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November 30, 2008 RARE EARTH RESERVES AND RESOURCES AND ASSOCATIED MINERALIZATION OF THORIUM ENERGY, INC., LEMHI PASS, IDAHO AND MONTANA NOVEMBER 2008 Prepared for:Thorium Energy, Inc.Williams Investment Company19 East 200 SouthSuite 1080Salt Lake City, Utah 84111 Prepared by:Rich Reed, P.E., P.G., R.E.M.Idaho Engineering & Geology, Inc.1846 Spring MeadowBoise, Idaho 83706 Attorney Privileged and ConfidentialThis report is privileged and confidential and is the sole property of Thorium Energy Inc. Copies can not be made or distributed without the expressed written consent of Thorium Energy, Inc. IDAHO ENGINEERING & GEOLOGY, INC.CONSTRUCTION, ENVIRONMENTAL & NATURAL RESERVES 1846 Spring Meadow LaneBoise, ID 83706 FAX (208) 345-1307 CELLULAR (208) 863-2112
LEMHI PASS, IDAHO AND MONTANA NOVEMBER 2008 EXECUTIVE SUMMARY This report summarizes the rare earth elements of the thorium and rare earth vein deposits of unpatented mining claims of Thorium Energy, Inc. located in the Lemhi Pass Thorium District of Idaho and Montana. This report provides a detailed discussion of the individual rare earth elements including their distribution and estimated amounts of the individual rare earths based upon reported reserves and resources by the United State Geological Survey (USGS) and Idaho Energy and Resources Company (IERCO) a former subsidiary company of Idaho Power Company. It also discusses the possible mode or origin of mineralization based upon the relative concentrations of the individual rare earth elements and the potential for a buried larger mineralized system possibly similar in nature to peralkaline REE-Th, IOCG/Fe-REE and/or carbonatite models of deposition. A summary report of proven reserves and resources of thorium and total rare earths in the Lemhi Pass of Idaho and Montana of Thorium Energy Inc. has been completed (IEG, April 2008). That report provides relevant information of historical reports of the thorium and total rare earths as well as historical names and respective claim names and holdings of Thorium Energy Inc. Thorium and rare earth vein deposits in the Lemhi Pass of Idaho and Montana are the largest known in the United States. The United State Geological Survey (USGS), the United States Atomic Energy Commission (AEC), the United States Defense Minerals Exploration Administration (DMEA), the United States Bureau of Mines (USBM), the Idaho Bureau of Mines & Geology (IBM&G) – Idaho Geological Survey (IGS), Montana Bureau of Mines & Geology (MBM&G) have performed a number of investigations throughout the years in greatly contributing to the current understanding of the thorium deposits in the Lemhi Pass. In addition many private individuals, and a number of companies, including Nuclear Fuels and Rare Metals Corporation, Sawyer Petroleum and Union Pacific Railroad, Dow Chemical, Tenneco Oil Company, and Idaho Power Company to name a few have also actively explored and evaluated the mineral deposits in the Pass over the years and also have greatly contributed to their understanding. Amounts of total rare earths vary within an individual vein and between the different vein deposits. However the relative amounts of individual rare earths appear to be consistent within individual veins and like many of the veins in the Pass are enriched in the MREE, particularly in neodymium. Niobium is also relatively enriched in many of the veins. The amounts of thorium and rare earth contained in the claim holdings of Thorium Energy, Inc. in the Lemhi Pass District have been estimated from its proportionate holdings of the reported indicated reserves or resources by the U.S. Geological Survey. It is estimated that an indicated reserve or resource of about 157,790 short tons of ThO2 and an inferred reserve or resource of 115,210 short tons of ThO2 or a combined reserve or resource of 273,000 short tons of ThO2 at about an average concentration of 0.40 % (8 lbs. /ton) is contained within the claim holdings of Thorium Energy Inc. In addition it is estimated that an indicated reserve or resource of about 212,855 short tons of REO and an inferred reserve or resource of 141,745 short tons of REO or a combined reserve or resource of 354,600 short tons (T) of REO at an average concentration of about 0.52 % (10 lbs. /ton) is also contained within the holdings of Thorium Energy Inc. Estimates of the resource amounts and grades of individual rare earth elements contained within the holdings of Thorium Energy Inc are: 74,340 T of yttrium at about 0.11 %, 24,780 T of lanthanum at about 0.04 %, 67,260 T of cerium at a grade of about 0.10 %, 10,620 T of praseodymium at about 0.02 %, 63,720 T of neodymium at about 0.09 %, 38,940 T of samarium at about 0.06%, 14,160 T of europium at about 0.02 %, 38,940 T of gadolinium at about 0.06 %, 1,770 T of terbium at about 0.003%, 14,160 T of dysprosium at about 0.0.02%, 1,770 T each of holmium, and ytterbium at about 0.003% each, and about 885 T or less each of erbium, thulium, and lutetium at about 0.001 % or less each. The Last Chance thorium and rare earth vein deposit is located in the Lemhi Pass and is part of the ThO2 and REO reserves reported by the U.S. Geological Survey. It is held under claim by Thorium Energy, Inc. The Last Chance vein is reported to be the most significant thorium vein deposit in the Lemhi Pass and also the richest thorium vein deposit in the United States. It has been reported to contain an average concentration of thorium oxide, ThO2 of 0.39 % (7.8 lb. /ton) and rare earth oxide, REO of 0.33 % (6.5 lbs. /ton). It has a measured proven reserve of about 16,425 short tons of ore containing 387,120 lbs. (194 short tons) of ThO2 and 306,465 lbs. (153 short tons) of REO and a combined probable and possible reserve or resource of 582,850 short tons or 4,558,860 lbs. (2,279 short tons) of ThO2 and 3,793,035 lbs. (1,897 short tons) of REO. Recent and on-going work suggests the potential for a buried larger mineralized system possibly similar in nature to peralkaline REE-Th, IOCG/Fe-REE and/or carbonatite models of deposition. Discovery of a Cambrian syenite and examination of other petrologic and mineralogical signatures in the Pass, as well as geochronological work in progress, may help to identify the origin of the deposits and the potential for a larger buried hydrothermal iron oxide – REE deposit, carbonatite or per alkaline, intrusive-related mineralized system. Detailed discussion regarding this potential is beyond the scope of this report. Recent interest in the nuclear generation of electricity and the use of thorium as a fuel source both in the United States and abroad and recent increases in the price of uranium should certainly renew interest of thorium and rare earth deposits in the Lemhi Pass of Idaho and Montana. In addition, there has been an increase in demand and a decrease in the supply of available rare earths in recent years and forecasts of even greater demand. Global demand of rare earths is expected to increase at about 9 % per year over the next few years resulting in a shortfall in 2010 which should also add to the interest of the thorium and rare earth deposits in the Pass. Niobium may be a by-product from thorium and rare earth production and would aid to the economics of the deposits.
RARE EARTH RESERVES AND RESOURCES AND ASSOCIATED MINERALIZATION OF THORIUM ENERGY, INC. LEMHI PASS, IDAHO AND MONTANA NOVEMBER 2008 INTRODUCTION Traditional markets and use of rare earths is the metallurgical, magnet, ceramic, electronic, chemical, and optical industries. The demand and use of rare earths has increased significantly over the last few years in response to new uses, supply, and demand. The main growth markets are expected to be in their use in catalysts, magnets, alloys, particularly in phosphors for energy efficiency in the auto industry. China is the world’s largest supplier and also the world’s largest consumer with an estimated annual increase in consumption of about 28 percent since 2002 (Benfield, 2008). China is currently restricting its production and regulating its export of rare earths. Global demand is expected to increase at about 9 % per year over the next few years resulting in a shortfall in 2010. Similar estimates and projections of supply and demand have been recognized by others. Kingsnorth, 2008 reports a total demand of 120,000 metric tons of REO with a total US$ value of 1.3 billion and an average price of US$ of $ 10-12 per kg ($ 4.50 – 5.50 per lb.) of REO and estimates a shortage of Dy, Nd, Eu, and Tb by 2012. Recent interest in the nuclear generation of electricity and the use of thorium as a fuel source both in the United States and abroad and recent increases in the price of uranium should certainly renew interest of thorium and rare earth deposits in the Lemhi Pass of Idaho and Montana. In addition, there has been an increase in demand and a decrease in the supply of available rare earths in recent years and forecasts of even greater demand which should also add to the interest of the thorium and rare earth deposits in the Pass. This report summarizes the rare earth elements of the thorium and rare earth vein deposits of unpatented mining claims of Thorium Energy, Inc. located in the Lemhi Pass Thorium District of Idaho and Montana. This report provides discussion of the individual rare earth elements including their distribution and provides an estimate of proven, indicated, and inferred reserves and resources of the individual rare earths in the Lemhi Pass of Idaho and Montana of Thorium Energy Inc. (Thorium Energy) unpatented mining claims based upon reported reserves as resources by the United State Geological Survey (USGS) and IERCO, a former subsidiary company of Idaho Power Company. The report provides reported amounts of individual rare earths of the previous work as well as results of more recent analysis. It also discusses the possible mode or origin of mineralization based upon the relative concentrations of the individual rare earth elements. A summary report of proven reserves and resources of thorium and total rare earths in the Lemhi Pass of Idaho and Montana of Thorium Energy Inc. has been completed (IEG, April 2008). That report provides relevant information of historical reports of the thorium and total rare earths as well as historical names and respective claim names and holdings of Thorium Energy Inc. The district strides the continental divide separating Montana and Idaho (See Figure 1). A general location map of the unpatented mining claims of Thorium Energy and respective thorium and rare earth veins are shown on Figure 2. For purposes of this report and respective reported values of total or individual rare earth elements or rare earth oxides are treated as the same. A brief description of historical background information regarding rare earths, general geology and mineralogy, and recent and on-going work is provided. More detailed information regarding these topics can be found in the cited references, including the earlier report by Reed, April 2008. Mr. Rich Reed and Mr. Steve Derricott provided claim staking services for Thorium Energy in 2006 and 2007. They also examined a number of veins and intrusive dikes in the Lemhi Pass and collected samples for petrologic examination and recent analytical analysis of thorium, rare earth elements, and other trace and major elements on behalf of Thorium Energy and Idaho Geological Survey (IGS). The thorium and total rare earth element concentrations from these recent analyses are provided herein. The results collaborate earlier findings regarding total and individual rare earth concentrations of the various vein deposits reported by previous investigators. This report provides a more detailed discussion regarding the rare earth and other major and trace elements of the vein deposits of the Lemhi Pass. A summary report of proven reserves and resources of thorium and total rare earths in the Lemhi Pass of Idaho and Montana of Thorium Energy Inc. have been completed (Reed, April 2008). That report provides relevant information of historical information of the thorium and rare earths as well as historical names and respective claim names and holdings of Thorium Energy Inc. This report was prepared by Rich Reed of Idaho Engineering & Geology, Inc. (IEG). Mr. Reed is a registered professional engineer and geologist. Mr. Reed worked on a number of the same thorium and rare earth veins in the late 1970s thru the early 1980s in the Lemhi Pass while employed by Idaho Power Company. Mr. Steve Derricott an independent registered professional geologist worked on these same veins with Mr. Reed while he was also employed by Idaho Power Company. Mr. Reed and Mr. Derricott have experience in mineral exploration and mining claim staking, recordation, and filing. Each is familiar with the Lemhi Pass area having done mineral exploration, claim examinations, and claim staking in the Lemhi Pass in the late 1970s and early 1980s on behalf of Idaho Power Company. Each has worked on a number of the thorium vein systems and corresponding claims, commonly known by historic name and location, including a number of the same veins and same corresponding claims of Thorium Energy. The United State Geological Survey (USGS), the United States Atomic Energy Commission (AEC), the United States Defense Minerals Exploration Administration (DMEA), the United States Bureau of Mines (USBM), the Idaho Bureau of Mines & Geology (IBM&G), Idaho Geological Survey (IGS), Montana Bureau of Mines & Geology (MBM&G) have performed a number of investigations throughout the years in greatly contributing to the current understanding of the thorium deposits in the Lemhi Pass. In addition many private individuals, and a number of companies, including Nuclear Fuels and Rare Metals Corporation, Sawyer Petroleum and Union Pacific Railroad, Dow Chemical, Tenneco Oil Company, and Idaho Power Company to name a few have also actively explored and evaluated the mineral deposits in the Pass over the years and also have greatly contributed to their understanding. Thorium Energy Inc. acquired all of Idaho Power Company’s data and files in 2006, which included available information and data of Sawyer Petroleum and Union Pacific Railroad, and Tenneco. Work by the USGS and IGS continues on the thorium deposits in the Lemhi Pass. Officers of Thorium Energy began investigating and acquiring thorium vein deposits in about 1998. The Lemhi Pass Thorium District, as it is commonly referred to, covers approximately 55 square miles in the central part of the Beaverhead Mountains lying astride the Continental Divide in Idaho and Montana. The area is principally contained in T19N, R24E and R25E and in part within T18N, R24E and 25E, BM in Idaho and T10S, R15W and in part within T11S, R15W, MM in Montana. It is located about 20 miles southeast of Salmon, Idaho and lies in Beaverhead County, Montana and Lemhi County, Idaho. A panoramic view of the area near the divide in Idaho is provided in Figure 3. The district can be primarily accessed from a gravel county road from Tendoy, Idaho located off Idaho State Highway 28 about 10 miles south of Salmon that follows along much of Agency Creek and crosses the Divide at Lemhi Pass then follows Trail Creek over to Armstead, Montana. Secondary unimproved Forest Service and BLM roads access the district along the Continental Divide from the Lemhi Pass and from a number of others off Trail Creek in Montana and others in Idaho including Pattee, Yearian, Reese, and Peterson Creeks off the Lemhi Valley. Maximum relief of the area is about 4,000 feet with the lower part along the Lemhi River Valley at about 5,000 feet and highest part along the Continental Divide at about 9,000 feet above sea level. Snow is abundant from late October to late May and access to the higher elevations may typically be as late as the end of June or longer. PURPOSE The purpose of the report is primarily to report on the total rare earths and individual rare earths of the thorium and rare earth vein deposits of unpatented mining claims of Thorium Energy, Inc. located in the Lemhi Pass Thorium District of Idaho and Montana and provide an estimate of quantified proven reserves, and indicated and inferred resources of total and individual rare earth elements of Thorium Energy’s unpatented mining claims based upon reported reserves and resources by the United State Geological Survey (USGS) and IERCO, a former subsidiary company of Idaho Power Company and recent analytical work. It also discusses the possible mode or origin of mineralization based upon the relative concentrations of the individual rare earth elements and associated metals and a potential for a buried larger mineralized system possibly similar in nature to peralkaline REE-Th, IOCG/Fe-REE and/or carbonatite models of deposition. For purposes of this report and respective reported values, individual rare earths or total rare earths (TREE or REE) and/or individual and total rare earth oxides (REO) are treated as the same. GENERAL GEOLOGY AND MINERALOGY Bastnaesite, monazite, and xenotime are typically the most important rare earth minerals (Jackson, 1993). Bastnaesite occurs principally as a primary mineral in carbonatites. While monazite and xenotime can also be found in primary deposits, they are recovered principally from heavy mineral placers mined for titanium or tin. Castor & Hedrick, 2004 report a number of minerals that contain rare earths that occur in economic or potentially economic deposits that also includes iron-REE minerals in addition to others such as bastnaesite, monazite, and xenotime. Samson and Woods, 2005 include the Lemhi Pass thorium and rare earth deposits in their discussion regarding the origin of various rare earth deposits that includes rare earth analysis of deposits in the Lemhi Pass (See Appendix A). They report monazite as the dominate rare earth mineral followed by xenotime and apatite. They also report chondrite and individual rare earth ratio plots, including work by Gibson, 1998 regarding the origin of the thorium and rare earth deposits in the Pass. Gibson suggests that the original mineralizing fluids were light rare earth element (LREE) enriched magmatic or metamorphic fluids and middle rare earth element (MREE) enrichment followed caused by LREE depletion due to mineral precipitation. Respective plots of individual rare earth ratios of veins places the Lemhi Pass vein deposits within an iron oxide-REE field of origin. Plots of Olympic Dam carbonates compare reasonably well with the carbonatite plot of the Lemhi Pass. In general quartz veins that include the thorium and rare earth bearing veins are contained in Precambrian Belt Series rocks consisting principally of quartzite and argillite. The quartz veins can be basically grouped into four types (Sharp, 1962); quartz-hematite-thorite veins; quartz-copper-bearing sulfide-thorite veins; quartz-copper-bearing sulfide veins; and quartz-hematite veins. The thorium bearing quartz veins are most abundant where three major faults intersect. According to Staatz, 1979 the principal thorium and rare earth mineral in the veins is thorite whereby Th is commonly replaced with rare earths and SiO4 with PO4, followed by monazite, and brockite, to lesser degrees, allanite, synchisite, and doverite; and as trace amounts of xenotime and bastnaesite. Sharp, 1968 indicates that the USBM identified the principal ore mineral as phosphatic thorite or aueralite, an isomorphous series between xenotime (YPO4) and thorite (ThSiO2) by substitution of yttrium (Y) plus REE for Th and PO4 for SiO4. He reports that allanite and monazite containing thoria and rare earths are locally common, but are usually subordinate to aueralite. More detailed mineralogy and geology of the vein deposits in the district can be found in the cited references. Recent work by the USGS and IGS has identified new geologic and structure and mineral age relationships and genesis since this earlier work and will be discussed more fully in subsequent discussion. A report by the IGS was in progress at the time of this report. HISTORICAL RARE EARTH BACKGROUND INFORMATION Geology, ore genesis, mineralogy, and apparent rare earth element (REE) fractionation and potential zonal relationships of copper or gold and other minerals of the thorium and rare earth deposits of the Lemhi Pass have been investigated and reported by others: Anderson, 1958; Sharp etal, 1962; Geach, 1966; Sharp etal, 1968; Austin 1968; Austin etal January, 1970; and Staatz, 1972, 1974, and 1979. Anderson, 1958 reported that the deposits contain considerable concentrations of thorium and rare earth elements (regarded primarily as thorite deposits and REE principally of the cerium (LREE) group associated with silicon, phosphate, barium, potassium, calcium, iron, and sulfates. Principal minerals include thorite, allanite, monazite, apatite, specular hematite, barite, feldspar, calcite, and quartz. The minerals typically are microscopic and generally can not be detected by the unaided eye. Specularite and feldspar typically are the main markers of mineralization, but radioactivity is the principal guide to the ore. Anderson believed that the deposits are younger than the Idaho batholith and genetically related with late Cretaceous or early Tertiary magmatic activity. Because of mineral associations and structural relations, he considered the deposits as hydrothermal veins and lodes composed of a unique group of minerals which in part are more characteristic of igneous rocks and pegmatite than of veins. The thorite and associated minerals have been introduced from sources presumably deep within the earth. The association of thorium and rare earths metals with phosphates, iron oxides, barium sulfate, potash feldspar, calcium carbonate, and silica occurs in conjunction with igneous activity, representing some of the products formed during differentiation of alkali magmas. The presence of a few dioritic and lamprophyric dikes in the vicinity of the deposits may serve as evidence that such a magma did exist at depth. Sharp etal, 1962 proposed apparent zonation of thorium and copper mineralization in the Lemhi Pass. Sharp reports quartz veins and irregular siliceous replacement bodies containing copper, gold, and thorium. He also suggests a zonation of the different types of veins and their respective mineral assemblages related to copper, thorium, and hematite in the Lemhi Pass (See Appendix B). The Wonder and the Buffalo thorium and rare earth veins were mined for copper and other associated metals in their early development although production was minimal. It has been reported that copper minerals are evident throughout the outcrop length of the Wonder thorium vein. A suite of samples contained between 1.5 % and 2.8 % copper. The westerly portion of the vein located closest to a mapped fault and about 300 feet lower in elevation than its remaining exposure is less radioactive and contains substantially more copper, base, and precious metal mineralization. As reported previously by Sharp, 1962 and again by Staatz, 1979: concentrations of Cu, as high as 2.8 %; Zn, as high as 3.4 %; Ag as high as 0.99 oz. per ton; and 0.020 oz. per ton of Au is contained in samples from the Wonder vein. Geach, 1966 was one of the first investigators to examine the individual rare earth elements in much detail. Geach presented results of x-ray spectrographic analysis by the AEC of a number of thorium and rare earth veins in Montana and included earlier work by Sharp, 1962. Semi-quantitative results were presented that indicates yttrium is the dominant rare earth element in the veins in Montana followed by the cerium or light rare earth elements (LREE) group and the terbium or middle rare earth elements (MREE) group. Austin, 1968 provided a summary report of thorium and rare earths of the Lemhi Pass mineral zone that included as many as thirty nine (39) veins analyzed from 1964-1965 by the AEC that included multiple analyses of individual veins. Analysis included emission spectrography, x-ray spectrography, and wet chemical. The purpose of his work was primarily to evaluate the various analytical methods used at that time. He reports elevated yttrium accompanies the rare earths in the veins. He reports that the principal thorium and rare earth mineral in the veins is thorite and generally exhibit a higher thoria (ThO2) to rare earth oxides (REO) than the replacement deposits that are dominated by monazite. He classifies the Lucky Horseshoe vein in the Lemhi Pass as a monazite deposit. Based on a review of this data by IEG, it is apparent that over half of the veins analyzed are enriched in yttrium. At least seven of these veins appear to be enriched with middle rare earth elements (MREE) such as gadolinium and/or relative enrichment of heavy rare earths (HREE) and includes the Atomic Blast, Black Bear 2, Caga, Shear Zone, Mornell, Reactor, SQ-38A, SQ-52B, ThO2, and the Wonder. According to Sharp 1968, regional forces that formed the Rocky Mountain trench apparently have influenced the location of the thorium and rare earth deposits in the Lemhi Pass area that includes a mineralized zone extending from Leadore, Idaho at the southeast end to North Fork, Idaho at the northwest end. Commonly, veins containing monazite and the cerium group of rare earths occur at the northwest end while veins farther to the southeast contain thorite and the yttrium group of rare earths. Specular hematite, feldspar, calcite, barite, and quartz are discernable to the naked eye. He indicates that the USBM has identified the principal ore mineral as phosphatic thorite or aueralite, an isomorphous series between xenotime (YPO4) and thorite (ThSiO2) by substitution of yttrium (Y) plus REE for Th and PO4 for SiO4. He reports that allanite and monazite containing thoria and rare earths are locally common, but are usually subordinate to aueralite. Specular hematite, feldspar, calcite, barite, and quartz are discernable to the naked eye. However, other commonly present minerals of aueralite, apatite, allanite, and pyrite are not. He reports that there is a relatively high content of Yttrium rare earths (HREE) in most veins and that the rare earths will become an important source as their demand improves. He also reports that the Wonder-Black Rock vein contains up to two ounces of silver and several pounds of zinc besides the thorium and rare earths. Sharp indicates that there is no apparent restriction on depth of mineralization in that rich veins occur at the top of the continental divide as well as in the low foothills, some 4,000 feet of vertical relief. Reserve estimates are provided in subsequent discussion. Discussion related to mining and milling methods is also presented. Austin, January 1970 reports elevated yttrium accompanies the rare earths in the veins. He reports that the principal thorium and rare earth mineral in the veins is thorite and these veins generally exhibit higher thoria (ThO2) to rare earth oxides (REO) than the replacement deposits that are dominated by monazite. He classifies the Lucky Horseshoe vein in the Lemhi Pass as a monazite deposit. He also presents a detailed discussion of the mineralogy of the Lemhi Pass area. Although titled and described as the Lemhi Pass, Lemhi Pass in his report includes thorium and rare earth deposits that encompasses a northwest trending “mineral zone” extending from Leadore, Idaho at the southeast end to North Fork, Idaho at the northeast east end. Thorium and rare earth deposits described by Staatz and others include the area actually surrounding the Lemhi Pass that borders both Idaho and Montana southwest of Salmon, Idaho. He also provides a table of the various minerals that had been identified in the district and discusses possible and reported paragenesis of the vein mineralization. He classifies the mineral deposits into two distinct types; 1) base and precious metal veins with minor thorium primarily near the western border and 2) thorium veins with rare earths and minor base and precious metal. The thorium veins are further divided into quartz-hematite-thorite veins predominately located in the southeast (actual Lemhi Pass, Idaho and Montana) and replacement deposits with monazite dominantly located at the northwest end North Fork, Idaho. He indicates that some of the quartz-hematite-thorite veins have mineralogical attachments with carbonate gangue of calcite, manganocalcite, siderite, ankerite (ferroan dolomite) that are rich in thorium. He cites work by Sharp, 1962 regarding post genesis and replacement of quartz by siderite, barite, and thorite in the Wonder and Last Chance veins and of particular interest relationships between quartz and the carbonate minerals and suggests that the veins may have contained carbonate minerals which were replaced to some degree by quartz based on evidence indicated at the SQ-52B vein. He indicates that the quartz and carbonate may have penecontemporaneous or more likely there may be more than one generation of quartz and primary carbonate minerals. He further describes the rough mineral zonation of the district and recognizes that neither the indicated zoning nor the types of deposits are sharply defined. He also adds that zonation is further complicated by the occurrence of gold, sliver, and base metals in quartz-hematite-thorite veins neat the center of the district. Staatz reported in Economic Geology, 1972 the results of REE analysis of 21 veins in the Pass. He reports that thorium and rare earths commonly occur together in the same mineral, but in different proportions. He reports TREE to Th ratios range from 0.05 to 9.2. The higher ratios occurred in 5 of the veins ranging from about 3 to 1 to about 9.2 to 1. The higher ratios occurred in the Luck Horseshoe generally ranging from about 6.3 to 8.1; the Black Bull Frt. at about 3.3 - 4.8 to 1; MSDs No.8 at about 3.3 to 1; the HRS No. 1 at about 3.0 to 1, and about 9.2 to 1 in the Atomic Blast. The three most common REE and Th bearing minerals are thorite, monazite, and brockite. He acknowledges the difficulties in identifying typical rare earth bearing minerals due to the character of the veins whereby mineralization is fine grained and the rare earth minerals are masked by abundant iron and manganese oxides. He provides a plot of the REE spatial distribution of veins of predominately cerium, neodymium, gadolinium, or dysprosium (See Appendix B). He reports that the veins in the Lemhi Pass are unusual in that neodymium is the most abundant rare earth in most of the veins and that europium is also concentrated in many of the veins more than it is in the earth’s crust (See Appendix C). He surmises that the concentration of the neodymium and europium is caused by fractionation close to but not at the present site of the vein. Staatz recognizes that the veins although considered principally as a source of thorium, indicate that they are as equally important as a source for rare earths. He also indicates that the importance of the rare earths has generally not been recognized. He indicates that the overall thoria content of the veins in this area is only slightly greater than the total content of rare earth oxides and therefore the potential value of the total rare earth in the veins is several times the value of the thorium. Staatz, 1979 reports that neodymium is the most abundant rare earth in many of the veins although this could possibly be attributed to depletion of cerium rather than an enrichment of neodymium. He also reports that europium makes up a greater portion of total rare earths in about 70 percent of the veins in the Lemhi Pass as compared to other reported occurrences of thorium and rare earth vein deposits. Carbonate gangue minerals are somewhat scarce in the thorium veins: calcite, dolomite, and/or siderite have only been detected in nine veins; all occurring within the major fault structures and most all occurring in relatively close proximity to one another. One small carbonatite dike and apparently related breccia pipe is also present which may offer a clue to a buried alkalic body according to Staatz. According to Staatz, 1979 the principal thorium and rare earth mineral in the veins is thorite, whereby Th is commonly replaced with rare earths and SiO4 with PO4, followed by monazite and brockite, to lesser degrees; allanite, synchisite, and doverite, and trace amounts of xenotime, and bastnaesite. IERCO, a subsidiary of Idaho Power Company performed exploration work including surface trenching, drilling, tunneling, mapping, sampling and analysis on a number of the vein deposits from about the middle 1980s to the early 1990s. Work also included thorium and individual rare earth analysis. Earlier work by other private companies focused primarily on thorium and total rare earths. The individual rare earth data of IERCO, 1987 was compiled and evaluated in recent work by IEG and IGS and is subsequently discussed. It should be noted that in addition to the thorium and rare earth mineralization, copper veins were staked in 1893 in the Pass and prior to the discovery of thorium, two of the thorium and rare earth veins (Buffalo and Wonder veins) in the Pass were mined for copper and associated metals, although production was minimal. Reported ore concentrations of Cu were as high as 2.8 %, with up to 3.4% Zn, 0.99 oz. per ton Ag, and 0.020 oz. per ton of Au. Appreciable concentrations of copper, zinc, lead and anomalous silver and gold occur in a number of the thorium and rare earth veins in the Pass. RECENT AND ONGOING WORK IEG has made a brief examination of the summary of analytical and mineralogical data provided by Sharp, 1962, and Staatz, 1972 and 1979, which included some of the data reported by other workers and IERCO. Although the review was restricted because of the limited analytical and mineralogical data available, not all veins in the district had been examined for minerals or geochemically analyzed (See Tables 1 and 2) mineralogical and analytical data suggest possibly an association of copper and other trace metals in an area of the district occurring between the Last Chance deposit at the SE end and possibly the Lucky Horseshoe at the NE end (See Appendix D). This area also comprises the general locations of three major faults in the Pass and the area of reported copper mining in the early days. Of particular interest is the Wonder and Buffalo thorium and rare earth veins located about in the middle of this area and near the Copper Queen mine that were mined in the late 1800s and early 1900s for copper and associated metals although thorium had not been recognized. Vein material from the Wonder includes siderite, an iron calcite mineral. Also within this same area, two other reported thorium and rare earth bearing veins that have been classified as calcite (IERCO-Deer) or siderite (Sharp, 1962; sample AS by IEG) occur. Both the Deer calcite-thorium vein reported by IERCO and the siderite-thorium vein reported by Sharp, 1962 are located just west of the Copper Queen mine and near the intersection of the three major faults. In addition to the Copper Queen vein there are a number of other copper bearing thorium and rare earth veins in this vicinity, such as In Trust (Anderson, 1958, Sharp, 1962, and Staatz, 1979). It is also noted that the westerly portion of the Wonder vein contains lesser relative amounts of thorium and rare earths than the easterly exposed portion. The TREE to Th ratio is also somewhat elevated in the westerly portion of the vein typically measuring above 2 or greater as compared to much lower ratios measured at the easterly portion of the vein. The copper and associated metals, including gold and silver, are also significantly higher at the west end of the vein which is at a lower elevation of a few hundred vertical feet (the portion of vein previously mined) and adjacent to one of the three major faults mapped by others in the area. This is the same area where a Cambrian syenite intrusive has been identified by IGS and is also where IEG recently found porphoritic granodiorite float. This cursory evaluation would indicate that this area may likely have the greatest potential of a buried larger hydrothermal iron oxide – REE deposit, carbonatite or per alkaline, intrusive-related type deposit although the current understanding is preliminary in nature. More detailed discussion regarding this potential and work by the IGS follows. Additional work is needed to further evaluate potential zoning of mineralization possibly by spatial distribution of the rare earth elements and copper and associated metals. New mapping of the Salmon National Forest including portions of the Lemhi Pass in Idaho was done by the USGS (Lund, 2003). Based upon review by IEG, mapping by Lund was on a much broader scale and likely relied primarily on aerial photography and not necessarily on ground proofing. Lund’s mapping is also restricted to Idaho and does not extend into Montana. More recent work by the IGS has focused on mapping in the field, particularly near the vicinity of the Pass but final results are not yet available. Major differences in mapping in the Lemhi Pass thorium district by Lund versus that of Sharp, 1962 and Staatz, 1972 & 1979 includes the occurrence of thrust faulting along the west side of the divide in Idaho (See Appendix D). Lund also omitted most all of the northeasterly trending faults identified by Sharp and Staatz. In addition, Lund has classified older Precambrian Belt Series rock classified by Staatz as undifferentiated siltite and quartzite as younger Gunsight Precambrian rock described by Staatz as grey feldspathic quartzite and by Lund as dark grey medium grained feldspathic metasandstone. This change of rock classification is primary along the west side (Idaho side) of the Divide and south to about the headwaters of Yearian Creek. More notable thorium and rare earth veins that appear to be included in the reclassified Gunsight host rock include the Lucky Horseshoe, Buffalo, Wonder, and Cago No. 12, as well as those veins on the Divide extending south from the Wonder No. 18 vein to the Saddlehorn No. 3 vein. Portions of older undifferentiated Precambrian rock north of the Lemhi Pass Fault have also been reclassified as younger Gunsight quartzite. Further mapping and evaluation work of the Lemhi Pass Thorium District has been recently done by the IGS (Gillerman, 2000, 2001, 2002, 2003, and 2008). Gillerman reported that the structure and petrology of some of the deposits in the Lemhi Pass are similar to Mesoproterozoic epigenetic mineralization, and display many features of Iron Oxide-Copper-Gold-Uranium-Rare Earth Element Deposits (Gillerman, 2000, 2001 & 2003). Gillerman, 2000, indicates that reconnaissance work suggests that the Lemhi Pass mineralization may better be explained as a variant on Olympic Dam type Proterozic Cu-U-Fe-REE association. She also suggests that copper present in veins with or without thorium may possibly be associated with Protoerozoic-age mafic sills and dikes. Gillerman, 2002 indicates that both Tertiary and Precambrian ages have been suggested for mineralization which could belong to the Fe-Cu-U-REE class of deposits she described in 2000. She reports that age dating of monazite deficient in thorium is 800-1100 Ma with thin rims of thorium enriched monazite being considerably younger or about 200-400 Ma based on samples of the Lucky Horseshoe. She also reports that the older monazite correlates well with the age dating of molybdenite of 1055 Ma from a nearby copper vein. Gillerman, 2002, in her second abstract also reports that stoichiometric thorite with high lead provide ages of 330-280 Ma similar to the monazite rims dating about 200-400 Ma. Two other altered populations of thorite give ages of 200-280 Ma and 100-180 Ma, but lacked Tertiary signature. The results were considered consistent with field relations and confirm Precambrian regional relations and provide “hidden” evidence of a Paleozoic hydrothermal event and document secondary alteration probably related to Mesozoic structural and magmatic evolution. Mapping by the IGS has provided new insights into regional geology and tectonics in and around the Lemhi Pass and has revealed numerous examples of where the thorium and rare earth deposits were cut by likely Cretaceous age structures or pre-Tertiary unconformities (Gillerman, 2003). The syenite discovered by the IGS during mapping in 2006 is located in the south-eastern corner, Sec. 23, T19N, R23E (Boise Meridian), just on the Idaho side of the Continental Divide near Staatz’s Bull Moose Fault. The syenite, was dated by U-Pb methods at 529.1 million years old (with an error of approximately 5 million years). The syenite is most likely cut off by the fault, although outcrop is poor and the direction of offset is only conjecture. A single subcrop of syenite was also found in a trench below and south of the Bluebell copper claims, and the significant amount of epidote-bearing hornfels in the area is compatible with a buried intrusive. New, unpublished Ar40/Ar39 ages of hornblende from two mafic dikes are also compatible with an earliest Cambrian intrusive complex. Red-brown hornblende in the sulfide-mineralized Copper Queen porphyry dike is older than 400 Ma, and brown hornblende megacrysts in the Location 77 carbonate-matrix breccia pipe gave a good “plateau age” of 558 Ma. Thus, although the exact relations between the Th-REE veins and the intrusives are yet to be determined, evidence for a Cambrian alkaline intrusive system is mounting. There is actually a NW-trending belt of Neoproterozoic-Paleozoic alkaline affinity systems extending through the region, according to USGS work and older maps. However, economic thorium mineralization is not known elsewhere in the region. Furthermore, a digital compilation of the USGS regional scale aeromagnetic survey (USGS OFR 99-371) does show a magnetic high along the Continental Divide with a low (often associated with alteration) near the north side of Lemhi Pass and a small circular high just south of the syenite, approximately between the Cago and Last Chance mines. The resolution of the aeromag data is insufficient for precise location of intrusives or alteration systems. The lack of drilling or detailed geophysics in the district makes it impossible to better evaluate the subsurface potential for a causative, deeper and larger system, whether alkaline intrusive, carbonatite, or even IOCG. However, the age constraints do indicate that both veins and intrusives are likely to have been offset by the faults shown on Staatz’s map and by any Cretaceous thrusts or Tertiary low-angle faults. Fieldwork by the IGS suggests that resolving the quartzite’s into mappable units is nearly impossible and that determining the complex (and undoubtedly overprinted) structural offsets is very difficult and would require an immense amount of very detailed work in the district and region. Work is still ongoing by the IGS and may further document the relationship between the various types of mineralization and the intrusives. An aeromagnetic survey by the USGS, OFR 75-655 of southwest Montana and east central Idaho shows an oval shaped magnetic low along the continental divide a couple of miles southwest of the Pass. This anomaly was transposed on a forest service base map (See Appendix D). The anomaly is bounded on the south near the Saddlehorn vein; on the east near the Last Chance vein; and on the north near the Wonder and Cago veins. The magnetic low may possibly indicate an altered intrusive buried at depth. A review was also made of a Bouguer gravity map by IBM&G (Bonini, 1963 – See Appendix D). Only a swing in gravity contour is noted to occur in the vicinity of the Lemhi Pass. Staatz, 1979 recognized three largest faults that he believed formed after the Challis volcanics; the Lemhi Pass, Bull Moose, and Dan Patch and that the thorium bearing veins are most abundant where the three major Tertiary faults intersect. Seventy percent of the veins are located in this area and most are within a mile of the Dan Patch, Bull Moose, or Lemhi Pass faults (See Appendix D). It is believed based on some of the more recent work that these faults may be much older dating back possibly to Cambrian or earlier and that renewed movement likely occurred during Tertiary. Reed and Gillerman, 2008, and Gillerman, 2008, recently reported on newly discovered intrusives and recent rare earth and thorium analysis in the Lemhi Pass. Gillerman reports the discovery of an ultramafic sill having possible carbonatitic affiliation and one lamprophyre dike being cut by base metal mineralization. She also reports the discovery of syenite cut by nonradioactive specular hematite veins. The age of the syenite is dated as lower Cambrian and suggests that mineralization could be associated with a buried Precambrian or Cambria alkaline intrusive complex or both. Recent and on-going work suggests the potential for a larger mineralized system possibly similar in nature to peralkaline REE-Th, iron oxide copper gold (IOCG)/Fe-REE and/or carbonatite models of depositions such as carbonatite noted by Staatz (See Appendix D). Detailed discussion regarding this potential is beyond the scope of this report. More extensive and detailed mapping will likely be required to more fully understand the regional geology and structure and their bearing on mineral deposits in the Lemhi Pass. Further mapping, evaluation, and sampling was done in 2006 and 2007 by IGS and IEG on behalf of IGS and Thorium Energy and included collection of whole rock and vein samples for geochemical analysis for trace and associated elements, base and precious metals in addition to uranium, thorium and rare earths. Evaluation of this work is on-going. Full results of recent mapping by the IGS were not available at the time of this report. A report regarding the more recent work by IGS is anticipated by the end of 2008. In summary mapping by the IGS in the Pass has revealed numerous examples of where the thorium and rare earth deposits are cut by likely Cretaceous-age structures or cutoff at pre-Tertiary unconformities. Geological and geochronological work by IGS and others suggest that the Lemhi Pass district has a component of Mesoproterozoic epigenetic mineralization and displays many features of Iron Oxide-Copper-Gold-Uranium-REE deposits, such as Olympic Dam, although the district is enriched in thorium instead of uranium (Reed and Gillerman, February 2008 and Gillerman, et al, March 2008). Recent IGS mapping also discovered a Cambrian syenite which could be part of a structurally disrupted, alkaline intrusive system. Discovery of the syenite and examination of other petrologic and mineralogical signatures in the Pass, as well as geochronological work in progress, may help illuminate the origin of the deposits and the potential for a larger hydrothermal iron oxide – REE deposit, carbonatite or per alkaline, intrusive-related mineralized system (Reed and Gillerman, February 2008 and Gillerman, et al, March 2008). Based on preliminary review by IEG, data suggest possibly a concentration of copper and associated trace metals with thorium and rare earth mineralization in an area of the district occurring between the Last Chance deposit at the SE end and the possibly the Lucky Horseshoe at the NE end and more particularly in the vicinity of the Wonder vein. This is an area of interest of a potential larger buried mineralized deposit (See Staatz-Appendix D). Evaluation is on-going. RECENT ANALYSIS Recent samples of rocks and veins for analysis were collected by Virginia Gillerman of Idaho Geological Survey in 2006 and 2007. IEG made brief examinations of each of the veins in 2006, 2007 and 2008 and collected samples of host rock, vein rock, and various intrusive rocks for examination and laboratory analysis. Analytical analysis for the REE, thorium and a number of other trace and major elements was provided by Activation Laboratories Ltd. (Actlabs) of Ancaster, Ontario, Canada. Fusion induced coupled plasma (FUS-ICP) was the method used for REE, thorium and a number of other trace and major element analysis and atomic absorption (INAA) was used on a number of other trace metals including gold. Similar mineralogy and geology reported by earlier investigations was observed in the field at each of the veins. A summary of individual rare earths and copies of laboratory analysis are contained in Appendix E. A summary of vein and rock samples and respective sample abbreviations are provided in Appendix F. The reported analyses were reformatted and corresponding graph plots of individual rare earths and yttrium, including chondrite normalized plots, thorium, uranium, and other elements of interest such as niobium and gold and are also provided. Five individual data sets are provided and summarized in Appendix E. They include IPCo. SME (IERCO) 1987 REE Th Charts, SME A07-4811 REE Th Charts, SME A07-3286 REE Th Charts, SME A07-6276 REE Th Charts, and report #08-4251. Laboratory report A08-4551 was not reformatted and plots of REE and other associated elements have not been made. IERCO analysis consists of nineteen (19) separate veins (two calcite rich veins: Deer and Wonder) that includes the Last Chance, Iola, Lone Star, Pattee Mountain, Caga, Silver Queen 52B and Silver Queen 38A, Deer Main, Deer Calcite. ThO2 Main, ThO2 West, Bull Moose, Lucky Horseshoe, Shear Zone, Frying Pan, Contact, Viola, Black Rock Montana, and Wonder veins. Most of their analysis did not include the Holmium thru Lutelium lanthanide rare earth series which for the most part are relatively insignificant for estimating individual rare earths. Report # 4811 contains the Lucky Horseshoe thorium and rare earth vein considered to be a replacement deposit, a replacement vein sample from North Fork, Idaho and select rock samples. Report # 3276 contains seven (7) thorium and rare earth veins; Buffalo, Silver Queen 52B and Silver Queen 38A, G&G 1, Chief Tendoy 9, Chief Tendoy 13, and a quartz copper vein and includes three separate analysis of the Caga (Cago) vein. Report # 6276 contains ten (10) thorium and rare earth veins in the Pass; including the Agency Creek and Wonder calcite-siderite bearing veins, Idaho Black Rock, Copper Queen quartz-copper vein, Black Bear 2, Mornell, Bull Moose, Atomic Blast, Orpha, and Reactor, and a few select rock samples including to iron veins. A number of these veins are included in the IERCO set of veins. Detailed discussion is provided in the table summary. A plot of gold, silver, and/or copper concentrations where appreciable are also provided. Recent results from A08-4251 which includes analysis of four other thorium and rare earth veins; Last Chance, Lucky Horseshoe, In Trust, and the THO2 veins, and select rocks is provided but the data has not been plotted on charts in lieu of multiple analyses of some of these respective veins contained n the IERCO data. The estimated percentages of individual rare earths from the SME IERCO data set is Y@ 12%, La @ 9%, Ce @ 22%, Pr @ 4%, Nd @ 26%, Sm @ 10%, Eu @ 2 %, Gd @ 11 %, Tb @ ½ %, Dy @ 3 % and Ho thru Lu @ <1 %. The estimate of average total REO is 0.43 %, which includes the Lucky Horseshoe vein that contains the greatest amount of REO in the district. A plot of individual rare earths and total rare earths versus thorium is provided on Figures 4 and 5, respectively. IERCO, 1987 also examined individual rare earth concentrations in the Lucky Horseshoe and the Last Chance veins (See Appendix C). As shown, the relative amounts of individual rare earths are consistent within each of these veins although the total rare earth content varies and like many of the veins in the Pass are enriched in the MREE, particularly in neodymium. The ratio of TREE to Th for the LH vein is about 7 for the SME 4811 data set, similar to previous analysis by others. Thorium measured about 0.25 % and REE measured about 1.67 % from the vein. The sample exhibits an enrichment of the MREE particularly Nd measuring about 0.84 %. Anomalous copper of about 0.071 % and 0.013% was measured in the greenstone and pyroxene porphyry located at the Copper Queen mine. Only trace anomalous amounts of As, Au, or Ag was measured in any of the samples. Elevated TREE, Th, Nb, and Zr were measured in the syenite. Somewhat elevated Ba was measured in some of the pyroxene porphyry, greenstone, and mafic dike rocks. Most of veins in SME 3286 data set exhibit an enrichment of the middle rare earth elements (MREE) of neodymium, samarium, europium, and gadolinium and a couple express an enrichment of yttrium. Three samples were collected from the Caga vein to examine thorium and individual and total rare earth concentrations within the same vein. One sample contained altered quartzite. Thorium ranged from 209 to 2770 ppm (average of 0.12%) and total rare earths ranged from 855 to 3781 ppm (average of 0.19%). However, the relative amounts of individual rare earths are about the same for the three different samples, but particularly between the two vein samples (C2 & C5 1500 feet from each other – See Appendix C). The estimated percentages of individual rare earths from the report # 3286 data set is Y@ 13%, La @ 8%, Ce @ 21%, Pr @ 3%, Nd @ 15%, Sm @ 17%, Eu @ 6 %, Gd @ 12 %, Tb @ 1 %, Dy @ 3 % and Ho thru Lu @ 1 %. The estimate of average total REO is 0.21 %, but does not contain data from some veins of reported higher REO content, such as the Lucky Horseshoe and others. A plot of the individual rare earths in veins and rocks from this sample set is provided on Figure 6. A plot of REE vs. thorium is provided on Figure 7. This relative enrichment of the MREE is similar to results reported by earlier workers and agrees reasonable well with the IERCO data set. A number of the thorium veins, typically those of higher TREE and Th concentration also contain anomalous amounts of trace elements. They include tungsten, molybdenum, arsenic, and antimony as well as fluorine as high as 1.3 %, barium as high as about 0.15 %, niobium as high as about 0.06%, copper (.06-0.56%), lead (0.03-.25%), zinc (as high as about 0.02%), silver (1-33 ppm) and gold (3-144 ppb). Uranium ranged from about 15 to 160 ppm. Fe oxide is abundant in all the thorium veins ranging from about 4 to 28 % within a single vein (C2 and C5) and similarly between the suites of veins. Note: Additional discussion and plots of TREE/Th and/or TREE vs. gold and copper with this respective trace metal data is combined and provided below within the IEG #6276 data and charts. Copper and quartz veins without elevated thorium or rare earths plot below and all thorium and rare earth veins plot above upper crust normalization in SME 6276 data set. The mafic rocks typically show greater concentrations of light rare earth elements (LREE) and lesser concentrations of heavy rare earth elements (HREE) relative to the upper crust. Most of this suite of veins exhibits an enrichment of the MREE of neodymium, samarium, europium, and gadolinium and most exhibit an enrichment of yttrium. The estimated percentages of individual rare earths from the report # 6276 data set is Y@ 38%, La @ 5%, Ce @ 13%, Pr @ 2%, Nd @ 13%, Sm @ 7%, Eu @ 3 %, Gd @ 9 %, Tb @ <1 %, Dy @ 7 % and appreciable high relative amounts of Ho thru Lu @ 2 % with Ho @ 0.5%, Er @ 0.25%, Tm @ 0.25%, Yb @ 1%, and Lu @ 0.25%. The estimate of average total REO is 0.17 %, but does not contain data from some veins of reported higher REO content, such as the Lucky Horseshoe and others. A plot of the individual rare earths in veins and rocks from this sample set is provided in Figure 8. A plot of REE vs. thorium is provided on Figure 9. The ratio of TREE to Th for almost all the veins is roughly about 1 to 1. However, TREE/Th ratio in the thorium and rare earth veins was the highest in Mornell, Atomic Blast, and Wonder veins, measuring about 2.6, 2, and 3.4, respectively. The ratio of the mafic rocks are typically much higher than that of the veins with peridotite of about 40 and the carbonate breccia pipe of about 60. The ratio of the granite rock that contains anomalous Th is about 10 as compared to the Leadore granite sample of Report # 4811 that is not anomalous in Th for which the ratio is about 25. A number of the thorium veins, but not necessarily those of higher TREE and Th concentration also contain anomalous amounts of trace elements (typically greatest in the Wonder vein). They include tungsten, molybdenum, arsenic, and antimony as well as fluorine as high as 0.58 %, barium as high as about 1.3 % and 5.9 %, niobium as high as about 0.37 %, copper (0.02-1.38%), lead (0.01-0.87%), zinc (0.02-0.59%), silver (1-2 ppm or less) and gold (1-300 ppb). Uranium ranged from about 5 to 40 ppm. Fe oxide is abundant in all the thorium veins ranging from about 3 to 20 % weight. Niobium was particular high in this data set ranging from 37 to 3650 ppm (0.37%), averaging about 0.05%. Plots of TREE/Th ratio to Cu and Au are provided on Figures 10 and 11, respectively. The association of copper appears somewhat scattered although the greatest copper concentrations occur with higher ratios and within the Wonder and Buffalo thorium veins. The association of gold is also scattered. Appreciable gold also appears to occur at higher TREE/Th ratios as noted in the Wonder vein, and to a lesser extent in the Caga and Atomic Blast veins. Report # A08-4251 includes analysis of four other thorium and rare earth veins: Last Chance, Lucky Horseshoe, In Trust, and the THO2 veins. In Trust is a reported copper bearing thorium and rare earth vein although copper was not measured in the sample analyzed. It contained anomalous gold of 46 ppb. The sample contained 0.74% TREE and 0.37 % Th. The sample of the THO2 vein contained 0.37% TREE and 0.30 % Th. Both these veins contain a relative enrichment of MREE such as neodymium and samarium. Analysis of the Lucky Horseshoe was similar to previous analysis and anomalous gold was measured at 48 ppb. Niobium ranged from as little as 5 ppm at the Last Chance vein to 138 ppm from the Lucky Horseshoe vein, averaging about 89 ppm. A significant amount of analysis, particularly REE and Th by IERCO and others has been done on the Last Chance vein, including identification of anomalous copper. Appreciable copper of about 0.16 % was measured. The estimated average percentages of individual rare earths from the combined reports # 3276, # 6276, and IERCO data sets are Y@ 21%, La @ 7%, Ce @ 19%, Pr @ 3%, Nd @ 18%, Sm @ 11%, Eu @ 4 %, Gd @ 11 %, Tb @ 0.5 %, Dy @ 4 %, Ho @ 0.5%, Er @ 0.25%, Tm @ <0.25%, Yb @ 1%, and Lu @ <0.25%. The estimate of the combined average total REO is 0.27 % but does not contain data from some veins of reported higher REO content, such as the Lucky Horseshoe and others. This average concentration is less than that reported by IEG, 2008 or that of Staatz, 1979. Staatz, 1979 indicated that 96 % of his reported resources contain thorium at 0.43 % and rare earth at 0.57 % from the ten largest veins in the district. IEG reported an average ThO2 content of 0.40% and REO of 0.52 % for the combined historical data including IERCO. As such the reported resources of rare earths reported herein are estimated to be 0.52%. In summary the analytical results collaborate the findings and measured thorium and individual rare earth concentrations and anomalous trace elements reported by the USGS and AEC. The thorium and rare earth concentrations, including relative amounts of individual rare earths vary between and within the various vein deposits. However, the overall concentrations of these elements and particularly the relative enrichment of the MREE and Y that have been reported by earlier investigations, including Staatz, 1979 and others and IERCO, 1987 and 1991 are reasonable estimates. The average TREE of the vein deposits in the Pass is about 0.52 % while the average ThO2 of the vein deposits in the Pass is about 0.40 % (IEG, April 2008). The average TREE/ThO2 ratio of the vein deposits in the Pass is about 1.3 or typically 1. In addition the recent analysis indicates an enrichment of the middle rare earths such as neodymium, samarium, europium, gadolinium, and yttrium as well as heavier rare earths such as terbium thru ytterbium. Amounts of total rare earths vary within an individual vein and between the different vein deposits. However the relative amounts of individual rare earths appear to be consistent within individual veins and like many of the veins in the Pass are enriched in the MREE, particularly in neodymium. Niobium is also relatively enriched in many of the veins. Plots of rare earth ratios of La/Ld to Eu/Eu* modified from Castor & Hedrick, 2005 have been used to possibly determine origins or models of mineralization of the veins and associated rocks in the Lemhi Pass. Such plots are provided on (See Appendix A). Plots for Lemhi Pass suggest a possible per alkaline-REE or an Iron-REE type deposit. Appreciable concentrations of copper, zinc, lead and anomalous silver and gold occur in some of the thorium and rare earth veins in the Pass. A number of the thorium veins in the Pass contain anomalous amounts of other trace elements, including tungsten, molybdenum, arsenic, and antimony, as well as fluorine (to 0.58 %), barium (1.3 to 5.9 %), niobium ( as high as 0.37 %), strontium (trace to 0.28%), copper (0.02-1.38%), lead (0.01-0.87%), zinc (0.02-0.59%), silver (1-2 ppm) and gold (1-300 ppb). Uranium ranges from about 5 to 40 ppm. Iron oxide is abundant in all the thorium veins and it ranges from about 3 to 20 weight % (Reed and Gillerman, 2008). THORIUM & RARE EARTH RESERVES AND RESOURCES OF THORIUM ENERGY, INC The amounts of thorium and rare earth contained in the claim holdings of Thorium Energy, Inc. in the Lemhi Pass District have been estimated from its proportionate holdings of the reported reserves or resources by Staatz, 1979 and IERCO, 1991 (See Reed, IEG April 2008). Reported reserves and resources of ThO2 and REO reported by Staatz were used because his reported amounts are based on selected thorium veins whereas the reported amounts by others represent the district as a whole. Reported reserves by IERCO are considered a valid estimate of thorium and rare earth reserves of the Last Chance vein. As mentioned previously, recent analysis of rare earths of the veins indicates an enrichment of the middle or heavy rare earths such as neodymium, samarium, europium, gadolinium, and yttrium as well as heavier rare earths such as terbium thru ytterbium although totals amounts of total rare earths and individual rare earths vary between individual veins (See Appendix E). Respective individual percentages and or amounts of individual rare earth elements are based on the average amounts of the combined thorium and rare earth veins recently sampled. The respective percentages in decreasing amounts are: cerium @ 33%, neodymium @ 25%, lanthanum @ 12%, samarium @ 8%, yttrium @ 7%, praseodymium @ 5%, gadolinium @ 5%, dysprosium and europium @ 2%, each, and other reaming heavy rare earths at about 1% or less each. A summary of the thorium and rare earth resources estimated from Staatz, 1979 of the USGS is provided on Table 3. INDICATED & INFERRED RESERVES AND RESOURCES It is estimated that an indicated reserve or resource of about 157,790 short tons of ThO2 and an inferred reserve or resource of 115,210 short tons of ThO2 or a combined reserve or resource of 273,000 short tons of ThO2 at about an average concentration of 0.40 % (8 lbs. /ton) is contained within the claim holdings of Thorium Energy (Reed, IEG, April 2008). In addition it is estimated that an indicated reserve or resource of about 212,855 short tons of REO and an inferred reserve or resource of 141,745 short tons of REO or a combined reserve or resource of 354,600 short tons of REO at an average concentration of about 0.52 % (10 lbs. /ton) is also contained within the holdings of Thorium Energy. Based on the average percentages of the individual rare earth elements obtained from recent sampling in conjunction with individual REE analysis by IERCO, the following preliminary estimates of the resource amounts and grades of individual rare earth elements are (See Table 3): 74,340 T of yttrium at about 0.11 %, 24,780 T of lanthanum at about 0.04 %, 67,260 T of cerium at a grade of about 0.10 %, 10,620 T of praseodymium at about 0.02 %, 63,720 T of neodymium at about 0.09 %, 38,940 T of samarium at about 0.06%, 14,160 T of europium at about 0.02 %, 38,940 T of gadolinium at about 0.06 %, 1,770 T of terbium at about 0.003%, 14,160 T of dysprosium at about 0.0.02%, 1,770 T each of holmium, and ytterbium at about 0.003% each, and about 885 T or less each of erbium, thulium, and lutetium at about 0.001 % or less each. QUANTIFIED PROVEN RESERVES AND RESOURCES OF LAST CHANCE VEIN IERCO, a subsidiary of Idaho Power Company, determined a weighted average content of ThO2 of 0.39 % (7.82 lb. /ton) and REO of 0.33 % (6.5 lbs. /ton) (IERCO, 1991 & Reed, IEG, April 2008). A Th and REE Ore Block Map of Quantified Reserves & Resources of the Last Chance Vein by IERCO 1991 are shown on Figure 12). IERCO measured a quantified proven reserve of 16,427 short tons (T) of ore containing about 387,120 lbs. (194 T) of ThO2 and 306,465 lbs. (153 T) of REO; a probable reserve or resource of 79,985 short tons (T) of ore or 932,674 lbs. (466 T) of ThO2 and 772,480 lbs. (386 T) of REO, and a possible reserve or resource of 3,239,068 lbs. (1,620 T) of ThO2 and 2,714,091 lbs. (1357 T) of REO for a combined reserve or probable and possible resource of 582,850 T of ore or 4,558,860 lbs. (2,279 T) of ThO2 and 3,793,035 lbs. (1,897 T) of REO. Based on the percentages of the individual rare earth elements reported by IERCO, 1991, the following preliminary estimates of total reserves and indicated and inferred resource amounts and grade estimates of amounts of individual rare earth elements are (See Table 3): 190,000 lbs (95 T) of yttrium at about 0.02 %, 342,000 (171) T of lanthanum at about 0.03 %, 872,000 lbs (436 T) of cerium at about 0.08 %, 114,000 lbs. (57 T) of praseodymium at about 0.01 %, 872,000 lbs (436 T) of neodymium at about 0.08 %, 682,00 lbs (341 T) of samarium at about 0.06%, 190,000 lbs. (95 T) of europium at about 0.02 %, 380,00 lbs. (190 T) of gadolinium at about 0.03 %, 20,000 lbs. (10 T) of terbium at about 0.002%, 114,000 lbs. (57 T) of dysprosium at about 0.0.01%, and about 10,000 lbs. (5 T) or less each at about 0.001% or less of holmium, erbium, thulium, ytterbium, and lutetium. This report is privileged and confidential and is the sole property of Thorium Energy Incorporated. Copies can not be made or distributed without the expressed written consent of Thorium Energy Inc.
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Samson, Iain M., Woods, Scott, A., “The Rare Earth Elements: Behavior in Hydrothermal Fluids and Concentration in Hydrothermal Mineral Deposits, Exclusive of Alkaline Settings,” GAC Short Course Notes 17, p. 269-297, 2005. Sharp, Byron J. and Hetland, Donald L., “Thorium and Rare Earth Resources of the Lemhi Pass Area, Idaho and Montana,” Summary Report U.S. Atomic Energy Commission Resource Investigation Division July 1968, Issued by USDOE, RA-12, January 1978. Sharp, William and Cavender, Wayne, “Geology and Thorium Bearing Deposits of the Lemhi Pass Area, Lemhi County, Idaho and Beaverhead County, Montana,” U.S. Geological Survey Bulletin 1126, 1962. Silberman, Byron, and Randolph, Koki, “K-Ar Relations of the Granodiorite Emplacement and Tungsten and Gold Mineralization near the Getchell Mine, Humboldt County, Nevada,” Economic Geology, Vol. 69, pp. 646-656, 1974. 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Rare Earth Reserves 
