Peak Resources : Strategic relationship with ERP and associated funding

Peak Resources Limited (ASX: PEK) ("Peak" or the "Company") is pleased to announce a firm commitment from ERP Strategic Minerals, LLC (ERP) and associates for a $1.5 million placement into Peak. The price of the placement is 4 cents per share and receipt of funds is expected in approximately seven days. Peak is excited to be working with ERP and its associated supporters.

ERP is backed by Tom Clarke, who has built a US$2+ billion annual revenue coal and iron ore business in the United States. Peak recently had the opportunity to work with ERP on the bid for the Mountain Pass Rare Earth Project in the USA and during this process a solid relationship was established. ERP has strong interest in entering the rare earth business and sees partnering with Peak as an integral component of their global strategy given Peak's 75% ownership of the Ngualla Project combined with the Company's team who have extensive mining, technical and operational skills in the rare earth space. ERP's goal is to work with Peak in a tactical and strategic manner in the near term and with respect to this the two companies have signed a non-binding Memorandum of Understanding to establish a Joint Venture Company ("JVC"). The JVC's initial focus will be on evaluating opportunities for the extraction of rare earth elements from coal deposits in the United States. ERP has a number of coal assets in the United States and has a strong interest in evaluating this potential opportunity in collaboration with the Peak team. In addition, the JVC will evaluate opportunities for trading in neodymium-praseodymium ("NdPr") rare earths.

The allocation of any of Peak's staffing to JVC projects will assist Peak in managing costs. The JVC has plans to evaluate a number of other potential global opportunities in the rare earth space.

Chairman of ERP, Mr Tom Clarke said "We are very excited to work with the Peak team and to make an investment directly into Peak Resources. We see Peak as having a number of extensive skills in the rare earth space. We see great opportunities in the evolving technology metals space and we would like to develop a global business in this space as demonstrated recently by our efforts to jointly purchase the Mountain Pass asset. We see the investment in Peak and the formation of the joint venture as an important first step in developing a global relationship and we see a very strong partnership in the future between ERP and Peak".

Darren Townsend, Managing Director of Peak Resources states "We are very pleased to have the opportunity to work further with ERP. It was a pleasure working with the ERP team on the Mountain Pass transaction and it became clear that there are a number of synergies between what Peak is trying to achieve in the rare earth space and ERP's strategic vision. We look forward to working with ERP to evaluate further opportunities in the global rare earth space. We think the timing is perfect for such a venture given the rising prices of rare earths, which has seen the NdPr price rise by 36% since the completion of Peak's Bankable Feasibility Study ("BFS") for Ngualla".

In conjunction with the $1.5 million share placement, Peak intends to undertake a rights issue to raise up to $5 million and is in the process of finalising the details of this offer to send to shareholders in the near term. Subject to completion of the placement, the pricing of the rights issue will be the same as the placement issue price and otherwise proceed in accordance with applicable regulatory requirements.

At 4 cents per share this equates to the issue of up to 125,000,000 new shares. Further details (including timing) will be set out in the offer documentation for the rights issue.

The primary uses of funds from the combined placement and rights issue will be to:

• progress with permitting and the mining license application for Ngualla while the Company seeks further clarity on the practical application of the recent regulatory changes in Tanzania by actively engaging with the Government;

• study opportunities to further improve the economics of the Ngualla project;

• cover general operating expenses; and

• retire some debt to Appian.

The issue of shares to ERP and associates is being made in accordance with the Company's placement capacity and otherwise is being made on customary terms.

For and on behalf of Peak Resources Limited.

Managing Director

ERP Strategic Minerals, LLC is associated with Tom Clarke and the ERP group of companies, which group have successfully completed 7 acquisitions out of bankruptcy and insolvency proceedings in the past two years. The business operations include the second largest coking coal producer in North America, merchant coke batteries, an iron ore pellet production business, and related mining operations with over US$2 billion in forecasted aggregate revenue in 2017.

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