Quest Uranium Corp.
Booth # 3008
is in a “Rare” Position Indeed
Peter Cashin
President & CEO
As its name indicates, Quest Uranium
started out in the uranium exploration
business and still holds properties with
excellent potential for that resource,
but in the past two years its focus has
turned mainly to the development of
what could turn out to be a hugely
profitable rare earth element (REE)
project in Quebec. The current price
of Quest’s stock certainly reflects the
market’s belief that this is a company
with a bright future in the production
of metals for which there is a rapidly
growing demand in numerous high
tech applications. We spoke with Peter
Cashin, Quest’s President & CEO, who
clearly made a strong case for why his
company was the best performing stock
on the TSX-V Exchange in 2009, growing
by over 5.530% during the year.
R
esource Intelligence: Can you give us a brief
rundown on how Quest got to be where it
is at this point in time?
Peter Cashin: Well, Quest started as a spinoff from
Freewest Resources and we had some 30 proper-
ties from the roll-in when I joined the company
in 2007. That was way too many for a company
our size to try to both hold and manage properly
so we distilled that number down to six proper-
ties that we thought were worth concentrating
our efforts on. Initially these were all uranium
properties.
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www.questuranium.com
416.916.0777
RI: How did you become a rare earth elements m, within a larger, 135.85 m-thick, mineralized
(REE) headliner? envelope grading between 0.9%-1.0% TREO.
PC: We were monitoring the status of claims RI: For those readers who aren’t familiar with
around our Strange Lake holdings in the George them, what exactly are rare earth elements?
River area of northeast Quebec and in the fall of
2007 we discovered that some claims adjoining PC: The REEs are a series of 15 metals critical
ours on the Quebec side of the Labrador bor- to the automotive, aerospace, high-tech, and
der were about to fall open and we immediately nanotechnology industries. What are called the
went in and restaked them for about $1,250 in “light” REEs with atomic numbers 57 through
staking costs. So we added about 600 hectares 62 are: La=lanthanum Ce=cerium Pr = praseo-
to our holdings of some 98,000 hectares in the dymium, Nd = neodymium, Pr=promethium,
area but those 600 may turn out to be some of Sm = samarium. The “heavy” REEs with num-
the most valuable, at least at this point in time. bers from 63 through 71 are: Eu=europium,
Gd=gadolinium, Tb=terbium, Dy=dysprosium,
RI: And what do you have on this huge land Ho=holmium, Er=erbium, Tm=thulium,
package? Yb=ytterbium Lu=lutetium. Currently, over
97% of the world’s rare earth metals are pro-
PC: On what we call the “A” Zone on the Strange duced in China. With their abundant resources
Lake Property, we hold the Québec portion of and low production costs they have a virtual
the Strange Lake REE-Zr-Y-Nb-Beryllium (Be) monopoly as a source for these metals. China
deposit which was discovered by the Iron Ore has placed strict controls on REE mining, pro-
Company of Canada in the late 1970’s. A his- duction and export in order to maximise its own
torical resource
estimate, pre-NI
use of the resources.
43-101 published RI: So how did China
by Venkatswaran “We believe that we end up in that pos-
in 1983 shows 52 ition?
million tonnes have what it will take
PC: Well, during the
@ 3.25% ZrO2, to make it all happen 1990s and early 2000s,
0.56% Nb2O5,
0.66% Y2O3, for our shareholders.” significant production
0.12% BeO and surpluses and the re-
~President & CEO Peter Cashin sulting low REE prices
1.30% Total Rare
Earth Oxides led most non-Chinese
(TREO). On April rare earth producers
30, 2009, John Kaiser of Kaiser Bottom-Fishing to cease their operations and users to rely al-
Report put the in-ground gross value of the “A” most exclusively on Chinese supplies. With a
Zone mineralization we currently control at curbing of exports from China and continued
about $4-billion. So, that was a great way to start growth demand elsewhere, the supply demand
out in the REE exploration space. deficit is causing great concern to major REE
consuming countries like Japan, Korea, Tai-
Then about 3 km NW of that we have a new wan, United States, which are now anxious to
discovery we call the “B” Zone which has a identify new sources of rare earths. With excel-
footprint about four times the size of the “A” lent prospects for growth in the hybrid auto
Zone. We drilled that down to 150 m last fall battery manufacturing, aerospace and elec-
and every single hole stopped in mineralization, tronics industries, there’s a projected demand
so we don’t yet know how big it could be but growth in REE of 8-11% per year and a very
the potential appears to be huge. The drill results pressing need for new non-Chinese produc-
confirmed strong REE mineralization over 1.1 tion capacity in the next three to five years.
km of strike, over widths of at least 500 m and
over vertical thicknesses of up to 135.2 m. Quest If China sticks to its announced production
now has 100% control of all of the favourable and export limits, there’s a real prospect that,
REE geology in and adjacent to our Strange within five to ten years, they will only produce
Lake deposit. Our surface sampling returned enough material to satisfy their domestic con-
spectacular grades of up to 14.43% Total Rare sumption. So, to meet the estimated global
Earth Oxides (TREO), with Heavy Rare Earth demand of 180-190,000t rare earth oxides
Elements (HREE) representing between 7% and (REO) in 2010, around 60,000t of new cap-
67% of the total TREO component. We later acity will be needed to meet the unfulfilled de-
confirmed the importance of the surface grades mand from outside China. On top of that, it’s
with diamond drilling, returning multiple, high- estimated that world demand could reach to
grade vertical intersections of between 1.03% 230,000 tonnes of REE per year by 2013, up
and 3.74% TREO over widths of 3.0 and 38.5
See page 96 for Disclosure, Disclaimers & Info on Mineral Resource and Reserves
 Quest Uranium Corp.
- Continued
from 135,000 tonnes in 2008. So it certainly
appears that primary production is unlikely to
keep up with the increasing demand.
RI: Tell us a little about the metallurgy and
structure of the Strange Lake Property.
PC: We have Hazen Research in Denver doing
metallurgy testing on a one-tonne bulk sample
of ore and it appears that we will be able to
get good recoveries using conventional meth-
ods. Work done by IOC when they had the
basic property indicated recoveries in the 70%-
80+% range and we appear to be getting simi-
lar results. From a mining aspect, there appears
to be virtually no overburden on the mineral-
ization so we should be able to mine by open
pit methods using conventional milling and
flotation and have an expected total cost in the
range of $110 and $125/t. At four-year average
metals prices, it appears that the higher-grade
surface mineralization should run, according
to John Kaiser, between $325 and $425/t in
gross value, so there should be a very nice mar-
gin in there.
RI: Strange Lake isn’t your only property with
great potential. You recently announced some
exciting news on your Misery Lake Property.
Free Revolutionary Online Investment Calculators and all 43-101 data with sources and project values www.resourceintelligence.net
Tell us about that.
PC: We are very excited about our Misery Lake
property which lies approximately 120 km
south of our Strange Lake project area. The rare
earth potential of the Misery Lake area was first
recognized by Quest exploration crews in Au-
gust 2007 when they did reconnaissance bed-
rock sampling over a concentric magnetic fea-
ture which produced grab sample results of up
to 27% Fe2O3, 1.2% P2O5, 1.5% TiO2 and
2.25% TREO including Yttrium. A total of
145 claims were staked to cover the anomalous
feature in September 2007. The ring complex
shows up as a 6-km diameter airborne magnet-
ic anomaly and translates into a target feature
that has a potential strike length continuation
of approximately 20 km. We obtained grab
samples from the “ring” which returned val-
ues of up to 8.56% Total Rare Earth Oxides,
42.3 % iron oxide, 7.12 % phosphate, 4.85 %
titanium oxide, 3.05 % zirconium oxide, and
2.72 % niobium oxide. The geology is similar
to the Lovozero Peralkaline Complex in Rus-
sia, which is their primary producing area for
rare earths, niobium, tantalum, phosphate and
zirconium. We recently identified new, high-
priority REE targets to the south of the Misery
Booth # 3008
www.questuranium.com
416.916.0777
Lake discovery which has led to the staking of
1,500 more mining claims covering approxi-
mately 60,000 hectares. So now the property
consists of 1,776 claims, covering 794 km2 in
Quebec and Labrador.
RI: It’s probably premature to speculate at this
point, but when do you think it would be pos-
sible to expect to see some production from
your Strange Lake properties and what do you
think it would cost to get into production?
PC: We’ll definitely have a better idea when we
have a feasibility study in hand but I personally
think we could be breaking our first rock in
about five years after a project Capex running
in the order of $500 to $600 million.
RI: In closing, what points would you like in-
vestors to focus on in considering Quest as an
attractive investment at this time?
PC: We believe that we have what it will take to
make it all happen for our shareholders: the
high-value REE resources in the ground, the
potential for developing much more of them
in the future, the financing we need at this
time, and the experienced people to bring it
all together.
Milestones:
• 43-101 resource estimate for
the Main and B zones by early
April
• A metallurgical study complete
by Q2, 2010, followed by a
Scoping Level Study
• $5.5 million exploration pro-
gram in 2010
• Move tonnage from inferred
into the indicated category
for use in a Feasibility Study in
2011
• Production by 2015
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