Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
100135-200-46 – Rev. 0
21-1
21 Capital and Operating Cost
21.1 Initial Capital Cost Estimate
21.1.1 Basis of Estimate
21.1.1.1 Methodology
The estimate development methodology is based on major equipment supply cost
factored to installed equipment cost. The estimate also includes building and construction
costs estimated for the selected site using building specifications developed during the
study. Indirect costs have been factored based on the direct costs and have magnitudes
selected to account for the characteristics of the project. The major equipment items have
been identified from the engineering component of the study and an equipment list
developed. Where possible, budget pricing for major cost items has been obtained from
vendors based on preliminary specifications developed during engineering. Alternatively,
where recent and relevant project data enable an item to be estimated, it may be based
on that information. When neither is possible, such as in equipment or infrastructure that
will require design and fabrication, preliminary estimates of unit dimensions, material of
construction and material quantities have been used, concurrently taking into account the
nature and complexity of the equipment. When none of the above was available,
allowances were assigned based on the experience and judgment of the engineers and
estimators involved in the project. Some elements of the capital cost estimate were
supplied by sub-contractors of Rare Element and have been included in the cost
estimated by the sub-contractors.
These elements are:
Access roads
The Mine facilities and mining equipment
The electrical power lines to the Mine site
The electrical power lines to the Hydromet site
The Tailings Storage Facility
Mine closure costs
Hydromet site closure costs
Mine pre-strip costs
