- John Ray retained to lead gold exploration program.
- Property position increased by more than 100%.
- Newmont's pre-emptive right eliminated.
TSX-V: RES
VANCOUVER, May 12 /PRNewswire-FirstCall/ - Rare Element
Resources Ltd. (TSX-V: RES) ("Rare Element" or the "Company")
announces that the Company has signed an agreement with Newmont
North American Exploration Ltd. ("Newmont") that Newmont will not
exercise its option to acquire a 65% interest in the gold and base
metals at the Sundance Venture of Rare Element's Bear Lodge
property, Wyoming. This allows
Rare Element to maintain its 100% interest in the mineral potential
within the entire property. In addition, all of Newmont's 327
wholly owned claims outside the venture will be transferred to the
Company.
"We are excited about this opportunity for Rare Element because
of the potential to define gold deposits with a gold-focused
drilling program this year in addition to our planned
rare-earth-focused drilling program. We expect to be able to
generate the first NI 43-101-compliant gold resource estimate early
in 2011 for the Sundance gold
project from the planned drilling. We believe gold resources, in
addition to our rare-earth resource, will add significant value to
the Company and for our shareholders," stated President
Don Ranta.
Terms of the Agreement
The gold exploration project will continue to be called the
"Sundance" project and the rare-earths project will continue to be
called the "Bear Lodge" project. Both projects are included within
separate areas of the same property position in the Bear Lodge
Mountains. In consideration for transferring its claims and
terminating the venture agreement, Newmont was granted a
right-of-first-refusal on all claims, excluding rare-earth
elements, and a 0.5% NSR royalty, for precious and base metals
only, on the new claims being transferred to Rare Element from
outside of the Venture.
The original venture agreement, signed in June 2006, required Newmont to spend $5 million over 5 years to earn 65% interest.
Newmont had the right to earn an additional 15% working interest by
completing a positive feasibility study. To date, Newmont has
expended $2.85 million over nearly
four years. Newmont's withdrawal from the Sundance venture creates an opportunity for
Rare Element to control its own destiny on the property at a time
when record demand for gold and rare-earth elements is imminent.
The withdrawal agreement honors an arrangement between Newmont and
Bronco Creek Exploration Company on Newmont's formerly wholly owned
claims; Bronco Creek will continue to receive minor payments and a
retained 0.05% NSR royalty, with a cap, on precious and base metals
produced on the transferred claims that were wholly owned by
Newmont outside the venture area.
The Sundance Venture exploration program, lead by Newmont, also
had a right to operate both the gold and REE exploration programs
if they ever conflicted and this right is now terminated.
Gold Exploration Summary and Plans
The Bear Lodge property with the additional claims now consists
of 489 claims and a leased Wyoming State section for a total of
approximately 16 square miles. As a result of the agreement with
Newmont, the Company retains a totally unencumbered rare-earth
project and now has 100% interest in all gold and other minerals in
the Bear Lodge district. The core group of claims (venture area) is
free of royalties. Rare Element sees an immediate opportunity to
define a potentially economic gold resource by offset drilling of
holes where Newmont encountered significant gold mineralization.
The exploration goal for near-surface gold targets at the Taylor,
Smith, and Carbon gold targets is
to define an aggregate resource of 50 to 100 million tons ranging
from 0.015 to 0.030 ounces of gold per ton, with considerable
upside potential for resource expansion. A drilling program is
planned for 2010. The Bear Lodge alkaline-igneous complex, which
has many geologic similarities to the Cripple Creek district in Colorado, also has significant potential for
the discovery of deeper, high-grade gold mineralization along
structural zones.
During the past four years, Newmont contributed significantly to
the advancement of the Sundance
gold-focused exploration project, and also to the geological,
geochemical, and geophysical understanding of the entire project
area. Their activities expanded the areas of known gold
mineralization and led to increased understanding of the
mineralization controls. Newmont drilled 45 holes in the venture
area and another 13 holes on their claims held outside the venture.
Preliminary metallurgical testing of their drill samples of oxide
mineralization suggests excellent gold recoveries (70-80%) in a
heap leach system, depending on the crush size. An Environmental
Assessment was completed and a Plan of Operations approved for 200
acres of disturbance, a much larger area than typically allowed
under exploration permits because of the extent of both gold and
rare-earth mineralization. All of the claims, technical data, and
other pertinent information generated by Newmont in the district
has been or will be transferred to the Company. The Bear Lodge
project has been much improved and advanced due to Newmont's
efforts, and Rare Element is grateful for their contributions.
Mr. John Ray retained to lead the
gold exploration program
Rare Element has retained the services of geologist John Ray, Newmont's former on-site project
manager during the past four years, to manage the Company's
Sundance gold exploration program
under the direction of Dr. James
Clark, Vice President of Exploration. Mr. Ray states that,
"The Bear Lodge property has many untested exploration targets that
are ready for drilling, and the district remains at a relatively
immature level of gold exploration. The potential for discovery of
major gold deposits is very high for shallow low-grade
mineralization, and there is potential for discovery of
structurally controlled high-grade mineralization at depth. I am
excited about the opportunity to continue guiding the exploration
for gold in the Bear Lodge Mountains with Rare Element."
Rare Element Resources Ltd (TSX-V: RES) is a publicly traded
mineral resource company focused on exploration and development of
rare-earth elements and gold on the Bear Lodge property. Gold
exploration in the Bear Lodge Mountains has been conducted for
several decades with a number of companies significantly
contributing to the database and understanding. Newmont's recent
exploration efforts were the most comprehensive and extensive of
these programs.
Rare Element's Bear Lodge property encompasses one of the
largest disseminated rare-earth occurrences in North America (M H Staatz, 1983, US Geological
Survey Professional Paper 1049D). In parallel with the gold-focused
exploration project, Rare Element completed an NI 43-101-compliant
resource estimate and a Technical Report on the Bear Lodge
Rare-Earth Mineralization, and updating of the resource estimate
will be completed this spring. The Company has 100% interest in the
property, is continuing with drilling and a metallurgical testing
program, has begun a Scoping Study to accomplish a preliminary
engineering-economic assessment of the rare-earth project, and will
conduct drilling for gold mineralization in order to estimate
resources.
ON BEHALF OF THE BOARD
Donald E Ranta, PhD, PGeo,
President & CEO
Donald E. Ranta, PhD, PGeo,
serves the Board of Directors of the Company as an internal,
technically Qualified Person. Technical information in this news
release has been reviewed by Dr. Ranta and has been prepared in
accordance with Canadian regulatory requirements that are set out
in National Instrument 43-101. This news release was prepared by
Company management, which takes full responsibility for content.
Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Rare Element Resources Ltd.