NI43-101Pre-Feasibility Study Report - page 110

Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
, 2014
10135-200-46 - Rev. 0
Newmont Exploration Limited acquired a small land package in the district and
carried out limited gold exploration activities from 1986 until 1988. The company
drilled 10 reverse circulation holes totaling 3,115 feet (949 m).
Phelps Dodge acquired a large part of the area in 1994 and focused their efforts on
gold exploration over the next three years. It appears that Phelps Dodge ceased
exploration due more to the downturn in gold prices, rather than to lowered
expectations for the property.
Paso Rico (USA), Inc. began looking at the Bear Lodge property in 1998-99, staked
some claims, and negotiated a lease and option agreement on adjacent claims held
by Phelps Dodge Corporation in March 2000. The lease was terminated and replaced
by a 2% NSR royalty in September 2002. The 2% royalty was purchased from
Freeport McMoRan Corporation by Rare Element in March 2009 and Phelps
Dodge/Freeport has no further interests in the property. Rare Element Resources Ltd.
was incorporated in the province of British Columbia on June 3, 1999 and acquired
Paso Rico Resources Ltd. (Paso Rico) in 2003, as a wholly owned subsidiary, in
order to explore and develop primarily the rare earth mineralization, but also the gold
mineralization. Rare Element owns the Bear Lodge property claims in Wyoming. On
June 1, 2006, Rare Element, through its subsidiary, Paso Rico, and Newmont North
American Exploration signed an agreement to establish a gold exploration venture on
the joint Newmont-Rare Element claim block. This agreement was terminated in May
2010, with Rare Element becoming the sole participant in the combined gold-REE
6.2 Historical Resource Estimates
This section discusses a number of historical resource estimates for rare earth
elements as well as gold that are included as part of the historical record for the
project. As to the rare earth historical resources, no qualified person did sufficient
work on these estimates to classify them as current resources, and the reliability of
the estimates is unknown. Further, Rare Element did not conduct work to verify
historical rare earth resources, but rather used current drilling and geological data
developed by the company between 2004 and 2013 for purposes of its resource
estimation. The gold historical resource is not progressing under Rare Element’s
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