News that Ucore Rare Metals is proceeding to the next step in its process toward developing a mine at its Bokan Mountain/Dotson Ridge property on the southeast coast of Prince of Wales Island should be viewed positively — despite coming at a difficult time for the rare earth element mining sector.

This past week, Ucore announced that it’s requesting proposals from entities interested in conducting a bankable feasibility study of Ucore’s Bokan project.

Bankable feasibility studies give banks and other potential lenders and investors a detailed view of a potential project’s mechanics and prospects. A positive BFS can open doors to the financing needed to proceed further toward constructing mine.

In announcing the request for proposals, Ucore CEO Jim McKenzie allowed that the rare earth element sector is in a “market down cycle.”

This is true.

Prices for REEs as a group have dropped since 2011. Earlier this month, McKenzie told Seeking Alpha analyst Ben Kramer-Miller that he believes the price declines have resulted from the stockpiling of REEs that occurred after China, the current primary producer of REEs, was considering banning the export of REEs from China.

The other factor noted by McKenzie is continued weakness in the Chinese, European and U.S. economies that make the most use of products and processes that use REEs.

The result has been a drop in the share prices of mineral exploration companies like Ucore — and established producers like Molycorp — that are involved in rare earth elements. A look at the stock-price charts of Ucore and others is to realize the intestinal fortitude of whatever long-term investors there are in this sector.

Fortunately, and despite less-than-optimal access to operating capital, Ucore was able to conduct a summer exploration drilling project this past summer that could add to the estimates of types and amounts of the resources present at Bokan.

Ucore also has provided information about its research into the mineral separation process with University of Alaska Fairbanks and the State of Alaska, according to Kramer-Miller’s write-up of an interview with McKenzie, Ucore COO Ken Collison, and Vice President of Business Development Mark MacDonald.

Speaking of the State of Alaska, it is squarely in Ucore’s corner at this point.

The state Legislature earlier this year approved the potential for the Alaska Industrial Development and Export Authority to provide $145 million in financing for the Bokan project. That would come in handy, should the project reach the final stages of development.

That’s not a sure thing, but McKenzie is voicing optimism, as he believes his company will be able to take advantage of a future rise in REE prices.

The company’s move toward conducting the bankable feasibility study is evidence that it believes its long-term situation is positive.

That’s good news for southern Southeast Alaska, which stands to potentially benefit from a successful mining operation in this region.

The road ahead might be long, but even lengthy journeys are completed this way — one step at a time.

— Ketchikan Daily News,

Oct. 20