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TORONTO, ONTARIO – Oct. 23, 2013 – Quest Rare Minerals Ltd. (TSX:QRM)(NYSE MKT:QRM) is pleased to announce that a comprehensive pre-feasibility study (PFS) for its Strange Lake B-Zone rare earth project shows positive results. As envisaged in the PFS, Quest believes that its Strange Lake B-Zone deposit, located in northern Québec, will be one of the world’s largest and highest-grade heavy rare earth (HREE) mining projects and that the planned processing facility in southern Québec will be the largest facility of its kind in North America. Quest’s goal is to provide the growing global market for critical manufacturing inputs with a secure and dependable supply of rare earth elements (REE), given the vagaries of pricing and availability from China, currently the world’s largest source of REE.
Contributors to the PFS were Micon International Limited (Micon International), Process Research Ortech Inc., AECOM, Hatch Associates Ltd., Hazen Research Inc., SLR Consulting Ltd. and RPC. The PFS results show positive cash flows and a robust internal rate of return. With projected average annual rare earth oxide (REO) concentrate production of 13,650 metric tonnes (t), Quest believes that it has the potential to become a significant long-term global supplier of HREE. Based on the PFS, 47% of Strange Lake’s annual rare earth oxide production and 56% of its total revenues will be derived from HREE plus yttrium (HREE+Y) concentrate, which would make Quest one of the world’s leading suppliers of HREE+Y.
The PFS provides for the construction of a hydrometallurgical plant in southern Québec to process whole ore shipped from Strange Lake and to produce four separated products – a mixed HREE+Y oxide concentrate, high-purity zirconium basic sulfate (ZBS, for further downstream processing), high-purity niobium oxide, and a mixed light rare earth double-sulfate concentrate. A mini-pilot metallurgical plant processing 100 kg per day of ore was commissioned in early 2012 to test certain separation processes. Quest is currently preparing for the construction of a full pilot mill, scheduled to commence operation in early 2014.
“We are very pleased with the results of this pre-feasibility study; our consultants have been conservative with the assumptions used and we are satisfied that the returns are very healthy for such a capital-intensive industrial plan,” said Peter Cashin, President and CEO of Quest. “The Strange Lake project has the potential to provide an important base for establishing a major new North American industrial sector, able to address the chronic HREE+Y supply deficit over a long period of time. Over the past three years of intensive work, we have moved the Strange Lake project from a small discovery evaluated on the basis of a limited data set to a substantial mineral development that has grown significantly in terms of footprint and importance to Quest, its shareholders and the industries that are critically in need of the products that Strange Lake will ultimately supply.”
The Strange Lake project dovetails with both Canadian federal and Québec provincial industrial strategies. Quest believes that strategic North American industries from defense to automotive (electric cars) to wind turbines will welcome a stable source of rare earth product. Quest offers a major high-technology industrial opportunity for Québec and Canada with potential for employing many highly-skilled technical and engineering employees. In Quest’s view, the compelling net present value of the Strange Lake project and expected significant amount of product output from Quest’s plant support the required capital investment. Quest believes that the full suite of products, considerable output level and lengthy project mine life will provide key customers with a significant advantage – the stability of North American supply. The successful completion of the PFS marks a major milestone for Quest. Basic engineering for the Strange Lake project is under way. This will allow Quest to accelerate its current discussions with potential off-take and strategic partners for financial and technical commitments to the Strange Lake project.
Quest is committed to ensuring that the Strange Lake mining project sets a high standard for sensitivity to local environmental and aboriginal concerns. Public approval for this project, or its social license to operate, is as important to Quest as are regulatory requirements. The Strange Lake project is designed with a high respect for regional needs and expectations.
PFS Highlights (Table 1):