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| PART I – FINANCIAL INFORMATION | 3 | |
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| ITEM 1. | FINANCIAL STATEMENTS | 3 |
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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 16 |
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 21 |
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| ITEM 4. | CONTROLS AND PROCEDURES | 21 |
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| PART II – OTHER INFORMATION | 21 | |
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| ITEM 1. | LEGAL PROCEEDINGS | 21 |
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| ITEM 1A. | RISK FACTORS | 21 |
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| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 22 |
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| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 22 |
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| ITEM 4. | MINE SAFETY DISCLOSURES | 22 |
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| ITEM 5. | OTHER INFORMATION | 22 |
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| ITEM 6. | EXHIBITS | 23 |
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| SIGNATURES | 24 | |
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ii
Reporting Currency, Financial and Other Information
All amounts in this report are expressed in thousands of United States (“U.S.”) dollars, unless otherwise indicated.
Financial information is presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
References to “RER,” the “Company,” “we,” “our,” and “us” mean Rare Element Resources Ltd., our predecessors, and consolidated subsidiary, or any one or more of them, as the context requires.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”), including* “Management’s Discussion and Analysis of Financial Condition and Results of Operations”in Item 2 of Part I of this report,* contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “forward-looking information” within the meaning of Canadian securities laws (collectively, “forward-looking statements”). Any statements that express or involve discussions with respect to business prospects, predictions, expectations, beliefs, plans, intentions, projections, objectives, strategies, assumptions, future events, performance or exploration and development efforts using words or phrases (including negative and grammatical variations) such as, but not limited to, “expects,” “anticipates,” “plans,” “estimates,” “intends,” “forecasts,” “likely,” “projects,” “believes,” “seeks,” or stating that certain actions, events or results “may,” “could,” “would,” “should,” “might” or “will” be taken, occur or be achieved, are not statements of historical fact and may be forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in these forward-looking statements are reasonable, we cannot be certain that these plans, intentions, and expectations will be achieved. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this Quarterly Report. Forward-looking statements in this Quarterly Report include, but are not limited to, statements regarding the following:
| ● | our business, prospects, and overall strategy; |
| ● | progress in the development of our Demonstration Plant (as defined below) and the timing of that progress; |
| ● | our ability to successfully complete the design review and any rework activities on the Demonstration Plant, and the timing and cost to complete any rework activities; |
| ● | planned or estimated expenses and capital expenditures, including the Demonstration Plant’s expected costs of commissioning, operation, decommissioning, and the sources of funds to pay for such costs; |
| ● | availability of funds and capital resources; |
| ● | our Demonstration Plant team’s ability to achieve the full amount of funding support from the Department of Energy (“DoE”) through the remainder of the Demonstration Plant project; |
| ● | the securing and timing of an amendment to the Cost Share Agreement (as defined below), if required, between the Company and General Atomics, whose affiliate Synchron is the Company’s majority shareholder; |
| ● | our ability to complete a potential novation of the Demonstration Plant funding agreement with the DoE and replacing General Atomics as the prime contractor to ensure the full DoE committed funding is realized (as described below); |
| ● | our ability to secure additional funding (in addition to the previously awarded or obtained funding) relating to the Demonstration Plant project or any further initiatives or advancements that may be undertaken relating to the Demonstration Plant; |
| ● | our ability to receive the remaining uncollected funds in connection with the Wyoming Energy Authority (the “WEA”) grant for the Demonstration Plant; |
| ● | our ability to operate the Demonstration Plant, including in a manner to meet the project objectives within our funding capacity and estimated timeline; |
| ● | our estimates regarding the source, quality, costs, and timing of materials, equipment, supplies and resources, including human resources, for the commissioning, operation, and decommissioning of the Demonstration Plant; |
| ● | the Sundance Gold Project remaining on hold for the foreseeable future and our ability to advance or monetize it in the future; |
| ● | our plans and strategies during and following the completion of operations of the Demonstration Plant, including the potential for further operation of the Demonstration Plant to meet additional objectives and advancement opportunities; |
| ● | our plans and strategies relating to the advancement of the Bear Lodge REE Project (as defined below), including the restart of the permitting and licensing process; |
| ● | our plans and strategies to secure further funding for our longer-term business plans, including the advancement of the Bear Lodge REE Project through permitting and licensing, and, if feasible, ultimate construction and operations of a commercial mine and plant for processing and separation of rare earth elements; |
| ● | the prospects and potential impact of governmental policies, directives, laws, and regulations; and |
| ● | our success in obtaining, and the timing for receipts of, necessary governmental permits and approvals for our business and projects. |
Forward-looking statements are based on our current expectations and assumptions that are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements in this Form 10-Q are more fully described within Part II, Item 1A, “Risk Factors” in this Quarterly Report and “Part I, Item 1A. Risk Factors” in our Form 10-K. Such risks are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
In addition, statements of belief and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us, as applicable, as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
Except as required by law, we disclaim any obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.We qualify all of the forward-looking statements contained in this Quarterly Report by the foregoing cautionary statements. We advise you to carefully review the reports and documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and with the Canadian securities regulatory authorities, particularly our Annual Report on Form 10-K for the year ended December 31, 2024. The reports and documents filed by us with the SEC are available at www.sec.gov and with the Canadian securities regulatory authorities under the Company’s profile at www.sedarplus.ca.
