Demonstration Plant Planned to Advance Development Work
Company Website:
http://www.rareelementresources.com
LAKEWOOD, Colo. -- (Business Wire)
Rare Element Resources Ltd. (NYSE MKT: REE and TSX: RES) (the
âCompanyâ), a mineral resources company advancing development of the
Bear Lodge Critical Rare Earth Project (the âProjectâ), reported today
that it has filed its unaudited consolidated financial statements on
Form 10-Q for the three months and nine months ended September 30, 2014
on www.sec.gov
and www.sedar.com.
âDuring the quarter, we released a very positive Preliminary Feasibility
Study on the Bear Lodge Project that integrated the results of the
multiple advancements we made over the last two years,â said Randall J.
Scott, President and Chief Executive Officer. âSince then we have built
on this with success in our test work on an innovative approach to
separation and further optimizing of our proprietary recovery process â
both of which will contribute to lower costs. We are also advancing
plans for construction of a larger-scale demonstration plant, one that
will process between one and three tons of material a day, to minimize
start-up and commissioning risk by providing key data on materials of
construction, equipment selection and material handling parameters. This
work should allow us to smoothly transition from start-up to full
operations without many of the operational issues experienced by others
in the sector. With respect to the permitting side of the Project, the
alternatives analysis under the Environmental Impact Statement process
has not been completed as originally scheduled. Therefore, we are not
able to complete the application process for certain licenses and
permits in the fourth quarter of 2014 as previously anticipated. This
has resulted in our adjusting expectations for Project commissioning to
mid-2017.â
Financial Results (Please note
that financial results published by the Company are all stated in U.S.
Dollars.)
For accounting purposes, the Company is classified as an exploration
stage company and, as such, does not have production-related revenues at
this time. The net loss for the quarter ended September 30, 2014,
totaled $3.6 million, or $0.08 per share, compared with a net loss of
$6.9 million, or $0.15 per share, for the same period in 2013. The key
drivers behind the reduced year-over-year loss were primarily:
-
A decrease in exploration and evaluation expense of $3.3 million, the
result of a shift from exploration activities to development-related
activities; and
-
Lower corporate administrative cost of $0.5 million, primarily due to
lower stock-based compensation expense and the Companyâs continued
focus on containing costs; partially offset by
-
An unfavorable variance in currency translation of $0.5 million.
For the nine months ended September 30, 2014, the net loss was $11.1
million, or $0.23 per share, compared with a net loss of $16.5 million,
or $0.36 per share, for the same period in 2013. The key drivers behind
the improved year-over-year results were primarily:
-
A decrease in exploration and evaluation expenses of $3.3 million;
-
Lower corporate administrative cost of $1.3 million; and
-
A favorable variance in currency translation losses of $0.9 million.
Cash Balance
As of September 30, 2014, the Company had cash and cash equivalents of
$12.9 million, compared with $16.1 million at June 30, 2014. The net
cash used of $3.2 million during the quarter was spent primarily on
permitting, engineering and economic evaluation work to support the
Preliminary Feasibility Study (PFS) (please see release dated August 26,
2014 and the related NI 43-101 Technical Report published on October 10,
2014 for additional details on the PFS), trench work and general
corporate expenses.
Current cash balances will be used to fund the following work programs:
-
Continued support of efforts by the U.S. Forest Service (USFS) and the
third-party contractor to prepare the Environmental Impact Study (EIS)
on the Project;
-
Application for other permits and licenses, as appropriate, once the
EIS alternatives assessment has been completed;
-
Continued evaluation of recommendations identified in the PFS for
potential inclusion in the Feasibility Study (FS), including certain
process optimization methods and the on-going analysis of technical
advancements made in downstream elemental separation technology;
-
Distribution of separated rare earth products resulting from current
test work to potential offtake partners for evaluation; and
-
Initiation of the FS, pending Board approval.
Over the next two years, as we continue to move the Bear Lodge Project
toward construction, the Company anticipates that it will need to raise
between $45 and $60 million to advance the EIS and necessary permitting;
to complete work on the FS and detailed engineering; and to design,
construct and operate a larger-scale (one to three tons per day)
demonstration plant to generate key operating data to inform the FS and
detailed engineering as well as provide large product samples to
prospective customers.
The unaudited quarterly financial statements are available through the
Canadian securities regulatory authorities at www.sedar.com,
and with the U.S. Securities and Exchange Commission at www.sec.gov.
They are also available on the Companyâs website at www.rareelementresources.com.
Permitting Update
âWe have seen some delays by the U.S. Forest Service in the past few
months in the preparation of the alternatives analysis for the EIS,â
said Jaye T. Pickarts, Chief Operating Officer. âThis has impacted the
Companyâs ability to complete the application process for permits
required from other agencies. We are pleased that the Forest Service has
stated its intent to make up the time lost and remain on its original
schedule, but we currently expect that delays related to the other
applications will impact our schedule by three to six months. We intend
to use this time productively by building and operating a demonstration
plant, which will allow us to generate key data for the detailed
engineering portion of development and avoid some of the start-up
difficulties that have plagued others in the industry. As a result, we
are shifting our anticipated timing for Project commissioning from late
2016 to mid-2017.â
As originally outlined in the U.S. Forest Service timeline, the
alternatives analysis for the EIS was expected to be completed in August
2014. At the time of this press release, however, the identification of
alternatives has not been finalized and the impact analysis has not
begun. Applications for some of the necessary state and federal permits
depend on the project modifications, if any, that may be determined from
the EIS alternatives analysis. The Companyâs development timeline
required those applications to be made in the fourth quarter, but it now
expects they will not be made until the first quarter of 2015. While the
Forest Service has stated it expects to be able to make up the current
delay and remain on schedule to deliver a draft EIS in Spring 2015, the
resultant delay in other permitting is expected to push back the
anticipated commissioning of the Project until mid-2017.
Rare Element Resources Ltd. is a publicly traded mineral resource
company focused on exploration and development of rare-earth element
deposits, specifically those with significant distribution of critical
rare earths. The Company is advancing development of the Bear Lodge
Project, located in northeast Wyoming. Bear Lodge is a significant
mineralized district containing many of the less common, more valuable
critical rare earths that are essential for electronics, fiber optics,
laser systems for health and defense, as well as many evolving green
technologies, like hybrid cars, solar panels and wind turbines.
Permitting and feasibility work on the Project continue to advance. The
Company is a member of the U.S. Department of Energyâs Critical
Materials Institute, a combined government and private sector
organization committed to eliminating supply chain issues for rare
earths and other critical elements. Please see CMIâs website at https://cmi.ameslab.gov/
for additional details on its mission and members.
For additional information, please visit the Companyâs website at www.rareelementresources.com
or contact Robbin Lee at 720-278-2462 or rlee@rareelementresources.com.
Forward Looking Statements
This news release contains forward-looking statements within the meaning
of securities legislation in the United States and Canada. Except for
statements of historical fact, certain information contained herein
constitutes forward-looking statements. Forward-looking statements are
usually identified by our use of certain terminology, including "will",
"believes", "may", "expects", "should", "seeks", "anticipates", "plans",
"has potential to", or "intends" (including negative or grammatical
variations thereof) or by discussions of strategy or intentions. Such
forward-looking statements include statements regarding: the estimated
Project timing , the estimated Project economics and parameters, the
impact of the Companyâs proprietary technology on production, the timing
of the draft EIS and filing of other permits applications; mineral
resource and reserve estimates; the timing and expected results of a
definitive Feasibility Study including the potential for upside as a
results of the incorporation of Project opportunities into the
definitive Feasibility Study; the timing for the Company to update the
schedule for the Project, processing test work and expected results;
permitting process and progress; the expected commissioning of the
Project and Project development plans for the future. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results or
achievements to be materially different from any future results or
achievements expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include,
but are not limited to, the progress of our Bear Lodge Project;
fluctuations in demand for, and price of, rare earth products; success
of process technology under testing or development; results from
geological evaluations and programs; timing of and unexpected events at
the Bear Lodge property; delay or failure to receive government
approvals and permits; our ability to obtain financing for the Project
on acceptable terms or at all; changes in U.S. and Canadian securities
markets; and general economic conditions. There can be no assurance that
future developments affecting the Company will be those anticipated by
management. Please refer to the discussion of these and other factors in
our Annual Report on Form 10-K for the year ended December 31, 2013. We
expect that the above estimates as to development plans, technology and
other processes, time frames and financial needs will change as new
information is received and that actual results will vary from these
estimates, possibly by material amounts. While we may elect to update
these estimates at any time, we do not undertake to update any estimate
at any particular time or in response to any particular event. Investors
and others should not assume that any forecasts in this news release
represent management's estimate as of any date other than the date of
this news release.
Contacts:
Rare Element Resources Ltd.
Robbin Lee, 720-278-2462
rlee@rareelementresources.com
Source: Rare Element Resources Ltd.
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