RARE ELEMENT RESOURCES LTD (Form: 8-K, Received: 10/27/2021 11:45:12)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 25, 2021

RARE ELEMENT RESOURCES LTD.

(Exact name of registrant as specified in its charter)


British Columbia, Canada	001-34852	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)


P.O. Box 271049 Littleton, Colorado	80127
(Address of principal executive offices)	(Zip Code)


Registrant’s telephone number, including area code:	(720) 278-2460

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

On October 25, 2021, Rare Element Resources, Inc. (the “Company”), a Wyoming corporation and wholly owned subsidiary of Rare Element Resources Ltd. (the “Registrant”), and Whitelaw Creek LLC, a Wyoming limited liability company (“Whitelaw Creek”), entered into an amendment (the “Amendment”) to the previously announced asset purchase agreement dated October 20, 2016 between the Company and Whitelaw Creek (the “APA”). The Amendment modified certain provisions of the APA related to the terms and conditions of the Company’s option to repurchase (the “Repurchase Option”) approximately 640 acres of non-core real property located in Crook County, Wyoming, that is under consideration for a stockpile facility for the Bear Lodge rare earth elements project. Pursuant to and subject to the terms of the Amendment, among other things,

●

the term of the Repurchase Option (which was to expire on October 26, 2021) was extended for up to three additional years, subject to annual option extension payments from the Company to Whitelaw Creek of $25,000 in cash per year (each, a “Repurchase Option Extension Payment”); and

●

the exercise price of the Repurchase Option was increased from $1,000,000 to a price to be determined by a mutually agreed upon real estate appraiser (the “Repurchase Price”), provided that (i) the Repurchase Price must not be less than $1,200,000 or greater than $1,850,000 and (ii) any Repurchase Option Extension Payments paid by the Company to Whitelaw Creek must be credited toward the Company’s payment of the Repurchase Price if the Repurchase Option is later exercised.

The transfer, sale or exchange of any common shares of the Registrant that may be issued as part of the Repurchase Price is exempt from registration as a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder, among other exemptions.

The foregoing description of the Amendment is qualified in its entirety by the terms of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 3.02

Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 is incorporated herein by reference.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.		Description
10.1‡		First Amendment to Asset Purchase Agreement, dated as of October 25, 2021, by and between Rare Element Resources, Inc. and Whitelaw Creek, LLC.
104		Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101.

‡	Certain schedules or similar attachments to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally to the Securities and Exchange Commission upon request a copy of any omitted schedule or attachment to this exhibit.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 27, 2021


	RARE ELEMENT RESOURCES LTD.


	By:	/s/ Randall J. Scott
	Name:	Randall J. Scott
	Title:	President and Chief Executive Officer

Exhibit 10.1

FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT

This FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”), is entered into as of October 25, 2021, by and between Rare Element Resources, Inc., a Wyoming corporation (“Seller”), and Whitelaw Creek, LLC, a Wyoming limited liability company (“Buyer”). Seller and Buyer may be referred to individually as a “Party” or collectively as the “Parties.”

RECITALS

A.Seller and Buyer are parties to that certain Asset Purchase Agreement dated as of October 20, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Agreement”), pursuant to which Seller sold to Buyer on October 26, 2016 (the “Closing Date”) that certain real property located in Crook County, Wyoming, as more particularly described in Exhibit A to the Agreement (the “Property”).

B.The Agreement provides, among other things, that Seller has a right to repurchase the Property, subject to certain conditions.

C.The Parties desire to amend certain terms of the Agreement in accordance with Section 10.3 of the Agreement as set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

1.1Definitions. Capitalized terms used herein but not defined herein shall have the meanings as given them in the Agreement, unless the context otherwise requires.

1.2Amendments to the Agreement. The Parties hereby amend the Agreement as follows:

(a)Section 2.3(b) of the Agreement is hereby amended and restated in its entirety to the following:

“(a)Repurchase Term. The Repurchase Option shall terminate on the earlier of (i) November 2, 2021, October 26, 2022 or October 26, 2023 if Seller has not paid to Buyer an amount in cash equal to $25,000 by each such date (each, a “Repurchase Option Extension Fee”); (ii) the date on which Seller provides written notice to Buyer of Seller’s intention not to exercise the Repurchase Option; or (iii) October 26, 2024. Such period of time beginning on the Closing Date and ending on the earlier of (i) the date the Repurchase Option is exercised or (ii) the termination of the Repurchase Option is referred to

hereinafter as the “Repurchase Term.” If Seller has paid one or more Repurchase Option Extension Fees and Seller later exercises the Repurchase Option in accordance with the terms of this Agreement, such Repurchase Option Extension Fee(s) shall be credited toward Seller’s payment of the Repurchase Price (as defined below).”

(b)Section 2.3(b) of the Agreement is hereby amended and restated in its entirety to the following:

“(b)Repurchase Price. In the event Seller elects to exercise the Repurchase Option, Seller shall pay to Buyer an amount equal to the then-current appraised value of the Property, as determined by a real estate appraiser to be selected by mutual agreement of the Parties, in order to repurchase the Property (the “Repurchase Price”); provided that in no event shall the Repurchase Price be less than $1,200,000 or greater than $1,850,000. Any appraisal of the Property for purposes of determining the Repurchase Price must be completed within 60 days following the Election Date (as defined below).”

(c)The second sentence of Section 2.3(c) of the Agreement is hereby amended by replacing “30 days” with “70 days.”

(d)The first sentence of Section 9.6 of the Agreement is hereby amended to read as follows:

“With the exception of (a) the representations and warranties set forth in Sections 4.1–4.4, 4.7, 5.1–5.4 and 5.6, which shall survive indefinitely, and (b) the representations and warranties set forth in Section 5.7, which shall be true and correct as of the date of the closing of the Repurchase Option if Buyer elects to receive all or a portion of the Repurchase Price with Common Shares, the representations and warranties of the Parties in Article 4 and Article 5 shall terminate on the first anniversary of the Closing Date.”

(e)Section 9.7 of the Agreement is hereby amended by adding the following sentence at the end of Section 9.7:

“Notwithstanding the foregoing, with respect to a failure by Buyer to comply with any of the provisions of Section 2.3 upon Seller’s exercise of the Repurchase Option, Seller shall have the right of specific performance, as well as all other legal and equitable remedies to which Seller is entitled in connection therewith.”

1.3Representations and Warranties. Each Party hereby represents and warrants to the other Party that:

(a)It has all requisite power and authority to execute and deliver this Amendment, an Amendment and Notice of Amendment to Repurchase Option regarding the amendment of the repurchase option terms for recording in Crook County, substantially in the form attached hereto as Exhibit A (the “Amendment Notice”), and the other agreements and instruments to be executed and delivered by it pursuant to this Amendment (collectively, the “Amendment Ancillary Documents”) and to consummate the transactions contemplated hereby and thereby.

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(b)The execution, delivery and performance of this Amendment and the Amendment Ancillary Documents have been duly authorized by all necessary action on the part of such Party. This Amendment has been duly and validly executed and delivered by such Party and constitutes, and the Amendment Ancillary Documents upon their execution and delivery by such Party constitutes (assuming, in each case, the due and valid authorization, execution and delivery thereof by the other Party thereto), legal, valid and binding agreements of such Party, enforceable against such Party, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws and by equitable principles generally.

1.4Additional Representations, Warranties and Covenants of Buyer. Buyer represents and warrants that during the period from the Closing Date through the date of this Agreement, Buyer has not (a) created or allowed for the creation any liens or encumbrances on the Property or (b) granted to any third party any right or interest or the right to acquire any right or interest in the Property. Buyer shall not create or allow for the creation of any liens or encumbrances or grant any third party any such rights during the Repurchase Term.

1.5Covenants. Buyer shall promptly record and pay all recording fees associated with the delivery and recording of the Amendment Notice in Crook County, substantially in the form attached hereto as Exhibit A.

1.6Confirmation of the Agreement. Other than as expressly modified pursuant to this Amendment, all of the terms, conditions and other provisions of the Agreement are hereby ratified and confirmed and shall continue to be in full force and effect in accordance with their respective terms, including with respect to the valuation of the Common Shares for purposes of payment of the Repurchase Price as set forth in Section 2.3(c) of the Agreement (it being understood, for the avoidance of doubt, that such valuation shall be based on the 10-day volume-weighted average closing price of such shares as of the Closing Date, or approximately $0.0536 per share, unless prohibited by applicable securities laws or stock exchange rule).

1.7References. All references to the Agreement (including “hereof,” “herein,” “hereunder,” “hereby” and “this Agreement”) shall refer to the Agreement as amended by this Amendment. Notwithstanding the foregoing, references to the date of the Agreement (as amended hereby) and references in the Agreement to “the date hereof,” “the date of this Agreement” and terms of similar import shall in all instances continue to refer to October 20, 2016.

1.8Counterparts. This Amendment may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same Amendment. Such counterparts may be delivered by facsimile or electronic transmission and the receiving party is entitled to rely on the same to the same extent as if it had been an executed original.

1.9Entire Agreement. The provisions of Article 11 of the Agreement shall apply to this Amendment mutatis mutandis, and to the Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms as modified hereby.

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized representatives of the Parties as of the date first above written.

RARE ELEMENT RESOURCES, INC.

By: /s/ Randall J. Scott
Name: Randall J. Scott
Title: President and Chief Executive Officer

WHITELAW CREEK LLC

By: /s/ Sheri Stinson
Name: Sheri Stinson
Title: Manager