Rare Earth Metals Inc

HIGHLIGHTS

18 DIAMOND DRILL HOLES TESTED THE CABONATITE-MAGNETITE ZONE FOR A STRIKE LENGTH OF 700 METERS
NEWEST DRILL HOLE ASSAYS INCLUDE:
CH-09 : 0.69% TREO /0.12% Nb203 /47.20% Fe203 /76.6 METERS
CH-17 : 0.85% TREO /0.13% Nb205 /37.76% Fe203 /35 METERS
CH-13 : 0.69% TREO / 0.14% Nb205 /57.8% Fe203/105.3 METER
INC: 1.088 TREO/0.14% Nb205 and 65.95% Fe203/ 16.9 METERS
100% OWNED PATENTED MINERAL AND SURFACE RIGHTS, ROAD ACCESSIBLE WITH GREAT INFRASTRUCTURE - HIGHWAY, RAILROAD AND PIPELINES WITHIN 40 KILOMETERS
VERY SIMILAR TO THE BAYAN OBO MINE IN CHINA
NUMEROUS OTHER UNTESTED MAGNETIC ANOMALIES WITHIN THE 110 SQ KM CARBONATITE COMPLEX
18 DDH COMPLETED (5432.5 METERS)
MUTIPLE MAGNETITE ZONES INTERSECTED IN DRILLING THAT INDICATE A STRIKE LENGTH OF OVER 700 METERS AND OPEN IN ALL DIRECTIONS
CORE SAMPLES HAVE BEEN SELECTED AND SENT TO XSTRATA PROCESS SUPPORT IN SUDBURY FOR METALLURGICAL TESTWORK; RESULTS WILL BE AVAILBLE IN SIX WEEKS
FOLLOW UP DRILLING ONCE ALL ASSAYS ARE COMPILED AND PRELIMINARY MINERALOGICAL WORK COMPLETED, ALSO PROSPECT ALL OTHER TARGETS IN THE COMPLEX

The Clay-Howells Prospect is a massive to semi-massive magnetite deposit with appreciable Rare Earth Elements and Niobium. The deposit consists of multiple bands of mineralization with a minimum strike length of 1.0 km and hosted within a Carbonatite Complex. Previous work in 1958 had partially outlined the iron resource however no analysis was done for REEs or Niobium. The 1958 drilling was the last fieldwork done prior to Rare Earth Metals acquiring the patented claims in 2009.

Since acquisition RA has carried out a regional airborne geophysical survey, drilled the Clay-Howells Prospect (5432 meters in 18 holes) and initiated a prospecting/sampling program on numerous other magnetic targets outside the main prospect. Results from the 2010 drilling include intersections up to 105.3 meters grading 57.83% Fe2O3, 0.694% TREO and 0.14% Nb2O5. Higher grade Rare Earth zones within the magnetite include 2.45% TREO over 4.9 meters. The drilling has tested a 700 meter section of the Deposit which remains open in all directions. The average cumulative drilled widths of the magnetite zone, which appears to be represented as two main lenses, is approximately 67 meters. The amount of Heavy Rare Earths within the Total Rare Earths varies from 5% to 20% with an average of 10%.

Preliminary metallurgical/mineralogical test work results have been recieved from Xstrata Process Support in Sudbury, ON. This work is being carried out on three drill composites selected from the winter drilling program. The purpose of the test work is to better understand the ore hosting minerals and to carry out preliminary magnetic separation work to better evaluate the deposit’s economics. The results to date are from the magnetic separation work only, which involves crushing and pulverizing the sample and putting the fine material through a magnetic separator to produce two fractions, a Non Magnetic fraction and a Magnetic fraction. Preliminary results from this test work indicate that a large majority of the magnetite and rare earth mineralogy is coarse grained and that there is a consistent upgrading of REE grade into the Non Magnetic fraction and a substantial upgrade of the Iron content in the Magnetic fraction. In summary 69.7% of the material reported to the Magnetic fraction and 30.3% reported to the Non Magnetic fraction.

Non Magnetic fraction: Testing of the three samples produced a 46.6% to 65.2% recovery of the Rare Earth Elements to the Non Magnetic fraction. The lower recovery of 46.6% resulted in a Non Magnetic fraction grade of 1.4% TREO with the Heavy REO representing 11.8% of the Total. The highest recovery of 65.2% resulted in a Non Magnetic fraction grade of 3.9% TREO with the Heavy REO representing 7.1% of the Total. A breakdown of the more abundant REO’s in the higher grade Non Magnetic fraction includes 1.79% Ce2O3, 1.08% La2O3, 0.52% Nd2O3 and 0.13% Y2O3. Further upgrading of Rare Earth Elements to the Non Magnetic fraction will require optimization of the grind size as well as testing different settings on the magnetic separator. It is anticipated that, after initial magnetic separation, additional REE concentration of the Non Magnetic fraction could be done with conventional flotation methods if the mineralogy is favourable.

Magnetic fraction: Analysis of the Magnetic fraction showed a recovery of between 86.1% and 93.1% of total Iron (Fe2O3). The amount of Fe2O3 reporting to the Magnetic fraction increased by an average of 35% from feed grade of the composites. The Iron grade of the Magnetic fraction ranged from 55.8% to 71.7% Fe2O3 and it is thought that a magnetite concentrate of similar grade is possible from this deposit.

These test results demonstrate that magnetic separation will result in two products being produced, one a high grade iron concentrate and the second being a higher grade REE product that may be amenable to further upgrading. The results are very preliminary in nature and a larger sample will be required to follow up with the next phase of test work that would include a further upgrading of the non magnetic fraction.