Jun 28 2012
Texas Rare Earth Resources Corp., a rare earths mineral exploration and development company, announced today the release of its preliminary economic assessment (PEA) for the Company's flagship Round Top rare earth minerals project in Hudspeth County, Texas.
The PEA has been posted on the Company's website, filed in Canada on SEDAR, and furnished to the U.S. Securities and Exchange Commission on a Form 8-K. The following are highlights of the PEA results, as previously reported by the Company in its press release dated June 15, 2012:
“NI 43-101 Preliminary Economic Assessment, Round Top Project, Sierra Blanca, Texas”
PEA Highlights
- Annual after-tax cash flow of $482 million at full production, life-of-mine (LOM) cash flow of $10.3 billion
- After-tax net present value (NPV) of $1.2 billion at a 10% discount rate
- After-tax internal rate-of-return (IRR) of 19% with an after-tax payback of capital of 4.3 years
- 80,000 tonnes-per-day processed, open-pit operation
- Annual total REO (TREO) sales of 10,800 tonnes
- 26-year mine life
- Project capital costs of $2.0 billion, including a 25% contingency
- Simple mineralogy, predominantly yttrofluorite, hosted in a unique metaluminous rhyolite rock; REEs uniformly distributed throughout the rhyolite and initial metallurgical testing and characterization indicates conventional technology can be used to concentrate the REE minerals
- Metallurgical recovery of 72% (base case)
- 97% of revenues forecasted from the sale of critical rare earth oxides (CREOs)
- Rare earth oxide basket price of $110.31/kg
- Estimated average operating costs of $48/kg of TREOs sold
The results of the PEA disclosed in this press release are preliminary in nature and include inferred mineral resources* that are considered speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the results of the PEA will be realized. Mineral resources* that are not mineral reserves have no demonstrated economic viability.
The scientific and technical information contained in this press release is based on the PEA, which was prepared by Gustavson Associates, LLC, based in Lakewood, Colorado. Mr. Anthony Garcia, the Company's Senior Vice President of Project Development and Engineering and a qualified person (as defined in NI 43-101), reviewed and approved the scientific and technical information provided in this press release.
For additional information on the Round Top project and the PEA, see the Company's technical report entitled "NI 43-101 Preliminary Economic Assessment, Round Top Project, Sierra Blanca, Texas," dated June 22, 2012.
About Texas Rare Earth Resources
Texas Rare Earth Resources Corp.'s primary focus is exploring and developing its Round Top rare earth minerals project. The Round Top project is located in Hudspeth County, Texas, 85 miles east of El Paso, Texas. The Company's common stock trades on the OTCQX U.S. Premier tier under the symbol "TRER."
For more information on Texas Rare Earth Resources Corp., visit its website at trer.com.
*Cautionary Note to Investors
The United States Securities and Exchange Commission ("SEC") limits disclosure for U.S. reporting purposes to mineral deposits that a company can economically and legally extract or produce. This press release and the PEA use the terms "mineral resource," "measured mineral resource," "indicated mineral resource," and "inferred mineral resource." We advise U.S. investors that while these terms are defined in accordance with Canadian National Instrument NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Standards"), such terms are not recognized by the SEC and are normally not permitted to be used in reports and registration statements filed with the SEC. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves" as in-place tonnage and grade without reference to unit measures. "Inferred resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Our Round Top project currently does not contain any known proven or probable ore reserves under SEC Guide 7 reporting standards. U.S. investors are urged to consider closely the disclosure in our latest reports and registration statements filed with the SEC. You can review and obtain copies of these filings at http://www.sec.gov/edgar.shtml. U.S. Investors are cautioned not to assume that any defined resource would ever be converted into SEC compliant reserves.
Forward-Looking Statements
This press release and the PEA contains forward-looking statements within the meaning of the U.S. Securities Act of 1933, as amended, and U.S. Securities Exchange Act of 1934, as amended, and forward-looking information under Canadian securities laws. Mineral resource estimates, mineralogy, results of the PEA (including LOM, cash flows, NPV, IRR, process facility capacity, total sales, capital costs, percentage of revenues from CREO's, recovery rates, metallurgical recovery rates, low-acid consumption, REOs prices, and operating and other costs), size of the deposit, economics of the Round Top project, occurrence of CREOs, mineralogy, use of low-cost conventional processing methods, ratio of heavy rare earth elements, consistency of rare earth element grades within the rhyolite, infrastructure assumptions, conclusions from leach testing and related recovery and extraction rates, and ability to separate uranium from host rock are forward-looking statements. The material factors and assumptions used to develop forward-looking statements contained in this press release include the following: exploration and assay results, results of the PEA; mineral resource estimates; terms and conditions of agreements with contractors (including Gustavson); assumptions concerning REEs prices; cut-off grade; power costs, processing recovery rates; mine plans and production scheduling; process and infrastructure design and implementation; accuracy of the estimation of operating and capital costs; applicable tax rates; open-pit design, accuracy of mineral resource estimates and resource modeling; reliability of sampling and assay data; representativeness of mineralization; accuracy of metallurgical testwork; and, board approved plans. When used in this press release, the words "potential", "indicate", "expect", "intend", "hopes," "believe," "may," "will," "if," "anticipate," and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, uncertainty of mineralized material and mineral resource estimates, risks relating to completing metallurgical testing at the Round Top project, risks related to project development determinations, risks related to fluctuations in the price of rare earth minerals, the inherently hazardous nature of mining-related activities, potential effects on the Company's operations of environmental regulations, risks due to legal proceedings, risks related to uncertainty of being able to raise capital on favorable terms or at all, as well as those factors discussed under the heading "Risk Factors" in the Company's quarterly report on Form 10-Q as filed on April 16, 2012, and the Company's latest annual report on Form 10-K as filed on November 22, 2011 and other documents filed with the U.S. Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Except as required by law, the Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.