Posted in | Rare Earth Elements

Rare Earth Metals Provides Update on Global Rare Earth Vertical Integration Strategy

Rare Earth Metals Inc. ("Rare Earth Metals", "REM" or the "Company") is pleased to provide an update regarding progress on finalizing REM's global rare earth vertical integration strategy and management's action plans.

REM's management team, board of directors and advisory board, along with its strategic alliance partner, CEC Rare Earth Corporation ("REC"), have the background, knowledge and experience to complete all aspects of the production and marketing of rare earth metals. This strategy takes full advantage of the REM/REC alliance and includes all aspects of the rare earth industry from exploration and mining to constructing and managing large scale rare earth separation plants. The group will also take advantage of its international business development expertise and its excellent international government relations.

Tracy A. Moore, President and CEO of REM stated: "We are very pleased to outline REM's proposed action plans to generate future revenues and to commission the design and construction of a heavy rare earth refinery in 2013 for completion in 2014. As a result of our strategic alliance, REC is prepared to begin planning and engineering work on future refining capacity for REM. Furthermore, the action plan anticipates the generation of "revenue and sales" relationships in 2013 by leveraging REC's connections to secure supply allocations in China and outside China. These are the initial key building blocks for REM to realize its vision of a vertically integrated rare earth business. Over the past three months REC has been collaborating with REM in finalizing the details of a four year action plan designed to achieve our goals. REM has been negotiating with REC to access REC's expertise in refinery design, construction and operations as well as securing access to its partners."

REM's vision is to establish a minimum of 10,000 metric tonnes ("MT") of full spectrum refining capability over the next four years. We expect the refineries will be built in modules of 1,000 to 5,000 MT (annual output capacity) in multiple locations, with the ability to separate both light and more importantly, heavy rare earths. The capability to refine heavy rare earths differentiates us from other projects and is, again, based on the expertise and ability of REC and its affiliates.

The strategy entails three key aspects or platforms which are outlined below. The benefits of successful implementation are obvious and include an early stream of revenue and an increased profit margin as each milestone is realized. Additionally, early entry in the rare earth market will help raise REM's profile and strengthen its business ability, reputation and credibility. The three key platforms are:

1. REM becoming a strategic rare earth supplier in 2013

  • REM's financial resources will be focused on near-term business development with the goal of generating sales revenue by establishing REM as a supplier of rare earth oxides ("REOs") to leading international manufacturers of hi-tech and green-tech products through REC's connections in China and outside China.
  • Secure access to 500 MT of REOs, increasing to 3,000 MT annually by 2015 for sale to customers. Increase REM's focus on the rare earth industry by divesting of its coal and graphite properties. These are non-strategic assets.
  • Seek partners to fund the continuing exploration of REM's Canadian rare earth properties, while maintaining the rights to separate rare earths from the properties. REC has access to Asian exploration companies interested in Canadian properties.

2. REM establishing itself as one of the earliest non-Chinese HREE Refineries: 2013 - 2014

Establish REM refining capacity / capability sufficient to produce 500 to 1,500 MT annually of REOs by mid-2014 (overweighted to heavy rare earths). Negotiate with one of REC's affiliates outside of China to acquire REM proprietary refining capacity.

  • Leverage REC's skills of designing, constructing and operating full spectrum (light and heavy) rare earth refineries to build a dedicated REM production capacity on an existing rare earth refinery site
  • Secure near term HREE concentrate streams to feed into REM's refinery
  • Become the rare earth separation partner for recycling operators to augment REM's supply of rare earths
  • Secure relationships with major international manufacturer users of rare earths as their strategic rare earth partner/supplier

3. REM developing into a leading Full Spectrum, Vertically Integrated Rare Earth Business outside of China: 2013 - 2016

Expand REM's annual production capacity to more than 10,000 MT of full spectrum (heavy and light) separated rare earths through:

  • Acquisition of existing refineries through REC's relationships
  • Expansion on existing sites
  • Specifically design and construct purpose built refineries
  • Secure rare earth concentrate off-takes for future production and expansion
  • Extend downstream capabilities to separated rare earth products such as alloys, specialty and co-precipitate products, and powders

Stated Michael Stares, board member and former President and CEO of REM, "We are very pleased with the progress made over the past two months by REC and the new direction the Company has taken. The association with rare earth producers and refineries has added a new dimension by providing a team focused on supplying product and services to the rare earth market. We look forward to the coming months and the new opportunities that lie ahead for REM."

Source: http://www.rareearthmetals.ca

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