Rare Element Resources Ltd. · OTC:REEMF
Rare Element Resources — Investor Presentation (November 2010)
32 slides from Rare Element Resources's investor presentation, November 2010
Slide 1: Rare Earth Elements & Gold Investor Presentation
RARE EARTH ELEMENTS & GOLD Investor Presentation November 2010 AMEX: REE & 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements 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 econom
Slide 3: Company Highlights
Company Highlights The Bear Lodge Project in Wyoming -- one of the largest deposits of disseminated (low-grade) rare earth elements (“REEs”) in North America1 with attractive high-grade zones NI 43-101 inferred REE resource: 17.5 mm tons @ 3.46% rare earth oxides (“REO”)2 strategically located in on
Slide 4: Bear Lodge Rare Earths Overview
Bear Lodge Rare Earths Overview Bear Lodge Mountains contain “one of the largest occurrences of disseminated rare earths in North America” plus high-grade zones1,2 Updated NI 43-101 inferred mineral resources of 17.5 mm tons @ 3.46% REO3 including 4.4 mm tons @ 6.65% REO with excellent resource expa
Slide 5: Scoping Study Highlights
Scoping Study Highlights Case 1 (Base Case) Case 2 3-year trailing average prices1 Estimated long-term prices2 Production Rate (tpd) 1,000 1,000 Mine Life (years) 15 15 Initial Capital (US$) $87 million $87 million Operating Cost (US$/ton) $213 $213 Life of Mine Sustaining Capital (US$) $88 million
Slide 6: Net Present Value Sensitivity
Net Present Value Sensitivity Historic three year average concentrate prices used for base case REO concentrate prices are approximately 34% lower than refined REO prices1 Historic REO concentrate prices are depressed relative to current REO concentrate prices2 Current REO concentrate prices are app
Slide 7: Oxide Zone Distribution of REE
Oxide Zone Distribution of REE Wt-% Oxide % Relative 61% of REO value Rare Earth Element potentially derived Resource1 Value from scarce, high Lanthanum 29.3% 20.4% demand REO Cerium 45.9% 15.5% production Praseodymium 4.4% 7.7% Nd, Pr, Tb, and Dy Neodymium 14.4% 25.4% used in high-strength permanen
Slide 8: 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 within 2 miles of Gillette, WY project 60 mi Hills Power line (~3 cents per kwh) within 1 mile of project 35 miles to nearest
Slide 9: Bear Lodge Geology & General Target Areas
Bear Lodge Geology & General Target Areas Simplified Geologic Map Corral Carbon Bull Hill REE BH Taylor Richardson Targets Fracture-Fault Control Smith Breccia Hosted Sediment Hosted Precambrian Granite Hosted Carbonatite Hosted AMEX: REE & 9
Slide 10: Rare Earth Drilling
Rare Earth Drilling Rare Element, Hecla, Bull Hill drilling – 2010 Molycorp and Duval have previously drilled 46 holes through 2009. In 2010, Rare Element has drilled 60 holes. In 2010, Rare Element also collect an 8.8-ton bulk sample Historical exploration hindered by extensive soil cover AMEX: REE
Slide 11: Dike-Swarm Section – Bull Hill
Dike-Swarm Section – Bull Hill 2009-10 holes Old holes Dikes Low-grade Low-grade Inferred Mineral Resource 17.5 million tons @ 3.5% REO (compliant with NI 43-101) Fault Plug? AMEX: REE & 11
Slide 12: Bull Hill Area Drill Holes
Bull Hill Area Drill Holes Mineralization open Step-off holes RES 10-15 to -19 Mineralization Whitetail Bull Hill NW open Ridge REE resource Open at RES 10-20 20m @ 4.48% depth 10-21 11m @ 4.16% REO Bull Hill resource Step-off holes Fault Offset RES 10-01 to -04 &Plug? Mineralization open AMEX: REE
Slide 13: 2009 Drilling Results REE – Selected Intervals
2009 Drillings Results REE – Selected Intervals Hole Oxide / Trans. No. Dikes 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% incl. 1 10.91 m 9.24% RES09-6 Oxide 2 21.95 m 5.62% incl. 1 8.64 m 11.83% RES0
Slide 14: 2010 Drilling Results REE – Selected Intervals
2010 Drillings Results REE – Selected Intervals Hole Oxide/Trans. No. Dikes Agg. True Thick. REO % RES 09-21 oxide w/ trans. 3 75.6 m 5.79% RES 10-01 oxide 1 13.0 m 6.21% (step-off) RES 10-01A oxide 1 29.6 m 6.57% (step-off) RES 10-02 oxide / trans. 1 11.6 m 6.88% (step-off) RES 10-03 oxide 1 12.8 m
Slide 15: Bull Hill REE Mineralization – FMR Dikes & Veins
Bull Hill REE Mineralization – FMR Dikes & Veins Bull Hill Diatreme FMR with Bastnasite-Group Breccia Minerals (light brown) Low-grade REO High-grade REO AMEX: REE & 15
Slide 16: Metallurgical Test Results (Oxide Mineralization)
Metallurgical Test Results (Oxide Mineralization) Scrubbing Comparison Showing Recovery, Grade & Wt-% 1 2 3 4 5 Screening No 10 min. 60 min. 60 min. 60 min. Scrubbing Flotation Gentle Attrition Flotation Crushing ? Machine Scrub Impeller Machine Assay Grade 14.33 14.80 14.25 13.46 12.95 (%) Scrubbin
Slide 17: REE Exploration Targets
REE Exploration Targets Excellent exploration potential Multiple targets remain to be tested Mineralization open in most directions REE mineralization contained within ~1 sq km. AMEX: REE & 17
Slide 18: Milestones
Milestones Milestones Achieved Schedule Drilled 32 core holes in REE minz, in addition to 14 historic holes Estimated first NI 43-101 inferred resource 2004 – 2009 Favourable metallurgical test results Began a Scoping Study Updated resource estimate May 2010 Began development drilling for reserves,
Slide 19: 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 for ROFR The Bear Lodge property exposes upper levels of alkaline-igneous complex
Slide 20: Bear Lodge Geology – Alkaline-Igneous Complex
Bear Lodge Geology – Alkaline-Igneous Complex Bull Hill REE in core area surrounded by gold occurrences Bull Hill Same gold deposit type as near-surface low-grade gold mineralization of Cripple Creek alkaline system Example of excellent geologic database provided by Newmont AMEX: REE & Source: Newmo
Slide 21: Select Gold Drilling Results
Select Gold Drilling Results Gold Assay Hole Target Interval (m) Intercept (m) (g/t) Carbon 1.5 – 48.8 47.3 0.56 Sun-01 incl. 19.8 – 29.0 9.2 1.17 Carbon 1.5 – 39.6 38.1 0.40 Sun-02 plus 83.8 – 141.8 57.9 0.53 Sun-08 Taylor 0.0 – 126.5 126.5 0.44 Sun-09 Taylor 0.0 – 175.3 175.3 0.44 Carbon 0.0 – 155
Slide 22: Proven Management Team
Proven Management Team Donald E Ranta, PhD, PGeo, President, CEO & Director Over 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 23: Directors and Strategic Advisors
Directors and Strategic Advisors Directors: Norman W. Burmeister, P.E., 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: Jefferey D
Slide 24: Use of Proceeds
Use of Proceeds Use of Proceeds Total (C$mm) Pre-Feasibility Study $15.000 Full feasibility study $15.000 Exploration at Sundance gold project $3.000 Exploration at Eden Lake and Nuiklavik $0.250 General corporate and working capital purposes $16.750 Total Use of Proceeds $50.000 AMEX: REE & 24
Slide 25: 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, P.E. – Resource estimation, Ore Reserves Engineering • Michael Richardson, P.E. – Minin
Slide 26: Capital Structure
Capital Structure Capital Structure as at November 18, 2010 Common Shares Outstanding: 34,926,965 Options: 2.5 mm @ $0.55 to $3.28 Warrants 1.75 mm @ $1.00 to $4.75 Fully Diluted: 39,327,823 Market Capitalization: $350 mm Share Price: $10.25 (52 week H/L $14.80/$1.94) Insider Holdings: 7.0% Cash on
Slide 27: What are Rare Earth Elements?
What are Rare Earth Elements? REE – an unusual group of metallic elements with unique properties: chemical, catalytic, magnetic, metallurgical and phosphorescent REE – uses in high-strength magnets are in high demand – includes Neodymium, Praseodymium, Dysprosium and Terbium REO Price Price Rare Ear
Slide 28: Applications are Driving Strong Forecasted Demand
Applications are Driving Strong Forecasted Demand Total demand for REE is expected to grow from 125,000 tonnes in 2010, to 205,000 tonnes by 2015, and over 280,000 tonnes in 2020; a growth rate of ~10% per year 2008 Demand by Application Growth Forecast by Application Other Ceramics 7% Catalysts Gro
Slide 29: Where are REE’s Found?
Where are REE’s Found? China accounts for ~96% of the world’s current REE production Currently operating at or near capacity ? Reducing exports year by year No significant non-Chinese supply sources available today Small and limited production – Russia, India, and California All REE deposits – envir
Slide 30: Increasing Export Restrictions
Increasing Export Restrictions China controls the market producing 96% of the world’s current production Increasing restrictions on Chinese exports implies strategic nature of non-Chinese controlled projects with prospects of development Chinese Government Policy Chinese Production Limits • Strategi
Slide 31: Key Applications of REE
Key Applications of REE REE are critical and enabling for many emerging Green Energy technologies, High Tech applications and Defence Systems; examples include hybrid cars, plug-in hybrid electric vehicles, wind power turbines, computer hard drives, fluorescent lights, missile guidance systems, lase
Slide 32: Major Applications of REE
Major Applications of REE Hybrid Cars Nd magnets & La batteries Wind Turbines With Nd-Fe-B magnets AMEX: REE & 32
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