UURAF Ucore Rare Metals Inc (QX)

Ucore
Reports Robust Economics for Bokan PEA Study 

November 28, 2012 –
Halifax, Nova Scotia – Ucore Rare Metals Inc (TSX-V:UCU) (OTCQX:UURAF)
(“Ucore” or “the Company”) is pleased to report very strong results  of the Preliminary Economic Assessment (PEA)
completed by Tetra Tech of Vancouver, BC, regarding the Dotson Ridge Zone of
the Company’s Bokan Mountain heavy rare earth property in Southeast Alaska.

Highlights
of the PEA Include:

·        
Net
Present Value (NPV): $577M at a 10% discount rate, pre-tax.

·        
Internal
Rate of Return (IRR): 43%.

·        
Payback
Period: 2.3 years.

·    Capital
Cost: $221M, including a complete on-site rare earth oxide (REO)
separation plant, and a contingency provision in the amount of $25M. Among the
lowest capital outlays in the rare earth mining sector.

·        
Mining
Rate: 1,500 tonnes
per day (TPD), 75% of mill feed is eliminated via the use of Dual Energy X-Ray
Transmission (DEXRT) sorting and magnetic separation, netting approximately 375 TPD to feed the leach circuit.   

·        
Average
Total Rare Earth Recoveries: 81.6%

·        
Production
of REOs at site: Deployment of Solid Phase Extraction (SPE)
technology to generate high purity individual rare earth oxides at the site.

·     REO
Production: Averaging 2,250 tonnes per year (TPY) during
the first five years at full production, including 95 tonnes of
dysprosium oxide, 14 tonnes of terbium oxide, and 515 tonnes of yttrium oxide.

·        
Mine
Life: 11 years, based on existing Inferred Mineral Resource
Estimate (April 21, 2011), excluding highly prospective expansion at depth,
along strike, and other exploration targets at the I&L Zone and beyond.

·        
Direct
Employment: 170 employees.

·    Ease
of Shipping Access: Only rare earth project with immediate deep
water shipping facilities, resulting in prospective mine-mouth shipping rates
among the lowest in the industry.

·       Elimination
of Tailings on Surface at Closure: Only known mine to eliminate
tailings on surface at closure. All tailings will be placed underground via
cemented paste backfill. The processing plant will generate approximately 735
TPD of tailings, significantly less than the mine requirement of approximately
1,030 TPD backfill.

·       Recycling
of Nitric Acid: Nitric acid that is not consumed in the leach
circuit will be recycled through the use of diffusion dialysis, greatly
reducing acid consumption by more than 75%, resulting in significant financial
and environmental benefits.

·        
Near
Term, High Value Production: Relative high percentage of rare earth
metals strategically critical to the US defence, clean energy, aerospace,
supercomputing and transportation sectors: including Tb, Dy and Y.

·    Excellent
Geopolitical Support: Offset of completion risk through strong
legislative and financial support at state and federal levels.

“The completion of this PEA
is a key milestone in Ucore’s march to near term HREE production,” said Jim
McKenzie, President & CEO of Ucore. “Bokan’s unique features have generated
a CAPEX that is among the absolute lowest in the industry, remarkably including
full downstream separation facilities that promise to render high purity oxides
both economically and on-site. In turn, the Bokan PEA has delivered highly
robust IRR and NPV calculations. Beyond all of this, the Bokan facility will have
little in the way of direct domestic competition. The facility will generate critical
technology metals that are indispensable and increasingly difficult to obtain
for applications that are the lifeblood of US competitiveness, including defense
sector, clean technology, supercomputing, transportation and advanced aerospace.
Our thanks to the many researchers, scientists, engineering specialists and
contractors who made this document possible.”

Overview
of Bokan Project and PEA

Ucore’s Bokan Mountain
project is located on Prince of Wales Island, Alaska, approximately 60 km
southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British
Columbia, with direct ocean access to the western seaboard and the Pacific Rim.  The project is situated in the Tongass
National Forest, within an area set aside for natural resource development.

The PEA has been completed
based on the Inferred Resource Estimate Technical Report filed on April 21^st,
2011 by Ucore, with the exclusion of the I&L Zone.  The resource was estimated by R. J. Robinson
of Aurora Geosciences. The resource incorporated into the current mine plan
totals 5.3 million tonnes, with an average grade of 0.65% total rare earth
oxides (TREO), at a cut-off grade of 0.4% TREO. Of the TREO, approximately 40%
are comprised of heavy rare earth oxides. A summary of the operating
assumptions and financial model for the project is as follows:

 

Item	Units	Year 1	Year 2	Annual for balance of mine life
Tonnes Mined	Mt	198,000	470,900	540,000
Tonnes Processed	Mt	198,000	470,900	540,000
Mined Grade TREO		0.416%	0.511%	0.473%
Recovery		81.6%	81.6%	81.6%

 

	(million $US)
Total Revenue	$2,546
Initial Capital Expenditure	$221
Sustaining Capital	$145
Total Before-Tax Cash Flow (undiscounted)	$1,516
Before-tax NPV @ 8%	$697
Before-tax NPV @ 10%	$577
Before-tax NPV @ 12%	$478
Before tax IRR (%)	43%

 

Geology

The Dotson Ridge deposit is
a well delineated rare earth element (REE) mineralized vein-dike system related
to the Mesozoic Bokan peralkaline granitic complex. The mineralized system is a
tabular body exposed at the surface for a strike length of 3.5 km.  The deposit was drilled to a depth of 450 m, and
remains open both along strike and at depth. The system outcrops along the
ridge so that it is readily accessible for drilling and bulk sampling.  The REE-bearing veins can be visually identified
from the surrounding host rock and the material is amenable to DEXRT sorting,
as noted below.  An existing road network
provides access to all main target areas. There are a number of other
occurrences of REE mineralization located within, or at the margins of the
Bokan complex which remain highly prospective exploration targets.

 

Proposed
Mining Plan

The underground mine design
was completed by Stantec of Tempe, AZ. 
The design contemplates trackless mining with adit access and blasthole
stoping with paste backfill as the preferred mining method for the
project.  This mining approach will
result in a production rate of 1,500 tonnes per day, at a 0.4% TREO cut-off
grade.   

The mine plan proposes the
use of mill tailings as cemented paste backfill to fill the mined out areas of
the underground workings. At full production, the mill will produce
approximately 735 TPD of tailings and the mine will require 1,030 TPD of
backfill.  This will result in all
tailings being placed underground as backfill, thereby eliminating the need for
a tailings facility at surface upon mine closure.  Waste rock will be utilized for the remainder
of the backfill.

 

Proposed
Beneficiation and Processing Plan

The proposed processing flow
sheet consists of three areas: physical beneficiation, leaching and downstream
REO separation.

i)            
Physical
Beneficiation

The mine will produce 1,500
TPD of mineralized material which will be crushed and split into four size
ranges. The fines will by-pass the sorters and each of the other size ranges
will feed one of three sorters utilizing dual energy x-ray transmission. This
circuit will reject approximately 50% of the feed as waste. The concentrated mineralized
material will then be further crushed and ground in a rod mill. The resultant material
will be processed by magnetic separators, which will reject a further 50% of
their feed as waste. 

In total, approximately 75%
of non-REE bearing material will be discarded through the physical beneficiation
process.  The remaining 375 TPD of
concentrated mineralized material is further ground to -40 um and then fed to
the leaching circuit. 

The physical beneficiation
circuit results in significant savings in terms of initial capital expenditure and
ongoing operating costs, due to reduced power and acid consumption during the leaching
and separation process.

ii)           
Leaching
Circuit

The leaching circuit consists
of a nitric acid leach process. The concentrated mineralized material is
leached utilizing nitric acid heated to a temperature of 90° C.  The resultant slurry is filtered, with solids
then submitted to the backfill plant to be placed underground as cemented paste
backfill. Prior to the pregnant solution continuing on to the separation circuit
it is treated by diffusion dialysis in order to recover the unconsumed nitric
acid. The recovered acid is then recycled into the leach circuit, resulting in significant
operating cost savings. 

       iii)      REO
Separation Circuit

The separation of individual
rare earth oxides is achieved through the use of Solid Phase Extraction (SPE),
a technology developed by IntelliMet LLC of Montana, in conjunction with Ucore.  The pregnant leach solution generated by the nitric
acid leach is introduced into a series of purpose-built SPE columns.  The first stage of this process removes nuisance
materials such as thorium, uranium, and iron from the solution.  A subsequent series of columns then separates
the rare earths into the following lanthanide sub-classes, Ce-La; Pr-Nd; Y; Sm-Eu-Gd;
Tb-Dy; and Ho-Er-Tm-Yb-Lu.  The final
circuit of columns then separates the subclasses into individual rare earth chlorides,
which can then be precipitated to generate individual purified rare earth
oxides. 

The SPE process produces
chemical transfers of selective elements from the pregnant solution to a solid
phase within a matter of seconds, giving the columns the capacity to process a
large volume of solution in relatively small flow-through extraction units.  The result is a relatively low initial capital
cost for the SPE circuits. Waste products from the separation process will be
returned underground as part of the cemented backfill.

   

Capital
Cost Estimate

Initial capital cost
estimates for the project are as follows:

Item	Total Cost (million $US)
Direct Capital Cost
Site development	6.1
Mine underground	18.9
Mine surface facilities	23.8
Process	62.9
Tailings and waste rock management	10.1
Utilities	3.4
Buildings	3.0
Temporary facilities	5.2
Plant mobile equipment & misc.	1.4
Subtotal	134.7
Indirect Capital Cost
Indirect construction costs	51.1
Owner's costs	10.9
Contingency	24.5
Subtotal	86.5
Total Capital Cost	221.3

 

Initial
capital costs include all costs required to bring the facility to production. The
ongoing sustaining capital costs are estimated to be $145M over the 11 year
mine life. 

 

Operating Cost Estimate 

 

Item	Average Unit Cost ($US/t mined)
Mining	41.69
Processing	54.83
G&A	13.56
Power	11.78
Misc.	0.93
Total Operating Cost	122.78

REE
Pricing Considerations

In developing rare earth
pricing assumptions, a number of sources were considered by both Ucore and Tetra
Tech.  Price forecasts generated by
analysts and Ucore’s rare earth peer group vary widely.  In selecting pricing assumptions, efforts
were made to incorporate assumptions that were independent, supportable, and
conservative.  As a result, Tetra Tech
has used a three-year trailing average of China FOB prices from October, 2009
to October, 2012 to establish prices for the rare earth oxides, except Ho, Lu, Yb
& Er oxides, where two-year trailing averages were used due to limited
Chinese market data.   These prices are displayed in “Scenario 1”
below.  The Company also considered the
impact of pricing REO’s based on a 6-month trailing average and a 3-month
trailing average.  These results are
displayed in “Scenario 2” and “Scenario 3” below, respectively.

 

	Pricing Scenario 1 3-Year trailing average	Pricing Scenario 2 6-Month trailing average	Pricing Scenario 3 3-Month trailing average
REO	$US/kg	$US/kg	$US/kg
La2O3	48.69	20.85	18.42
Ce2O3	47.21	21.38	19.23
Pr2O3	113.10	110.00	103.08
Nd2O3	126.70	108.96	101.58
Sm2O3	57.74	71.79	61.42
Eu2O3	1,834.94	2,185.00	2010.00
Gd2O3	81.70	99.42	96.35
Tb2O3	1,520.83	1,907.12	1,840.38
Dy2O3	845.80	1,009.42	948.08
Ho2O3	211.39	107.25	107.05
Er2O3	88.20	153.61	140.08
Tm2O3	N/A	N/A	N/A
Yb2O3	102.79	124.07	110.51
Lu2O3	1,036.40	1,420.79	1,427.56
Y2O3	80.41	100.75	85.12
NPV @ 10% Discount	$577M	$620M	$513M

 

Economic
Analysis and Sensitivity Analysis

The economic analysis was
based on the mineral resource estimate filed by Ucore in April of 2011, totalling
5.3 million tonnes at an average grade
of 0.65% TREO in the Inferred category. 
This resource is adequate to allow for an 11 year mine life, based on
current mining assumptions including a mining rate of 1,500 TPD.  TREO recoveries are expected to average 81.6%. 

These assumptions, together
with capital cost and operating cost estimates noted above, result in a before
tax NPV, at a 10% discount rate, of $577 million.  The payback period for the project is 2.3
years from the start of production.  The
project generates a pre-tax IRR of 43%.

A sensitivity analysis was
performed, to test the impact of changes to several key assumptions included in
the economic model, with the following results:

 

Changes to selling price of REOs	NPV at 10%,   $US million	IRR, %
Increase of 20%	802	52%
Increase of 10%	690	47%
Base Case	577	43%
Decrease of 10%	464	38%
Decrease of 20%	352	33%

 

Changes in operating costs	NPV at 10%,   $ US million	IRR, %
Increase of 20%	519	40%
Increase of 10%	548	42%
Base Case	577	43%
Decrease of 10%	606	44%
Decrease of 20%	635	45%

 

Change in initial capital expenditure	NPV at 10%,   $ US million	IRR, %
Increase of 20%	526	37%
Increase of 10%	552	40%
Base Case	577	43%
Decrease of 10%	602	46%
Decrease of 20%	627	51%

 

Environmental
Assessment

Ucore is currently
conducting environmental baseline studies to prepare for the forthcoming
permitting process at the Dotson Ridge Project. 
The project plan is being developed in consultation with local
stakeholders as well as state and federal regulators.  A Plan of Operations, which will be based upon
engineered facility designs advanced from the concepts presented in the PEA,
will be submitted to the US Forest Service (USFS) to initiate a National
Environmental Policy Act (NEPA) review. 
Permitting advantages for the project include the elimination of a
permanent surface tailings storage facility, due to the use of x-ray sorting
technology, which will allow for 100% of the mill tailings to be placed in
mined out areas underground as cemented paste backfill. The study includes cost
estimates for site water management and treatment.

Qualified
Persons

The technical disclosures in
this press release have been reviewed and approved by Kenneth W. Collison, P.
Eng. a consultant to and COO of Ucore together with the following independent qualified
persons;

·        
R. J. Robinson, consultant, Aurora
Geosciences Inc. for geology and mineral
resource

·        
S. Annavarapu, consultant, AMEC (formerly
Stantec) for mine planning.

·        
E. Bentzen, consultant, Lyntek for physical
benefication processes.

·        
R. Hammen, consultant, IntelliMet for leaching
and SPE processes.

·        
H. Ghaffari, consultant, Tetra Tech for cost
estimating.

·        
S. Hafez, consultant, Tetra Tech for economic
analysis.

Cautionary
Notes

Please note that the PEA is
preliminary in nature, that it includes inferred mineral resources that are
considered too speculative geologically to have the economic considerations applied
to them that would enable them to be categorized as mineral reserves, and there
is no certainty that the PEA will be realized. 
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.

Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for the adequacy
or accuracy of this press release. 

About Ucore Rare Metals Inc.

Ucore Rare Metals Inc. is a
development-phase mining company focused on establishing rare metal resources
with near term production potential. With multiple projects across North
America, Ucore’s primary focus is the 100% owned Bokan - Dotson Ridge REE property
in Alaska. The Bokan -  Dotson Ridge REE
project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of
Prince Rupert, British Columbia and has direct ocean access to the western
seaboard and the Pacific Rim, a significant advantage in developing near term
production facilities and limiting the capital costs associated with mine
construction.

The Bokan property is
particularly enriched with heavy rare earth elements, including the critical
elements dysprosium, terbium and yttrium. Approximately 40% (by weight) of the
rare earth elements contained on the Dotson Ridge property are heavy rare earth
elements, as disclosed in the Company’s NI43-101 resource estimate technical
report, filed on April 21^st, 2011. The resource was completed by R.
J. Robinson, a consultant from Aurora Geosciences.

For further information,
please contact Mr. Jim McKenzie, President and Chief Executive Officer of Ucore
Rare Metals Inc. at: (902) 482-5214 or visit http://www.ucore.com