Rare Element Resources is a publicly traded company (RES on the TSX Venture Exchange) that is enjoying some growth and attention from its early successes – which can be attributed to being in the right place at the right time – and it presents an attractive opportunity for investors.

I spoke with Dr. Donald Ranta, President, CEO, and Director of Rare Element Resources. Dr. Ranta has worked in all aspects of the mining industry around the world. He's worked on a number of deposits including Montana's McDonald gold, Mexico's Santa Gertrudis gold, Baja California's Paradones Amarillos, Idaho's Kilgore, Montana's Seven-Up Pete, Mexico's Dolores gold-silver, Burkina Faso's Youga gold and Russia's Kuranakh gold. He joined the company in October 2007.

Rare Element Resources has enjoyed early success by being in the right place at the right time:

The right place…

Dr. Ranta began by telling us a little about the company itself. "Rare Element Resources got started in 2003. It acquired a company [Paso Rico Resources Ltd.]that controlled the Bear Lodge property in Wyoming. The Bear Lodge property has opportunities for gold and for rare earth elements."

The first factor was there: The company was in the right place: Dr. Ranta continued: "From 2004 through 2007, there were drilling programs and 8 holes were drilled over that 4 year time period… But the key in 2006 was that Newmont Mining approached our company and a deal was signed where Newmont could acquire up to 65% of the gold and other metals except for the rare earth elements on the Bear Lodge property."

This was Newmont's Sundance Venture and the agreement required Newmont to invest 5 million over 5 years to earn the 65%, plus they have an option to earn 15% more with delivery of a positive feasibility study. In the three and a half years that the agreement has been in place Newmont has invested nearly 3 million dollars so far.

"It is an interesting property," Ranta says, "the gold deposits are scattered around the rare earth deposit… the rare earth deposit is central and the [gold] deposits are in almost a ring around the rare earth deposit."

The agreement was a good opportunity for Rare Element Resources and it allowed the company to do some financing at good share prices. It's unclear which deposit – gold or rare earth – is the more valuable deposit, but since Rare Element Resources was focused on rare earth elements, the agreement made sense.

Between winter of early 2008 and spring of 2009, testing was performed and the subsequent reports revealed that there were 9.8 million short tons at 4.07% of rare earth oxides. "That got everybody's attention because it could be the second largest of the higher grade rare earth deposits in North America [second to the privately held Mount Pass Mine in California]" describes Dr. Ranta. "So, we had a substantial resource."

… and the right time

The impressive discovery of what is possibly the second largest and highest grade rare earth deposit in North America led to a growing amount of attention for the company. At the same time, Ranta says the media "started describing the shortage of rare earths in the western world; that China produces 97% of them and they've been cutting back on their exports nearly 10% per year for the last 5 years. And, they've actually indicated that they may be eliminating all exports of rare earth materials from China – other than in finished products like motors and magnets – in just a few years… perhaps 2014 or 2015."

The future looks good for rare earth elements since green technology – like hybrid vehicles – are dependent on these elements to help them operate. "Rare earths are critical in the batteries… and in the small motors that are needed in cars for the seats, for the windows, for the antenna, for the trunk [and more]" explains Dr. Ranta. Rare earths are also needed in other technologies like flat screen TVs, cell phone screens, defense applications, and even windmill turbines. All of these are increasingly important marketplaces.

But don't get me wrong

I've suggested that Rare Element Resources is successful today because it was in the right place at the right time. But don't misread me! It wasn't luck. They're headed up by an impressive and experienced management team.

Rare Element Resources geologist, Dr Jim Clark, supervises preparation of Rare-earth-element metallurgical test sample, which was split from drill-hole

Joining Dr. Ranta is Mark Brown, the CFO, who is a chartered accountant and the president and director of Pacific Opportunity Capital Ltd. Dr. Jim Clark, their VP of exploration, is described by Dr. Ranta as "our ace in the hole" because he's been working on the property – on and off – for over 23 years, so he knows Bear Lodge very well and is "one of the most knowledgeable geologists in rare earths on this continent." He runs the Bear Lodge project.

Challenges are inherent in any project and Rare Element Resources is no exception, but their team, strategic alliance, and vision are helping them to overcome any challenges.

"Metallurgy with rare earths is a challenge. Bear Lodge is no exception to that. Starting last spring, we began doing some metallurgical test work on our oxide (near surface) material that is a little higher grade and that material has responded well to concentration… giving strong indication that we are getting a breakthrough on the metallurgy," explains Dr. Ranta.

Permitting could be a challenge in the future when they want to ramp up production. But an environmental assessment, performed by Newmont, represents about 85% of the legwork already completed for production; another plus for the company.

Going forward, they have some clear strategies and opportunities: "We see a tremendous potential for expansion," Dr. Ranta says, "We’re expecting  to double the oxide resource… with drilling from this summer and drilling in 2010." As China pulls back on exports, and because North American organizations will need a North American rare earth source, "there's always a worry that there could be a retrenchment [like the Uranium price] but I don’t think that's a realistic worry because of the market conditions."

It pays to be in the right place at the right time!

Contact information

Rare Element Resources Ltd.

Suite 410 - 325 Howe Street

Vancouver, BC V6C 1Z7

Tel: 604.687.3520 EX 229

Fax: 604.688.3392

Contacts:

Donald E Ranta, President  & CEO

(604) 687-3520

don@rareelementresources.com