Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
10135-200-46 – Rev. 0
1-17
The PFS prices then assume a 25% discount to the weighted average basket price of
the Project’s planned production to account for further costs to separate the high-
quality, mixed TREO concentrate into individual rare earth oxides. Most of the
transactions within the rare earth industry are done under private contract, and pricing
information is of limited transparency, thus exact information on separation costs is
unavailable. To arrive at the discount used in the PFS, the Company surveyed a
number of market sources that suggested a discount of 20% to 30% was appropriate
for the Company’s 97+% pure TREO concentrate. As another reference point, the
Company calculated a blended tolling charge, based on reported tolling charges in
the rare earth market of $5.00/kg for light rare earth concentrate and $20 - $25/kg for
heavy rare earth concentrates. Based on the Company’s rare earth distribution, this
blended charge is estimated at approximately $5.50 - $5.70/kg.
As a final data point, the Company investigated the historical monthly average pricing
differential between rare earth concentrate and oxide, using the limited publicly
available pricing data. Metal-Pages regularly quotes prices for only one rare earth
concentrate, a 45% TREO cerium carbonate concentrate. The Company compared
this with the 99% cerium oxide price using FOB China prices from the same source.
Using the historical quoted prices for the two-year period ending June 2014, the
average monthly price differential was 25.2%.
Given the opaque nature of much of the rare earths market and the limitations of the
pricing methodologies noted above, Rare Element Resources took an empirical
approach to the assumed rare earths pricing for this preliminary feasibility study.
The prices of certain RE elements were revised downward significantly to take into
account continuing weak RE market conditions.
Based on the evaluation methods identified above, the prices and rare earth
distribution used in the PFS are outlined in Table 1.9.
