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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together
with our financial statements and related notes appearing elsewhere in this Annual Report. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary
Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those anticipated in
these forward-looking statements as a result of many factors, including, but not limited to, those set forth under
“Risks and Uncertainties” and elsewhere in this Annual Report.
On September 7, 2012, our Board of Directors approved a change in our fiscal year-end from June 30 to December
31, with the change to the calendar year reporting cycle beginning January 1, 2013. Consequently, on March 18,
2013, we filed a Transition Report on Form 10-K for the six-month transition period ended December 31, 2012. The
intent of the change was to align the reporting of our financial results more closely with that of our peers.
The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our Consolidated Financial Statements and accompanying notes included in Item 8 of this Annual
Report on Form 10-K. References in this report to fiscal 2012 and fiscal 2011 indicate the twelve-month periods
ended June 30, 2012 and 2011, respectively. Financial information with respect to the year ended December 31,
2012 is unaudited. Management’s Discussion and Analysis (“MD&A”) has been prepared based on information
known to management as of March 12, 2015. This MD&A is intended to help the reader understand the
consolidated audited financial statements of Rare Element.
INTRODUCTION
We are focused on advancing to production the Bear Lodge REE Project in Wyoming. We completed a PFS on our
Bear Lodge REE Project in 2014.
All currency amounts are expressed in thousands of U.S. dollars, except per share and common share amounts,
unless otherwise noted.
OUTLOOK
We have sufficient cash on hand to diligently execute our development plans through 2015 as well as the ability to
defer certain activities and reduce our rate of expenditures if market conditions dictate. Major activities through
2015 include:
Continue to support the USFS’s efforts to prepare an Environmental Impact Statement (“EIS”) on the
project in accordance with the National Environmental Policy Act process. The draft EIS is currently
anticipated in the second half of 2015. The final EIS and draft record of decision (“ROD”) are expected in
early 2016, with the final ROD anticipated in the first half of 2016.
Submit applications for mine and industrial siting permits to the Wyoming Department of Environmental
Quality. These tasks are dependent upon completion of the alternative assessment portion of the EIS.
Test additional elemental separation methods directed at creating product baskets that meet end-users’
specific needs and maximize product value to the Company.
Initiate engineering studies, including rheology studies, final geotechnical confirmation of waste rock and
tailings characteristics to support the next phase of engineering for inclusion in the FS.
Exercise responsible cash management, while seeking additional funding sources to finance construction of
a planned demonstration plant and ensure continued timely progress toward project construction.
Continue to cultivate relationships with potential off-take partners, including supplying upgraded product
samples and providing project progress updates.
