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The success of our business may depend, in part, on the establishment of new uses and markets for rare earth
products.
The success of our business may depend, in part, on the establishment of new markets by us or third parties
for certain rare earth products. Although we plan to produce rare earth products for use in end-products such as
NdFeB magnets, which are used in critical existing and emerging technologies such as hybrid and electric vehicles
and wind power turbines, oil refining catalysts and compact fluorescent lighting, the success of our business may
depend on the creation of new markets and the successful commercialization of REE products in existing and
emerging markets. Any unexpected costs or delays in the commercialization of any of the foregoing products or
applications could have a material adverse effect on our ability to develop our Bear Lodge REE Project or operate
our business profitably.
We rely on our proprietary technology and processes to further our Bear Lodge REE Project.
We rely on a combination of trade secret protection, nondisclosure and licensing agreements and patents to
establish and protect our proprietary intellectual property rights. We utilize trade secret protection, patent-pending
filings, and nondisclosure agreements to protect our proprietary rare earth technology. As of December 31, 2015,
we had filed six U.S. provisional patent applications relating to rare earth processing and separation methods. Two
of these provisional applications were converted to a single utility application and an application under the
international PCT. This PCT application was nationalized in several foreign jurisdictions in 2015. Also during
2015, we converted another one of these provisional applications into a single utility application and an application
under the PCT, and combined another three of these provisional patent applications into a single PCT application
that also designates the United States as the jurisdiction for patent protection. These intellectual property rights may
be challenged or infringed upon by third parties or we may be unable to maintain, renew or enter into new license
agreements with third-party owners of intellectual property on reasonable terms. In addition, our intellectual
property could be subject to infringement or other unauthorized use outside of the United States. In such case, our
ability to protect our intellectual property rights by legal recourse or otherwise may be limited, particularly in
countries where laws or enforcement practices are undeveloped or do not recognize or protect intellectual property
rights to the same extent as does the United States. Unauthorized use of our intellectual property rights or inability
to preserve existing intellectual property rights could adversely impact our competitive position or results of
operations. The loss of our patents could reduce the value of the related products.
The success of our business depends, in part, on our ability to utilize our proprietary process technologies,
and we could encounter unforeseen problems or costs, or both, in scaling up our technologies to commercial
applications.
Our Mineral Resource estimates may be inaccurate and any material change in these estimates could affect
the economic viability of placing our Bear Lodge REE Project into production.
Unless otherwise indicated, our Mineral Resources are based upon estimates made by independent
geologists. When making determinations about whether to advance the Bear Lodge REE Project to development,
we must rely upon such estimated calculations as to the quantity and grades of mineralization on the property as well
as estimates about mining and processing costs and future prices. Until mineralized material is actually mined and
processed, Mineral Resources and grades of such mineralization must be considered estimates only, which may
prove to be unreliable.
Because we have not completed a FS on the Bear Lodge REE Project and have not commenced actual
production, mineralization estimates, including Mineral Resource estimates, for the Bear Lodge REE Project may
require adjustments, including potential downward revisions. In addition, the grade of material ultimately mined, if
any, may differ from that indicated in our Mineral Resource estimates or in future feasibility studies.
Our Mineral Resource estimates have been determined based on assumed cut-off grades that depend upon
estimated REE prices, recovery rates and project operating costs. Any significant change in cut-off grades could
reduce our estimates of mineralization, or the amount of mineralization to be extracted, and could have a material
adverse effect on our share price and the value of our Bear Lodge REE Project.