Quest Rare Minerals

Strange Lake Rare Earth Project

QUEBEC/LABRADOR

The Strange Lake property, located 220 km northeast of Schefferville and 125 km west of the Voisey Bay Nickel-Copper-Cobalt Mine, covers an area of 54,000 hectares. Exploration is focused around the historical Strange Lake rare earth element (REE) deposit discovered by the Iron Ore Company of Canada (IOC) and around additional anomalous REE showings identified by Quest crews on the property. All were selected on the basis of airborne radiometric anomalies, historical showings and proximity to known mineralization. Surface prospecting and diamond drilling of a two km-long airborne radiometric geophysical anomaly, less than three km northwest of the Strange Lake REE deposit (Main Zone), led to the identification of an important new REE mineralized zone named the B Zone which is located fully in Québec.

B-Zone and Main Zone Location Map, Strange Lake Project, Québec and Labrador
Click here to download large map

A National Instrument 43-101 Preliminary Resource Estimate of the B Zone rare earth deposit completed by Wardrop Engineering Inc in April 2010 indicated that at a 0.95% total rare earth oxides (TREO) base-case cut-off grade, the B Zone contains an Indicated Resource of 36.4 million tonnes grading 1.16% TREO, 2.17% zirconium oxide (ZrO2), 0.24% niobium pentoxide (Nb2O5), 0.05% hafnium oxide (HfO2) and 0.12% beryllium oxide (BeO). A further Inferred Resource of 14.4 million tonnes grading 1.11% TREO, 2.02% ZrO2, 0.21% Nb2O5, 0.05% HfO2 and 0.09% BeO is calculated.

Furthermore, this resource calculation demonstrated the extremely heavy rare earth oxide (HREO) rich nature of the B Zone, representing between 40% and 51% of the TREO in the deposit. Contained within the Indicated Resource is an outcropping and higher grade “Pegmatite Spine”containing 8.1 million tonnes at 1.66% TREO, 2.77% ZrO2, 0.37% Nb2O5, 0.06% HfO2 and 0.19% BeO. A further Inferred “Pegmatite Spine” resource of 2.57 million tonnes grading 1.53% TREO, 2.57% ZrO2, 0.30% Nb2O5, 0.06% HfO2 and 0.15% BeO is calculated.

A metallurgical study ON a one-tonne bulk sample from the B Zone conducted by Hazen Research Inc in May 2010 obtained strong REE recoveries of between 77% and 93% for all of the rare earths detected in the deposit. A program of Phase 2 metallurgical testing studies for the deposit is currently being undertaken by Hazen Research Inc.. The data from these studies will form the basis for a future Preliminary Feasibility Study (PFS) of the deposit.

Indicated Resource Estimate for the Strange Lake B-Zone Deposit
Click here to download larger table

A Preliminary Economic Assessment (PEA) of the B-Zone from Wardrop Engineering Inc. shows positive cash-flow, a strong Internal Rate of Return and strong Net Present Value metrics at discount rates of up to 20% for a potential mining operation at Strange Lake. The mine model calls for an open-pit production rate of 4,000 tonnes per day, requiring a capital expenditure (CAPEX) of $563.4 million (including a 25% contingency), a payback in the fourth year of production and a minimum mine life of 25 years.

Property Location Map, George River Area Projects, Québec and Labrador

B-Zone Definition Drill Program

Assays have been received for 138 diamond drill holes representing 17,110.4 m (see Table 1). The
drilling program tested the extent of B-Zone mineralization to the limits of the Whittle Pit shell
established by Quest’s 43-101 Revised Resource Estimate (see Press Release : April 13, 2011), on a 50 m
by 50 m drilling pattern (see Figure 1). The new drilling was focused on tight definition of the upper 150
m of the deposit, although mineralization is observed to continue down to 325 m vertical. In addition to
enlarging the peripheral limits to the deposit within the pit shell, drilling indicates that good higher-grade
Pegmatite-style mineralization continues to the southwest, past the established limit to the pit shell (see
Figure 2). In addition to the definition drilling, 53 holes for 4,772.0 m were completed for metallurgical
testing purposes across the full extent of mineralization defined within the pit shell as well as for
geotechnical testing. This data will be used in the pre-feasibility study currently underway on the BZone.

Winter 2011 Exploration Program Update

A 21-hole, 3,318.0m program of diamond drilling to test the northern continuity of the B-Zone "Pegmatite Spine" was recently completed. The program successfully traced out the northern strike extension of the REE-mineralized host granites and pegmatites beneath Lac Brisson. All samples have been submitted to Activation Laboratories for analysis and results are pending.

Field work has also begun on the gathering of geotechnical data in support of open pit mine design and on the continuation of the successful metallurgical testing program that was carried out last year. A metallurgical sampling drillhole for 152.0m was completed during winter drilling and will supplement an 18-tonne bulk sample that was collected from the surface exposure of the B-Zone last summer. Hazen Research will complete Phase 2 Metallurgical studies on B-Zone mineralization. The remaining material from the bulk sample will be used for future Pilot Mill studies for the Zone. The results from these activities will feed into the remainder of the prefeasibility study which is expected to be completed by year end.

Pre-feasibility Study for the Strange Lake B-Zone Deposit

Quest's management has completed the selection of its technical team for the pre-feasibility study for the B-Zone project.
The initial scope of the B-Zone pre-feasibility study has been established in light of the results that were generated in 2010. The current scope contemplates the excavation of REE-bearing material by means of an open pit mine using conventional truck-and-shovel mining equipment that will provide feed at a nominal throughput rate of 4,000 tonnes per day to a plant that is located in the vicinity of the deposit. The preliminary metallurgical test work that has been completed to date has suggested that the REE-bearing pegmatites and granites are amenable to direct acid attack of the crushed and ground feed from the open pit mine without the need for any pre-concentration steps (see Press Release : August 12, 2010). The use of magnetic separators whose goal will be to remove a portion of the non-REE bearing minerals will be investigated as a potential enhancement to the acid attack flowsheet. Following acid attack, the solution is then envisioned to be sent to a solvent extraction circuit where final products will be generated. The material remaining from the process is envisioned to be stored in a land-based storage facility that is located in proximity to the deposit. Trade-off studies will be undertaken which examine the relative merits of transporting supplies, consumables and final products either by a road link to a port facility located on the Labrador coast or to an existing rail head located in the Schefferville, Québec area.

Additional News

Quest recently completed a small, four-hole, 310.3m drilling program on its Alterra Strange Lake, Labrador option property with Search Minerals Inc. (TSX VENTURE:SMY). The program tested surface REE mineralized occurrences identified by Quest during its summer 2010 exploration activities. Mineralized pegmatite and granite aplite was intersected in all holes on the property. All holes were sampled and submitted to the lab for analysis. Assay results are pending.

RELATED INFORMATION

February 11, 2013
Quest Provides Update on Pre-Feasibility Study for Strange Lake B-Zone Rare Earth Element Project

October 31, 2012
Quest Announces That a Revised Resource Estimate For The Strange Lake B-Zone REE Desposit Shows a Doubling of Tonnage; Hires a Metals Marketing Expert

October 26, 2012
Quest Engages Hatch to Undertake Advanced Metallurgical and Separation Plant Engineering Work, Strange Lake B-Zone Deposit, Quebec

February 15, 2012
Quest Rare Minerals Reports Progress on the B-Zone Rate Earth Deposit, Strange Lake, Quebec

January 12, 2012
Quest Reports Strong Summer Program Drill Results at Strange Lake, Intersects 144.4 Metres at 1.44% Treo, Strange Lake.
Click Here for Drillhole Assay Table - PDF
Click Here for Drillhole Sections - PDF

June 8, 2011
Quest and Partner Search Minerals Drills New REE Zone South of the B-Zone, Returns 1.78% TREO Over 24.0 M, Strange Lake Area, Labrador

June 2, 2011
Quest B-Zone Winter Drilling Intersects 143.2 Metres at 1.16% TREO Including 3.08% TREO Over 13.4 Metres, Strange Lake, Quebec

May 25, 2011
Strange Lake B Zone Resource Model Update

April 21, 2011
Quest Board Approves Funding for Pre-Feasibility Study, Strange Lake B-Zone Deposit, Quebec

January 11, 2010
Quest B-Zone Pegmatite Zone Drilling Returns up to 105.3 Metres at 1.34% Treo With Sections Grading up to 20.36% Treo, Strange Lake, Québec
B-Zone Diamond Drilling Results

December 9, 2010
Quest Drilling Discovers New Deep REE Zone Northwest of the B-Zone Pegmatite Deposit, Returns Up to 14.3 Metres at 2.65% TREO, Strange Lake, Quebec