Rare Element Resources Ltd. · OTC:REEMF
Rare Element Resources — Investor Presentation (June 2010)
40 slides from Rare Element Resources's investor presentation, June 2010
Slide 1: Corporate Overview
Corporate Overview RARE-EARTH ELEMENTS & GOLD Management Presentation June 2010 1
Slide 2: Disclaimer
Disclaimer • The information contained herein, while obtained from sources which we believe are reliable, is not guaranteed as to its accuracy or completeness. The company is an exploration company and its mineral project has yet to be proven to be economic. Many references to geologic and technical
Slide 3: Vision
Vision Creating shareholder value through: • A foundation in rare-earth metals development • A future in gold exploration and development 3
Slide 4: Company Highlights
Company Highlights Exploring the Bear Lodge Property, which potentially hosts: • One of the largest deposits of disseminated rare-earth elements (REEs) in North America(1), with high-grade zones – “Bear Lodge Project” • NI 43-101 inferred REE resource: 17.5 mm tons @ 3.46% REO(2) • Carbonatite depos
Slide 5: Bear Lodge Location and Infrastructure
Bear Lodge Location and Infrastructure Bear Lodge Mountains, Wyoming, USA Spearfish, SD I-90 Power & paved road Excellent Mining Infrastructure Rail – 35 mi Black • Paved road and power lines within 2 Gillette, WY miles of project site 60 mi • 35 miles to nearest railhead Hills • Skilled labor and w
Slide 6: Northern Black Hills Gold Belt
Northern Black Hills Gold Belt Bear Lodge & Sundance Projects Bear Lodge Mountains 40 M oz gold 9 M oz gold Black Hills 6
Slide 7: Bear Lodge Geology & General Target Areas
Bear Lodge Geology & General Target Areas Simplified Geologic Map Corral Carbon Bull Hill BH Taylor Richardson Targets Fracture-Fault Control Smith Breccia Hosted Sediment Hosted Precambrian Granite Hosted Carbonatite Hosted 7
Slide 8: Bear Lodge Rare-Earths Overview
Bear Lodge Rare-Earths Overview • US Geological Survey(2): Bear Lodge Mountains contain “one of the largest occurrences of disseminated rare earths in North America” plus high-grade zones; USBM study & historic resource estimate • Updated NI 43-101 inferred mineral resource of 17.5 mm tons @ 3.46% R
Slide 9: Rare-Earth Drilling
Rare-Earth Drilling Bull Hill drilling - 2009 9
Slide 10: Bull Hill Area Geology & Target Areas
Bull Hill Area Geology & Target Areas Carbon (Au) Whitetail Bull Hill NW Ridge REE resource Bull Hill (after Newmont-2008) Fault Offset diatreme & Taylor (Au) &Plug? REE resource Smith (Au) 10
Slide 11: Bull Hill Area Drill Holes
Bull Hill Area Drill Holes Whitetail Ridge Bull Hill NW Target 2009 Drill Holes, Target 1-3 angle holes from each site Bull Hill Southwest Resource Area Fault offset Deep Carbonatite Southeast Plug Target Extension Target 11
Slide 12: Dike-Swarm Section - Bull Hill
Dike-Swarm Section - Bull Hill 2009 holes Old holes Dikes Low-grade stockwork Inferred Mineral Resource 17.5 million tons @ 3.5% REO (compliant with NI 43-101) Fault Plug? 12
Slide 13: 2004-08 Drilling Results REE - Selected Intervals
2004-08 Drilling Results REE - Selected Intervals Hole Oxide/Non-ox No. Dikes Agg. True Thick. REO (%) RES04-1 oxide 3 8.47 m 8.70 non-oxide 6 16.61 m 4.14 RES04-2 non-oxide 1 36.27 m 4.06 RES05-2 oxide 2 2.65 m 9.84 non-oxide 5 19.35 m 3.92 RES07-1 oxide 1 5.58 m 4.19 non-oxide 3 28.53 m 4.81 RES07
Slide 14: 2009 Drilling Results REE - Selected Intervals
2009 Drilling Results REE - Selected Intervals Hole Oxide/Non-ox No. Intervals Agg. True Thick. REO (%) RES09-1 oxide 2 21.04 m 3.88 RES09-2 oxide 2 13.11 m 3.70 RES09-3 oxide 1 25.00 m 6.78 RES09-3A oxide 2 24.70 m 7.70 including 1 10.91 m 9.24 RES09-6 oxide 2 21.95 m 5.62 including 1 8.64 m 11.83
Slide 15: REE Mineralogy by Zone
REE Mineralogy by Zone Oxidized / Mineralized Body REE Mineralogy Unoxidized Oxide Zone FMR dikes and veins (FeOx + Bastnasite - group minerals (0 to 150 m in MnOx + REE) + subord. monazite depth) Loose and friable material Easily liberated Transitional Partly oxidized dikes – Bastnasite - group min
Slide 16: Bull Hill REE Mineralization - FMR Dikes & Veins
Bull Hill REE Mineralization - FMR Dikes & Veins Bull Hill Diatreme FMR with Bastnasite-Group Minerals Breccia (light brown) 16
Slide 17: Typical Distribution of REE
Typical Distribution of REE Rare-Earth Element Oxide Sample(1) Unoxidized Sample(1) Lanthanum 29.3% 32.5% Cerium 45.0% 46.4% Praseodymium 4.8% 4.3% Neodymium 16.8% 13.7% Samarium 2.0% 1.4% Europium 0.4% 0.3% Gadolinium 0.8% 0.6% Terbium 0.1% 0.0% Dysprosium 0.2% 0.2% Yttrium 0.5% 0.5% Total 99.9% 99
Slide 18: Metallurgical Test Results (Oxide Mineralization)
Metallurgical Test Results (Oxide Mineralization) Scrubbing Comparison Showing Recovery, Grade & Wt-% Project 6115-A: Scrubbing Characteristics Affecting the -500 mesh Fraction 1 10 min 2 3 60 min. 60 min 4 60 min 5 Crushing ? No Flotation Gentle Attrition Flotation Scrubbing Scrubbing Machine Scrub
Slide 19: Exploration Targets
Exploration Targets WP-2 – 186 ft @ 9.5% WP-1 Whitetail Ridge REO 430 ft Target @2.4% 19
Slide 20: Milestones
Milestones Completed: • 2004-2008 – Drilled 12 core holes in REE minz; in addition to 14 historic holes • March 2009 – Estimated first NI 43-101 inferred resource • July & September 2009 – Favorable metallurgical test results • August – December 2009 – Drilled 20 core holes in REE mineralization • O
Slide 21: Bear Lodge - Gold Overview
Bear Lodge - Gold Overview • Rare Element and Newmont established Sundance gold exploration venture on Bear Lodge property in 2006: Newmont advances the project, withdraws in May 2010, and transfers claims, data and core • The Bear Lodge property exposes upper levels of alkaline-igneous complex, sim
Slide 22: Bear Lodge Geology - Alkaline-Igneous Complex
Bear Lodge Geology - Alkaline-Igneous Complex • Bull Hill in core area surrounded Bull Hill by gold occurrences • Many similarities to near-surface low-grade gold mineralization of Cripple Creek alkaline system Source: Newmont, 2008 22
Slide 23: Geophysics & Geochemistry
Geophysics & Geochemistry • Newmont created excellent exploration Carbon database on property Bull Hill Taylor Smith 23
Slide 24: Carbon - Drill Holes and Trenches
Carbon - Drill Holes and Trenches • Example of Newmont’s drilling • Indicates potential for a near-surface low-grade bulk- tonnage gold deposit • Newmont drilled 45 holes on Carbon, Taylor, and Smith targets plus 13 holes more 24
Slide 25: 2006-09 Drilling Results - Gold
2006-09 Drilling Results - Gold (Selected Holes) Interval (m) Intercept (m) Gold Assay (g/t) Sun-01 (Carbon) 1.5 - 48.8 47.3 0.56 includes 19.8 - 29.0 9.2 1.17 Sun-02 (Carbon) 1.5 - 39.6 38.1 0.40 plus 83.8 - 141.8 57.9 0.53 Sun-08 (Taylor) 0 - 126.5 126.5 0.44 Sun-09 (Taylor) 0 - 175.3 175.3 0.44 S
Slide 26: Proven Management Team
Proven Management Team Donald E Ranta, PhD, PGeo, President, CEO & Director • 35 years of mining & corporate experience with successful executive leadership roles in exploration and project evaluation • Previously at Echo Bay, Phelps Dodge, AMAX and Kennecott Mark T Brown, BComm, CA, CFO & Director
Slide 27: Directors & Strategic Advisors
Directors & Strategic Advisors Directors: • Norman W. Burmeister, PEng, President & CEO, Saratoga Gold • M. Norman Anderson, PEng, Past Chairman & CEO, Cominco • Stephen P. Quin, PGeo, President & CEO, Capstone Mining Corp • Gregory E. McKelvey, PGeo, President & CEO, Animas Resources Advisors: • Je
Slide 28: Bear Lodge Project Technical Consultants
Bear Lodge Project Technical Consultants • Dr. Tony Mariano & Dr. Jim Clark, LGeo – Mineralogy & geology • Dr. Ellie Leavitt, PGeo – REE geology & exploration • John Ray – Gold geology & exploration • Alan Noble, PEng – Resource estimation, Ore Reserves Engineering • Michael Richardson, PEng – Minin
Slide 29: Capital Structure
Capital Structure Shares Outstanding: 32,117,737 Fully Diluted: 35,878,487 (2,546,000 opts + 3,836,250 wts) Market Capitalization: C$110 million Share Price: $2.75 (52 week H/L 4.69/1.10) Insider Holdings: 7.0% Cash on Hand: C$12.2 million and no debt (1) As at February 10, 2010 29
Slide 30: Comparable Companies Analysis
Comparable Companies Analysis (All figures in C$ million unless otherwise denoted) Contained Adj. Market Contained Market Adj. Market Resource Grade REO REO Cap/REO Resource Value Stage of (1) (1)(2) Project Cap Cap (t million) (%) (t million) ($/t) (US$ million) Production Mt. Weld (LYC) (A$) $ 819
Slide 31: Company Highlights
Company Highlights Exploring the Bear Lodge Property, which potentially hosts: • One of largest deposits of disseminated rare-earth elements in North America(1), with high-grade zones – “Bear Lodge Project” • NI 43-101 inferred REE resource: 17.5 mm tons @ 3.5% TREO(2) • Carbonatite deposit; similar
Slide 32: For Further Information
For Further Information Donald E Ranta, Phd, PGeo, President & CEO don@rareelementresources.com Mark T. Brown, CA, CFO mtbrown@pacificopportunity.com Rare Element Resources Ltd Suite 410 - 325 Howe Street Vancouver, BC V6C 1Z7 Tel: (604) 687-3520 www.rareelementresources.com 32
Slide 33: Appendix An Overview of Rare-Earth Elements
Appendix An Overview of Rare-Earth Elements What are they? What are their uses? 33
Slide 34: What are Rare-Earth Elements?
What are Rare-Earth Elements? • REEs are a unusual group of metallic elements with unique properties: chemical, catalytic, magnetic, metallurgical and phosphoricl • REEs used in high-strength magnets, such as Neodymium, Praseodymium, Dysprosium and Terbium, are high in demand Periodic Table of REEs
Slide 35: What are Rare-Earth Elements?
What are Rare-Earth Elements? • China accounts for 97% of the world’s current REE production • Currently operating at capacity • No significant non-Chinese supply sources available today • Small and limited production in Russia (3,000 - 4,000 tpa) • Beach sand processed by Indian Rare Earths, subsid
Slide 36: Key Applications of REE
Key Applications of REE • REEs are critical and enabling for many emerging Green Energy technologies, High Tech applications and Defense Systems; examples include hybrid cars, plug-in hybrid electric vehicles, wind power turbines, computer hard drives, missile guidance systems, lasers and cell phone
Slide 37: Major Applications of REE
Major Applications of REE Hybrid Cars Nd magnets & La batteries Wind Turbines With Nd-Fe-B magnets 37
Slide 38: Applications are Driving Strong Forecasted Demand
Applications are Driving Strong Forecasted Demand • Total demand for REE is expected to grow to ~210,000 tonnes by 2013, representing a CAGR of 10% from 2008 2008 Demand by Application Growth Forecast by Application Other 7% Growth rate 2013 demand Ceramics Catalysts 5% 19% Application % p.a. tonnes
Slide 39: Applications are Driving Strong Forecasted Demand
Applications are Driving Strong Forecasted Demand • China wants to create major wind turbine, solar panel, and hybrid car industries Chinese Government Policy Chinese Production Limits • Strategic value of REO well understood • Largest REO mine Baotou (50% of world supply) operating at capacity • Mi
Slide 40: Supply and Demand
Supply and Demand 250,000 200,000 S 5 i 150,000 ' S = = 100,000 a 50,000 0 noo aoe? Agee now? Ae {ge gS jg ao a9 ag ad al al tad al - - - - - - [= ROW Supply Gas ChinaSupply Adjusted Global Demand China Demand TSX.v: RES
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