Oct. 5, 2009 (PR Newswire) -- TSX-V: RES
VANCOUVER, Oct. 5 /PRNewswire-FirstCall/ - Rare Element Resources Ltd. (TSX-V: RES) (the "Company") is pleased to announce that it has signed a letter of intent to acquire 100% of the Eden Lake Rare Earth Elements ("REE") project from VMS Ventures Inc. ("VMS" ). VMS optioned the project in 2001 and has explored the project for REEs intermittently since then. The total claim block area covers 28 square kilometers.
Eden Lake Rare Earth Element Project, Manitoba, Canada
The Eden Lake REE Project is located 35 kilometers northwest of Leaf Rapids, Manitoba. In 2003 VMS, which was then called Rare Earth Metals Corp., performed detailed geological mapping, sampling, and petrographic studies that led to the discovery of an extensive area (approximately 8 square kilometers) of hydrothermal stock-work veining, magmatic carbonatite dikes, and breccia exposed in outcrop. Carbonatite dikes and plugs were discovered at three locations, and the property geology has characteristics that suggest a large carbonatite complex.
REE-enriched minerals identified in petrographic studies include strontium-REE-apatite, britholite, allanite, and REE mineral inclusions in andradite garnet. REE enrichments occur in all hydrothermally metasomatized rocks. The highest REE concentrations encountered by VMS are in the carbonatite dikes (up to 1.6% total REO, 9,764 ppm Sr, and 745 ppm Y), and in hydrothermal REE-rich veins (up to 13.8% total REO and 5,307 ppm Y). VMS also discovered heavy REEs (Eu-Lu) on the project during their field work. Rare Element will be evaluating the carbonatite complex, which may have similarities to the Company's Bear Lodge project, and the heavy rare earths plus yttrium in the hydrothermal veins.
A drill program was completed on the project in 2006, and the holes provided additional favourable geologic indications for a carbonatite complex, but without hitting significant REE grades. Six holes for a total of 765 meters were drilled in the northeastern half of the 8 square kilometer zone of intensely altered rocks. Most of the favourable targets have not been adequately tested, and additional exploration of the project for yttrium and heavy rare earths is warranted.
Acquisition Terms
Rare Element has agreed to acquire 100% of the Eden Lake REE Project for payment of 300,000 common shares and a 3% Net Smelter Returns ("NSR") royalty. The Letter of Intent calls for a due diligence period, which is currently underway, and a formal purchase agreement to be signed. The common shares will be issued as 75,000 at closing, and 75,000 at 6, 12, and 18 months thereafter.
