Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
10135-200-46 - Rev. 0
15-2
In this study, mineral reserve is defined as the measured and indicated mineral
resource that would be extracted by the mine design and which can then be
processed at a profit. All measured resources meeting that standard are herein
classified as proven mineral reserves, while all indicated resources meeting that
standard are classified as probable mineral reserves.
Proven and probable reserves are estimated in compliance with CIM Definition
Standards and are not compliant with the U.S. Securities and Exchange Commission
(SEC) Industry Guide 7. The mineral resource estimate, which is the basis for the
engineering studies that estimate reserves, is compliant with CIM Definition
Standards, but is not reconciled to SEC Industry Guide 7 within this technical
report. The Company cannot be certain that any part of the deposit will ever be
confirmed or converted into SEC Industry Guide 7 compliant reserves and makes no
such determination within this technical report.
15.2 Parameters for Reserve Estimation
The reserve estimate is based on open-pit mining of the oxide and oxide-with-calcite
(OxCa) portions of the mineral resource; all transition, sulfide and inferred mineral
resources were excluded from contributing any revenue to the pit optimization
analysis. A Lerchs-Grossmann (LG) pit shell was generated using MineSight®
software from Mintec to guide the development of an open-pit design. The economic
parameters used for the pit optimization are summarized in Table 15.1. Block values
were discounted 1% per 10-ft model level, reflecting an annual time-value-of-money
discount rate of 8%-12%.
REO recoveries are projected to vary by pit area and ore type (i.e., oxide vs OxCa),
but are also dependent on the TREO grade. Table 15.1 lists a simplified range of
recoveries that were computed on a block-by-block basis in the deposit model.
Holmium, Lutetium, Thulium and Ytterbium oxides are present in the deposit, but at
very low concentrations and are not included in projected revenue estimates at the
present time.
Provisions for mining dilution have been incorporated into the block model, reflecting
a selective mining unit of about 20 x 20 x 20 ft. No additional dilution or ore loss
factors have been applied to the reserve estimates.
