AMEX: REE & TSX-V: RES
VANCOUVER, Nov. 10 /PRNewswire/ -
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
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.
SOURCE Rare Element Resources Ltd.
Copyright . 10 PR Newswire