Rare Element files Preliminary Economic Assessment of
the Bear Lodge Rare Earth Elements Project
Vancouver B.C. - Rare Element Resources Ltd. (TSX-V: RES and AMEX: REE) (the
"Company") is pleased to announce that the Preliminary Economic
Assessment ("PEA") report on the Bear Lodge Rare Earth Elements
Project has now been filed on www.SEDAR.com.
The results of the PEA or "Scoping Study" (the "Study") (an
NI 43-101 compliant "Preliminary Economic Assessment" or
"PEA") on the rare-earth resources delineated on its 100% owned Bear
Lodge project, located in northeastern Wyoming, USA were announced on September
28th, 2010 in news release 24-2010.
"The preliminary economic assessment completed on Rare Element's Bear
Lodge rare-earths deposit demonstrates a potentially robust case, without any
government support or incentives," stated Don Ranta,
Rare Element's President & CEO. "The Bear Lodge Project is expected to
significantly contribute to employment, revenues, and the economy of the State
of Wyoming. Work is continuing to advance the project towards a production
decision and a number of opportunities to further enhance the already robust
project economics are being evaluated."
Bear Lodge -- Rare Earth Prices and Markets
The prices used in this study are based on historic three-year
average concentrate prices. It is important to note that the current prices are
much higher that these historic prices. In the news release announcing the
results of the PEA, it was noted that a 10% change in the price of REO
concentrate would change the Base Case NPV of the project on an after-tax basis
by approximately $58 million at a 10% discount rate, and $42 million at a 15%
discount rate.
The price assumptions used by Boyd for the REO concentrates are based on
compilations of the past three years that range from US$4.59 (2008), to $3.65
(2009), to $7.54/kg (2010). These concentrates contain approximately 43.5% REO
and were derived from deposits that have a similar, but slightly less valuable,
REO distribution compared to the Bear Lodge deposits. The 2010 concentrate
price is based on www.Metal-Pages.com data through August 31, 2010.
A recent price quote for REE concentrates on an FOB China basis, as reported on
November 4, 2010 by Metal-Pages.com, is $37.50/kg. The elements needed for
high-strength permanent REE magnets include neodymium, praseodymium, dysprosium
and terbium; prices were quoted by Metal-Pages (November 4, 2010) at US$75.00,
$84.00, $385 and $595/kg, respectively for those elements. Current REE
producers seek to increase production of neodymium, praseodymium, dysprosium
and terbium to meet the growing demand from magnet manufacturers. This
underlines the need for new producers with mineral resources having an REE
distribution that is more reflective of current market demand, such as that
indicated for the bastnasite-group minerals at Bear
Lodge. A complete list of historic prices used is provided in the Technical
Report filed on SEDAR.
Bear Lodge -- PEA Summary
The results of the Scoping Study (PEA) demonstrate
that the Bear Lodge REE project can achieve acceptable after-tax returns on
invested capital and therefore warrants further investment to advance the
project to a prefeasibilty level of analysis.
Increased rates of return are potentially achievable through any combination of
higher prices, increased product sales, higher resource/reserve grades, lower
operating costs, or higher metal recoveries.
Boyd recommends that the Bear Lodge project proceed to a Preliminary
Feasibility level analysis. The recommended work includes completion of bulk
sampling, pilot plant testing, further drilling of the Bull Hill SW and NW
deposits to upgrade more of the REE resources to Measured or Indicated
categories of confidence, REO extraction and separation testwork
on both the Bull Hill SW and NW deposits, environmental studies, mine
permitting, and continuing community engagement.
The estimated cost of this work program is $15 million with the work to be
conducted in two phases. Phase 1 is comprised of preparation of an updated
mineral resources estimate that includes 2010 drilling results, continued
metallurgical testing, and a pilot plant test, which is anticipated to start in
the spring of 2011. Phase 1 would include work to be conducted on samples and
analyses from the 2010 drilling program. Phase 2 will include another drilling
program for further resource expansion, resource definition, and collection of
metallurgical samples that will be used in a subsequent full feasibility study.
The Phase 2 program will then proceed to more detailed metallurgical testwork and engineering studies, leading to final process
design and commercial testing, market studies, environmental studies and mine permitting, community consultation, engineering design, and
economic modeling. Phase 2 work is planned to commence in the late spring of
2011, subject to positive results from Phase 1 and arranging additional
financing for the project.
Qualified Persons
Michael P. Richardson, P.E. is the independent qualified person from John T.
Boyd Company responsible for the Scoping Study (Preliminary Economic
Assessment) as well as mine planning, capital and operating cost estimation,
and developing the economic models. He also reviewed and approved this news release
as well as all sections of the Scoping Study. Alan C. Noble, P.E. of Ore
Reserves Engineering, is the independent qualified person responsible for
resource estimation. Dr. Ron Roman, P.E. of Mountain State R&D
International is the metallurgical engineer and an independent qualified person
responsible for the metallurgy, process development, and estimation of the mill
capital and operating costs. Dr. James G. Clark, L.Geo., who has direct
experience with the project dating back to 1986, is responsible for the
geologic, drilling, and sampling data on behalf of the Company; these data and
descriptions were reviewed and approved by Mr. Richardson. The full Study is
accessible on www.SEDAR.com and the Executive Summary will be
available on the Company's website shortly.
Rare Element Resources Ltd (TSX-V: RES & AMEX: REE) is a publicly
traded mineral resource company focused on exploration and development of
rare-earth elements and gold on the Bear Lodge property.
Rare-earth elements are key components of the green energy technologies and
other high-technology applications. Some of the major applications include
hybrid automobiles, plug-in electric automobiles, advanced wind turbines,
computer hard drives, compact fluorescent light bulbs, metal alloys, additives
in ceramics and glass, petroleum cracking catalysts, and a number of critical
military applications. China currently produces more than 95% of the 130,000
metric tonnes of rare-earths consumed annually
worldwide, and China has been reducing its exports of rare earths each year.
The rare-earth market is growing rapidly, and is projected to accelerate if the
green technologies are implemented on a broad scale.
ON BEHALF OF THE BOARD
Donald E. Ranta, PhD, PGeo, President & CEO
For information, refer to the Company's website at www.rareelementresources.com or contact:
Mark T Brown, CFO, (604) 687-3520 ext 242 mtbrown@pacificopportunity..com .
Donald E Ranta, (604) 687-3520 don@rareelementresources.com
Donald E. Ranta, PhD, PGeo, serves the
Board of Directors of the Company as an internal, technically Qualified Person.
Technical information in this news release has been reviewed by Dr. Ranta and has been prepared in accordance with Canadian
regulatory requirements that are set out in National Instrument 43-101. This
news release was prepared by Company management, who take full responsibility
for content. Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.