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CRITICAL RARE EARTH REFINING AND PROCESSING
CORPORATE OVERVIEW
December 2013
CEC Rare Earth Corp. Confidential 2
CONTENTS OVERVIEW
• Overview of Rare Earths and the market• Introduction to CEC Rare Earth Corp• The building of Rare Earth Refineries• Supply of Rare Earth Products
CEC Rare Earth Corp. Confidential 3
KEY MESSAGES• A significant gap exists for supply of Critical Rare Earth products and there is a race to
fill it – CEC Rare Earth has proven capabilities to build refineries for these products• The supply of these critical resources within the Western hemisphere will be highly
valued for re-establishing supply chains and industrial bases outside of China• A secure source of these strategic resources enables regional investment in related
industries and businesses• Rare earths contribute more to global climate change than any other factor – by
enabling clean technologies such as hybrid cars, alternative energies and cleaner gasoline and diesel.
• Contrary to typical commodities and metals (Gold, Silver, Copper) the largest value add activities in Rare Earth products is the refinery:
– Ore – $1– Concentrate - $5– Refined Rare Earth Products - $20 -$100
• A major Rare Earth facility for Critical Rare Earth products established within 3 years can be competitive with the largest RE companies globally in revenues & profits.
CEC Rare Earth Corp. Confidential 4
RARE EARTHS AND THE MARKETSources, applications, uses, demand and supply
CEC Rare Earth Corp. Confidential 5
WHAT ARE RARE EARTH ELEMENTS?
• 17 elements used for improved performance and quality• Found combined together in mineral deposits• Rare Earths are of little industrial value unless separated
Light Rare Earth Elements (LREE) Heavy Rare Earth Elements (HREE)
CEC Rare Earth Corp. Confidential 6
RARE EARTHS BACKGROUND
• Rare Earth mineral deposits are not rare
• Commercially viable Rare Earth mineral deposits are rare
• Rare Earths separation capability is extremely rare outside of China
• CEC Rare Earth delivers proven Critical Rare Earth separation capability outside China
CEC Rare Earth Corp. Confidential 7
Neodymium Praseodymium Dysprosium Terbium
Yttrium Europium Terbium
Neodymium Praseodymium Dysprosium Terbium
Neodymium Praseodymium Dysprosium Terbium
GREEN TECH APPLICATIONS
CEC Rare Earth Corp. Confidential 8
FOCUS ON THE CRITICAL REES
Heavies (HREEs)Dysprosium (Dy)Terbium (Tb)Europium (Eu)Yttrium (Y)
Lutetium (Lu)Gadolinium (Gd)Holmium (Ho)Erbium (Er)Thulium (Tm)Ytterbium (Yb)
Lights (LREEs)Neodymium (Nd)
Praseodymium (Pr) Cerium (Ce)Lanthanum (La)Samarium (Sm)
CEC Rare Earth plants and our partners will produce all of the Critical Rare Earth products.
GLOBAL SUPPLY SITUATION
CEC Rare Earth Corp. Confidential 9
Source: IMCOA
Surplus or Deficit of major Rare Earths
2010
2015
CEC Rare Earth Corp. Confidential 10
CEC RARE EARTH CORPAn introduction and overview
CEC Rare Earth Corp. Confidential 11
WHO IS CEC RARE EARTH CORPORATION?• CEC Rare Earth Corporation is based in Vancouver, Canada with a
strong management team and key advisors from China’s Rare Earth industry
• CEC Rare Earth team has significant experience in processing and supplying Rare Earths– Team members has many years of collective experience and have design
and built over 10 refineries inside and outside China
• CEC Rare Earth has two complementary business areas:1. Designing, Building and operating of Rare Earth Refineries outside of
China
2. Supply of Rare Earth Products to top level industries outside of China
CEC RARE EARTH’S KEY PEOPLE
Rojer Li (Managing Director)– 10 years experience in RE industry, extensive contacts in refining and international trading.– Li family business owns and operates the premier rare earth engineering and design company in China as well they
own, in whole or in part, four rare earth refineries inside and outside of China.
Bill Purcell (President & COO)– Extensive experience in the downstream oil industry.– Strong background in environmental management
Peter Shearing (SR VP – Sales & Business Development)– Broad international experience in the electronics and high-tech manufacturing industries. – 25+ years of materials, electrical, and process engineering background
Apolo Ohno (Director)Wide ranging international business experience with Fortune 500 companies; the most decorated US
Winter Olympian
Rod Jao (Director)
Global venture capital experience with a variety of industries including technology, manufacturing and telecommunications.
Tracy A Moore (Advisor)
Extensive corporate finance experience in 20 countries, and CEO of REC’s strategic partner, Canada Rare Earth, a public Canadian rare earth exploration company.
REC Confidential 12
Feb 2013
CEC Rare Earth Corp. Confidential 13
CHALLENGES & OPPORTUNITY
Global Rare Earth Supply and Demand Situation• Global industry depends on China’s refineries (>90%) for Rare Earth products
• Demand for Rare Earth materials in new clean technologies and advanced applications is growing and exceeding global output
• Prices reflect this supply gap and the lack of Western rare earth refining capability
• Non-China based companies demand new sources of Rare Earth supply outside of China to support their business and products
• Establishment of Rare Earth refineries requires very specialized and hard to obtain expertise and experience
The CEC Rare Earth Opportunity• Unique team with technical expertise in the design, build and operation of Rare Earth
separation plants
– experience not available from other engineering companies
• CEC Rare Earth’s advantage provides supply for its customers through highly valued off take agreements to deliver significant revenues and profits
CEC Rare Earth Corp. Confidential 14
BUILDING RARE EARTH REFINERIESCEC Rare Earth Corp unique capabilities and the advantages
CEC Rare Earth Corp. Confidential 15
“Finding rare earths are only a small part of the process of turning the ore into usable materials” Dr. Steven Leeb
“Mining is the easy bit: Separating rare earth elements is where the complexity comes in” Kidela Capital presentation
“Mining is — believe it or not — the absolute easiest thing we do. Once we pull it out of the ground, that’s when things get complicated,” Mark Smith, MolyCorp past CEO
CEC RARE EARTH ADVANTAGE
Turn Key Refinery Projects– Proven expertise, experience and IP in design, construction and
operations
– Lower project risks of design flaws, construction cost overruns, operating problems and delays getting to market.
CEC Rare Earth Corp. Confidential 16
VERTICAL INTEGRATION• Buyers’ Rare Earth needs are matched to mine deposit• Ingredients for a Joint Venture – mine, refiner, buyer• Attractive to investors: pre-sold high value output, efficient
refinery
Buyers
Refinery
Mine
Concentrate
Separated oxides & metals
• Specific element and quality specs• Need secure, reliable supply• Want reasonable, predictable prices
• Efficient design:• Reliable supply of consistent raw materials• Known and pre-sold end product specs
• Extends the value chain beyond concentrate
VALUE COMPARISONCEC Rare Earth
Turn-key Separation Plant• Fixed Price contract delivers a complete and
operating separation plant • Guaranteed startup success based on numerous
refinery startups• Proven ability to separate all Critical Rare Earth
Elements, production of specialty products, • Integrated process design and build team of
Rare Earth refinery experts • Operations training and support
Advantages with Turn-key• Fixed Cost• Proven ability to deliver quality
Rare Earth products• On time completion
Typical Engineering Project
• Estimated costs only for individual elements (design, build, operate etc.), based on little to no experience in REO separation
• Little if any experience in the startup and optimization of a REO separation plant
• Individual process design, build, startup, and operation teams with varying levels of RE knowledge and experience
12-06-09 Confidential: www.cecrareearthcorp.com 17
Engineering Project Risks• Late startup • Quality issues• Budget overruns
CEC Rare Earth Corp. Confidential 18
SUPPLY OF RARE EARTH PRODUCTSCEC Rare Earth Corp Supply Chain
CEC Rare Earth Corp. Confidential 19
CEC RARE EARTH’S CHINA EXPORT SOURCES
• CEC Rare Earth has 4 primary sources within China all who have been inspected and approved for the environmental requirements
• Access to all RE oxides, metals, and specialty compounds for domestic China requirements or exportation
• More than 2000 MT committed to CEC Rare Earth for export to its customers
CEC Rare Earth Corp. Confidential 20
PARTNER REFINERY
Mechanically complete & in final
permit approval process
• 2015 production start
• SE Asia: outside of China
• 3,000 MT Critical Rare Earth Products
CEC Rare Earth Corp. Confidential 21
LONGER TERM SUPPLY
CEC Rare Earth is securing future supply from new projects;• Currently in planning, design and permit stage for a full spectrum Rare Earth plant
in SE Asia
• Additional projects agreement for a 2nd SE Asia refinery; combined output exceeds 5000 MT
• Strategic alliance with Canada Rare Earth for two more major proposed refineries.
• Expect to build a total of 5 refineries with total capacity exceeding 15,000 MT
CEC Rare Earth Corp. Confidential 22
EXECUTIVE SUMMARY• CEC Rare Earth Corporation’s business:
– Building Turn-key Rare Earth refineries
– Supply of all Rare Earth products
• Over 5000 MT of Rare Earth supply available for top tier customers including supply from non-China based refineries
• CEC Rare Earth has the proven capability for processing Critical Rare Earth products outside of China
• CEC Rare Earth is building a full spectrum Rare Earth refinery outside China and an opportunity to participate currently exists
CEC Rare Earth Corp. Confidential 23
THANK YOU