More REEs at Bear Lodge for Rare Element

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) has boosted the measured and indicated resources of its Bear Lodge rare earths project in Wyoming by 38%. The estimate will be updated again by the end of this year’s second quarter 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 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 oxides and oxide-carbonate mineralization.

News of the updated resource sent the company’s shares up 21%, or 76¢, to close at $4.35 per share on Jan. 4. By midday on Jan. 5, Rare Element Resources had gained another 13%, 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 December 2011.

The updated resource estimate was calculated from a rare earth element (REE) database that included 117 holes drilled 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 upgraded Bull Hill resource will be used in a prefeasibility study that the company expects completed before April.

The company says it is conducting metallurgical tests at its pilot plant and expand its REO separation testing. It confirms that it will work on a full feasibility study following prefeasibility.

Rare Element says the drilling suggests 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.

Formerly known as Bull Hill Southwest, the Bull Hill deposit 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 characteristics with the Bull Hill Southwest deposit, and it appears that northerly striking mineralized bodies predominate.

The dikes are part of an FMR-carbonatite dike system that is 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 resource-development drilling this year.

The major dike sets in all of the resource areas come with 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, Ariz., at Nagrom in Perth, Western Australia, and at Hazen Research in Golden, Colo.

The objective is to develop and optimize an effective and cost-efficient metallurgical flowsheet.

Metallurgical testing will continue throughout the year on mineralized bulk-core samples and surface bulk samples collected in 2011. Metallurgical testing of the oxide-carbonate zone resource is also progressing.

The Bear Lodge project contains the light REEs – lanthanum, cerium, praseodymium, neodymium, samarium, europium and gadolinium – with lanthanum, cerium, praseodymium and neodymium making up the majority of the Bear Lodge deposits.

Hecla Mining (HL-N) explored Bear Lodge in the late eighties, 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.