technical report and resource estimate of the lavergne ... · 1192410400-rep-r0001-01 report to:...

Report to:

RARE EARTH METALS INC.

Technical Report and Resource Estimate of the Lavergne-Springer REE Project, Ontario, Canada

Document No. 1192410400-REP-R0001-01

1192410400-REP-R0001-01

Report to:


TECHNICAL REPORT AND RESOURCE ESTIMATE OF THE LAVERGNE-SPRINGER REE PROJECT, ONTARIO, CANADA

EFFECTIVE DATE: MAY 4, 2012

Prepared by Paul Daigle, P.Geo.

330 Bay Street, Suite 900, Toronto, ON M5H 2S8 Phone: 416-368-9080 Fax: 416-368-1963

1192410400-REP-R0001-01

Report to:


TECHNICAL REPORT AND RESOURCE ESTIMATE OF THE LAVERGNE-SPRINGER REE PROJECT, ONTARIO, CANADA

EFFECTIVE DATE: MAY 4, 2012

Prepared by “Original document signed by

Paul Daigle, P.Geo.” Date May 25, 2012

Paul Daigle, P.Geo.

Reviewed by “Original document signed by Jeff Wilson, Ph.D., P.Geo.” Date May 25, 2012

Jeff Wilson, Ph.D., P.Geo.

Authorized by “Original document signed by

Paul Daigle, P.Geo.” Date May 25, 2012

Paul Daigle, P.Geo.

PD/jc

330 Bay Street, Suite 900, Toronto, ON M5H 2S8 Phone: 416-368-9080 Fax: 416-368-1963

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1192410400-REP-R0001-01

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00 2012/05/18 Paul Daigle - Paul Daigle Draft report to client for review 01 2012/05/25 Paul Daigle Jeff Wilson Paul Daigle Final to client

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T A B L E O F C O N T E N T S

1.0 SUMMARY .......................................................................................................................... 1 1.1 INTRODUCTION ..................................................................................................................... 1 1.2 PROPERTY DESCRIPTION ...................................................................................................... 1 1.3 GEOLOGY ............................................................................................................................. 2 1.4 EXPLORATION AND DRILLING ................................................................................................. 2 1.5 RESOURCE ESTIMATE ........................................................................................................... 3 1.6 RECOMMENDATIONS ............................................................................................................. 4

2.0 INTRODUCTION ................................................................................................................. 6 2.1 TERMS OF REFERENCE AND PURPOSE OF REPORT ................................................................ 6 2.2 INFORMATION AND DATA SOURCES ........................................................................................ 6 2.3 TETRA TECH QP SITE VISIT ................................................................................................... 6

3.0 RELIANCE ON OTHER EXPERTS ..................................................................................... 7

4.0 PROPERTY DESCRIPTION AND LOCATION ................................................................... 8 4.1 LOCATION ............................................................................................................................. 8 4.2 PROPERTY DESCRIPTION .................................................................................................... 10 4.3 PROPERTY OWNERSHIP ...................................................................................................... 13

4.3.1 LAVERGNE OPTION AGREEMENTS ...................................................................... 13 4.3.2 LAVERGNE SURFACE RIGHTS AGREEMENT ......................................................... 14 4.3.3 ZIMTU OPTION AGREEMENT ............................................................................... 14

4.4 ENVIRONMENTAL LIABILITIES ............................................................................................... 14

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY .............................................................................................................. 15 5.1 ACCESSIBILITY .................................................................................................................... 15 5.2 CLIMATE ............................................................................................................................. 15 5.3 LOCAL RESOURCES ............................................................................................................ 15 5.4 INFRASTRUCTURE ............................................................................................................... 16 5.5 PHYSIOGRAPHY .................................................................................................................. 16

6.0 HISTORY ........................................................................................................................... 17 6.1 GEOPHYSICAL ENGINEERING & SURVEYS, 1968-1969 ......................................................... 17 6.2 CONCENTRATED RARE EARTH MINERALS LTD., 1988 ........................................................... 18

7.0 GEOLOGICAL SETTING AND MINERALIZATION .......................................................... 19 7.1 REGIONAL GEOLOGY........................................................................................................... 19 7.2 PROPERTY GEOLOGY .......................................................................................................... 21

7.2.1 LITHOLOGIES ..................................................................................................... 23 7.2.2 STRUCTURE AND METAMORPHISM ...................................................................... 25

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7.3 MINERALIZATION ................................................................................................................. 25 7.3.1 NOMENCLATURE ................................................................................................ 27

8.0 DEPOSIT TYPES .............................................................................................................. 28

9.0 EXPLORATION ................................................................................................................. 29 9.1 AIRBORNE RADIOMETRIC AND MAGNETIC SURVEY, 2011 ...................................................... 29 9.2 MINERALOGY STUDY, 2011 ................................................................................................. 31 9.3 MAPPING ............................................................................................................................ 31

10.0 DRILLING .......................................................................................................................... 32 10.1 RARE EARTH METALS, 2011 ............................................................................................... 32 10.2 RARE EARTH METALS, 2012 ............................................................................................... 33

11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY ............................................... 36

12.0 DATA VERIFICATION ...................................................................................................... 37 12.1 DATABASE VERIFICATION .................................................................................................... 37 12.2 TETRA TECH CHECK SAMPLES ............................................................................................ 39

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ......................................... 43

14.0 MINERAL RESOURCE ESTIMATES ................................................................................ 45 14.1 INTRODUCTION ................................................................................................................... 45

14.1.1 DATABASE ......................................................................................................... 45 14.1.2 SPECIFIC GRAVITY ............................................................................................. 45

14.2 EXPLORATORY DATA ANALYSIS ........................................................................................... 46 14.2.1 RAW ASSAYS ..................................................................................................... 46 14.2.2 CAPPING ANALYSIS ............................................................................................ 47 14.2.3 COMPOSITES ..................................................................................................... 51

14.3 GEOLOGICAL INTERPRETATION ............................................................................................ 51 14.4 BLOCK MODEL .................................................................................................................... 57

14.4.1 VARIOGRAPHY ................................................................................................... 58 14.4.2 VARIOGRAPHY PARAMETERS .............................................................................. 59 14.4.3 INTERPOLATION PLAN AND SPATIAL ANALYSIS .................................................... 60

14.5 MINERAL RESOURCE ESTIMATE ........................................................................................... 66 14.5.1 MINERAL RESOURCE CLASSIFICATION ................................................................ 66

14.6 VALIDATION ........................................................................................................................ 71 14.6.1 MODEL VOLUME VALIDATION .............................................................................. 71 14.6.2 INTERPOLATION VALIDATION............................................................................... 71 14.6.3 SWATH PLOTS ................................................................................................... 71

15.0 ADJACENT PROPERTIES ............................................................................................... 74

16.0 OTHER RELEVANT DATA AND INFORMATION ............................................................ 75

17.0 INTERPRETATION AND CONCLUSIONS ....................................................................... 76

18.0 RECOMMENDATIONS ..................................................................................................... 78 18.1 DRILLING ............................................................................................................................ 78

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18.2 METALLURGICAL TEST WORK .............................................................................................. 80 18.3 OTHER RECOMMENDATIONS ................................................................................................ 80

19.0 REFERENCES .................................................................................................................. 82

20.0 CERTIFICATE OF QUALIFIED PERSON ......................................................................... 85

L I S T O F A P P E N D I C E S

APPENDIX A MINERAL CLAIMS APPENDIX B DESCRIPTIVE STATISTICS – RAW DATA APPENDIX C CUMULATIVE PROBABILITY APPENDIX D DESCRIPTIVE STATISTICS – 3 M COMPOSITE DATA APPENDIX E MODELLED VARIOGRAPHY RESULTS

L I S T O F T A B L E S

Table 1.1 Indicated Resource Estimate for the Lavergne-Springer Deposit ........................ 4 Table 1.2 Inferred Resource Estimate for the Lavergne-Springer Deposit .......................... 4 Table 4.1 Summary of the Lavergne-Springer Project Patented and Mineral Claims ........ 11 Table 4.2 Summary of the Rare Earth Metal’s Adjacent Mineral Claims............................ 13 Table 6.1 Summary of Exploration Activities by GES ......................................................... 17 Table 6.2 Summary of 1969 Drill Program .......................................................................... 18 Table 7.1 List of Elements and Oxides Associated REE Mineralization............................. 27 Table 10.1 Select Assay Results from the 2011 Drill Program ............................................. 32 Table 10.2 Selected Assay Results from the 2012 Drill Program ......................................... 34 Table 12.1 Conversion Factor Errors – Corrections Made to Database ............................... 37 Table 12.2 Incorrect Summation of TREO% Value .............................................................. 38 Table 12.3 Missing Entries for Either LREO% Summation Values ...................................... 38 Table 12.4 Missing Entries for Either HREO% Summation Values ...................................... 38 Table 12.5 Interval Length Calculation Errors ....................................................................... 39 Table 12.6 “From” or “To” Value Interval Errors / Not Originally Imported ........................... 39 Table 12.7 Examination of Check Sample 626466 from Drillhole SL-11-03 ........................ 41 Table 12.8 Summary of Check Samples Collected by Tetra Tech ....................................... 41 Table 12.9 Comparison of Assay Results for REEs ............................................................. 42 Table 14.1 Summary Statistics for SG Data (g/cm3) ............................................................. 46 Table 14.2 Raw Assay Statistics (No Zeros) for La2O3%, Y2O3% and ThO2%TREO%

and ThO2% .......................................................................................................... 46 Table 14.3 Statistics on the Assay Sample Lengths of the Raw Data .................................. 51 Table 14.4 Summary of 3.0 m Composite Data for La2O3%, Y2O3% and ThO2% ................ 51

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Table 14.5 List of Rock Codes and Wireframe Codes .......................................................... 53 Table 14.6 Block Coordinates for the Lavergne-Springer Block Model ................................ 57 Table 14.7 Variogram Parameter Profiles ............................................................................. 59 Table 14.8 Variography Parameters GROUPL Elements ..................................................... 59 Table 14.9 Variography Parameters for GROUPM Elements .............................................. 60 Table 14.10 Variography Parameters for GROUPHY Elements ............................................ 60 Table 14.11 Variography Parameters for ThO2 by Domain .................................................... 60 Table 14.12 Description of Interpolation Passes for Lavergne-Springer ................................ 61 Table 14.13 Lavergne-Springer Search Ellipse Parameters .................................................. 61 Table 14.14 Indicated Resource Estimate for the Lavergne-Springer Deposit ...................... 67 Table 14.15 Indicated Resource Estimate for the Lavergne-Springer Deposit by REOs ....... 67 Table 14.16 Inferred Resource Estimate for the Lavergne-Springer Deposit ........................ 68 Table 14.17 Inferred Resource Estimate for the Lavergne-Springer Deposit by REOs ......... 68 Table 14.18 Volume Comparison Between Wireframe Solid Models and Block Models ....... 71 Table 14.19 Comparison of OK, ID2 and NN Average Grades ............................................... 71 Table 17.1 Indicated Resource Estimate for the Lavergne-Springer Deposit ...................... 76 Table 17.2 Inferred Resource Estimate for the Lavergne-Springer Deposit ........................ 77 Table 18.1 Estimated Cost Breakdown for Proposed Drill Program ..................................... 78 Table 18.2 Summary of Proposed Drillhole Locations .......................................................... 79

L I S T O F F I G U R E S

Figure 4.1 Lavergne-Springer Location Map .......................................................................... 9 Figure 4.2 Property Location Map ........................................................................................ 10 Figure 4.3 Lavergne-Springer Claim Map ............................................................................ 12 Figure 7.1 Regional Geology – Northwestern Portion of the Grenville Province in the

Vicinity of North Bay, Ontario .............................................................................. 20 Figure 7.2 Property Geology Map ........................................................................................ 22 Figure 7.3 Local Geology Map; Modified after Thomas, 2011 ............................................. 24 Figure 7.4 Plane Polarized Light Image of Typical Intergrowths of Synchysite and

Fe-Oxide/Hydroxide ............................................................................................ 26 Figure 7.5 Back-Scatter Electron Image of Synchysite Cluster in Ankerite Matrix .............. 26 Figure 9.1 Airborne Magnetic Survey, 2011; Showing Magnetic High (Red) and Low

(Blue) Results ...................................................................................................... 30 Figure 10.1 Drillhole Location Map; Grey Solid Represents the Interpreted Mineralized

Deposit ................................................................................................................ 35 Figure 13.1 Sample 1044755 Synchysite Concentrates; < 60 Mesh to > 100 Mesh

Fraction; Red Grains are Synchysite/Iron Oxide Material .................................. 44 Figure 14.1 Histogram and Cumulative Probability Plot for La2O3% (All Data) ..................... 48 Figure 14.2 Histogram and Cumulative Probability Plot for Y2O3% (All Data) ....................... 49 Figure 14.3 Parrish Decile Analysis for La2O3% .................................................................... 50 Figure 14.4 Plan View of the Lavergne-Springer Deposit; Showing Drillhole Locations,

and the 0.31 and 0.82 TREO% Grade Shell Projections .................................... 54 Figure 14.5 Plan View of Lavergne-Springer Wireframes – 0.31 and 0.82 TREO%

Grade Shells ........................................................................................................ 55 Figure 14.6 Perspective View of Lavergne-Springer Wireframes – 0.31 and 0.82 TREO%

Grade Shells ........................................................................................................ 56

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Figure 14.7 Block Model Origin for the Lavergne-Springer Block Model ............................... 57 Figure 14.8 Block Model Attributes for the Lavergne-Springer Deposit Resource

Estimate ............................................................................................................... 58 Figure 14.9 Search Ellipse PASS1 and PASS2; Perspective View Looking Northwest;

No Scale .............................................................................................................. 62 Figure 14.10 Plan View of the Lavergne-Springer Deposit Block Model Showing TREO%;

at 220 m Elevation ............................................................................................... 64 Figure 14.11 Cross-section of the Lavergne-Springer Deposit Block Model Showing

TREO%; at 5143980 mN .................................................................................... 65 Figure 14.12 Grade – Tonnage Curve for the Lavergne-Springer Indicated Resource

Estimate (TREO%) .............................................................................................. 69 Figure 14.13 Grade – Tonnage Curve for the Lavergne Springer Inferred Resource

Estimate (TREO%) .............................................................................................. 70 Figure 14.14 Swath Plots for TREO% by Easting .................................................................... 72 Figure 14.15 Swath Plots for TREO% by Northing .................................................................. 72 Figure 14.16 Swath Plots for TREO% by Elevation ................................................................. 73 Figure 18.1 Locations of Proposed Drillholes; Plan View ...................................................... 80

G L O S S A R Y

UN ITS OF ME AS U RE above mean sea level ...................................................................................................................... amsl acre .................................................................................................................................................. ac ampere ............................................................................................................................................. A annum (year) .................................................................................................................................... a billion ................................................................................................................................................ B billion tonnes .................................................................................................................................... Bt billion years ago ............................................................................................................................... Ga British thermal unit ........................................................................................................................... BTU centimetre ........................................................................................................................................ cm cubic centimetre ............................................................................................................................... cm3 cubic feet per minute ........................................................................................................................ cfm cubic feet per second ....................................................................................................................... ft3/s cubic foot.......................................................................................................................................... ft3

cubic inch ......................................................................................................................................... in3 cubic metre ...................................................................................................................................... m3

cubic yard......................................................................................................................................... yd3 Coefficients of Variation ................................................................................................................... CVs day ................................................................................................................................................... d days per week .................................................................................................................................. d/wk days per year (annum) ..................................................................................................................... d/a dead weight tonnes .......................................................................................................................... DWT decibel adjusted ............................................................................................................................... dBa decibel ............................................................................................................................................. dB

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degree .............................................................................................................................................. ° degrees Celsius ............................................................................................................................... °C diameter ........................................................................................................................................... ø dollar (American) .............................................................................................................................. US$ dollar (Canadian) ............................................................................................................................. Cdn$ dry metric ton ................................................................................................................................... dmt foot ................................................................................................................................................... ft gallon ............................................................................................................................................... gal gallons per minute (US) ................................................................................................................... gpm gigajoule........................................................................................................................................... GJ gigapascal ........................................................................................................................................ GPa gigawatt............................................................................................................................................ GW gram ................................................................................................................................................. g grams per litre .................................................................................................................................. g/L grams per tonne ............................................................................................................................... g/t greater than ...................................................................................................................................... > hectare (10,000 m2) ......................................................................................................................... ha hertz ................................................................................................................................................. Hz horsepower ...................................................................................................................................... hp hour .................................................................................................................................................. h hours per day ................................................................................................................................... h/d hours per week ................................................................................................................................ h/wk hours per year .................................................................................................................................. h/a inch .................................................................................................................................................. " kilo (thousand) ................................................................................................................................. k kilogram ........................................................................................................................................... kg kilograms per cubic metre ................................................................................................................ kg/m3 kilograms per hour ........................................................................................................................... kg/h kilograms per square metre ............................................................................................................. kg/m2 kilometre .......................................................................................................................................... km kilometres per hour .......................................................................................................................... km/h kilopascal ......................................................................................................................................... kPa kilotonne........................................................................................................................................... kt kilovolt .............................................................................................................................................. kV kilovolt-ampere ................................................................................................................................. kVA kilovolts ............................................................................................................................................ kV kilowatt ............................................................................................................................................. kW kilowatt hour ..................................................................................................................................... kWh kilowatt hours per tonne (metric ton) ................................................................................................ kWh/t kilowatt hours per year ..................................................................................................................... kWh/a less than........................................................................................................................................... < litre ................................................................................................................................................... L litres per minute ............................................................................................................................... L/m megabytes per second ..................................................................................................................... Mb/s megapascal ...................................................................................................................................... MPa megavolt-ampere ............................................................................................................................. MVA

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megawatt ......................................................................................................................................... MW metre ................................................................................................................................................ m metres above sea level ................................................................................................................... masl metres Baltic sea level ..................................................................................................................... mbsl metres per minute ............................................................................................................................ m/min metres per second ........................................................................................................................... m/s metric ton (tonne) ............................................................................................................................. t microns ............................................................................................................................................ µm milligram........................................................................................................................................... mg milligrams per litre ............................................................................................................................ mg/L millilitre ............................................................................................................................................. mL millimetre.......................................................................................................................................... mm million ............................................................................................................................................... M million bank cubic metres ................................................................................................................. Mbm3 million bank cubic metres per annum ............................................................................................... Mbm3/a million tonnes ................................................................................................................................... Mt minute (plane angle) ........................................................................................................................ ' minute (time) .................................................................................................................................... min month ............................................................................................................................................... mo ounce ............................................................................................................................................... oz pascal .............................................................................................................................................. Pa centipoise ......................................................................................................................................... mPa∙s parts per million ................................................................................................................................ ppm parts per billion ................................................................................................................................. ppb percent ............................................................................................................................................. % pound(s) ........................................................................................................................................... lb pounds per square inch ................................................................................................................... psi revolutions per minute ...................................................................................................................... rpm second (plane angle) ....................................................................................................................... " second (time) ................................................................................................................................... s specific gravity ................................................................................................................................. SG square centimetre ............................................................................................................................ cm2 square foot ....................................................................................................................................... ft2 square inch ...................................................................................................................................... in2 square kilometre .............................................................................................................................. km2 square metre .................................................................................................................................... m2 thousand tonnes .............................................................................................................................. kt three dimensional ............................................................................................................................. 3D three dimensional model .................................................................................................................. 3DM tonne (1,000 kg) ............................................................................................................................... t tonnes per day ................................................................................................................................. t/d tonnes per hour ................................................................................................................................ t/h tonnes per year ................................................................................................................................ t/a tonnes seconds per hour metre cubed ............................................................................................. ts/hm3 volt ................................................................................................................................................... V week ................................................................................................................................................ wk

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weight percent .................................................................................................................................. wt% weight/weight ................................................................................................................................... w/w wet metric ton ................................................................................................................................... wmt year (annum) .................................................................................................................................... a

AB B REV I AT IO NS A N D ACR ONY MS Activation Laboratories Ltd. ............................................................................................... Actlabs aluminium oxide ................................................................................................................. Al2O3 antimony ............................................................................................................................ Sb arsenic ............................................................................................................................... As backscattered electron imaging ......................................................................................... BSE barium ................................................................................................................................ Ba beryllium ............................................................................................................................ Be bismuth .............................................................................................................................. Bi caesium ............................................................................................................................. Cs calcium oxide ..................................................................................................................... CaO Canadian Institute of Mining, Metallurgy and Petroleum .................................................... CIM cathodoluminescence ........................................................................................................ CL cerium ................................................................................................................................ Ce chromium ........................................................................................................................... Cr cobalt ................................................................................................................................. Co copper ................................................................................................................................ Cu diamond drillhole ................................................................................................................ DDH dysprosium ........................................................................................................................ Dy energy-dispersive x-ray detection ...................................................................................... EDS europium ............................................................................................................................ Eu gadolinium ......................................................................................................................... Gd gallium ............................................................................................................................... Ga Geophysical Engineers & Surveys ..................................................................................... GES germanium ......................................................................................................................... Ge global positioning system ................................................................................................... GPS hafnium .............................................................................................................................. Hf heavy rare earth metals and oxide ..................................................................................... HREO holmium ............................................................................................................................. Ho indium ................................................................................................................................ In inductively coupled plasma ................................................................................................ ICP inductively coupled plasma/mass spectrometry ................................................................. ICP/MS International Organization for Standardization ................................................................... ISO iron oxide ........................................................................................................................... Fe2O3 iron ..................................................................................................................................... Fe lanthanum .......................................................................................................................... La Lavergne-Springer REE deposit ........................................................................................ the Property lead .................................................................................................................................... Pb light rare earth element ...................................................................................................... LREE light rare earth oxide .......................................................................................................... LREO

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lutetium .............................................................................................................................. Lu magnesium oxide ............................................................................................................... MgO manganese oxide .............................................................................................................. MnO molybdenum ...................................................................................................................... Mo National Environmental Laboratory Accreditation Program ............................................... NELAP National Instrument 43-101 ................................................................................................ NI 43-101 National Topographic System ............................................................................................ NTS nearest neighbour .............................................................................................................. NN neodymium ........................................................................................................................ Nd net smelter return ............................................................................................................... NSR nickel.................................................................................................................................. Ni niobium oxide ..................................................................................................................... Nb2O5 North American Datum ...................................................................................................... NAD Ontario Power Authority ..................................................................................................... OPA Ontario Power Generation Inc. .......................................................................................... OPG ordinary kriging .................................................................................................................. OK OTC Markets Group Inc. .................................................................................................... OTCQX phosphorus oxide .............................................................................................................. P2O5 potassium oxide ................................................................................................................. K2O praseodymium ................................................................................................................... Pr Qualified Person ................................................................................................................ QP quality assurance/quality control ........................................................................................ QA/QC rare earth element ............................................................................................................. REE Rare Earth Metals Inc. ....................................................................................................... Rare Earth Metals rare earth oxide .................................................................................................................. REO rock quality designation ..................................................................................................... RQD rubidium ............................................................................................................................. Rb samarium ........................................................................................................................... Sm scandium ........................................................................................................................... Sc scanning electron microscopy ............................................................................................ SEM silicon oxide ....................................................................................................................... SiO2 silver .................................................................................................................................. Ag sodium oxide ...................................................................................................................... Na2O specific gravity ................................................................................................................... SG strontium ............................................................................................................................ Sr tantalum ............................................................................................................................. Ta terbium ............................................................................................................................... Tb thallium .............................................................................................................................. Tl thorium ............................................................................................................................... Th thorium dioxide .................................................................................................................. ThO2 thulium ............................................................................................................................... Tm tin ....................................................................................................................................... Sn titanium oxide ..................................................................................................................... TiO2 total rare earth oxide .......................................................................................................... TREO TSX Venture Exchange ..................................................................................................... TSXV tungsten ............................................................................................................................. W

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ultraviolet ........................................................................................................................... UV Universal Transverse Mercator .......................................................................................... UTM uranium .............................................................................................................................. U vanadium ........................................................................................................................... V Wardrop, a Tetra Tech Company ...................................................................................... Tetra Tech x-ray element mapping ...................................................................................................... XEM x-ray fluorescence ............................................................................................................. XRF ytterbium ............................................................................................................................ Yb yttrium ................................................................................................................................ Y yttrium oxide ...................................................................................................................... Y2O3 zinc .................................................................................................................................... Zn zirconium ........................................................................................................................... Zr

Rare Earth Metals Inc. 1 1192410400-REP-R0001-01 Technical Report and Resource Estimate of the Lavergne-Springer REE Project, Ontario, Canada

1 . 0 S U M M A R Y

1 . 1 I N T R O D U C T I O N

Rare Earth Metals Inc. (Rare Earth Metals) is a Canadian-based and Canadian-registered company that is based in Thunder Bay, ON. Rare Earth Metals is a junior exploration company listed on the TSX Venture Exchange (TSXV) as RA.V and on the OTC Markets Group Inc. (OTCQX) as RAREF. It is focused on developing rare earth element (REE) projects with superior existing infrastructure or excellent potential infrastructure for mine development (website: www.rareearthmetals.ca).

This technical report and resource estimate describes the Lavergne-Springer REE deposit (the Property) in southeast Ontario, Canada, which is situated approximately 80 km east of Sudbury, ON.

Wardrop, a Tetra Tech Company (Tetra Tech) was retained by Rare Earth Metals to produce the first National Instrument 43-101 (NI 43-101) resource estimate on the Property and to provide the accompanying technical report. This technical report has been prepared in accordance with NI 43-101 Standards of Disclosure for Mineral Projects and Form 43-101F1.

The Qualified Person (QP) responsible for this report is Paul Daigle, P.Geo., a Senior Geologist for Tetra Tech. Mr. Daigle conducted a site visit on the Property on January 23, 2011 for one day. The project site and drill core logging and sampling facilities were inspected during the site visit. Mr. Daigle was accompanied on the site visit by Mr. Glen Penney, Project Geologist for Rare Earth Metals and Mr. Roy Hill, Field Technician for Rare Earth Metals.

1 . 2 P R O P E R T Y D E S C R I P T I O N

The Property is defined by the mineral rights to one patented claim and ten contiguous mining claims in southeast Ontario, currently 100% held by Rare Earth Metals, and cover an area of approximately 775.5 ha. The mineral rights are held through four option agreements; three option agreements for the patented claim and one option agreement for the ten adjacent mineral claims. The known Lavergne-Springer deposit is wholly situated within the patented claim.

In March 2012, Rare Earth Metals agreed to purchase the surface rights to the eastern half of the patented claim, a total of 64 ha, and covers approximately half of the known Lavergne-Springer deposit.


1 . 3 G E O L O G Y

The Property is located in the northwestern portion of the Grenville Province that forms part of southern Precambrian craton of the Canadian Shield and is situated approximately 50 km southeast of the Grenville Front which serves as the boundary between the Grenville and Southern Provinces.

Granitic Rocks in the Springer, Pedley and Field Townships, together with the Indian Reserve No. 10 between Dukis Point and Jocko Point on Lake Nipissing appear to comprise a complex, deformed, syntectonic or pre-tectonic batholith that contains numerous concordant layers of metasediments. Biotite granite along the north shore of Lake Nipissing, north Beaucage Point and south of the major northwesterly trending fault, as well as granitic rocks forming most of the islands in Lake Nipissing could be part of this batholith. Anatectic augen gneisses (biotite granites and hornblende-biotite granites with evidence of partial melting) predominate, referred to as the Sturgeon Falls batholith (Lumbers 1971).

The Lavergne-Springer deposit is classified as a carbonatite that has intruded into a granite gneiss (granitoid) host. The host granitoid rocks appear to have undergone varying (weak to intense) hydrothermal alteration.

A carbonatite is defined as an igneous rock body with more than 50% modal carbonate minerals, mainly in the form of calcite, dolomite, ankerite or sodium- and potassium-bearing carbonates. Carbonatites commonly occur as intrusive bodies, such as isolated sills, dikes, or plugs, although rarely occur as extrusive rocks. Many carbonatites are associated with alkali silicate rocks (e.g. syenite, nepheline syenite, ijolite, urtite, pyroxenite, etc.). Carbonatites are usually surrounded by an aureole of metasomatically altered rocks called fenites. Carbonatite-associated deposits can be classified as magmatic or metasomatic types (Richardson and Birkett 1996).

1 . 4 E X P L O R A T I O N A N D D R I L L I N G

Since acquiring the Property in 2011, Rare Earth Metals has conducted geological mapping, mineralogical and petrology studies, drilling, and an airborne geophysical survey on the Lavergne-Springer project.

Between June 14 and 21, 2011, a semi-detailed mapping program was conducted on the Property. Seven traverses were carried out along and between the bush tracks on the main part of the Property. Due to the cover of thick bush and swamp, as well as an extensive mantle of glacial drift, surficial exposure of bedrock within the mapped area was sparse (Thomas 2012).

In September 2011, a 960 line kilometre airborne radiometric and magnetic survey was completed by Geo Data Solutions Inc., of Laval, QC. The survey was flown by helicopter, over the 16 km length of the Property. Flight line spacing was nominally 100 m, with a closer spacing of 50 m along the Lavergne-Springer segment of the Property (Geo Data 2011).


In 2011, Rare Earth Metals retained Anthony Mariano, a consulting mineral exploration geologist and REE specialist based in Carlisle, Massachusetts, USA, to conduct a mineralogical study and preliminary bench test on four selected samples from the 2011 drill core. The mineralogical studies were conducted on four polished and thin sections and slabs corresponding to the four samples of drill core from the Lavergne-Springer deposit.

In January 2012, Rare Earth Metals retained Dr. Roger H. Mitchell at Lakehead University in Thunder Bay, ON, to undertake a petrographic study and identification of the major REE bearing minerals. Two grab samples were selected from the East and West Lavergne REE Zones were forwarded. Sample 599357 was collected from a synchysite-fluorite carbonatite and sample 599358 was collected from hydrothermally altered granite.

Between June 2011 and February 2012, Rare Earth Metals has conducted two phases of diamond drilling on the Lavergne-Springer deposit. A total of 6,080 m were drilled from 22 HQ-size drillholes. Twenty of the drillholes intersected the known Lavergne-Springer deposit totalling 5,619 m.

1 . 5 R E S O U R C E E S T I M A T E

Tetra Tech has prepared a new mineral resource estimate for the Lavergne-Springer deposit in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Best Practice Guidelines and disclosed in accordance with NI 43-101. The effective date of the Lavergne-Springer mineral resource estimate is May 4, 2012.

The block model and mineral resource for the Lavergne-Springer deposit is classified as having both Indicated and Inferred Mineral Resources based on the number of drillholes, drillhole spacing and sample data populations used in the estimation of the blocks. The mineral resource estimate for the deposit, at 0.9 total rare earth oxide (TREO) % cut-off, is an Indicated Resource of 4.2 Mt at 1.14% TREO, 0.02 thorium dioxide (ThO2) % with approximately 6% of the TREO being made up of heavy rare earth metals and oxides (HREOs); and an Inferred Resource of 12.7 Mt at 1.17% TREO, 0.01 ThO2% with approximately 4% of the TREO being made up of HREOs.

The mineral resource was estimated by the ordinary kriging (OK) interpolation method on uncapped grades for all 15 rare earth oxides (REOs) and thorium dioxide. The TREO% is a sum of the 15 individual interpolations of the REOs. No recoveries have been applied to the interpolated estimates.

Table 1.1 and Table 1.2 summarizes the Indicated and Inferred Resource estimates, for the Property, at various TREO% for the cut-offs between 0.6 and 1.3 TREO%.


Table 1.1 Indicated Resource Estimate for the Lavergne-Springer Deposit

TREO% Cut-off Density

Tonnes ('000) LREO% HREO%* TREO%

HREO:TREO Ratio (%) ThO2%

1.30 2.59 759 1.363 0.080 1.443 6 0.018 1.20 2.60 1,384 1.280 0.074 1.353 5 0.017 1.10 2.60 2,124 1.209 0.072 1.281 6 0.017 1.00 2.60 3,028 1.143 0.069 1.212 6 0.016 0.90 2.60 4,167 1.073 0.066 1.139 6 0.016 0.80 2.60 6,022 0.987 0.062 1.049 6 0.015 0.70 2.61 8,249 0.910 0.058 0.967 6 0.014 0.60 2.61 10,719 0.840 0.054 0.894 6 0.013

Note: *Includes yttrium oxide (Y2O3) LREO = Light Rare Earth Oxide

Table 1.2 Inferred Resource Estimate for the Lavergne-Springer Deposit




1.30 2.65 2,805 1.482 0.053 1.535 3 0.010 1.20 2.65 4,405 1.378 0.053 1.431 4 0.010 1.10 2.65 6,531 1.285 0.053 1.337 4 0.011 1.00 2.64 9,433 1.196 0.052 1.249 4 0.011 0.90 2.65 12,732 1.119 0.051 1.170 4 0.011 0.80 2.65 18,274 1.024 0.048 1.072 5 0.010 0.70 2.65 25,917 0.931 0.045 0.976 5 0.009 0.60 2.65 38,876 0.825 0.041 0.866 5 0.008

Note: *Includes Y2O3

1 . 6 R E C O M M E N D A T I O N S

Tetra Tech recommends that additional drilling is warranted to further investigate and develop the known Property. Additional drilling will determine, with greater confidence, both the continuity and extents of the REO mineralization. The recommended drilling includes step-out drilling to the north and laterally to the east and west of identified mineralization.

Tetra Tech recommends a 23 drillhole, 7,300 m drilling program. The next phase of drilling should focus on the northern half of the deposit within the area of higher REO grades. Tetra Tech has proposed a total of 23 drillholes to investigate the extension to the north, and later extensions to the east and west. Pending positive results, further drilling may be considered. The budget for the proposed drill program is estimated at approximately Cdn$1.55 million.


Tetra Tech also recommends that metallurgical test work be conducted on the Lavergne-Springer mineralization to determine concentrate and metal recoveries. To this end, Rare Earth Metals has retained Xstrata Process Support (XPS), based in Sudbury, ON, to conduct grinding and flotation test work to determine potential recovery methods. This test work is expected to be completed in Q3 2012.


2 . 0 I N T R O D U C T I O N

Rare Earth Metals is a Canadian-registered resource company, based in Thunder Bay, ON, and is publicly listed on the TSXV as RA.V and with the OTCQX as RAREF. Rare Earth Metals is a junior exploration company focused on REE projects with superior existing infrastructure or excellent potential infrastructure for mine development (website: www.rareearthmetals.ca).

This technical report and resource estimate covers the Property in southeast Ontario, Canada, which is situated approximately 80 km east of Sudbury, ON.

2 . 1 T E R M S O F R E F E R E N C E A N D P U R P O S E O F R E P O R T

Tetra Tech was retained by Rare Earth Metals to produce the first NI 43-101 compliant resource estimate on the Property and to provide the accompanying NI 43-101 technical report. This technical report conforms to the standards set out in NI 43-101 Standards of Disclosure for Mineral Projects and is in compliance with Form 43-101F1. The objective of this study is to produce a NI 43-101 resource estimate and technical report on the Lavergne-Springer REE project

The QP responsible for this report is Paul Daigle, P.Geo., a Senior Geologist for Tetra Tech.

All units of measurement used in this technical report and resource estimate are in metric, unless otherwise stated.

2 . 2 I N F O R M A T I O N A N D D A T A S O U R C E S

The main sources of information in preparing this report are from press releases and internal reports from Rare Earth Metals. A complete list of references is provided in Section 19.0 of this report.

2 . 3 T E T R A T E C H Q P S I T E V I S I T

Mr. Daigle conducted a site visit to the Property on January 23, 2011 for one day. The project site and drill core logging and sampling facilities were inspected during the site visit. Mr. Daigle was accompanied on the site visit by Mr. Glen Penney, Project Geologist for Rare Earth Metals and Mr. Roy Hill, Field Technician for Rare Earth Metals.


3 . 0 R E L I A N C E O N O T H E R E X P E R T S

In preparation of this report, Tetra Tech has relied upon Rare Earth Metals and others for information and for matters relating to property ownership, property titles, and environmental issues, including status tenure associated with the Lavergne-Springer REE project. The majority of the information has been sourced from Rare Earth Metals internal reports and company press releases.

Sources of third party sources are disclosed in Section 19.0. The content of these references are disclosed in Sections 4.0, 6.0, 7.0 and 8.0. Tetra Tech has not conducted an examination of land titles or mineral rights for the Property.


4 . 0 P R O P E R T Y D E S C R I P T I O N A N D L O C A T I O N

The Property is defined by the mineral rights to one patented claim and ten contiguous mining claims in southeast Ontario, currently 100% held by Rare Earth Metals, and cover an area of approximately 775.5 ha.

4 . 1 L O C A T I O N

The Property is located:

• within National Topographic System (NTS) map sheets 31L/5 (Sturgeon Falls map sheet; 1:50,000 scale)

• at approximately 46°27’ N and 79°57’ W in southeast Ontario, Canada

• at approximately 580600 E and 5143800 N (Zone 17T; North American Datum (NAD) 27)

• at approximately 300 km north of Toronto, provincial capital of Ontario

• at approximately 80 km east of Sudbury, ON

• at approximately 40 km west of North Bay, ON

• at approximately 7 km north of Sturgeon Falls, in the District of Nipissing; Sturgeon Falls is one of ten towns and villages amalgamated into the municipality of West Nipissing in 1999

• in the Ward 5 of the municipality of West Nipissing

• in the Sudbury Mining Division

• in the Townships of Springer and Field

• at roughly 10 km north of Lake Nipissing

• at roughly 1.5 km east of Burnt Lake

• at approximately 2 km south of Sturgeon River

• at approximately 6.5 km west of Crystal Falls hydroelectric dam, on the Sturgeon River.

The Property is situated as shown in Figure 4.1 and Figure 4.2.


Figure 4.1 Lavergne-Springer Location Map


Figure 4.2 Property Location Map

4 . 2 P R O P E R T Y D E S C R I P T I O N

The Property is comprised of one patented claim and ten contiguous mineral claims where the mineral rights are 100% held by Rare Earth Metals. Rare Earth Metals acquired the rights to the Property through four option agreements.

The patented claim and mineral claims are summarized in Table 4.1 and illustrated in Figure 4.3. Detailed information on the mineral claims may be found in Appendix A.


Table 4.1 Summary of the Lavergne-Springer Project Patented and Mineral Claims

Patent or Claim No.

Claim Units Townships

Recorded Date

Expiry Date

Rare Earth Metals Interest

(%) Area (ha)

Patented Claim Claude Lavergne Option Agreement (80% Interest) Alcide Lavergne Option Agreement (10% Interest) Gerard Lavergne Option Agreement (10% Interest) Lot 6, Concession VI

- Springer - - 100 128.00

Mineral Claims Zimtu Option Agreement

4255048 12 Field 20 Apr 2011 20 Apr 2013 100 194.25 4255049 12 Field 20 Apr 2011 20 Apr 2013 100 194.25 4255050 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259243 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259244 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259245 2 Springer 20 Apr 2011 20 Apr 2013 100 32.37 4259247 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259248 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259249 1 Springer 20 Apr 2011 20 Apr 2013 100 16.19 4259250 8 Springer 20 Apr 2011 20 Apr 2013 100 129.50 Subtotal 40 - - - - 647.50

Total 775.50

The above-mentioned patented claim and mineral claims cover all of the known mineralization area of the Lavergne-Springer deposit described within this report, and consists of sufficient land for exploration and development purposes. The known Property is located on the patented claim, Lot 6, Concession VI.

In March 2012, Rare Earth Metals purchased the surface rights to the eastern half of the patented map, an area of 64 ha, that covers the known Lavergne-Springer deposit.


Figure 4.3 Lavergne-Springer Claim Map

Note: Modified from Rare Earth Metals

OTHER RAR E EARTH METALS MIN ERAL CL AIMS

Rare Earth Metals also holds the mineral rights to 14 other mineral claims in the Springer Township and adjacent Townships of Field to the north and Pedley to the


east. These claims are not subject to this report and are listed in Table 4.2 for completeness.

Table 4.2 Summary of the Rare Earth Metal’s Adjacent Mineral Claims

Claim No.

Claim Units Townships

Recorded Date

Expiry Date

Rare Earth Metals Interest

(%) Area (ha)

4248240 4 Field 28 Jun 2011 28 Jun 2013 100 64 4262422 16 Field 28 Jun 2011 28 Jun 2013 100 256 4262423 15 Field 28 Jun 2011 28 Jun 2013 100 250 4264602 16 Pedley 28 Jun 2011 28 Jun 2013 100 256 4264603 16 Pedley 28 Jun 2011 28 Jun 2013 100 256 4264606 8 Pedley 28 Jun 2011 28 Jun 2013 100 128 4264607 9 Pedley 28 Jun 2011 28 Jun 2013 100 144 4264608 12 Pedley 28 Jun 2011 28 Jun 2013 100 192 4262424 12 Springer 28 Jun 2011 28 Jun 2013 100 192 4262425 4 Springer 28 Jun 2011 28 Jun 2013 100 64 4262426 16 Springer 28 Jun 2011 28 Jun 2013 100 256 4264601 4 Springer 28 Jun 2011 28 Jun 2013 100 64 4264604 4 Springer 28 Jun 2011 28 Jun 2013 100 64 4264605 12 Springer 28 Jun 2011 28 Jun 2013 100 192 Total 148 - - - - 2,378

All patented and mineral claims are illustrated in Figure 4.2.

4 . 3 P R O P E R T Y O W N E R S H I P

4.3.1 LAVER GN E OPTION AGREEMENTS

The Lavergne Option Agreements are made up of three agreements with members of the Lavergne family, co-owners in the mineral and surface rights of the patented claim Lot 6, Concession VI.

GERAR D LAVER GN E OPT ION AGR EEMENT (80% INTER EST)

On April 13, 2011, Rare Earth Metals entered an Option Agreement with the Lavergne family, comprised of eight individuals, and represented by Gerard Lavergne. This Option Agreement was amended on February 23, 2012. The Gerard Lavergne Option Agreement grants Rare Earth Metals the mineral rights to 80% interest in the patented claim Lot 6 Concession VI.


ALCID E LA VER GN E OPT ION AGR EEMENT (10% IN TEREST)

On May 4, 2011, Rare Earth Metals entered an Option Agreement with Alcide Lavergne. This Option Agreement was amended on February 23, 2012. The Alcide Lavergne Option Agreement grants Rare Earth Metals the mineral rights to the 10% interest in the patented claim Lot 6, Concession VI.

CLAUD E LAVER GN E OPTION AGR EEMENT (10% IN TEREST)

On January 12, 2012, Rare Earth Metals entered an Option Agreement with the estate of Harvey Lavergne, comprised of six individuals and represented by Claude Lavergne. The Claude Lavergne Option Agreement grants Rare Earth Metals the mineral rights to the remaining 10% interest in the patented claim Lot 6, Concession VI.

The terms of the agreements to option the mineral rights to the 128 ha patented claim, to Rare Earth Metals, include staged payments of $241,111 over three years, including $40,000 on signing. The owners will retain a 1% net smelter return (NSR) and Rare Earth Metals will have the right to purchase half of the NSR for $1,000,000.

4.3.2 LAVER GN E SURF AC E RIGHTS AGR EEMENT

On March 20, 2012, Rare Earth Metals entered into an agreement to purchase the surface rights to the eastern half of the patented claim for a total of $150,000, in two payments. The eastern half of the Lot 6 Concession VI covers 64 ha and approximately half of the known Property.

4.3.3 ZIMTU OPTION AGR EEMENT

On June 7, 2011, Rare Earth Metals entered into an Option Agreement with Zimtu Capital Corp., Mr. Paul Sobie and Mr. Bill Brereton (the Zimtu Option) where the Zimtu Option grants Rare Earth Metals 100% interest in the 10 mineral claims, currently held in the name of Bill Brereton, and made up of 40 mineral claim units and covers 647.5 ha. This Option Agreement was amended on January 12, 2012.

The terms of this Option Agreement include total payments of 2,000,000 shares over two years, including an initial payment of $50,000. The Zimtu Option will retain a 2% NSR on the 40 mineral claim units and Rare Earth Metals will have the right to purchase half of this NSR for $1,000,000. This agreement is subject to TSXV approval.

4 . 4 E N V I R O N M E N T A L L I A B I L I T I E S

Tetra Tech is unaware of any environmental liabilities on the Property.


5 . 0 A C C E S S I B I L I T Y , C L I M A T E , L O C A L R E S O U R C E S , I N F R A S T R U C T U R E A N D P H Y S I O G R A P H Y

5 . 1 A C C E S S I B I L I T Y

The Property area is located approximately 7 km north of Sturgeon Falls, and situated between the cities of North Bay and Sudbury. The project site is easily accessible by car or truck, however, access around the Property is best by 4 x 4 vehicles on the all-weather access roads (Figure 4.2) that can be accessed all year round. The deposit area is located 300 m north of the drill core logging set up.

Access from North Bay or from Sudbury is by following the Trans-Canada Highway, Highway Number 17, into Sturgeon Falls to join Ottawa Street, or Provincial Highway 64, north for approximately 8.5 km to join Burnt Lake Road west for approximately 1 km, to join an unmarked access road north 100 m to the project site.

There are regular scheduled flights to and from Sudbury and North Bay. Flight time from Toronto is typically less than one hour. The drive from Sudbury is typically one hour and from North Bay approximately 30 minutes.

5 . 2 C L I M A T E

The North Bay area is characterized by warm summer continental climatic zone (Dfb; Köppen climate classification) where summers are short and warm and winters are long and cold with heavy snowfall.

The minimum and maximum mean annual temperatures in the region are -13.0°C and 18.5°C, respectively. July average minimum and maximum temperatures are 10.0°C and 20.9°C, respectively, and January average minimum and maximum temperatures are -18.0 and -8.1°C, respectively. Annual average precipitation and snowfall are roughly 81.2 mm and 22.4 cm respectively (www.climate-charts.com – North Bay, ON).

Exploration activities may take place all year-round.

5 . 3 L O C A L R E S O U R C E S

The closest towns to the Property are Sturgeon Falls, a largely francophone town, is situated 7 km south of the Property with a population of approximately 7,000 (estimated in 2011); and the town of North Bay, that hosts a Canadian Forces Base, is situated 40 km to the east. Sudbury is situated 80 km to the west and is the


central mining town to the Sudbury nickel basin. Sudbury is also the main mining centre for this region of Ontario where most mining service suppliers and contractors may be sourced.

Operations and accommodations for the Lavergne-Springer project are based out of Sturgeon Falls. The project site has a temporary camp set up with a wall tent for drill core logging, sampling with the drill core stored adjacent to the camp.

The Property has sufficient land for exploration and development purposes.

5 . 4 I N F R A S T R U C T U R E

There is limited infrastructure on the Lavergne-Springer project site, other than a small network of access roads, however, the project is located approximately 400 m north of residences that have access to a paved road, electricity and running water.

There is no source of electricity on the Property; therefore, electric power to the project camp is by portable generator. The Property is located approximately 6.5 km west of the Crystal Falls hydroelectric dam (8 MW) on Sturgeon River and 8 km north of the Sturgeon Falls hydroelectric dam (8 MW) in Sturgeon Falls. The Crystal Falls station is operated by the Ontario Power Generation Inc. (OPG). The Sturgeon Falls station was operated by Resolute Forest Products (formerly AbitibiBowater Inc.) but has recently been sold to Ontario Power Authority (OPA).

The nearest major airports are located in North Bay and Sudbury, and the nearest railhead is located in Sturgeon Falls.

Water sources are abundant on the Property.

5 . 5 P H Y S I O G R A P H Y

Relief over the majority of the Property is gentle to moderately flat and does not typically exceed 25 m. Exposure of bedrock is limited, with most of the outcrops occurring in the north-northeast portion of the Property. Outcrops tend to be low-lying and rounded, with wide swaths of thick forest cover or swamp in between (Penney and Neilson 2010). A fairly continuous 4 to 20 m thick layer of overburden covers much of the Property (press release May 9, 2011).

Timber growth in the region is a mix of evergreen and deciduous trees, which are primarily made up of pine, birch and maple trees.


6 . 0 H I S T O R Y

Prior to 1968, there had been little to no exploration work or geological activity conducted on the Property. The earliest known work is from the Geological Survey of Canada, in 1965, which conducted a regional airborne magnetic geophysical survey. From this survey, a negative magnetic anomaly in the vicinity of the Lavergne-Springer deposit was identified and followed up in 1968.

6 . 1 G E O P H Y S I C A L E N G I N E E R I N G & S U R V E Y S , 1 9 6 8 - 1 9 6 9

All known historical work was conducted by Geophysical Engineers & Surveys (GES) between 1968 and 1969 and is summarized in Table 6.1.

Table 6.1 Summary of Exploration Activities by GES

Year Company Work

Completed Comments Source

1968 GES Geological Mapping Conducted by pace and compass traverse using claims lines as control points, located small exposures of the carbonatite-type intrusive rooks but no mineralization of interest.

MacLeod 1969

1969 GES Drilling Four holes drilled (Table 6.2), DDH 69-1 tested the West Lavergne REE Zone and intersected 0.98% REO over 112.7 m including 1.22% REO over 63.3 m, DDH-L-69-4 intersected 1.33% REO over 19.8 m and 1.36% REO over 27.4 m.

MacLeod, 1969

1969 GES Trenching Trenching extended the REE bearing zone to the south by roughly 600 m. Assaying of trenches yield reported historic values of up to 3.25% cerium (Ce), 1.33% lanthanum (La), 0.70% neodymium (Nd), and 0.045% europium (Eu). Program suggested that the mineralization is hosted within large areas of syenite with carbonatized and brecciated granite gneiss.

MacLeod, 1969


The geological mapping located small exposures of the carbonatite-type intrusive rooks but encountered no mineralization of interest.

The 1969 drill program of occurred from July to October 1969, and a total of four drillholes totalling 899.7 m were completed (Table 6.2). The drilling located a wide section of carbonate veining containing what was thought to be bastnäsite and other unusual mineralization.

Table 6.2 Summary of 1969 Drill Program

Drillhole Bearing Dip (°)

Length (ft)

Length (m)

69-1 West / 270° -45 859 261.8 69-2 N40°W / 320° -45 525 160.0 69-3 N20°W / 340° -45 706 215.2 69-4 West / 270° -45 862 262.7 Total - - 2,952 899.7

There are no historical mineral resources or reserves for the Property.

6 . 2 C O N C E N T R A T E D R A R E E A R T H M I N E R A L S L T D . , 1 9 8 8

In 1988, Concentrated Rare Earth Minerals Ltd. (CREM) carried out an exploration program that consisted of geological mapping and ground geophysical survey program on the mineral claims adjacent to the patented claims of the Property.

The geophysical survey was conducted over approximately 12.4 line kilometres (7.7 line miles) and consisted of a magnetic, an electromagnetic and radiometric survey. The two surveys were conducted on a 045° azimuth line spaced 400 ft apart and 100 ft between stations.

While the magnetic geophysical survey appears inconclusive, the electromagnetic and radiometric helped to define areas for future prospecting and sampling particularly on the west side of the mineral claims, that is, toward the Lavergne-Springer deposit.

No further exploration activities were carried out on the Property until 2011 by Rare Earth Metals.


7 . 0 G E O L O G I C A L S E T T I N G A N D M I N E R A L I Z A T I O N

7 . 1 R E G I O N A L G E O L O G Y

The Property is located in the northwestern portion of the Grenville Province that forms part of southern Precambrian craton of the Canadian Shield and is situated approximately 50 km southeast of the Grenville Front which serves as the boundary between the Grenville and Southern Provinces.

The following is taken from Farrow (2004):

Local bedrock is Precambrian high-grade gneisses and plutons of the Grenville Province (1.7-1.2 Ma), bounded to the northwest along the Grenville Front by the lower-grade metasediments of the Southern Province Huronian sequence (2.5-2.1 Ma) (Lumbers, 1971). Small Cambrian intrusive complexes occur as islands and along the eastern shore of Lake Nipissing. Small outliers of Ordovician limestone and dolostone also occur on islands in Lake Nipissing and along the south shore (Colquhoun 1958, Lumbers 1971). Ice flow was regionally southwestward (Boissonneau 1968). The long axis of Lake Nippissing parallels a fault-controlled lowland extending east from Georgian Bay which is floored by Ordovician carbonate and clastic sediments dipping gently southwest into the Michigan structural basin.

The following is taken from Basa (2000):

The Grenville Front is a major northeasterly trending tectonic zone separating the Grenville metamorphic complex from the less metamorphosed rocks of both the Superior and Southern Provinces. The Grenville Province in this area is comprised predominantly of metasedimentary gneisses interlayered with gneisses of mafic and felsic intrusive rocks. Late, undeformed stocks and dykes intrude into theses gneisses. Much of the rock in the northwestern section of the Grenville Province is possibly a high grade metamorphic and more structurally deformed equivalent of the rocks immediately to the northwest of this tectonic zone.

The regional geology of the area is illustrated in Figure 7.1 and Figure 7.2.


Figure 7.1 Regional Geology – Northwestern Portion of the Grenville Province in the Vicinity of North Bay, Ontario

Source: Davidson and van Breemen (2001)


7 . 2 P R O P E R T Y G E O L O G Y

The following is taken from Lumbers (1971):

Granitic Rocks in the Springer, Pedley and Field Townships and within the Indian Reserve No. 10 between Dukis Point and Jocko Point on Lake Nipissing appear to forma complex deformed, syntectonic or pre-tectonic batholith containing numerous concordant layers of metasediments. Biotite granite along the north shore of Lake Nipissing, north Beaucage Point and south of the major northwesterly trending fault, as well as granitic rocks forming most of the islands in Lake Nipissing could be part of this batholith. Biotite granite, mainly magmatic augen gneiss, and hornblende-biotite granite, also a slightly magmatic augen gneiss, predominate in the mass, which is referred to herein as the Sturgeon Falls batholith.

The southern part of the batholith is obscured by extensive deposits of varved clay, but from the available exposures, hornblende-biotite granite appears to be more abundant here than in the northern part that contains many more metasedimentary layers and is mainly biotite granite. Structural trends within the batholith and the surrounding meta-sediments are conformable and suggest that these rocks were folded after emplacement of the batholith to form a dome, centred north of the village of Crystal Falls in Field Township. The western contact of the batholith extends in the neighbouring Burwash area (Lumbers, 1967a).

Lumbers (1971) goes on the note that a few small outcrops occur in the vicinity of what is now known as the Property. He notes that a small alkali complex may be present or that the veins and fenitisation could be one of several localized zones of shattering and fenitisation with the regional rift system.

An excerpt of the North Bay Geology map with approximate location of the Lavergne-Springer deposit is shown in Figure 7.2.


Figure 7.2 Property Geology Map

Source: ODM 1971


7 .2.1 LITHOLOGIES

The following is taken from Thomas (2012):

The oldest and most prevalent unit within the Property area is a well banded migmatitic orthogneiss which varies from tonalitic to granodioritic in composition. It is comprised of coarsely crystalline quartzo-feldspathic layers up to 0.5 m wide and hornblende-biotite-rich restite layers of comparable thickness. It occurs mostly in the northeastern and southwestern portions of the Property area.

The granitic gneiss is similar to the orthogneiss, but is mainly quartzo-feldspathic in nature. A weak to moderate biotite foliation comprises the main fabric with banding less common than in orthogneiss.

The third main unit is a granite, medium to coarse grained, massive to foliated, and generally exhibits igneous or relict igneous texture where metamorphically recrystallized.

The syenite … is massive, rusty red in colour (due to extensive hematization), igneous textured, and may have peralkaline chemistry. This unit is likely a granite or granodiorite showing replacement alteration by carbonatitic fluids. Although no contacts have been observed, it appears to be a late intrusive body which cuts across the regional structure. Hematite, carbonate, fluorite, pyrite, and REE mineralized veins and fractures are found cutting this unit.

Two occurrences of amphibolite have been found in the map area, one in the main discovery outcrop for REE mineralization. It consists of medium to coarse hornblende crystals and black biotite books (up to 1 cm), is volumetrically minor, and its geological relationship to other units is presently unknown.

One small outcrop of gabbro/diabase occurs along the edge of the swamp, near the pits and trenches in the northwestern part of the map area. It is a minor rock type, exhibits fresh igneous texture, and constitutes a late intrusive phase. Two occurrences of porphyry and or brecciated hematite syenite were found in the southwestern part of the map area, near the confluence of the main track and swamp. One is in an old trench, and the other is in outcrop 50 m to the southeast.

The rock is rusty coloured, hematitic, and consists of euhedral feldspar crystals and/or angular fragments of hematitic syenite in a fine grained matrix of light green minerals (fluorite?chlorite?sericite? mixture). It appears to be an undeformed, high level late stage intrusive lithology, associated with the syenite. The intermediate volcanic unit is based upon one small outcrop located in a creek close to the porphyry outcrop. It comprises 1 mm to 10 mm quartz, feldspar and ferromagnesian mineral crystals in a fine grained greenish coloured glassy matrix. It is possible that this rock is a boulder.


The local geology is illustrated in Figure 7.3.

Figure 7.3 Local Geology Map; Modified after Thomas, 2011


7 .2.2 STRUCTUR E AND METAMOR PHISM

From Thomas (2012):

Orthogneiss within the Property is highly deformed, and has a very regular and well defined layering or foliation trend that strikes between approximately 290°and 320° degrees, and dips to the northeast at angles between 35° and 90°. This orientation is consistent throughout the area, and is also that of the foliation within both the granite and granite gneiss units. Folded bands in the orthogneiss have axes parallel to the regional trend, which plunge to the southeast at moderate angles. Rocks of the orthogneiss, granite, and granite gneiss units have been metamorphosed to at least amphibolite grade, as evidenced by the presence of euhedral garnet crystals in sugary textured granite gneiss found along the access road bordering the property to the south. The syenite with which REE mineralization is associated is undeformed and apparently unmetamorphosed.

7 . 3 M I N E R A L I Z A T I O N

The Lavergne-Springer mineralization is light rare earth element (LREE) dominant, consisting of mainly lanthanum, cerium and neodymium with the HREO/TREO ratios typically ranging from 1.4% to 5.5%. REE mineralization occurs within veins and fractures closely associated with the syenite unit (Thomas 2012). There are unusually low levels of radioactivity associated with the host REE mineralization in that thorium (Th) generally ranges from 12 to 320 ppm and uranium (U) is typically less than 30 ppm. Barium (Ba), mainly in the form of barite, and strontium (Sr) are also present in relative abundance throughout the deposit.

Various analytical techniques such as conventional petrography, ultraviolet (UV) examination, cathodoluminescence (CL) and scanning electron microscopy (SEM), have confirmed the nature of the REE mineralogy to be synchysite, a calcium REE fluorocarbonate mineral. The majority of the synchysite mineralization is fine-grained and is intimately associated with iron oxides. It occurs as an essentially single mineral source for the REEs, however, REEs also occur as substitutional trace impurities in the apatite structure. Other associated minerals, namely apatite, ankerite/dolomite, potassium feldspar, iron oxide, pyroxene/amphibole, pyrite, and quartz, are also present (Mariano and Mariano 2012). Synchysite occurs mostly as fine-grained clusters and is intimately associated with iron (Fe) oxides. This relationship is demonstrated in Figure 7.4 and Figure 7.5. Figure 7.4 is taken from the petrology study by Mitchell (2012) on a sample of mineralized carbonatite. Figure 7.5 is taken from the mineralogical study by Mariano and Mariano (2012).


Figure 7.4 Plane Polarized Light Image of Typical Intergrowths of Synchysite and Fe-Oxide/Hydroxide

Source: Mitchel 2012

Figure 7.5 Back-Scatter Electron Image of Synchysite Cluster in Ankerite Matrix

Source: Mariano and Mariano 2012


7 .3.1 NOMENCL ATUR E

Present day nomenclature for REE is shown in Table 7.1. References to TREO, unless otherwise stated, include yttrium oxide.

Table 7.1 List of Elements and Oxides Associated REE Mineralization

Element Element Acronym Common Oxides

LREO

TREO

Lanthanum La La2O3 Cerium Ce Ce2O3

Praseodymium Pr Pr2O3 Neodymium Nd Nd2O3 Samarium Sm Sm2O3

HREO

Europium Eu Eu2O3 Gadolinium Gd Gd2O3

Terbium Tb Tb2O3 Dysprosium Dy Dy2O3

Holmium Ho Ho2O3 Erbium Er Er2O3 Thulium Tm Tm2O3

Ytterbium Yb Yb2O3 Lutetium Lu Lu2O3 Yttrium Y Y2O3


8 . 0 D E P O S I T T Y P E S

The Lavergne-Springer deposit is classified as a carbonatite that has intruded into a granite gneiss (granitoid) host. The host granitoid rocks appear to have undergone varying degrees of hydrothermal alteration from weak to intense alteration.

A carbonatite is defined as an igneous rock body with more than 50% modal carbonate minerals, mainly in the form of calcite, dolomite, ankerite, or sodium- and potassium-bearing carbonates. Carbonatites commonly occur as intrusive bodies, such as isolated sills, dikes, or plugs, although rarely occur as extrusive rocks. Many carbonatites are associated with alkali silicate rocks (e.g. syenite, nepheline syenite, ijolite, urtite, pyroxenite, etc.). Carbonatites are usually surrounded by an aureole of metasomatically altered rocks called fenites. Carbonatite-associated deposits can be classified as magmatic or metasomatic types (Richardson and Birkett 1996).

Carbonatites have been classified based on chemical classification into four classes (Woolley and Kempe 1989; Wyllie and Lee 1998), and further subdivided based on mineralogical and textural characteristics:

• calciocarbonatite coarse-grained: sovite, and finer-grained: alvikite

• magnesiocarbonatite dolomite-rich: beforsite, and ankerite-rich: rauhaugite

• ferrocarbonatite (iron rich carbonates)

• natrocarbonatite (sodium-potassium-calcium carbonates).

The use of a chemical classification of carbonatites should be used with caution when replacement, or metasomatic, processes have altered the primary composition of the carbonatite rock (Mitchell 2005).

The majority of carbonatite deposits are located within stable, intra-plate crustal units, although some are linked with orogenic activity, or plate separation. It is also important to note that carbonatites tend to occur in clusters, and in many places there has been repetition of activity over time (Woolley 1989).

Worldwide, carbonatite deposits are mined for niobium, REEs, iron, copper, phosphate (apatite), vermiculite and fluorite; with barite, zircon/baddeleyite, tantalum, and uranium as common by-products (Richardson and Birkett 1996).


9 . 0 E X P L O R A T I O N

Since acquiring the Property in 2011, Rare Earth Metals has conducted mineralogical studies, drilling, mapping, and geophysical surveys on the Lavergne-Springer project.

9 . 1 A I R B O R N E R A D I O M E T R I C A N D M A G N E T I C S U R V E Y , 2 0 1 1

A 960 line kilometre airborne radiometric and magnetic survey was completed in September 2011 by Geo Data Solutions Inc., of Laval, QC. The survey was flown by helicopter, over the 16 km length of the Property. Flight line spacing was nominally 100 m, with a closer spacing of 50 m along the Lavergne-Springer segment of the Property (Geo Data 2011). Results are shown in Figure 9.1.


Figure 9.1 Airborne Magnetic Survey, 2011; Showing Magnetic High (Red) and Low (Blue) Results


9 . 2 M I N E R A L O G Y S T U D Y , 2 0 1 1

Two selected grab samples from the East and West Lavergne REE Zones were forwarded to Dr. Roger H. Mitchell at Lakehead University in Thunder Bay, ON for petrology study and identification of the major REE bearing minerals. Sample 599357 was collected from a synchysite-fluorite carbonatite and sample 599358 was collected from hydrothermally altered granite.

A summary of the findings from Mitchell (2012) is as follows:

• REE mineralization is essentially synchysite, a REE fluorocarbonate mineral, typically prismatic, and fine to coarse grain up to 300 µm in size.

• The synchysite contains approximately 16.9 weight percent (wt%) CaO, 13.9 wt% La2O3; 24.3 wt% Ce2O3; 2.2 wt% Pr2O3; 7.4 wt% Nd2O3 – making it light REE enriched.

• Synchysite distribution is very heterogeneous and is associated mainly, but not entirely, with fluorite, barite and iron-oxide/hydroxides; liberation of this assemblage appears not to be problematic.

9 . 3 M A P P I N G

A semi-detailed mapping program was conducted on the Property between June 14 and 21, 2011. Seven traverses were carried out along and between the bush tracks on the main part of the Property. Due to the cover of thick bush and swamp, as well as an extensive mantle of glacial drift, surficial exposure of bedrock within the mapped area was sparse (Thomas 2012).


1 0 . 0 D R I L L I N G

Since acquiring the Property in 2011, Rare Earth Metals has drilled a total of 22 diamond drillholes, totalling 6,079.75 m.

1 0 . 1 R A R E E A R T H M E T A L S , 2 0 1 1

Between June and August 2011, Rare Earth Metals drilled the deposit with seven diamond drillholes, totalling 2,594.45 m. The drill campaign was the first exploration program to be conducted on the Property since 1969, and the purpose was to confirm and expand on historical results which had indicated the presence wide zones of rare earth mineralization. Drilling was performed by Cartwright Drilling of Goose Bay, NL (press release June 28, 2011), utilizing one drill rig.

Five of the holes tested the Lavergne West Zone over a strike length of 300 m and produced drill widths ranging from 79 to 360 m with higher grade intersections of up to 1.65% TREO over 90.2 m within a larger zone of 1.43% TREO over 157.5 m (press release March 20, 2012). The drillholes were drilled towards the west with dips ranging from -45 to -60°. Two holes tested the Lavergne deposit to the east, over a possible strike length of 300 m, and were roughly oriented at 325° azimuth with a dip of -45°. Selected assay results are shown in Table 10.1.

The collar location was recorded by Rare Earth Metals personnel with a handheld global positioning system (GPS), an Etrex Legend HCx GPS unit, using the Universal Transverse Mercator (UTM) NAD 83 Projection. Downhole surveys were conducted by the drilling contractor, using a Reflex Easy Shot tool.

Table 10.1 Select Assay Results from the 2011 Drill Program

DDH From (m)

To (m)

Interval (m)

La2O3 (%)

Ce2O3 (%)

Nd2O3 (%)

TREO (%) HREO:TREO

SL-01 25.6 385.4 359.8 0.21 0.42 0.17 0.94 6.7 including 124.9 219.1 94.2 0.40 0.69 0.23 1.50 6.1 SL-02 123.8 425.4 301.6 0.24 0.45 0.16 0.97 7.0 including 132.8 268.0 135.2 0.32 0.56 0.18 1.24 8.1 including 213.8 254.5 40.7 0.41 0.74 0.23 1.57 5.4 SL-03 48.4 51.4 3.0 0.91 1.48 0.42 3.08 2.6 and 78.0 81.0 3.0 0.39 0.61 0.16 1.26 1.8 and 86.6 95.6 9.0 0.37 0.6 0.16 1.22 2.0 and 101.4 258.9 157.5 0.41 0.67 0.21 1.43 3.1 including 101.4 226.1 124.7 0.44 0.71 0.22 1.51 3.0 including 102.9 113.4 10.5 0.58 0.96 0.29 2.00 2.8

table continues…


DDH From (m)

To (m)

Interval (m)

La2O3 (%)

Ce2O3 (%)

Nd2O3 (%)

TREO (%) HREO:TREO

and 135.9 226.1 90.2 0.48 0.78 0.24 1.65 3.0 and 282.9 330.5 47.6 0.24 0.39 0.13 0.85 4.2 including 315.4 323.5 8.1 0.38 0.63 0.19 1.33 3.6 SL-04 69.2 414.5 345.3 0.16 0.35 0.17 0.81 7.7 including 238.1 299.0 60.9 0.19 0.46 0.31 1.07 7.7 and 284.0 297.8 13.8 0.31 0.69 0.32 1.54 6.2 SL-05 41.6 120.8 79.2 0.11 0.26 0.14 0.60 5.9 and 348.3 372.0 23.7 0.18 0.30 0.09 0.62 2.9 SL-06 84.4 213.4 129.0 0.18 0.37 0.15 0.78 3.3 including 126.2 183.2 57.0 0.26 0.52 0.20 1.10 3.1 including 133.7 162.5 28.8 0.38 0.75 0.29 1.60 2.8 SL-07 50.5 77.6 27.1 0.15 0.27 0.09 0.60 7.9 and 96.6 133.1 36.5 0.13 0.24 0.09 0.52 5.6 and 156.4 171.1 14.7 0.18 0.33 0.11 0.68 2.9

Notes: All intervals are downhole lengths, and do not necessarily represent true widths. DDH = diamond drillhole Source: Press release October 24, 2011

Drillhole SL-11-01 was collared near the historic drillhole site, named 69-1, which was drilled by GES in 1969. Results reported by GES for hole 69-1 included 1.22% REO% over 63.3 m. Drillhole SL11-02 was collared on the same set-up as SL-11-01 at a dip of -60°. The purpose was to undercut and test the down-dip extension of the mineralization encountered in SL-11-01. Drillhole SL-11-03 was collared 160 m north of SL-11-01 and 02, at a dip of -45°, and tested the northerly extension of the mineralization.

1 0 . 2 R A R E E A R T H M E T A L S , 2 0 1 2

The 2012 drill program was a follow-up to the successful campaign of 2011 and was conducted between January and February 2012. The objective was to investigate the north and south extension of the Lavergne-Springer deposit, as well as to establish the geometry and continuity of the REE mineralization; and to collect sufficient data for the determination of a NI 43-101 compliant resource estimate.

The 2012 drill program consisted of 15 drillholes, totalling 3,485.30 m, were all drilled to the west with a dip of -45°.

Rare Earth Metals contracted one drill rig from Forage Perfection Inc., based in Nôtre-Dame, QC. The drilling was performed in the winter months of January and February 2012, when freezing conditions permitted easier mobility within the Property. Selected drill results are presented in Table 10.2.


Table 10.2 Selected Assay Results from the 2012 Drill Program

DDH From (m)

To (m)

Interval (m)

La2O3 (%)

Ce2O3 (%)

Nd2O3 (%)

TREO (%) HREO:TREO

SL-08 13.00 253.50 240.50 0.24 0.41 0.15 0.91 4.8 including 19.00 119.00 100.00 0.39 0.68 0.25 1.49 4.7 including 19.00 41.00 22.00 0.57 0.94 0.31 2.04 4.2 and 62.00 89.00 27.00 0.48 0.78 0.25 1.70 4.5 SL-09 60.00 148.50 88.50 0.21 0.45 0.22 1.05 6.9 and 66.00 96.00 30.00 0.31 0.65 0.31 1.47 5.5 SL-10 10.00 150.00 140.00 0.29 0.45 0.12 0.95 3.2 including 10.00 69.00 59.00 0.44 0.67 0.18 1.40 2.9 including 10.00 34.00 24.00 0.66 0.99 0.26 2.08 2.7 SL-11 80.30 90.80 10.50 0.44 0.74 0.22 1.55 3.7 and 229.50 249.50 20.00 0.28 0.44 0.13 0.94 3.7 including 229.50 235.50 6.00 0.60 0.94 0.27 1.99 3.6 SL-12 5.20 15.20 10.00 0.44 0.71 0.20 1.47 2.0 SL-15 144.00 190.00 46.00 0.29 0.47 0.16 1.03 4.3 including 168.00 190.00 22.00 0.48 0.74 0.23 1.61 3.7 SL-17 136.70 150.70 14.00 0.28 0.48 0.17 1.04 3.6 SL-18 90.70 101.70 11.00 0.23 0.47 0.23 1.07 4.3 SL-19 7.00 27.00 20.00 0.41 0.61 0.17 1.29 2.0 SL-20 161.50 267.00 105.50 0.33 0.55 0.17 1.15 2.6 including 190.60 222.30 31.70 0.78 1.23 0.36 2.56 1.8 including 200.60 212.60 12.00 1.55 2.40 0.66 4.96 1.4 SL-22 121.50 141.50 20.00 0.28 0.48 0.15 1.01 2.9

Note: All intervals are downhole lengths, and do not necessarily represent true widths. Source: Press release March 20, 2012

The collar location was recorded by Rare Earth Metals personnel, as in the previous drill program, with a handheld GPS unit, an Etrex Legend HCx GPS unit. Downhole surveys were conducted by the drilling contractor, using a Reflex Easy Shot tool.

All drillholes from 2011 and 2012 drill programs are illustrated in Figure 10.1.


Figure 10.1 Drillhole Location Map; Grey Solid Represents the Interpreted Mineralized Deposit

It must be noted that the highest grade intersected to date was in hole SL-12-20, with an assay result of 4.96% TREO over 12 m within a larger intersection of REE mineralization with a length weighted composite assay result of 1.15 % TREO over 105 m. This drillhole is situated proximal to the southern portion of the Lavergne West REE trend and detailed drilling will be required to better define its dimensions (press release March 20, 2012).

The 2012 drilling campaign demonstrated that the east and west zones are connected and are a part of a much larger mineralized system (press release March 5, 2012).


1 1 . 0 S A M P L E P R E P A R A T I O N , A N A L Y S E S , A N D S E C U R I T Y

Diamond drill core was logged and split at the Rare Earth Metals camp, where core boxes are also stored. Samples were split using a hydraulic core splitter and one half of the core was sent to Activation Laboratories Ltd. (Actlabs) for analysis, and the other half was placed back into the core box. All samples were delivered by Rare Earth Metals personnel to Manitoulin Transport, and sent to Actlabs’ sample preparation and analytical facilities in Ancaster, ON. A total digestion technique employing a lithium metaborate/tetraborate fusion was utilized, along with inductively coupled plasma (ICP), inductively coupled plasma-mass spectrometry (ICP-MS) and x-ray fluorescence (XRF) techniques (press release March 20, 2012; press release October 24, 2011).

Each element was analyzed via the following analytical techniques:

• Fusion ICP OES: silicon oxide (SiO2), aluminium oxide (Al2O3), iron oxide (Fe2O3) (T), manganese oxide (MnO), magnesium oxide (MgO), calcium oxide (CaO), sodium oxide (Na2O), potassium oxide (K2O), titanium oxide (TiO2), phosphorus oxide (P2O5), scandium (Sc), beryllium (Be), vanadium (V), Sr, Y, zirconium (Zr), Ba

• Fusion ICP/MS: chromium (Cr), cobalt (Co), nickel (Ni), copper (Cu), zinc (Zn), gallium (Ga), germanium (Ge), arsenic (As), rubidium (Rb), molybdenum (Mo), silver (Ag), indium (In), tin (Sn), antimony (Sb), caesium (Cs), bismuth (Bi), La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu, hafnium (Hf), tantalum (Ta), tungsten (W), thallium (Tl), lead (Pb), Th, U

• Fusion XRF: niobium oxide (Nb2O5).

The Fusion XRF analysis was discontinued after the 2011 drill program when results of the Nb2O5% returned results that were considered too low to be of importance.

For quality assurance/quality control (QA/QC) measures, Rare Earth Metals systematically inserts standards, duplicates, and blanks into every sample batch. Actlabs is an International Organization for Standardization (ISO) 17025 (Lab 266) and National Environmental Laboratory Accreditation Program (NELAP) (Lab E87989) accredited lab for specific registered tests (press release March 20, 2012; press release, October 24, 2011).

It is Tetra Tech’s opinion that the adequacy of the sample preparation, sample security and analytical procedures are adequate for this type of deposit and are suitable for the purposes of this technical report and resource estimate.


1 2 . 0 D A T A V E R I F I C A T I O N

1 2 . 1 D A T A B A S E V E R I F I C A T I O N

Tetra Tech performed an internal verification process on Rare Earth Metal’s Lavergne-Springer project database against the laboratory-issued assay certificates. The validation of the data was completed on the assays grade entries of 1,644 of the total 3,311 samples, accounting for approximately 50% of the assay dataset. The data verification process examined certificate identification, sample number, and all REE elemental analyses. For assays that were below detection limit, half the detection limit value was used. No errors were found during this process.

There were, however, several inconsistencies observed during the database verification. All errors listed below were corrected in the database prior to the resource estimation. The errors included:

• LREO% values had not been imported into the original database for sample number 106578 from drillhole SL-12-12

• base of overburden for SL-12-14 was originally entered as 4.90 m, and was corrected to 4.10 m

• incorrect ytterbium (ppm) to Yb2O3% conversion factor had been used for two samples (Table 12.1)

• incorrect summation of TREO (%) value for one sample (Table 12.2)

• missing entries for either LREO (%) (Table 12.3) or HREO (%) (Table 12.4) summation values

• errors in sample interval length calculations (Table 12.5) or in “from” and “to” values (Table 12.6).

Table 12.1 Conversion Factor Errors – Corrections Made to Database

Hole_ID From (m)

To (m)

Database Corrected Value

Comment Yb2O3

(%) Yb2O3

(%)

SL-11-01 5.45 6.45 9.110 0.00009112 Conversion from Yb (ppm) to Yb2O3% different by factor of 100,000 SL-11-02 491.20 492.20 9.110 0.00009112


Table 12.2 Incorrect Summation of TREO% Value

Hole_ID From (m)

To (m)

Database Corrected Value

Comments TREO (%) TREO (%)

SL-12-12 121.70 123.70 0.1364697 0.70776852 Incorrect calculation in database

Table 12.3 Missing Entries for Either LREO% Summation Values

Hole_ID From (m)

To (m)

LREO (%) Comments

SL-12-12 113.20 115.20 0.1906 LREO had not been calculated in database SL-12-12 143.00 145.00 0.2500

SL-12-12 165.30 167.30 0.2529 SL-11-01 200.32 201.14 0.4499 SL-12-12 141.00 143.00 0.5062 SL-11-01 221.90 222.20 0.5206 SL-12-12 121.70 123.70 0.6723 SL-11-01 216.10 217.60 0.7233 SL-11-01 196.60 198.10 1.4896 SL-11-01 172.90 174.40 2.1105 SL-12-12 9.20 11.20 3.7693

Table 12.4 Missing Entries for Either HREO% Summation Values

Hole_ID From (m)

To (m)

HREO (%) Comments

SL-12-20 0.00 0.0 0.0001 HREO had not been calculated in database SL-12-12 165.30 167.3 0.01438

SL-11-01 200.32 201.14 0.015282 SL-12-12 113.20 115.2 0.015888 SL-12-12 143.00 145.0 0.019716 SL-11-01 196.60 198.1 0.031978 SL-12-12 141.00 143.0 0.032209 SL-12-12 121.70 123.7 0.03542 SL-11-01 172.90 174.4 0.04571 SL-12-12 9.20 11.2 0.05903 SL-11-01 216.10 217.6 0.070808 SL-11-01 221.90 222.2 0.071446


Table 12.5 Interval Length Calculation Errors

Hole_ID From (m)

To (m)

Database Correction

Sample Number Comment

Interval (m)

Interval (m)

SL-11-03 72.40 73.65 1.30 1.25 1085235

Interval length miscalculated in database

SL-11-03 85.00 86.55 1.60 1.55 1085239 SL-11-03 282.85 283.85 1.35 1.00 1044796 SL-12-09 177.40 179.40 0.00 2.00 106206 SL-12-12 7.20 9.20 0.00 2.00 106499 SL-12-12 80.90 83.20 2.00 2.30 106538 Interval length miscalculated

in database (database value subtracted core loss)

SL-12-12 117.20 119.70 2.00 2.50 106557

SL-12-20 265.70 267.00 0.00 1.30 627668

Interval length miscalculated in database

SL-12-21 96.60 98.60 0.00 2.00 627717 SL-12-21 98.60 100.60 0.00 2.00 627718 SL-12-21 100.60 102.60 0.00 2.00 627719 SL-12-21 102.60 104.60 0.00 2.00 627721 SL-12-21 104.60 106.00 0.00 1.40 627722 SL-12-21 106.00 108.00 0.00 2.00 627723

Table 12.6 “From” or “To” Value Interval Errors / Not Originally Imported

Hole_ID Database

Analyte_Symbol Comment From (m)

To (m)

Interval (m)

SL-11-01 388.50 389.90 1.40 1044291 Corrections made but not imported into database

SL-11-01 389.90 391.89 1.99 1044292 "To" value corrected to 390.80 m SL-11-01 391.98 392.50 0.52 1044293 "From" value corrected to 390.80 m,

"to" value corrected to 391.98 m SL-11-01 392.50 393.48 1.50 1044294 "From" value corrected to 391.98 m SL-11-01 412.70 413.30 0.60 1044314 "To" value corrected to 413.31 m

The drillhole data was imported into the Gemcom GEMS™ resource software program, which has a routine that checks for duplicate intervals, overlapping intervals, and intervals beyond the end of the hole. No errors were detected.

1 2 . 2 T E T R A T E C H C H E C K S A M P L E S

Paul Daigle, P.Geo., Senior Geologist with Tetra Tech, conducted a site visit to the Property on January 23, 2011 for one day. The project site and drill core logging and sampling facilities were inspected during the site visit. Mr. Daigle was accompanied


on the site visit by Mr. Glen Penney, Project Geologist for Rare Earth Metals and Mr. Roy Hill, field technician for Rare Earth Metals.

Independent check samples were collected during the site visit by Tetra Tech. Four samples were collected from the available drill core at the core storage site at Rare Earth Metals’ base camp.

The check sample intervals were selected randomly within the mineralized lithologies and spatially within the Lavergne-Springer deposit. The samples collected were from the same sample intervals as Rare Earth Metals’ samples and taken by splitting the half core into quarters, by hydraulic splitter, where one quarter was returned to the core box and the second quarter placed in a sample bag. The core splitting was supervised by Tetra Tech, placed in sample bags with a sample tag, labelled and sealed on site by Tetra Tech.

The samples were kept with the author at all times for the duration of the site visit and return to Toronto. Upon return to Toronto, the check samples were sent to Actlabs in Ancaster, ON for analysis.

At Actlabs, the sample were prepared and analyzed in the same manner as Rare Earth Metals’ analyses. Sample preparation was by crushing the sample was crushed to up to 90% of the sample passing a 2 mm screen, was split to 250 g and was pulverized where 90% passed 105 µm screen (Actlabs Code RX-1). Analysis was conducted using a fusion and ICP-MS analysis method (Actlabs Code 8 – REE Assay Package). For Nb2O5%, an additional trace level XRF analysis was carried out (Actlabs Code 8 – Nb2O5 XRF Option).

Tetra Tech is of the opinion that the sample analyses used for the Lavergne-Springer REE project are adequate for purposes of this technical report.

The purpose of the check sample assays are to confirm indications of mineralization are not intended as duplicate or QA/QC samples. Tetra Tech check sample analysis correlates well with Rare Earth Metals’ assay results, for the same sample intervals, for check samples 626463, 626464 and 626465.

Check sample number 626466, however, appears to show a poor coincidence. Upon examination of the bracketing sample analyses, i.e. sample results above and below the check sample where the check sample number 626463 was collected, there appears to be a point of a sudden change in grade between Rare Earth Metals samples 1044791 and 1044792. The relatively lower check sample result may be reflective of this sudden change as shown in Table 12.7.

It is Tetra Tech’s opinion that the assay analyses and results are adequate for purposes of this technical report and resource estimate.


Table 12.7 Examination of Check Sample 626466 from Drillhole SL-11-03

From (m)

To (m)

La (ppm)

Ce (ppm)

Pr (ppm)

Nd (ppm)

Sm (ppm)

Tetra Tech Sample No. 626466 251.4 252.9 3,780 5,880 546 1,650 185 Rare Earth Metals Sample No. 1044789 248.4 249.9 8,730 14,400 1,380 4,490 566 1044790 249.9 251.4 9,590 15,400 1,450 4,720 670 1044791 251.4 252.9 7,700 11,600 1,020 3,100 344 1044792 252.9 254.4 954 1,610 156 513 70.1 1044793 254.4 255.9 1,580 2,630 253 844 117

Results of the check assay sample analysis and corresponding sample analysis by Rare Earth Metals are shown in Table 12.8 and Table 12.9.

Table 12.8 Summary of Check Samples Collected by Tetra Tech

Tetra Tech Sample No.

Rare Earth Metals

Sample No. Drillhole

Sample Interval

(m) Core

Box(es) Lithology

626463 627635 SL-12-20 204.6 – 206.6 49 Strongly Altered Granitoid Breccia

626464 107634 SL-12-16 99.7 – 102.0 24 Intensely Altered Granitoid

626465 1044461 SL-11-02 224.3 – 225.0 52, 53 Intensely Altered Granitoid

626466 1044791 SL-11-03 251.4 – 252.9 59, 60 Intensely Altered Granitoid


Table 12.9 Comparison of Assay Results for REEs

Drillhole La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Y Th U

Tetra Tech Sample No. 626463 SL-12-20 7,710 12,500 1,160 3,460 311 62.1 186 11.70 36.50 4.70 10.30 1.29 7.90 1.19 109.00 78.40 2.70 626464 SL-12-16 1,980 4,360 554 2,230 331 69.4 160 14.20 50.40 6.80 14.20 1.55 8.90 1.29 184.00 176.00 2.70 626465 SL-11-02 4,850 8,320 845 2,670 301 69.1 196 20.30 91.20 15.00 34.50 4.00 20.10 2.55 406.00 261.00 5.80 626466 SL-11-03 3,780 5,880 546 1,650 185 43.1 119 9.50 29.30 3.60 7.20 0.78 4.40 0.65 82.00 65.20 11.40 Rare Earth Metals Sample No. 627635 SL-12-20 7,800 12,100 1130 3,430 310 61 158 12.3 38.5 4.8 10.3 1.31 8.1 1.25 106 71.8 2.6 107634 SL-12-16 1,470 3,140 403 1,690 257 53.5 111 10.7 38.5 4.8 10.1 1.25 8.4 1.27 153 144 2.8 1044461 SL-11-02 5,430 9,550 925 2,940 328 74.4 180 19.9 97.1 15.6 37 3.93 18.9 2.4 485 248 5.5 1044791 SL-11-03 7,700 11,600 1020 3,100 344 78.7 175 14.9 50.4 6 10.6 1.09 5.8 0.84 148 106 10

Difference (ppm)

- -90 400 30 30 1 1.1 28 -0.6 -2.0 -0.1 0.0 0.0 -0.2 -0.1 3.0 6.6 0.1 - 510 1,220 151 540 74 15.9 49 3.5 11.9 2.0 4.1 0.3 0.5 0.0 31.0 32.0 -0.1 - -580 -1,230 -80 -270 -27 -5.3 16 0.4 -5.9 -0.6 -2.5 0.1 1.2 0.2 -79.0 13.0 0.3 - -3,920 -5,720 -474 -1,450 -159 -35.6 -56 -5.4 -21.1 -2.4 -3.4 -0.3 -1.4 -0.2 -66.0 -40.8 1.4

Difference (%)

- -1 3 3 1 0 2 18 -5 -5 -2 0 -2 -2 -5 3 9 4 - 35 39 37 32 29 30 44 33 31 42 41 24 6 2 20 22 -4 - -11 -13 -9 -9 -8 -7 9 2 -6 -4 -7 2 6 6 -16 5 5 - -51 -49 -46 -47 -46 -45 -32 -36 -42 -40 -32 -28 -24 -23 -45 -38 14

Note: All assay values are in ppm unless otherwise stated.


1 3 . 0 M I N E R A L P R O C E S S I N G A N D M E T A L L U R G I C A L T E S T I N G

In 2011, Rare Earth Metals retained Anthony Mariano, a consulting mineral exploration geologist and REE specialist based in Carlisle, Massachusetts, USA, to conduct a mineralogical study and preliminary bench test on four selected samples from the 2011 drill core.

The mineralogical studies were conducted on four polished and thin sections and slabs corresponding to four samples of drill core from the Lavergne-Springer deposit. Analytical work included conventional petrography, CL, UV examination, and SEM. The UV examination utilized shortwave UV excitation with a filter (SWUV), and without a filter (SWUVNF). The SEM work included backscattered electron imaging (BSE), x-ray element mapping (XEM) and energy-dispersive x-ray detection (EDS). Positive identification of minerals relied predominantly on EDS plots compared with REE mineral standards. The mineralogical study indicates that the host REE-bearing mineral is synchysite, a calcium REE fluorocarbonate mineral.

To assess the potential of physically liberating the synchysite into a concentrate form, a bench metallurgical test on 12 laboratory reject samples from the 2011 drilling program was conducted. The majority of the synchysite mineralization is fine-grained and is intimately associated with iron oxides. It can be physically separated into a good concentrate based upon density, and to a lesser extent, upon magnetic susceptibility (Mariano and Mariano 2012).

Figure 13.1 shows three photos that present the final concentrates from Sample 1044755 of the less than 60 mesh (-250 µm) to greater than 100 mesh (+149 µm) fraction.

Mariano and Mariano (2012) recommended the use of flotation tests to examine the possibility of further upgrading the mineral concentrate. The use of flotation would assist in concentrating more of the finer-grained synchysite that is not readily concentrated through the use of gravity or magnetic techniques alone. The iron oxides associated with the synchysite will require chemical processing for final separation from the REE.

In May 2012, Rare Earth Metals retained Sudbury-based XPS to conduct grinding and flotation test work to determine potential recovery methods. This test work is expected to be completed in Q3 2012.


Figure 13.1 Sample 1044755 Synchysite Concentrates; < 60 Mesh to > 100 Mesh Fraction; Red Grains are Synchysite/Iron Oxide Material

Concentrate after magnetic separation at 0.7 A

Concentrate after magnetic and gravity separation; greater than 3.3 g/cm3

Concentrate after magnetic and gravity separation; less than 3.3 g/cm3

Source: Taken from Mariano and Mariano (2012)

2 mm

2 mm 2 mm


1 4 . 0 M I N E R A L R E S O U R C E E S T I M A T E S

1 4 . 1 I N T R O D U C T I O N

The following is a NI 43-101 compliant resource estimate for the Property. The effective date of this resource estimate is May 4, 2012.

This initial resource estimate was prepared using a single interpreted domain using a grade shell of 0.31 TREO%. A cut-off grade of 0.9 TREO% was chosen for the deposit resource estimate based on comparable deposits and in the absence of metallurgical data and recoveries and other economic parameters. Tetra Tech considers this cut-off grade to be reasonable.

14.1.1 DAT ABASE

Rare Earth Metals supplied all of the digital data for the resource estimate. This data was compiled from the assay analyses, which came directly to Rare Earth Metals from ActLabs in Microsoft Excel™ and PDF formats. The data was verified and imported into Gemcom GEMS™ v. 6.3.1 Resource Evaluation Edition.

The drillhole dataset included the header files and three other tables (including the survey, assay and lithology files). The dataset included 22 drillholes with 3,311 assay values, and 96 survey readings. Of the 22 drillholes completed by Rare Earth Metals, 20 drillholes intersect the interpreted Lavergne-Springer, for a total of 3,086 assay values.

A manual check on the database was made to search for obvious errors, such as negative values and overlapping sample intervals, prior to statistical treatments. The errors that were discovered are listed in Section 12.1. All errors were corrected in the database before importing into the Gemcom GEMS™.

14.1.2 SPEC IF IC GR AVITY

Rare Earth Metals conducted bulk density measurements on 432 samples from 20 drillholes, and on the major lithology types. These density measurements were imported into assay database and validated. No errors were found.

Overall, the specific gravity (SG) values range from 2.26 to 3.11 g/cm3 with an average of 2.68 g/cm3. The summary of the SG measurements are listed in Table 14.1.


Table 14.1 Summary Statistics for SG Data (g/cm3)

Lithology Rock Code

No. of Records

SG (g/cm3)

Granite Gneiss 100 50 2.67 Granite Gneiss with breccia veining 101 57 2.73 Granitoid Breccia 102 24 2.76 Granite Gneiss with Breccia Veining + Biotite Amphibolite Syenite 103 24 2.68

Granite Gneiss 200 50 2.73 Weakly Altered Granitoid 300 57 2.69 Moderately Altered Granitoid 400 54 2.62 Intensely Altered Granitoid 500 50 2.58 Granite Breccia 600 32 2.66 Biotite Xenocryst Intrusive 700 14 2.73 Total Records/Average SG - 432 2.68

The density measurements were interpolated by inverse distance squared (ID2) method for the block model where possible. Blocks that were not interpolated were assigned the average density of 2.68.

1 4 . 2 E X P L O R A T O R Y D A T A A N A L Y S I S

Exploratory data analysis is the application of various statistical tools to explain the characteristics of the data set. In this case, the objective is to understand the population distribution of the grade elements through the use of such tools as histograms, descriptive statistics and probability plots.

14.2.1 RAW ASSAYS

Raw assay statistics for the grades which intersect the deposit are shown in Table 14.2. Only those values greater than zero were used in the statistical analysis. A summary of descriptive statistics for all metals by domain may be found in Appendix B.

Table 14.2 Raw Assay Statistics (No Zeros) for La2O3%, Y2O3% and ThO2%TREO% and ThO2%

Length La2O3% Y2O3% TREO% ThO2%

Count 3,087 3,087 3,087 3,087 3,087 Minimum 0.20 0.005 0.001 0.036 0.001 Maximum 4.80 2.416 0.201 9.205 0.059 Mean 1.67 0.162 0.017 0.659 0.008 Standard Deviation 0.42 0.193 0.017 0.665 0.008 Variance 0.18 0.037 0.000 0.442 0.000 Coefficient of Variance 0.25 1.193 0.993 1.010 0.968


14.2.2 CAPPIN G AN ALYSIS

Cumulative probability plots, descriptive statistics and Parrish decile analysis were used to assess the need for capping of REO and thorium dioxide assays. Typically, a step-change in the profile or a separation of the data points is present if there are different populations in the dataset. High value outliers will show up in the last few percent of a cumulative probability plot (typically in the 97 to 100% range) and the break in the probability distribution may be selected to set a capping level.

Figure 14.1 and Figure 14.2 show example of the histogram and cumulative frequency plots for the raw uncapped La2O3%, and Y2O3% data. There appears to be no specific break in the dataset and outliers within the last percentile appear minimal. It was determined that capping of the data was not necessary for this dataset. Histogram and cumulative frequency plots for all REOs may be found in Appendix C.

Assay data for the REOs and the ThO2% were also examined by Parrish decile analysis which analyzes any bias of the data within the top decile and percentiles of the data set. The Parrish analysis also confirmed that no capping of the data was required.

Figure 14.3 summarizes the Parrish decile analysis for La2O3%.


Figure 14.1 Histogram and Cumulative Probability Plot for La2O3% (All Data)


Figure 14.2 Histogram and Cumulative Probability Plot for Y2O3% (All Data)


Figure 14.3 Parrish Decile Analysis for La2O3%


14.2.3 COMPOSIT ES

In the Gemcom GEMS™ project, the table “3mCompPoints”, and the point area “3mCompPoints” were created for 3.0 m composited point data.

Table 14.3 shows the descriptive statistics for the assay sample lengths of the entire raw data set for the Lavergne-Springer deposit. It was determined that a 3.0 m composite length would maintain a sufficient sample population for estimating the block model.

Table 14.3 Statistics on the Assay Sample Lengths of the Raw Data

Count Minimum Maximum Average Standard Deviation

Length (m) 3,033 0.40 6.00 1.52 0.19

Two sets of composites were examined for the data set 3 m and 4 m.

A total of 1,754 composite samples were created constrained to the solid intersections of 0.31 TREO% grade shell (as described in Section 14.3 below). All composited data was used in the interpolation of the Lavergne-Springer deposit.

Table 14.4 shows the descriptive statistics for the 3.0 m composites for the uncapped data for La2O3%, Y2O3%, TREO% and ThO2%. A detailed list of the uncapped 3.0 m composite data is found in Appendix D.

Table 14.4 Summary of 3.0 m Composite Data for La2O3%, Y2O3% and ThO2%

La2O3% Y2O3% TREO% ThO2%

Count 1,754 1,754 1,754 1,754 Minimum 0.008 0.002 0.053 0.001 Maximum 1.840 0.137 5.875 0.045 Mean 0.155 0.016 0.630 0.008 Variance 0.025 0.000 0.289 0.001 Standard Deviation 0.158 0.015 0.537 0.007 Coefficient of Variance 1.014 0.909 0.853 0.903

1 4 . 3 G E O L O G I C A L I N T E R P R E T A T I O N

Interpretation of the Lavergne-Springer deposit, based on current drill data, appears to be massive unit of differentiated granitoids including granite gneiss, granite breccia and syenite that with a roughly trend to the main body of mineralization in a near north-south direction. The mineralization appears continuous along an 800 m strike length.


The interpreted mineralization trends within a granitoid (granitic gneiss) at roughly 0° azimuth to 20° azimuth along a strike length of 800 m. The mineralization appears to dip sub-vertically to steeply dipping to the east. Based on the drill data to date, the mineralized granitoid appears to continue to the north-northeast and at depth, specifically in the northern half of the deposit.

Drilling to date appears to have outlined an area of greater mineralized in the north and northeast of the outlined deposit. In the southern extreme of the deposit, three drillholes have outlined a relatively narrow band (up to 40 m in thickness) with elevated TREO% values of greater than 0.82 TREO%. The direction and trend appear open to the south and at depth but have not yet been confirmed to reach surface. This area may also be a target for further exploration.

Within the deposit there does not appear to be a consistent relation to a specific lithology or alteration. Therefore, several grade shells were used to constrain grades based on distribution. The three grade shells were created in Leapfrog to encompass 0.31, 0.57 and 0.82 TREO%, coinciding with the 25th, 50th and 75th percentiles of the data.

The grade shell of 0.31 TREO% was determined to create the best envelope to capture and constrain the REO mineralization. Three-dimensional polylines were created perpendicular to the trend of the deposit and connected by tie lines to create the encompassing 0.31 TREO% grade shell with an area of influence of up to 50 m from the drillhole was applied.

Subsequently, the 0.82 TREO% grade shell appears to show an area of continuous elevated grades, greater than 0.82 TREO%, in the northeastern quadrant of the deposit. The data within the 0.82 and 0.31 TREO% grade shells was reviewed by cumulative frequency plots, descriptive statistics and a series of contact plots for TREO%, LREO% and HREO%. Contact plots illustrate the behaviour of data between two domains. However, in the Lavergne-Springer deposit, the contact appears to be gradual, or soft, therefore only one domain may exist constrained by the 0.31 TREO% grade shell. The contact plots for TREO%, LREO% and HREO% are shown in Figure 14.4, Figure 14.5 and Figure 14.6.

A waste model was also created for the block model and labeled as “Country Rock” using all blocks not within the 0.31 TREO% grade shell.

Rock codes were established for the main lithologies and the two domains for the Lavergne-Springer block model. All rock codes and domain codes are summarized in Table 14.5.


Table 14.5 List of Rock Codes and Wireframe Codes

Description Rock Code Rock Type

Air AIR 0 Water WATER 1 Overburden OB 8 Country Rock CR 9 Granite Gneiss 100 Granite Gneiss with Breccia Veining 101 Granitoid Breccia 102 Biotite Amphibole Syenite 103 Granite/Granite Gneiss 200 Weakly Altered Granitoid 300 Moderately Altered Granitoid 400 Intensely Altered Granitoid 500 Granite Breccia 600 Biotite Xenocryst Intrusive 700 0.31 TREO% Grade Shell GS_0.31XL 31 0.82 TREO% Grade Shell GS_0.82 82

Drill spacing varies between 50 to 120 m. Drillhole locations are shown in Figure 14.4. Figure 14.5 and Figure 14.6 illustrate the 0.31 TREO% and 0.82 TREO% wireframes.


Figure 14.4 Plan View of the Lavergne-Springer Deposit; Showing Drillhole Locations, and the 0.31 and 0.82 TREO% Grade Shell Projections

Note: Lines are 200 m x 200 m; north is up.

TREO%


Figure 14.5 Plan View of Lavergne-Springer Wireframes – 0.31 and 0.82 TREO% Grade Shells

Note: Lines are 200 m x 200 m; north is up.


Figure 14.6 Perspective View of Lavergne-Springer Wireframes – 0.31 and 0.82 TREO% Grade Shells


1 4 . 4 B L O C K M O D E L

A single block model was created to cover the interpreted Lavergne-Springer deposit. Table 14.6 and Figure 14.7 shows the Gemcom GEMS™ coordinates for the block model origins. A block size of 20 m x 20 m x 12 m was used for block model and resource estimate. The block size is considered reasonable where distances between drill fences are approximately 70 to 100 m.

Table 14.6 Block Coordinates for the Lavergne-Springer Block Model

Minimum Maximum Number

Easting 580000 581200 60 columns Northing 5143000 5144400 70 rows Elevation -276 300 48 levels

Figure 14.7 Block Model Origin for the Lavergne-Springer Block Model


The attributes in the block model folder were created for the 15 REOs and ThO2% for the Lavergne-Springer resource estimates and are shown in Figure 14.8.

Figure 14.8 Block Model Attributes for the Lavergne-Springer Deposit Resource Estimate

14.4.1 VARIOGR APHY

Samples used for variography are a function of geological interpretation. All composite data within the two domains were used determining variograms. The data between individual LREOs and HREOs correlate well, however, it was noted that a higher correlation exists between the intermediate REOs. Therefore, variography was carried out on three groups of REOs rather than two. The three groups of REOs are listed here below.

• GROUPL sum of: La2O3, Ce2O3, Pr2O3 and Nd2O3 grades

• GROUPM sum of: Sm2O3, Eu2O3, Gd2O3 and Tb2O3 grades

• GROUPHY sum of: Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3 grades


Due to a lack of correlation of the thorium dioxide to any of the REO groups, the variography was determined separately. Variograms were established using all the 3.0 m composite samples within the interpreted deposit.

The variography was generated using SAGE2001. The composited drillhole data was exported from Gemcom GEMS™ as a text file and imported into SAGE2001. Down hole variograms, using a lag distance equal to the composite length, were created for each element group to determine the nugget, or C0.

Since the distance between drillholes is variable, between 50 m and 120 m, lag distances of 30 m, 40 m and 50 m, were used in determining experimental variograms to capture the data along strike of the deposit. The ranges of the experimental variograms appear to reach the sill at approximately 60 to 120 m.

Experimental variography was subsequently used to calculate best-fit modeled variography. Two spherical structures were used for spatial modelling and orientations for each grade group and were customized to Gemcom GEMS™ requirements. Modelled variography results were exported from SAGE2001 as a report file were exported and are presented in Appendix E. Table 14.7 shows which variogram profile was used for each metal oxide.

Table 14.7 Variogram Parameter Profiles

Profile Name Metal Oxides

GROUPL La2O3, Ce2O3, Pr2O3, Nd2O3, GROUPM Sm2O3, Eu2O3, Gd2O3, Tb2O3, GROUPHY Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3

THO2 ThO2

14.4.2 VARIOGR APHY PAR AMET ERS

In Gemcom GEMS™, the convention used for variography parameters for Kriging profiles is right hand in the Z direction, right hand in the Y direction and right hand rotation in the Z direction. Table 14.8 to Table 14.11 summarizes the variography parameters used for OK interpolation for each group of metal oxides.

Table 14.8 Variography Parameters GROUPL Elements

Structure Sill =1

Search Anisotropy

Rotation About Z

(°)

Rotation About Y

(°)

Rotation About Z

(°)

X Range

(m)

Y Range

(m)

Z Range

(m) Search Type

C0 (nugget)

0.150 - - - - - - - -

C1 0.447 Rotation ZYZ

1 89 -39 58.9 80.2 7.5 Spherical


-75 -30 53 150.4 98.4 189.8 Spherical


Table 14.9 Variography Parameters for GROUPM Elements

Structure Sill =1

Search Anisotropy

Rotation About Z

(°)

Rotation About Y

(°)

Rotation About Z

(°)

X Range

(m)

Y Range

(m)

Z Range

(m) Search Type

C0 (nugget)

0.200 - - - - - - - -


1 24 17 50.3 35.2 14.3 Spherical


-46 -7 55 262.0 119.9 138.7 Spherical

Table 14.10 Variography Parameters for GROUPHY Elements

Structure Sill =1

Search Anisotropy

Rotation About Z

(°)

Rotation About Y

(°)

Rotation About Z

(°)

X Range

(m)

Y Range

(m)

Z Range

(m) Search Type

C0 (nugget)

0.050 - - - - - - - -


1 34 -20 62.8 42.2 14.3 Spherical


-30 -16 55 145.1 187.3 272.3 Spherical

Table 14.11 Variography Parameters for ThO2 by Domain

Structure Sill =1

Search Anisotropy

Rotation About Z

(°)

Rotation About Y

(°)

Rotation About Z

(°)

X Range

(m)

Y Range

(m)

Z Range

(m) Search Type

C0 (nugget)

0.050 - - - - - - - -


9 19 -53 69.5 37.0 11.4 Spherical


34 -18 18 169.9 177.2 327.3 Spherical

14.4.3 INTER POLATION PLAN AN D SPATIAL AN AL YSIS

The interpolation methods used for populating the block model were OK, ID2 and nearest neighbour (NN) on the uncapped data.

For all interpolation methods, two passes were used. For each domain, a minimum of nine and a maximum of 18 composite samples were used on the first pass to interpolate a block for the five metals. This allows the grade for each block to be interpolated by using composite assay values from at least three drillholes. The second pass used a minimum of five and a maximum of 16 composite samples to


allow remaining blocks to be estimated using a minimum of two drillholes. A summary of the interpolation passes are described in Table 14.12.

Table 14.12 Description of Interpolation Passes for Lavergne-Springer

Profile Name

Number of Composite Samples Used

Maximum Samples per Drillhole

Minimum Number of Drillholes

PASS1 Minimum 9; Maximum 16 4 3 PASS2 Minimum 5; Maximum 16 4 2

The search ellipses are created in the form of a sphere to allow for the selection of samples to use in the estimation of the blocks. Two search passes were made in both the north and south domains. A list of parameters for each search ellipse used for each pass is shown in Table 14.13. Figure 14.9 illustrate the orientations of the search ellipses used in the interpolation of the Lavergne-Springer block model.

Table 14.13 Lavergne-Springer Search Ellipse Parameters

Profile Name

Search Anisotropy

Rotation About Z

(°)

Rotation About X

(°)

Rotation About Z

(°)

X Range

(m)

Y Range

(m)

Z Range

(m) Search Type

PASS1 No Rotation - - - 90 90 90 Ellipsoidal PASS2 Rotation ZYZ -75 -30 53 150 150 200 Ellipsoidal


Figure 14.9 Search Ellipse PASS1 and PASS2; Perspective View Looking Northwest; No Scale


Figure 14.10 and Figure 14.11 present the resulting OK interpolation results for TREO%, at the 220 m elevation and on cross-section at UTM Northing 5143980 mN, illustrating the mineralization in a north portion of the deposit.


Figure 14.10 Plan View of the Lavergne-Springer Deposit Block Model Showing TREO%; at 220 m Elevation

Note: Block size is 20 m x 20 m x 12 m.


Figure 14.11 Cross-section of the Lavergne-Springer Deposit Block Model Showing TREO%; at 5143980 mN

Note: Block size is 20 m x 20 m x 12 m.


1 4 . 5 M I N E R A L R E S O U R C E E S T I M A T E

14.5.1 MIN ER AL RESOU RCE CLASSIF ICAT ION

Tetra Tech has estimated a new mineral resource estimate for the Lavergne-Springer deposit in accordance with CIM Best Practices and disclosed in accordance with NI 43-101. The effective date of the Lavergne-Springer mineral resource estimate is May 4, 2012.

The block model and mineral resource for the Lavergne-Springer deposit is classified as having both Indicated and Inferred Mineral Resources based on the number of drillholes, drillhole spacing and sample data populations used in the estimation of the blocks. The mineral resource estimate for the deposit, at 0.9 TREO% cut-off, is an Indicated Resource of 4.2 Mt at 1.14% TREO, 0.02 ThO2% with approximately 6% of the TREO being made up of HREOs; and an Inferred Resource of 12.7 Mt at 1.17% TREO, 0.01 ThO2% with approximately 4% of the TREO being made up of HREOs.

The mineral resource was estimated by the OK interpolation method on uncapped grades for all 15 REOs and ThO2. The TREO% is a sum of the 15 individual interpolations of the REOs. No recoveries have been applied to the interpolated estimates.

Table 14.14 and Table 14.15 lists a summary and detailed results for the Indicated Resource estimate, for the Property, at various TREO% for the cut-offs between 0.6 and 1.3 TREO%. Table 14.16 and Table 14.17 list the summary and detailed results for the Inferred Resource estimate. Figure 14.12 and Figure 14.13 illustrates the grade and tonnage curves for the Indicated and Inferred Resources for TREO% respectively.




Tonnes ('000) LREO% HREO%* TREO%**


1.30 2.59 759 1.363 0.080 1.443 6 0.018 1.20 2.60 1,384 1.280 0.074 1.353 5 0.017 1.10 2.60 2,124 1.209 0.072 1.281 6 0.017 1.00 2.60 3,028 1.143 0.069 1.212 6 0.016 0.90 2.60 4,167 1.073 0.066 1.139 6 0.016 0.80 2.60 6,022 0.987 0.062 1.049 6 0.015 0.70 2.61 8,249 0.910 0.058 0.967 6 0.014 0.60 2.61 10,719 0.840 0.054 0.894 6 0.013

Notes: *Includes Y2O3 **See Table 14.15

Table 14.15 Indicated Resource Estimate for the Lavergne-Springer Deposit by REOs




Tonnes ('000) LREO% HREO%* TREO%**


1.30 2.65 2,805 1.482 0.053 1.535 3 0.010 1.20 2.65 4,405 1.378 0.053 1.431 4 0.010 1.10 2.65 6,531 1.285 0.053 1.337 4 0.011 1.00 2.64 9,433 1.196 0.052 1.249 4 0.011 0.90 2.65 12,732 1.119 0.051 1.170 4 0.011 0.80 2.65 18,274 1.024 0.048 1.072 5 0.010 0.70 2.65 25,917 0.931 0.045 0.976 5 0.009 0.60 2.65 38,876 0.825 0.041 0.866 5 0.008

Notes: *Includes Y2O3 **See Table 14.17

Table 14.17 Inferred Resource Estimate for the Lavergne-Springer Deposit by REOs


Figure 14.12 Grade – Tonnage Curve for the Lavergne-Springer Indicated Resource Estimate (TREO%)


Figure 14.13 Grade – Tonnage Curve for the Lavergne Springer Inferred Resource Estimate (TREO%)


1 4 . 6 V A L I D A T I O N

14.6.1 MODEL VOLUME VAL IDAT ION

The block model volumes were validated against the solid wireframe volumes and all differences were found to be within a tolerance of less than 0.001%. The result of the comparison is shown in Table 14.18.

Table 14.18 Volume Comparison Between Wireframe Solid Models and Block Models

Wireframe

Wireframe Volume

(m3)

Block Model Volume

(m3) Difference

(%)

GS_031XL 48,629,136 48,629,080 <0.001%

14.6.2 INTER POLATION VALID AT ION

A comparison was made of the estimated metal grades from the three interpolation methods as a further validation of the resource estimation. The comparison between these three values for each metal is shown in Table 14.19.

Table 14.19 Comparison of OK, ID2 and NN Average Grades

Interpolation Method La2O3% Y2O3% TREO% ThO2%

OK 0.150 0.014 0.595 0.007

ID2 0.146 0.014 0.583 0.007

NN 0.148 0.015 0.590 0.007 3 m Comps 0.155 0.016 0.630 0.008

14.6.3 SWATH PLOT S

Swath plots were created for each estimated capped TREO% grade by bench, by column (easting) and by row (northing) for each interpolation method as a visual comparison of the precision of the interpolation methods. Figure 14.14, Figure 14.15 and Figure 14.16 illustrate the swath plots for TREO% by elevation, easting and northing, respectively. The ID2 and OK grades resemble each other quite closely. Variations in the NN grades, particularly at the ends of the graphs, that is, the limits of the block model, denotes areas where sample populations used for estimation are no longer similar.


Figure 14.14 Swath Plots for TREO% by Easting

Figure 14.15 Swath Plots for TREO% by Northing


Figure 14.16 Swath Plots for TREO% by Elevation


1 5 . 0 A D J A C E N T P R O P E R T I E S

There are no significant properties or mineral occurrences adjacent to the Property.


1 6 . 0 O T H E R R E L E V A N T D A T A A N D I N F O R M A T I O N

There is no additional information or explanation necessary to make the technical report understandable and not misleading.


1 7 . 0 I N T E R P R E T A T I O N A N D C O N C L U S I O N S

Tetra Tech has estimated a new mineral resource estimate for the Lavergne-Springer deposit in accordance with CIM Best Practices and disclosed in accordance with NI 43-101. The effective date of the Lavergne-Springer mineral resource estimate is May 4, 2012.

The block model and mineral resource for the Lavergne-Springer deposit is classified as having both Indicated and Inferred Mineral Resources based on the number of drillholes, drillhole spacing and sample data populations used in the estimation of the blocks. The mineral resource estimate for the deposit, at 0.9 TREO% cut-off, is an Indicated Resource of 4.2 Mt at 1.14% TREO, 0.02 ThO2% with approximately 6% of the TREO being made up of HREOs; and an Inferred Resource of 12.7 Mt at 1.17% TREO, 0.01 ThO2% with approximately 4% of the TREO being made up of HREOs.

The mineral resource was estimated by the OK interpolation method on uncapped grades for all 15 REOs and thorium dioxide. The TREO% is a sum of the 15 individual interpolations of the REOs. No recoveries have been applied to the interpolated estimates.

Table 17.1 and Table 17.2 summarize the Indicated and Inferred Resource estimates, for the Property, at various TREO% for the cut-offs between 0.6 and 1.3 TREO%.





1.3 2.59 759 1.363 0.080 1.443 6 0.018 1.2 2.60 1,384 1.280 0.074 1.353 5 0.017 1.1 2.60 2,124 1.209 0.072 1.281 6 0.017 1.0 2.60 3,028 1.143 0.069 1.212 6 0.016 0.9 2.60 4,167 1.073 0.066 1.139 6 0.016 0.8 2.60 6,022 0.987 0.062 1.049 6 0.015 0.7 2.61 8,249 0.910 0.058 0.967 6 0.014 0.6 2.61 10,719 0.840 0.054 0.894 6 0.013







1.3 2.65 2,805 1.482 0.053 1.535 3 0.010 1.20 2.65 4,405 1.378 0.053 1.431 4 0.010 1.10 2.65 6,531 1.285 0.053 1.337 4 0.011 1.00 2.64 9,433 1.196 0.052 1.249 4 0.011 0.90 2.65 12,732 1.119 0.051 1.170 4 0.011 0.80 2.65 18,274 1.024 0.048 1.072 5 0.010 0.70 2.65 25,917 0.931 0.045 0.976 5 0.009 0.60 2.65 38,876 0.825 0.041 0.866 5 0.008



1 8 . 0 R E C O M M E N D A T I O N S

Tetra Tech recommends that further investigation of the Lavergne-Springer deposit is warranted and necessary. Tetra Tech recommends that additional drilling and preliminary metallurgical test work be carried out.

1 8 . 1 D R I L L I N G

Tetra Tech recommends that additional drilling is warranted to further investigate and develop the known Property. Additional drilling will determine, with greater confidence, both the continuity and extents of the REO mineralization. The recommended drilling includes step out drilling to the north and laterally east and west of the interpreted deposit.

Tetra Tech has proposed a drilling program of approximately 7,300 m in 23 drillholes. Tetra Tech is of the opinion that the next phase of drilling should focus on the northern half of the deposit within the area of higher REO grades. Tetra Tech has proposed a total of 23 drillholes to investigate the extension to the north, and later extensions to the east and west. Pending positive results, further drilling may be considered. The budget for the proposed drill program is estimated at approximately Cdn$1.55 million.

A summary of the breakdown of costs for the proposed drill program is shown in Table 18.1.

Table 18.1 Estimated Cost Breakdown for Proposed Drill Program

Description

Estimated Cost

(Cdn$)

Drilling Drilling – Mobilization/Demobilization 40,000 Drilling – $130/m x 7,300 m 950,000 Rare Earth Metals Personnel – Geologists, Field Technicians 160,000 Assaying (including transport) 400,000 Total 1,550,000

Table 18.2 presents a list of proposed drillholes for the Lavergne-Springer deposit and Figure 18.1 presents a location map of the proposed drillholes.


Table 18.2 Summary of Proposed Drillhole Locations

Drillhole Easting

(m) Northing

(m) Length

(m) Bearing

(°Az) Dip (°) Comments

P-01 580720 5144100 300 270 -45 Extension north P-02 580800 5144100 300 270 -45 Extension north P-03 580880 5144100 300 270 -45 Extension north P-04 580880 5144040 350 270 -45 Extension northeast P-05 580880 5143980 350 270 -45 Lateral east P-06 580880 5143930 350 270 -45 Lateral east P-07 580880 5143880 350 270 -45 Lateral east P-08 580880 5143830 350 270 -45 Lateral east P-09 580855 5143770 350 270 -45 Lateral east P-10 580680 5144040 200 270 -45 Lateral west

P-11e 580600 5144010 300 90 -45 Infill; confirmation P-12 580680 5143930 300 270 -45 Lateral west P-13 580580 5143930 300 270 -45 Lateral west P-14 580580 5143870 300 270 -45 Lateral west P-15 580580 5143810 300 270 -45 Lateral west

P-16e 580450 5143780 350 90 -45 Infill; confirmation P-17 580580 5143750 300 270 -45 Lateral west P-18 580840 5143660 350 270 -45 Extension southeast P-19 580840 5143590 250 270 -45 Extension southeast P-20 580960 5144100 300 270 -45 Extension northeast P-21 580960 5144040 350 270 -45 Lateral east and at depth P-22 580960 5143980 350 270 -45 Lateral east and at depth P-23 580960 5143930 350 270 -45 Lateral east and at depth Total - - 7,300 - - -


Figure 18.1 Locations of Proposed Drillholes; Plan View

1 8 . 2 M E T A L L U R G I C A L T E S T W O R K

Tetra Tech also recommends that metallurgical test work be conducted on the Lavergne-Springer mineralization to determine concentrate and metal recoveries. To this end, Rare Earth Metals has retained XPS, based in Sudbury, ON, to conduct grinding and flotation test work to determine potential recovery methods. This test work is expected to be completed in Q3 2012. The estimated budget for this test work is approximately $110,000.

1 8 . 3 O T H E R R E C O M M E N D A T I O N S

Tetra Tech has reviewed current practices and standards used by Rare Earth Metals in their exploration activities and have made further recommendations in keeping with best practices.

Other recommendations include:

• Down hole survey: the down hole directional survey method type and magnetic field value should be recorded on the drill logs and in database


• Diamond drillhole logs: in anticipation of future engineering studies, geotechnical data should be collected and recorded in any additional drilling program (e.g. rock quality designation (RQD) and drill core recovery.

• Sample analysis: for completeness of the assay database, there were several unsampled intervals, mainly within the 2011 drillholes, that should be revisited and sampled.


1 9 . 0 R E F E R E N C E S

Basa E.M. Summary Report on Chebogamog Lake Mafic Intrusive Grant and Field Townships; District of Nipissing, Ontario. 2 April, 2000. 28 pages. Boissonneau, A.N. 1968. Glacial history of northeastern Ontario II. The Timiskaming-Algoma area. Canadian Journal of Earth Sciences, 5 : pages 97 109.

Chapman, L.J. 1954. An outlet of Lake Algonquin at Fossmill, Ontario. Proceedings of the Geological Association of Canada, 6, part 2, pages 61 68.

Colquhoun, D.J. 1958. Stratigraphy and paleontology of the Nipissing-Deux Rivieres outliers. Proceedings of the Geological Association of Canada, 10 : pages 83 93.

Davidson, A., and van Breemen, O. 2001. Mid-Mesoproterozoic granitoid rocks in the North Bay area, Grenville Province, Ontario. Geological Survey of Canada, Current Research 2001-F8, 9 pages.

Farrow, P.F. 2004. Algonquin-Nippissing Shorelines, North Bay, Ontario, Géographie physique et Quaternaire, vol. 58, nos 2-3, p. 297-304.

Harper, H.G., 1988. Concentrated Rare Earth Minerals Ltd., Rare Earth Prospect, Geophysical and Geological Surveys, Springer Township; Ontario MNDM File AFRI 31L05NW0005, AFRO ID: 2.10767. 15 January 1988. 14 pages.

Lumbers, S.B. 1971. Geology of the North Bay area, districts of Nipissing and Parry Sound. Ontario Department of Mines and Northern Affairs. Geological Report 94, 104 pages.

MacLeod, H.D. 1969. Geophysical Engineering & Surveys Ltd., North Bay, Ontario. Report on the Geology of Part of the Lavergne Rare Earths Property, Springer & Field Townships, Ontario. 18 November, 1969. 17 pages.

Mariano, A.N. and Mariano, A., 2012. A Rare Earth Mineralogical and Bench Scale Mineral Processing Study of Selected Samples from the Springer Lavergne Deposit, Ontario. 27 January 2012. 54 pages.

Mitchell, R.H. 2012 (unpublished). Petrographic Report – Springer Complex, Ontario, Sample 599357 – Carbonatite, for Rare Earth Metals Inc., Thunder Bay. 15 pages.

Ontario Department of Mines and Northern Affairs (ODM), 1971. Map 2216, North Bay Area; Nipissing and Parry Sound Districts. Geological Compilation Map. Published 1971.


Thomas, A., 2012 (unpublished). Report on the Geology of the REE Lavergne Property, Springer Township Ontario. March 2012. 3 pages.

WEBSITES

Climate Charts – North Bay, ON http://www.climate-charts.com/Locations/c/CN71731060857000.php

Ministry of Northern Development and Mines, Ontario (MNDM) – Claims Maps http://www.mndm.gov.on.ca/mines/claimaps_e.asp

PRESS RELEA SES

Press Release. June 28, 2011. Drilling Underway at Red Wine & Springer Projects. www.rareearthmetals.ca.

Press Release. July 6, 2011. Rare Earth Metals Report Preliminary Results on Mineralogy Study From Lavergne-Springer Project. www.rareearthmetals.ca.

Press Release. August 15, 2011. Rare Earth Metals Reports 1.50% TREO Over 94.2 Meters From Lavergne-Springer Project, Near Sudbury, On. www.rareearthmetals.ca.

Press Release. August 31, 2011. Rare Earth Metals Provides Update on Drilling From Lavergne-Springer Project, Near Sudbury, On. www.rareearthmetals.ca.

Press Release. September 15, 2011. Rare Earth Metals Extends the Lavergne-Springer REE Zone with 160 Meter Step Out Hole Intersecting 1.51% TREO Over 124.7 Meters. www.rareearthmetals.ca.

Press Release. October 24, 2011. Rare Earth Metals Confirms REE Mineralization in East Lavergne Mineralized Zone on its Springer Lavergne Prospect.

Press Release. January 17, 2012. Rare Earth Metals Reports Positive Metallurgical Test Results and Follow-Up Drill Program on Lavergne-Springer Mineralization. www.rareearthmetals.ca.

Press Release. February 8, 2012. Rare Earth Metals Provides Update on Drilling from Lavergne-Springer Project. www.rareearthmetals.ca.

Press Release. June 7, 2011. Rare Earth Metals Secures Highly Prospective New Rare Earth Prospect in Sudbury Area, Ontario and Commences Coldwell Airborne Survey in Marathon Area, Ontario. www.rareearthmetals.ca.

Press Release. March 5, 2012. Rare Earth Metals Reports Initial Results from 2012 Drilling at Lavergne-Springer. www.rareearthmetals.ca.

http://www.climate-charts.com/Locations/c/CN71731060857000.php

http://www.mndm.gov.on.ca/mines/claimaps_e.asp


Press Release. March 20, 2012. High Grade Rare Earths from 2012 Drilling. www.rareearthmetals.ca.


2 0 . 0 C E R T I F I C A T E O F Q U A L I F I E D P E R S O N

I, Paul Daigle, P.Geo., of Toronto, Ontario, do hereby certify:

• I am a Senior Geologist with Tetra Tech WEI Inc. with a business address at 900-330 Bay Street, Toronto, Ontario, M5H 2S8.

• This certificate applies to the technical report entitled Technical Report and Resource Estimate of the Lavergne-Springer REE Project, Ontario, Canada, dated May 4, 2012 (the “Technical Report”).

• I am a graduate of Concordia University, (B.Sc. Geology, 1989). I am a member in good standing of the Association of Professional Geoscientists of Ontario (Registration #1592) and the Association of Professional Engineers and Geoscientists of Saskatchewan (Registration #10665). My relevant experience includes over 21 years of experience in a wide variety of geological settings and, most recently, the completion of a NI 43-101 compliant resource estimate and technical report on the B zone REE deposit, Strange Lake Project, Québec; and the Clay-Howells Fe-REE deposit, Ontario. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).

• My most recent personal inspection of the Property was January 23, 2011 for one day.

• I am responsible for Sections 1 to 20 of the Technical Report.

• I am independent of Rare Earth Metals Inc. as defined by Section 1.5 of the Instrument.

• I have no prior involvement with the Property that is the subject of the Technical Report. There has been no previous NI 43-101 compliant technical report written on the Property.

• I have read the Instrument and the Technical Report has been prepared in compliance with the Instrument.

• As of the date of this certificate, to the best of my knowledge, information and belief, the technical contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Signed and dated this 25th day of May, 2012 at Toronto, Ontario

“Original document signed and sealed by Paul Daigle, P.Geo.”

Paul Daigle, P.Geo. Senior Geologist Tetra Tech WEI Inc.

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SUDBURY - Division 70 Claim No: S 4255048 Status: ACTIVE

Due Date: 2013-Apr-20 Recorded: 2011-Apr-20

Work Required: $ 4,800 Staked: 2011-Mar-22 13:00

Total Work: $ 0 Township/Area: FIELD (G-2840)

Total Reserve: $ 0 Lot Description: LOT 8, W1/2 OF LOT 7, CON 1

Present Work Assignment: $ 0 Claim Units: 12

Claim Bank: $ 0

Claim Holders

Recorded Holder(s) Percentage Client Number

BRERETON, WILLIAM ERNEST ( 100.00 %) 111858

Transaction Listing

Type Date Applied Description Performed Number

STAKER 2011-Apr-20 RECORDED BY HILTZ, DAVID BRIAN (1002774) R1170.01255

STAKER 2011-Apr-20 HILTZ, DAVID BRIAN (144656) RECORDS 100.00 % IN THE NAME OF BRERETON, WILLIAM

ERNEST (111858)

R1170.01257

Claim Reservations

01 400' surface rights reservation around all lakes and rivers

02 Sand and gravel reserved

03 Peat reserved

04 Other reservations under the Mining Act may apply

05 Including land under water

06 Excluding road

13 Excluding Hydro right of way

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Copyright information: © Queen's Printer for Ontario, 2008

Mining Lands - Mining Divisions of Ontario http://www.mci.mndm.gov.on.ca/Claims/Cf_Claims/clm_cssm.CFM?Cl...

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Total Work: $ 0 Township/Area: FIELD (G-2840)

Total Reserve: $ 0 Lot Description: LOT 6, E1/2 OF LOT 7, CON 1


Claim Bank: $ 0

Claim Holders



Transaction Listing




ERNEST (111858)

R1170.01257

Claim Reservations



03 Peat reserved



06 Excluding road

09 Part mining rights only

13 Excluding Hydro right of way

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1 of 1 4/13/2012 4:23 PM

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Total Work: $ 0 Township/Area: SPRINGER (G-2944)

Total Reserve: $ 0 Lot Description: LOT 5, CON 5


Claim Bank: $ 0

Claim Holders



Transaction Listing




ERNEST (111858)

R1170.01257

Claim Reservations



03 Peat reserved



06 Excluding road

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Work Required: $ 400 Staked: 2011-Apr-07 09:25


Total Reserve: $ 0 Lot Description: SW1/4 N1/2 LOT 5, CON 6


Claim Bank: $ 0

Claim Holders



Transaction Listing




ERNEST (111858)

R1170.01246

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03 Peat reserved



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Total Reserve: $ 0 Lot Description: NW1/4 S1/2 LOT 5, CON 6


Claim Bank: $ 0

Claim Holders



Transaction Listing


STAKER 2011-Apr-20 RECORDED BY BOUCHARD, BARRON ALEXANDRE (M21185) R1170.01252

STAKER 2011-Apr-20 BOUCHARD, BARRON ALEXANDRE (110459) RECORDS 100.00 % IN THE NAME OF

BRERETON, WILLIAM ERNEST (111858)

R1170.01254

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03 Peat reserved



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Total Reserve: $ 0 Lot Description: SW1/4 S1/2 LOT 5, CON 6


Claim Bank: $ 0

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Transaction Listing


STAKER 2011-Apr-20 RECORDED BY MERCIER, BARRON JONATHON (1009364) R1170.01247

STAKER 2011-Apr-20 MERCIER, BARRON JONATHON (401604) RECORDS 100.00 % IN THE NAME OF BRERETON,

WILLIAM ERNEST (111858)

R1170.01248

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03 Peat reserved



06 Excluding road

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Total Reserve: $ 0 Lot Description: E1/2 OF S1/2 LOT 5, CON 6


Claim Bank: $ 0

Claim Holders



Transaction Listing


STAKER 2011-Apr-20 RECORDED BY BOUCHARD, BARRON ALEXANDRE (M21185) R1170.01252

STAKER 2011-Apr-20 BOUCHARD, BARRON ALEXANDRE (110459) RECORDS 100.00 % IN THE NAME OF

BRERETON, WILLIAM ERNEST (111858)

R1170.01254

Claim Reservations



03 Peat reserved



06 Excluding road

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Total Reserve: $ 0 Lot Description:


Claim Bank: $ 0

Claim Holders



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ERNEST (111858)

R1170.01246

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03 Peat reserved



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Total Reserve: $ 0 Lot Description: NE1/4 N1/2 LOT 5, CON 6


Claim Bank: $ 0

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Transaction Listing


STAKER 2011-Apr-20 RECORDED BY SALO, LARRY JOHN (M20010) R1170.01249

STAKER 2011-Apr-20 SALO, LARRY JOHN (191085) RECORDS 100.00 % IN THE NAME OF BRERETON, WILLIAM

ERNEST (111858)

R1170.01250

Claim Reservations



03 Peat reserved


06 Excluding road

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1 of 1 4/13/2012 4:23 PM

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Total Reserve: $ 0 Lot Description: NW1/4 N1/2 LOT 5, CON 6


Claim Bank: $ 0

Claim Holders



Transaction Listing


STAKER 2011-Apr-20 RECORDED BY SALO, LARRY JOHN (M20010) R1170.01249

STAKER 2011-Apr-20 SALO, LARRY JOHN (191085) RECORDS 100.00 % IN THE NAME OF BRERETON, WILLIAM

ERNEST (111858)

R1170.01250

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03 Peat reserved


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1 of 1 4/13/2012 4:22 PM

A P P E N D I X B

D E S C R I P T I V E S T A T I S T I C S – R A W D A T A

LA2O3 CE2O3 PR2O3 ND2O3 SM2O3 EU2O3 GD2O3 TB2O3 DY2O3 HO2O3 ER2O3 TM2O3 LU2O3 Y2O3 THO2Count 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303 3303Minimum 0.005 0.014 0.002 0.006 0.001 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.001 0.000Maximum 2.416 4.543 0.469 1.481 0.167 0.033 0.069 0.005 0.033 0.006 0.014 0.002 0.001 0.201 0.059Mean 0.158 0.293 0.032 0.111 0.015 0.003 0.008 0.001 0.004 0.001 0.001 0.000 0.000 0.017 0.008Standard Deviation 0.189 0.310 0.031 0.101 0.012 0.003 0.006 0.001 0.003 0.001 0.001 0.000 0.000 0.017 0.008Sample Variance 0.036 0.096 0.001 0.010 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000Coefficient of Variance 1.194 1.057 0.969 0.907 0.818 0.771 0.742 0.750 0.829 0.910 0.937 0.963 0.906 0.978 0.960Kurtosis 35.789 31.764 27.716 21.435 14.809 11.486 9.183 6.269 9.156 12.605 12.663 12.383 11.732 14.559 4.318Skewness 4.719 4.245 3.775 3.241 2.674 2.379 2.176 1.973 2.361 2.772 2.844 2.909 2.843 2.967 1.891

A P P E N D I X C

C U M U L A T I V E P R O B A B I L I T Y

A P P E N D I X D

D E S C R I P T I V E S T A T I S T I C S – 3 M C O M P O S I T E D A T A

LA2O3 CE2O3 PR2O3 ND2O3 SM2O3 EU2O3 GD2O3 TB2O3 DY2O3 HO2O3 ER2O3 TM2O3 YB2O3 LU2O3 Y2O3 THO2Count 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754 1754Minimum 0.008 0.019 0.003 0.011 0.002 0.000 0.001 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.002 0.001Maximum 1.840 2.843 0.263 0.783 0.076 0.016 0.049 0.004 0.023 0.004 0.010 0.001 0.006 0.001 0.137 0.045Mean 0.155 0.286 0.031 0.108 0.015 0.003 0.008 0.001 0.004 0.001 0.001 0.000 0.001 0.000 0.016 0.008Standard Deviation 0.158 0.254 0.025 0.083 0.010 0.002 0.005 0.001 0.003 0.000 0.001 0.000 0.001 0.000 0.015 0.007Sample Variance 0.025 0.065 0.001 0.007 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000Coefficient of Variance 1.015 0.890 0.813 0.765 0.694 0.657 0.644 0.664 0.754 0.839 0.867 0.887 0.860 0.825 0.909 0.903Kurtosis 24.648 17.497 11.863 7.715 4.210 3.521 4.360 3.437 7.568 11.091 11.039 10.632 9.663 8.565 12.541 2.783Skewness 3.849 3.182 2.595 2.123 1.693 1.557 1.624 1.617 2.191 2.638 2.699 2.732 2.646 2.525 2.813 1.702Range 1.832 2.824 0.260 0.772 0.075 0.016 0.048 0.004 0.023 0.004 0.010 0.001 0.006 0.001 0.135 0.044

A P P E N D I X E

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