Quantum Rare Earth – Niobium & Rare Earth Project – Elk Creek, Nebraska

Overview

Quantum Rare Earth Developments Corp (TSXV:QRE, OTCQX:QREDF, FSE:BR3) is developing its flagship Niobium project in Elk Creek, Nebraska.

Quantum aims to be the solution for America’s strategic and critical Niobium needs for the domestic steel and aviation industry. Niobium is crucial in high strength steel for bridges and buildings, oil and gas pipelines, stainless steel, MRI machines, wind turbines, jet thrusters, automobiles and more.

Elk Creek is an advanced project as Molycorp Inc. drilled 110 holes in the geological anomaly during the 1970s and 1980s. Niobium demand and prices have increased rapidly since then, and in 2010 Quantum took up where Molycorp left off.

Investment Highlights

  • 19.3 Mt @ 0.67% Nb2O5 (Indicated) and 83.3 Mt @ 0.63% (Inferred)
  • 129,182,000 kg of contained Nb2O5 (Indicated) and 523,844,000 kg of contained Nb2O5 (Inferred)
  • 131 meters of 1.02% Nb2O5 – a highlight from 2011 summer drill campaign
  • Deposit is open in three directions
  • High-grade Rare-Earth complex identified 2.5 km from Niobium deposit

Key Properties

Elk Creek, Nebraska Niobium Deposit

Quantum’s Elk Creek Niobium deposit is the only primary Niobium deposit in the US, and is the highest-grade, large-tonnage undeveloped deposit in North America.

Given the rapid demand growth of Niobium and the limited number of current and potential deposits, the company feels it has an excellent opportunity to secure a partner to advance the deposit toward production.

Elk Creek Highlights:

  • 19.3 Mt @ 0.67% Nb2O5 (Indicated) and 83.3 Mt @ 0.63% (Inferred)
  • 129,182,000 kg of contained Nb2O5 (Indicated) and 523,844,000 kg of contained Nb2O5 (Inferred)
  • Niobium price: ~$42/kg
  • 131 meters of 1.02% Nb2O5 – a highlight from 2011 summer drill campaign
  • Deposit is open in three directions
  • High-grade Rare-Earth complex identified 2.5 km from Niobium deposit
    • Historic TREO intercepts, including 54.9 m of 3.30%, contained in 155 m of 2.70%
    • In September 2011, Quantum released 2 rare earth holes 2.5 km away from the main niobium zone- highlight: 68.18 m 3.32% TREO

Peer Comparison with Iamgold’s Niobec Niobium Mine that has been in production for over 30 years:

IAMGOLD`s NIOBEC MINE

Quantum`s ELK CREEK

45.7 Mt @ 0.53% Nb2O₅ – Proven and Probable

19.7 Mt @ 0.67%  Nb2O₅ – Indicated

83.3 Mt @ 0.63% Nb2O₅ – Inferred

242,000,000 kg of contained Nb2O₅

129,182,000 kg of contained Nb2O₅ – Indicated

523,844,000 kg of contained Nb2O₅ – Inferred

4km Carbonatite

7km Carbonatite

Underground mining

Underground mining

Resource uses a 0.40% cut-off

Resource uses a 0.40% cut-off

IAMGOLD’s resource report from December 2010 – Quantum’s resource report from April 2, 2012

The Elk Creek Carbonatite is located in southeastern Nebraska, about an hour south of Lincoln. It is a former Molycorp project that was explored by the company during the 1970s and 1980s. In May 2010, Quantum took up where Molycorp had left off. Niobium demand has increased an average of 10% per year for the past decade, with growth forecast to continue in similar fashion in the coming decade. Niobium prices have increased in line with this growth. Rare-Earth prices have also seen dramatic increases.

Based on current forecasts, Niobium production from the three current producers is undergoing expansion. CBMM in Brazil, the world’s leading producer, is expanding capacity to meet this demand. The Niobec mine in Quebec, owned by Iamgold, is also undergoing expansion plans in hopes to triple their production levels in the coming years. Despite this increase in production from the current producers, the possibility of demand outstripping supply by the end of the decade remains, opening the doors for additional production to fulfill market needs.

The prospect of Niobium becoming a material that nations begin stockpiling for strategic purposes could also add additional demands on production. Currently, the U.S. (who import 100% of their Niobium supply), China and several EU countries have all announced their intention to begin stockpiling.

Jungle Well and Laverton – Australia

Quantum retains a 20% carried interest in two tenement packages located in southwestern Australia, which are considered to be highly prospective for the occurrence of Rare Earth Elements (REE). The projects are located in the same mineral field where Lynas Corporations’ (ASX: LYC) Mt. Weld rare earth deposit is currently being developed.

 

Archie Lake

In September 2009, Quantum acquired the Archie Lake property in Saskatchewan. The property is located 50 km east of Uranium City, and 50 km south of Great Western Minerals’ (TSXV: GWG) Hoidas Lake REE Deposit. Historic exploration at Archie Lake returned significant concentrations of Rare Earth Elements (REEs). The property consists of one mineral claim covering an area of 2,108 hectares.

Thirty six rock samples were collected from six historic trenches and one small blast pit at the property. Mineralization was confirmed in all six trenches plus one small unnamed blast pit. One chip sample, shown above, returned a high of 29.9% REE+Y. A total of five samples exceeded detection limits for one to four of the lanthanides (Ce, La, Nd, and Pr). Two of these samples exceeded 15% total rare earths plus yttrium (REE+Y). Of all 36 samples analyzed, a total of 18 samples exceed 2% REE+Y, six exceed 5% REE+Y with three exceeding 10% REE+Y. The peak value was comprised of nearly 60% monazite representing a highly mineralized pod within the overall zone.

Management

Peter Dickie – President, CEO, and Director
Mr. Dickie brings over 20 years of business experience with both public and private companies holding numerous senior management positions. A graduate of both the University of British Columbia, and the University of Victoria (B.C.), his background includes four years in the Securities industry with Jones, Gable & Co. Currently, he sits on the board of several public companies in a fiscal and management advisory capacity.

David C. Beling, P.E. – Director
Mr.Beling has a unique combination of project and corporate expertise, with over 47 years of experience in the global precious metal, base metal and energy mineral sectors. Mr. Beling has significantly reviewed or was directly involved with 84 underground mines, 127 open pit mines and 163 mineral processing plants as a consultant or while employed with Phelps Dodge, Union Oil, Fluor, United Technologies, Westinghouse, and several Canadian and US junior mining companies. In addition to developing and managing operations, he initiated or strongly contributed to the marketing and closing of several debt and equity financings, commodity and asset sales, mergers, acquisitions and joint ventures.

Claude Dufresne, Mining Engineer –  Director
Mr. Dufresne graduated with a Bachelors degree in Mining Engineering from Laval University in 1991. Following his graduation, Mr. Dufresne started working with Cambior as a metallurgist then mill superintendent before being transferred to Cambior’s largest operation located in South America. After spending 10 years on the operational side of the business, he became responsible for the worldwide Sales and Marketing of Cambior’s ferro-nioibium and calcined bauxite. After Cambior’s acquisition by Iamgold Corp, Mr. Dufresne collaborated with Iamgold’s Corporate Development group while continuing with its Sales & Marketing activities. In January 2008, Mr. Dufresne started Camet Metallurgy Inc., which was responsible for the worldwide Sales and Marketing of Iamgold’s niobium until the end of October 2012. Mr Dufresne is a member of the Ordre des Ingenieurs du Quebec, and of the Tantalum & Niobium International Study Center (TIC).

David R. Shoemaker, Mining Engineer – Technical Advisor
For over fifty years David R. Shoemaker has worked in the base metals, precious metals, and energy metals sectors experience in large open pit block caving and cut and fill operations sectors.Mr. Shoemaker has extensive pit, caving, operations. Mr. Shoemaker has held the positions of Mining Engineer, Chief Engineer, Operations Superintendent at caving and open pit mines, and Manager and Vice President of Molycorp Inc. Molybdenum Group. While working for Molycorp Inc., Hecla Mining Company, Phelps Dodge Corporation, Inspiration Consolidated Copper Co., Utica Mines Ltd., Homestake Mining Company, and as a Mining Consultant, Mr. Shoemaker has been involved in the evaluation, of over 100 mineral properties. In summary, Mr. Shoemaker has extensive experience in mine operations, mine planning, and mine evaluation.

James E. Reynolds, Chemical Engineer – Technical Advisor
Mr. Reynolds has a broad background as a chemical engineer in metallurgical and chemical operations in research, hydrometallurgical process development and chemical plant management covering 50 years. Mr. Reynolds has 30 patents issued during his 28 years of consulting activities on over 80 world-wide projects. His experience includes employment with American Potash, Kerr McGee Corporation and Hazen Research, specializing in light and heavy metals processing, recycle of secondary metals, and industrial electro-chemicals. As a project manager at Hazen Research, Mr. Reynolds managed base metals and uranium laboratory and pilot programs for project pre-feasibility evaluations.

Erin Chutter – Director
Mrs. Chutter is the President and Founder of Global Cobalt (formerly Puget Ventures Inc.), a TSXV listed mineral exploration company advancing the Werner Lake Cobalt Mine in Ontario, Canada. She is also a founder and director of two private companies. She has been active in politics since the late 1980s, and has managed and advised campaigns at three levels of government, as well as party leadership races, and has served on staff to federal and provincial ministers and leaders.

Casey Forward – CFO
Mr. Forward is an independent CGA with over 20 years of experience in both private and public companies involved in mining and business development. Mr. Forward currently serves as a director or officer of several public companies involved in the mineral resource sector.