Texas Rare Earth Resources Developing Lower Volume Staged Growth Approach to Round Top Heavy Rare Earth (HREE) Project
- Targeted Initial Project CAPEX Potentially Reduced to $60-90 Million
- Targeted Initial Potential HREE Output of 350-450 Tonnes per Year
- Scalable Project Would Seek to Increase Production Consistent With Market Demand
Texas Rare Earth Resources Corp. (OTCQX: TRER), an exploration company specializing in the heavy rare earths, announced today that the Company has completed an internal analysis by the TRER engineering team that indicates there is a reasonable possibility to profitably adapt a lower volume staged growth approach to development of the Round Top heavy rare earth (HREE) project.
We are focusing our efforts on what we believe are the high demand REEs and prioritizing our separation efforts on high value REEs with the goal of creating a reliable domestic supply. Our internal analysis indicates that an operation designed to produce a selected group of separated REE products in the range of 350-450 tonnes per year potentially yields favorable mine economics. Other rare earth elements not immediately separated and sold could be stored on site as a mixed rare earth product for future separation. Mining rates will be initially targeted to be in the range of 2500-3500 tonnes per day. We believe that this reduced initial production rate could be absorbed by the market and would allow us to market our total production consistently as a capable domestic alternate supplier to many industries, particularly those related to national defense, where surety of supply is essential. If and when our products gained acceptability, production could potentially be increased to meet any growing worldwide demand.
Management of TRER believes that the Round Top project lends itself well to a staged startup. The geographical setting of the project just outside El Paso, Texas, lack of overburden over the deposit, potentially low open cut mining costs, efficient heap leach metallurgical results obtained to date, favorable topography, minimal infrastructure needs and excellent land position lead management to believe that much of the capital needs can be proportionally reduced from the $293 million projection published in our December 2013 Preliminary Economic Analysis (PEA). Such factors include, but are not limited to, mining, leaching, solution management, required infrastructure and equipment are factors that can be proportionally decreased. We also anticipate that permitting lead times may decrease while simultaneously diminishing our environmental footprint. As a result, our internal analysis indicates that the initial capital cost for the scaled project could be in the $60-$90 million range.
Our detailed body of cost data regarding mining, transporting and crushing indicate that operating costs per tonne for the scaled project, while marginally higher than that estimated in the December 2013 PEA, would not be excessive. We are fortunate in having an active railroad ballast quarry located adjacent to our Round Top project area which mines, crushes and screens a physically similar rock at a rate of 3000-5000 tonnes per day, thus enabling us to accurately assess these mining and crushing costs. We are at present conducting a more detailed analysis of the relative CAPEX and OPEX requirements of a scaled down processing plant with both solvent extraction (SX) and ion exchange (IX) processes under evaluation. We believe the lower capital requirements of a staged startup could offset any marginal increase in unit operating costs.
About Texas Rare Earth Resources Corp.
Texas Rare Earth Resources Corp.’s primary focus is exploring and, if warranted, developing its Round Top rare earth minerals project located in Hudspeth County, Texas, 85 miles east of El Paso. The Company’s common stock trades on the OTCQX U.S. tier under the symbol “TRER.”
This press release contains forward-looking statements within the meaning of the U.S. Securities Act of 1933, as amended, and U.S. Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding the potential phased mine plan at the Round Top project, targeted reduced initial CAPEX, target reduced initial output. The ability to scale the project to market demand and increase production to meet any increase in market demand, potential for low mining costs, potential low mining costs, mining operation design, storage of certain REEs for potential future separation, targeted initial mining rates, project economics being directly scalable from December 2013 PEA, estimated operating cost per tonne, ongoing analysis of processing plant, potential to offset per tonne operating costs with reduced processing costs, decreased lead time for permitting, the potential development of the Round Top project, and other such similar statements. When used in this press release, the words “potential,” “indicate,” “expect,” “intend,” “hopes,” “believe,” “may,” “will,” “if, “anticipate,” and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, uncertainty of mineralized material and mineral resource estimates, risks to projected and estimated economics not reflecting actual economic results due to the uncertainty of mining processes, potential non-uniform sections of mineralized material, potential mining hazards and accidents, changes in equipment and labor costs, changes in projected REE prices and demand, competition in the REE industry, risks related to project development determinations, the inherently hazardous nature of mining-related activities, potential effects on the Company’s operations of environmental regulations, risks due to legal proceedings, liquidity risks and risks related to uncertainty of being able to raise capital on favorable terms or at all, as well as those factors discussed under the heading “Risk Factors” in the Company’s latest annual report on Form 10-K as filed on November 26, 2013 and other documents filed with the U.S. Securities and Exchange Commission. Except as required by law, the Company assumes no obligation to publicly update any forward-looking statements.
Cautionary Note to Investors
The Preliminary Economic Analysis is not a definitive feasibility study and our Round Top project currently does not contain any known proven or probable ore reserves under SEC Industry Guide 7 reporting standards. The results of the Company’s preliminary analysis contained in this press release of a scaled project and the targeted CAPEX, scaled operating costs per unit, and targeted production and mining rates are derived, in part, from a scaled analysis of the PEA. The PEA and the preliminary analysis of the scaled project are preliminary in nature and there is no certainty that the results or estimates of the PEA or the preliminary analysis will be realized. U.S. investors are urged to consider closely the disclosure in our latest reports filed with the SEC. You can review and obtain copies of these filings at http://www.sec.gov/edgar.shtml.
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