EDITOR: | February 19th, 2014 | 23 Comments

Alaska Legislation Sets Out $145 Million Bond Funding for Ucore’s Bokan-Dotson Ridge

| February 19, 2014 | 23 Comments
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Ucore-Rare-Metals-200x125February 19, 2014 (Source: Marketwired) — Ucore Rare Metals Inc. (TSX VENTURE:UCU)(OTCQX:UURAF) (“Ucore” or “the Company”) is pleased to comment on an initiative now before Alaska lawmakers which contemplates the financing of up to $145 Million of the Bokan-Dotson Ridge Project Capital Expenditure through the Alaska Industrial Development and Export Authority (“AIDEA” or the “Authority”).

On February 18, Senator Bert Stedman (AK-R) presented an Amendment to Alaska Senate Bill No. 99 (“SB99” or “the Bill”), originated by State Senator Lesil McGuire (AK-R) in 2013. The amended Bill would give AIDEA the authority to issue long term bonds to finance the infrastructure and construction costs of the Bokan-Dotson Ridge rare earth project up to a Principal Amount of $145,000,000.

AIDEA is a public corporation of the State of Alaska. The Authority has been active in the financing of multiple capital project initiatives in the Alaskan mining sector since 1985, including the DeLong Mountain Transportation System which serves the Red Dog Mine, the Skagway Ore Terminal, the Seward Coal Terminal, mine facilities at Fort Knox, as well as multiple non-mining capital projects, including the Federal Express Maintenance Facility in Anchorage, the Snettisham Hydroelectric Project in Juneau, and the Ketchikan Shipyard in Southeast Alaska.

Senator Stedman’s Amendment was read at the first committee hearing on the Bill on February 18. SB 99 is now expected to be scheduled before the Labor and Commerce Committee for further action in preparation for the scheduling of a vote before the full Senate and presentation to the House of Representatives during the current legislative session.

“We thank Alaskan legislators for all of the support they’ve shown for the development of Bokan Dotson-Ridge”, stated Jim McKenzie, President & CEO of Ucore. “Bokan represents an unsurpassed opportunity for Alaska to furnish materials of critical importance to American national defense, energy consumption and competitiveness in high tech applications at a world level, and Alaska lawmakers have recognized this.”

In April of last year, the Alaska State Legislature unanimously voted in favor of Senate Joint Resolution No. 8 (the “Resolution” or “SJR8”). All 39 representatives in attendance voted in favor of the Resolution, which states the Legislature’s support for continued and increased exploration, extraction, processing and production of rare earth elements in the State (see Ucore Press Release April 23, 2013:http://ucore.com/alaska-state-legislature-votes-unanimously-in-favor-of-bokan-development).

Several Representatives spoke out in favor of SJR8, including Representatives Costello, Kreiss-Tomkins, Johnson, and Millett. A video record of the discussion is available at the following link: http://ucore.com/resolution8 In discussing the prospective positive environmental aspects of the Bokan Project and China’s domination of rare earth mining and downstream processing industries, Representative Craig Johnson noted, “I see a future for Alaska where we can become a state that processes these minerals….and this could be the future of Alaska.” Representative Millett noted Alaska’s potential to play a crucial role in the US Department of Defense’s recent announcement to stockpile strategic rare earths such as dysprosium. She asked representatives to vote in favor of the Joint Resolution and to “…send a message to Congress that we are ready, willing, and able to serve their needs for rare earth elements”. The Joint Resolution, introduced in the Alaska Senate by Senator Lesil McGuire with 15 co-sponsors, passed both the Senate (with all 20 Senators voting in favor) and the Legislature unanimously.

Cautionary Notes

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

About Ucore Rare Metals Inc.

Ucore Rare Metals Inc. is a development-phase mining company focused on establishing rare metal resources with near term production potential. With multiple projects across North America, Ucore’s primary focus is the 100% owned Bokan – Dotson Ridge REE property in Alaska. The Bokan – Dotson Ridge REE project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British Columbia and has direct ocean access to the western seaboard and the Pacific Rim, a significant advantage in developing near term production facilities and limiting the capital costs associated with mine construction.

This press release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future exploration activities, legislative undertakings, events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include exploitation and exploration successes, continued availability of financing, and general economic, market or business conditions.


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Comments

  • David Mortimer

    Nice bit of news for UCORE.

    February 19, 2014 - 12:45 PM

  • hackenzac

    The only reason that Alaska has such a huge sovereign wealth fund is because they have a history of financing natural resource projects. Bakken oil is putting the Alaska north slope out of business so it makes perfect sense for the state to invest in replacement royalty projects. Imagine what kind of highway system or internet we’d have if the government stayed out and we left it to “free enterprise”. If you don’t think that there’s compelling strategic government interest in this project, you sir are simply not paying attention or worse, your Ayn Rand myopia has gotten the better of your logic circuits.

    February 19, 2014 - 5:14 PM

  • David Mortimer

    The product will be purchased by the United States DOD they have been in close contact with UCORE to supply them with HRE when the mine hits production .

    February 19, 2014 - 6:54 PM

    • Neil

      LOL, Bob made a funny

      February 20, 2014 - 6:02 AM

    • Jack Lifton

      Bob,
      You are as usual quite perspicacious. “What do you do with rare earth mineral process leach concentrates that are:
      1. Free of uranium and thorium, and
      2. Free of active aluminum, iron, and other SX process interferants ?
      The answer, today, as it has been for nearly 20 years is that you try to get them processed in China or France unless they are produced in Japan.
      The real problem for investors is their total lack of understanding of the term, “metallurgy,” as it is used in juniorland. In the case of the rare earths it is the extraction and group separation of the rare earths from ore concentrates to produce a PLS described chemically as above that is the key to being able to offer such cleaned PLS to processors or to process it yourself. Just cracling an ore chemically even to the point of 100% recovery of the contained rare earths is of NO VALUE unless the resulting solution CAN be SAFELY, EFFICIENTLY, and LEGALLY processed and/or transported. The announcements I look for will say:
      The Company has produced a clean concentrated PLS with radioactivity below legal limits for health, safety, and transportation to the processor, and it has met the processor’s specification for levels of interferant species such as Al, Fe, F as well as levels of free acid. I’m sorry to bore this audience with such details, but they are the reason that no one is rushing to complete or even to begin the construction of a total rare earth supply chain. I predict however that the Clean PLS problem will be solved for many juniors in the next 12-24 months and that 2016 will dawn with a half dozen non-Chinese global juniors in development to supply total supply chains in North America and Europe, and perhaps southeast Asia and South America. The true global issue is to bring enough SEG and HREE capacity INTO PRODUCTION outside of China to sustain Asian new end-use demand as well as the slower growth of the already large non-Chinese demand. The issue today is the maldistribution of SEG and HREE separation, refining, and meatl making capacity. China has overcapacity in all three categories, but China’s refusal to allow duty free import “processing of rare earths” for return to customers outside of China is the reason that there is a processing “crisis.” I’m going to China in a couple of weeks to again present this argument to a Chinese rare earth industry conference. I think its beginning to be noticed, In the meantime I believe that total rare earth supply chains are aborning outside of China, and, they are being promoted by people who know of what they speak (This is a reference to Ludwig Wittgenstein’s dictum that people who don’t know what they’re talking about shouldn’t talk.)
      Stay tuned.

      February 20, 2014 - 8:33 AM

      • hackenzac

        Surely there is a market for clean hree pls produced by a company like Ucore. I don’t see why the Chinese wouldn’t jump all over such a product. That a company like Ucore would be stuck with such a product in the absence of a row total supply chain is preposterous. So Bob, if the Japanese can’t use it and the rest of the world can’t handle it, China will take it regardless of whatever refusals they’re currently engaging in. Logic simply will not allow them to pass up such a product. Why would they? They need it.

        February 20, 2014 - 9:53 AM

      • Nevada George

        Jack,
        I always appreciate your expert and common sense analysis.
        Will North America ever be able to
        work-around our reliance on China?
        We know the problems and solutions??? However, due to numerous obstacles, feasibility is
        the big question. Can any of these juniors evolve into integrators?
        Will processing plants be allowed to
        be built and operated as designed?
        — and will the junior REE miners be allowed surface transportation
        to a North American processor?
        The US has indicated that they are
        cognizant of the need for strategic and critical metals. We are starting to get some lip service. However, the environmentalists still have a
        large audience of elected officials.
        The REE industry in the US needs
        to disseminate information to the public that we have/can develop REE product processing plants that are environmentally safe.
        Stakeholders such as the
        TRU Group Rare Earth Team
        are working on HRE processing technology.
        Necessity is the Mother of invention.
        I am keeping the faith that Ucore is going the be “the one” that crosses
        the finish line.
        —– I am staying tuned

        February 20, 2014 - 11:19 AM

      • vacuum

        Dennison (DNN) has Mc Clean Lake Mill (uranium) aprx 750km north of . Saskatoon. White Mesa uranium mill , Energy Fuels (UUUU, EFR.to) is said to be the only US uranium mill, located in Utah.

        Yeh, it’s uranium, not REE. However, these are in operation, and also they are also vestiges of North America’s producing past.

        One wonders why there could not be some synergy between North American REE miners and these facilities, and maybe Los Alamos too.

        At the very least perhaps it is a little ray of light vs the dreary sentiment that no strategic elements are processed in North America.

        February 20, 2014 - 10:45 PM

      • Tim Ainsworth

        Jack, are you able to make an estimate of the processing cost of a clean PLS?
        Perhaps just a broad percentage range of finished value as I imagine there would be any number of variables.
        Any guidance would be useful as there seem to be quite a number of propositions around with a mixed RE final product & historical FOB pricing on the same page.

        February 21, 2014 - 9:19 AM

  • Joe o

    So let’s assume ucore is able to finance with “free market” financing assuming they only need another 100 million(unless they pull a moly mess) what kind of potential sp wise would it have.? I have a few grand invested in it and right now it’s the only one not taking a bath
    I also own moly mess , qrm and GW
    I would be happy if two out of four make it

    February 19, 2014 - 9:30 PM

  • Lou

    Jack: China’s current stranglehold on rare earth separation capacity reminds me of a quote attributed to General Creighton Abrams in WW II. (I believe it was at the battle of the bulge.) Speaking of the German position, he said “They’ve got us surrounded, poor bastards.” It is inconceivable to me that the ROW will not eventually develop separation capacity for both economic and geopolitical strategic reasons. The question is when, not if. As you point out, if China wishes to monetize its processing over-capacity, it must open up to allow conventional tolling arrangements with ROW miners. For China, would it not have the additional benefit of slowing down and undercutting the sense of emergency that will impel the development of separation capacity outside of China? (Since we in the west do not seem capable of reacting to a crisis until it hits us in the face.)

    February 20, 2014 - 12:35 PM

  • Veritas Bob

    This is a reply to hackenzac http://investorintel.wpengine.com/rare-earth-news/alaska-legislation-sets-145-million-bond-funding-ucores-bokan-dotson-ridge/#comment-230872 .

    Let’s say that China jumps all over or can otherwise be convinced to process material mined by Ucore, How exactly doe that help meet a critical U.S. security need, and remove the threat of, or mitigate the impact of, China stopping the flow of processed critical rare earth elements to the United States in the event of a deterioration in relations between China and the U.S., to include the possibility of finding themselves on opposite sides of some armed conflict?

    Since I am not an Alaskan, I suppose that Alaskans can choose to “invest” their money as they please, but I am a Federal taxpayer, and don’t want a single penny of my tax money used for corporate welfare or for the glorification and political benefit of some opportunistic politicians. And yes, plenty of my tax money is wasted all over the country on such things, but that doesn’t mean I want it wasted at Bokan. So those politicians, and the UCore CEO who, on behalf of Ucore, so strongly approves of the government providing his company special deals, can do you know what with all that bogus flag waving. Per Ucore press release http://investorintel.wpengine.com/rare-earth-news/alaska-legislation-sets-145-million-bond-funding-ucores-bokan-dotson-ridge/ , “Bokan represents an unsurpassed opportunity for Alaska to furnish materials of critical importance to American national defense, energy consumption and competitiveness in high tech applications at a world level, and Alaska lawmakers have recognized this.”

    February 20, 2014 - 1:14 PM

  • hackenzac

    Bob: In the absence of a total supply chain, it’s perfectly legitimate to ask what good a US stockpile of rare earth oxides might be but Ucore is also a technology company so a helping hand in developing it is certainly in the interest of the US government. Of course the military/industrial/security state amounts to massive corporate welfare but that’s a little tangental to our discussion. US land grants built the railroads and there are many other examples of “free enterprise” getting a helping hand in building out if it’s in the national interests and I think that the argument that Bokan is in the national interests trumps one that says it isn’t. Free enterprise is what sent Magnequench to China in the first place so obviously unfettered capitalism isn’t a solution. The government has to step in. That’s what we hire them for.

    February 20, 2014 - 6:31 PM

  • Lou

    This from U-Core’s preliminary PEA: •Capital Cost: $221M, including a complete on-site rare earth oxide (REO) separation plant, and a contingency provision in the amount of $25M.
    •Production of REOs at site: Deployment of Solid Phase Extraction (SPE) technology to generate high purity individual rare earth oxides at the site.

    Read more at http://www.stockhouse.com/news/press-releases/2013/01/15/ucore-files-preliminary-economic-assessment-43-101-technical-document#EyuO9Ej2yqL7fHLR.99

    If U-Core is capable of producing separated rare earth oxides on-site, why does China have to come into the picture for separation? Metal and alloy and metal manufacturing capacity and expertise exists outside of China and can expand their output if there is a market. End-user manufacturing that have moved production to China to assure access to rare earth inputs can relocate if the economics dictate. What am I not understanding?

    February 20, 2014 - 6:45 PM

    • Veritas Bob

      You’re right. The PEA does have a separation plant plan. If you want a good belly laugh I had one a year+ ago when it came out), look at the REO prices in table 22.1 of the PEA (click on the link in your link). Even the alternate and sensitivity cases are hilarious.

      Let me ask you. Do you honestly believe that the whole operation, with separation facility, is going to be built for anywhere near the amount listed in the PEA, allowing even for the full contingency (reserve) to be used? And that a separation plant working as advertised will result from that expenditure? And that costs will be close to those listed? By the way, I’m still waiting for Molycorp to achieve its much advertised production cost figure of $2.77/kg REO (they only have another factor of 8 to 10 reduction in cost to get there), and to come in within 100% over budget and within 100% over scheduled time – still waiting for overdue chlor-alkali commissioning. I’m waiting to see Ucore sell its Cerium at $47.21/kg when Molycorp can’t give it away.

      February 21, 2014 - 2:18 AM

      • hackenzac

        Let me ask you. Do you honestly believe that actual reo prices 2 years from now are going to resemble anything like Table 22.1? Furthermore, they’re not going to sell the cerium. It’s getting back pasted into the mine shaft, another new fangled thing that they’re doing. You ought to click around on Intellimet’s website and get yourself up to speed on SPE. It’s a game changer. In my opinion and my money, Ucore is a best of breed company because of its coastal Alaska location and their 40 billion dollar slush fund not to mention their superior business model. Point to another row sovereign that’s coughing up this kind of dough for a strategic mine like this. I know that you don’t impress easily but the market sure was. You’re arguing that they don’t and won’t have a viable business model and I find that laughable. You’re an outlier dude. Nearly everyone else including Jack has Ucore on their short list. Let me ask you something else. What ree company do you like? Are you invested in any? If not, why not? If you are, why them?

        February 21, 2014 - 8:03 AM

        • Veritas Bob

          Go to the PEA, and crunch the numbers, removing all cerium sales, and putting in more realistic prices for other elements (take account of Molycvorp and Lynas ramping up production), and then even if you believe the cost figures, which would be a huge leap of faith, see what you get. If another HREE mine or two come on line, I think you can kiss anything near current Yttirum prices good bye. The one thing Ucore has in its favor, is getting politicians behind it to give special deals to it – we’ll have to see fi that is enough.

          By the way does anyone remember all of Molycorp’s flag waving, and then it bought Neo Materials and essentially changed into a Chinese company, with its Mountain Pass mine sending output to China for (further) processing?

          February 21, 2014 - 10:26 AM

          • hackenzac

            Bob: There’s more than one way to look at currency. It’s not the price of dysprosium. It’s the dysprosium. It’s a strategic mineral precursor that the military must procure along with the rest of an American supply chain. Profit is not the motive. Yeah, it’s money down the bottomless national security hole but that’s the way the world works. You assume normal supply and demand market forces and I would argue otherwise. The fact that Bokan has the lowest capex, opex and best hree skew in North America makes it the lowest hanging fruit, right sized as Jack puts it. Another thing that you don’t see coming, or Kingsnorth for that matter, are electric bikes, millions and millions, maybe even billions of them and every one of them will have magnets and batteries. Have you seen the air in China? It’s untenable and they know it. Chinese hree supplies will by drying up as they need to electrify badly. Magnet demand will in all probability be exceeding the expectations of some of our experts but I’m not one of them. That’s why I appreciate the opportunity to interact with all of yous.

            February 21, 2014 - 12:25 PM

      • Tim Ainsworth

        Am I reading that PEA correctly?

        889tpa Dy at $845.80kg?

        I note Dudley Kingsnorth’s most recent forecast for 2016 Dy demand was 800/850tpa and the Q4/13 average China domestic pricing for Dy $313.40.

        Would appear there is some rather broad divergence of opinion ATM.

        February 21, 2014 - 8:44 AM

        • Tim Ainsworth

          hackenzac, it may pay to read Con K’s commentary re Dy use in magnets from Moly’s Q4 2012 Con Call transcript pages 6 & 7, downloadable from their website or here: http://seekingalpha.com/article/1275811-molycorps-ceo-discusses-q4-2012-results-earnings-call-transcript?page=7
          It may help explain that Dudley Kingsnorth is not suggesting a lack of RE magnet demand, simply a lower proportion of Dy.

          February 22, 2014 - 7:25 AM

          • Bill Keenes

            Lynas estimates that for the rare earths permanent magnets sector to carry on growing at 10% a year average dysprosium content in rare earths magnets will need to fall to 0.8% from 1.8% now – assuming no new supplies of the element become available.

            Dy Oxide 99% min China is up another 3%, and that’s on top of the 3% rise at the start of the week.

            February 23, 2014 - 1:41 AM

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