Rare Element Resources (NYSE:REE) (TSE:RES) said late Tuesday that it has started its 2012 drilling and exploration program at its Bear Lodge rare earth element project in Wyoming.
core drill rigs and one reverse circulation drill rig are currently at
the site, with the aim of expanding and upgrading the current reserve
and resource base at the Bull Hill deposit with infill and step-out
Infill and step-out drilling will also be taking place
at the growing Whitetail Ridge deposit, designed to expand the current
resource and upgrade a portion of the resource to the measured and
indicated categories, the company said. The Whitetail Ridge deposit is
enriched in the more valuable heavy rare earth elements (HREE) relative
to the Bull Hill deposit.
Rare Element will also be embarking on
exploration drilling this year to establish inferred resources at the
Carbon and East Taylor target areas, both of which show "significant
HREE-enrichment", the company said, as reported in May.
addition, condemnation drilling will be done on the Physical Upgrade
plant site, and on state section 16, the proposed stockpile and waste
In total, around 15,000 metres of drilling are
budgeted for the year's program, which aside from drilling, will also
include geological mapping, soil and rock chip surveys, and bulk
sampling for metallurigcal testing.
Indeed, the company said
metallurgical test-work of bulk sample material from the Whitetail
Ridge, Carbon and East Taylor areas is currently underway in Vail,
The test-work is focused on determining the best
process to recover the rare earth elements from these ores, which are
significantly enriched in heavy rare earths compared to the Bull Hill
Based on the metallurgical results, the
company will make a decision in the fourth quarter as to whether to
integrate the development of one or more of these heavy rare earths
deposits into the definitive feasibility study and permitting timeline
for the project.
Including significant zones of heavy rare
earths in the study would provide "substantial upside" to the project,
Rare Element said, as well as bring additional shareholder value. The
goal is to ramp-up to production sometime in 2016.
that by expanding our drilling program into the Whitetail Ridge, Carbon
and East Taylor deposit areas, we will provide additional benefits for
Rare Element to increase its heavy rare earth element profile," said
president and CEO, Randall Scott.
"We are dedicated to the advancement of the Bear Lodge project and maximizing the value for shareholders."
earth elements are key components of green energy technologies and
other high-tech applications such as hybrid automobiles, plug-in
electric automobiles, advanced wind turbines, computer hard drives,
metal alloys in steel, additives in ceramics and glass, and many others.
China currently produces more than 96 per cent of the 124,000
tonnes of rare-earths consumed worldwide annually, with the country
continually reducing its exports of rare earths each year.
April, the company unveiled a revised preliminary feasibility study
(PFS) for Bear Lodge, giving a net present value of $1.27 billion, at a
10 per cent discount rate after state taxes but before federal income
taxes, and an internal rate of return of 47.8 per cent 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.
company said that it sees 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.
than a month later, Rare Element released an updated NI 43-101-compliant
mineral resource estimate for the three deposits located in the Bull
Hill area of the Bear Lodge project.
The company registered a 10
per cent increase in measured and indicated resources and a 61 per cent
increase in oxide and oxide-carbonate inferred mineral resources.
Element's updated resource estimate for its Bull Hill deposit consists
of 7.5 million tons (6.8 million metric tonnes) grading 3.79% Rare Earth
Oxides (REO) in the measured and indicated categories, using a 1.5% REO
The inferred oxide and oxide carbonate stands at 25.7 million tons (23.3 million metric tonnes) at a grade of 2.86% REO.