Rare Element Resources Ltd. (NYSE MKT: REE and TSX: RES) (the "Company"), a mineral resources company advancing development of the Bear Lodge Critical Rare Earth Project (the "Project"), reported today that it has filed its unaudited consolidated financial statements on Form 10-Q for the three months and nine months ended September 30, 2014 on www.sec.gov and www.sedar.com. "During the quarter, we released a very positive Preliminary Feasibility Study on the Bear Lodge Project that integrated the results of the multiple advancements we made over the last two years," said Randall J. Scott, President and Chief Executive Officer. "Since then we have built on this with success in our test work on an innovative approach to separation and further optimizing of our proprietary recovery process - both of which will contribute to lower costs. We are also advancing plans for construction of a larger-scale demonstration plant, one that will process between one and three tons of material a day, to minimize start-up and commissioning risk by providing key data on materials of construction, equipment selection and material handling parameters. This work should allow us to smoothly transition from start-up to full operations without many of the operational issues experienced by others in the sector. With respect to the permitting side of the Project, the alternatives analysis under the Environmental Impact Statement process has not been completed as originally scheduled. Therefore, we are not able to complete the application process for certain licenses and permits in the fourth quarter of 2014 as previously anticipated. This has resulted in our adjusting expectations for Project commissioning to mid-2017." Financial Results (Please note that financial results published by the Company are all stated in U.S. Dollars.) For accounting purposes, the Company is classified as an exploration stage company and, as such, does not have production-related revenues at this time. The net loss for the quarter ended September 30, 2014, totaled $3.6 million, or $0.08 per share, compared with a net loss of $6.9 million, or $0.15 per share, for the same period in 2013. The key drivers behind the reduced year-over-year loss were primarily:
- A decrease in exploration and evaluation expense of $3.3 million, the result of a shift from exploration activities to development-related activities; and
- Lower corporate administrative cost of $0.5 million, primarily due to lower stock-based compensation expense and the Company's continued focus on containing costs; partially offset by
- An unfavorable variance in currency translation of $0.5 million.
- A decrease in exploration and evaluation expenses of $3.3 million;
- Lower corporate administrative cost of $1.3 million; and
- A favorable variance in currency translation losses of $0.9 million.
Current cash balances will be used to fund the following work programs:
- Continued support of efforts by the U.S. Forest Service (USFS) and the third-party contractor to prepare the Environmental Impact Study (EIS) on the Project;
- Application for other permits and licenses, as appropriate, once the EIS alternatives assessment has been completed;
- Continued evaluation of recommendations identified in the PFS for potential inclusion in the Feasibility Study (FS), including certain process optimization methods and the on-going analysis of technical advancements made in downstream elemental separation technology;
- Distribution of separated rare earth products resulting from current test work to potential offtake partners for evaluation; and
- Initiation of the FS, pending Board approval.
As originally outlined in the U.S. Forest Service timeline, the alternatives analysis for the EIS was expected to be completed in August 2014. At the time of this press release, however, the identification of alternatives has not been finalized and the impact analysis has not begun. Applications for some of the necessary state and federal permits depend on the project modifications, if any, that may be determined from the EIS alternatives analysis. The Company's development timeline required those applications to be made in the fourth quarter, but it now expects they will not be made until the first quarter of 2015. While the Forest Service has stated it expects to be able to make up the current delay and remain on schedule to deliver a draft EIS in Spring 2015, the resultant delay in other permitting is expected to push back the anticipated commissioning of the Project until mid-2017.Rare Element Resources Ltd. is a publicly traded mineral resource company focused on exploration and development of rare-earth element deposits, specifically those with significant distribution of critical rare earths. The Company is advancing development of the Bear Lodge Project, located in northeast Wyoming. Bear Lodge is a significant mineralized district containing many of the less common, more valuable critical rare earths that are essential for electronics, fiber optics, laser systems for health and defense, as well as many evolving green technologies, like hybrid cars, solar panels and wind turbines. Permitting and feasibility work on the Project continue to advance. The Company is a member of the U.S. Department of Energy's Critical Materials Institute, a combined government and private sector organization committed to eliminating supply chain issues for rare earths and other critical elements. Please see CMI's website at https://cmi.ameslab.gov/ for additional details on its mission and members. For additional information, please visit the Company's website at www.rareelementresources.com or contact Robbin Lee at 720-278-2462 or email@example.com. Forward Looking Statements This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are usually identified by our use of certain terminology, including "will", "believes", "may", "expects", "should", "seeks", "anticipates", "plans", "has potential to", or "intends" (including negative or grammatical variations thereof) or by discussions of strategy or intentions. Such forward-looking statements include statements regarding: the estimated Project timing , the estimated Project economics and parameters, the impact of the Company's proprietary technology on production, the timing of the draft EIS and filing of other permits applications; mineral resource and reserve estimates; the timing and expected results of a definitive Feasibility Study including the potential for upside as a results of the incorporation of Project opportunities into the definitive Feasibility Study; the timing for the Company to update the schedule for the Project, processing test work and expected results; permitting process and progress; the expected commissioning of the Project and Project development plans for the future. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include, but are not limited to, the progress of our Bear Lodge Project; fluctuations in demand for, and price of, rare earth products; success of process technology under testing or development; results from geological evaluations and programs; timing of and unexpected events at the Bear Lodge property; delay or failure to receive government approvals and permits; our ability to obtain financing for the Project on acceptable terms or at all; changes in U.S. and Canadian securities markets; and general economic conditions. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors in our Annual Report on Form 10-K for the year ended December 31, 2013. We expect that the above estimates as to development plans, technology and other processes, time frames and financial needs will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we may elect to update these estimates at any time, we do not undertake to update any estimate at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this news release represent management's estimate as of any date other than the date of this news release.