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)
74
On May 12, 2010, Newmont terminated the option and the Company retained its 100% interest in the mining claims
of the entire property. In addition, 327 contiguous claims wholly-owned by Newmont outside the Venture were
transferred to the Company. In consideration for transferring these claims, Newmont was granted a right-of-first-
refusal on all claims sold or disposed, excluding those containing REE, and a 0.5% net smelter royalty (“NSR”)
royalty, for precious and base metals only, on the claims transferred to the Company by Newmont. This agreement
honors an arrangement between Newmont and Bronco Creek Exploration Company, a wholly owned subsidiary of
Eurasian Minerals Inc. (“Bronco Creek”), on Newmont’s formerly wholly-owned claims, pursuant to which Bronco
Creek will continue to receive minor payments and will retain a 0.05% NSR royalty on these claims.
The Bear Lodge Property comprises 499 unpatented mining claims located on land administered by the USFS and
634 acres (257 hectares) of owned property for a total of approximately 9,000 acres (3,642 hectares).
5. EQUIPMENT AND LAND
At December 31, 2014 and 2013, equipment consisted of the following:
December 31,
2014
December 31,
2013
Cost
Accumulated
depreciation
Net book
value
Cost
Accumulated
depreciation
Net book
value
Computer equipment
$ 189 $ 168
$ 21 $ 169 $ 118
$ 51
Furniture
111
64
47
111
48
63
Geological equipment
488
319
169
488
217
271
Vehicles
221
114
107
208
72
136
$ 1,009 $ 665
$ 344 $ 976 $ 455
$ 521
Depreciation expense for the year ended December 31, 2014 and 2013 and six-month period ended December 31,
2012 was $210, $197 and $90, respectively. Depreciation expense for the fiscal year ended June 30, 2012 was $123.
We evaluate the recoverability of the carrying value of equipment when events and circumstances indicate that such
assets might be impaired.
On April 29, 2013, we completed a land acquisition from the state of Wyoming in conjunction with a third-party
land exchange resulting in an additional 640 acres being owned by the Company and subject to a royalty retained by
the state of Wyoming. The royalty is a non-participating interest at the royalty rate commensurate with the state or
federal royalty rate, whichever is higher, for any such mineral(s), at the time of development. The property is
immediately adjacent to our mine site, and the cash consideration paid was $980.
6. ADDITIONAL PAID IN CAPITAL
Stock-based compensation
We have options outstanding and exercisable that were issued under two plans, the Fixed Stock Option Plan
(“FSOP”) and the 10% Rolling Stock Option Plan (“RSOP”).
The FSOP was originally approved by shareholders on December 11, 2002 and subsequently approved by
shareholders on December 7, 2009, following certain amendments to the FSOP. The FSOP expired upon the
adoption of the 10% Rolling Stock Option Plan, which was approved by shareholders on December 2, 2011, and as
such, we may no longer grant options under the FSOP. However, the terms of the FSOP continue to govern all prior
awards granted under such plan until such awards have been cancelled, forfeited or exercised in accordance with the
terms thereof. Under the FSOP, we could grant stock options for up to 5,779,347 common shares to eligible
directors, officers, employees or consultants. The maximum term of an option was five years. The exercise price of
an option was not less than the closing price on the last trading day preceding the grant date, less allowable
discounts in accordance with the policies of the TSX and the NYSE MKT. All options granted under the FSOP
vested as follows: 20% upon each of 4 months, 8 months, 12 months, 15 months and 18 months after the date of
grant. As of December 31, 2014, there were 1,915,000 stock options outstanding under the FSOP with a weighted-
average exercise price of $7.37, all of which were exercisable.
