Stans Energy is a development-stage company focused on progressing Heavy Rare Earth (HRE) properties in parts of the former Soviet Union. Rare earth elements have many uses in the high-tech and clean tech industries. In 2009, the company acquired a 20-year mining license for the past-producing Kutessay II rare earth mine from the Kyrgyz Republic and in 2011 Stans completed the purchase of the Kashka Rare Earth Processing Plant, the same plant that previously refined rare earth elements (REEs) historically from Kutessay II. Kashka was the only hard rock plant to produce all rare earth elements outside of China, producing 120 different metals, alloys, and oxides.

For over 30 years, Kutessay II produced 80% of the rare earth metals for the former Soviet Union.

Stans Energy’s chief operating officer Boris Aryev said:

Mining licenses in Kyrgyzstan are comprised of two parts: license certificate for the term of the license, which in Stans’ case is for the period 2009 through to 2029; and a licensing agreement which typically are negotiated for periods of 2 to 5 years with the Kyrgyz Ministry of Natural Resources.

This licensing agreement spells out what scope of work will be undertaken to move the project towards production.

By the end of December, the company submitted a complete report on the work done on all aspects of Kutessay II to the Kyrgyz Government. Along with this submission a request to extend the agreement for a period of one year was tabled as well. The work done to date will allow the company to proceed with the plans for Phase I development to restart mining operations at the historical Soviet levels of production.

Stans Energy said it plans to build a 1 million tonnes per year mining complex, which would enable the company to achieve its Phase II production targets of 1,500 tonnes per year rare earth oxides. The planned increase in output relative to historical production rates requires construction of a new mill and tailings pond with increased capacities. Upon the original signing of licensing agreement in 2009, this expanded rate of production had not been determined and as subsequent engineering work expanded, so did the time required for proper investigation and due diligence.

Historically, Soviet engineers had designed Tailings Pond number 5 and chosen a site for a new mill as part of their plans to expand upon the historic production levels of 1991. Upon closer inspection, the company’s engineers found that these sites do not meet modern technological and environment requirements and thus new sites had to be chosen. The company has identified potential sites, however engineering surveys cannot be completed until the spring of 2012.

The close working relationship shared between the company and the Kyrgyz Ministry of Natural Resources was affected by the shutdown and slow-down periods of governmental operations, due to elections and transfers of ministerial obligations.

For Kalesay, the company said that by the end of December, it submitted a complete report on work done to date on all aspects of the deposit to the Kyrgyz government. Along with this submission a request to extend the licensing agreement for two years was tabled as well.

Due to inconsistencies encountered with samples taken for resource calculation in the fall of 2010 from the company’s inability to access un-weathered sampling material, Stans was required to apply to the Kyrgyz government for access into deeper sections of the exploration body.

In the fall of 2011, Stans reopened Adit number 20, one of the exploration bodies, to take more representative samples. Resampling work was completed in late December and a report will be completed by the end of March 2012. This report will govern the economic extraction of the beryllium deposit

Aryev said:

The scope of work required for the licensing agreement extension constitutes a large majority of topics that will be included in our preliminary feasibility study, which is currently being finalized and translated for public disclosure and will highlight the economics of resuming production at Kutessay II and commencing production at Kalesay.

Kalesay is currently planned to be mined out as part of the open pit operation of Kutessay II thus becoming an offshoot of Kutessay II production. This development is a prime reason for requesting a two-year extension on the licensing agreement for this property.

The company said it looks forward to working closely with the Kyrgyz authorities to develop and realize the full economic potential of the Aktyuz Ore Field deposits.