Rare Element begins pilot plant tests, completes metallurgical tests at Bull Hill in Wyoming

Rare Element Resources (TSE:RES)(AMEX:REE) announced Thursday it completed the metallurgical testing on the near-surface high-grade rare earth vein on the Bull Hill deposit at its wholly owned Bear Lodge rare earth element (REE) property, located in the northeast corner of Wyoming.

The company also announced the start of pilot plant testing, in order to define an economical ore process and to develop a design that will enable it to scale up to commercial operation, it said.
Rare Element shares in Toronto were unmoved in morning trading, having closed on Wednesday at $8.26.
REEs are key components in several "green" technologies, including hybrid and electric automobiles and advanced wind turbines, and have several military applications. China currently produces over 95% of the 130,000 tonnes of REEs consumed globally each year.

A mineralization of low-grade stockwork, grading less than 1.5% REO, surrounds the high-grade vein on the Bull Hill deposit. Rare Element said this low-grade resource will be mined in the current pit design to allow for easier access to high-grade areas, which extend to up to 500 feet in depth.

Bench-scale metallurgical testing evaluated the near-surface, oxidized high-grade, REE veins in the area.

A -48 mesh sample posted a recovery rate of 91.1% of the rare earth oxide (REO) at a grade of 17.83% REO. Other notable results from the tests include 20.6% REO from a -325 mesh sample, with an 84.8% recovery rate, and 21.68% REO from a -500 mesh sample, at a 79.1% recovery rate. This resource will be mined in a two-step process, involving both physical upgrading and chemical leaching.

The pilot plant testing, which commenced earlier this month, will process approximately 13 tonnes of high-grade and stockwork mineralized material over the next several months. The results will help Rare Element to develop a pre-feasibility study and support the ongoing environmental permitting process.

Both the high-grade material, measuring between 3.5% and 6.0% REO, and the stockwork material, grading between 0.5% and 1.5% REO, will be fed at a rate of 1,000 short tons per day.

In other news, Rare Element discovered regions of high-grade heavy REE to the west of the Bull Hill deposit, on the Whitetail Ridge area, and in the East Taylor and Carbon target areas. Preliminary characterization includes grades over 3% REO, as well as high amounts of light REEs.

The company is currently collecting samples from the area, which is particularly enriched in europium, terbium, dysprosium, and gadolinium, and with the East Taylor and Carbon targets also containing significant yttrium. Metallurgical testing will begin in the fourth quarter of 2011.