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To carry out reclamation obligations imposed on us in connection with the potential future development activities at
the Bear Lodge Property, we must allocate financial resources that might otherwise be spent on further exploration
and future development programs. We have set up a provision for reclamation obligations as currently anticipated
for exploration completed on the Bear Lodge Property, as appropriate, but this provision may not be adequate. If we
are required to carry out unanticipated reclamation work, our financial position could be adversely affected.
Legislation and regulations have been proposed that would significantly affect the mining industry and our
business.
The U.S. Congress from time to time has considered proposed revisions to the General Mining Law of
1872, including budget legislation introduced in 2016. If these proposed revisions are enacted, such legislation
could change the cost of holding unpatented mining claims or could significantly impact our ability to develop
mineralized material on unpatented mining claims. Such bills have proposed, among other things, to (i) impose a
federal royalty on production from unpatented mining claims, (ii) impose a fee on the amount of material displaced
at a mine, (iii) impose time limits on the effectiveness of plans of operation that may not coincide with mine life,
(iv) impose more stringent environmental compliance and reclamation requirements on activities on unpatented
mining claims, (v) establish a mechanism that would allow states, localities and Native American tribes to petition
for the withdrawal of identified tracts of federal land from the operation of the U.S. general mining laws, (iv) replace
the location of mining claims with federal leases for locatable minerals, and (vii) allow for administrative
determinations that mining would not be allowed in situations where undue degradation of the federal lands in
question could not be prevented. Although we cannot predict what legislated royalties might be, the enactment of a
federal royalty or other provisions contained in these proposed bills could adversely affect the potential for
development of our unpatented mining claims, and could adversely affect our ability to operate or our financial
performance. The effect of any proposed revision of the General Mining Law on operations cannot be determined
until enactment. However, it is possible that revisions would materially increase the carrying and operating costs of
mineral properties located on federal unpatented mining claims.
In 2009, the EPA announced that it would develop financial assurance requirements under CERCLA Section 108(b)
for the hardrock mining industry. The EPA had previously announced that it expected to publish its proposed
financial responsibility regulations in 2016. On January 29, 2016, the U.S. District Court for the District of
Columbia issued an order requiring that if the EPA intends to prepare such regulations, it must do so by December
1, 2016. The EPA’s notice did not indicate what the anticipated scope of these requirements will be, or whether they
will be duplicative of existing bonding and other financial assurance requirements applicable to the hardrock mining
industry. In 2015, U.S. President Obama issued a Presidential Memorandum to the Secretary of Interior and other
federal agencies requiring them to undertake rulemaking regarding avoidance, minimization, and compensation for
impacts to natural resources, among other public lands impact items. The rulemaking is proceeding in 2016. The
impact of the memorandum and subsequent rulemaking regarding reclamation and financial assurance requirements
for future mineral extraction projects such as the Bear Lodge REE Project are uncertain. The promulgation of these
regulations that may require significant additional financial assurance could have a material adverse effect on our
business operations.
Foreign currency fluctuations may have a negative impact on our financial position or results.
Certain assets are subject to foreign currency fluctuations that may adversely affect our financial position or results.
We maintain some accounts in Canadian dollars, and thus, any appreciation in the U.S. dollar against the Canadian
dollar increases the costs of carrying out our operations in the United States. Management may or may not enter
into foreign currency contracts from time to time to mitigate this risk. Failing to enter into currency contracts, or the
risk in the currency contracts themselves, may cause losses due to adverse foreign currency fluctuations.
Our directors and senior management may be engaged in other businesses. Potential conflicts of interest or
other obligations of management could interfere with corporate operations.
Some of our directors, officers and key contractors may be engaged in additional businesses, or situations
may arise where our directors, officers and contractors could be in direct competition with us. Conflicts, if any, will
be dealt with in accordance with the relevant provisions of applicable policies, regulations and legislation. Some of
our directors and officers are or may become directors or officers of other entities engaged in other business
ventures. As a result of their other business endeavors, our directors, officers and contractors may not be able to
devote sufficient time to our business affairs, which may negatively affect our ability to conduct ongoing operations
or to generate revenues.