Rare Element Resources (REEMF) 10-Q8 Nov 232023 Q3 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 06, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity File Number	001-34852
Entity Registrant Name	Rare Element Resources Ltd
Entity Incorporation, State or Country Code	A1
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	P.O. Box 271049
Entity Address, City or Town	Littleton
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80127
City Area Code	720
Local Phone Number	278-2460
Title of 12(b) Security	None
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		212,858,451
Entity Central Index Key	0001419806
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 6,593,000	$ 15,523,000
Due from related party (Note 4)	368,000	174,000
Prepaid to related party (Note 4)	3,243,000	2,142,000
Prepaid expenses and other	263,000	140,000
Total Current Assets	10,467,000	17,979,000
Equipment, net	30,000	15,000
Restricted cash	183,000
Right of use asset (Note 5)	205,000	273,000
Investment in land (Note 7)	600,000	600,000
Total Assets	11,485,000	18,867,000
CURRENT LIABILITIES
Accounts payable and accrued liabilities	221,000	227,000
Lease liability, current (Note 5)	128,000	124,000
Total Current Liabilities	349,000	351,000
Reclamation obligation	182,000	132,000
Lease liability, long-term (Note 5)	101,000	168,000
Repurchase option (Note 7)	1,493,000	1,281,000
Other long-term liabilities	92,000
Total Liabilities	2,217,000	1,932,000
Commitments and Contingencies (Note 7)
SHAREHOLDERS' EQUITY:
Common shares, no par value - unlimited shares authorized; shares outstanding at September 30, 2023 and December 31, 2022 of 212,808,451 and 212,515,951, respectively	136,929,000	136,906,000
Additional paid in capital	29,075,000	28,673,000
Accumulated deficit	(156,736,000)	(148,644,000)
Total Shareholders' Equity	9,268,000	16,935,000
Total Liabilities and Shareholders' Equity	$ 11,485,000	$ 18,867,000

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Common shares, par value	$ 0	$ 0
Common shares, authorized	Unlimited	Unlimited
Common shares, outstanding	212,808,451	212,515,951

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Exploration and evaluation (See Note 4 for related party costs)	$ (2,508)	$ (770)	$ (6,183)	$ (2,267)
Corporate administration	(646)	(902)	(2,001)	(4,041)
Depreciation and amortization	(25)	(25)	(76)	(75)
Total operating expenses	(3,179)	(1,697)	(8,260)	(6,383)
Non-operating income (expense):
Interest income	130	78	391	100
Accretion expense	(70)	(71)	(212)	(213)
Interest expense	(7)	(23)	(23)	(31)
Gain on sale of equipment			12
Other income		8
Total non-operating income (expense)	53	(8)	168	(144)
Net loss	$ (3,126)	$ (1,705)	$ (8,092)	$ (6,527)
LOSS PER SHARE - BASIC (in dollars per share)	$ (0.01)	$ (0.01)	$ (0.04)	$ (0.03)
LOSS PER SHARE - DILUTED (in dollars per share)	$ (0.01)	$ (0.01)	$ (0.04)	$ (0.03)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC	212,756,761	212,466,889	212,627,591	212,466,889
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, DILUTED	212,756,761	212,466,889	212,627,591	212,466,889

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (8,092)	$ (6,527)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1	1
Accretion expense	212	213
Right of use asset amortization	75	74
Lease liability	(70)	(62)
Stock-based compensation	402	2,480
Reclamation obligation	50
Other	82	(25)
Total adjustments to reconcile net loss to net cash used in operating activities	(7,340)	(3,846)
Changes in working capital:
Due from related party	(194)	(21)
Prepaid expenses and other	(1,227)	(1,622)
Accounts payable and accrued liabilities	(5)	(653)
Net cash used in operating activities	(8,766)	(6,142)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of equipment	12
Purchase of equipment	(16)
Net cash used in investing activities	(4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock option exercise	23
Net cash provided by financing activities	23
Net change in cash, cash equivalents and restricted cash	(8,747)	(6,142)
Cash, cash equivalents and restricted cash- beginning of the period	15,523	24,947
Cash, cash equivalents and restricted cash- end of the period	$ 6,776	$ 18,805

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Reconciliation of amounts in the Balance Sheet to amounts in the Cash Flow Statement
Cash and cash equivalents	$ 6,593,000	$ 15,523,000	$ 18,805,000
Restricted cash, long-term	183,000
Total of cash, cash equivalents and restricted cash - end of period	$ 6,776,000	$ 15,523,000	$ 18,805,000	$ 24,947,000

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2021	212,466,889
Beginning balance at Dec. 31, 2021	$ 136,906	$ 25,753	$ (139,218)	$ 23,441
Stock-based compensation		2,480		2,480
Net loss			(6,527)	(6,527)
Ending balance, shares at Sep. 30, 2022	212,466,889
Ending balance at Sep. 30, 2022	$ 136,906	28,233	(145,745)	19,394
Beginning balance, shares at Jun. 30, 2022	212,466,889
Beginning balance at Jun. 30, 2022	$ 136,906	27,781	(144,040)	20,647
Stock-based compensation		452		452
Net loss			(1,705)	(1,705)
Ending balance, shares at Sep. 30, 2022	212,466,889
Ending balance at Sep. 30, 2022	$ 136,906	28,233	(145,745)	19,394
Beginning balance, shares at Dec. 31, 2022	212,515,951
Beginning balance at Dec. 31, 2022	$ 136,906	28,673	(148,644)	$ 16,935
Stock option exercise, shares	295,000			330,000
Stock option exercise, amount	$ 23			$ 23
Stock-based compensation		402		$ 402
Common shares cancelled	(2,500)			0
Net loss			(8,092)	$ (8,092)
Ending balance, shares at Sep. 30, 2023	212,808,451
Ending balance at Sep. 30, 2023	$ 136,929	29,075	(156,736)	9,268
Beginning balance, shares at Jun. 30, 2023	212,613,451
Beginning balance at Jun. 30, 2023	$ 136,913	29,004	(153,610)	12,307
Stock option exercise, shares	195,000
Stock option exercise, amount	$ 16			16
Stock-based compensation		71		71
Net loss			(3,126)	(3,126)
Ending balance, shares at Sep. 30, 2023	212,808,451
Ending balance at Sep. 30, 2023	$ 136,929	$ 29,075	$ (156,736)	$ 9,268

NATURE OF OPERATIONS

NATURE OF OPERATIONS	9 Months Ended
NATURE OF OPERATIONS	Sep. 30, 2023
NATURE OF OPERATIONS
NATURE OF OPERATIONS	1. NATURE OF OPERATIONS Rare Element Resources Ltd. (“we,” “us,” “Rare Element” or the “Company”) was incorporated under the laws of the Province of British Columbia, Canada, on June 3, 1999. Rare Element holds a 100% interest in the Bear Lodge rare earth elements project (the “Bear Lodge REE Project”) located near the town of Sundance in northeast Wyoming. The Bear Lodge REE Project consists of several large, disseminated rare earth elements (“REE”) deposits that comprise one of the highest-grade REE deposits identified in North America. In addition, to neodymium-praseodymium (“Nd/Pr”), the Bear Lodge REE Project has a favorable distribution of a number of other critical rare earth elements. The Company also holds a 100% interest in the Sundance Gold Project that is adjacent to the Bear Lodge REE Project and contains a historical inferred mineral resource primarily composed of three gold targets within the area of the Bear Lodge property. Given the Company’s longstanding focus on the Bear Lodge REE Project and the current interest in REE, the advancement of the Sundance Gold Project has been on hold since 2011 and will likely remain so for the foreseeable future. The Company is currently focused on the advancement of a rare earth processing and separation demonstration-scale plant (the “Demonstration Plant”) project. In January 2021, a consortium of companies, of which the Company is a part, received notice from the Department of Energy (“DoE”) that the consortium had been selected for negotiation of a potential financial award for the engineering, construction and operation of a rare earth separation and processing Demonstration Plant. The consortium of companies is led by General Atomics, an affiliate of Synchron, the Company’s majority shareholder, and includes certain of General Atomics’ affiliates, and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. A formal proposal was submitted by the consortium in response to a published Funding Opportunity Announcement in mid-2020 for the construction and operation of a rare earth separation and processing demonstration plant utilizing proprietary technology to produce commercial-grade products. The DoE finalized the award, and an agreement was executed by the DoE’s grants/agreement officer on September 27, 2021, with an effective date of October 1, 2021. The Company, as a subrecipient of the award, along with the other consortium members, commenced work on the planning and design of the Demonstration Plant project in November 2021, with the Company’s contractual arrangement with General Atomics finalized in December 2021. The DoE funding is in the amount of $21,900 and represents approximately one To address the Company’s funding needs, the Company completed, in December 2021, a rights offering for gross proceeds of approximately $25,400. The Company is using the net proceeds from the rights offering primarily for the permitting, licensing, engineering, and planned construction and operation of the Demonstration Plant near the Company’s Bear Lodge REE Project. The previously noted $21,900 financial award from the DoE was expected to fund approximately one During 2022 and through the nine months ended September 30, 2023, the Company continued its work on the Demonstration Plant project. This work is expected to continue over the remainder of 2023 and through the Demonstration Plant project’s expected completion date in the early part of 2025. In December 2022, the Demonstration Plant achieved its final engineering design milestone marking the completion of the DoE’s first go/no-go decision point. The completion of this milestone was a gating event for the DoE’s continued funding as provided for in the 2021 award grant. Future gating milestones include the DoE’s National Environmental Policy Act of 1969 (NEPA) review, which is expected in the fourth quarter of 2023, and the approval to proceed with the Demonstration Plant’s construction, which is anticipated shortly thereafter. If such approval is received, construction will commence thereafter and is expected to be completed in mid-2024. Operations to process and separate the REE from the stockpiled sample materials are expected to follow the completion of the Demonstration Plant’s construction for an additional eight During 2023, the GA-led consortium has seen increases in the Demonstration Plant project costs, including expected final equipment costs, due to, among other factors, inflation. Accordingly, the project team has commenced discussions with the DoE and other government agencies regarding further cost-sharing opportunities to offset the increase in the anticipated project budget and further project objectives. At this time, the Company has sufficient funding to complete construction of the Demonstration Plant; however, even with the completion of the 2021 rights offering and expected receipt of the WEA grant monies, the Company may not have sufficient funds to operate the Demonstration Plant for a sufficient period to obtain the information to support a commercialization decision. Further, the Company does not have sufficient funds to progress other activities, including with respect to (i) any potential funds for continuation of the Demonstration Plant’s operation to achieve further objectives beyond the current program objectives; and (ii) funds for any feasibility studies, permitting, licensing, development, and construction related to the Bear Lodge REE Project. Therefore, the achievement of these activities will be dependent upon the receipt of additional funds through financings, off-take agreements, joint ventures, strategic transactions, financial awards, or grants. We plan to seek additional funding no later than the end of the first quarter of 2024; however, there can be no assurance that the Company will be successful in completing a financing. Ultimately, in the event the Company cannot secure additional financial resources, or complete a strategic transaction in a timely manner, the Company may need to curtail or suspend its operational plans regarding the Demonstration Plant or other initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment. The Company has incurred losses since its inception, and further losses are anticipated in the development of its business. As of September 30, 2023, the Company had cash and cash equivalents of $6,593 . On a comparative basis, we consumed cash of $8,766 during the nine months ended September 30, 2023, of which approximately $7,000 was used for the payment of costs associated with the Demonstration Plant project, while the remainder was used for the payment of the Company’s general and administrative expenses and other ongoing costs of sustaining its properties and mining claims.

BASIS OF ACCOUNTING AND PRESENT

BASIS OF ACCOUNTING AND PRESENTATION	9 Months Ended
BASIS OF ACCOUNTING AND PRESENTATION	Sep. 30, 2023
BASIS OF ACCOUNTING AND PRESENTATION.
BASIS OF ACCOUNTING AND PRESENTATION	2. BASIS OF ACCOUNTING AND PRESENTATION In accordance with U.S. GAAP for interim financial statements, these unaudited condensed consolidated financial statements do not include certain information and note disclosures that are normally included in annual financial statements prepared in conformity with U.S. GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of December 31, 2022, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal, recurring nature) necessary to present fairly in all material respects the Company’s financial position as of September 30, 2023, and the results of its operations and cash flows for the three and nine months ended September 30, 2023 and 2022 in conformity with U.S. GAAP on a going concern basis. These interim results of operations for the nine months ended September 30, 2023 may not be indicative of the results that will be realized for the full year ending December 31, 2023. Restricted Cash The Company periodically maintains cash deposits that are held and earmarked for a specific purpose. At September 30, 2023, the Company had $183 in restricted cash for amounts held by a third party as security for a surety bond for our Demonstration Plant.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	9 Months Ended
FAIR VALUE OF FINANCIAL INSTRUMENTS	Sep. 30, 2023
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS	3. FAIR VALUE OF FINANCIAL INSTRUMENTS U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): ● Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. ● Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of September 30, 2023 and December 31, 2022 are presented in the following table: Fair value at September 30, 2023 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 6,368 $ 6,368 $ — $ — Fair value at December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 5,216 $ 5,216 $ — $ — U.S. Treasury bills 9,961 9,961 — — Money market funds and U.S. Treasury bills are valued at cost, which approximates fair value. These amounts are included on the balance sheet in cash and cash equivalents at September 30, 2023 and December 31, 2022.

RELATED PARTY

RELATED PARTY	9 Months Ended
RELATED PARTY	Sep. 30, 2023
RELATED PARTY
RELATED PARTY	4. RELATED PARTY Cost Share Agreement with General Atomics In January 2021, a consortium of companies, of which the Company is a part, received notice from the DoE that the consortium had been selected for negotiation of a potential financial award for the engineering, construction, and operation of the Demonstration Plant. The consortium of companies is led by General Atomics, an affiliate of Synchron (the Company’s majority shareholder), and includes certain of General Atomics’ affiliates, and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. A formal proposal was submitted by the consortium in response to a published Funding Opportunity Announcement in mid-2020 for the construction and operation of the Demonstration Plant utilizing proprietary technology to produce commercial-grade products. The DoE’s share of the Demonstration Plant project funding is $21,900 and represents approximately one that was awarded by the DoE for the Demonstration Plant. The Cooperative Agreement provides that up to approximately $43,800 in allowable costs for the Demonstration Plant would be funded on a cost-share basis, 50% by the DoE and 50% by a non-federal entity. On November 30, 2021, the Company and General Atomics entered into a Cost Share Funding Assumption Agreement (the “Cost Share Agreement”) pursuant to which the Company agreed to assume and pay for certain costs incurred by, and on behalf of, General Atomics and the consortium of companies for the design, construction, and operation of the Demonstration Plant near the Bear Lodge REE Project in Upton, Wyoming. Pursuant to the terms of the Cost Share Agreement, the Company has made payments to General Atomics, as leader of the consortium, totaling $13,700 through September 30, 2023, for Company-assumed costs for the Demonstration Plant, with the number and amount of additional payments to be subject to the mutual written agreement of the parties. The term of the Cost Share Agreement will continue until the date of completion of the Demonstration Plant project, unless terminated earlier by either party. Either party may terminate the Cost Share Agreement immediately upon written notice to the other party if any of the following events occurs: (a) the Cooperative Agreement is terminated for any reason prior to the completion of the Demonstration Plant project; (b) the other party commits a material breach of its obligations under the Cost Share Agreement and fails to cure such breach within 30 days; or (c) the other party makes an assignment for the benefit of its creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, or commences any insolvency or bankruptcy proceedings. Upon any early termination of the Cost Share Agreement, the Company must pay for all costs incurred by or on behalf of General Atomics to wind down the Demonstration Plant project other than any allowable costs for such wind-down paid for by the DoE. The following table summarizes transactions under the Cost Share Agreement during the nine months ended September 30, 2023: Balance of funds paid under the Cost Share Agreement at December 31, 2022 $ 6,700 Funds transferred to General Atomics during the nine months ended September 30, 2023 7,000 Company's share of Demonstration Plant project costs incurred through September 30, 2023 (10,457) Balance of funds remaining on deposit as a prepaid expense with General Atomics at September 30, 2023 $ 3,243 The following table summarizes related party receivables due from General Atomics for reimbursable costs incurred by the Company under the Cost Share Agreement during the nine months ended September 30, 2023: Balance of receivables due from General Atomics at December 31, 2022 $ 174 Reimbursable costs incurred by the Company during the nine months ended September 30, 2023 999 Reimbursements received from General Atomics during the nine months ended September 30, 2023 (805) Balance of receivables due from General Atomics at September 30, 2023 $ 368 In October 2023, the Company received $282 from General Atomics for amounts owing under the Cost Share Agreement at September 30, 2023.

LEASES

LEASES	9 Months Ended
LEASES	Sep. 30, 2023
LEASES
LEASES	5. LEASES The Company accounts for leases in accordance with ASC 842 – Leases. In considering the lease asset value, the Company considers fixed or variable payment terms, prepayments, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. Effective September 21, 2021, the Company entered into a lease agreement for real property, including land and buildings in Upton, Wyoming for the Demonstration Plant. The lease is a 12-month Total future lease payments as of September 30, 2023 are as follows: Remainder of 2023 $ 32 2024 128 2025 96 Total lease payments 256 Less interest (27) Present value of lease payments $ 229 For the nine months ended September 30, 2023, $70 was included in operating cash flows for amounts paid for operating leases. As of September 30, 2023 the weighted average lease term for the Company’s one operating lease was 2.0 years (including renewal options) and the weighted average discount rate was estimated at 12%.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	9 Months Ended
SHAREHOLDERS' EQUITY	Sep. 30, 2023
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY	6. SHAREHOLDERS’ EQUITY Stock-based compensation As of September 30, 2023, the Company had 3,580,000 issued and outstanding stock options that were issued under the 10% Rolling Stock Option Plan, as amended and restated (the “2011 Plan”) and 1,270,000 issued and outstanding stock options that were issued under its 2022 Equity Incentive Plan (the “2022 Plan”). The 2011 Plan was replaced in 2022 by the 2022 Plan and, as such, no additional stock options can be granted under the 2011 Plan. Under the 2011 Plan, our Board of Directors could from time-to-time grant stock options to eligible directors, officers, employees, and consultants. The maximum term of any stock option grant under the 2011 Plan was 10 years. Under the 2022 Plan, as approved by our shareholders at the annual meeting of shareholders on August 23, 2022, our Board of Directors is authorized to grant stock options, stock appreciation rights, restricted stock units, performance stock units and other cash and share-based awards to eligible directors, officers, employees, or consultants up to a maximum of 17,236,689 common shares. The maximum term of any grant under the 2022 Plan is 10 years. The Company estimates the fair value of its stock option grants using the Black-Scholes option valuation model and the closing price of our common shares on the business day prior to the grant date. The significant assumptions used to estimate the fair value of the 1,020,000 and 1,830,000 stock options awards granted during the nine months ended September 30, 2023 and 2022, respectively, were as follows: Nine Months Ended September 30, 2023 2022 Risk-free interest rate 1.54 % 1.71 % Expected volatility 123 % 135-144 % Expected dividend yield Nil Nil Expected term in years 8 8 The following table summarizes our stock option activity for each of the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 Weighted Weighted Average Average Number of Stock Exercise Number of Stock Exercise Options Price Options Price Outstanding, beginning of period 4,160,000 $ 1.26 2,180,000 $ 1.18 Granted 1,020,000 $ 0.38 1,830,000 $ 1.40 Exercised (330,000) $ 0.07 — $ — Outstanding, end of period 4,850,000 $ 1.15 4,010,000 $ 1.28 Exercisable, end of period 4,006,250 $ 1.29 2,605,000 $ 1.08 Non-vested, end of period 843,750 $ 0.48 1,405,000 $ 1.65 The 330,000 options exercised during the nine months ended September 30, 2023, resulted in the issuance of 295,000 common shares on a net settlement basis. The following table summarizes the intrinsic value and weighted average remaining life for stock options as of September 30, 2023: Weighted Average Remaining As of September 30, 2023: Intrinsic Value Life (Years) Stock options outstanding $ 204 7.1 Stock options exercisable $ 138 6.7 Stock options non-vested $ 66 9.1 Stock-based compensation expense is included in corporate administration expenses within the Company’s interim condensed consolidated statements of operations. For the three months ended September 30, 2023 and 2022, the Company recognized compensation expense related to stock option awards of $71 and $452, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized compensation expense related to stock option awards of $402 and $2,480, respectively. As of September 30, 2023, there was approximately $127 of total unrecognized compensation cost related to the 843,750 unvested stock options that is expected to be recognized over a weighted-average remaining vesting period of approximately one The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2023, was $0.35.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES Our commitments and contingencies include the following items: Potential environmental contingency The Company’s exploration and development activities and its planned Demonstration Plant are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are regularly changing and generally have become more restrictive. The Company conducts its operations to protect public health and the environment and believes that its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. The ultimate amount of reclamation and other future site-restoration costs to be incurred for existing mining interests is uncertain. Contract commitment – related party Pursuant to the Cost Share Agreement between the Company and General Atomics and as discussed more fully in Note 4, the Company has agreed to assume and pay for approximately one Asset purchase agreement On October 25, 2021, the Company and Whitelaw Creek LLC, a Wyoming limited liability company (“Whitelaw Creek”), entered into an amendment (the “Amendment”) to the previously announced asset purchase agreement dated October 20, 2016 between the Company and Whitelaw Creek (the “APA”). The Amendment modified certain provisions of the APA related to the terms and conditions of the Company’s option to repurchase (the “Repurchase Option”) approximately 640 acres of non-core real property located in Crook County, Wyoming, that is under consideration for a stockpile facility for the Bear Lodge REE Project. Pursuant to and subject to the terms of the Amendment, among other things, the term of the Repurchase Option (which was to expire on October 26, 2021) was extended for up to three Wyoming Energy Authority grant In June 2023, the Company, and the Wyoming Energy Authority (the “WEA”) entered into a Funding Agreement (the “Funding Agreement”) pursuant to which the WEA agreed to fund, subject to certain conditions, a $4,400 grant to the Company, the proceeds of which are to be used for the Demonstration Plant. Pursuant to the Funding Agreement, the grant will be paid upon the WEA’s receipt of invoices from the Company detailing its actual expenses relating to the Demonstration Plant (half of which funds will be allocated to two milestone periods during the development process), minus a 10% (or $440) retainer, the payment of which is conditioned upon the WEA’s receipt following the commencement of the Demonstration Plant’s operations of an invoice and the Company’s final executive summary report in a form to be approved by the WEA. Pursuant to the Funding Agreement, the funding for the Demonstration Plant will be provided to the WEA from the Energy Resources Council (the “ERC”) and is further conditioned upon the availability of government funds that are appropriated or allocated for the payment of the grant and which may be limited for any reason, including congressional, legislative, gubernatorial, or administration action. The Funding Agreement will terminate when the funding has been fully disbursed, but no later than December 31, 2025, unless terminated sooner by either party in accordance with the terms of the Funding Agreement. The Funding Agreement may be terminated by either party if the WEA does not receive the requested funding from the ERC, if the grant funds are not allocated or available for the continued performance of the Funding Agreement, or by the WEA immediately for cause if the Company fails to perform in accordance with the terms of the Funding Agreement. As of September 30, 2023, no funds had been received by the Company under the WEA grant, and no amounts related to the grant have been included in the Company’s financial statements. Any future recognition of this grant in the Company’s financial statements will occur with the achievement of the grant’s milestones.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2023
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	8. SUBSEQUENT EVENTS None.

BASIS OF ACCOUNTING AND PRESE_2

BASIS OF ACCOUNTING AND PRESENTATION (Policies)	9 Months Ended
BASIS OF ACCOUNTING AND PRESENTATION (Policies)	Sep. 30, 2023
BASIS OF ACCOUNTING AND PRESENTATION
Restricted Cash	Restricted Cash The Company periodically maintains cash deposits that are held and earmarked for a specific purpose. At September 30, 2023, the Company had $183 in restricted cash for amounts held by a third party as security for a surety bond for our Demonstration Plant.

FAIR VALUE OF FINANCIAL INSTR_2

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	9 Months Ended
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	Sep. 30, 2023
BASIS OF ACCOUNTING AND PRESENTATION
Schedule of fair value of financial assets and liabilities on a recurring basis	Fair value at September 30, 2023 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 6,368 $ 6,368 $ — $ — Fair value at December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 5,216 $ 5,216 $ — $ — U.S. Treasury bills 9,961 9,961 — —

RELATED PARTY (Tables)

RELATED PARTY (Tables)	9 Months Ended
RELATED PARTY (Tables)	Sep. 30, 2023
RELATED PARTY
Schedule of related party transactions	Balance of funds paid under the Cost Share Agreement at December 31, 2022 $ 6,700 Funds transferred to General Atomics during the nine months ended September 30, 2023 7,000 Company's share of Demonstration Plant project costs incurred through September 30, 2023 (10,457) Balance of funds remaining on deposit as a prepaid expense with General Atomics at September 30, 2023 $ 3,243
Schedule of related party receivables	Balance of receivables due from General Atomics at December 31, 2022 $ 174 Reimbursable costs incurred by the Company during the nine months ended September 30, 2023 999 Reimbursements received from General Atomics during the nine months ended September 30, 2023 (805) Balance of receivables due from General Atomics at September 30, 2023 $ 368

LEASES (Tables)

LEASES (Tables)	9 Months Ended
LEASES (Tables)	Sep. 30, 2023
LEASES
Schedule of total future minimum lease payments	Remainder of 2023 $ 32 2024 128 2025 96 Total lease payments 256 Less interest (27) Present value of lease payments $ 229

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	9 Months Ended
SHAREHOLDERS' EQUITY (Tables)	Sep. 30, 2023
SHAREHOLDERS' EQUITY
Schedule of significant assumptions used to estimate fair value	Nine Months Ended September 30, 2023 2022 Risk-free interest rate 1.54 % 1.71 % Expected volatility 123 % 135-144 % Expected dividend yield Nil Nil Expected term in years 8 8
Schedule of stock option activity	Nine Months Ended September 30, 2023 2022 Weighted Weighted Average Average Number of Stock Exercise Number of Stock Exercise Options Price Options Price Outstanding, beginning of period 4,160,000 $ 1.26 2,180,000 $ 1.18 Granted 1,020,000 $ 0.38 1,830,000 $ 1.40 Exercised (330,000) $ 0.07 — $ — Outstanding, end of period 4,850,000 $ 1.15 4,010,000 $ 1.28 Exercisable, end of period 4,006,250 $ 1.29 2,605,000 $ 1.08 Non-vested, end of period 843,750 $ 0.48 1,405,000 $ 1.65
Schedule of intrinsic value and weighted average remaining life for stock options	Weighted Average Remaining As of September 30, 2023: Intrinsic Value Life (Years) Stock options outstanding $ 204 7.1 Stock options exercisable $ 138 6.7 Stock options non-vested $ 66 9.1

NATURE OF OPERATIONS (Details)

NATURE OF OPERATIONS (Details) $ in Thousands	9 Months Ended
NATURE OF OPERATIONS (Details) $ in Thousands	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Oct. 01, 2021 USD ($)
Nature of Operations
Amount of potential DoE funding					$ 21,900
Percentage of total estimated cost for the project covered by DoE funding	50%				50%
Rights offering authorized amount				$ 25,400
Amount of initial estimate for the Demonstration Plant					$ 43,800
Cash and cash equivalents	$ 6,593	$ 18,805	$ 15,523
Cash used in operations	8,766	$ 6,142
Payments for demonstration plant project costs	7,000
Wyoming Energy Authority
Nature of Operations
Grants Receivable	$ 0				$ 4,400
Minimum
Nature of Operations
Additional period for operation processes from samples	8 months
Maximum
Nature of Operations
Additional period for operation processes from samples	10 months
Sundance Gold Project
Nature of Operations
Ownership interest (as a percent)	100%
Number of gold targets \| item	3
Bear Lodge REE Project
Nature of Operations
Ownership interest (as a percent)	100%

BASIS OF ACCOUNTING AND PRESE_3

BASIS OF ACCOUNTING AND PRESENTATION (Details)	Sep. 30, 2023 USD ($)
BASIS OF ACCOUNTING AND PRESENTATION
Restricted cash	$ 183,000

FAIR VALUE OF FINANCIAL INSTR_3

FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Money market funds
Assets
Assets fair value	$ 6,368	$ 5,216
U.S. Treasury bills
Assets
Assets fair value		9,961
Level 1 \| Money market funds
Assets
Assets fair value	$ 6,368	5,216
Level 1 \| U.S. Treasury bills
Assets
Assets fair value		$ 9,961

RELATED PARTY (Details)

RELATED PARTY (Details) - USD ($) $ in Thousands	Oct. 01, 2021	Sep. 30, 2023
Related Party
Amount of potential DoE funding	$ 21,900
Percentage of total estimated cost for the project covered by DoE funding	50%	50%
Allowable costs for planned demonstration funded on cost share basis	$ 43,800
Percentage of total cost of the demonstration plant funded by DoE	50%
Percentage of total cost of the demonstration plant funded by non federal entity	50%
General Atomics
Related Party
Commitment Amount		$ 13,700

RELATED PARTY - Schedule of tra

RELATED PARTY - Schedule of transactions - General Atomics (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
RELATED PARTY
Balance of funds paid under the Cost Share Agreement at beginning of year	$ 6,700
Funds transferred to General Atomics during the year	7,000
Company's share of Demonstration Plant project costs during the year	(10,457)
Balance of funds remaining on deposit as a prepaid expense with General Atomics at end of year	$ 3,243

RELATED PARTY - Schedule of Rel

RELATED PARTY - Schedule of Related Party Receivables - General Atomics (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Oct. 31, 2023	Sep. 30, 2023
Related Party
Beginning balance of receivables due	$ 368	$ 174
Reimbursable costs incurred by the Company during the period		999
Reimbursements received from General Atomics during the period		(805)
Ending balance of receivables due		$ 368
General Atomics
Related Party
Reimbursements received from General Atomics during the period	$ 282

LEASES - (Details)

LEASES - (Details) $ in Thousands	9 Months Ended
LEASES - (Details) $ in Thousands	Sep. 30, 2023 USD ($)
LEASES
Option to extend	true
Term of contract	12 months
Operating lease payments	$ 70
Weighted average lease term	2 years
Weighted average discount rate	12%

LEASES - Lease Payments (Detail

LEASES - Lease Payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Lease payments
Remainder of 2023	$ 32
2024	128
2025	96
Total lease payments	256
Less interest	(27)
Present value of lease payments	$ 229

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding	4,850,000	4,010,000	4,850,000	4,010,000	4,160,000	2,180,000
Option granted			1,020,000	1,830,000
Compensation expense for stock option awards	$ 71	$ 452	$ 402	$ 2,480
Unrecognized compensation cost	$ 127		$ 127
Unvested stock options	843,750	1,405,000	843,750	1,405,000
Unrecognized compensation cost period of recognition			1 year
Intrinsic Value of Stock options non-vested	$ 66		$ 66
Weighted average grant-date fair value of options granted (in dollars per share)			$ 0.35
Rights offering authorized amount						$ 25,400
Equity Incentive Plan 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock option			10 years
Shares issued			1,270,000
Maximum share based awards	17,236,689		17,236,689
10% Rolling Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock option			10 years
Options outstanding	3,580,000		3,580,000
Option granted			0
Percentage of Vesting On Rolling Stock			10%

SHAREHOLDERS' EQUITY - Fair val

SHAREHOLDERS' EQUITY - Fair value assumptions (Details)	9 Months Ended
SHAREHOLDERS' EQUITY - Fair value assumptions (Details)	Sep. 30, 2023	Sep. 30, 2022
Risk-free interest rate	1.54%	1.71%
Expected volatility	123%
Expected dividend yield
Expected term in years	8 years	8 years
Minimum
Expected volatility		135%
Maximum
Expected volatility		144%

SHAREHOLDERS' EQUITY - Stock op

SHAREHOLDERS' EQUITY - Stock option activity (Details)	9 Months Ended
SHAREHOLDERS' EQUITY - Stock option activity (Details)	Sep. 30, 2023 $ / shares shares	Sep. 30, 2022 $ / shares shares
Number of Stock Options
Outstanding, beginning of period	4,160,000	2,180,000
Granted	1,020,000	1,830,000
Exercised	(330,000)
Outstanding, end of period	4,850,000	4,010,000
Exercisable, end of period	4,006,250	2,605,000
Non-vested, end of period	843,750	1,405,000
Common shares issued on a net settlement basis	295,000
Weighted Average Exercise Price
Outstanding, beginning of period (in dollars per share) \| $ / shares	$ 1.26	$ 1.18
Granted (in dollars per share) \| $ / shares	0.38	1.40
Exercised (in dollars per share) \| $ / shares	0.07
Outstanding, end of period (in dollars per share) \| $ / shares	1.15	1.28
Exercisable, end of period (in dollars per share) \| $ / shares	1.29	1.08
Non-vested, end of period (in dollars per share) \| $ / shares	$ 0.48	$ 1.65

SHAREHOLDERS' EQUITY - Intrinsi

SHAREHOLDERS' EQUITY - Intrinsic value and weighted average remaining life for stock (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
SHAREHOLDERS' EQUITY
Intrinsic Value of Stock options outstanding	$ 204
Intrinsic Value of Stock options exercisable	138
Intrinsic Value of Stock options non-vested	$ 66
Weighted Average Remaining life (Years) of Stock options outstanding	7 years 1 month 6 days
Weighted Average Remaining life (Years) of Stock options exercisable	6 years 8 months 12 days
Weighted Average Remaining life (Years) of Stock options non-vested	9 years 1 month 6 days

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands		1 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Oct. 25, 2021 USD ($) a	Oct. 31, 2022 USD ($)	Sep. 30, 2023	Oct. 01, 2021
Commitments and Contingencies
Percentage of total estimated cost for the project covered by DoE funding			50%	50%
Amendment to Whitelaw Creek Asset Purchase Agreement
Commitments and Contingencies
Area of non core property \| a	640
Repurchase of option extension term	3 years
Repurchase of option extension payment per annum	$ 25
Exercise price of repurchase option	1,000
Payments for repurchase option extension		$ 25
Amendment to Whitelaw Creek Asset Purchase Agreement \| Maximum
Commitments and Contingencies
Exercise price of repurchase option	1,850
Amendment to Whitelaw Creek Asset Purchase Agreement \| Minimum
Commitments and Contingencies
Exercise price of repurchase option	$ 1,200

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Wyoming Energy Authority grant (Details) - Wyoming Energy Authority [Member] $ in Thousands		9 Months Ended
	Jun. 01, 2023 USD ($) Milestone	Sep. 30, 2023 USD ($)	Oct. 01, 2021 USD ($)
Other Commitments [Line Items]
Grants receivable		$ 0	$ 4,400
Proceeds from grant		$ 0
Funding Agreement
Other Commitments [Line Items]
Grants receivable	$ 4,400
Number of milestones during development process \| Milestone	2
Percentage of actual expenses	10%
Retainer amount	$ 440