RER’s Bear Lodge Project: REE’s in one of the world’s best mining Locations
Rare Element Resources Ltd. (‘RER’, AMEX: REE | TSX: RES) recently issued an updated NI 43-101 resource estimate, announcing a 65% greater measured and indicated REE (from 259 to 428 million kg) for its Bear Lodge project in the Black Hills, Wyoming, near Sundance, containing one of the richest REE deposits in North America. The State of Wyoming is also an ideal location, given this State’s favorable mining regulations. Indeed, the State and the University of Wyoming have been promoting the identification and study of REE mining prospects, offering experienced sector professionals, low cost energy, good road and rail networks and mining friendly population.
The estimate includes the resource at the heavy rare earth element (HREE) enhanced Whitetail Ridge deposit as well as critical rare earth oxides (CREOs – i.e. REE oxides with the greatest value) in all deposits. RER is very pleased by the extent of HREE enrichment of the resource. RER decided to include the Whitetail Ridge resource area as part of the project development phase – including the FS, given its potential to improve the project’s economics. The drilling results, moreover, suggest that all resource could see additional expansion both in the current deposit and in surrounding target areas. RER will continue the target drilling program in preparation of the definitive Feasibility Study (FS), which is due before the end of 2013. Production of about 11,500 tons (Total Rare Earth Oxides) could technically begin by 2015, provided all federal permits are granted. While, RER is not at production stage – therefore it has no revenue yet – it has a solid cash position and no debts.
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Encouraged by strong mineralization values (3.6% HREO at Bull Hill & White tail combined, and 7.6% HREO at Whitetail alone) RER has already performed impact studies for wildlife, water and traffic. RER is now getting ready to prepare the Environmental Impact Statement (EIS) process. The Australian Nuclear Science and Technology Organization (ANSTO) has performed tests to help RER achieve improved purification, enabling the Company to start producing heavy rare earths such as samarium, gadolinium, europium, terbium, dysprosium and neodymium-praseodymium along with the ‘lights’ such as cerium and lanthanum. RER plans to complete the initial separation into the aforementioned groups and then test further processing to separate the groups into individual rare earth oxides.
Apart from the promising mineralogy, RER can rely on strong support, allowing it to make the necessary infrastructure investments with little to no regulatory risk. This is a significant advantage, given that RER will invest some USD$ 400 million in infrastructure. Wyoming considers REE’s as a strategic asset for economic growth and rather than discouraging – as some States have done – has encouraged the establishment of REE processing facilities within its jurisdiction. Wyoming has adopted a comprehensive and clear regulatory regime, which puts an emphasis on responsible and clean practices from the outset. This requires companies to adopt strict controls; however, it also guarantees that the rules are clear and fair, reducing the risk of ‘surprises’ when the time comes to go into production. There is transparency on both sides. A Wyoming based processing facility, therefore, could attract processing contracts from beyond the State and beyond the United States themselves.
Wyoming is also rich in energy resources, which makes it cheaper to mine and process the minerals. The Bear Lodge project only faces limitations from the federal government. Indeed, while RER has the exploration permits to widen its drilling areas at the Project in Wyoming, it still has to receive federal permits to fully exploit the property. There is a need to reform the mining sector in the United States. This is hardly news for those involved in the mining sector. However, there is some pressure to move public policy in favor of easing regulations to boost resource development.
At the recent Technology Metals Summit in Toronto (#TMS2013), several panelists addressed the growing need for the US and its allies to improve their security of rare earths supply. Moreover, there was consensus that the demand for REE’s can only increase, given the rise of new technologies in all sectors, from medicine and transportation to nanotechnology and space exploration that rely on rare earth magnets. There is a new Bill before Congress, the Resource Assessment of Rare Earths (RARE) Act of 2013, which aims to improve the security of rare earth supplies while reducing reliance on China, which still dominates production of these minerals. Re. Hank Johnson re-introduced the Bill before the House of Representatives.