Texas Mineral Resources Signs MOU With Pennsylvania Coal Company to Recover and Produce Scandium and Rare Earth Byproducts From Coal Ash and Coal Overburden

SIERRA BLANCA, TX--(Marketwired - July 05, 2016) - Texas Mineral Resources Corp. (OTCQX: TMRC)

• U.S. Department of Energy data suggests potentially significant amounts of scandium and rare earth byproducts are present
  
• Both coal ash and in-situ coal overburden have been outlined as potential resources
  
• Preliminary internal economic analysis of a coal ash project suggests modest CAPEX requirements along with profitability
  
• TMRC to establish Scandium America Corp subsidiary upon signing definitive agreement

Texas Mineral Resources Corp. (TMRC), an exploration company targeting the heavy rare earths and a variety of other high-value elements and industrial minerals, is pleased to announce that it has signed a memorandum of understanding (MOU) with a well-established privately-held Pennsylvania coal company. The MOU gives TMRC a six-month period of time to further evaluate the potential to finance, recover and produce scandium and other rare earth byproducts from their properties.

The National Energy Technology Laboratory of the Department of Energy has recently conducted studies at the properties that are the subject of this MOU, suggesting the existence of potentially valuable rare earth and scandium mineralization in coal ash being deposited at several locations on the property and in the in-situ coal bed overburden at different sites on company property.

Tonnages of the ash repositories are well documented. The area chosen for initial study, because of its favorable location, contains 3.7 million short tons of coal ash. A total of three ash repositories and an as yet undetermined number of in-situ overburden deposits lend themselves to simultaneous development. The property is fully permitted for mining and processing of coal. Only the additional permitting for scandium and rare earth processing would be needed.

With respect to the coal ash deposit, preliminary internal economic analysis, done by TMRC, of a modest startup operation processing 300 tons of coal ash per day suggests that it would require an estimated CAPEX of approximately $17 million, inclusive of a 25% contingency. Assuming a recoverable grade of 45 ppm (parts per million) scandium content, potential estimated production of scandium oxide would approximate 7,500 kilograms per year. Using a current scandium oxide market price of $2,000/kg could potentially result in pre-tax cash flow of approximately $10.3 million, after operating costs and royalty payments to the coal company. These assumptions assume that only the recovered scandium would be sold, attributing no value to the rare earth and other elements and minerals that could be recovered.