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IBC Disclaims Role in Ucore Rare Earth Element Proposal to U.S. Department of Defense

The date of: 2019-08-27
viewed: 2

source:Yahoo Finance

AMERICAN FORK, Utah, Aug. 26, 2019 /PRNewswire/ -- Ucore Rare Metals, Inc. ('Ucore') recently issued a press release announcing that Ucore had made a proposal to the U.S. Department of Defense ('Proposal') in response to a request for information ('RFI') from the Defense Production Act ('DPA') Title III Office.  Although the exact terms of the Proposal are not evident, it appears that Ucore represented that the technology and services of IBC Advanced Technologies, Inc. ('IBC') would be involved in the processing and separation of rare earth elements ('REE'). Given this, IBC feels compelled to announce that it has taken no part in the Proposal, and disclaims any connection with or responsibility for it.

In its Press Release of August 22, 2019 ('Ucore Press Release'), Ucore announced that it had responded to the RFI by proposing the advancement of its Bokan-Dotson Ridge Rare Earth Project's mine ('Bokan Mine') and a rare earth processing and separation plant in Southeast Alaska ('REE Plant').  Title III of the DPA authorizes Federal Government procurement and installation of equipment in industrial facilities owned by private entities.

False Representations to the Federal Government

Given the nature of the Proposal, as described in the Ucore Press Release, IBC is extremely concerned that Ucore has likely made false representations to the Federal Government as to Ucore's purported REE Plant capabilities and the feasibility of the Bokan Mine in order to gain entrance into the lucrative DPA Title III program and that Ucore has represented to the Federal Government that it will utilize IBC's technology and services to separate and process REEs from the Bokan Mine.  IBC wholly disclaims any such representations.

IBC's concerns focus on the following issues.

Unsupported Claims of REE Processing and Separation Capabilities

Ucore has provided no assurance that it possesses the technology, processes or financial resources to construct and operate a REE Plant to process and separate rare earths. Ucore operates no REE separations or processing facilities, has abandoned the separations technology upon which its Preliminary Economic Assessment ('PEA') was based and has no license from IBC for the separation and processing of REEs.

Infeasibility of the Bokan Mine based on Undisputed Independent Expert Findings

A recent independent expert study has demonstrated that the Bokan Mine is not economically feasible for development and production of REEs currently or far into the foreseeable future ('Independent Expert Findings').  Dr. David R. Hammond (Hammond International Group), an independent mineral economics consultant, conducted an update of the economic value indicators represented by Ucore in its March 13, 2013, PEA.  Among other things, the Independent Expert Findings make clear that the Bokan Mine will not be commercially feasible for approximately 30-40 years, if ever. In fact, the updated analysis of Ucore's 2013 PEA indicates the Bokan Mine project's current Net Present Value is negative $819 million at an after-tax nominal discount rate of 12%.

In his sworn declaration, Dr. Hammond also stated that as a result of previous uranium mining operations between 1957 and 1971, contaminated soils, mine workings and waste rock remain at the Bokan Mine location, which is now designated as a Superfund Site by the United States Environmental Protection Agency.  Although not currently on the National Priority List, cleanup and other remediation costs are unknown and offer potentially enormous financial liability to any owner or Potentially Responsible Party.

By Ucore's own admission, the Bokan Mine resources are so speculative that they cannot be categorized as mineral reserves and thus do not have demonstrated economic viability. 

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