Rare Element's Scott sees "busy 2012" ahead as Bear Creek advances

Rare Element Resources (TSE:RES)(AMEX:REE) is set for an eventful year as it advances its Bear Lodge rare earth elements project in Wyoming.
Late last week, the company unveiled a revised preliminary feasibility study (PFS) for Bear Lodge, giving a net present value of $1.27 billion, at a 10 percent discount rate after state taxes but before federal income taxes, and an internal rate of return of 47.8 percent with two-year payback of initial capital.
The PFS outlined initial capital costs of $334 million, with life-of-mine capital estimated at $404 million.
The company said that it sees an average annual operating costs of $61.8 million and operating costs of $194 per tonne mined and $2.94 per kilogram of bulk mixed rare earth carbonate concentrate.
In a conference call Tuesday, Rare Element's chief executive Randall Scott said: "We have a busy 2012 in front of us."
Scott outlined the changes in the revised preliminary feasibility study, which included a change to the capacity at the hydrometallic plant based on a review of ore grades and future market demand.
This has resulted in a smaller plant with lower capital costs.
Scott said that "resources are substantial" at Bear Lodge and the recent filings have not included additional inferred oxide resources of 15 million tonnes at 2.76% REO.
Looking forward, Scott said that the current drilling program has the goal of delineating targets at Carbon and East Taylor within the Bear Lodge project.
"We're very excited about additional drilling to firm-up resources," Rare Element's Scott said.
Rare Element is currently in the planning stages of a full definitive feasability study and Scott said that the biggest hurdle going forward was the environmental permitting process and impact statement.
The company will start the environmental permitting process before the end of April.
Rare earth elements are key components of the green energy technologies and other high-technology applications. Some of the major applications include high-strength magnets, hybrid automobiles, electric automobiles, advanced wind turbines and additives in ceramics and glass, among many others uses.
China currently produces more than 96 percent of the 124,000 tonnes of rare-earths consumed annually worldwide, and China has been reducing its exports of rare earths for a number of years. The market is projected to grow rapidly as these green technologies are implemented on a broad scale.