Rare Element Resources (TSX: RES) has two important projects at its Bear Lodge property in Wyoming. One is a rare earths project and the other is a gold project jointed ventured with Newmont Mining. The gold mineralization at Bear Lodge appears to be very similar to the Cripple Creek mine owned by Anglo. Several investors have commented that I seem to like the rare earths side better. I don’t like either better and invested in the company precisely because it has two stories that I like and choose to speculate on. Once Newmont receives its new drilling permits later this year, I believe the gold story will gain more traction. Below are the reasons I like the gold side of the story and I believe Newmont does too. I plan on attending several analyst tours this fall to the Bear Lodge property.
Attached is a list of Cripple Creek data including past production, resources, and reserves (data from the April 2008 field trip to Cripple Creek). Cripple Creek is being used as a model for the exploration of the Bear Lodge gold system through Newmont-Rare Elements Sundance joint venture. Some of the important points worth noting and comparing with Bear Lodge are the following:
Cripple Creek's stripping ratio is 2.6:1 which appears to be higher than that expected at Bear Lodge, which generally has good gold mineralization from the surface to depth.
The character of the ore at Cripple Creek requires crushing the ore to -3/4 inch to achieve acceptable recoveries. Newmont’s recent preliminary metallurgical test work at Bear Lodge (see press release here http://www.rareelementresources.com/... ) shows it might be possible that no crushing will be needed for the Bear Lodge mineralized material that is thoroughly oxidized.
Because of the sulfide-bearing character of the ore at Cripple Creek, their recovery and projected recoveries range from 53 to 57% of crushed ore. Newmont's preliminary metallurgical tests on Bear Lodge mineralization suggest potential recovery in the mid-60s with no crushing ("run-of-mine"); and with some crushing the recoveries would be much higher.
The grade of Cripple Creek ore appears to be, at this time, higher than the mineralization of Bear Lodge, but this may be offset with the possibilities of lower stripping ratio, no crushing, and higher recoveries, and some of the best Bear Lodge targets have not been drilled yet.
Approximately 10 million ounces of near-surface low-grade gold-disseminated mineralized material have been mined or remain in current resources at Cripple Creek within about 550 million tons. I believe there is a reasonable target of 350-550 million tons for the near-surface low-grade mineralization at Bear Lodge.
Most gold mined at Cripple Creek (approximately 20 million ounces) was in high-grade veins averaging about 0.5 opt Au (17 gpt), and this type of mineralization is a possible target for further deep exploration at Bear Lodge. Once Newmont has the necessary permits for 200 acres of disturbance and can drill in many locations that were previously not permitted, then a new major drilling program can begin for both near-surface and deeper mineralization.
Rare Element Resources will be at booth #103 at the Las Vegas Hard Assets Conference on September 9th and 10th. Rare Element Resources President, Dr. Donald Ranta, and I look forward to meeting some of you there.
Thank you,
Jefferey D. Phillips
http://www.globalmarketdev.com
