Texas Rare Earth Resources has reported the results of a preliminary economic assessment (PEA) of its Round Top rare earth minerals project in Hudspeth county, Texas, approximately 85 miles southeast of El Paso. The PEA describes a surface mining operation producing 80,000 mt/d over a 26-year mine life. Annual total rare earth oxide sales are estimated at 10,800 mt. Project capital costs are estimated at $2 billion, including a 25% contingency.

                                The Round Top project is based on a Tertiary rhyolite intrusion that is enriched in both heavy and light rare earth elements (REEs). The stratigraphy is relatively simple, with Tertiary rhyolite laccoliths cutting Tertiary diorite dykes and intruding Cretaceous marine sedimentary rocks. As of mid-May 2012, estimated measured and indicated mineral resources at Round Top totaled 359 million mt at a rare earth oxide grade of 639 ppm. Estimated inferred mineral resources totaled 675 million mt at a grade of 638 ppm. Mineral resources are reported using a 428 ppm yttrium-equivalent cutoff.

                                The PEA assumes a rare earth oxide basket price of $110.31/kg. Average operating costs are estimated at $48/kg of total rare earth oxides sold.

                                The Round Top mineralogy is described as simple, predominantly yttrofluorite hosted in a unique metaluminous rhyolite rock. REEs are uniformly distributed throughout the rhyolite, and initial metallurgical testing and characterization indicates conventional technology can be used to concentrate the REE minerals, with base-case metallurgical recovery of 72%.

                                Preliminary flotation and leaching test work suggests uranium can be separated and leached from the rhyolite host rock, but uranium extraction was not considered in the PEA.

                                Side-hill open-pit mining methods are proposed, with on-site processing facilities. For purposes of the PEA, it was assumed that mining and processing operations will operate 24 hr/day, seven days per week. Mining will be based on conventional truck-and-loader production methods. The rhyolite will be mined in two 25-ft lifts on 50-ft benches. Equipment will include 150-st-capacity trucks and wheel loaders with 22-yd3 buckets. Texas Rare Earth Resources currently plans to own, operate, and maintain all equipment.

                                Texas Rare Earth Resources is headquartered in Englewood, Colorado. Gustavson Associates, based in Lakewood, Colorado, prepared the Round Top PEA.