Peak Resources Limited is publicly listed on the Australian Stock Exchange (“ASX”) and has a market capitalization of approximately AUD24.4 million. Peak’s ownership is primarily composed of institutional investors such as Shaw Stockbroking (4.5 percent), Kinetic Investment Partners (3.5 percent), UBS (3.7 percent), Blue Ocean Equities (2.0 percent) and others. Peak’s main asset and current focus is the development of its pre-feasibility stage Ngualla Rare Earth Project in Tanzania. Peak Resources Limited holds its interest in the Ngualla project through an intermediate holding company, called Peak African Minerals Limited, incorporated in Mauritius. The operating subsidiary and project company, PR NG Minerals Limited, is domiciled and registered in Tanzania.

The total cost for the completion of the BFS and advancing metallurgical test work is approximately US$25 million with both expected to have been completed by mid-2016. IFC’s proposed investment is US$5m through a combination of equity (in both listed and Peak’s intermediate subsidiary), convertible notes and option to purchase a royalty. This investment will be in conjunction with Appian Natural Resources Fund (“Appian”) and represent 20% of the US$25million financing announced by Peak and Appian on September 29, 2014.

5.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.68
Equity	3.82

* These investment figures are indicative

The Project is located in southwest Tanzania, 55 kilometers west of the main north-south trunk road. An 827 kilometer long bitumen highway and the TAZARA railway connect the city of Mbeya, 150 kilometers south of the site, to the deep water sea port of Dar es Salaam. The closest nearby village to the Project is the community of Ngwala which lies approximately 4.5 kilometers south of the Ngualla deposit. The village of Ngwala has over 5,000 inhabitants.

The proposed investment is an early-stage investment preceding final feasibility studies to confirm the commercial viability of the deposit. Generally, exploration projects have limited near-term development impact but even at this early stage, the proposed investment has shown tangible benefits for the surrounding community. The Project provides direct employment and training to the village of Ngwala, a rural community, in a region where formal employment opportunities are scarce and poverty levels are high. The vast majority of employees are Tanzanian nationals, most of which are from Ngwala, and are employed based on a rotation schedule. The community also benefits from a variety of community programs the Company has implemented, mainly in the educational field, and the purchase of local products.

Should exploration lead to mine development and production, the developmental impact from this Project could be significant, in particular given its potentially long mine life. The mine could generate significant revenues for the government, largely in the form of taxes and royalties. The development of a rare earth project would also help diversify the mining sector which is currently predominantly driven by gold production. Additional future development impacts include an important demonstration effect of how large-scale mining may be developed in accordance with good international industry practices, environmental and social and transparency standards.

Governance has been weak in the country as captured by various governance metrics, including the World Bank Governance Indicators and Transparency International. However, the Government of Tanzania (“GoT”) has placed a priority on improving governance and tackling corruption. In 2009, Tanzania was one of the first African countries to join the Extractives Industries Transparency Initiative (“EITI”) and has been an EITI compliant country since then. The GoT is also working with the World Bank to strengthen its regulatory framework, licensing, management and enforcement of mineral rights and to build technical and institutional capacity for the mineral sector. In addition, given the early stage nature of the Project and limited benefits, especially in terms of fiscal revenues, any potential governance risks are deemed limited in the near to medium term. A further safeguard will be IFC’s disclosure requirements for material contracts related to the Project.

IFC''s role is expected to include: (i) providing access to equity capital. IFC will provide long-term risk equity capital to the Company, as it is advancing the Project to the Bankable Feasibility Study Stage at a time when most mining companies find it difficult to access the capital markets; (ii) providing advice on environmental and social performance standards: IFC will assist the company with setting policy and the design and implementation of an environmental and social risk management system; and (iii) providing a stamp of approval for the company and its approach to environmental and social risk management, thereby assisting the company to raise further equity and potentially debt financing as the project progresses.

This is a category B project according to IFC’s Environmental and Social Review Procedure because the environmental and social impacts of the Project are limited, site specific and therefore manageable through implementation of appropriate mitigation measures. IFC’s categorization of this Project is based on the impacts of the DFS activities which include trenching for bulk sample for pilot plant; small scale reverse circulation (“RC”) drilling grade control pattern and infill drilling program; hydrological studies; geotechnical investigations; and the completion of an Environmental and Social Impact Assessment (“ESIA”). These impacts include noise, dust and emissions, pollution prevention, surface and groundwater protection, management of fuel, oil and waste, transportation safety management, and occupational and community health and safety. Please see the Environmental and Social Review Summary (ESRS) for more information.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.