Rare Element Resources – High-Risk, High-Potential Bet on U.S. Rare Earth Independence Hinges on 2025 Demo Plant Launch

Highlights

• Rare Element Resources is developing the Bear Lodge Rare Earth Element Project in Wyoming.
• The aim is to establish a secure domestic supply chain for critical rare earth minerals.
• The company raised $35.8 million through a rights offering.
• A $4.4 million grant was secured from the Wyoming Energy Authority to support its Demonstration Plant project.
• Despite ongoing development stage challenges, the company has strong liquidity with $29.68 million in cash.
• Strategic partnerships are positioning the company for potential future success.

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​Rare Element Resources Ltd. (opens in a new tab) (OTCQB: REEMF) is a mineral resource company focused on advancing the Bear Lodge Rare Earth Element (REE) Project in Wyoming (opens in a new tab), aiming to establish a secure domestic supply chain for critical rare earths used in advanced technologies.​

Financial Performance

For the fiscal year ending December 31, 2024, the company reported a net loss of $18.451 million, a significant increase from the $8.996 million loss in2023. This escalation is primarily attributed to heightened explorationand evaluation expenses related to the Bear Lodge Project and the development of a Demonstration Plant designed to showcase proprietary processing and separation technologies. ​

As of September 30, 2024, Rare Element Resources held total assets valued at $36.409 million, with cash and short-term investments comprising $29.68 million. The company’s total liabilities stood at $4.14 million, resulting in a shareholders’ equity of $29.14 million as reported in Trading View (opens in a new tab).

Strategic Initiatives and Funding

In March 2024, the company successfully completed a rights offering, raising approximately $35.8 million to support the Demonstration Plant and other corporate purposes. Additionally, a $4.4 million grant was secured from the Wyoming Energy Authority to further the plant’s development. The company is also part of a consortium led by General Atomics, which received funding from the Department of Energy to support the Demonstration Plant project. ​

Market Position and Comparison

Rare Element Resources is among several companies striving to establish a domestic rare earth supply chain, a sector currently dominated by China. Competitors include MP Materials Corp. (NYSE: MP), which operates the Mountain Pass mine in California, and Lynas Rare Earths Limited (ASX: LYC), a significant producer with operations in Australia and Malaysia. Unlike these competitors, Rare Element Resources has not yet commenced commercial production and remains in the development stage. ​

Financial Ratios and Stock Performance

The company’s quick and current ratios are both reported at 5.02, indicating a strong liquidity position. However, profitability metrics such as return on assets and return on equity are negative, reflecting the company’s pre-revenue status. As of January 3, 2025, Rare Element Resources’ stock was trading at $0.40 per share, with a market capitalization of approximately $204.90 million. ​

Conclusion

Rare Element Resources Ltd. is actively advancing its Bear Lodge REE Project and Demonstration Plant, which is supported by recent funding initiatives and strategic partnerships. While the company’s financials reflect the typical challenges of a development-stage mining entity, including ongoing losses and the absence of revenue, its substantial cash reserves and low debt levels provide a foundation for continued project advancement. The successful transition to commercial production remains contingent upon the Demonstration Plant’s outcomes and the company’s ability to navigate the competitive landscape of the rare earths industry.​

Rare Earth Resources Ltd., founded in 1999, is based in Vancouver, Canada.

The Wyoming Project

The Bear Lodge Project is positioned to be a major North American source of rare earth elements (REEs).  The quality and quantity of the mineralization at Bear Lodge make it a world-class mining district and a dependable, long-term source for the REEs that technology demands.

The Project is rich in the REEs critical to high-strength permanent magnet manufacturing and is higher-valued and expected to experience faster demand growth and better price support over the long term.  It is situated in one of the best mining districts in the world.  The mine site is ideally located in northeastern Wyoming, just off of I-90, and has easy access to power and supporting infrastructure.  The processing facility will be located nearby, in the town of Upton, Wyoming, in an established industrial area. Both communities contain a ready workforce that is skilled in natural resource development.

Project Highlights:

• Outstanding Mineralized District: Not only does the Project have a well-defined and drilled mineral asset, but it is also one of the highest-grade deposits for the critical magnet REEs neodymium and praseodymium (Nd/Pr) as well as samarium (Sm) and terbium (Tb).  These elements are expected to see the largest demand growth and price support over the next 10 years due to their importance in green technologies, like electric vehicles, solar panels, and wind turbines.

• High-Grade Zone: An identified near-surface, high-grade zone, if mined initially, would accelerate early cash flows.

• Additional Targets Already Identified: Exploration drilling has been completed on two additional targets located within Rare Element Resources’ claims.  These targets represent excellent potential to extend the Project’s life.

• Exceptional Location: Wyoming’s rich history of mineral development and pro-business focus makes it an excellent location. It also has a readily available, skilled workforce and a business-friendly tax climate.   In 2022, the Wyoming Energy Authority (WEA) granted $4.4M in support of the planned demonstration plant, which will confirm the scalability of the Company’s innovative recovery/separation technology.  This strong statement of support demonstrates Wyoming’s ongoing commitment to job creation and diversification, both well represented by the demonstration plant and the Bear Lodge Project.

• Excellent Existing Infrastructure: Easy access to a major interstate, transcontinental rail, natural gas, water, and low-cost power.

• Permitting Work: Significant work was completed, and relationships were built by RER while previously pursuing permits for the Bear Lodge Project. The Company believes these efforts will create a good foundation for permitting work resumes.

• Proprietary Technology: Could generate additional revenue through tolling of third-party material or licensing for use at other facilities.