Executive Summary

Q3 2020 loss widened as operating spend increased to advance pilot testing; net loss was $(0.86)M (vs $(0.36)M YoY) and $(0.01) EPS, driven by higher exploration and corporate costs tied to technology work and compliance/government relations .
Liquidity remains adequate for ~12 months from filing (cash $3.49M at 9/30/20; working capital $3.44M), but the company still requires additional financing or strategic alternatives to fund feasibility, permitting and a demonstration plant beyond near term .
Management reiterated execution milestones: pilot testing expected to complete by year-end 2020 with results report in Q1 2021; COVID-19-related contractor restrictions in Germany continued to slow progress modestly but were not yet material to plans .
No 8‑K 2.02 earnings press release or earnings call transcript was found for Q3; analysis relies on the Form 10‑Q and MD&A. Prior quarters (Q1, Q2 2020) filed 10‑Qs provide trend context .

What Went Well and What Went Wrong

What Went Well

Pilot program tracking to planned milestones: “The Company expects the pilot testing to be completed by year-end and the report on the results of testing to be completed during the first quarter of 2021.”
Policy tailwinds remain supportive: management is engaging with U.S. initiatives to secure a non‑Chinese rare earth supply chain, positioning Bear Lodge as a potential upstream source .
Liquidity coverage for the next year: “the Company has adequate funds to meet its obligations for the 12 months following the date of filing this quarterly report on Form 10‑Q.”

What Went Wrong

Operating spend and losses rose: total operating expenses nearly doubled YoY ($0.84M vs $0.42M), and net loss widened to $(0.86)M from $(0.36)M, reflecting higher exploration and corporate administration .
COVID-19 caused execution friction: UIT pilot plant work experienced delays due to worker restrictions in Germany, slowing progression of planned work .
Ongoing funding gap for scale-up: despite 12‑month liquidity, management reiterated insufficient funds for feasibility, permitting, licensing, demonstration plant, and construction without future financing/strategic transactions .

Financial Results

Income Statement Trend (oldest → newest)

Metric ($USD thousands except per-share)	Q3 2019	Q1 2020	Q2 2020	Q3 2020
Exploration & evaluation	284	232	292	397
Corporate administration	137	390	454	443
Total operating expenses	422	623	748	841
Total non‑operating income (expense)	58	21	5	(19)
Net loss	(364)	(602)	(743)	(860)
Loss per share (basic & diluted)	(0.00)	(0.01)	(0.01)	(0.01)
Weighted avg. shares (M)	79.59	103.97	104.01	104.30

Notes: YoY comparables reflect prior-year Q3; sequential trend shown for 2020.

Liquidity and Cash Runway

Liquidity KPI ($USD thousands)	Q1 2020	Q2 2020	Q3 2020
Cash & cash equivalents (period end)	4,918	4,184	3,485
Working capital (period end)	4,692	4,163	3,436
Cash used in operations (YTD)	(746) (3M)	(1,586) (6M)	(2,285) (9M)

Segment breakdown: not applicable (development-stage; no reported revenues) .

Key drivers:

Corporate administration increased YoY due to compliance/regulatory obligations, government relations, and stock-based compensation .
Exploration & evaluation increased YoY as Bear Lodge environmental obligations and technology advancement under the UIT agreement continued .

Guidance Changes

Metric/Topic	Period	Previous Guidance/Commentary	Current Guidance/Commentary	Change
Pilot testing timeline	2020/Q1–Q1’21	“Plans to further piloting… during the remainder of 2020.”	“Pilot testing to be completed by year-end 2020; report on results in Q1 2021.”	Clarified timeline (maintained)
UIT pilot program budget	2020	Approved amount not to exceed $650; August 2020 amendment +$47	2020 engagement $650 with August and November amendments adding ~$131 in estimated costs	Increased scope/cost
Liquidity outlook	Next 12 months	Adequate funds for 12 months; insufficient for feasibility/permitting/demonstration plant without additional financing	Same language reaffirmed	Maintained
Quantitative revenue/margin guidance	2020	None provided	None provided	Maintained

Dividends: none .

Earnings Call Themes & Trends (oldest → newest)

Topic	Previous Mentions (Q1 2020)	Previous Mentions (Q2 2020)	Current Period (Q3 2020)	Trend
Technology/pilot progress	Engaged UIT in March 2020 for further pilot test work	Continued pilot testing under UIT	Expect pilot completion by YE20; results report Q1’21	Progressing to milestone
U.S. policy/DoD critical minerals	Emphasized federal initiatives; engaging with officials	Continued focus on domestic supply chain initiatives	Participating in initiatives; policy tailwind reiterated	Supportive backdrop
COVID-19 operational impact	UIT delays due to Germany restrictions	UIT delays persisted; impact not material yet	UIT delays continued; still not material, but could become so	Persistent headwind
Financing & liquidity	12‑mo liquidity; need funding for next phases	Same	Same	Unchanged; funding need remains
Permitting/licensing posture	Near‑term activities narrowed/suspended (risk/guidance language)	Similar forward-looking language	Similar forward-looking language	On hold near term
Related-party (UIT/Synchron) scope	UIT engagement authorized; Synchron affiliate	Payments under agreement; scope amended Aug’20	Additional scope/costs in Aug & Nov’20	Expanded scope/costs

Management Commentary

“The Company expects the pilot testing to be completed by year-end and the report on the results of testing to be completed during the first quarter of 2021.”
“The Company has seen delays from certain third party contractors with respect to the pilot plant studies being conducted by UIT… due to COVID‑19 related worker restrictions in Germany.”
“Corporate administration costs… increased… due to… compliance and regulatory obligations, government relations efforts and stock‑based compensation.”
“The Company has adequate funds to meet its obligations for the 12 months following the date of filing… [but] does not have sufficient funds to fully complete feasibility studies, licensing, permitting, development and construction… [and] achievement of these activities will be dependent upon future financings… or strategic transactions.”

Q&A Highlights

No earnings call transcript or Q&A was located for Q3 2020; there were no filed earnings-call materials in the period, and the recap is based on the Form 10‑Q and MD&A .

Estimates Context

Wall Street consensus estimates (EPS, revenue) for Q3 2020 were not available for this micro-cap in our S&P Global data pull, and the company reports no operating revenues at this stage .

Key Takeaways for Investors

Execution catalyst: Pilot testing completion by year-end 2020 and a results report in Q1 2021 are the next stock-moving milestones .
Persistent COVID friction: Contractor restrictions in Germany continue to slow progress; monitor for any “material” designation in future updates .
Rising operating spend: Exploration and corporate costs increased YoY to support technology and regulatory/government engagement; losses widened to $(0.86)M in Q3 .
Liquidity runway vs. scale-up gap: ~$3.5M cash and $3.4M working capital provide ~12 months of coverage, but significant external funding will be required for feasibility, permitting, and a demonstration plant—implying potential dilution/partnering ahead .
Policy support a tailwind: U.S. critical-minerals focus remains a strategic positive; company is actively engaging in related initiatives .
Watch for budget/scope creep: UIT program scope and costs increased in August and November; follow-on amendments could affect cash burn .
Risk skew: With no revenues and continued cash use, the near-term setup is binary around pilot outcomes and funding—traders should position around milestone timing and potential financing windows .

Tables and statements above are sourced from the company’s SEC filings and MD&A as cited.

RARE ELEMENT RESOURCES LTD (REEMF)·Q3 2020 Earnings Summary