IBC Disclaims Role in Ucore Rare Earth Element Proposal to U.S. Department of Defense
AMERICAN FORK, Utah, Aug. 26, 2019 /PRNewswire/ -- Ucore Rare Metals, Inc. ("Ucore") recently issued a press release announcing that Ucore had made a proposal to the U.S. Department of Defense ("Proposal") in response to a request for information ("RFI") from the Defense Production Act ("DPA") Title III Office. Although the exact terms of the Proposal are not evident, it appears that Ucore represented that the technology and services of IBC Advanced Technologies, Inc. ("IBC") would be involved in the processing and separation of rare earth elements ("REE"). Given this, IBC feels compelled to announce that it has taken no part in the Proposal, and disclaims any connection with or responsibility for it.
In its Press Release of August 22, 2019 ("Ucore Press Release"), Ucore announced that it had responded to the RFI by proposing the advancement of its Bokan-Dotson Ridge Rare Earth Project's mine ("Bokan Mine") and a rare earth processing and separation plant in Southeast Alaska ("REE Plant"). Title III of the DPA authorizes Federal Government procurement and installation of equipment in industrial facilities owned by private entities.
False Representations to the Federal Government
Given the nature of the Proposal, as described in the Ucore Press Release, IBC is extremely concerned that Ucore has likely made false representations to the Federal Government as to Ucore's purported REE Plant capabilities and the feasibility of the Bokan Mine in order to gain entrance into the lucrative DPA Title III program and that Ucore has represented to the Federal Government that it will utilize IBC's technology and services to separate and process REEs from the Bokan Mine. IBC wholly disclaims any such representations.
IBC's concerns focus on the following issues.
Unsupported Claims of REE Processing and Separation Capabilities
Ucore has provided no assurance that it possesses the technology, processes or financial resources to construct and operate a REE Plant to process and separate rare earths. Ucore operates no REE separations or processing facilities, has abandoned the separations technology upon which its Preliminary Economic Assessment ("PEA") was based and has no license from IBC for the separation and processing of REEs.
Infeasibility of the Bokan Mine based on Undisputed Independent Expert Findings
A recent independent expert study has demonstrated that the Bokan Mine is not economically feasible for development and production of REEs currently or far into the foreseeable future ("Independent Expert Findings"). Dr. David R. Hammond (Hammond International Group), an independent mineral economics consultant, conducted an update of the economic value indicators represented by Ucore in its March 13, 2013, PEA. Among other things, the Independent Expert Findings make clear that the Bokan Mine will not be commercially feasible for approximately 30-40 years, if ever. In fact, the updated analysis of Ucore's 2013 PEA indicates the Bokan Mine project's current Net Present Value is negative $819 million at an after-tax nominal discount rate of 12%.
In his sworn declaration, Dr. Hammond also stated that as a result of previous uranium mining operations between 1957 and 1971, contaminated soils, mine workings and waste rock remain at the Bokan Mine location, which is now designated as a Superfund Site by the United States Environmental Protection Agency. Although not currently on the National Priority List, cleanup and other remediation costs are unknown and offer potentially enormous financial liability to any owner or Potentially Responsible Party.
Further details concerning Dr. Hammond's findings, his credentials and a link to his sworn declaration can be found in IBC's press release dated July 4, 2019:
Ucore has not publicly disputed any of Dr. Hammond's findings, despite being aware of them since May 2019. See IBC's press release dated July 21, 2019:
By Ucore's own admission, the Bokan Mine resources are so speculative that they cannot be categorized as mineral reserves and thus do not have demonstrated economic viability. Ucore's Management's Discussion and Analysis for the year ended December 31, 2018 affirms:
"The PEA includes indicated and inferred mineral resources only, which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Most mineral exploration projects do not result in the discovery or development of commercially or profitably mineable ore deposits. No assurance can be given that any particular level of recovery of ore reserves or resources will be realized or produced from the Company's Bokan Project."
Financial Distress
In his sworn declaration, dated May 9, 2019, Mr. Gavin Harris, an independent forensic accountant, determined that Ucore was insolvent. Mr. Harris' declaration can be accessed at the following link: http://bit.ly/ibcmrt
Ucore has never earned a profit. In its financial statements for the period ending March 31, 2019, Ucore reported a retained deficit of CAD $48,305,314, cash of CAD $287,089, restricted cash of CAD $57,979 and stated:
"The Company has no sources of revenue, experienced significant losses and negative cash flows from operations in previous years and has a deficit….The Company's current liquidity and capital resources raise significant doubt about the Company's ability to continue as a going concern for the next twelve months without any inflow or new funds during the first half of 2019."
Failure to Meet Disclosure Obligations
Based on the Ucore Press Release, it is apparent that Ucore has not been candid with the U.S. Department of Defense about its lack of REE processing and separation capabilities, the infeasibility of the Bokan Mine, and its financial situation. Full disclosure of these points should disqualify Ucore from ever being chosen to become part of the DPA Title III program.
For the above reasons, IBC feels a public obligation to disclose its concerns of impropriety on the part of Ucore.
Background of IBC
IBC is an award-winning provider of proprietary and innovative Molecular Recognition Technology ("MRT") products and processes, based on green chemistry and green engineering, to premier customers worldwide. IBC's SuperLig®, AnaLig® and MacroLig® products and associated processes are used in manufacturing, analytical and laboratory applications.
In 1988, IBC was founded by and named after three Brigham Young University professors: Dr. Reed M. Izatt, Dr. Jerald S. Bradshaw and Dr. James J. Christensen.
IBC is the proud sponsor of the International Izatt-Christensen Award. This Award, founded in 1991 and named after Dr. Reed M. Izatt and Dr. James J. Christensen, two of the founders of IBC, recognizes excellence in macrocyclic and supramolecular chemistry. It is known as one of the most prestigious small awards in chemistry. The Award is presented annually at the International Symposium on Macrocyclic and Supramolecular Chemistry ("ISMSC"). Two of the early recipients of the Award later shared the 2016 Nobel Prize in Chemistry. The precursor of the ISMSC was founded by Dr. Izatt and Dr. Christensen in 1977.
A privately-held Utah corporation, IBC counts among its shareholders a multi-billion dollar international manufacturing company, which has been a major customer and benefactor of IBC for over thirty (30) years. IBC has built its business upon integrity, trust and excellence and values its close association with such top-tier companies.
IBC provides proprietary, green chemistry and green engineering SuperLig® Molecular Recognition Technology products and processes worldwide. More information can be found at www.ibcmrt.com
SOURCE IBC Advanced Technologies, Inc.
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