Peak Resources : Quarterly Activities Report and Appendix 5B

HIGHLIGHTS:

Peak Resources Limited ("Peak" or the "Company") connue to progress the development of its 75% owned Ngualla Rare Earth Project ("Project") with the following acvies occuring during the Quarter:

• • Meeng with the newly appointed Tanzanian Mining Minister

• • SML recommended for approval by the Mining Commissioner to the Minister

• • Further producve visits with potenal off-take partners

• • Testwork programs validate and provide potenal for further Project opmisaon

Meeting with the newly appointed Minister of Minerals

In early January 2019 the President of Tanzania, Dr John Magufuli promoted the deputy Minister of Minerals Doo Biteko to Minister. Mr Biteko replaces Angellah Kairuki who has been appointed Minister of State to the Prime Minister's investment office. Stanslaus Nyongo who, alongside Mr Biteko, was also a deputy minister under Madam Kairuki will remain as sole Deputy Minister.

The Company has an excellent on-going relaonship with the new minister from dealing with him in his capacity as deputy minister and is confident that there will be good connuity between the outgoing and in-coming ministers.

The Company's Tanzanian Commercial Manager, Ismail Diwani met with Hon Biteko on 15 January to congratulate him on his appointment and to expedite the issue of the Special Mining Licence (SML). The Minister confirmed that he "understands the urgency of the SML" and he will "play his part to push this as swiſtly as it can get". The Minister stated that his office has received the approved applicaon from the Mining Commission and the planning team of the Ministry is preparing the relevant Cabinet Papers.

A follow up meeng between the Minister and Peak's execuve has been set for early February.

SML recommended for approval by the Mining Commission

The Tanzanian Mining Commission has confirmed to the Company that they are sasfied with the applicaon and supporng documents received and has recommended the licence for approval to the Minister of Minerals. The Minister is required to seek cabinet approval prior to the SML being granted. The final informaon submied to the Commission included a strategy and commitment to explore and potenally develop the other commodies that have previously been idenfied within the Ngualla licence area. These commodies include Fluorspar, Barite, Niobium and Phosphate, details of each are included below.

ENABLING LOW CARBON TECHNOLOGIES

DIRECTORS

Non-Execuve Chairman: Peter Meurer

Non-Execuve Directors: John Jeer

Jonathan Murray Darren Townsend Tony Pearson

Chief Execuve Officer: Rocky Smith

Company Secretary: Graeme Sco

CORPORATE DETAILS

AS AT 31 Dec 2018:

Ordinary Shares on issue: 799.3m

Listed Opons:

PEKOC $0.06 14 Jun 2020: 61.1m

52 week range: 2.5c - 6.4c

Market Cap: $22.7m (at 2.6c)

ASX: PEK

Peak Resources Limited Ground Floor, 5 Ord Street, West Perth, WA 6005.

PO Box 603, West Perth 6872.

ASX: PEK ACN: 112 546 700

Telephone: [phone]

Quarterly Activities Report and Appendix 5B

December 2018

Fluorspar

A Fluorspar occurrence has been discovered in the fenite rim around the carbonate body at Ngualla as shown in the plan below. To date work undertaken includes trenching and rock chip sampling in early stage exploraon to assess the deposit. The rock chip sampling of outcropping mineralisaon was encouraging and assayed up to 96% fluorspar.

The available trenching data is at a very early stage of evaluaon and does not allow for a JORC Mineral Resource or an Exploraon Target status at present. The Company does however believe that the occurrence is large enough to warrant future further exploraon. (Refer ASX announcement of 20 February 2017 tled "Wide zones of high grade fluorite idenfied at Ngualla")

As shown in the Figure 1 the fluorspar occurrence occurs well outside the Rare Earth mining and infrastructure. The idenfied fluorspar mineralisaon potenal will not therefore be impacted by the rare earth mine.

Figure 1 - Locaon of trenches reported in relaon to rare earth mineralisaon in the centre of the Ngualla Carbonate Complex and fluorspar and rare earth zones discovered to date within the fenite alteraon zone

The Company's intenon is to connue exploraon on this occurrence following the development of the rare earth operaon. Profits from the Rare Earth mine will partly be used to fund this exploraon. Infrastructure built for the rare earth mine will assist in making a potenal mining operaon economic.

Barite

The weathered bastnaesite zone that is the primary resource to be mined at Ngualla is comprised of approximately 40% Barite. Over 90% of the Barite that is planned to be mined at Ngualla as part of the Rare Earth operaon reports to the first tailings stream of the rare earth plant. This stream comes from the barite pre-float circuit with a grade of approximately 90% and would therefore be suitable as drilling mud. At the current projected mining rate this equates to approximately 200,000 tonnes per annum of Barite being produced from the planned processing plant. To ensure that the barite resource is not lost the tailings dam at Ngualla has been designed with separate cells for the Barite stream. (Refer to ASX announcement of 2 March 2017 tled "Ngualla Mineral Resource esmate re-stated to include barite" for details).

Figure 2 - Plan view of maximum down hole Nb2O5 in the Southern Rare Earth and Northern Zones of the Ngualla Carbonate showing niobium - tantalum inersecons highlights. Mineralisaon remains open to the north, south and west.

Phosphate

Phosphate occurrences have also been detected over much of the Ngualla area. In fact it was the phosphate potenal that first aracted Peak to the Project. As shown on the plan below the phosphate mainly occurs outside the rare earth mining zone with the higher grades occurring in the northern zone. The phosphate potenal will not therefore be encumbered by the rare earth acvies.

Figure 3 - Plan view of maximum down hole phosphate in the Southern Rare Earth Zones of the Ngualla Carbonate showing phosphate intersecons highlights. Mineralisaon remains open to the north, south and west.

Niobium

Niobium occurrences have been detected over most of the area at Ngualla. The higher grade and potenally economic targets were intersected in drilling within the weathered carbonate to the north of the Bastnaesite Zone outside the rare earth mining zone and shown in the figure below. The relavely shallow <20m mineralisaon extends over 1km x 1km area. Mineralogy tesng by the Company idenfied pyrochlore and columbite as the primary Niobium minerals. These higher grade zones would be the focus of further exploraon acvies by the company aſter the development of the rare earth mine. Parcular aenon will be focussed on the magnec anomaly in that area. (Refer ASX announcement of 15 February 2010 tled "Final drill results received from the Ngualla Rare Earth Project").

The Company has made inial representaons to the management at the nearby Panda Hill project in Mbeya to invesgate the potenal for that company to process the Ngualla Niobium. Panda Hill have confirmed that this could be a possibility and the companies will connue to

work together to further explore this potenal.

Quarterly Activities Report and Appendix 5B

December 2018

Concentraons over 20% P2O5 have been reported in the Northern Zone due to weathering of carbonate minerals. The weathering upgrades the grade from approximate 6% P2O5 average in Fresh Rock. It is these weathered zones in the north that show the most potenal for success and will be the focus of future exploraon to be undertaken aſter the rare earth mine is developed and operang. (Refer ASX announcement of 15 February 2010 tled "Final drill results received from the Ngualla Rare Earth Project")

The Mineralogy of the phosphate is primarily Apate in the Northern Zone, some Monazite in periphery of the Bastnaesite Zone. Apate is used to produce ferliser for the agricultural industry and is therefore of parcular interest to the local communies who are very reliant on farming.

The Company confirms that it is not aware of any new informaon or data that materially affects the informaon included in the market announcements referenced in this report and listed following: ASX announcement of 20 February 2017 tled "Wide zones of high grade fluorite idenfied at Ngualla", ASX announcement of 2 March 2017 tled "Ngualla Mineral Resource esmate re-stated to include barite", and ASX announcement of 15 February 2010 tled "Final drill results received from the Ngualla Rare Earth Project". The Company also confirms that all the material assumpons and technical parameters underpinning the mineral resources esmates in the ASX announcement of 2 March 2017 tled "Ngualla Mineral Resource esmate re-stated to include barite" connue to apply and have not materially changed.

Tanzanian Operations

The project office and site were closed in early December ahead of the wet season. The main operaons undertaken prior to the site closure include;

• • Handover of the Iziro classroom and community projects

• • Community Liaison with the local and wider Ngwala community

• • Receive guests including government officials and potenal investors

Figure 4 - The Regional Commissioner for Songwe officially opens the classrooms at Iziro.

Community Social Responsibility

Peak takes its community and social responsibilies very seriously and is proud of its record to date. The projects undertaken in the past and the manner in which it engages with the local community has resulted in widespread support for the Project.

The construcon of two classrooms and a teacher's office at the Iziro local school were completed and handed over to the community in November at a formal ceremony. The ceremony was aended by the recently appointed Regional Commissioner for Songwe, Brigadier General (rered) Nicodemus Mwangela and other local dignitaries.

Testwork Programs Validate Use of Collector and Provides Potential for Further Project Optimisation

During the Quarter a limited testwork program was completed on the preferred collector idenfied towards the end of compleon of the Bankable Feasbility Study. The testwork validated and confirmed previous results which underpins a brief reagent opmisaon program, currently underway.

Marketing and Communications

During the Quarter member's of Peak's execuve team connued further engagement and visits with potenal customers. More of these potenal customers are growing to realise the need to have a more diversified supply of material including material sources that are independent of China.

Quarterly Activities Report and Appendix 5B

December 2018

Market Update

China

The Ministry of Industry and Informaon Technology (MIIT) has published an update of their rare earth guidelines in which they confirmed that they will step up efforts to eliminate illegal mining, producon and smuggling of rare earth materials (main focus Myanmar) and will connue to encourage further downstream integraon of the industry.

The MITT made clear that the overall regulaon and supervision in the industry had improved, but illegal mining, smuggling and producon connued to disrupt "market order" and damage the interests of legimate enterprises. The MIIT confirmed that they will step up their efforts and in 2019 will focus on prevenng and stopping any illegal mining and illegal recycling acvies to ensure that unauthorized pracce and facilies are eliminated. This is important news as the recycling sector is a known channel for illegal material and including this sector under the supervision of the government represents a major change for this part of the rare earth industry. MIIT also confirmed that they will establish a "traceability system" to prevent buyers from using illegal materials and to ensure that producers do not exceed the governmental established quota. Non-law abiding companies will have their licences suspended.

The big 6 Chinese State owned enes (SoE) are execung the downstream integraon governmental agenda. Recently several of them have announced various investments in the E-mobility area and in parcular in the permanent magnet motor industry sector. For example, Xiamen Tungsten announced in December 2018 that is to build a Permanent magnet motor industrial park in Jimei District, Xiamen City.

The aforemenoned new Chinese regulaons and other industry announcements can be found on the Peak Resources website under "The Market - China" secon.

Australia/Malaysia

Lynas Corporaon had a limited output from their Malaysian Lynas Advanced Materials Plant (LAMP) in December 2018. The background to this was the need for them to comply with processing restricons which is part of their current Operang License. Since the beginning of 2019 normal producon at the LAMP has resumed. However, the long term future of the LAMP plant is uncertain aſter the Malaysian Atomic Energy Licencing Board (AELB) announced new pre-condions for the renewal of the operang license of the LAMP plant which is scheduled for renewal in September 2019. One of the main requirements from the Malaysian authories is that Lynas is requested to remove (export) certain waste from Malaysia. At the beginning of this year, Lynas has appealed against these requirements. The global rare earth community is following these events and developments with interest; Lynas is the world's major supplier of rare earths outside China and recent developments have shown how vulnerable the non-Chinese rare earth supply chain sll is.

Peak sees these recent developments as a confirmaon of our industry and market understanding. On the demand side we see connuous growth in the NdFeB permanent magnets sector supported by the global trend of the electrificaon of our society and on the supply side, we see that the regulaons in China are ghtening which is the main global supply base for this specific material - this represents the dichotomy facing rare earth customers. We believe that the global rare earth downstream community will need to revisit their rare earth sourcing strategies as these factors begin to impact on their supply chain and operaons. Diversificaon of the global supply footprint will be instrumental for the future success of the global NdFeB industry. The key will be to assure producon and raw material supply to maintain full operaons and profitability and at the same me to migate any operaonal and polical risk exposure.