Rare Element Resources discusses the Bear Lodge Heavy Rare Earth Project Advancement
October 7, 2013 — Tracy Weslosky, Publisher of InvestorIntel interviews Randy Scott, President, CEO and Director of Rare Element Resources Ltd. (TSXV: RES | NYSE MKT: REE) for an update and discusses the company’s stellar stock performance and most recent achievements, including major institutional investment, preparation of the Environmental Impact Study for its flagship Bear Lodge Project (a world-class rare earths district), and that pilot plant testing is expected to be completed within weeks. Rare Element Resources’ primary focus is advancing the Bear Lodge Critical Rare Earth Project, located in northeastern Wyoming, into production. The mine site is located approximately 12 miles northwest of the town of Sundance, Wyoming. The Company also has an option on a parcel of land located on the outskirts of the town of Upton, Wyoming, approximately 40 miles to the southwest. This is the planned site for the Project’s hydrometallurgical processing plant. In mid-2013, the Company began a number of detailed engineering and economic studies aimed at further refining specific aspects of the Project. This included pilot plant testing of its proprietary processing technology. The results from this work are expected later in 2013 and will support the completion of detailed engineering and a definitive Feasibility Study on the Bear Lodge Project. With timely permitting, the Bear Lodge Project could be producing commercially saleable rare earth oxides as early as late 2016.
Tracy Weslosky starts (TW): I’m here today with Randy Scott. He’s the CEO and President for Rare Element Resources. Randy, how are you today?
Randy Scott (RS): I’m doing great, Tracy, thanks for having me.
TW: Randy, it’s our pleasure, especially with your stock nearly doubling in the last couple of weeks. Can you tell us what you think might be the inspiration for your stock movement? Do you think investors are finally realizing you’re one of the best market valuations to invest in currently?
RS: We’re very excited about the movement that the stock has demonstrated for us over the last two to two-and-a-half weeks. I think it’s a combination of a number of different things. Obviously the market appears to be turning around. Rare earth metals prices are improving as well and we’ve had some good news out with regards to our permitting and our memorandum of understanding, moving us forward with the Forest Service.
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TW: Let’s talk about the news release that you just put out about Rare Element Resources having closed on its US$8 million offering with institutional investors, is that correct?
RS: That’s correct; it’s US$8 million registered direct offering with an oversubscription right for another US$4 million, Tracy. It’s good news for us and for our shareholders. We wanted to try to have a major fundraising at this time. Obviously the stock price has been very high; we were able to execute the deal at a very high stock price. And we’re looking forward to continuing to make good progress on the project now and to maintain those capital balances — those cash balances — which we’re known for in the industry.
TW: As a leader in the rare earths sector, let’s start with your most recent big news — substantial news –which would be your Environmental Impact Statement that you’re currently preparing. Can you give us a bit of background on this?
RS: You bet, Tracy. Back in May we announced that the Forest Service had approved the Plan of Operations for the Bear Lodge Project. And then just recently, we announced that we had signed a Memorandum of Understanding with the Forest Service. And that essentially starts the Environmental Impact Statement (EIS). We’re moving forward with the selection of the primary contractor, as well as developing the set of Memorandum of Understanding procedures and processes in conjunction with the Forest Service for the EIS.
TW: For some of our investors that may be from the technology sector, for instance, new to the resource sector, that are crossing over for rare earths, can you tell us a little more about what this Environmental Impact Statement will mean once you have it completed?
RS: Yes, it’s our approval from the Forest Service. The Bear Lodge resource is located on public lands and as a requirement for the public lands permitting process in the United States; you have to develop an Environmental Impact Statement. Once you have the Environmental Impact Statement and the approval from the State of Wyoming to go ahead and mine, then you can begin to develop and operate the property.
TW: Clearly, you have institutional investors interested. We know that you have one of the largest followings of any of the top-5 players in the rare earths sector. Can you give our audience an overview of Bear Lodge and what’s happening there right now?
RS: Sure, that’s great. We’ve been extremely busy over the last several months. We have made quite a bit of progress and we expect to make substantial progress in the next month or two or three. First of all, we announced that we had started drilling on the resource at the Whitetail Ridge deposit earlier this year. Whitetail Ridge, as you’ll recall, is the heavy rare earth enriched resource that is adjacent to the main Bull Hill high-grade zone. The drilling on the Whitetail resource is now complete and we’re compiling the information from drilling that resource as well. But that’s not all, because we also announced that we are going to extend the drilling program in 2013 to include further delineation of what we call the main Bull Hill high-grade zone. We’re very encouraged by some of the early trade-off studies that we’ve seen and some of the resource estimates and mine plans that seem to indicate that we will be able to mine in a high-grade zone for an extended period of years. And so we wanted to further delineate that as part of the drilling program this year. And that drilling program is ongoing now and hopefully will be complete by the end of October.
TW: Randy, you have just answered the question I wanted to ask you. I’m constantly clarifying for our audience that, actually, Rare Element Resources does have heavy rare earths. Can I just get you to back up and give us a one-minute overview on what you actually have? I’d like to clarify some of this misinformation once and for all.
RS: Sure, Tracy. We refer to ourselves as a ‘world-class critical rare earths district’ now. And what that means, for us, is when you look at the elements of neodymium, praseodymium, europium, terbium, and dysprosium, we in fact are going to generate over 80% of our revenue from those elements in the project — and those will be the drivers from an economic perspective.
TW: In addition to the resource update, Randy, would you mind giving us an overview on what else Rare Element Resources has been up to? We’ve certainly been hearing a lot through the grapevine.
RS: Sure, Tracy, one of the important things we achieved earlier this year was we were able to confirm, with independent laboratories, the proprietary oxalate process technology that we had developed. That was done back in the May-June timeframe and we’ve immediately moved that bench scale confirmation into pilot plant testing. And that pilot plant testing has been ongoing for two-and-a-half to three months, and is still ongoing, and we expect to complete it sometime in the next couple of weeks.
TW: That’s actually very exciting, Randy. The pilot plant testing… you’re expecting to complete this in the next couple of weeks, is that correct?
RS: Yes, in the next couple of weeks we should have all the data at hand. Obviously there’s a tremendous amount of analysis that needs to be done regarding the data that we’ve been collecting.
TW: Randy, thank you for joining us today.
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Tracy Weslosky is the CEO for InvestorIntel Corp. and founder of InvestorIntel.com, a trusted source of online market information for investors in the capital markets, ... <Read more about Tracy Weslosky>