Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
100135-200-46 – Rev. 0
21-2
21.1.1.2 Accuracy
The highest proportion of the direct costs is based on budget pricing with the remaining
costs based approximately equally on quantities and allowances, determined from
engineering performed during the study. Budget pricing means that a budget equipment
price is factored to an estimated installed cost. It does not mean a budget price was
necessarily provided for the installed equipment cost.
This study has completed the necessary amount of engineering required for a pre-
feasibility engineering phase, and as a result, the accuracy of the estimate provided is ±
25%.
21.1.1.3 Estimate Structure
Direct costs are conventionally structured in columns with line-item costs divided into
equipment, material and labor. The unit costs and rates are shown for bulk material, man-
hours, area, etc. The estimate is divided by areas. Within each area, sub-areas such as
site preparation, civil/structural, mechanical, etc. are presented. At the most detailed level,
line items are listed, with any additional components that are included in the line-item
scope of supply.
Indirect costs are broken down into ten sub-areas:
Engineering, procurement and construction management (EPCM) costs;
Procurement and construction management;
Temporary site facilities;
Commissioning and start-up;
Common construction equipment;
Spare parts;
Others;
Owner’s cost;
Taxes and duties (not included);
Access roads, environmental impact & permitting;
Contractor profit.
21.1.1.4 Currency
All currency is in US Dollars and is not adjusted for inflation.
