Matamec Explorations inc.

TSX VENTURE : MAT


Matamec Explorations inc.

January 30, 2012 08:00 ET

Matamec PEA Study Shows Robust Economics for the Kipawa HREE Project

MONTREAL, QUEBEC--(Marketwire - Jan. 30, 2012) - Matamec Explorations Inc. (TSX VENTURE:MAT)(OTCQX:MHREF)

Kipawa PEA Highlights

Very strong project economics:

  • $606 million before-tax value (NPV8%);
  • 36.9% before-tax Internal Rate of Return (IRR);
  • $2.8 Billion revenue;
  • $1.67 Billion Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA");
  • A before-tax payback period in 2.4 years;
  • CAPEX: $315.8 million (including contingency of $63.2 million or 25%);
  • OPEX: $89.2 million per year or $16.97 / kg mixed TREO concentrate;
  • Mine life: 12.9 years.

Robust project:

  • straightforward mineralogy, ideal deposit geometry, simple processing flow-sheet, most infrastructure in place;
  • 79.8% of resources in the indicated category;
  • Mineral concentrate grade of 1.11% TREO;
  • Overall REE recovery of 81%;
  • Average annual production of 5,072 tonnes of mixed TREO concentrate.

Fast-tracking development: first production planned for Q2 2016, possibly sooner.

Matamec Explorations Inc. ("Matamec" or the "Company") (TSX VENTURE:MAT)(OTCQX:MHREF) is going forward with its Kipawa HREE Project ("Kipawa") development based on the positive results of the preliminary economic assessment ("PEA") study. The PEA demonstrates a robust project containing all of the rare earth elements (REEs) with most of its value found in the contained five critical elements (Dy, Tb, Y, Eu and Nd) as identified by the U.S. Department of Energy ("DOE") in 2010-2011. The five critical elements are essential for clean energy technologies.

The project shows significant upside potential from several by-products and deposit expansion drilling. Based on annual production, Kipawa is expected to be amongst the top five HREE assets outside China.

Andre Gauthier, President and CEO of Matamec, summaries the progress in the development of the Kipawa Project as follows: "2011 has been an excellent year for us. The resource was upgraded and now 79.8% is in the indicated category. Bench tests for the processing of the Kipawa ore have outlined a simple and low cost flowsheet. These results have encouraged a high profile end-user to step forward and sign an MOU to become a strategic partner with us. Our common goal is to fast-track the project into production. Matamec will have an off-take agreement and financing in place thereby de-risking the project significantly."

Matamec intends to press the Kipawa project forward on multiple fronts by going straight to the feasibility study with the intention of obtaining permits by Q2 2014 and starting production by Q2 2016.

Ongoing activities include:

  • Mr. Bertho Caron, ing., has been hired as V-P Project Development and Construction and will work full time on the feasibility study as of mid-February 2012
  • Bench-scales tests are in progress and a pilot plant is scheduled for May-June 2012
  • Mining lease application is expected to be filed before the end of March 2012
  • Project notice to begin environmental permitting is expected to be filed before the end of Q1 2012

Andre Gauthier, President and CEO of Matamec stated: "The present schedule shows a project start-up planned for the second quarter of 2016. However, Matamec intends to put all effort into advancing the project permitting and feasibility during the coming year in order to advance the project start-up date."

Annual Operating Summary

Production Units Year 1 Year 2-12
(avg)
Year 13
Resource mined Mt 1.134 1.5 1.362
Strip Ratio Waste : Ore 1.93:1 1.37:1 0.93:1
Tonnes processed Mt 1.134 1.5 1.362
Grade % TREO 0.460 0.432 0.352
Mineral concentrate grade % TREO 1.18 % 1.11 % 0.9 %
Recovery % TREO 81 % 81 % 81 %
Mixed TREO concentrate Tonnes 4,229 5,257 3,882
N.B. The pre-production period includes mining 886,000 tonnes of waste material.

Annual Production (Contained REE in mixed TREO concentrate)

REO
(tonnes)
Year 1 Year 2-12
(avg)
Year 13 Average
(Y1-Y13)
Ce2O3 599 782 564 751
La2O3 1,275 1,532 1,088 1,478
Pr2O3 166 198 143 191
Nd2O3 581 694 499 671
Sm2O3 128 157 115 151
Eu2O3 17 20 15 20
Gd2O3 127 155 114 150
Tb2O3 23 29 22 28
*Dy2O3 149 190 146 183
Ho2O3 33 42 33 40
Er2O3 102 130 104 126
Tm2O3 16 20 16 19
Yb2O3 97 121 99 118
Lu2O3 13 16 14 16
Y2O3 903 1170 912 1130
* Dy2O3 production target averages 200 TPY from Y2 to Y8

Operating Revenue and Costs

Units Year 1 Year 2-12
(avg)
Year 13 Average
NMR * $ /kg TREO 158 150 124 149
Mining $ /kg TREO 3.897 3.162 3.859 3.272
Processing $ /kg TREO 11.557 11.099 12.418 11.236
G&A $ /kg TREO 2.091 1.682 1.882 1.729
Site Costs - Tailings $ /kg TREO 0.057 0.046 0.051 0.047
Site Costs - Transport $ /kg TREO 0.915 0.982 1.098 0.985
Cash Costs $ /kg TREO 18.516 16.970 19.308 17.269
Production mixed TREO concentrate Tpy 4229 5257 3882 5072
*NMR : Net Metal Return (grade x recovery x revenue)

Additional costs and financial information can be found below.

PEA

A preliminary economic assessment (PEA) is a study that includes an economic analysis of the potential viability of mineral resources taken at an early stage of the project prior to the completion of a pre-feasibility or feasibility study. The present PEA contains higher quality data than is normally required for a PEA study.

Project Location

The Kipawa HREE project is located in the Témiscamingue region of Quebec, some 160 kilometres south of Rouyn-Noranda and 50 kilometres east of the town of Temiscaming.

Geology, Mineralogy and Mineralization

The Kipawa Alkaline Intrusive Complex of peralkaline syenite and granite is less than 200 metres thick. It's an elongate, V-shaped body folded around a major southeast plunging anticline. The west limb of this fold includes the Kipawa deposit. In the mineralized area around the Kipawa deposit, the concordant sheet dips gently to the south-west with a dip between 20 and 30 degrees. The deposit outcrops over 1.4 km along strike with an additional outcrop discovered 300m to the north-west during the summer 2011 exploration campaign.

Rare earth-yttrium-zirconium mineralization at the Kipawa deposit is contained in medium grained silicate minerals. Grains are distinct and generally well crystallized. Five minerals are presently considered as potentially economical in the Kipawa deposit, namely eudialyte (a sodic silicate), yttro-titanite/mosandrite (titanite silicate) and britholite (calsic silico-phosphate) for rare-earth-yttrium, while vlasovite/gittensite (sodic silicates) and eudialyte (sodic silicate) are considered for zirconium as a potential by-product.

Three mineralized zones have been defined based on their spatial characteristics: the Eudialyte (70% of existing rare earth-yttrium resources), Mosandrite (20% of existing rare earth-yttrium resources) and Britholite (10% of existing rare earth-yttrium resources) zones. Despite their name, the different zones contain a mix of the potentially economic minerals. The name simply indicates the dominant REE mineral present in that zone. All zones outcrop at surface.

The main Eudialyte zone consists of intermixed eudialyte (51%) and mosandrite/yttro-titanite (39%) with trace britholite (10%). It sits near the top of the syenite body and is not associated with any large calco-silicate horizon.

Uranium and thorium, while present, are considered contaminants in the main REE-Zr mineralization. Average values of Th (193ppm, i.e. 0.019%) and especially U (22ppm, i.e. 0.002%), though higher than the surrounding rocks, remain low in the mineralized syenite portion of the Kipawa deposit. Initial results suggest that most of the thorium is contained in coarse-grained urano-thorite and ekanite crystals while the uranium is disseminated within rare-earth minerals.

Mineral Resource Estimate

The Kipawa deposit's mineral resource estimate was updated in June 2011 (see press release on June 30th, 2011 and July 7th, 2011) using the same method as the November 2010 estimate (see press release on January 20th, 2011). The overall mineral resource model was developed by SGS Geostat. The term "mineral resource" is defined by the Canadian Insitute of Mining, Metallurgy and Petroleum as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM council.

The in-pit mineral resource was estimated by Roche using an in-pit cut-off grade of $72.24/t after applying mining dilution and recovery factors.

In-pit mineral resources* Tonnes
(t)
Grade
(%)
Indicated (79.8% of the deposit) 15,161,000 0.434
Inferred (20.2% of the deposit) 3,843,000 0.403
Total 19,004,000 0.428
*Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Preliminary Economic Assessment includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the results projected in the Preliminary Economic Assessment will be realized and actual results may vary substantially.

Mining

Mining will be carried out using trucks and a shovel as mining equipment. The open pit strip ratio is estimated to be 1.42:1 (waste:ore) with a mine life of 12.9 years. The mill feed is 1.5 million TPY or 4,110 TPD.

Processing

Early test work at SGS Canada Inc. in Lakefield (Ontario) in 2010 was directed toward examining a known recovery process employing aggressive conditions for extraction of rare earth elements (acid baked leaching). By early 2011, it had become apparent that much less aggressive conditions than anticipated were possible for the particular minerals present in the Kipawa material (room temperature leaching); this allowed a substantial improvement in the projected flowsheet.

The present study is based on metallurgical test work results dating prior to November 1st, 2011. Metallurgical test work in support of the PEA was conducted on two composite samples ("2010 composite" and "2011 composite"). The 2010 Composite was comprised of core sample rejects from the eudialyte zone and the 2011 Composite was a split of a 5 tonne trench sample. These samples are suitable for process development purposes and satisfactory for the current PEA study, but are not necessarily representative of the overall deposit.

The proposed process is comprised of two steps 1) an initial crushing, grinding and magnetic separation pre-concentration plant located at the Kipawa mine site and 2) a hydrometallurgical facility located near the town of Temiscaming:

  1. Mine site

The ore will be hauled by truck to a jaw crusher feed hopper where it will be dumped in a jaw crusher and stored in a coarse ore bin ahead of the grinding circuit. The crushed material will be conveyed from the ore bin to a semi-autogenous grinding mill (SAG), in open circuit, followed by a rod mill, in closed circuit, and screened to produce a ground product. A rare earth concentrate is recovered from the ground product using magnetic separation and the resulting concentrate is shipped by truck for further processing at the hydrometallurgical facility.

  1. Hydrometallurgical facility

The concentrate is re-ground in a ball mill prior to leaching with sulphuric acid in a series of atmospheric leach tanks. The leached product is thickened, and a pregnant solution is recovered by two stage drum filtration. The washed filter residue is mildly acid and is neutralized with lime prior to disposal. The pregnant solution is partially neutralized with limestone in a series of tanks and the resulting gypsum slurry is thickened and filtered on a belt filter to recover the solution. After clarification, ion exchange is used to remove some impurities from the solution. Rare earths are recovered by chemical precipitation with oxalic acid. The precipitate is filtered, and calcined to yield a final product. The barren solution is then recycled as much as possible, with the balance reporting to the residue neutralization circuit.

Infrastructure

Access to the Kipawa Deposit is provided by a network of logging roads of variable quality leading to the nearest town of Témiscaming, Quebec. Témiscaming is located some 50 kms west of the property. It is a small pulp and paper town (pop. 3,000) where a Tembec dissolving pulp and chemical by-product mill is located and employs over 950 people. It provides access to the Hydro-Quebec electric grid. North Bay (pop. 55,000) is the nearest large town, located 68 kms to the south west of Témiscaming. It has the largest airport north of Toronto and is connected to Témiscaming and the larger metropolitan centres in Ontario and Quebec by a good highway and railway. Mining services are found in the Sudbury, Rouyn-Noranda and Val d'Or mining communities.

The main elements of the proposed infrastructure at the Kipawa mine site include: diesel power generation, a mineral concentration facility, a maintenance shop, a tailing pond and access road improvement. The Témiscaming plant site includes: a hydrometallurgical facility, a tailing pond, a warehouse and offices.

Capital Cost Estimate

The capital cost estimate covers the mineralized rock mining, processing and infrastructure required for the Kipawa HREE project based on the application of standard methods of achieving a PEA Study with an accuracy of +/-35%. The initial capital costs have been estimated at $315.8 million, of which $197.5 million are direct costs and $55.1 million are indirect costs such as engineering, procurement, construction management, owner's costs, and a 25% contingency cost of $63.2 million as outlined below:

Capital Cost Items Cost
(million CAD)
Kipawa site
Mining 13.400
Open pit & Auxiliary Services 7.617
Concentrator Tailings Management Facilities 10.269
Process Facilities (Kipawa Site) 62.292
Kipawa Site Infrastructure 7.200
Total 100.778
Temiscaming Site
Metallurgical Facility Tailings Management Facilities 15.004
Metallurgical Facility 67.472
Temiscaming Site Infrastructure 3.523
Total 85.999
Other Infrastructures
Auxiliary Buildings - Non Processing 10.730
Total Direct Costs 197.507
Total Indirect Costs 55.103
Contingency (25%) 63.153
Total Costs: 315.763

Operating Cost Estimate

The operating cost estimates were made for each step and compiled by Roche. The operating cost for both steps of the Matamec Kipawa operation covers mining, processing, transportation of the ore concentrate and mixed TREO concentrate, tailings and water management, general and administration fees as well as infrastructure and services. The project operating estimate is based on the following parameters:

  • Tonnes of mineralized rock & waste mined per year: 3.557 million;
  • Tonnes of mineralized rock milled per year: 1.5 million;
  • Tonnes of mineral concentrate per year: 0.525 million;
  • Tonnes of mixed TREO concentrate typical yearly average: 5,257;
  • Tonnes of mixed TREO concentrate yearly average: 5,072;
  • Total manpower required for operation: 221 employees.

The overall operating cost for the Matamec Kipawa project is estimated at $89.2 million per year or $16.97/kg mixed TREO concentrate. A summary of the operating costs for the project is shown below:

Operating Cost Items Annual Cost
(Million $/y)
Cost Per kg
of Mixed TREO
concentrate ($/kg)
General & Administration
Manpower - Administration 3.672 0.698
Contracts 2.971 0.565
General 1.343 0.255
Marketing 0.450 0.086
Municipal Taxes 0.405 0.077
Total G&A 8.841 1.682
Mining (including Mine Manpower) 16.619 3.161
Process
Man Power - Concentrator - Metallurgy Facility 10.571 2.011
Energy 9.781 1.861
Fresh Water 0.098 0.019
Reagents 29.207 5.556
Consumables 4.741 0.902
Other Processing 3.952 0.752
Total Process 58.350 11.099
Tailings 0.240 0.046
Transportation
Concentrate Transport From Kipawa To Temiscaming 4.2 0.799
Mixed TREO Concentrate Transport to Asia 0.960 0.183
Total Transportation 5.160 0.982
Total 89.210 16.970

Market Study

The production of REEs outside of China will increase in the coming years, increasing the market offer. The introduction of Kipawa's production onto the market will reduce the outside dependency on Chinese resources and their refining capacities. In particular, the Matamec Kipawa project will increase the supply of dysprosium and terbium. It will have less impact on the market of the other light and heavy REEs.

The price deck used in the PEA are based on a review of historical prices reported by trade websites and studies such as Metal Pages, Asian Metals, Industrial Minerals and Roskill Information Service Ltd.; as well as, Rare Earth market review and market and price forecasts of various analysts and financial firms such as IMCOA, Byron Capital Markets, John Kaiser Bottom Fish, Cormark Securities Inc., CIBC World Markets, Jacob Securities Inc., and reviews of other REE project studies and prices published and forecast by companies including Molycorp Inc., Lynas Corporation, Avalon Rare Metals, Quest Rare Minerals and Rare Element Resources Ltd.. Discussions with Matamec and potential Asian end-users were important in defining the final price deck.

Prices from the various sources mentioned above vary and depend on the analyst's perception of the future markets for 2020 and beyond. A comparison was done between the three year trailing averages and forecasts by the various sources which lead to a conservative choice of prices for each REO based on Roche's general perception of the future markets and the increase in the expected demand and supply over the 2012-2020 period.

A refining process whereby 99.9% pure, individual RE oxides are formed was outside the scope of the PEA; and hence, not evaluated. It was decided that since the forecasted prices are for 99.9% pure, individual oxides and Matamec will be producing a mixed TREO concentrate, the projected selling prices should be reduced by $18.34 /kg mixed TREO concentrate. The price reduction to $42.08/kg was determined as a trade-off between the general refining costs and the high HREE content of the Kipawa mixed TREO concentrate being produced by Matamec in comparison with other rare earth mining operations or future projects. Note that refining costs in China or elsewhere are undisclosed.

Economic Analysis

An economic/financial analysis of the project has been carried out using a cash flow model. The model is constructed using annual cash flow in constant money terms (fourth quarter 2011). No provision is made for the effects of inflation. As required in the financial assessment of investment projects, the evaluation is carried out on a so called "100% equity" basis, i.e. the debt and equity sources of capital funds are ignored.

Economic Assumptions
RE Oxides Market Prices
(US $/ kg)
Ce2O3 5.00
La2O3 10.00
Nd2O3 75.00
Pr2O3 75.00
Sm2O3 9.00
Eu2O3 500.00
Gd2O3 30.00
Tb2O3 1 500.00
Dy2O3 750.00
Ho2O3 65.00
Er2O3 40.00
Lu2O3 320.00
Y2O3 20.00
Exchange Rate( CAD $/US $) 1.00
Discount Rate (%) 8.0
No value was attributed to Tm and Yb because no prices were available.
Technical Assumptions
Item Unit Base Case Value
Total Ore Mined M tonnes 19.0
Processing Rate Tonnes / year 1,500,000
Life of Mine years 12.9
Average Combined Process Recovery % 81.0
Average Mining Cost ($ / tonne mined) 4.67
Average Processing Cost ($ / tonne milled) 38.90
Average General & Administration Costs ($ / tonne milled) 5.90
Concentrate Transport between Process Plants ($ / tonne concentrate) 8.00
Mixed TREO concentrate Average Transport to Asia ($ / tonne concentrate) 183.00
Refining Charges $ /kg 18.34

Financial Model and Results

A capital cost breakdown by item provides a preliminary capital spending schedule over a 2-year pre-production period. The total pre-production capital expenditures are evaluated at $315.8 million, excluding the working capital. The total sustaining capital requirement is evaluated at $38.3 million which excludes rehabilitation expenditures. A working capital equivalent of 3 months of total annual operating costs is maintained throughout the production period. The initial working capital outlay is $9.9 million. Additional amounts are required or withdrawn as total annual operating costs increase or decrease. A total of $7.5 million is provided for reclamation expenses. The total operating costs are estimated at $1,142.5 million for the life of the mine or an average of $60.12/tonne milled.

The financial results indicate a positive before-tax NPV of $606M at a discount rate of 8%, a before-tax IRR of 36.9% and a payback period of 2.4 years.

Revenues and Expenditures Base Case
(million CAD)
Total Mine Revenue 2,822.1
Pre-production Capital Expenditures 315.8
Sustaining Capital Expenditures 38.3
Initial Working Capital Requirement 9.9
Mine Reclamation Costs 7.5
Total Operating Cost 1,142.5
Total Before-tax Cash Flow 1,679.6
Before-tax NPV @ 8% 606
Before-tax NPV @ 5% 811
Before-tax NPV @ 10% 500
Before-tax IRR (%) 36.9
Before-tax Payback Period (years) 2.4

Sensitivity Analysis

A sensitivity analysis has been carried out on the base case scenario described above to assess the impact of changes in REE market prices, total pre-production capital costs and operating costs on the project's NPV @ 8% and IRR. Each variable was examined independently. An interval of +/-30% with increments of 10% were used for all three variables. The project's before-tax viability is not significantly vulnerable to the under-estimation of capital and operating costs, taken independently. The net present value is more sensitive to variations in operating expenses. As expected, the NPV is most sensitive to variations in REE prices, followed by operating costs and then by capital costs.

Environmental Studies, Permitting and Social/Community Impact

Matamec has always respected the rules outlined by the different government authorities.

After the first drilling campaign outlined a good quality deposit (2009), Matamec decided to begin a baseline study of the territory around the deposit. Enviréo Conseil Inc., an independent firm from Rouyn-Noranda, was hired to perform the study and water, fish, aquatic plant and mud samples were taken from 5 sites, instead of the 3 recommended by law. The results of this study (2010) clearly show that the land and water are not polluted by REE, yttrium, zirconium, uranium and thorium.

The mining lease is expected to be filed before the end of March 2012. The project notice to begin the environmental permitting is expected to be filed before the end of Q1 2012. The restoration study and environmental impact study will begin at the beginning of March 2012 and continue over a 1 to 2 year period.

Matamec has hired local people to add to its team of geologists and prospectors with the start of more advanced exploration work on the property (stripping and drilling). Matamec also began meeting local authorities (mayors, municipal councillors, chiefs and 2 first nation band councils) from all the local communities. Several public meetings and site visits were organised by Matamec and a roundtable was put in place by a group of key people to guide and inform Matamec about the concerns of the communities. Three committees were formed to address education possibilities, economic benefits including job creation, and environmental concerns.

Project Development

Major milestones to be achieved prior to the first production targeted for Q2 2016:

  • Feasibility study by Q1 2013;
  • Environment and permitting by Q2 2014;
  • EPCM and construction by Q2 2016.

The Additional Upside Opportunities for the Kipawa Deposit

Pre-concentration and hydrometallurgical plants

  • Optimization test work to improve recoveries and reduce treatment and refining costs;
  • Use of Hydro-Quebec's power grid at the mine site instead of diesel power;
  • Mineral concentrate transport by pipeline between mine site and hydrometallurgical plant;
  • Upgrade present mineral resource to the measured category by infill drilling;

Expansion

  • Verification of lateral and down dip extension by drilling;
  • Test work to recover zirconium and other by-products (minor metals) in the RE mineralized zones & in the syenite body;

NI 43-101 Compliance

The technical information in this news release has been prepared in accordance with Canadian regulatory requirements by, or under the supervision of, Guy Saucier, ing. of Roche Ltd., André Roy, ing. of Roche Ltd., Pierre Casgrain, ing. of Roche, and Al Hayden, P. Eng. of EHA Engineering Ltd., all of whom are independent Qualified Persons as set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").

These data come from the updated NI 43-101 resource estimate of the Kipawa deposit received from the independent firm SGS Canada Inc. - Geological group Geostat ("SGS Geostat"). For reference, the original estimate as of May 20, 2010 was filed on SEDAR September 17, 2010 and the first update as of November 29, 2010 was issued January 20, 2011. Yann Camus (ing.) engineer for the independent firm SGS Canada Inc. - geological group Geostat ("SGS Geostat ") is the qualified person under NI 43-101 standards.

Technical information in this news release was reviewed by Robert Crépeau, ing. for Matamec.

Readers are advised that Mineral Resources not included in Mineral Reserves do not demonstrate economic viability. Mineral Resource estimates do not account for mineability, selectivity, mining loss and dilution. These Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied.

Based on the resource estimate, a standard methodology for pit limit analysis, mining sequence and cut-off grade optimization, including application of mining dilution, process recovery, economic criteria and physical mine and plant operating constraints has been followed to design the open pit mine and to determine the mineral resource estimate for the deposit.

The full Kipawa PEA, prepared as a NI 43-101 compliant Technical Report, will be filed under Matamec Explorations' profile on SEDAR at www.sedar.com within 45 days.

Conference Call

Matamec will be hosting a conference call and webcast to discuss the PEA highlights on Monday, January 30, 2012 beginning at 11:00 AM (Eastern Time). Participants may join the call by dialing toll free 1-800-954-0629 or 1-416-981-9000 for local calls or calls from outside Canada and the United States. A live webcast of the call will be available through our website at: www.matamec.com. A copy of the presentation will be available on our website one hour prior to the webcast.

A replay of the webcast and the associated webcast presentation will be available through a link on our website at www.matamec.com.

About Matamec

Matamec Explorations Inc. is a junior mining exploration company whose main focus is in developing the heavy rare earths Kipawa deposit and exploring more than 35 km of strike length in the Kipawa Alkalic Complex for rare earths-yttrium-zirconium-niobium-tantalum mineralization on its Zeus property.

The Company is also exploring for gold, base metals and platinum group metals. Its gold portfolio includes the Matheson JV property located along strike and in close proximity to the Hoyle Pond Mine in the prolific mining camp of Timmins, Ontario.

In Quebec, the Company is exploring for lithium and tantalum on its Tansim property and for precious and base metals on its Sakami, Valmont and Vulcain properties. As well, it is exploring for gold together with Northern Superior Resources Inc. on the Lesperance/Wachigabau property.

Cautionary Statement Concerning Forward-Looking Statements

This news release contains "forward-looking information" including without limitation statements relating to mineral reserve estimates, mineral resource estimates, realization of mineral reserve and resource estimates, capital and operating costs estimates, the timing and amount of future production, costs of production, success of mining operations, the ranking of the project in terms of cash cost and production, permitting, economic return estimates, potential upside, and the future price and supply and demand for rare earths. Readers should not place undue reliance on forward-looking statements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The preliminary economic assessment study results are estimates only, are preliminary in nature and are based on a number of assumptions, any of which, if incorrect, could materially change the projected outcome. Until a positive feasibility study has been completed, and even with the completion of a positive feasibility study, there are no assurances that Kipawa will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices of rare earth; availability of alternative rare earth sources or substitutes; actual rare earth recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry, political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion or development or construction activities.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially for those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this presentation and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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