Rare Element Files December 31 Second Quarter Financial Results and Update on Preliminary Feasibility Study for Bear Lodge Project
Rare Element Resources Ltd. (NYSE: REE) announced that its unaudited consolidated financial statements and Form 10-Q for the second quarter ended December 31, 2011 have been filed on www.sedar.com and www.sec.gov.
All dollar amounts stated below are in United States dollars.
Second Quarter Ended December 31, 2011 Financial Highlights:
The net loss for the second quarter ended December 31, 2011 totaled $10.1 million or $0.23 per share as compared to a net loss of $2.6 million or $0.07 per share for the same period in 2010. The $7.5 million negative variance in net loss between the periods was due to the following:
-- Increased exploration spending at the Bear Lodge property ($3.8 million); -- Increased stock-based compensation expenses due to the amortization of past option grants to the recently hired executives ($2.4 million); -- Write-down of the Nuiklavik mineral property located in Canada ($0.9 million); -- Increased general and administrative expenses due to more employees ($0.7 million); -- Reduced foreign exchange gain due to the impacts on the Company's Canadian dollar cash balances related to exchange rate fluctuations in the US dollar on the balance sheet date ($0.5 million); and -- Partially offset by positive variances in the mark-to-market gains on purchase warrants ($0.4 million) and increased interest income ($0.2 million).
Cash and cash equivalents at December 31, 2011 were $59.5 million compared to $64.2 million as of September 30, 2011. The $4.7 million decrease in cash was primarily due to exploration and general & administrative spending.
Rare Element currently has 44.2 million common shares outstanding and 49.0 million common shares outstanding on a fully diluted basis.
The unaudited financial statements are available through the Canadian securities regulatory authorities at www.sedar.com, and with the Securities and Exchange Commission at www.sec.gov. They are also available on the Company's website at www.rareelementresources.com.
Update on the Bear Lodge Project Preliminary Feasibility Study:
On January 4, 2012 we announced the results of an updated National Instrument 43-101 (NI 43-101) compliant mineral resource estimate of rare-earth elements plus yttrium contained in three deposits located in the Bull Hill deposit. The updated resource estimate of the Bull Hill deposit consists of 6.8 million tons (6.2 mm metric tonnes) averaging 3.75% rare-earth oxide (REO) in measured and indicated (M & I) mineral resources categories, increased from 4.9 million tons (4.4 mm metric tonnes) averaging 3.77% REO last year, both using a 1.5% REO cutoff grade. The total pounds of REO contained in all the high-grade deposits in all resource categories increased by 26% from 1,450 million pounds (660 million kg) to 1,830 million pounds (830 million kg). The interim M & I mineral resource estimate for the Bull Hill deposit was provided for inclusion in our current Preliminary Feasibility Study (PFS). However, the interim mineral resources estimate includes less than half of the new assay results from holes drilled in 2011. We intend to update the mineral resource estimate again by the end of the fourth quarter of 2012, utilizing all of the 2011 drill holes.
We expect to complete the PFS during the first quarter of 2012. Immediately after completing the PFS we will start work on the Feasibility Study. During 2012 we plan to begin the formal National Environmental Policy Act Environmental Impact Study process followed by the 2013 start of the formal mine permitting process with Wyoming Department of Environmental Quality. Mine construction will commence immediately upon the successful completion of the feasibility studies, environmental impact studies and permitting.
Cautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Mineral Resources
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