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OTCQB: REEMF

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Rare Element Resources Announces Completion of $4.752 million Strategic Investment by Affiliate of General Atomics

by User Not Found | Oct 03, 2017
October 3, 2017 – Littleton, Colorado – Rare Element Resources Ltd. (“Rare Element” or the “Company”) (OTCQB: REEMF) is pleased to announce that it has completed the previously disclosed investment in the Company by Synchron, a subsidiary of General Atomics Technologies Corporation (“Synchron”).

October 3, 2017 – Littleton, Colorado – Rare Element Resources Ltd. (“Rare Element” or the “Company”) (OTCQB: REEMF) is pleased to announce that it has completed the previously disclosed investment in the Company by Synchron, a subsidiary of General Atomics Technologies Corporation (“Synchron”). Pursuant to an Investment Agreement entered into on September 29, 2017, the Company issued to Synchron on October 2, 2017, 26,650,000 common shares of the Company, which constitute approximately 33.5% of the issued and outstanding common shares of the Company, and an option to purchase approximately an additional 15.49% of the Company’s fully diluted common shares immediately after the exercise for an aggregate exercise price of $5,040,000.  Concurrent with the issuance of shares and option grant and in consideration thereof, Synchron paid $4,752,000 in cash ($500,000 of which had been paid upon execution of the previously announced term sheet in respect of the transaction). The option is exercisable for a period up to four years from the initial investment. Additionally, the parties executed an IP Rights Agreement, whereby Synchron received rights to use and improve the Company’s intellectual property relating to rare earth processing and separation. Synchron also received minority voting rights as to certain corporate actions. Synchron will appoint two directors to the Company’s Board of Directors.

Randall J. Scott, President and CEO of Rare Element stated, “We are very pleased to have Synchron, an affiliate of General Atomics, as a key investor in the Company and the Bear Lodge Rare Earth Project. With this investment, and the valued input of the investor’s director-nominees, the Company will develop and execute on a plan to progress the project. Our vision is for Bear Lodge to be the next rare earth producer in the United States, focusing on the critical materials needed to support development of technology, green energy and defense applications.”

Synchron and its affiliated General Atomics companies are a privately held group of companies engaged in advanced research, technology, products and systems for the energy and defense sectors.

Rare Element Resources Ltd. is a publicly traded, strategic materials company focused on delivering rare earth products for technology, energy and defense applications by advancing the Bear Lodge Critical Rare Earth Project in northeast Wyoming.  Bear Lodge is a significant mineralized district containing many of the less common, more valuable, critical rare earths that are essential for high-strength permanent magnets, electronics, fiber optics, laser systems for health and defense, as well as many evolving technologies like hybrid cars, solar panels and wind turbines.  In addition to the Bear Lodge Rare Earth Project, the Company controls the Sundance gold project which is located on the same property in Wyoming.

Please contact Randy Scott at 720-278-2460 or rscott@rareelementresources.com, for additional information.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada.  Except for statements of historical fact, certain information contained herein constitutes forward-looking statements.  Forward-looking statements are usually identified by our use of certain terminology, including “will,” “believes,” “may,” “expects,” “should,” “seeks,” “anticipates,” “plans,” “has potential to,” or “intends,” or by discussions of strategy or intentions.  Such forward-looking statements include statements regarding the Company’s plans to progress the project.  Factors that could cause actual results to differ materially include, but are not limited to,  the Company’s ability to remain compliant with U.S. Securities and Exchange Commission (the “SEC”) reporting requirements, the impact of the care-and-maintenance program on the project, market conditions, and other matters discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and our other periodic and current reports filed with the SEC and available on www.sec.gov and with the Canadian securities commissions available on www.sedar.com.  There can be no assurance that future developments affecting the Company will be those anticipated by management.  Please refer to the discussion of these and other uncertainties and risk factors set out in our filings made from time to time with the SEC and the Canadian regulators, including, without limitation, our reports on Form 10-K and Form 10-Q. Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made.  While we may elect to update our forward-looking statements at any time, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Bear Lodge Panoramic
Sample Drilling
Core Samples

The Bear Lodge Project area is a significant mineralized district that contains one of the largest disseminated rare earth deposits in North America. This deposit contains many of the less common, more valuable critical rare earths that are essential for electronics, fiber optics, laser systems for health and defense, and many evolving green technologies, such as hybrid cars, solar panels and wind turbines. Rare Element Resources owns 100% of the project and, after completing a positive preliminary feasibility study in 2014, is current working with state and federal regulators to secure the permits and licenses necessary to move the Project toward development. 

Project Highlights

  • Solid Returns with Excellent Upside – the October 2014 PFS shows an after-tax 29% IRR, a NPV of $330 million using a 10% discount and an initial payback period of less than 3 years. It also identified several opportunities for upside including further operating cost reductions with refinement of the Company’s proprietary processing technology, the ability to recover Inferred mineral resource within the pit outline, the current investigation of further separation as a means to participate more fully in the value chain, and the ability to boost revenues by recovering certain by-products.
  • Superior Location – Wyoming is recognized by Canada’s Fraser Institute as one of the world’s top five mining jurisdictions. The site is ideally located near existing infrastructure, has access to low cost power and is generally supported by the local communities, who are well versed in natural resource development.
  • Robust Ore Body – the strength of our mineral resource is demonstrated by a 45 year Project life with a high-grade core that  results in a 2.9 year payback period.
  • Proprietary Technology – continued improvements to the Company’s patent-pending recovery technology have delivered a 99.999% pure, thorium-free TREO concentrate.  Recent work has identified an enhancement to existing separation technology that has produced a number of high purity, separated rare earth products in bench-scale testing.  The process is not only efficient and cost effective but environmentally friendly.  Pilot plant testing was started in July 2015. 
  • Permitting Advancing – the US Forest Service is preparing the Environmental Impact Statement on the site, the draft of which is expect in the second half of 2015.  The Company submitted its applications for key permits and license to the appropriate state and federal agencies in the second quarter of 2015. 
  • Optimization Work – optimization work identified in the PFS is currently being undertaken and will support detailed engineering and the Feasibility Study.