Mr. Randall Scott reports
RARE ELEMENT REPORTS 10 PERCENT INCREASE OF M & I RARE-EARTH MINERAL RESOURCES AND 61 PERCENT INCREASE OF OXIDE AND OXIDE-CARBONATE INFERRED MINERAL RESOURCES
Rare Element Resources Ltd. has released the results of an updated National Instrument 43-101-compliant mineral resource estimate of rare earth elements (REE) plus yttrium contained in three deposits located in the Bull Hill area of the Bear Lodge project, Wyoming. The updated resource estimate of the Bull Hill deposit consists of 7.5 million tons (6.8 million metric tonnes) grading 3.79 per cent REO (rare earth oxides) in the measured and indicated categories, up from 6.8 million tons (6.2 million metric tonnes) averaging 3.75 per cent REO reported in a news release dated Jan. 4, 2012, both using a cut-off grade of 1.5 per cent REO (see accompanying table). The total pounds of REO contained in all the high-grade deposits in all resource categories increased by 38 per cent from 1,831 million pounds (832 million kilograms) to 2,525 million pounds (1,148 million kiograms) (see accompanying table). The inferred oxide plus oxide-carbonate resource increased by about 61 per cent, from 16.5 million tons (15 million metric tonnes) grading 2.76 per cent REO in the Jan. 4, 2012, news release to 25.7 million tons (23.3 million metric tonnes) at a grade of 2.86 per cent REO. The near-surface oxide plus oxide-carbonate resources are those that are potentially amenable to open pit mining and have favourable metallurgical characteristics. The current resource estimate is updated from that provided in the company's National Instrument 43-101 technical report dated April, 2012, and includes all the drill holes from Rare Element's 2011 drilling program. The mineral resources were estimated by Ore Reserves Engineering (ORE), an independent consultant.
Randall Scott, president and chief executive officer, stated: "We are pleased with the results received to date from the exploration successes at the Bear Lodge project. It is significant to note that the increase in the resource base as announced in this press release is based on the totality of results from all the holes that were drilled in 2011, and includes those that were not yet available for our previous press releases. Additionally, we have seen an increase of 46 per cent in the inferred resources at the Whitetail Ridge deposit, which has a higher concentration of heavy REEs (HREEs). We are anxious to begin the 2012 exploration and drilling activities to expand all deposits and compare the new results to the excellent results we received in 2011."
The new resource estimate is derived from an REE drill hole database that includes 139 core holes completed by the company between 2008 and 2011. The estimate focuses on the dike sets in the main Bull Hill deposit (including Bull Hill West), plus the Bull Hill Northwest and Whitetail Ridge deposit areas. In addition, the drilling indicates significant potential for expansion of all three deposit areas, for discovering mineralization in the undrilled areas between the deposits, and for the definition of heavy REE-enriched resources in the East Taylor and Carbon targets, both of which were drilled in 2011.
The total mineral resources estimate by ORE for the three deposits at a cut-off grade of 1.5 per cent REO is summarized in the accompanying table for the different oxidation zones, including the oxide (OX), oxide-carbonate (OxCa), transitional (tran) and sulphide/unoxidized (sulph) zones.
ESTIMATED REE MINERAL RESOURCES FOR THE MAIN BULL HILL,
BULL HILL NORTHWEST AND WHITETAIL RIDGE DEPOSITS
(in the oxide, oxide-carbonate, transitional and unoxidized
mineralization zones, for all resource categories,
at a cut-off grade of 1.5 per cent)
Total Main NW Bull
Resource class Zone Cut-off Tons Grade Tons Grade
(%) (Mt) (% REO) (Mt) (% REO)
Measured OX 1.5 1.1 4.08 - -
OxCa 1.5 1.0 3.81 - -
Total 1.5 2.2 3.95 - -
Indicated OX 1.5 3.0 3.75 - -
OxCa 1.5 2.4 3.68 - -
Total 1.5 5.4 3.72 - -
Measured and
indicated OX 1.5 4.1 3.84 - -
OxCa 1.5 3.4 3.72 - -
Total 1.5 7.5 3.79 - -
Inferred OX 1.5 12.7 3.06 1.3 2.57
OxCa 1.5 6.7 2.81 0.2 2.00
OX + OxCa 1.5 19.4 2.98 1.5 2.50
TRAN 1.5 1.3 3.01 0.1 2.27
Sulph 1.5 6.5 2.70 0.9 2.62
Tran + Sulph 1.5 7.8 2.75 1.0 2.58
Total 1.5 27.2 2.91 2.5 2.53
Whitetail Total
Resource class Zone Cut-off Tons Grade Tons Grade REO
(%) (Mt) (% REO) (Mt) (% REO) (Mlb)
Measured OX 1.5 - - 1.1 4.08 92
OxCa 1.5 - - 1.0 3.81 78
Total 1.5 - - 2.2 3.95 170
Indicated OX 1.5 - - 3.0 3.75 222
OxCa 1.5 - - 2.4 3.68 179
Total 1.5 - - 5.4 3.72 400
Measured and
indicated OX 1.5 - - 4.1 3.84 314
OxCa 1.5 - - 3.4 3.72 257
Total 1.5 - - 7.5 3.79 571
Inferred OX 1.5 3.1 2.71 17.1 2.96 1,012
OxCa 1.5 1.7 2.14 8.6 2.66 459
OX + OxCa 1.5 4.8 2.51 25.7 2.86 1,471
TRAN 1.5 0.0 2.23 1.4 2.94 82
Sulph 1.5 0.1 2.08 7.5 2.69 401
TRAN + Sulph 1.5 0.1 2.12 8.9 2.73 483
Total 1.5 4.9 2.50 34.6 2.83 1,954
The distribution of individual REOs for the total measured and indicated resource is given in the accompanying table, and another table shows the distribution of individual REOs for the inferred resources in the oxide and oxide-carbonate zones.
DETAILED REE GRADES OF INDIVIDUAL REO FOR MEASURED AND INDICATED RESOURCES OF OXIDE AND
OXIDE-CARBONATE ZONE MINERALIZATION IN THE BULL HILL DEPOSIT
Measured Indicated
Oxide plus Total Oxide plus Total
Parameters Oxide carb oxide Oxide carb oxide
Tons resource (M) 1.13 1.02 2.15 2.95 2.43 5.38
Volume resource (ft3) 17 15 33 45 36 81
Tonnage factor (ft3/ton) 15.3 14.9 15.1 15.3 14.9 15.1
% REO (%) 4.08 3.81 3.95 3.75 3.68 3.72
Million lb REO (M) 92 78 170 222 179 400
% cerium oxide Ce2O3 1.74 1.67 1.71 1.64 1.62 1.63
% lanthanum La2O3
oxide 1.20 1.04 1.12 1.06 0.99 1.03
% neodymium Nd2O3
oxide 0.69 0.69 0.69 0.65 0.67 0.66
% praseodymium Pr2O3
oxide 0.198 0.191 0.195 0.187 0.185 0.186
% samarium oxide Sm2O3 0.108 0.106 0.107 0.098 0.104 0.101
% gadolinium Gd2O3
oxide 0.057 0.047 0.052 0.047 0.048 0.047
% yttrium Y2O3 0.041 0.027 0.035 0.028 0.027 0.028
% europium oxide Eu2O3 0.024 0.022 0.023 0.021 0.021 0.021
% dysprosium Dy2O3
oxide 0.0144 0.0098 0.0122 0.0101 0.0096 0.0099
% terbium oxide Tb2O3 0.0047 0.0035 0.0042 0.0036 0.0035 0.0036
% erbium oxide Er2O3 0.0032 0.0022 0.0027 0.0022 0.0023 0.0022
% ytterbium Yb2O3
oxide 0.0018 0.0015 0.0017 0.0013 0.0014 0.0014
% holmium oxide Ho2O3 0.00163 0.00109 0.00138 0.00109 0.00108 0.00109
% lutetium oxide Lu2O3 0.00023 0.00019 0.00021 0.00017 0.00019 0.00018
% thulium oxide Tm2O3 0.00028 0.00020 0.00024 0.00019 0.00020 0.00020
Total light 3.935 3.701 3.825 3.638 3.571 3.608
Total heavy 0.148 0.114 0.132 0.114 0.114 0.114
Fraction heavy 0.036 0.030 0.033 0.030 0.031 0.031
Measured and indicated
Oxide plus Total
Parameters Oxide carb oxide
Tons resource (M) 4.09 3.45 7.54
Volume resource (ft3) 63 51 114
Tonnage factor (ft3/ton) 15.3 14.9 15.1
% REO (%) 3.84 3.72 3.79
Million lb REO (M) 314 257 571
% cerium oxide Ce2O3 1.67 1.63 1.65
% lanthanum La2O3
oxide 1.10 1.01 1.06
% neodymium Nd2O3
oxide 0.66 0.68 0.67
% praseodymium Pr2O3
oxide 0.190 0.187 0.188
% samarium oxide Sm2O3 0.101 0.105 0.103
% gadolinium Gd2O3
oxide 0.049 0.048 0.049
% yttrium Y2O3 0.032 0.027 0.030
% europium oxide Eu2O3 0.021 0.021 0.021
% dysprosium Dy2O3
oxide 0.0113 0.0097 0.0105
% terbium oxide Tb2O3 0.0039 0.0035 0.0037
% erbium oxide Er2O3 0.0025 0.0023 0.0024
% ytterbium Yb2O3
oxide 0.0015 0.0014 0.0014
% holmium oxide Ho2O3 0.00124 0.00108 0.00117
% lutetium oxide Lu2O3 0.00019 0.00019 0.00019
% thulium oxide Tm2O3 0.00022 0.00020 0.00021
Total light 3.720 3.610 3.670
Total heavy 0.124 0.114 0.119
Fraction heavy 0.032 0.031 0.031
DETAILED REE GRADES OF INDIVIDUAL REO FOR INFERRED RESOURCES FROM ALL MINERALIZED
ZONES IN THE BULL HILL DEPOSIT
Oxide plus Total
Parameters Oxide carb oxide Transition Sulphide
Tons resource (M) 17.1 8.6 25.7 1.4 7.5
Volume resource 262 127 389 20 88
Tonnage factor (ft3/ton) 15.3 14.7 15.1 14.1 11.8
% REO 2.96 2.66 2.86 2.94 2.69
Million lb REO (M) 1,012 459 1,471 82 401
% cerium oxide Ce2O3 1.29 1.17 1.25 1.30 1.20
% lanthanum
oxide La2O3 0.77 0.68 0.74 0.79 0.73
% neodymium
oxide Nd2O3 0.53 0.49 0.52 0.52 0.47
% praseodymium
oxide Pr2O3 0.149 0.135 0.144 0.146 0.134
% samarium oxide Sm2O3 0.086 0.078 0.084 0.082 0.072
% gadolinium
oxide Gd2O3 0.046 0.039 0.044 0.038 0.034
% yttrium Y2O3 0.043 0.032 0.039 0.023 0.020
% europium oxide Eu2O3 0.020 0.017 0.019 0.017 0.015
% dysprosium
oxide Dy2O3 0.0137 0.0105 0.0127 0.0083 0.0072
% terbium oxide Tb2O3 0.0041 0.0032 0.0038 0.0028 0.0026
% erbium oxide Er2O3 0.0028 0.0022 0.0026 0.0017 0.0016
% ytterbium
oxide Yb2O3 0.0016 0.0012 0.0014 0.0010 0.0009
% holmium oxide Ho2O3 0.00160 0.00122 0.00147 0.00091 0.00079
% lutetium oxide Lu2O3 0.00021 0.00016 0.00019 0.00014 0.00012
% thulium oxide Tm2O3 0.00029 0.00022 0.00027 0.00017 0.00014
Total light 2.828 2.556 2.737 2.843 2.606
Total heavy 0.134 0.106 0.124 0.093 0.082
Fraction heavy 0.045 0.040 0.044 0.032 0.031
Total tran
Parameters plus sulphide Total
Tons resource (M) 8.9 34.6
Volume resource 107 496
Tonnage factor (ft3/ton) 12.1 14.4
% REO 2.73 2.83
Million lb REO (M) 483 1,954
% cerium oxide Ce2O3 1.22 1.24
% lanthanum
oxide La2O3 0.74 0.74
% neodymium
oxide Nd2O3 0.48 0.51
% praseodymium
oxide Pr2O3 0.136 0.142
% samarium oxide Sm2O3 0.073 0.081
% gadolinium
oxide Gd2O3 0.035 0.042
% yttrium Y2O3 0.020 0.034
% europium oxide Eu2O3 0.015 0.018
% dysprosium
oxide Dy2O3 0.0074 0.0113
% terbium oxide Tb2O3 0.0026 0.0035
% erbium oxide Er2O3 0.0016 0.0024
% ytterbium
oxide Yb2O3 0.0009 0.0013
% holmium oxide Ho2O3 0.00081 0.00130
% lutetium oxide Lu2O3 0.00013 0.00017
% thulium oxide Tm2O3 0.00015 0.00024
Total light 2.644 2.713
Total heavy 0.084 0.114
Fraction heavy 0.031 0.040
The distribution of individual REOs for the inferred resource at the Whitetail Ridge deposit is given in the accompanying table. Note the significant enrichment in HREE in the Whitetail Ridge deposit relative to the Bull Hill deposit.
DETAILED REE GRADES OF INDIVIDUAL REO FOR INFERRED RESOURCES FROM THE
WHITETAIL RIDGE DEPOSIT
Whitetail inferred resource
Parameters Oxide Oxide plus carb Ox+OxCa
Tons resource (M) 3.074 1.718 4.792
Volume resource 46.5 25.0 72
Tonnage factor (ft3/ton) 15.1 14.6 14.9
% REO 2.71 2.14 2.51
Million lb REO 167 74 240
% cerium oxide Ce2O3 1.11 0.90 1.03
% lanthanum oxide La2O3 0.71 0.53 0.64
% neodymium oxide Nd2O3 0.48 0.39 0.45
% praseodymium oxide Pr2O3 0.131 0.103 0.121
% samarium oxide Sm2O3 0.089 0.069 0.082
% gadolinium oxide Gd2O3 0.060 0.049 0.056
% yttrium Y2O3 0.069 0.058 0.065
% europium oxide Eu2O3 0.024 0.018 0.022
% dysprosium oxide Dy2O3 0.0233 0.0194 0.0219
% terbium oxide Tb2O3 0.0065 0.0052 0.0061
% erbium oxide Er2O3 0.0044 0.0038 0.0042
% ytterbium oxide Yb2O3 0.0020 0.0017 0.0019
% holmium oxide Ho2O3 0.00269 0.00228 0.00255
% lutetium oxide Lu2O3 0.00025 0.00022 0.00024
% thulium oxide Tm2O3 0.00041 0.00036 0.00039
Total light 2.520 1.984 2.328
Total heavy 0.193 0.158 0.181
Fraction heavy 0.071 0.074 0.072
Notes
- REOs include Ce2O3, La2O3, Nd2O3, Pr2O3, Sm2O3,
Gd2O3,,Y2O3, Eu2O3, Dy2O3, Tb2O3, Er2O3 and other minor oxides listed
in general order of decreasing abundance in the deposits (see tables).
- The resources estimates are classified as measured, indicated and
inferred mineral resources as defined by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and referenced in National Instrument 43-101.
- ORE considers a cut-off grade in the range of 1 to 2.5 per cent REO to be
reasonable in estimation of potentially economic resources. A cut-off
grade of 1.5 per cent REO is selected as the base case. Low-grade material above
the cut-off grade of 0.5 per cent is undergoing metallurgical testing to determine if a
simple low-cost process can result in its being upgraded.
- A detailed program of core sampling and bulk density measurement was
conducted successfully during the 2010/2011 drilling programs, especially
for oxide mineralization, to ensure the most accurate data.
- For the purposes of this resource estimate, light rare earths (LREE) are
defined as Ce2O3, La2O3, Nd2O3, Pr2O3 and Sm2O3l, and HREEs are defined as Gd2O3, Y2O3, Eu2O3, Dy2O3, Tb2O3, Er2O3 and
other minor oxides listed in general order of decreasing abundance (see tables).
Resources were estimated using inverse-distance weighting with grade zones to differentiate between high-grade and stockwork mineralization. High-grade mineralization was defined as a minimum 30 feet (6.1 metres) true width above 1.5 per cent for the main southwest area. Slightly different cut-off grades and minimum widths were used in other areas. Drill holes were composited to nominal 10-foot (3.1 metres) true-width intervals for estimation. Grades were not capped, but oxide and oxide-carbonate grades were adjusted downward for estimation of the transition and sulphide zones to compensate for the significant increase in grade in the oxidized zones. Grades were estimated using trend surfaces to interpolate parallel to the carbonatite/FMR (iron (Fe) oxide plus magnesium (Mn) oxide plus REE) dike orientation. The resource model blocks are 10-by-10-by-10-foot cubes. Based on four-year average REO prices, the cut-off grade of 1.5 per cent REO was selected near the high point of a range of likely cost scenarios. As additional data are gathered, work will continue on the resource estimates with further evaluation and refinement.
Geology and mineralization
The Bull Hill deposit contains the bulk of the current resources. The deposit comprises a steeply dipping FMR-carbonatite dike swarm with dominant northwesterly and subordinate northerly trends. Carbonatite dikes at depth are interpreted to transition toward the surface into either oxide-carbonate bodies or FMR bodies, which range in size from submillimetre veinlets to large dikes more than 100 feet (30 metres) in width. The Bull Hill Northwest deposit shares many characteristics with the Bull Hill deposit. Northerly striking mineralized bodies predominate at Bull Hill Northwest. The dikes are part of an FMR/carbonatite dike system that appears to be separate from the Bull Hill dike system.
The Whitetail Ridge deposit is more enriched in HREEs, and is distinguished by a zone of FMR stockwork, some dikes and a coincident geophysical anomaly. The size of the geophysical anomaly (approximately 1,400 by 2,000 feet elongated northeasterly) provides an indication that the REE target may be larger than others in the district. Expansion of the Whitetail Ridge resource is a key objective of the company's 2012 drilling program. Anther objective of the 2012 drilling program will be the development of National Instrument 43-101-compliant resources for the HREE-enriched mineralization at the Carbon and East Taylor target areas.
The major dike sets in all of the resource areas are accompanied by peripheral zones of lower-grade stockwork REE mineralization. The term stockwork refers to a rock cut by a network of small veins or dikes that contain the mineralization. REE grades in the stockwork zones range between about 0.5 per cent to 2 per cent REO. The company is continuing its investigation of low-cost physical processing methods to upgrade the contained REE mineralization in the stockwork for eventual inclusion with the resources.
Cut-off grade and metallurgy
The resource size is sensitive to an assumed cut-off grade, which is sensitive to metallurgical operating costs. The company is advancing its rare earth metallurgical studies at: (i) Mountain States Research & Development International (MSRDI), Vail, Ariz., under the direction of Dr. Roshan Bhappu, PE; (ii) Nagrom, Perth, Australia, under the direction of Tony Wilkinson; and (iii) Hazen Research, Golden, Colo. The objective for each of these testing laboratories is the development and optimization of an effective and cost-efficient metallurgical flow sheet. The metallurgical testing program will continue in 2012 on mineralized bulk core samples and surface bulk samples collected during 2011. Metallurgy of the FMR oxide zone is well established and was reported previously. Metallurgical testing of the oxide-carbonate zone resource is in progress.
Mineral resources are not reserves
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss and dilution. These mineral resource estimates are in the measured, indicated and inferred mineral resource categories. Inferred mineral resources are normally considered too speculative geologically for the application of economic considerations that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to measured and indicated mineral resource categories through further drilling, or into mineral reserves once economic considerations are applied.
Rare Element announced positive economic results from its prefeasibility study (PFS) on March 1, 2012, and a revised news release on April 12, 2012. The PFS established a proven plus probable mineral reserve for the Bull Hill deposit that contains 7,914,000 tons (7.2 million metric tonnes) at a grade of 3.12 per cent REO and at a cut-off grade of 1.1 per cent REO.
Quality assurance
The mineral resource estimate was completed by Alan C. Noble, PE, principal engineer of ORE, and is based on geological interpretations supplied by the company to ORE and subsequently modified by ORE. Mr. Noble is an independent qualified person for the purposes of National Instrument 43-101, standards of disclosure for mineral projects, of the Canadian Securities Administrators, and Mr. Noble has verified the data disclosed in this release.
The Rare Element field programs were carried out under the supervision of Dr. James G. Clark, vice-president of exploration, John Ray and Dr. Ellen Leavitt, who is a qualified person for the purposes of National Instrument 43-101, standards of disclosure for mineral projects, of the Canadian Securities Administrators. A detailed quality assurance/quality control program was implemented for the 2007 through 2011 drill programs. The quality assurance/quality control program was organized by Dr. Jeffrey Jaacks. Dr. Jaacks and Dr. Clark have verified the sampling procedures and quality assurance/quality control data delivered to ORE. They share the opinion that the data are of good quality and suitable for use in the resource estimate.
A full table of significant drill results from the company's exploration programs from 2004 to 2011, along with maps and sections detailing the location of the drill holes, are available at Rare Element's website.
Donald E. Ranta, PhD, PGeo, serves the board of directors of the company as an internal technically qualified person. Technical information in this news release has been reviewed by Dr. Ranta, in addition to the others mentioned above, and has been prepared in accordance with Canadian regulatory requirements that are set out in National Instrument 43-101. This news release was prepared by company management, which takes full responsibility for content.
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