Press release from TheNewswire.ca
Canada Rare Earths Acquires 2 New Quebec Graphite Projects & Introduces Lavallée P.Geo as Director
Thursday, April 19, 2012
Canada Rare Earths Acquires 2 New Quebec Graphite Projects & Introduces Lavallée P.Geo as Director06:30 EDT Thursday, April 19, 2012(via Thenewswire.ca) Vancouver, British Columbia - April 19th, 2012 - Today, Canada Rare Earths Inc. ("Canada Rare Earths" or "the Company") (TSX.V: CJC; FSE: YXEN; OTC-BB: CJCFF) announces the acquisition of two new Quebec based graphite projects located on the St-Laurent North Shore in Quebec, and that Jean Sebastien Lavallee P.Geo is expected to join the Board of Directors of the Company. These new acquisitions, coined the Champagne and Tetepisca North graphite projects respectively, significantly enhance the Company's Quebec based graphite project portfolio. The Champagne Graphite Property The Champagne graphite property consists of one large contiguous block of 88 mineral claims totaling approximately 4,870 hectares located approximately 120 km north of Baie-Comeau, Quebec. The Champagne graphite property was originally explored by Outokumpu Mines Inc. ("Outokumpu") in 1998 for base metal mineralization. According to Outokumpu's historical reports filed with the Ministere des Ressources Naturelles et de la Faune du Quebec, an advanced helicopter borne geophysical survey consisting of 2,600 kilometers of flight path in the region was performed at that time. The airborne survey revealed multiple electro-magnetic (EM) anomalies in the area, outside or coinciding with magnetic anomalies. In a 15 kilometer long trend across the property, the survey revealed multiple EM target anomalies and off-set structures, including several zones of parallel conductors each measuring as much as 3-5 kilometers long. This suggests an apparent strike length of EM conductors associated with known graphite occurrences of approximately 11 kilometers and the total of all EM structure length close to 20 kilometers long providing a large prospective area to explore for a graphite resource on the Champagne property. This helicopter borne geophysical survey was followed by ground exploration on approximately half of the major conductors only. The program was abandoned midway when it was concluded that all anomalies visited were related to graphite mineralization and that the base metal sulphides of interest were nearly absent. This historical ground work also confirmed the presence of graphite on surface, coincident with at least several of these conductors. (See map on website http://www.canadarareearths.com/projects-champagne-graphite.php). Four of the EM conductors have been identified as 'strong' and are considered as potentially pod style targets averaging in size between 250 meters by 500 meters to 1.8 kilometers by 250 meters, with moderate EM signatures seemingly connecting them along the length of this trend. Seen as these areas were also identified as hosting graphite mineralization they are early high priority targets for a summer drill program on the property. Some of the graphite occurrences seem to be associated with the contact (shear zone) between the different geological units. The geology is consistent with the Central Metasedimentary Belt of the Grenville Province and includes quartzofeldspathic rocks, quartzite, biotite gneiss, marble and locally pegmatitic quartzofeldspathic rocks, and intrusive rock as anorthosite and gabbro. Property logistics are excellent with nearby power and road access via the main lumber haul road which originates in Baie-Comeau and Labrieville leading to numerous tertiary/forest roads that transect the property. Given the advanced historical pre-drilling exploration work on the Champagne property, and subject to confirmatory reconnaissance of the historical reporting, the project is near ready to be trenched and drilled. The Company has begun the process for camp and drill permitting and is reviewing historical data to plan a new graphite focused exploration campaign on the Champagne property as soon as possible. The campaign will consist of detailed reconnaissance sampling and mapping, trenching and an anticipated first phase of 3,000 meters of drilling to test mineralization along strike to an anticipated vertical depth of approximately 125 meters. The Company cautions that neither it, nor the Qualified Persons named below have verified the quality and accuracy of the historic exploration results reported in this news release, and cautions readers not to rely upon them. The results were generated from sources believed to be reliable; however, they have not yet been confirmed. Tetepisca North Property The Tetepisca North property totals approximately 2,142 hectares, located in the general area of the southwest bank of the Manicouagan Reservoir, approximately 43 kilometres from the Manic V hydro-electric dam, ? 9 kilometres southwest of the Lac Gueret project of Cliffs Natural Resources Inc. (recently purchased by Mason Graphite) and 215 km from the Quebec North Shore deep sea port town of Baie-Comeau. Access is achieved via the 389 national road (Baie-Comeau-Labrador) and logging roads. The property covers the extension of regional conductor and magnetic anomalies over an area of approximately 7 kilometers long and 2 kilometers wide. The property is located along the multikilometric corridor of metasediments or sediments identified by the Ministry of Natural Resources of Quebec as the Proterozoic Nault formation and features excellent road access. Regionally, the Montreal-based firm Mason Graphite and Cliffs Natural Resources Inc. recently concluded a $ 7.5 million transaction involving the Lac Gueret graphite property. Meanwhile, St-Georges Platinum and Base Metals Ltd. recently announced that it has increased the size of its Tetepisca property after confirming the existence of surface grab samples that yielded results in the range of 50.9% to 58.1% of carbon graphite in the area. (Note: grab samples are selective by nature and are unlikely to represent average grades on the property). The Company is in the planning stage for an initial prospecting and mapping program expected to be followed by an EM survey of the area. NEW APPOINTMENT The Company is also pleased to announce that Mr. Jean Sebastien Lavallee P. Geo, one of the Optionors of the Champagne graphite property, is expected to join the Board of Directors of the Company upon TSX Venture Exchange acceptance of the Champagne Graphite property acquisition agreement. Mr. Lavallee has been active in mining exploration since 1994. He is the vice president of Consul-Teck Exploration Inc., a consulting firm of Val-d'Or founded in 2003 that specializes in mining exploration in northern areas. Most of the firm's mandates involve the generation and execution of projects in remote areas. Mr. Lavallee is also President & CEO of Critical Elements Corporation, a publicly listed company. Mr. Lavallee has acted as a geologist for many companies, including Uracan Resources Ltd., Agnico-Eagle Mines Ltd., Noranda Minerals Inc., Champion Minerals Inc., Matamec Explorations Inc., Argex Mining Inc., and others. Having been responsible for the planning and execution of many exploration programs in recent years, Mr. Lavallee has acquired solid experience in exploration project development. ACQUISITION TERMS Champagne graphite property Canada Rare Earths has an option to earn a 100-per-cent interest in the Champagne graphite property from the vendors by making the following payments and issuing the following common shares to the vendors: i) $60,000 on signing of the option agreement; ii) $60,000 and 3,000,000 shares on TSX-V acceptance of this option agreement (the "Effective Date"); iii) $150,000 on closing of project financing (maximum within 6 months from the Effective Date); iv) 750,000 shares on that day which is 6 months from the Effective Date; v) $45,000 and 750,000 shares on that day which is 12 months from the Effective Date; vi) $45,000 and 750,000 shares on that day which is 18 months from the Effective Date; and vii) $45,000 and 750,000 shares on that day which is 24 months from the Effective Date. During the period which is 18 months from the effective date, Canada Rare Earth will complete a minimum of $500,000 of exploration on the Champagne graphite property, during the period which is month 18 to month 24 from the Effective Date, Canada Rare Earths will complete a minimum of $1,000,000 of exploration on the property and during the period which is month 24 to month 36 from Effective Date, Canada Rare Earths will complete a minimum of $1,500,000 of exploration on the property. The vendors will retain a 2-per-cent net smelter returns royalty on the property, 1% of which can be purchased by Canada Rare Earths for $1,000,000. In addition, if the company files a National Instrument 43-101 compliant technical report that discloses a resource estimate with 200,000 tonnes or more of graphite content (at cut-off of 5%), the Company will pay to the Vendors cash consideration of $150,000 and issue 3,000,000 shares to the vendors. All payments are payable in equal proportions to the three Vendors. Tetepisca North Property Canada Rare Earths has an option to earn a 100-per-cent interest in the Tetepisca North Property from the vendor by making the following payments and issuing the following common shares to the vendor: i) $25,000 and 250,000 shares on TSX-V acceptance of this agreement (the "Effective Date"); and ii) 250,000 shares on the first anniversary of the initial share issuance. The vendor will retain a 1.5-per-cent net milling royalty on the property, one-third (0.5%) of which can be purchased by Canada Rare Earths for $250,000. In addition, the Company agrees to pay the vendor a 1 million share bonus payment if either: a) The Company establishes a resource equal or greater than 5 million tonnes of Graphite Carbone in any Ni 43-101 category of resources on the property, or if any subsequent buyer does, or b) If the Company decides to put the project into production. The Company also agrees to spend a minimum of $75,000 on the property over the course of the next 18 months. Exploration Plans With these two graphite property agreements, combined with the Company's three earlier acquisitions (see the Company's news release dated February 27th, 2012), Canada Rare Earths now possesses a strong portfolio of Quebec based graphite projects. Plans are now underway to commence exploration on these properties as soon as possible. The Company's Q2 exploration plans include: Lac Des Isles West: -Ground sampling, mapping and an EM survey. Champagne: -Ground sampling, mapping, trenching, and drilling. La Loutre: -Ground sampling, mapping and an EM survey. Tetepisca North: -Ground sampling and mapping. Labelle: -Ground sampling, mapping, EM survey beginning upon completion of community consultation. In all areas, the exploration targets are multiple crystalline flake graphite targets similar to other graphite deposits and mines in Quebec such as Focus Metals Inc.'s Lac Knife Deposit and Timcal Graphite and Carbon Inc.'s Lac des Iles Mine. For more information on these projects please visit the Company's website at www.canadarareearths.com. Chad McMillan, President & CEO of Canada Rare Earths comments that, "These acquisitions, collectively with those previously announced, now offer the Company several new opportunities within this emerging graphite space all located in an attractive mining jurisdiction and all featuring very good logistics. Each of these projects contains unique features that make them particularly attractive: The Champagne project features a large trend that has already been the subject of recent and advanced pre-drilling exploration work including a large EM survey. The strong EM signatures are described as coincident with graphite occurrences on surface for as much as 11 kilometers. This is a large prospective area now ready for trenching and drilling to determine its true resource potential. Lac Des Isles West is adjoining the west side of the Timcal Lac Des Isles Graphite project claims, approximately 2 kilometers from their currently producing operations. A ground prospecting program will seek to confirm potential graphite outcropping on surface while an EM survey will be conducted to highlight key target areas for drilling. La Loutre features a 5 kilometer trend with historical surface samples ranging from 1 to 10% graphite on surface. An EM survey is expected to help refine the structure and ready targets for drilling. Tetepisca North features a large magnetic signature and graphite outcropping on surface. Sampling and an EM survey will refine these structures towards a future drill program in an emerging and soon to be active exploration area. Labelle is a past small scale graphite production project with at least 5km of underexplored strike length. Ground sampling and an EM survey is expected to help refine the true target potential of the area, and is expected to commence upon obtaining the support of the local community to advance the project. With our portfolio now possessing such a diverse and intriguing range of opportunity, there will continue to be a great deal of activity as the Company works to advance these projects as soon as possible. We look forward to a spring/summer of promising exploration." ABOUT GRAPHITE Natural graphite comes in several forms: flake, amorphous and lump. Graphite has many important new applications including its use in lithium ion batteries, fuel cells and nuclear and solar power that have the potential to significantly increase the demand for this critical element. For instance, there is between 10 and 30 times more graphite required by weight to produce a lithium-ion battery than there is lithium. In addition, the recent discovery of a new material called graphene, which is actually derived from graphite, has also heightened interest. International research is now underway into a number of its potential applications including enhancing the speed and processing power of many modern electronic devices. This has also increased the interest in graphite. Meanwhile, global consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MM t in 2012. Demand for graphite has been increasing by approximately 5% per year since 2000 due to the ongoing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Of the 1.2 million tons of graphite produced annually, approximately 40% is of the most desirable flake type. China, which produces about 73% of the world's graphite, is seeing production and export growth leveling and export taxes and a licensing system have been instituted. A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the EU, July 2010). As a function of these fundamentals, demand for graphite and thereby prices are expected to rise as electric vehicles and lithium battery technology continue to be adopted and while the material performs a greater role in new technology applications. Graphite prices have been increasing in recent months and over the last couple of years and prices for large flake, high purity graphite (+80 mesh, 0.2mm, 94-97% Carbon) have more than doubled. Jean-Sebastien Lavallee P.Geo, geologist, a Qualified Person as defined by National Instrument 43-101, and an Optionor of the Champagne Graphite property, has reviewed and approved the content of this release. For more information on Canada Rare Earths Inc., please visit www.canadarareearths.com or call 604.685.5851. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. On Behalf of the Board, "Chad McMillan" President & CEO Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the Company's plans for and intentions with respect to the acquisitions and exploration of the Lac Des Iles West, La Loutre, Labelle, Champagne and Tetepisca North graphite properties, and historical information of the projects, constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain any required government or other regulatory approvals and any required financing to complete the acquisitions and the Company's planned exploration activities, that the Company is able to procure equipment and supplies in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors relating to Canada Rare Earth's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks include, among others, actual results of the Company's exploration activities being different than those expected by management, uncertainties involved in the interpretation of drilling results and geological tests, delays in obtaining or inability to obtain required government or other regulatory approvals or financing, inability to procure equipment and supplies in sufficient quantities and on a timely basis, equipment breakdowns and bad weather. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. Canada Rare Earths does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. 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