Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 16, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
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 Public Float | $ 100,600,000 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Central Index Key | 0001419806 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Common Stock, Shares Outstanding | 212,466,889 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Location | Spokane, WA | ||
Auditor Firm ID | 243 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 22,247 | $ 2,706 |
Restricted cash | 2,700 | |
Due from related party | 106 | |
Prepaid expenses and other | 75 | 47 |
Total Current Assets | 25,128 | 2,753 |
Equipment, net | 16 | 51 |
Right of use asset | 372 | |
Investment in land | 600 | 600 |
Total Assets | 26,116 | 3,404 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 407 | 115 |
Due to related party | 712 | |
Lease liability, current | 124 | |
Total Current Liabilities | 1,243 | 115 |
Reclamation obligation | 132 | 132 |
Lease liability, long-term | 253 | |
Repurchase option | 1,047 | 933 |
Total Liabilities | 2,675 | 1,180 |
Commitments and Contingencies (Note 9) | ||
SHAREHOLDERS' EQUITY: | ||
Common shares, no par value - unlimited shares authorized; shares outstanding December 31, 2021 and December 31, 2020 - 212,466,889 and 105,308,445, respectively | 136,906 | 111,823 |
Additional paid in capital | 25,753 | 24,217 |
Accumulated deficit | (139,218) | (133,816) |
Total Shareholders' Equity | 23,441 | 2,224 |
Total Liabilities and Shareholders' Equity | $ 26,116 | $ 3,404 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED BALANCE SHEETS | ||
Common shares, par value | $ 0 | $ 0 |
Common shares, authorized | Unlimited | Unlimited |
Common shares, outstanding | 212,466,889 | 105,308,445 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | ||
Exploration and evaluation | $ (2,089) | $ (1,347) |
Corporate administration | (3,114) | (1,823) |
Depreciation and amortization | (30) | (5) |
Impairment charges | (30) | 0 |
Total operating expenses | (5,263) | (3,175) |
Non-operating income (expense): | ||
Interest income | 27 | |
Accretion expense | (114) | (80) |
Interest expense | (25) | |
Total non-operating income (expense) | (139) | (53) |
Net loss | $ (5,402) | $ (3,228) |
LOSS PER SHARE - BASIC (in dollars per share) | $ (0.03) | $ (0.02) |
LOSS PER SHARE - DILUTED (in dollars per share) | $ (0.03) | $ (0.02) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC | 173,490,546 | 167,774,213 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DILUTED | 173,490,546 | 167,774,213 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |
Exploration expense, net to related party | $ 606 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,402) | $ (3,228) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 5 | 5 |
Accretion expense | 114 | 80 |
Impairment charges | 30 | 0 |
Right of use asset amortization | 25 | |
Lease liability | (20) | |
Stock-based compensation | 1,536 | 386 |
Total adjustments to reconcile net loss to net cash used in operating activities | (3,712) | (2,757) |
Changes in working capital | ||
Receivables | (106) | |
Prepaid expenses and other | (28) | (7) |
Accounts payable and accrued liabilities | 1,004 | (355) |
Net cash used in operating activities | (2,842) | (3,119) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Stock option exercise | 133 | 161 |
Financing transaction, net (Note 7) | 24,950 | |
Net cash and cash equivalents provided by financing activities | 25,083 | 161 |
Increase (decrease) in cash and cash equivalents | 22,241 | (2,958) |
Cash and cash equivalents - beginning of the period | 2,706 | 5,664 |
Cash, cash equivalents and restricted cash - end of the period | 24,947 | $ 2,706 |
Supplemental cash flow disclosures: | ||
Right of use asset - operating lease capitalized | $ 397 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Reconciliation of amounts in the Balance Sheet to amounts in the Cash Flow Statement | |||
Cash and cash equivalents | $ 22,247 | $ 2,706 | |
Restricted cash | 2,700 | ||
Total of cash, cash equivalents and restricted cash - end of period | $ 24,947 | $ 2,706 | $ 5,664 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2019 | 103,966,880 | |||
Beginning balance at Dec. 31, 2019 | $ 111,662 | $ 23,831 | $ (130,588) | $ 4,905 |
Stock option exercise, shares | 928,365 | 1,100,000 | ||
Stock option exercise, amount | $ 161 | $ 161 | ||
Stock-based compensation | 386 | 386 | ||
Net loss | (3,228) | (3,228) | ||
Ending balance, shares at Dec. 31, 2020 | 104,895,245 | |||
Ending balance at Dec. 31, 2020 | $ 111,823 | 24,217 | (133,816) | 2,224 |
Financing transaction, shares | 105,808,444 | |||
Financing transaction, amount | $ 24,950 | $ 24,950 | ||
Stock option exercise, shares | 1,763,200 | 1,775,000 | ||
Stock option exercise, amount | $ 133 | $ 133 | ||
Stock-based compensation | 1,536 | 1,536 | ||
Net loss | (5,402) | (5,402) | ||
Ending balance, shares at Dec. 31, 2021 | 212,466,889 | |||
Ending balance at Dec. 31, 2021 | $ 136,906 | $ 25,753 | $ (139,218) | $ 23,441 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
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 is the 100%-holder of 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 and one of the highest-grade europium (Eu) deposits in the world. In addition, the Bear Lodge REE Project has a favorable distribution of the remaining 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 During the year ended December 31, 2021, the Company completed the pilot plant phase for the confirmation and enhancement of its proprietary technology for recovery and separation of rare earth elements. The work was conducted by Umwelt-und Ingenieurtechnik GmbH Dresden (“UIT”), an affiliate of Synchron, our largest shareholder and of General Atomics Corporation (“General Atomics”), per an agreement with the Company. The results are being incorporated into the demonstration plant, as described below. 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, 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 plant utilizing proprietary technology to produce commercial grade products. The DoE funding is in the amount of $21,900 and represents approximately one However, even with the completion of the rights offering (Note 7), the Company does not have sufficient funds to progress with longer-term activities beyond the demonstration plant project, including feasibility studies, permitting and licensing, development and construction related to the Bear Lodge REE Project. Therefore, the achievement of these longer-term activities will be dependent upon receipt of additional funds through financings, off-take agreements, joint ventures, strategic transactions, or sales of various assets. There is no assurance, however, that the Company will be successful in completing other financings or transactions. Ultimately, in the event that the Company cannot secure additional financial resources, or complete a strategic transaction in the longer term, it may need to suspend its operational plans or even have to liquidate its business interests, and investors may lose all or part of their investment. COVID-19 Impact on Business In response to the COVID-19 pandemic, we implemented travel restrictions, both domestically and internationally, and our employee and consultants abided by government guidance and orders. As a result, we saw delays in the metallurgical studies conducted by UIT that slowed the progression of the prior test work. Any continued pandemic impact may be material to the completion of the design inputs needed for the demonstration plant. Any further economic downturn triggered by COVID-19 and any resulting direct and indirect negative impact on us could have a material adverse impact on our future activities, cash flows and liquidity. We may experience higher prices for the equipment and raw materials for the demonstration plant due to shortages, commodity inflation and supply chain issues, including transportation delays as a result of COVID-19 and other economic factors. Further, it is unknown what, if any, impact COVID-19 and any resulting economic factors will have on rare earth prices and market supply and demand fundamentals. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION Principles of Consolidation These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and are inclusive of the accounts of Rare Element Resources Ltd. and its directly and indirectly held wholly owned subsidiaries, which consist of its wholly owned subsidiary Rare Element Holdings Ltd. (“Holdings”) and Holdings’ wholly owned subsidiary, Rare Element Resources, Inc. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The amounts that involve significant estimates include our reclamation obligations. Cash and Cash Equivalents Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2021 and 2020, cash and cash equivalents consisted of $22,247 and $2,706, respectively, of funds held in bank accounts with financial institutions in the United States. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. Mineral Properties and Exploration and Evaluation Costs Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable mineral reserves under Item 1300 of Regulation S-K, development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. Reclamation Obligations The Company’s mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. The Company reclaims the disturbance from its exploration programs on an ongoing basis; therefore, the portion of its reclamation obligation corresponding to its exploration programs will be settled in the near term and is classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven or probable mineral reserves as defined under Item 1300 of Regulation S-K, the timing of these reclamation activities is uncertain as the reclamation areas will only be utilized once the Bear Lodge REE Project is operating. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the reclamation obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the reclamation obligation in connection with the Bear Lodge Property. Reclamation obligations are secured by surety bonds held for the benefit of the state of Wyoming in amounts determined by applicable federal and state regulatory agencies. The Company’s reclamation obligation was $132 as of December 31, 2021 and 2020. Depreciation Depreciation is computed using the straight-line method. The Company depreciates computer equipment furniture fixtures three Stock-based Compensation The fair value of stock-based compensation awards is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period, with a corresponding increase in additional paid-in capital. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. The Company has elected to account for forfeitures as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. Loss per Share The loss per share is computed using the weighted average number of shares outstanding during the period. During December 2021, the Company completed a rights offering (Note 7) whereby the Company offered existing shareholders the right to purchase additional common shares at $0.24 (the “offer price”). The offer price was significantly lower than the fair value of the common shares at that time. The discounted offer price is considered a bonus element that is similar to a stock dividend. As a result, the earnings per share calculation is adjusted retroactively for the bonus element for all periods presented. For the years ended December 31, 2021 and 2020, the Company’s basic and diluted earnings per share calculation has been adjusted to include the impact of the bonus element. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented, as the effect on the basic loss per share would be anti-dilutive. At December 31, 2021 and 2020, we had 2,180,000 and 3,100,000 of potentially dilutive securities, respectively related to outstanding stock options. Fair Value 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 December 31, 2021 and 2020 are presented in the following table: Fair value at December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 22,700 $ 22,700 $ — $ — Fair value at December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 2,569 $ 2,569 $ — $ — Money Market Funds are valued at cost, which approximates fair value. These amounts are included in Cash and cash equivalents and Restricted Cash on the Balance Sheet as of December 31, 2021 and 2020. Recently Issued Accounting Pronouncements Financial Disclosures of Government Assistance In November 2021, ASU No. 2021-10 was issued which provides guidance for required annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance is effective for all entities for annual periods beginning after December 15, 2021. The Company is still completing its evaluation of the impact of ASU 2021-10. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
LEASES | 4. LEASES The Company accounts for leases in accordance with ASC 842 – Leases. (“ROU”) and corresponding lease obligation for lease payments. Rent expense is realized on a straight-line basis and the lease obligation is amortized based on the effective interest method. The amounts recognized reflect the present value of remaining lease payments for all leases that have a lease term greater than 12 months. The discount rate used is an estimate of the Company’s incremental borrowing rate based on information available at lease commencement in determining present value of lease payments. 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, a facility and office space in Upton, Wyoming for the demonstration plant. The lease is a 12-month lease with annual renewal terms. The agreement, which is classified as an operating lease, generally provides for base rent and requires the Company to pay all insurance, taxes and other maintenance costs. The lease agreement does not include variable lease payments, nor does it contain residual value guarantees or contain restrictive covenants. The total future minimum lease payments as of December 31, 2021 is as follows: 2022 $ 124 2023 124 2024 124 2025 93 Total 465 Less interest 88 Present value of lease payments $ 377 In connection with this lease, the Company obtained right-of-use assets in exchange for lease liabilities of approximately $397 upon commencement of new operating leases during year ended December 31, 2021. The weighted average lease term for operating leases is 3.75 years (including renewal options) and the weighted average discount rate is 12%. |
MINERAL PROPERTIES
MINERAL PROPERTIES | 12 Months Ended |
Dec. 31, 2021 | |
MINERAL PROPERTIES | |
MINERAL PROPERTIES | 5. MINERAL PROPERTIES Bear Lodge Property, Wyoming, USA The Company, through its indirectly held, wholly owned subsidiary, Rare Element Resources, Inc., holds a 100% interest in 499 unpatented mining claims located on land administered by the USFS and a repurchase option (see Note 6 for discussion) on approximately 640 acres (257 hectares) of fee property, together which contain (1) the Bear Lodge REE Project that contains REE mineralization; and (2) the Sundance Gold Project that contains gold mineralization. The property is situated in the Bear Lodge Mountains of Crook County, in northeast Wyoming. |
EQUIPMENT AND LAND
EQUIPMENT AND LAND | 12 Months Ended |
Dec. 31, 2021 | |
EQUIPMENT AND LAND | |
EQUIPMENT AND LAND | 6. EQUIPMENT AND LAND At December 31, 2021 and 2020, equipment consisted of the following: December 31, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost depreciation value Cost depreciation value Computer equipment $ — $ — $ — $ 1 $ 1 $ — Furniture — — — 13 13 — Geological equipment 240 224 16 346 296 50 Vehicles 50 50 — 87 86 1 $ 290 $ 274 $ 16 $ 447 $ 396 $ 51 Depreciation expense for the years ended December 31, 2021 and 2020 was $5 and $5, respectively. The Company evaluates the recoverability of the carrying value of equipment when events and circumstances indicate that such assets might be impaired. As a result of this evaluation, during the year ended December 31, 2021, the Company recorded impairment charges of $30 related to assets no longer in use. There were no Pursuant to an asset purchase agreement (the “Asset Purchase Agreement”), dated October 20, 2016 and as amended on October 25, 2021, between the Company and Whitelaw Creek LLC, a Wyoming limited liability company (“Whitelaw Creek”), the Company has the right to repurchase (the “Repurchase Option”)from Whitelaw Creek approximately 640 acres of non-core real property located in Crook County, Wyoming, that we sold to Whitelaw Creek in October 2016 for approximately $600 in cash. The property is under consideration for a stockpile facility for the Bear Lodge REE Project. The Repurchase Option terminates on October 26, 2022 but may be extended for up to two subject to annual option extension payments from the Company to Whitelaw Creek of $25 in cash per year (each, a “Repurchase Option Extension Payment”). The Company has the right to repurchase the land for a price to be determined by a mutually agreed upon real estate appraiser (the “Repurchase Price”), provided that (i) the Repurchase Price must not be less than $1,200 or greater than $1,850 and (ii) any Repurchase Option Extension Payments paid by the Company to Whitelaw Creek (including a Repurchase Option Extension Payment made on, or prior to, November 2, 2021) must be credited toward the Company’s payment of the Repurchase Price if the Repurchase Option is later exercised. For accounting purposes, the Company has classified our value in the land as an asset on its Consolidated Balance Sheets titled “Investment in land” and the value of the Repurchase Price as a liability on our Consolidated Balance Sheets titled “Repurchase option”. Additionally, the Company is increasing the Repurchase Option liability on a straight-line basis through accretion expense until the liability reaches anticipated repurchase amount of $1,850. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 7. SHAREHOLDERS’ EQUITY Stock-based Compensation The Company has options outstanding and exercisable that were issued under the 10% Rolling Stock Option Plan (the “RSOP”). The terms of the RSOP were approved by our shareholders at the annual meeting of shareholders on December 2, 2011, and the RSOP was amended and restated on April 7, 2020, as approved by the Board. The RSOP established the maximum number of common shares which may be issued under the RSOP as a variable amount equal to 10% of the issued and outstanding common shares on a non-diluted basis. Under the RSOP, our Board of Directors may from time to time grant stock options to individual eligible directors, officers, employees or consultants. The maximum term of any stock option is 10 years. Options generally vest over two years. The exercise price of a stock option is not less than the closing price on the last trading day preceding the grant date. The Board retains the discretion to impose vesting periods on any options granted. The fair value of stock option awards granted to directors, officers, employees and/or consultants of the Company are estimated on the grant date using the Black-Scholes option valuation model and the closing price of our common shares on the grant date. The significant assumptions used to estimate the fair value of 855,000 and 750,000 stock option awards granted during the years ended December 31, 2021 and 2020, respectively, using the Black-Scholes option valuation model are as follows: Year Ended December 31, 2021 2020 Risk-free interest rate 1.69 % 1.45 % Expected volatility 146 % 148 % Expected dividend yield Nil Nil Expected term in years 8 5 The following table summarizes stock option activity for each of the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Weighted Weighted Average Average Number of Stock Exercise Number of Stock Exercise Options Price Options Price Outstanding, beginning of period 3,100,000 $ 0.28 3,450,000 $ 0.16 Granted 855,000 2.25 750,000 0.83 Exercised (1,775,000) 0.13 (1,100,000) 0.28 Outstanding, end of period 2,180,000 $ 1.18 3,100,000 $ 0.28 Exercisable, end of period 1,377,500 $ 0.94 1,925,000 $ 0.12 Non-vested, end of period 802,500 $ 1.59 1,175,000 $ 0.48 The stock-based compensation cost recognized in the Company’s Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 was $1,536 and $386, respectively. As of December 31, 2021, there was $565 of unrecognized compensation cost related to 802,500 unvested stock options. This cost is expected to be recognized over a weighted-average remaining period of approximately one year. At December 31, 2021, the intrinsic value of outstanding and exercisable stock options was $1,014 and $856, respectively. The intrinsic value of stock options exercised during the year ended December 31, 2021 and 2020 was $2,985 and $514, respectively. The intrinsic value of non-vested stock options at December 31, 2021 was $158. The weighted-average grant-date fair value of options granted during the years December 31, 2021 and 2020 was $2.25 and $0.75, respectively. At December 31, 2021, the weighted average remaining life of stock options outstanding, stock options exercisable and unvested stock options was 4.2 years, 4.5 years and 3.7 years, respectively. See Note 12 for discussion of stock options granted subsequent to December 31, 2021. Rights Offering During December 2021, the Company completed a rights offering for gross proceeds of approximately $25,400 in which each holder of the Company’s common shares as of the close of business on the record date of October 19, 2021 was eligible to participate. Terms of the rights offering included the issuance of one subscription right for each common share owned by each holder on the record date with each subscription right entitling the holder to purchase one common share of the Company at a subscription price of $0.24 per share (the “basic subscription privilege”). If any holder exercised its basic subscription privilege in full, the holder could also exercise an oversubscription privilege to purchase additional common shares for which were unsubscribed at the expiration of the rights offering, subject to availability and pro rata allocation of shares among persons exercising the oversubscription privilege. The Company plans to use the net proceeds from the rights offering for the permitting, licensing, engineering, construction and operation of the rare earth separation and processing demonstration plant near the Company’s Bear Lodge Project and other general corporate purposes, with a portion to be used for the prepayment of outstanding indebtedness, in the principal amount of $1,000, which repayment was completed in December 2021. The previously discussed $21,900 financial award from the DoE for the demonstration plant will fund approximately one |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX | |
INCOME TAX | 8. INCOME TAX The Company recognizes future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax bases of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which the Company does not consider the realization of such assets to meet the required “more likely than not” standard. The Company’s future tax assets and liabilities at December 31, 2021 and 2020 include the following components: As of December 31, 2021 2020 Deferred tax assets: Non-current: Accrued vacation and deferred revenue $ — $ 3 Noncapital loss carryforwards, Canada 2,651 2,579 Capital loss carryforwards, Canada 6 6 Net operating loss carryforwards, U.S. 22,235 20,242 Mineral properties 1,714 2,322 Reclamation provision 28 28 Equipment 91 85 Share based compensation 237 65 Research and development 513 761 Deferred tax assets 27,475 26,091 Valuation allowance (27,475) (26,091) Net $ — $ — Deferred tax liabilities: Deferred tax liabilities $ — $ — Net deferred tax asset/(liability) $ — $ — The composition of the Company’s valuation allowance by tax jurisdiction is summarized as follows: As of December 31, 2021 2020 Canada $ 3,093 $ 3,022 United States 24,382 23,069 Total valuation allowance $ 27,475 $ 26,091 It is more likely than not that the net deferred tax assets will not be realized, therefore the Company continues to record a 100% valuation allowance against the net deferred tax assets. The valuation allowance increased $1,384 from the year ended December 31, 2020 to the year ended December 31, 2021. The increase in the deferred tax assets resulted primarily from the increase in net operating loss carryforwards (“NOLs”) and noncapital loss carryforwards, partially offset by amortization of capitalized exploration costs. At December 31, 2021, we had U.S. NOL carryforwards of approximately $92,708, which expire from 2022 to indefinitely. As a result of the Tax Cuts and Jobs Act, U.S. NOLs generated in years ending after 2017 have an indefinite carryforward rather than the previous 20-year carryforward. This does not affect losses incurred in years ended in 2017 or earlier. In addition, we had Canadian non-capital loss carryforwards of approximately C$12,563, which expire from 2025 to 2040. As of December 31, 2021, there were Canadian capital loss carryforwards of C$59. A full valuation allowance has been recorded against the tax effected U.S. and Canadian loss carryforwards as we do not consider realization of such assets to meet the required ‘more likely than not’ standard. Section 382 of the Internal Revenue Code could apply and limit our ability to utilize a portion of the U.S. NOL carryforwards. No Section 382 study has been completed; therefore, the actual usage of U.S. NOL carryforwards has not been determined. For financial reporting purposes, loss from continuing operations before income taxes consists of the following components: For the year ended December 31, 2021 2020 Canada $ (310) $ (238) United States (5,092) (2,990) $ (5,402) $ (3,228) A reconciliation of expected income tax on net income at statutory rates is as follows: As of December 31, 2021 2020 Net loss $ (5,402) $ (3,228) Statutory tax rate 27 % 27 % Tax expense at statutory rate (1,459) (872) State taxes (290) (309) Foreign rate differential 302 130 Change in tax rates 43 — Share issuance costs amortization (3) (3) Stock-based compensation 56 20 Nondeductible expenses 11 40 Expired net operating loss carryovers 9 24 Prior year true-up (53) 88 Change in valuation allowance 1,384 882 Income tax expense $ — $ — The Company does not have any unrecognized income tax benefits. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of the interest expense and operating expense, respectively. Rare Element and its wholly owned subsidiary, Rare Element Holdings Ltd., file income tax returns in the Canadian federal jurisdiction and provincial jurisdictions, and its wholly owned subsidiary, Rare Element Resources, Inc., files in the U.S. federal jurisdiction and various state jurisdictions. The years still open for audit are generally the current year plus the previous three. However, because we have NOLs carrying forward, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax losses carried forward to open years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Potential Environmental Contingency The Company’s exploration and development activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually 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 On March 9, 2020, the Board of Directors approved the engagement of UIT for further test work in an amount not to exceed $650. Under the 2020 engagement, UIT optimized certain process steps, developed scale-up design criteria for a demonstration plant, and confirmed operating and capital cost estimates. Consistent with the prior Board of Directors’ action engaging UIT, the three directors of Rare Element nominated by Synchron abstained because Synchron is a majority shareholder of the Company and is an affiliate of UIT. The 2020 UIT test work was completed in December 2020, and test work reports were provided to the Company in early 2021. In January 2021, the Board of Directors approved $500 for additional UIT test work in the first half of 2021 to include optimizing of certain process steps, developing scale-up design criteria for a demonstration plant, and confirming operating and capital cost estimates. Consistent with the prior Board of Directors’ action engaging UIT, the three directors of Rare Element nominated by Synchron abstained because Synchron is a majority shareholder of the Company and is an affiliate of UIT. The 2021 contract work by UIT was completed in August 2021 and a report was issued with recommendations to proceed with the incorporation of the technology in the demonstration plant project. For the years ended December 31, 2021 and 2020, the Company paid $740 and $1,131, respectively, for services rendered by UIT. There were no amounts owed to UIT as of December 31, 2021. 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 General Atomics for the design, construction, and operation of a planned rare earth separation and processing demonstration plant near the Bear Lodge REE Project in Upton, Wyoming. As previously discussed, in January 2021, the DoE announced that a consortium of companies, which includes the Company, led by General Atomics, an affiliate of Synchron, and certain of its affiliates, and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor, was selected for a potential financial award in the amount of $21,900 for the engineering, construction and operation of a rare earth separation and processing demonstration plant. The DoE award was finalized through a cooperative agreement dated October 1, 2021 (the “Cooperative Agreement”) that was awarded by the DoE for the demonstration plant. The Cooperative Agreement provided that up to approximately $43,900 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. Pursuant to the terms of the Cost Share Agreement, the Company is obligated to make a prepayment to General Atomics of $2,700 for the first $2,700 of Company-assumed costs for the demonstration plant, with the number and amount of additional prepayments to be subject to the mutual written agreement of the parties. Because the Company made this prepayment during January 2022, the $2,700 was classified as restricted cash on the Company’s balance sheet as of December 31, 2021. Additionally, as of December 31, 2021, under the terms of the Cost Share Agreement, the Company has a receivable of $106 related to amounts due from General Atomics and an accrued liability of $712 related to estimated amounts due to General Atomics. The term of the Cost Share Agreement will continue until the date of completion of the demonstration plant, 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; (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 other than any allowable costs for such wind-down paid for by the DoE. Land Purchase Option 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 “Asset Purchase Agreement”). The Amendment modified certain provisions of the Asset Purchase Agreement 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 waste rock 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 subject to annual option extension payments from the Company to Whitelaw Creek of $25 in cash per year (each, a “Repurchase Option Extension Payment”); and the exercise price of the Repurchase Option was increased from $1,000 to a price to be determined by a mutually agreed upon real estate appraiser (the “Repurchase Price”), provided that (i) the Repurchase Price must not be less than $1,200 or greater than $1,850 and (ii) any Repurchase Option Extension Payments paid by the Company to Whitelaw Creek must be credited toward the Company’s payment of the Repurchase Price if the Repurchase Option is later exercised |
SUPPLEMENTAL DISCLOSURE WITH RE
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 12 Months Ended |
Dec. 31, 2021 | |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 10. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS The Company did not have any significant non-cash transactions during the years ended December 31, 2021 or 2020. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 11. SEGMENT INFORMATION The Company operates in a single reportable operating segment, being the exploration of mineral properties. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating and evaluating financial performance. All of the Company’s long-lived assets are located in the United States. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS On January 5, 2022, the Company granted 1,705,000 stock options to certain employees, directors and consultants with an exercise price of $1.42. The vesting schedule for these stock options is 50% on July 5, 2022 and 50% on January 5, 2023. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and are inclusive of the accounts of Rare Element Resources Ltd. and its directly and indirectly held wholly owned subsidiaries, which consist of its wholly owned subsidiary Rare Element Holdings Ltd. (“Holdings”) and Holdings’ wholly owned subsidiary, Rare Element Resources, Inc. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The amounts that involve significant estimates include our reclamation obligations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2021 and 2020, cash and cash equivalents consisted of $22,247 and $2,706, respectively, of funds held in bank accounts with financial institutions in the United States. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. |
Mineral Properties and Exploration and Evaluation Costs | Mineral Properties and Exploration and Evaluation Costs Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable mineral reserves under Item 1300 of Regulation S-K, development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. |
Reclamation Obligations | Reclamation Obligations The Company’s mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. The Company reclaims the disturbance from its exploration programs on an ongoing basis; therefore, the portion of its reclamation obligation corresponding to its exploration programs will be settled in the near term and is classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven or probable mineral reserves as defined under Item 1300 of Regulation S-K, the timing of these reclamation activities is uncertain as the reclamation areas will only be utilized once the Bear Lodge REE Project is operating. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the reclamation obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the reclamation obligation in connection with the Bear Lodge Property. Reclamation obligations are secured by surety bonds held for the benefit of the state of Wyoming in amounts determined by applicable federal and state regulatory agencies. The Company’s reclamation obligation was $132 as of December 31, 2021 and 2020. |
Depreciation | Depreciation Depreciation is computed using the straight-line method. The Company depreciates computer equipment furniture fixtures three |
Stock-based Compensation | Stock-based Compensation The fair value of stock-based compensation awards is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period, with a corresponding increase in additional paid-in capital. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. The Company has elected to account for forfeitures as they occur. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. |
Loss per Share | Loss per Share The loss per share is computed using the weighted average number of shares outstanding during the period. During December 2021, the Company completed a rights offering (Note 7) whereby the Company offered existing shareholders the right to purchase additional common shares at $0.24 (the “offer price”). The offer price was significantly lower than the fair value of the common shares at that time. The discounted offer price is considered a bonus element that is similar to a stock dividend. As a result, the earnings per share calculation is adjusted retroactively for the bonus element for all periods presented. For the years ended December 31, 2021 and 2020, the Company’s basic and diluted earnings per share calculation has been adjusted to include the impact of the bonus element. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented, as the effect on the basic loss per share would be anti-dilutive. At December 31, 2021 and 2020, we had 2,180,000 and 3,100,000 of potentially dilutive securities, respectively related to outstanding stock options. |
Fair Value | Fair Value 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 December 31, 2021 and 2020 are presented in the following table: Fair value at December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 22,700 $ 22,700 $ — $ — Fair value at December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 2,569 $ 2,569 $ — $ — |
Recently Issued Accounting Pronouncements | Money Market Funds are valued at cost, which approximates fair value. These amounts are included in Cash and cash equivalents and Restricted Cash on the Balance Sheet as of December 31, 2021 and 2020. Recently Issued Accounting Pronouncements Financial Disclosures of Government Assistance In November 2021, ASU No. 2021-10 was issued which provides guidance for required annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance is effective for all entities for annual periods beginning after December 15, 2021. The Company is still completing its evaluation of the impact of ASU 2021-10. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |
Schedule of fair value of financial assets and liabilities on a recurring basis | Fair value at December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 22,700 $ 22,700 $ — $ — Fair value at December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 2,569 $ 2,569 $ — $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Schedule of total future minimum lease payments | 2022 $ 124 2023 124 2024 124 2025 93 Total 465 Less interest 88 Present value of lease payments $ 377 |
EQUIPMENT AND LAND (Tables)
EQUIPMENT AND LAND (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EQUIPMENT AND LAND | |
Schedule of equipment | December 31, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost depreciation value Cost depreciation value Computer equipment $ — $ — $ — $ 1 $ 1 $ — Furniture — — — 13 13 — Geological equipment 240 224 16 346 296 50 Vehicles 50 50 — 87 86 1 $ 290 $ 274 $ 16 $ 447 $ 396 $ 51 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
Schedule of significant assumptions used to estimate fair valu | Year Ended December 31, 2021 2020 Risk-free interest rate 1.69 % 1.45 % Expected volatility 146 % 148 % Expected dividend yield Nil Nil Expected term in years 8 5 |
Schedule of stock option activity | Year Ended December 31, 2021 2020 Weighted Weighted Average Average Number of Stock Exercise Number of Stock Exercise Options Price Options Price Outstanding, beginning of period 3,100,000 $ 0.28 3,450,000 $ 0.16 Granted 855,000 2.25 750,000 0.83 Exercised (1,775,000) 0.13 (1,100,000) 0.28 Outstanding, end of period 2,180,000 $ 1.18 3,100,000 $ 0.28 Exercisable, end of period 1,377,500 $ 0.94 1,925,000 $ 0.12 Non-vested, end of period 802,500 $ 1.59 1,175,000 $ 0.48 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX | |
Schedule of future tax assets and liabilities | As of December 31, 2021 2020 Deferred tax assets: Non-current: Accrued vacation and deferred revenue $ — $ 3 Noncapital loss carryforwards, Canada 2,651 2,579 Capital loss carryforwards, Canada 6 6 Net operating loss carryforwards, U.S. 22,235 20,242 Mineral properties 1,714 2,322 Reclamation provision 28 28 Equipment 91 85 Share based compensation 237 65 Research and development 513 761 Deferred tax assets 27,475 26,091 Valuation allowance (27,475) (26,091) Net $ — $ — Deferred tax liabilities: Deferred tax liabilities $ — $ — Net deferred tax asset/(liability) $ — $ — |
Schedule of composition of valuation allowance by tax jurisdiction | As of December 31, 2021 2020 Canada $ 3,093 $ 3,022 United States 24,382 23,069 Total valuation allowance $ 27,475 $ 26,091 |
Schedule of components of loss from continuing operations before income taxes | For the year ended December 31, 2021 2020 Canada $ (310) $ (238) United States (5,092) (2,990) $ (5,402) $ (3,228) |
Schedule of reconciliation of expected income tax on net income at statutory rates | As of December 31, 2021 2020 Net loss $ (5,402) $ (3,228) Statutory tax rate 27 % 27 % Tax expense at statutory rate (1,459) (872) State taxes (290) (309) Foreign rate differential 302 130 Change in tax rates 43 — Share issuance costs amortization (3) (3) Stock-based compensation 56 20 Nondeductible expenses 11 40 Expired net operating loss carryovers 9 24 Prior year true-up (53) 88 Change in valuation allowance 1,384 882 Income tax expense $ — $ — |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Oct. 01, 2021USD ($) | Dec. 31, 2019USD ($) | |
Nature of Operations | ||||
Cash and cash equivalents | $ 24,947 | $ 2,706 | $ 5,664 | |
Cash used in operations | $ 2,842 | $ 3,119 | ||
Amount of potential DoE funding | $ 21,900 | |||
Percentage of total estimated cost for the project covered by DoE funding | 0.50% | |||
Sundance Gold Project | ||||
Nature of Operations | ||||
Ownership interest (as a percent) | 100.00% | |||
Number of gold targets | item | 3 | |||
Bear Lodge REE Project | ||||
Nature of Operations | ||||
Ownership interest (as a percent) | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | ||
Cash and cash equivalents | $ 22,247 | $ 2,706 |
Reclamation obligation | $ 132 | $ 132 |
Subscription price | $ 0.24 | |
Potentially dilutive securities | 2,180,000 | 3,100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Depreciation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer Equipment | Minimum | |
Depreciation period | 3 years |
Computer Equipment | Maximum | |
Depreciation period | 10 years |
Furniture | Minimum | |
Depreciation period | 3 years |
Furniture | Maximum | |
Depreciation period | 10 years |
Geological Equipment | Minimum | |
Depreciation period | 3 years |
Geological Equipment | Maximum | |
Depreciation period | 10 years |
Vehicles | |
Depreciation period | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Money market funds | $ 22,700 | $ 2,569 |
Level 1 | ||
Assets | ||
Money market funds | $ 22,700 | $ 2,569 |
LEASES - (Details)
LEASES - (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
LEASES | |
Option to extend | true |
Term of contract | 12 months |
Right-of-use assets in exchange for lease liabilities | $ 397 |
Weighted average lease term | 3 years 9 months |
Weighted average discount rate | 12.00% |
LEASES - Lease Payments (Detail
LEASES - Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Lease payments | |
2022 | $ 124 |
2023 | 124 |
2024 | 124 |
2025 | 93 |
Total | 465 |
Less interest | 88 |
Present value of lease payments | $ 377 |
MINERAL PROPERTIES (Details)
MINERAL PROPERTIES (Details) - Amendment to Whitelaw Creek Asset Purchase Agreement | Dec. 31, 2021 | Dec. 31, 2021item | Dec. 31, 2021a | Dec. 31, 2021ha | Oct. 25, 2021a | Oct. 20, 2016a |
Mineral properties | ||||||
Number of unpatented mining claims | 499 | |||||
Area of non core property | 640 | 257 | 640 | 640 | ||
Unpatented Mining Claims | ||||||
Mineral properties | ||||||
Ownership percentage | 100.00% |
EQUIPMENT AND LAND - Equipment
EQUIPMENT AND LAND - Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Cost | $ 290 | $ 447 |
Accumulated depreciation | 274 | 396 |
Net book value | 16 | 51 |
Computer Equipment | ||
Cost | 1 | |
Accumulated depreciation | 1 | |
Furniture | ||
Cost | 13 | |
Accumulated depreciation | 13 | |
Geological Equipment | ||
Cost | 240 | 346 |
Accumulated depreciation | 224 | 296 |
Net book value | 16 | 50 |
Vehicles | ||
Cost | 50 | 87 |
Accumulated depreciation | $ 50 | 86 |
Net book value | $ 1 |
EQUIPMENT AND LAND (Details)
EQUIPMENT AND LAND (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
EQUIPMENT AND LAND | ||
Depreciation expense | $ 5 | $ 5 |
Impairment charges | $ 30 | $ 0 |
EQUIPMENT AND LAND - Asset Purc
EQUIPMENT AND LAND - Asset Purchase Agreement with Whitelaw Creek (Details) - Amendment to Whitelaw Creek Asset Purchase Agreement $ in Thousands, shares in Millions | Oct. 25, 2021USD ($)a | Oct. 20, 2016USD ($)ashares | Dec. 31, 2021a | Dec. 31, 2021ha | Dec. 31, 2021USD ($) |
Equipment and Land | |||||
Area of non core property | 640 | 640 | 640 | 257 | |
Repurchase of option extension term | 3 years | 2 years | |||
Repurchase of option extension payment per annum | $ 25 | $ 25 | |||
Exercise price of repurchase option | 1,000 | $ 1,850 | |||
Proceeds from sale of property | $ 600 | ||||
Threshold percentage of outstanding common shares | 9.90% | ||||
Number of common shares issuable for payment to Whitelaw Creek | shares | 5 | ||||
Minimum | |||||
Equipment and Land | |||||
Exercise price of repurchase option | 1,200 | $ 1,200 | |||
Maximum | |||||
Equipment and Land | |||||
Exercise price of repurchase option | $ 1,850 | $ 1,850 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Dec. 31, 2019 |
SHAREHOLDERS' EQUITY | ||||||
Term of stock option | 10 years | |||||
Vesting period | 2 years | |||||
Options outstanding | 2,180,000 | 2,180,000 | 3,100,000 | 3,450,000 | ||
Compensation expense for stock option awards | $ 1,536 | $ 386 | ||||
Unrecognized compensation cost | $ 565 | $ 565 | ||||
Unvested stock options | 802,500 | 802,500 | 1,175,000 | |||
Unrecognized compensation cost period of recognition | 1 year | |||||
Intrinsic value of options outstanding | $ 1,014 | $ 1,014 | ||||
Intrinsic value of options exercisable | 856 | 856 | ||||
Intrinsic value of options exercised | 2,985 | $ 514 | ||||
Intrinsic value of nonvested options | 158 | $ 158 | ||||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 2.25 | $ 0.75 | ||||
Weighted average remaining life of stock options outstanding | 4 years 2 months 12 days | |||||
Weighted average remaining life of stock options exercisable | 4 years 6 months | |||||
Weighted average remaining life of unvested stock options | 3 years 8 months 12 days | |||||
Option granted | 855,000 | 750,000 | ||||
Rights offering authorized amount | $ 25,400 | $ 25,400 | ||||
Number of non-transferable subscription right issued | 1 | |||||
Number of subscription right to purchase | 1 | 1 | ||||
Subscription price | $ 0.24 | $ 0.24 | ||||
Grants receivable | $ 21,900 | $ 21,900 | $ 21,900 | |||
Principle amount outstanding | $ 1,000 | $ 1,000 | ||||
Percentage of total cost of the demonstration plant funded by DoE | 50.00% | 50.00% |
SHAREHOLDERS' EQUITY - Fair val
SHAREHOLDERS' EQUITY - Fair value assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SHAREHOLDERS' EQUITY | ||
Risk-free interest rate | 1.69% | 1.45% |
Expected volatility | 146.00% | 148.00% |
Expected dividend yield | ||
Expected term in years | 8 years | 5 years |
SHAREHOLDERS' EQUITY - Stock op
SHAREHOLDERS' EQUITY - Stock option activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Stock Options | ||
Outstanding, beginning of period | 3,100,000 | 3,450,000 |
Granted | 855,000 | 750,000 |
Exercised | (1,775,000) | (1,100,000) |
Outstanding, end of period | 2,180,000 | 3,100,000 |
Exercisable, end of period | 1,377,500 | 1,925,000 |
Non-vested, end of period | 802,500 | 1,175,000 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 0.28 | $ 0.16 |
Granted (in dollars per share) | 2.25 | 0.83 |
Exercised (in dollars per share) | 0.13 | 0.28 |
Outstanding, end of period (in dollars per share) | 1.18 | 0.28 |
Exercisable, end of period (in dollars per share) | 0.94 | 0.12 |
Non-vested, end of period (in dollars per share) | $ 1.59 | $ 0.48 |
INCOME TAX - Net deferred tax a
INCOME TAX - Net deferred tax asset liabilities (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020CAD ($) |
Deferred Tax Assets: | |||
Accrued vacation and deferred revenue | $ 3 | ||
Capital loss carryforwards | $ 59 | ||
Mineral properties | $ 1,714 | 2,322 | |
Reclamation provision | 28 | 28 | |
Equipment | 91 | 85 | |
Share based compensation | 237 | 65 | |
Research and development | 513 | 761 | |
Deferred tax assets | 27,475 | 26,091 | |
Valuation allowance | (27,475) | (26,091) | |
Canada | |||
Deferred Tax Assets: | |||
Noncapital loss carryforwards | 2,651 | 2,579 | |
Capital loss carryforwards | 6 | 6 | |
US | |||
Deferred Tax Assets: | |||
Net operating loss carryforwards | $ 22,235 | $ 20,242 |
INCOME TAX - Valuation allowanc
INCOME TAX - Valuation allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
INCOME TAX | ||
Canada | $ 3,093 | $ 3,022 |
United States | 24,382 | 23,069 |
Total valuation allowance | $ 27,475 | $ 26,091 |
INCOME TAX - Loss from continui
INCOME TAX - Loss from continuing operations before income tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAX | ||
Canada | $ (310) | $ (238) |
United States | (5,092) | (2,990) |
Net loss | $ (5,402) | $ (3,228) |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of expected income tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAX | ||
Net loss | $ (5,402) | $ (3,228) |
Statutory tax rate | 27.00% | 27.00% |
Tax expense at statutory rate | $ (1,459) | $ (872) |
State taxes | (290) | (309) |
Foreign tax rates | 302 | 130 |
Change in tax rates | 43 | |
Share issuance costs amortization | (3) | (3) |
Stock-based compensation | 56 | 20 |
Nondeductible expenses | 11 | 40 |
Expired net operating loss carryovers | 9 | 24 |
Prior year true-up | (53) | 88 |
Change in valuation allowance | $ 1,384 | $ 882 |
INCOME TAX (Details)
INCOME TAX (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020CAD ($) | |
INCOME TAX | ||
Valuation allowance as a percent of deferred tax assets | 100.00% | 100.00% |
Increase in valuation allowance | $ 1,384 | |
Net operating loss carryforwards | $ 92,708 | |
Non capital loss carry carryforward | $ 12,563 | |
Capital loss carryforwards | $ 59 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Oct. 25, 2021USD ($)a | Oct. 01, 2021USD ($) | Oct. 20, 2016USD ($)a | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021a | Dec. 31, 2021ha | Jan. 31, 2021USD ($)director | Mar. 09, 2020USD ($)director |
Commitments and Contingencies | ||||||||||
Due to related party | $ 712 | $ 712 | ||||||||
Grants Receivable | $ 21,900 | 21,900 | $ 21,900 | |||||||
Percentage of total cost of the demonstration plant funded by DoE | 50.00% | 50.00% | ||||||||
Percentage of total cost of the demonstration plant funded by non federal entity | 50.00% | |||||||||
Allowable costs for planned demonstration funded on cost share basis | $ 43,900 | |||||||||
Restricted cash | $ 2,700 | 2,700 | ||||||||
UIT | ||||||||||
Commitments and Contingencies | ||||||||||
Payment for services rendered | 740 | $ 1,131 | ||||||||
Due to related party | 0 | 0 | ||||||||
General Atomics | ||||||||||
Commitments and Contingencies | ||||||||||
Commitment Amount | 2,700 | |||||||||
Due from related party | 106 | 106 | ||||||||
Due to related party | 712 | 712 | ||||||||
Allowable costs for planned demonstration funded on cost share basis | $ 2,700 | |||||||||
Amendment to Whitelaw Creek Asset Purchase Agreement | ||||||||||
Commitments and Contingencies | ||||||||||
Area of non core property | 640 | 640 | 640 | 257 | ||||||
Repurchase of option extension term | 3 years | 2 years | ||||||||
Repurchase of option extension payment per annum | $ 25 | $ 25 | ||||||||
Exercise price of repurchase option | 1,000 | $ 1,850 | $ 1,850 | |||||||
Amendment to Whitelaw Creek Asset Purchase Agreement | Maximum | ||||||||||
Commitments and Contingencies | ||||||||||
Exercise price of repurchase option | 1,850 | 1,850 | ||||||||
Amendment to Whitelaw Creek Asset Purchase Agreement | Minimum | ||||||||||
Commitments and Contingencies | ||||||||||
Exercise price of repurchase option | $ 1,200 | $ 1,200 | ||||||||
Pilot Plant Test Work | UIT | ||||||||||
Commitments and Contingencies | ||||||||||
Commitment Amount | $ 500 | |||||||||
Number of directors abstained | director | 3 | 3 | ||||||||
Pilot Plant Test Work | UIT | Maximum | ||||||||||
Commitments and Contingencies | ||||||||||
Commitment Amount | $ 650 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Jan. 05, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Events | |||
Option granted | 855,000 | 750,000 | |
Exercise price | $ 2.25 | $ 0.83 | |
Subsequent Event | |||
Subsequent Events | |||
Option granted | 1,705,000 | ||
Exercise price | $ 1.42 | ||
Subsequent Event | Vesting on July 5, 2022 | |||
Subsequent Events | |||
Vesting Percentage | 50.00% | ||
Subsequent Event | Vesting on January 5, 2023 | |||
Subsequent Events | |||
Vesting Percentage | 50.00% |