Rare Element Resources, Limited, (RES: TSX.V) is a company focused on the rare earth business in North America, with their wholly owned property at Bear Lodge. Containing significant rare earth deposits, Rare Element Resources is working toward developing the property to its full potential.
Don Ranta, President and CEO of Rare Element Resources at the World Resource Investment Conference in Vancouver
According to Don Ranta, President and CEO of Rare Element Resources, “We are advancing our project in the Bear Lodge Mountains of Wyoming very rapidly.” Their quick development has led to additional information that will be available shortly in addition to moving forward with new phases of development. Ranta said, “We are about ready to come out with a new resource report in the next week or so. We're going to start a pilot plant test with about ten tons of bulk sample material. That will start up in July or August. We are going to finish our prefeasibility study by either the end of this year or the beginning of 2012.” All of these developments have led Ranta and the team at Rare Element Resources to feel optimistic. Ranta said, “All of those are very positive. We have a major drilling program equal to the one we had last year of 40 to 60 drill holes planned for this summer and fall, so lots of very positive things are happening. We see our resource getting larger and larger and have had positive metallurgical results. Everything is going really, really well.”
One of the reasons that Ranta is so optimistic about the Bear Lodge property is because of the results they have seen from their early testing. Said Ranta, “The most important thing is to look at the grade and the distribution of our elements within our rare earth deposits. The grade we have is about 3.46%-- that is our current resource estimate and that is the third highest grade of any substantial deposit in the world. It's really pretty outstanding.” Not only is the grade of the deposit significant, the distribution of rare earth metals is an asset to Rare Element Resources. Ranta explained, “We have a very good distribution of both the heavy rare earths and the light rare earths. We have some of the highest europium and terbium values, which are two of the heavy rare earths, in North America, plus a very respectable amount of dysprosium. So, with the combination of europium, terbium and dysprosium, we rank competitively with any deposit in North America.” One element that they don't have as much of is yttrium, however, Ranta does not see that as a challenge. While yttrium would be a positive addition to the deposit, it generally has a lower price, ranks as one of the lowest value rare earths, and will likely by in oversupply in a few years.
Currently, Rare Element Resources is moving forward on the plans that they outlined earlier this year in terms of next steps leading to production. Ranta said, “Our plan and what we have in our scoping study published in November is that we would create initially a rare earth carbonate concentrate. Our plan continues to be that we will produce a rare earth carbonate concentrate – a bulk mixed rare earth concentrate that we would sell to one of the other refiners.” This portion of the plan would go on for an extended period of time as a way to generate cash for the company. Said Ranta, “We would do that for a period of three to five years. At the same time, we'll be doing all the engineering work and all the test work – we started that about a year and a half ago – for the most complex part of the process. The most complex process is the extraction and separation of individual rare earths and refining into rare earth oxides.” The reason for continuing testing in separation of the rare earths has to do with Rare Element Resources’ own potential to become a producer of value-added rare earth products. Said Ranta, “If we can keep our capital costs low by only putting in the plant that would allow us to do the rare earth carbonate concentrate, we can keep our capital costs at around $100 million dollars, rather than the half a billion to a billion dollars that many of our competitors are talking about. That's one of the ways we are trying to distinguish ourselves from our competition.” By spending time on analysis, Rare Element Resources is hoping to minimize their capital outlay and maximize their profit.
But, Ranta said that Rare Element Resources has not come to a final decision as to whether they would actually pursue producing just the carbonate concentrate or to produce other downstream products on their own. He explained, “With all this test work we are doing, and all the engineering work, we are thinking that eventually the company will produce rare earth oxides. Whether or not we go into magnet manufacturing or anything else is yet to be seen, but our plan is to do the rare earth carbonate concentrates initially for a number of years and then go into the refining business and build our refinery.”
Given their extensive plan, Ranta believes that Rare Element Resources is attractive to investors because they believe they can effectively self finance with their revenues. In addition, they are on track to finish their preliminary feasibility by the end of year or early 2012, and, if the prefeasibility study is positive, complete a full feasibility study by the end of 2012. After that, Ranta said, Rare Element Resources would focus on permitting through 2013 and 2014. If the feasibility study is positive, mine financing of $100 million for construction could be conducted in 2013 or 2014. Again assuming positive studies, mine construction could begin
in 2014 and Rare Element Resources hopes to go into production in 2015. Ranta said, “If everything goes well with each one of these steps, that's where we'd like to be.”
With 43.8 shares outstanding, 47.5 million fully diluted, and a market cap of approximately $500 million, Ranta said, “We're pretty excited about where we are going.” With good reason, Rare Element Resources has a significant deposit of high-demand and high-grade rare earth metals, and an aggressive plan to go into carbonate concentrate production. Investors may see Rare Element Resources as an opportunity to invest in a nearby resource that offers upside potential.
For more information
http://www.rareelementresources.com
Rare Element Resources Ltd.
Suite 410 - 325 Howe Street
Vancouver, BC V6C 1Z7
Tel: 604.681.4236
Fax: 604.688.3392
Rare Element Resources USA
225 Union Blvd, Suite 250
Lakewood, CO 80228
Tel: 720.278.2460
Fax: 720.278.2490
Contacts:
Donald E Ranta, President & CEO
don@rareelementresources.com
Mark T. Brown, CFO
mbrown@rareelementresources.com