RARE ELEMENT RESOURCES LTD

DEF 14A 1 tm2418787d1_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

(Name of Registrant as Specified in its Charter)

Not Applicable

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

Notice of Annual Meeting of Shareholders

and

Management Information and Proxy Circular

Dear Shareholder:

Over the last few years, there has been growing awareness of the risks represented by China’s monopoly on the rare earth industry because of the importance of rare earth elements (“REE”) in evolving technologies, especially those critical to the United States national security needs and carbon reduction goals. This issue is the driving factor in our mission to become the cornerstone of a domestic rare earth supply chain.

In 2023, Rare Element Resources Ltd. (“we,” “us,” “our” or the “Company”) successfully navigated the steps necessary for construction on our demonstration-scale rare earth separation and extraction plant in Upton, Wyoming, that will incorporate our proprietary REE recovery and separation technology (the “Demonstration Plant” or the “Plant”). The Demonstration Plant is expected to generate the operational and economic data necessary for further optimization of the technology to inform the design of a commercial-scale plant. With the General Atomics-led consortium, a technology leader whose affiliate Synchron is the majority shareholder in the Company, we completed detailed engineering and acquired the necessary licenses and permits to begin construction in December 2023. The Company expects plant operations to commence in the third quarter of 2024 utilizing previously stockpiled materials from the Bear Lodge Rare Earth Element Project (the “Bear Lodge REE Project” or the “Project”), which will be processed and separated into targeted rare earth products. Once commissioning is completed, the Plant is expected to operate for up to twelve months.

To support the engineering, construction and operation of the Demonstration Plant, a $21.9 million financial award was secured from the U.S. Department of Energy (the “DOE”) Office of Energy Efficiency and Renewable Energy in late 2021. This amount represented approximately one half of the Demonstration Plant’s original budget of approximately $44 million. In June 2023, the Company completed a funding agreement for a $4.4 million grant from the Wyoming Energy Authority (“WEA”) to be used toward its portion of the costs of the Demonstration Plant.

In July 2023, the U.S. Nuclear Regulatory Commission completed its review and issued a Source Material License, which allows the processing of the material previously stockpiled from the Bear Lodge REE Project at the Plant. Then, in November 2023, the DOE finalized its National Environmental Policy Act (“NEPA”) review, completing the federal permitting process required prior to construction of the Demonstration Plant.

In December 2023, we received the DOE’s Project Continuation Notice following its approval of the initial Demonstration Plant construction budget. This approval, in conjunction with the completion of the DOE’s NEPA review, allowed us to immediately begin onsite construction of the Demonstration Plant. To expedite time to start-up, a two-track approach was used with onsite infrastructure and existing building refurbishment occurring at the same time that an off-site integrator was assembling equipment skids for delivery to the site, fully factory-tested and ready for installation. The first equipment skid arrived onsite at the beginning of May 2024.

Given cost increases due to the extraordinary inflationary pressures since the original budget was developed in 2021 as well as certain design upgrades, the projected total cost of the Demonstration Plant has risen. A revised overall project budget, of approximately $53.6 million, reflecting updated anticipated costs, was provided to the DOE in May 2024 and is pending approval, including a decision as to DOE’s commitment of cost-share funding above the previously agreed upon commitment in 2021.

In the first quarter of 2024, the Company successfully completed an oversubscribed rights offering of common shares that generated approximately $35.8 million in gross proceeds. The Company will utilize proceeds from the rights offering, in part, to progress operation of the Demonstration Plant to generate the information necessary to support a commercialization decision. The Company has sufficient resources to provide the funds to cover the cost increases for the updated project budget.

Given our continued progress in 2023 and the first half of 2024, we believe that the Company is well positioned to be able to make informed commercialization decisions in the near term as we move toward becoming a secure domestic supplier of critical REEs.

At the annual meeting of shareholders, the Board of Directors recommends that you vote affirmatively:

Your affirmative** vote will continue positioning the Company for future success.**

We encourage you to attend this year’s annual meeting of shareholders. We will host the annual meeting of shareholders in-person at the Upton Community Center, 916 Ash Street, Upton, Wyoming 82730 on Tuesday, August 20, 2024 at 2:00 p.m. (Mountain Daylight Time).

We intend to hold our annual meeting of shareholders in person. Registered holders can vote their shares in advance of the meeting by Internet, toll-free telephone, or mail. If your common shares are held in the name of a broker, bank or other holder of record, follow the voting instructions you receive from the holder of record describing how to vote your common shares. Shareholders may also vote in person at the meeting. If changes to our current plan to hold an in-person meeting become advisable due to public health or other concerns, we will disclose the updated plan on our proxy website (http://www.proxyvote.com) and our company website (www.rarelementresources.com). We encourage you to check one of these websites prior to the meeting if you plan to attend in person.

It is important that you retain a copy of the control number found on the proxy card, voting instruction form or notice of meeting, as such number will be required in order for shareholders to dial in to listen to the meeting.

Only shareholders of record at the close of business on June 26, 2024 are entitled to notice of, and to vote at, the annual meeting.

Respectfully,

KENNETH J. MUSHINSKI

President, Chief Executive Officer and Director

Littleton, Colorado

July 8, 2024

ii

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an annual meeting of shareholders of Rare Element Resources Ltd. (“Rare Element,” “we,” “us,” “our” or the “Company”) will be held at the Upton Community Center, 916 Ash Street, Upton, Wyoming 82730 on Tuesday, August 20, 2024 at 2:00 p.m. (Mountain Daylight Time) (the “Meeting”). At the Meeting, shareholders will receive the audited financial statements for the fiscal year ended December 31, 2023, together with the independent registered public accounting firm’s report thereon, and will be asked to consider resolutions to:

Nominees for directors to be elected at the Meeting are set forth in the enclosed management information and proxy circular.

Only shareholders of record at the close of business on June 26, 2024, the record date for the Meeting fixed by the Board of Directors, are entitled to notice of, and to vote at, the Meeting.

YOUR VOTE IS IMPORTANT.

Important Notice Regarding Availability of Proxy Materials for the Meeting to be Held on August 20, 2024

Our management information and proxy circular is attached. Financial and other information concerning Rare Element Resources Ltd. is contained in our 2023 annual report to shareholders. You may access the management information and proxy circular and 2023 annual report to shareholders athttp://materials.proxyvote.com/75381M.

We will provide to any person or corporation, upon request, one copy of any of the following documents:

Copies of the foregoing documents are also available on the Company’s website atwww.rareelementresources.com, or copies of the above documents will be provided by the Corporate Secretary of the Company, upon request, by mail at P.O. Box 271049, Littleton, Colorado 80127 or by e-mail at info@rareelementresources.com, free of charge to shareholders of the Company. The Company may require the payment of a reasonable charge from any person or entity that is not a shareholder of the Company and that requests a copy of any such document. Financial information relating to the Company is provided in the Company’s financial statements and management’s discussion and analysis for the fiscal year ended December 31, 2023. Additional information relating to the Company is available electronically on SEDAR+ atwww.sedarplus.ca and on EDGAR atwww.sec.gov/edgar.shtml.

iii

Whether or not you plan to attend the Meeting, we urge you to vote and submit your proxy to ensure the presence of a quorum.

Registered holders may vote:

Beneficial Shareholders. If your common shares are held in the name of a broker, bank or other holder of record, follow the voting instructions you receive from the holder of record to vote your common shares.

We intend to hold the Meeting in person. Shareholders joining the Meeting by phone will not be able to vote their shares during the call. As noted above, shareholders will be able to vote their shares in advance of the Meeting, depending on how their common shares are held, or in person at the Meeting. If changes to our current plan for an in-person meeting become advisable due to public health or other concerns, we will disclose the updated plan on our proxy website (http://www.proxyvote.com) and our company website (www.rarelementresources.com). We encourage you to check one of these websites prior to the Meeting if you plan to attend in person.

It is important that you retain a copy of the control number found on the proxy card, voting instruction form or notice of meeting, as such number will be required in order for shareholders to dial in to listen to the Meeting.

Respectfully,

KENNETH J. MUSHINSKI

President, Chief Executive Officer and Director

Littleton, Colorado

July 8, 2024

iv

TABLE OF CONTENTS

Page

ii

MANAGEMENT INFORMATION AND PROXY CIRCULAR

(as at December 31, 2023 except as otherwise indicated)