VANCOUVER, April 29 /CNW/ - Rare Element Resources Ltd. (TSX-V: RES) ("Rare Element" or the "Company") is pleased to report the re-purchase of the royalty interest (the "Royalty") on certain claims, plus an area of interest, on the Bear Lodge property, Wyoming, from Freeport-McMoRan Corporation ("Freeport"). The royalty is on all minerals produced on the claims, and the area of interest, that cover approximately six square miles in the center of the district, including both rare-earth and gold mineralization occurrences. In addition, Rare Element and Newmont North America Exploration Limited ("Newmont") are progressing on gaining final approval of a permit to conduct drilling programs scheduled to begin in the summer of 2009.
Bear Lodge NSR Repurchase -------------------------
The 50 unpatented claims with the royalty were held previously by Freeport (then known as Phelps Dodge Corporation Mining Division), and were transferred to a wholly owned subsidiary of Rare Element, by way of a "Mineral Lease and Option for Deed" signed on March 30, 2000. Subsequently, the mineral lease and option agreement was terminated and replaced on September 30, 2002, with a production royalty of 2% net smelter returns ("NSR") payable to Freeport. Rare Element repurchased the Royalty for a one time payment, and there are no other royalties outstanding on the Bear Lodge property.
Rare Element's gold and precious metals partner, Newmont, as Manager, has the right to elect for the Venture to acquire this royalty, other than as it relates to the Rare Earths and Uranium, within a certain time frame. If Newmont elects to do so, a portion of the cost of the royalty acquisition would be born by Newmont with such cost to be credited toward Newmont's earn in requirement under the venture agreement.
Mark T. Brown, Chief Financial Officer of Rare Element noted that "The only royalty on the Bear Lodge Project is now held by Rare Element itself which bought the royalty but did not cancel it. The royalty covers all metals, including gold and rare earth elements, at Bear Lodge. With the recent positive exploration results of both the rare earths and gold exploration programs, we felt it was time to clean up this royalty which had been outstanding for 7 years."
Exploration Permit Status -------------------------
The Sundance gold exploration venture, which is a joint venture between Paso Rico USA, Inc. (Rare Element's wholly owned subsidiary) and Newmont, has received a "Record of Decision" on the exploration permit, subject to an appeals period that has now expired. Two appeals were received by the US Forest Service and are currently being considered and evaluated. The permit, once approved, will allow for an expanded drilling program on the Bear Lodge property. Detailed drilling plans for the 2009 program are being formulated by Newmont with input from Rare Element Resources.
Rare Element Resources Ltd (TSX-V:RES) is a publicly traded mineral resource company focused on gold and strategic metals such as the rare-earth elements. Rare Element and Newmont have entered into the Sundance gold exploration joint venture on the Company's Wyoming property. Newmont has the right to earn a 65% working interest in Rare Element's property, excluding any rights to the rare-earth elements and uranium but including rights to gold and other metals, by performing US$5 million in property work expenditures over a five-year period. Newmont also has the right to earn an additional 15% working interest by completing a positive project feasibility study.
Rare Element's Bear Lodge property, Wyoming, also 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 Sundance gold-focused exploration project, Rare Element has completed a NI 43-101 compliant resource estimate and a Technical Report on the Bear Lodge Rare-Earth Mineralization. The Company is also continuing with a metallurgical testing program of the drill-hole samples collected during 2008.
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.