ENABLING LOW CARBON TECHNOLOGIES

Peak Resources Limited Ground Floor, 5 Ord Street, West Perth, Western Australia 6005. PO Box 603, West Perth 6872. ASX: PEK ACN: 112 546 700 Telephone: +61 8 9200 5360 info@peakresources.com.au www.peakresources.com.au Non-Executive Chairman: Peter Harold Managing Director: Darren Townsend

Technical Director: Dave Hammond Non-Executive Directors: Jonathan Murray, John Jetter Company Secretary: Graeme Scott

ASX Announcement 3rd July 2017

Ngualla Project Development UpdatePeak Resources Limited (ASX: PEK) (“Peak” or the “Company”) is pleased to provide a business strategy update, driven by recent positive developments relating to the Ngualla Rare Earth Project:

HIGHLIGHTS:

• Company to progress with permitting for Ngualla: The Company is in the final stages ofcompleting the documentation required to lodge a mining licence application for the NguallaRare Earth Project now that the Bankable Feasibility Study is complete and the EnvironmentalCertificate received.

• Electric vehicles to drive NdPr demand: The mining licence application is in line with theCompany’s primary business strategy to position the Ngualla Rare Earth Project as one ofthe very few that is ready for implementation in time to meet the widely predicted surge indemand for the magnet metals neodymium and praseodymium (“NdPr”) from the change intransport technology to electric and hybrid vehicles (“EVs”).

• Rare earth price increases: there have been sustained price rises for the magnet metal rareearths in China over the last seven and a half months. NdPr oxide prices have increased 32%since November 2016. NdPr is used in the manufacture of permanent magnet electric motorsfor hybrid and electric vehicles.

• Fluorspar opportunity: The Company will fast track studies to evaluate the potential ofthe new high grade fluorspar discovery at Ngualla to support a second product to rare earths.

Managing Director Mr Darren Townsend said “Signs are building that the surge in demand for Ngualla’s

NdPr is fast approaching. Against this background, we are pleased to progress with the mining licence

application to position our Ngualla Project as one of the very few able to help meet the predicted increase in

demand for these strategic metals. The long life, low cost Ngualla Rare Earth Project is at an advanced stage

of development with the Bankable Feasibility Study and Environmental permitting completed. As well as our

strong leverage to the rare earth magnet metals, we are also encouraged by the recent discovery of high

grade fluorspar and we will progress the evaluation of this second commodity opportunity in the short term.”

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TECHNICAL REPORT

Company to progress with permitting for NguallaThe Company’s business strategy and focus is to position the Ngualla Rare Earth Project ready for development in order to take advantage of the widely predicted rise in NdPr demand that is expected to occur as a result of the now rapidly approaching change in transport technology from the internal combustion engine to electric and hybrid vehicles (EVs). Peak is developing its 75% owned Ngualla Rare Earth Project together with partners Appian Natural Resource Fund and International Finance Corporation to be a low cost producer of these key magnet metal rare earths.

The Bankable Feasibility Study released on 12 April 2017 (ASX Announcement “BFS positions Ngualla as one of world’s lowest cost Rare Earth Projects”) estimates that NdPr is expected to contribute 90% of Ngualla’s future revenue.

The positive turnaround in the NdPr price trend and the high level of publicity on the development of EV product lines by the major car manufacturers provides the impetus to proceed with the mining licence application for the Ngualla Project. Two of the main documents required for the application – the Feasibility Study and an Environmental Certificate are completed and granted, and other documentation is in the final stages of preparation.

Senior personnel at the Ministry of Energy and Minerals have expressed support for the project and for the Company to make a mining licence application as soon as possible. The company expects to lodge the application very shortly.

Project Development in line with NdPr demand predictions from Electric VehiclesElectric vehicles are a potentially disruptive technology that could transform the car industry and drive increasing demand for NdPr.

A Bloomberg report# (The Electric-Car Boom, April 2017) indicates that all the major car manufacturers are developing EV product lines and that there will be 120 models in development by 2020 (Figure 1). The wave of EV releases is already in progress, with Ford, Volkswagen and Mercedes-Benz alone investing over US $25 Billion to develop dozens of EV lines over the next five years* (UBS, Tearing down the most disruptive car category since the Model T).

Figure 1: Electric-Car Boom. Models by style and range available through 2020. 120 different models of EV are in development and 75 are to be available in the market by 2020.

* UBS Evidence Lab Electric Car Teardown – Disruption Ahead? # Bloomberg New Energy Finance

(Source: Bloomberg New Energy Finance).

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3 PEAK RESOURCES LTD ASX ANNOUNCEMENT 3RD JULY 2017

Source: (18 May 2017 UBS Global Research Report)

Figure 2: Incremental commodity demand in a 100% EV world (% of today’s global commodity production).

Michael Liebreich, founder of Bloomberg New Energy Finance states “…the market is moving even quicker than anticipated. We estimated that we will see 75 new vehicle models in the market by 2020 and 250 by 2025….”#

NdPr are used in the powerful magnets in the electric motor that is preferred by the majority of electric and hybrid vehicle manufacturers. Over 90% of EV models in the pipeline use NdPr electric motors, each of which require about a kilogram of NdPr.

The UBS report also suggests that total cost of ownership parity (and therefore widespread market acceptance of EV’s) between EV and petrol cars will be achieved 2 to 3 years earlier than previously thought, by 2023 in Europe. The earlier prediction is due to the predicted reduction in battery costs which UBS say will raise EV sales penetration into the mainstream. UBS concludes that NdPr in particular could face demand shocks in case of a rapidly evolving EV market.

On the 16 June 17 the Legislative Affairs Office for China’s cabinet posted a new proposal to mandate automakers to sell a much higher level of plug-in and electrified vehicles in the near future - equivalent to 8 percent of total vehicle sales by 2018, 10 percent by 2019, and 12 percent by 2020.

The Link between Lithium, Cobalt and NdPrMarked increases in the prices of the speciality metals lithium and cobalt, the core materials in EV lithium – cobalt batteries, and the rapid development of new supply sources for these commodities, show that markets have become progressively aware of the potential for shortages of key raw materials as a result of an impending EV boom.

NdPr has a similar importance to EV manufacture as a raw material for the electric motor that takes the power from these lithium – cobalt batteries.

Lithium, cobalt and NdPr are identified in the UBS report as the three commodities that require the largest increase in current production levels to meet the new raw materials demand driven by EVs (Figure 2).

Peak’s strategy is to synchronise the development of the Ngualla Rare Earth Project to catch this predicted and rapidly approaching surge in demand for NdPr.

Lithium

Cobalt

Rare earths

Graphite

Nickel

Copper

Manganese

Aluminium

Silicon

Steel

PGM

2898%

1928%

655%

524%

105%

22%

14%

13%

0%

-1%

-53%

200% 0% 200% 400% 600% 800% 1000%

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Automobile electrification is predicted to create a surge in demand for the magnet metals NdPr, – as it has for lithium and more recently cobalt.

Over 90% of planned EV models will use NdPr permanent magnet motors.

Battery System: Lithium–cobalt

Drivetrain: NdPr Permanent Magnet Rare Earth Motor

Li2CO3 154% price increase from October 2015

Co 101% price increase from January 2017

NdPr Oxide 32% price increase from November 2016

Price movements as a percentage of the 19 August 2015 price in US$/Kg. Prices source: Asian Metal. Pricing information may not predict or forecast future price trends.

Lithium–cobalt battery

NdPr magnet motor

Speciality materials important in EV manufacture are seeing sequential and significant increases in pricing.

250%

200%

150%

100%

50%

0%

OCT 2015

JUNE 2017

OCT 2015

NOV 2016

JUNE 2017

OCT 2015

JUNE 2017

JAN 2017

210%

160%

110%

60%

10%

-40%

250%

200%

150%

100%

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0%

14 month lag 32%

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Rare Earth price increasesDomestic China NdPr oxide prices have seen steady and sustained increases over the last seven months, marking a significant turn around and reversal of the downward price trend of the past almost 6 years. Prices have risen by 32% since mid November 2016 (Figure 3).

Source: Asian Metal

$48.00

$46.00

$44.00

$42.00

$40.00

$38.00

$36.00

US$/

kg

NdPr US$/kg

16 Nov2016

16 Jan2017

16 Dec2016

16 Feb2017

16 Mar2017

16 Apr2017

16 May2017

28 June 2017

Figure 3: NdPr Oxide prices China (in US $/kg terms)

US $11.44/kg

(32%) in 7½ months

Fluorspar opportunityAs recently announced (ASX Announcement “New field programs extend high grade fluorspar discovery”of 28 June 2017), the zone of fluorspar mineralisation extended by further trenching is shaping up to be a substantial high grade discovery.

The Company is to fast track studies to evaluate the potential of the new high grade fluorspar discovery at Ngualla as a second commodity product to rare earths. The Company will continue with further evaluation of the fluorspar mineralisation through additional field programs including:

• further trenching and sampling

• geological mapping and reconnaisance of the several kilometres of the fenite alteration zone as yet unevaluated

• initial diamond core drilling of high priority areas

• discussions with potential offtake customers in Tanzania, including for a direct trucking grade fluorspar from the high grade zones

• metallurgical testing of typical mineralisation to evaluate the processing required to produce a high purity product for export

• initial desktop scoping studies

The field programs can be completed relatively quickly and at moderate cost as the processes and evaluation of fluorspar are conventional and well known. The Company looks forward to providing further updates on these programs as results come to hand.

For and on behalf of Peak Resources Limited.

Darren Townsend, Managing DirectorCompetent Person StatementThe information in this report that relates to Exploration Results is based on information compiled and/or reviewed by David Hammond, who is a Member of The Australian Institute of Mining and Metallurgy. David 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 the activity which he is undertaking to qualify as a Competent Person in terms of the 2012 Edition of the Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. David Hammond consents to the inclusion in the report of the matters based on his information in the form and contest in which it appears.

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