NI43-101Pre-Feasibility Study Report - page 111

Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
, 2014
10135-200-46 - Rev. 0
current development plant. Rare Element does not consider the historical estimates
as current resources, and the historical estimates should not be relied upon.
6.2.1 Rare Earth Resources
Molycorp first reported resource estimates for rare earth metals on the Bear Lodge
property in 1980. The company stated that it had partially drilled two “shallow blanket-
type stockwork bodies which total 9.1 million short tons (8.26 million tonnes) of
potential resources, with an estimated grade of 1.71% REO”, and a third deep tabular
body which “has been estimated to contain 6.8 million short tons (6.2 million tonnes)
of potential resources at a grade of 1.25% REO” (Lujan 1980). Molycorp’s
methodology and key assumptions for its resource estimation were not described.
In 1991, Hecla reported “total geological reserves for the three main dikes at 4.3
million short tons (3.9 million tonnes) at an average grade of 3.8% total REO” in the
first estimate of the Bull Hill deposit, and “roughly 8.5 million short tons (7.7 million
tonnes) at an average grade of 3.0% total REO” for the three dike swarms (Wineteer,
1991). The historical resource estimate of 4.3 million short tons (3.9 million tonnes) at
3.8% REO is based on about ten holes drilled in or near the resource area, and it
would likely be classified as an inferred mineral resource according to Section 1.2 of
National Instrument 43-101. The Hecla resource estimate was based on drill hole
assay intercepts and geological interpretations of continuity in the main mineralized
dikes along a strike length of about 1000 feet (328 meters). The other historical
resource estimates have drill hole spacing’s too broad to establish mineralization
continuity and insufficient mineralized intercepts to constitute anything other than
exploration targets.
Most of the historical drill core was discarded over the years, and only minor skeleton
core samples are still available. Historical assays cannot be confirmed, and many
original assay certificates from Duval and Molycorp are lost. However, the quality of
work performed by Duval, Molycorp, and Hecla is likely to be at or above the
standards of the industry, and their exploration and drilling results clearly indicate the
high potential for the property to host economically significant REE mineralization.
The USBM conducted exploration work in the Bear Lodge Mountains for REE in
1950-51 and re-evaluated that work in 1990 (Gersic
et al
., 1990). In 1950, the USBM
conducted sampling that identified an REE-anomalous area defined by total REE
abundances >2000 ppm. Subsequently, it drilled 9 of 10 shallow core holes, which
ranged in depth from 23.5 to 220.1 feet (7.2 to 67 meters), into one of the anomalous
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