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1/16/2013
Ucore files assessment

By SCOTT BOWLEN

Daily News Staff Writer

Ucore Rare Metals reached a milestone toward developing a rare-earth-element mine at Bokan Mountain on Tuesday when it filed it a preliminary economic assessment for the project with the Canadian Securities Administrators.

The 227-page report provides a first look at how the Nova Scotia-based Ucore might develop a mine and process minerals near Kendrick Bay on southeast Prince of Wales Island.

The technical report also describes potential mine costs and timelines, envisioning a $221-million capital cost for an operation that would mine 1,500 tons of mineralized material per day over a mine life of 11 years, based on current estimates of the mineral resources present at the site.

The report also estimates the mine would employ about 118 people for mining and support activities.

"Remarkably the PEA supports a very straight-forward mine development plan in combination with a near-term production horizon at Bokan," Ucore CEO Jim McKenzie said in a prepared statement announcing the PEA filing. "What’s more, this affordable, high-return facility will generate product that the U.S. critically requires to sustain competitiveness in multiple high-growth fields, including high-tech, renewable energy, medical science and defense systems."

Ucore did not return Daily News phone calls for comment Tuesday.

A Preliminary Economic Assessment is a early overview of a potential project, based on general mining economics, market conditions, and, in this case, "inferred" estimates of mineral resources considered "too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves," according to Ucore information.

Ucore indicates that results from its 2011 exploratory drilling program at Bokan are being analyzed, and it expects to release the results during the next month.

According to the PEA, Ucore anticipates launching the full feasibility study and mine permitting processes during the first quarter of this year. It estimates that the feasibility study will be completed by the end of this year, with permitting extending into the fall of 2014.

Ucore’s website states that a "comprehensivepilotplant" willbebuiltin 2013. However, the PEA’s project summary schedule estimates that construction would start in the third quarter of 2014 and wrap up at the end of 2015.

Located about 37 miles southwest of downtown Ketchikan, Ucore’s Bokan-Dotson Ridge project site has gained national attention for its deposit of heavy rare earth elements such as the yttrium, terbium and dysprosium that are used in a variety of technologies.

The 19 square-mile site would be largely self-contained if developed into a mine, according to the PEA.

Electricity, for example, would be supplied by generators powered by natural gas, in addition to a standby generator powered by diesel fuel.

The site would include a permanent camp and administration offices, vehicle maintenence shop and storage building, and plant and camp sewage facilities.

Also planned for the site are facilities for tailings and mine water management, waste rock management and water treatment.

Mineralized material from the underground mine would be processed at a mill on the site, according to the PEA. The tailings from the milling process would be deposited back underground.

"The milled tailings will be stored on surface in a lined (tailings and mine water management facility) during the first year of operations," states the PEA. "The tailings in the TMWMF will be re-slurried and used as paste backfill after Year 1, when sufficient space is available in the underground stopes. The tailings produced after Year 1 will be fed directly to the paste plant and placed underground as paste backfill."

The PEA document readily acknowledges that more work is needed to better determine the amount of mineral resources present at the site, in addition to efforts associated with mine design and other geotechnical work, baseline environmental studies, risk assessments and various economic analysis.

Ucore has completed an environmental review for the project, according to the PEA.

"Baseline studies have been initiated to support a pending environmental assessment, which will be conducted by the United States Forest Service," states the PEA. "The development and approval of a comprehensive reclamation plan will also be required before key construction permits are issued. Community consultation has been initiated and will continue throughout the permitting and operating period."

Several federal and state permits would be required for mine construction and operation.

McKenzie and UCORE Chief Operating Officer Ken Collison were positive in thier assessments of the PEA and the proposed project itself.

"Beyond representing an important milestone in the development of the Bokan property, this PEA opens the possibility of a complete downstream rare earth industry in Alaska," Collison said in Ucore’s prepared statement. "We look forward to working with a variety of local constituents who will participate in and benefit from the development of this remarkable property."

McKenzie said that, "Every so often, a low cost, right-size facility with a resilient, high-demand product presents itself in the mining sector. Bokan is such a facility."

Further information about the proposed project, including the PEA document, is available on the Ucore website at: www.ucore.com.