Resource World Magazine

fiEl d R E p ORt Namibia Rare Earths' exceptional heavy rare earth resource by Mike Niehuser Namibia rare earth geologist, Boniface katanga, with hand-held XrF device which detects the levels of yttrium, a potential indicator of heavy rare earths. photo by mike Niehuser. The initial, heavy rare earth, resource estimate completed on Namibia Rare Earths Inc.'s [NRE-TSX] brand new, district scale discovery in Namibia, Africa, has the highest percentage distribution of heavy rare earths, (also referred to as heavy rare earth enrichment) and consequently contains the highest value basket price, of any other rare earth company with a compliant resource estimate. In the face of declines in rare earth prices, which have hit the light rare earths particularly hard, the resource contains exceptional enrichment in dysprosium, as well as other critical, heavy rare earth metals, that have a supply risk over the next 10 to 15 years, including yttrium, terbium and europium. The resource estimate is based on a very intense exploration program, increasing the potential for multiple discoveries at its 100%-owned, 200 km2 Lofdal Carbonatite Complex. Namibia is a former German colony in southwestern Africa where there is a legacy of a high level of infrastructure and organization. Namibia gained its independence in 1990, and the country remains a popular tourist destination and exporter of organic beef to northern Europe. The primary components of the Namibian economy include tourism and mining; interestingly, Namibia is one of the world's greatest exporters of uranium and diamonds. I first became aware of the potential for heavy rare earths at Lofdal in the fall of 2009 at the Denver Gold Group Show. The project was, at that time, held by Etruscan Resources and advanced under the leadership of its CEO Gerry McConnell and VP 38 www.resourceworld.com of Exploration Don Burton. At the time, Etruscan had the largest land position in West Africa of any mining company. This was achieved by consistent attention to building relationships with federal authorities, assisting them in developing and shaping modern mining laws, and working responsibly with local communities. Etruscan was later acquired by Endeavour Mining Corp. [EDV-TSX], and the Namibian assets were spun-out in an initial public offering as Namibia Rare Earths in April of 2011. Endeavor maintains a 38.5% ownership interest in Namibia Rare Earths. McConnell is currently the CEO of Namibia Rare Earths and Burton is its President. Namibia Rare Earths is well prepared to positively assist this country in becoming one of the premier mining jurisdictions in the world. Namibia Rare Earths focused on Area 4 at Lofdal following an extensive regional sampling program and airborne radiometric surveys. The initial resource estimate at Area 4 is based on 93 diamond drill holes for a total of 10,025 metres, with drilling on 25-35 metres centres, predominantly within 70 metres of the surface, providing the bulk of the indicated resources. Deeper drilling, at 35 to 50-metre spacings to a maximum depth of 150 metres, provides the inferred resources. The resource estimate also benefited from 987 metres of trenching and hundreds of down-hole rock density measurements. The one deep hole, to 250 vertical metres, intersected the deposit as planned, but is outside of the resource estimate envelope. Management has often remarked on the consistency of the mineralized zone, and the zone remains open at depth and to the east along strike. The initial resource estimate, at a 0.3% cut-off, has a 900,000 tonnes indicated resource of 0.62% TREO (total rare earth oxides) with 86% heavy enrichment, and an inferred resource of 750,000 tonnes at 0.56% TREO with 85% heavy enrichment. At a lower grade cut-off of 0.1%, the resource at Area 4 increases to a 2.88 million tonnes indicated resource at 0.32% TREO with 76% heavy enrichment, plus an inferred resource of 3.28 million tonnes at 0.27% TREO with 75% heavy enrichment. The indicated resource of 900,000 tonnes at a 0.3% cut-off, with an estimated value of about $1,040 per tonne (based on FOB China oxide prices in August 2012), would suggest an in-situ value of close to $1 billion. This clearly qualifies as the most exceptional heavy rare earth discovery in the current metal cycle. Namibia Rare Earths' management reports that the current classifications of indicated and inferred could be upgraded to the measured and indicated categories upon completion of a metallurgical report. They are also stepping back and drilling to a vertical depth of 350 vertical metres. Considering the consistency of the mineralized zone, the deeper drilling may significantly increase the size of the resource. In addition to the potential to increase the size of the exceptional heavy rare earth resource, the company has a good capital structure and approximately $20 million in cash and cash equivalents. n Mike Niehuser owns shares of Namibia Rare Earths NOVEMBER 2012

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