LAKEWOOD, COLORADO--(Marketwired - Aug 9, 2013) - Rare Element Resources Ltd. (NYSE MKT:REE) (RES.TO)(the "Company") reports that it has filed its unaudited, consolidated interim financial statements on Form 10-Q for the three-months ended June 30, 2013 on www.sec.gov and www.sedar.com.
"During the quarter, we were pleased with both the progress we made advancing the Bear Lodge Project toward development and the strengthening we began to see in rare earth prices, especially the Critical Rare Earths (CRE) which will positively impact the economics of our Project," said Randall J. Scott, President and Chief Executive Officer. "The engineering work, pilot plant testing and drilling we undertook in the quarter were all designed to provide key information for inclusion in our planned Feasibility Study and as we move forward with permitting."
- The Plan of Operation for Bear Lodge was accepted as completed by the US Forest Service in May, allowing the Project to move into the NEPA evaluation process.
- Pilot plant testing was initiated on our proprietary process technology to assist in developing detailed engineering plans for inclusion in the Feasibility Study.
- The 2013 drilling planned on the Whitetail Ridge deposit was completed. The goal of the program was to upgrade identified resource into the Measured and Indicated categories.
- Concurrent shelf registrations were completed and declared effective in both the US and Canada.
- Five out of six of the CRE - Neodymium (Nd), Praseodymium (Pr), Europium (Eu), Terbium (Tb) and Dysprosium (Dy) - experienced price increases in June and July.
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 June 30, 2013, totaled $5.3 million, or $0.12 per share, compared to a net loss of $8.6 million, or $0.19 per share, for the same period in 2012. The $3.3 million positive variance in net loss between the two quarters was due to the following:
- Positive variance in stock-based compensation of $1.5 million;
- Positive variance of $0.7 million in foreign exchange due to the impacts on the Company's Canadian dollar cash balances related to exchange rate fluctuations at the end of the quarter; and
- A onetime $0.9 million write down of mineral property that occurred in 2012; and
- Miscellaneous positive variances of $0.2 million.
For the six-months ended June 30, 2013 the net loss was $9.7 million, or $0.21 per share, compared to a net loss of $13.9 million, or $0.31 per share for the same period in 2012. The $4.2 million positive variance in net loss between the two periods was due to the following:
- Positive variance in administrative expenses and stock-based compensation of $4.3 million;
- Reduced exploration spending of $0.5 million at the Bear Lodge property;
- A onetime $0.9 million write down of mineral property that occurred in 2012
- Negative variance of $1.6 million in foreign exchange due to the impacts on the Company's Canadian dollar cash balances related to exchange rate fluctuations at the end of the quarter; and
- Miscellaneous positive variances of $0.2 million.
Sufficient Cash Balances to Complete Current Work Program
As of June 30, 2013, the Company had cash and cash equivalents and short-term investments of $29.1 million. It is expected that this amount is sufficient to finance completion of pilot plant testing, the 2013 drill program and related assaying and assessment, engineering work supporting the Feasibility Study and the Feasibility Study.
The decrease in cash and investments in the quarter was $4.7 million primarily due to development drilling on the Bear Lodge Project, metallurgical work on ore for both resource evaluation and process testing, third-party work related to evaluation of the oxalate process and start of the pilot plant test, ongoing permitting, engineering and environmental costs and foreign exchange losses related to our Canadian cash balances.
"Activity on the Bear Lodge Project has never been higher with drilling, engineering and environmental work, and pilot plant testing all underway," said David P. Suleski, Chief Financial Officer. "These undertakings are all critical steps supporting both permitting and our planned Feasibility Study. In 2014, we expect that some of these data gathering activities will be winding down with the focus shifting to third-party analysis, and as a result, we expect lower spending in 2014."
The unaudited financial statements are available through the Canadian securities regulatory authorities at www.sedar.com, and with the U.S. Securities and Exchange Commission at www.sec.gov. They are also available on the Company's website at www.rareelementresources.com.
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 is currently underway.
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" or by discussions of strategy or intentions. Such forward looking statements include statements regarding the drilling program anticipated results, permitting process and progress 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; 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; 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 Transition Report on Form 10-K for the six months ended December 31, 2012. 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 press release represent management's estimate as of any date other than the date of this press release.