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We have placed the Bear Lodge REE Project under care-and-maintenance, and all permitting activities
have been suspended. At present, we are focused on raising capital and/or seeking strategic partners to resume our
efforts to complete elemental separation test work and technical studies. Based on current permitting timetables and
other factors, the Company anticipates it could receive all permits and licenses for the Bear Lodge REE project
approximately 12 to 18 months after resuming permitting efforts. If we obtain the requisite financing, the
Company’s plan is to resume development activities, including working in parallel (with permitting activities) to
advance engineering in preparation for the feasibility study, to gain strategic partners and off-take customers, to
evaluate a modular approach to development beginning with a smaller initial production facility and to scale up its
REE separation test work in further pilot plant testing. The Company’s ability to begin construction activities on the
Project will be subject to (i) the availability of adequate capital, (ii) a positive FS, (iii) securing off-take customers,
(iv) obtaining necessary permits and licenses, (v) Board approval, and (vi) other factors.
The Bear Lodge REE Project deposit is located near excellent mining infrastructure, including good road
access and a power line within two kilometers of the property. The project site is 100 kilometers east of Gillette,
Wyoming, a major infrastructure, support and logistics center for coal mines in the Powder River Basin that should
provide for ready access to the required production supplies and materials as well as skilled labor. The deposit is
also situated 64 kilometers from the nearest railhead at Upton, Wyoming, allowing access to major distribution
channels from the proposed hydrometallurgical plant. The Bear Lodge REE Project has favorable community
acceptance, and Wyoming is one of the top-ranked mining jurisdictions globally (based on the Fraser Institute’s
2015 ranking of 122 jurisdictions).
Additional information regarding the Bear Lodge REE Project and the Bear Lodge Property is included
under the section heading “Item 2. Properties” in this Annual Report.
RECENT CORPORATE DEVELOPMENTS
Accomplishments in 2015
In 2015, Rare Element continued to make progress on its Bear Lodge REE Project on several critical fronts.
The Company achieved a number of major milestones, including:
Supported the U.S. Forest Service (“USFS”) as the lead agency in its development of the
Environmental Impact Statement (“EIS”) under the National Environmental Policy Act (“NEPA”)
process for the Bear Lodge REE Project. The draft EIS was published in January 2016, a major
permitting milestone for the Project. We also submitted the application to the Nuclear Regulatory
Commission (“NRC”) for a license to possess source material and a mine permit application to the
LQD-WDEQ.
Received a unanimous support resolution from the Wyoming Legislature for the Bear Lodge REE
Project, recognizing the significance of re-establishing a strong domestic rare earth production base
and the importance and need for timely completion of the Bear Lodge REE Project EIS by the USFS.
Further state support was received in a letter from the Chief Executive Officer of the Wyoming
Business Council, the State’s principal economic development agency, emphasizing the Project’s
status as a “priority project” for the Council and expressing the Council’s commitment to continue
discussions on future State financing assistance.
Raised US$3.4 million in a registered direct equity offering of 5,230,770 common shares and warrants
to purchase up to 2,615,385 common shares. The units, each consisting of one common share and one
warrant to purchase half a common share, were priced at US$0.65 per unit. Proceeds from the offering
were used for pre-development work at the Bear Lodge REE Project, including for progression of
permitting, continued test work on rare earth element separation, engineering and optimization studies,
and progression toward a feasibility study, as well as for working capital and other general corporate
purposes.
Completed successful pilot plant tests of a modified, zero-waste SX process to separate rare earths in
an efficient and environmentally sound manner. Following on from successful bench-scale tests, the
initial pilot plant campaign exceeded expectations and validated the Company’s ability to extract, at