RARE ELEMENT RESOURCES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars, except share and per share amounts, unless otherwise noted)
73
The Company had no embedded derivatives as of December 31, 2014. Included within accounts payable, and other
accrued liabilities at December 31, 2013 and 2012 is an embedded derivative that has been accounted for in
accordance with the Company’s accounting policy as described above. This embedded derivative represents a
foreign currency option that the Company sells within an enhanced yield deposit account that has been included in
cash and cash equivalents. The fair value of the derivative liability associated with this embedded derivative
instrument is shown separately as a liability in the table below.
The following table presents information about financial instruments recognized at fair value on a recurring basis as
of December 31, 2014 and 2013, and indicates the fair value hierarchy:
December 31, 2014
December 31, 2013
Level 1
Level 2
Total
Level 1
Level 2
Total
Assets
Cash and cash equivalents
$ 10,139
$ -
$ 10,139
$ 23,902 $ -
$ 23,902
Short-term investments
-
-
-
-
-
-
Marketable securities
-
-
-
-
-
-
Total financial assets
$ 10,139
$ -
$ 10,139
$ 23,902 $ -
$ 23,902
Liabilities
Accounts payable and other
accrued liabilities
$ 1,098
$ -
$ 1,098
$ 1,425 $ -
$ 1,425
Asset retirement obligation
-
366
366
-
415
415
Derivative liabilities
-
-
-
-
103
103
Total financial assets and
liabilities
$ 11,237
$ 366
$ 11,603
$ 25,327 $ 518
$ 25,845
Derivative liabilities noted above are included within accounts payable and other accrued liabilities as presented on
the Consolidated Balance Sheets.
4. MINERAL PROPERTIES
The amounts shown represent acquisition costs, and do not necessarily represent present or future values as these are
entirely dependent upon the economic recovery of future ore reserves. A summary of current property interests is as
follows:
Bear Lodge Property, Wyoming, USA
The Company, through our indirectly held, wholly owned subsidiary, Rare Element Resources, Inc., holds a 100%
interest in a group of unpatented mining claims and 634 acres (257 hectares) of owned property, together which
contain: (1) the Bear Lodge REE Project that contains REE mineralization; and (2) the Sundance Gold Project that
contains gold mineralization. The property is situated in the Bear Lodge Mountains of Crook County, in northeast
Wyoming. These claims were, in part, acquired from Freeport-McMoRan Copper & Gold (“Freeport”) by way of a
“Mineral Lease and Option for Deed.”
On June 1, 2006, Rare Element Resources, Inc. and Newmont North America Exploration Limited (“Newmont”), a
subsidiary of Newmont Mining Corporation, signed an agreement to establish a gold-exploration venture on our
Bear Lodge Property (the “Venture”). Under the agreement, Newmont had the right to earn a 65% participating
interest in the Bear Lodge Property, excluding any rights to the REE and uranium, but including rights to gold and
other metals, by spending $5,000 on property exploration.
