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Spec Value Hunter Comment - May 28, 2010: Quest gearing up for major season at Strange Lake
 Quest Rare Metals Ltd expects to have a bench scale metallurgical study from Hazen Research by the end of June, which will be the basis for a preliminary economic assessment (PEA) expected in late July. Quest is mobilizing a major drill program which will include 13,000 m of infill drilling on the BZone to upgrade the inferred resource to indicated category and to test the eastern extension of the radiometric anomaly associated with the BZone. Quest will also drill 2,000 m on peripheral targets to test for other near surface high grade zones of rare earth mineralization. When that work is done the reconnaissance drill will be moved to Misery Lake where Quest plans to drill 100 m angled holes totaling 2,500 m on the rare earth mineralized ring structures it identified in 2009. Results indicating whether or not Misery Lake hosts high grade and continuous mineralization similar to what was obtained through surface sampling last year are expected in late November or December. Quest is putting in place a winterized camp at Strange Lake which will allow infill drilling to carry on until December, and resume in March 2011. During the summer Quest will excavate a 20 tonne bulk sample for the BZone which the junior will start flying out in August to Montreal for shipment to Hazen Research which will set up a pilot plant scale study expected to be done by the end of 2011. Assuming there are no setbacks the exploration timeline should put Strange Lake not far behind Avalon's Nechalacho project by the end of 2011. An updated 43-101 resource estimate should be available by the end of Q2 2011. With the logistics of the summer program in motion Quest's Peter Cashin is taking steps to beef up its management team and set the stage for the next round of financing to fund the 2011 program. On May 27, 2010 Quest appointed Robert LeClerc to replace as director and chairman Mac Watson who is retiring. Leclerc is currently the chairman of Minefinders Corp and was the CEO of Echo Bay from 1997-2003. During May the stock came under pressure as the world braced for a repeat of the 2008 meltdown, but during the last week of the month the market stabilized and Quest along with most of the rare earth sector rebounded. Needless to say, the drop was stomach-knotting for bottom-fishers and spec value hunters who have significant exposure to Quest and other rare earth juniors. The sector is in an air pocket where the end-users are still on the sidelines waiting for confirmation that recovery processes have been established, and the capital markets are still warily eyeing the agenda of the Chinese who last week published a draft of the proposed minimum operational thresholds for rare earth producers and processors as part of the government's effort to secure greater control over the industry. I am maintaining my Spec Cycle Hold 100% bottom-fish recommendation and continue to view Quest as a Good Relative Spec Value buy at current levels. However, until we know the results of the metallurgical study and the PEA we are unlikely to see significant new capital pools move into the market, which as a result will be volatile as nervous shareholder debate whether to keep their eye on the big picture or succumb to the general market tremors.
*JK owns shares in Quest Rare Minerals Ltd
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