Pele Mountain Advances Cogent Solution to Rare Earth Industry Dislocations

Rare Earth Deposits & Mining / Rare Earth Exploration, Mining, Processing, & Uses

Date posted: 07/29/15

Pele Mountain Resources Inc. today provided an update regarding the escalating dislocations in the rare earth industry and resulting implications for Pele monazite processing strategy. In 2014, Pele expanded its business model to include the sustainable development of a low-cost, early-to-market, rare earth processing center in Elliot Lake, Ontario, at the site of its Eco Ridge Mine Rare Earth and Uranium Project. Pele President Al Shefsky stated that after advancing Eco Ridge for several years, he realized more than a year ago that the already difficult capital markets were becoming increasingly less supportive of hard rock mining projects that require relatively high CAPEX. Accordingly, he began a transition toward a less capital-intensive solution to address the need for rare earth production and a rare earth supply chain outside China. These efforts evolved into the Pele monazite processing strategy. We continue to confidently pursue our vision of a rare-earth processing center in Elliot Lake in cooperation with qualified partners. Despite increasing demand for certain rare earths and billions of dollars invested to develop mining operations and processing facilities, there are no new, hard rock rare earth mines outside China that have achieved profitable production. Challenges that have undermined the viability of new projects include - 1) high capital costs to construct hard rock mines, processing facilities, and associated infrastructure, 2) complex technical issues associated with process development unique to each deposit, 3) an environment of strongly down-trending rare earth prices, and 4) extremely weak resource capital markets. These profound market-related and technical challenges have created a formidable impediment to the development of new hard rock rare earth mines and highlight the need for a different approach to achieve low cost rare earth production outside China.