Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
10135-200-46 – Rev. 0
25-4
25.4 Infrastructure
The Bear Lodge Project’s required infrastructure is divided into two areas. The Bull
Hill Mine and PUG plant site, and the Upton, WY Hydromet site and TSF.
The Bull Hill Mine and PUG plant will require construction and upgrade of Miller Creek
road, upgrade of the power supply to the Bull Hill site, and installation of a well to
supply the processing facility with fresh water.
The Hydromet site infrastructure will include connection to the Upton, WY municipal
water network to supply the Hydromet plant with fresh water, a new connection to the
industrial park natural gas network, and a new tailing storage facility located adjacent
to and south of the Hydromet plant. Power to the site will be provided by PreCorp at
25 KV from an existing substation in the industrial park.
25.5 Economic Analysis
Table 25.2 presents the Bear Lodge Project financial summary, as taken from
Chapter 22.
Table 25.2 - Bear Lodge Financial Summary (US$ Million)
Pre-tax / After-tax NPV @ 10% Discount
Rate
$426 / $330
Pre-tax / After-tax IRR
32.7% / 28.6%
Project Payback After Start-up (years)
2.9
Assumed Discounted RE basket price/kg
$24.60
Estimated Annual Cash Operating Cost,
LOM (US$ millions)
$102.6
(Roche, 2014)
25.6 Risks
The economics for the Company’s Bear Lodge Project indicate a 2.9 year payback of
the initial $290 million required to develop the project subject to the following factors.
25.6.1 Markets and Price
The global market and price for rare earth minerals is not as large or well established
as it is for commodity minerals. The rare earths industry is dominated by Chinese
producers and consumers with virtually all sales and purchases of rare earths
products based on contract prices negotiated privately by buyers and sellers. There
