Texas Rare Earth Resources Corp., an exploration company specializing in the heavy rare earths, announced today that the Company has completed an internal analysis by the TRER engineering team that indicates there is a reasonable possibility to profitably adapt a lower volume staged growth approach to development of the Round Top heavy rare earth (HREE) project.
We are focusing our efforts on what we believe are the high demand REEs and prioritizing our separation efforts on high value REEs with the goal of creating a reliable domestic supply. Our internal analysis indicates that an operation designed to produce a selected group of separated REE products in the range of 350-450 tonnes per year potentially yields favorable mine economics. Other rare earth elements not immediately separated and sold could be stored on site as a mixed rare earth product for future separation. Mining rates will be initially targeted to be in the range of 2500-3500 tonnes per day. We believe that this reduced initial production rate could be absorbed by the market and would allow us to market our total production consistently as a capable domestic alternate supplier to many industries, particularly those related to national defense, where surety of supply is essential. If and when our products gained acceptability, production could potentially be increased to meet any growing worldwide demand.
Management of TRER believes that the Round Top project lends itself well to a staged startup. The geographical setting of the project just outside El Paso, Texas, lack of overburden over the deposit, potentially low open cut mining costs, efficient heap leach metallurgical results obtained to date, favorable topography, minimal infrastructure needs and excellent land position lead management to believe that much of the capital needs can be proportionally reduced from the $293 million projection published in our December 2013 Preliminary Economic Analysis (PEA). Such factors include, but are not limited to, mining, leaching, solution management, required infrastructure and equipment are factors that can be proportionally decreased. We also anticipate that permitting lead times may decrease while simultaneously diminishing our environmental footprint. As a result, our internal analysis indicates that the initial capital cost for the scaled project could be in the $60-$90 million range.
Our detailed body of cost data regarding mining, transporting and crushing indicate that operating costs per tonne for the scaled project, while marginally higher than that estimated in the December 2013 PEA, would not be excessive. We are fortunate in having an active railroad ballast quarry located adjacent to our Round Top project area which mines, crushes and screens a physically similar rock at a rate of 3000-5000 tonnes per day, thus enabling us to accurately assess these mining and crushing costs. We are at present conducting a more detailed analysis of the relative CAPEX and OPEX requirements of a scaled down processing plant with both solvent extraction (SX) and ion exchange (IX) processes under evaluation. We believe the lower capital requirements of a staged startup could offset any marginal increase in unit operating costs.