investor

PERTH, Australia, Oct. 27, 2014 /CNW/ - Peak Resources Ltd. ("Peak" or the "Company"; ASX Code: PEK) is pleased to announce that International Finance Corporation ("IFC"), a member of the World Bank Group, is proposing an investment in Peak and the Ngualla Rare Earth Project in Tanzania, by joining a consortium with Appian Natural Resources Fund ("Appian") in the previously announced ~US $25million financing arrangement (see ASX Announcement on 29 September 2014 titled 'Peak secures BFS funding for Ngualla Rare Earth Project').

HIGHLIGHTS 

• IFC, a member of the World Bank Group, is proposing to join Appian in the ~US $25million total investment in Peak and the Ngualla Project on a 20:80 pro rata split (IFC contributing 20% of the total investment) 
• The potential investment would represent IFC's first within the rare earth space and is a strong endorsement of the technical advantages along with the socioeconomic benefits of the Ngualla Project 

The investment has been approved by IFC's investment committee but is subject to the successful completion of IFC's mandatory 30 day disclosure period and formal approval by IFC's Board.

Peak's Managing Director Darren Townsend said, "Following the introduction by Appian of IFC, we are very pleased to have attracted an organization of the standing and reputation of IFC as part of the consortium with Appian in the US $25million funding package.  The favorable technical aspects of the Ngualla Project together with the expertise and abilities these strategic partners bring put Peak in a solid position to become one of the next new rare earth producers."

Summary Agreement Details 

Appian Agreement 

On 29 September 2014 (see ASX Announcement 'Peak secures BFS funding for Ngualla Rare Earth Project') Peak announced details of a ~US $25 million total funding agreement with Jersey - based Appian Natural Resources Fund ('Appian').

The agreement with Appian is subject to final documentation and receipt of regulatory approvals and contemplates a staged investment anticipated to fully fund the Company through the Bankable Feasibility Study for the Ngualla Rare Earth Project. The transaction remains on track for closing by 30 November 2014.

The first US $1million - the initial tranche of a US $3million Bridge Loan Facility - has been received from Appian and allows Peak to fast track key development studies, which are now in progress (see ASX Announcement 'First tranche of funding for Ngualla Rare Earth Project received' of 13 October 2014).

Potential IFC Investment 

Following the introduction by Appian, IFC have completed a thorough due diligence on Peak and the Ngualla Project. IFC are, subject to the successful completion of IFC's mandatory 30 day disclosure period and approval by IFC's Board, proposing to participate as a consortium partner with Appian in the ~US $25million total investment described above, on a 20:80% pro rata basis (IFC 20% ; Appian 80%). IFC will have the right to appoint one member on a seven member board of Peak Resources Ltd..

During the 30 day disclosure period, the Summary of Investment Information (SII) and Environmental and Social Action Plan (ESAP) are made available to interested parties through their lodgment on the IFC's website*. The 30 day disclosure period extends to 23 November 2014.

Figure 1 below illustrates the investment structure on completion of all stages of the ~US $25 million investment by Appian and IFC.

* Source: IFC website http://www.ifc.org

     (Photo: http://photos.prnewswire.com/prnh/20141027/713123)

On successful completion of both the Appian and IFC transactions, Peak and the Ngualla Project will be fully funded through the BFS and have two well respected strategic partners to assist in driving the Project further forward towards production.

About IFC 

Part of the World Bank Group, 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 currently holds a portfolio of US $49.6 billion through equity in over 810 companies worldwide in 118 countries.

IFC is well respected as a promoter of environmental, social and corporate governance standards. It is recognised as having the resources and know-how of a global development bank with the flexibility of a merchant bank.

IFC acts as a long-term strategic partner and cornerstone investor with deep financial resources for future support together with an ability to possibly catalyze further financial support from other investors.

About Appian 

Appian Natural Resources Fund is a private equity fund which has been established to invest specifically in the metals and mining sector. Appian has a uniquely collaborative investment approach that seeks to partner with local owners, managers and investors to leverage its world-class operational and corporate finance expertise.

With this value-add approach and long-term investment horizon, it aims to generate significant value for the investors and other stakeholders of both the Company and Appian.

Further announcements will be made following the completion of IFC's disclosure period and Board process.

SOURCE Peak Resources Ltd.