rare-earth elements - Hard Assets Rare Earths Investment Summit
rare-earth elements - Hard Assets Rare Earths Investment Summit
rare-earth elements - Hard Assets Rare Earths Investment Summit
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RARE-EARTH ELEMENTS<br />
& GOLD<br />
NYSE AMEX: REE<br />
TSX: RES<br />
REEs<br />
A Look at the Road Ahead<br />
NYSE AMEX: REE<br />
TSX: RES<br />
1
Disclaimer<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• The information contained herein, while obtained from sources which we believe are reliable, is not guaranteed as to<br />
its accuracy or completeness. The company is an exploration company and its mineral project has yet to be proven to<br />
be economic. Some references to geologic and technical information contained herein are historical or have been<br />
generated by external consultants who may or may not be QPs under NI 43-101 and are therefore not in accordance<br />
with the requirements under NI 43-101 or have to be prepared in accordance with a preliminary or final feasibility<br />
study. The content of this presentation is for information purposes only and does not constitute an offer to sell or a<br />
solicitation to purchase any securities referred to herein.<br />
• Forward-looking statements: This presentation includes certain forward-looking statements about future events<br />
and/or financial results which are forward-looking in nature and subject to risks and uncertainties. Forward-looking<br />
statements include without limitation, statements regarding the company’s plan, goals or objectives and future mineral<br />
projects, potential mineralization, resources and reserves, exploration results and future plans and objectives of <strong>Rare</strong><br />
Element Resources. Forward-looking statements can generally be identified by the use of forward-looking terminology<br />
such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, or “continue” or the negative thereof or<br />
variations thereon or similar terminology. There can be no assurance that such statements will prove to be accurate<br />
and actual results and future events could differ materially from those anticipated in such statements. Important<br />
factors that could cause actual results to differ materially from expectations include risks associated with permitting,<br />
mining generally, and pre-development stage projects in particular. Potential investors should conduct their own<br />
investigations as to the suitability of investing in securities of <strong>Rare</strong> Element Resources.<br />
• Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources<br />
This presentation uses the term “Inferred” Mineral Resources. U.S. investors are advised that while such terms are<br />
recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them.<br />
“Inferred Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their<br />
economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded<br />
to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or<br />
other economic studies. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral<br />
Resource exists, or is economically or legally mineable.<br />
2
Current Status - REEs<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• China accounts for ~96% of the world’s current REE production<br />
• Currently believed to be operating at or near capacity<br />
• Reducing exports year-on-year<br />
• Attempted to acquire the two most advanced projects outside China<br />
• Potential importer of <strong>rare</strong> <strong>earth</strong>s in 5 - 6 years<br />
• Problem with lack of transparency in reserves and future plans<br />
• No significant non-Chinese supply sources currently available<br />
• Small and limited production - Russia, India, and California<br />
• Two <strong>rare</strong>-<strong>earth</strong> operations being constructed outside China:<br />
• Development-stage projects - production in late 2012 & 2013<br />
• Mt. Weld, W. Australia – Lynas Corporation<br />
• Mountain Pass, California – Molycorp<br />
• Others at earlier stages with longer lead times to production<br />
• New projects – technical, economic, and environmental hurdles<br />
3
Chinese Policies and Production<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• China wants to create major wind turbine, solar panel, and electric car industries<br />
Chinese Government Policy<br />
• Strategic value of REO well understood<br />
• Export quotas declining annually<br />
• -10% since 2004 to 59,600t in 2007<br />
• -6% to 56,900t in 2008<br />
• -12% to 50,100t in 2009<br />
• -40% to 30,300t in 2010<br />
• -7% ? to ~28,000 in 2011<br />
• Raised export tariffs to 15-25%<br />
• Key interest in maintaining long-term<br />
domestic supply for the Chinese<br />
manufacturing industry<br />
• Pressure high-tech companies that need<br />
these REE to relocate production to China<br />
Source: Metal-Pages<br />
Chinese Production Limits<br />
• Largest REO mine - Bayan Obo (50% of<br />
world supply) probably operating at or<br />
near capacity<br />
• REO is a by-product of iron mining<br />
• Future ore selection forecast to result in<br />
lower REO grades<br />
• Sichuan<br />
• Environmental issues<br />
• Underground mining<br />
• Jiangxi, Guangdong, Hunan, Fujian<br />
• Fragile resource due to over exploitation<br />
• Fragile environment due to mining methods<br />
• Limited reserves<br />
4
Looking Ahead at REE Market<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• China will account for a decreasing share of the world’s REE<br />
production<br />
• Lynas Corp. and Molycorp expected to be in production by 2012 /<br />
2013 and progressing to their stated capacities<br />
• Hurdles to other potential REE producers:<br />
• Decreasing prices as supply begins to meet demand<br />
• Grades and value per ore tonne for some deposits too low<br />
• Either high Nd-Pr grades or favorable HREE grades<br />
• Good metallurgy and high grade of mineral concentrate<br />
• Logistical and infrastructure challenges<br />
• Environmental challenges due to thorium content<br />
• Technology of REO separation<br />
• High capital costs of mine & plant construction<br />
5
Advanced-Stage Projects<br />
Being Evaluated<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Other projects with longer lead times to production:<br />
• Steenkampskraal, South Africa – Great Western<br />
• Bear Lodge, Wyoming – <strong>Rare</strong> Element<br />
• Nolans Bore, Australia – Arafura<br />
• Zandkopsdrift, South Africa – Frontier<br />
• Eldor, Quebec – Commerce<br />
• Sarfartoq, Greenland – Hudson<br />
• Nechalacho, NWT – Avalon<br />
• Strange Lake, Quebec – Quest<br />
• Kvanefjeld, Greenland – Greenland Minerals<br />
• Dubbo, Australia – Alkane<br />
• Bokan, Alaska – Ucore<br />
• Norra Karr, Sweden – Tasman<br />
• Kipawa (Zeus), Quebec – Matamec<br />
6
<strong>Rare</strong> Element Resources<br />
Why the Bear Lodge Project?<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• 2 nd highest grade <strong>rare</strong>-<strong>earth</strong> deposit in North America<br />
• Excellent distribution of <strong>elements</strong> (rich in Nd, Pr, Eu, Tb, Dy)<br />
• Simple low-cost metallurgical processing<br />
• Exceptional infrastructure<br />
Financial Information<br />
• 44.1M shares outstanding (47.9M FD)<br />
• Market cap of $240M<br />
• ~$63M in cash on hand, no debt<br />
• 52 week H/L of $17.92/$3.86<br />
• Insiders hold 5.8%<br />
7
<strong>Rare</strong> Element Resources Projects<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Bear Lodge Property, Wyoming, USA<br />
• Indicated <strong>Rare</strong>-Earth mineral resource (NI 43-101-compliant)<br />
• 4.9 million tons @ 3.77% REO (1)<br />
• Inferred <strong>Rare</strong>-Earth mineral resource (NI 43-101-compliant)<br />
• 17.8 million tons @ 3.03% REO (1)<br />
Preliminary Economic Assessment completed - 40% IRR<br />
• Carbonatite deposit - same type as Bayan Obo and Mountain Pass<br />
• Property 100% controlled & metallurgical process outlined<br />
Sundance Project, Wyoming, USA<br />
• Cripple Creek-style gold target<br />
• 947,000 oz inferred Au resource: 76 mm tons @ 0.0125 opt (2) (0.42 gpt)<br />
(NI 43-101 compliant)<br />
• Excellent potential for more resources of near-surface and higher grade gold<br />
(1) 1.5% REO cut-off-grade; prepared by Ore Reserves Engineering, June, 2011<br />
(2) 0.005 opt Au cut-off grade; prepared by Ore Reserves Engineering, March 2011<br />
8
Scoping Study Highlights<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Pricing basis - RE bulk concentrates<br />
Base Case<br />
3-year trailing average price<br />
($5.51/kg thru Aug 2010)<br />
Production rate 1,000 tpd<br />
Mine life 15 years (5M tons)<br />
Initial capital $87M<br />
Operating cost $213/ton<br />
LOM sustaining capital $88M<br />
REO recoveries to concentrates (23,700 tonnes conc.) 80%<br />
Annual tons REO in concentrates (10,300 tonnes REO) 11,400 tons<br />
Annual payable value of REO $143M<br />
Annual operating cash flow $50M<br />
Internal rate of return (IRR) 40%<br />
After tax LOM cash flow (undiscounted)<br />
After tax net present value (NPV)<br />
$598M<br />
10% discount rate $213M<br />
15% discount rate $131M<br />
Payback 3.1 years<br />
Concentrate prices: 3-year trend average $5.51/kg; 3.75-yr average $14.45/kg; current price of $38/kg<br />
Concentrates contain 42-45% REO (~43.5%)<br />
NI 43-101 Scoping Study (PEA) prepared by J.T. Boyd Company, November 2010<br />
9
Bear Lodge<br />
Location and Infrastructure<br />
Excellent Mining<br />
Infrastructure<br />
• Paved road within 2 miles of<br />
project<br />
• Low-cost power within 1 mile of<br />
project<br />
• 40 miles to nearest railhead<br />
• Skilled labor and water available<br />
• Favorable community<br />
acceptance; Major coal mining<br />
center 60 miles W<br />
• Top ranked mining jurisdiction (1)<br />
(1) Wyoming ranked as one of the top worldwide locations favorable for mining by the Fraser Institute<br />
NYSE AMEX: REE<br />
TSX: RES<br />
10
Bear Lodge<br />
<strong>Rare</strong>-<strong>Earths</strong> Overview<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• Contains “one of the largest deposits of disseminated (low-grade)<br />
<strong>rare</strong> <strong>earth</strong>s in North America” plus high-grade zones (US Geological<br />
Survey (2) ); USBM historic resource estimate<br />
• Indicated mineral resource - 4.9 mm tons @ 3.77% REO (1) of oxide,<br />
Inferred mineral resources of 17.8 mm tons @ 3.03% REO (1)<br />
including oxide zone of 11.6 mm tons @ 3.22% REO (NI 43-101)<br />
• Exploring for additional oxidized REE mineralization in the Bull Hill area<br />
carbonatites within 500 feet of surface<br />
• Low-cost simple metallurgical process for near-surface oxide<br />
mineralization; Pilot Plant in progress;<br />
• Preliminary Feasibility Study in progress<br />
(1) NI-43-101 compliant using 1.5% REO cut-off-grade; prepared by Ore Reserves<br />
Engineering, June 2011<br />
(2) US Geological Survey (Staatz, Professional Paper 1049-D, 1983)<br />
11
<strong>Rare</strong>-Earth Drilling<br />
NYSE AMEX: REE<br />
TSX: RES<br />
12
Bull Hill Area Drill Holes<br />
Carbon<br />
w/ HREE<br />
East Taylor<br />
w/ HREE<br />
Whitetail Ridge<br />
Resource HREE<br />
(USBM target)<br />
Target<br />
Bull Hill NW<br />
Resource<br />
Bull Hill West<br />
Bull Hill<br />
Bull Hill<br />
Resource<br />
NYSE AMEX: REE<br />
TSX: RES<br />
7 Target Areas<br />
Only Bull Hill<br />
well drilled<br />
Large areas of<br />
adjacent<br />
low-grade (1%)<br />
stockwork REE<br />
13
Dike-Swarm Section - Bull Hill<br />
Plug?<br />
Old holes<br />
Low-grade<br />
2008-11 holes<br />
High-grade<br />
REE in<br />
Dikes Low-grade<br />
Indicated Mineral Resource<br />
4.9 million tons @ 3.77% REO<br />
(compliant with NI 43-101)<br />
Plus Inferred Resources<br />
NYSE AMEX: REE<br />
TSX: RES<br />
14
2010 Drilling Results<br />
REE - Selected Intervals<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Hole Oxide/Non Thickness Total <strong>Rare</strong> Earth Oxides<br />
RES 09-21 oxide 93 ft 4.08%<br />
oxide 59 ft 8.79%<br />
oxide / trans. 96 ft 5.59%<br />
RES 10-01A oxide 97 ft 6.57% (step-off)<br />
RES 10-04 oxide / trans 163 ft 4.64% (step-off)<br />
RES 10-07 oxide 97 ft 8.43% (step-off)<br />
RES 10-19 oxide 58 ft 10.55% (step-off)<br />
RES 10-28 oxide 183 ft 3.55%<br />
RES 10-34 oxide 161 ft 4.10%<br />
RES 10-37 oxide 76 ft 10.01%<br />
RES 10-39 oxide 102 ft 4.20%<br />
oxide 99 ft 4.25%<br />
RES 10-62 oxide 179 ft 8.78% (step-off)<br />
15
2011 Drilling Results<br />
REE - Selected Intervals<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Hole Oxide/Non Thickness Total <strong>Rare</strong> Earth Oxides<br />
RES 11-10 WR oxide 32 ft 3.94% (step-off)<br />
oxide 44 ft 3.27% (step-off)<br />
oxide / trans 27 ft 4.68% (step-off)<br />
RES 11-17 oxide 58 ft 4.88% (step-off)<br />
RES 11-21 oxide 40 ft 3.21% (step-off)<br />
oxide / trans 115 ft 3.38% (step-off)<br />
RES 11-22 oxide 26 ft 4.17%<br />
oxide 64 ft 5.48%<br />
oxide / trans 79 ft 3.96%<br />
RES11-25 WR oxide 108 ft 3.81% (step-off)<br />
RES11-26 ET oxide 42 ft 4.15%<br />
RES11-26A ET oxide 19 ft 3.30%<br />
16
Bull Hill REE Mineralization -<br />
FMR Dikes & Veins<br />
This image cannot currently be displayed.<br />
Bull Hill Diatreme<br />
Breccia ~1%<br />
Low-grade REO<br />
NYSE AMEX: REE<br />
TSX: RES<br />
OXIDE Zone Mineralization - FMR<br />
with Bastnasite-group Minerals<br />
(light brown) High-grade REO<br />
17
Metallurgical Flowsheet<br />
Mineral<br />
Concentration<br />
(~ gravel wash plant)<br />
Preconcentrate<br />
90% recovery<br />
Chemical<br />
Concentration<br />
RE Carbonate<br />
Concentrate<br />
Overall 80% recovery<br />
(Oxide Mineralization)<br />
NYSE AMEX: REE<br />
TSX: RES<br />
18
Mineral Concentration<br />
Pilot Plant<br />
+ 1 inch<br />
Coarse Reject<br />
10m x 48m Fine Middling<br />
NYSE AMEX: REE<br />
TSX: RES<br />
1 inch x 10m Coarse Middling<br />
Pre-concentrate<br />
1 in x 10 m<br />
Recycle<br />
19
Chemical Concentration<br />
Pilot Plant<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Acid Addition Pre-concentrate Feed HCL Leaching<br />
Iron Hydroxide Precipitation REO Carbonate Precipitation Filtration<br />
20
Oxide Zone Distribution of REE<br />
<strong>Rare</strong>-Earth<br />
Element<br />
Wt-% Oxide<br />
Distribution (1)<br />
% Relative Value(2)<br />
Lanthanum 28.6% 19.6%<br />
Cerium 43.5% 15.3%<br />
Neodymium 17.2% 31.0%<br />
Praseodymium 4.9% 8.7%<br />
Samarium 2.6% 1.1%<br />
Europium 0.6% 17.1%<br />
Gadolinium 1.3% 0.8%<br />
Terbium 0.1% 2.7%<br />
Dysprosium 0.3% 3.0%<br />
Yttrium 0.8% 0.6%<br />
Total 99.9% 99.9%<br />
(1) From 43-101 resource estimation model of indicated category, ORE, June 2011<br />
(2) Based on 2010 average prices of REEs from January through August<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Bull Hill Deposit<br />
“Big 5” - most<br />
important and<br />
valuable<br />
<strong>elements</strong> for<br />
magnets – Nd,<br />
Pr, Tb, Dy & CFL<br />
–Eu, Tb<br />
23% of total<br />
distribution but<br />
over 62% of<br />
value<br />
21
Exploration Deposits & Targets<br />
HREE<br />
HREE<br />
Target?<br />
LREE<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Bear Lodge<br />
<strong>Rare</strong>-Earth<br />
District<br />
2010 drill holes<br />
Main resource<br />
at Bull Hill<br />
HREE targets to<br />
the West<br />
22
Bear Lodge REE Geology<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Bear Lodge<br />
REE District<br />
High-grade<br />
REO shown as<br />
FMR in dark<br />
MnOx dikes<br />
Soil cover<br />
masks some<br />
geology<br />
23
Milestones<br />
• Completed<br />
√ 2004-2009: Drilled 32 core holes<br />
in REE mineralization, + 23<br />
historic holes, favorable met test<br />
results, estimated resources<br />
√ 2010: Updated resource<br />
estimate; drilled 60 holes + 40<br />
large diameter holes for bulk<br />
sample; positive Scoping<br />
Study (PEA) on oxides, $66M<br />
financings<br />
√ 2011: Updated resources<br />
estimate, drilled 63 holes,<br />
continued met testing, began<br />
pilot plant testing<br />
• Upcoming<br />
NYSE AMEX: REE<br />
TSX: RES<br />
– Q4 2011: Collect environmental<br />
baseline data; pilot plant tests<br />
on 10-ton bulk sample<br />
– Q1 2012: Complete<br />
Preliminary Feasibility Study<br />
– Q1 2012: Market products from<br />
pilot plant tests; initiate mine<br />
permitting; continue tests for<br />
extraction and separation of REEs<br />
24
Appendix<br />
Thank You<br />
NYSE AMEX: REE<br />
TSX: RES<br />
25
Proven Management Team<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Donald E. Ranta, PhD, PGeo, President, CEO & Director<br />
• 40 years of leadership in exploration and project evaluation<br />
• Previously at Echo Bay, Phelps Dodge, AMAX, Kennecott<br />
Jaye T. Pickarts, P.E., Chief Operating Officer<br />
• 25 years’ experience in project evaluation and production<br />
• Previously at Knight Piesold, Pegasus, Texasgulf, Freeport<br />
David Suleski, CPA, Chief Financial Officer<br />
• 25 years of leadership as CFO, treasurer, controller, & in financings<br />
• Previously at Atna, Golden Star, Rothschild, Apex, Cyprus-Amax,<br />
PWC, E & Y<br />
James G. Clark, PhD, LGeo, VP Exploration<br />
• <strong>Rare</strong>-<strong>earth</strong> geology expert with 30 years experience<br />
• Previously at Molycorp and Hecla Mining<br />
George G. Byers, M.A., VP Government & Community Relations<br />
• 35 years’ experience in successful project development<br />
• Previously at Santa Fe Pacific Gold, Rio Algom, Cameco<br />
26
Directors & Strategic Advisors<br />
Directors: M.N. Anderson, Chairman<br />
• M. Norman Anderson, PEng, Past Chairman & CEO, Cominco<br />
• Mark Brown, C.A., President, Pacific Opportunity Capital<br />
• Norman W. Burmeister, P.E., President & CEO, Saratoga Gold<br />
• Gregory E. McKelvey, PGeo, consullting geologist<br />
• Paul Schlauch, retired partner, Holland & Hart<br />
Advisors:<br />
• Jefferey D. Phillips, President of Global Market Development<br />
• Dr. Anthony Mariano, consulting mineralogist & geologist<br />
• Stephen P. Quin, PGeo, President & CEO, Midas Gold<br />
• Robert Bishop, investor and former newsletter writer<br />
• William H. Bird, PhD, PGeo, President of Medallion Resources Ltd.<br />
• David Beling, P.E., former Executive VP & COO of Geovic, Ltd.<br />
• Matt Bender, P.E., Senior Director, Newmont Mining Company<br />
NYSE AMEX: REE<br />
TSX: RES<br />
27
Bear Lodge Project<br />
Technical Team<br />
• Dr. Tony Mariano – Mineralogy & REE geology<br />
• Dr. Roshan Bhappu, P.E. – Metallurgy, Mountain States R&D<br />
• Dudley Kingsnorth, PEng – <strong>Rare</strong>-<strong>earth</strong> markets<br />
• Jack Lifton – Strategy and OEM contacts<br />
• John Ray – REE & Gold exploration manager<br />
• Dr. Ellie Leavitt, PGeo – REE geology & exploration<br />
• James Leavitt, PGeo – Gold geology & exploration<br />
• Alan Noble, P.E. – Resource estimation, Ore Reserves Engineering<br />
• Michael Richardson, P.E. – Mining engineering, John T Boyd Co.<br />
• William Ahrens, P.E. – Metallurgical engineering, Mountain States R&D<br />
• Dr. Richard Hammen, P.E. – Extraction & separation, Intellimet<br />
• Thomas Kerr, PEng – Geotechnical engineering, Knight Piesold<br />
• Richard DeLong – Environmental & permitting, Enviroscientists<br />
NYSE AMEX: REE<br />
TSX: RES<br />
28
What are <strong>Rare</strong>-Earth Elements?<br />
<strong>Rare</strong> <strong>Earths</strong> Commercial Use<br />
REO Price<br />
(USD/kg)<br />
Scandium Stadium Lights Not Av.<br />
Yttrium Lasers 11.30<br />
Lanthanum Electric car batteries 6.12<br />
Cerium Lens polishes 4.57<br />
Praseodymium Searchlights, aircraft parts 28.38<br />
Neodymium High-strength magnets 29.49<br />
Promethium Portable X-ray units Synthetic<br />
Samarium Glass 4.50<br />
Europium Compact fluorescent bulbs 480.00<br />
Gadolinuim Neutron radiography 8.43<br />
Terbium High-strength magnets 350.00<br />
Dysprosium High-strength magnets 129.50<br />
Holmium Glass tint Not Av.<br />
Erbium Metal alloys 30.00<br />
Thulium Lasers 790.00<br />
Ytterbium Stainless steal 132.00<br />
Lutetium None 288.42<br />
Source: Metal-Pages as at February 3, 2010 and at October 11, 2011<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• REE – an unusual group of metallic <strong>elements</strong> with unique properties: chemical,<br />
catalytic, magnetic, metallurgical and phosphorescent<br />
• REE – uses in high-strength magnets are in high demand – includes Neodymium,<br />
Praseodymium, Dysprosium and Terbium,<br />
Price<br />
11-1-11<br />
---<br />
142.50<br />
64.00<br />
59.00<br />
218.50<br />
240.00<br />
---<br />
101.50<br />
3790.00<br />
142.50<br />
3010.00<br />
2090.00<br />
---<br />
---<br />
---<br />
---<br />
---<br />
21<br />
Sc<br />
39<br />
Y<br />
57<br />
La<br />
58<br />
Ce<br />
59<br />
Pr<br />
60<br />
Nd<br />
Periodic Table of REEs<br />
61 62 63<br />
Pm Sm Eu<br />
64<br />
Gd<br />
65<br />
Tb<br />
- Heavy <strong>Rare</strong> <strong>Earths</strong><br />
- Light <strong>Rare</strong> <strong>Earths</strong><br />
- Other <strong>Rare</strong> Metals<br />
66<br />
Dy<br />
67<br />
Ho<br />
68<br />
Er<br />
69 70<br />
Tm Yb<br />
71<br />
Lu<br />
29
Where are REE Found?<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• China accounts for ~96% of the world’s current REE production<br />
• Currently believed to be operating at or near capacity<br />
• Reducing exports year-on-year<br />
• Potential importer of <strong>rare</strong> <strong>earth</strong>s in 5 - 6 years<br />
• No significant non-Chinese supply sources currently available<br />
• Small and limited production - Russia, India, and California<br />
• All REE deposits - environmentally challenging due to thorium content<br />
• Development projects currently in construction or study:<br />
• Advanced stage projects - production in late 2011 & 2012<br />
• Mt. Weld, W. Australia – Lynas Corporation<br />
• Mountain Pass, California – Molycorp<br />
• Others at earlier stages with longer lead times to production<br />
• New projects – technical, economic, and environmental hurdles<br />
30
Key Applications of REE<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• REE are critical and enabling for many emerging Green Energy technologies, High Tech<br />
applications and Defense Systems; examples include hybrid cars, plug-in hybrid electric<br />
vehicles, wind power turbines, computer hard drives, fluorescent lights, missile guidance<br />
systems, lasers and cell phones<br />
Energy<br />
Efficiency<br />
Environmental<br />
Miniaturization<br />
Technology<br />
Application Elements<br />
• Compact fluorescent lights<br />
• Weight reduction in cars<br />
• Higher oil refinery yields<br />
• Hybrid vehicles<br />
• Auto catalytic converter<br />
• Diesel additives<br />
• Disk drives<br />
• Digital cameras<br />
• Flat panel displays<br />
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Major Applications of REE<br />
Hybrid Cars<br />
Nd-Fe-B magnets & La batteries<br />
NYSE AMEX: REE<br />
TSX: RES<br />
Wind Turbines<br />
With Nd-Fe-B magnets<br />
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Applications are Driving Strong<br />
Forecasted Demand<br />
NYSE AMEX: REE<br />
TSX: RES<br />
• Total demand for REE is expected to grow from 125,000 tonnes in 2010, to 170,000<br />
tonnes by 2015, and to 255,000 tonnes in 2020; a growth rate of ~7% per year<br />
2008 Demand by Application<br />
Ceramics<br />
5%<br />
Phosphors &<br />
Pigments<br />
8%<br />
Magnets<br />
21%<br />
Other<br />
7%<br />
Metal Alloys<br />
18%<br />
Total = 124,000 tonnes<br />
Source: Dudley J Kingsnorth, IMCOA<br />
Catalysts<br />
19%<br />
Glass<br />
Additive<br />
10%<br />
Polishing<br />
Powder<br />
12%<br />
Growth Forecast by Application<br />
Application<br />
Growth rate<br />
% p.a.<br />
2015 demand<br />
tonnes<br />
Catalysts 0% 25,500<br />
Glass Additive 0% 10,000<br />
Polishing Powder 5-10% 25-30,000<br />
Metal Alloys 4-8% 36-40,000<br />
Magnets 10-15% 40-45,000<br />
Phosphors & Pigments 4-8% 13-15,000<br />
Ceramics 5-8% 9-10,000<br />
Other 8-12% 12-14,000<br />
Total 6-10% 170-190,000<br />
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