Apr 19, 2012 – Vancouver, British Columbia – April 19th, 2012 – Today, Canada Rare Earths Inc. (“Canada Rare Earths” or “the Company”) (tsx.v:CJC) DE:YXEN +11.97% (otc-bb:CJCFF) announces the acquisition of two new Quebec based graphite projects located on the St-Laurent North Shore in Quebec, and that Jean Sebastien Lavallee P.Geo is expected to join the Board of Directors of the Company. These new acquisitions, coined the Champagne and Tetepisca North graphite projects respectively, significantly enhance the Company’s Quebec based graphite project portfolio.
The Champagne Graphite Property
The Champagne graphite property consists of one large contiguous block of 88 mineral claims totaling approximately 4,870 hectares located approximately 120 km north of Baie-Comeau, Quebec.
The Champagne graphite property was originally explored by Outokumpu Mines Inc. (“Outokumpu”) in 1998 for base metal mineralization. According to Outokumpu’s historical reports filed with the Ministere des Ressources Naturelles et de la Faune du Quebec, an advanced helicopter borne geophysical survey consisting of 2,600 kilometers of flight path in the region was performed at that time. The airborne survey revealed multiple electro-magnetic (EM) anomalies in the area, outside or coinciding with magnetic anomalies. In a 15 kilometer long trend across the property, the survey revealed multiple EM target anomalies and off-set structures, including several zones of parallel conductors each measuring as much as 3-5 kilometers long. This suggests an apparent strike length of EM conductors associated with known graphite occurrences of approximately 11 kilometers and the total of all EM structure length close to 20 kilometers long providing a large prospective area to explore for a graphite resource on the Champagne property.
This helicopter borne geophysical survey was followed by ground exploration on approximately half of the major conductors only. The program was abandoned midway when it was concluded that all anomalies visited were related to graphite mineralization and that the base metal sulphides of interest were nearly absent. This historical ground work also confirmed the presence of graphite on surface, coincident with at least several of these conductors. (See map on website http://www.canadarareearths.com/projects-champagne-graphite.php ). Four of the EM conductors have been identified as ‘strong’ and are considered as potentially pod style targets averaging in size between 250 meters by 500 meters to 1.8 kilometers by 250 meters, with moderate EM signatures seemingly connecting them along the length of this trend. Seen as these areas were also identified as hosting graphite mineralization they are early high priority targets for a summer drill program on the property.
Some of the graphite occurrences seem to be associated with the contact (shear zone) between the different geological units. The geology is consistent with the Central Metasedimentary Belt of the Grenville Province and includes quartzofeldspathic rocks, quartzite, biotite gneiss, marble and locally pegmatitic quartzofeldspathic rocks, and intrusive rock as anorthosite and gabbro.
Property logistics are excellent with nearby power and road access via the main lumber haul road which originates in Baie-Comeau and Labrieville leading to numerous tertiary/forest roads that transect the property.
Given the advanced historical pre-drilling exploration work on the Champagne property, and subject to confirmatory reconnaissance of the historical reporting, the project is near ready to be trenched and drilled. The Company has begun the process for camp and drill permitting and is reviewing historical data to plan a new graphite focused exploration campaign on the Champagne property as soon as possible. The campaign will consist of detailed reconnaissance sampling and mapping, trenching and an anticipated first phase of 3,000 meters of drilling to test mineralization along strike to an anticipated vertical depth of approximately 125 meters.
The Company cautions that neither it, nor the Qualified Persons named below have verified the quality and accuracy of the historic exploration results reported in this news release, and cautions readers not to rely upon them. The results were generated from sources believed to be reliable; however, they have not yet been confirmed.
Tetepisca North Property
The Tetepisca North property totals approximately 2,142 hectares, located in the general area of the southwest bank of the Manicouagan Reservoir, approximately 43 kilometres from the Manic V hydro-electric dam, ? 9 kilometres southwest of the Lac Gueret project of Cliffs Natural Resources Inc. (recently purchased by Mason Graphite) and 215 km from the Quebec North Shore deep sea port town of Baie-Comeau. Access is achieved via the 389 national road (Baie-Comeau-Labrador) and logging roads. The property covers the extension of regional conductor and magnetic anomalies over an area of approximately 7 kilometers long and 2 kilometers wide. The property is located along the multikilometric corridor of metasediments or sediments identified by the Ministry of Natural Resources of Quebec as the Proterozoic Nault formation and features excellent road access.
Regionally, the Montreal-based firm Mason Graphite and Cliffs Natural Resources Inc. recently concluded a $ 7.5 million transaction involving the Lac Gueret graphite property.
Meanwhile, St-Georges Platinum and Base Metals Ltd. recently announced that it has increased the size of its Tetepisca property after confirming the existence of surface grab samples that yielded results in the range of 50.9% to 58.1% of carbon graphite in the area. (note:grab samples are selective by nature and are unlikely to represent average grades on the property).
The Company is in the planning stage for an initial prospecting and mapping program expected to be followed by an EM survey of the area.
NEW APPOINTMENT
The Company is also pleased to announce that Mr. Jean Sebastien Lavallee P. Geo, one of the Optionors of the Champagne graphite property, is expected to join the Board of Directors of the Company upon TSX Venture Exchange acceptance of the Champagne Graphite property acquisition agreement.
Mr. Lavallee has been active in mining exploration since 1994. He is the vice president of Consul-Teck Exploration Inc., a consulting firm of Val-d’Or founded in 2003 that specializes in mining exploration in northern areas. Most of the firm’s mandates involve the generation and execution of projects in remote areas. Mr. Lavallee is also President & CEO of Critical Elements Corporation, a publicly listed company. Mr. Lavallee has acted as a geologist for many companies, including Uracan Resources Ltd., Agnico-Eagle Mines Ltd., Noranda Minerals Inc., Champion Minerals Inc., Matamec Explorations Inc., Argex Mining Inc., and others. Having been responsible for the planning and execution of many exploration programs in recent years, Mr. Lavallee has acquired solid experience in exploration project development.
ACQUISITION TERMS
Champagne graphite property
Canada Rare Earths has an option to earn a 100-per-cent interest in the Champagne graphite property from the vendors by making the following payments and issuing the following common shares to the vendors:
i) $60,000 on signing of the option agreement;
ii) $60,000 and 3,000,000 shares on TSX-V acceptance of this option agreement (the “Effective Date”);
iii) $150,000 on closing of project financing (maximum within 6 months from the Effective Date);
iv) 750,000 shares on that day which is 6 months from the Effective Date;
v) $45,000 and 750,000 shares on that day which is 12 months from the Effective Date;
vi) $45,000 and 750,000 shares on that day which is 18 months from the Effective Date; and
vii) $45,000 and 750,000 shares on that day which is 24 months from the Effective Date.
During the period which is 18 months from the effective date, Canada Rare Earth will complete a minimum of $500,000 of exploration on the Champagne graphite property, during the period which is month 18 to month 24 from the Effective Date, Canada Rare Earths will complete a minimum of $1,000,000 of exploration on the property and during the period which is month 24 to month 36 from Effective Date, Canada Rare Earths will complete a minimum of $1,500,000 of exploration on the property. The vendors will retain a 2-per-cent net smelter returns royalty on the property, 1% of which can be purchased by Canada Rare Earths for $1,000,000.
In addition, if the company files a National Instrument 43-101 compliant technical report that discloses a resource estimate with 200,000 tonnes or more of graphite content (at cut-off of 5%), the Company will pay to the Vendors cash consideration of $150,000 and issue 3,000,000 shares to the vendors. All payments are payable in equal proportions to the three Vendors.
Tetepisca North Property
Canada Rare Earths has an option to earn a 100-per-cent interest in the Tetepisca North Property from the vendor by making the following payments and issuing the following common shares to the vendor:
i) $25,000 and 250,000 shares on TSX-V acceptance of this agreement (the “Effective Date”); and
ii) 250,000 shares on the first anniversary of the initial share issuance.
The vendor will retain a 1.5-per-cent net milling royalty on the property, one-third (0.5%) of which can be purchased by Canada Rare Earths for $250,000.
