Returning interest to the rare earths space has eyes back on Rare Element Resources
“Patience is a virtue”.
That would be an understatement when it comes to the long history of Rare Element Resources Ltd. (OTCQB: REEMF) and President & CEO Randy Scott. However, the company has not remained unnoticed by the market and the current share price reflects the returning interest to the rare earths space.
The company owns a 100% interest in a group of 499 unpatented mining claims and 640 acres owned in patent, called the Bear Lodge Project. The mine site is located approximately 12 miles northwest of the town of Sundance, Wyoming in close proximity to transportation, power and human resources in a mining-friendly jurisdiction. According to the company, the Bear Lodge deposit is one of the highest grade rare earths deposits in North America. Average ore composition is approximately 3% rare earths, but the company has discovered a large minable zone of 8-10% rare earths. Truly world class!
The company’s rare earths project has been delineated and basically ready to develop since mid-2014, when a Preliminary Feasibility Study on development of the Bear Lodge Project was published. As followers of the rare earths industry know, this unfortunately coincided with an orchestrated collapse of the global industry and caused Rare Element Resources (RER) to pause their activities.
The good news – the Bear Lodge Project was put under “care and maintenance”, but RER did not stop working. In 2017, the company attracted a strategic investor Synchron, a subsidiary of General Atomics Technologies Corporation, which invested US$4.75 million in new equity in the company. Synchron had an option to acquire further equity in the company for just over US$5.0 million, which was exercised in late 2019 and gave Synchron an approximate 49% interest in RER. This strategic investment has allowed RER to continue work on its proprietary technology for rare earths separation and also update environmental baseline information that will be used in application to move the project forward.
According to RER “Bear Lodge is a significant mineralized district containing many of the less common, more valuable, critical rare earths that are essential for high-strength permanent magnets, electronics, fiber optics, laser systems for health and defense, as well as many technologies like electric vehicles, solar panels and wind turbines.” Between 2004-2013, a total of more than 160,000 feet of drilling was completed in over 200 core holes that range in depth from 88 to 1,886 feet. This allowed the company to prepare a report (NI 43-101) in 2014 that estimated the resource potential of the project.
Proposed operations at the Bear Lodge Project will consist of the following:
- A small surface mine,
- A Physical Upgrade (PUG) Plant located adjacent to the mine for mineral pre-concentration, and
- A Hydrometallurgical (Hydromet) Plant for further concentration, impurity removal and recovery of the rare earth oxides from the mineral pre-concentrate, located in Upton, Wyoming.
Current estimates are that RER could receive all permits and licenses for the Bear Lodge Project approximately 18 to 30 months after resuming permitting efforts. However, separate from the mining project, the company has made significant strides in developing their proprietary rare earth separation technology which will be used to process the mine’s output.
As followers of the company know, the Synchron connection has been invaluable to RER. Leveraging the General Atomics relationship, another subsidiary (Umwelt-und Ingenieurtechnik GmbH Dresden or UIT) has operated the pilot plant in Germany utilizing RER developed processes, while tweaking them to adjust or improve the technology. Once that has been completed, the company will be approaching the demonstration plant decision. This plant is expected to be constructed somewhere in Wyoming
In February 2020, the company announced successful pilot scale test work conducted over the previous year for extraction of rare earths metals. This is ultimately leading up to the construction of a demonstration scale rare earths processing and separation plant which is anticipated to take approximately 18-24 months once funding is secured. The company has approximately 900 tons of ore stockpiled from the Bear Lodge Project – operations to process and separate rare-earth-elements from the stockpiled ore will follow in an additional 12-month period.
“The most important event for RER in past three or four years has been investment by Synchron” according to CEO Randy Scott. “Their strategic investment really is a big deal and the General Atomics/Synchron organization bringing a lot of knowledge and experience to the RER board.”
I would tend to agree, as the company has a world class ore deposit and the ability to exploit it economically. The company expects to update the market as appropriate, but notes that no further mining would be required for ore to feed a demonstration plant as approximately 900 tons is currently stockpiled.
The corporate philosophy is to announce results, rather than prognosticate and then revise. While there is limited historic news flow, you can rest assured that when there is a corporate announcement, it will be meaningful to shareholders.
Frederick Kozak is a Professional Engineer with extensive oil and gas, and international business experience and has more than 25 years involved in capital markets ... <Read more about Frederick Kozak>