Rare Element Resources adds to resource

In an updated resource estimate that includes less than half of the new assay results from holes drilled in 2011, Rare Element Resources (RES-T, REE-X) has boosted by 38% the measured and indicated resources of its Bear Lodge rare earths project in Wyoming. The resource estimate will be updated again by the end of the second quarter of 2012 and incorporate all 2011 drill holes.

For now the Bull Hill deposit contains 6.2 million tonnes averaging 3.75% rare earth oxides (REO) at a 1.5% REO cut-off grade in the measured and indicated category, up from 4.4 million tonnes averaging 3.77% REO last year.

Inferred resources add about 22 million tonnes at 2.74% REO, including 16.1 million tonnes at 3.10% REO at a 2% cut-off grade.

All of the measured and indicated resources and 15 million tonnes of the inferred resources are near-surface oxide and oxide-carbonate mineralization.

News of the updated resource sent the company’s shares in Toronto up 21.17% or 76¢ to close at $4.35 per share yesterday. By mid-day today, Rare Element Resources had gained another 13.33% or 58¢ to $4.93. Over the last year the company has traded between a high of $16.80 per share in January 2011 and a low of $3.16 per share in Dec. 2011.

The updated resource estimate was calculated from a REE database that included 117 drill holes between 2008 and 2011 and focused on the dike sets in the main Bull Hill deposit (including Bull Hill West), in addition to the Bull Hill Northwest and Whitetail Ridge deposit areas.

The current upgraded Bull Hill resource will be used in a prefeasibility study that the company expects will be completed in the first quarter of this year.

In the meantime the company says it is continuing to conduct metallurgical tests at its pilot plant and expand its REO separation testing. And as soon as it completes its prefeasibility study it will start working right away on a full feasibility study, it confirms. 

Rare Element believes the drilling suggests that there is potential to expand all three deposits and define heavy REE-enriched resources in the East Taylor and Carbon targets, both of which were drilled last year. The Bull Hill deposit (formerly known as Bull Hill Southwest) contains the bulk of the current resources. The deposit comprises a steeply-dipping FMR-carbonatite dike swarm with a dominant northwesterly trend. The Bull Hill Northwest deposit shares many characteristics with the Bull Hill Southwest deposit. It appears that northerly-striking mineralized bodies predominate. The dikes are part of an FMR/carbonatite dike system that is most likely separate from the Bull Hill dike system.

The Whitetail Ridge deposit is more enriched in heavy rare earths and is distinguished by a zone of FMR stockwork, some dikes, and a coincident geophysical anomaly, the company outlines on its website. Whitetail Ridge is a key target for further resource development drilling during 2012. The major dike sets in all of the resource areas are accompanied by peripheral zones of lower-grade stockwork REE mineralization.

The company is advancing its rare-earth metallurgical studies at Mountain States Research & Development International in Vail, Arizona, at Nagrom in Perth, Australia, and at Hazen Research in Golden, Colorado. The objective is developing and optimizing an effective and cost-efficient metallurgical flowsheet. Metallurgical testing will continue through 2012 on mineralized bulk core samples and surface bulk samples that were collected in 2011. Metallurgical testing of the oxide-carbonate zone resource is also progressing.

The Bear Lodge project contains the light rare earth elements (lanthanum, cerium, praseodymium, neodymium, samarium, europium, and gadolinium) and four of them (cerium, lanthanum, neodymium, and praseodymium) make up the majority of the Bear Lodge deposits.

Hecla Mining (HL-N) explored Bear Lodge in the late 1980s, focusing on a swarm of three carbonatite dikes at Bull Hill. Hecla drilled 12 core holes into the system, intercepting multiple rare-earth concentrations in nearly every hole; earlier, four holes drilled by Duval and Molycorp (MCP-N) also found rare earths.