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Tasman’s Pea Study of Norra Karr Heavy Rare Earth and Zirconium Project Demonstrates Robust Economics and Long Mine Life

March 21, 2012

TSXV : TSM
NYSE AMEX : TAS

VANCOUVER, March 21, 2012 /PRNewswire/ – Tasman Metals Ltd. (“Tasman” or the “Company”) (TSXV : TSM) (Frankfurt :
T61); (NYSE AMEX : TAS).
Mr Mark Saxon, President & CEO, is pleased to announce the positive
technical and financial results achieved from the NI 43-101 Compliant
Preliminary Economic Assessment (PEA) of the Norra Karr heavy rare
earth element (REE) and zirconium (Zr) project in southern Sweden.

“The PEA clearly demonstrates the strong economics of this highly
strategic project, with the majority of the projected cash flow sourced
from the production of the critical heavy rare earth elements,
dysprosium, terbium and yttrium” said Mark Saxon, Tasman’s President
and CEO. “Norra Karr is one of the largest and most economically robust
projects amongst its peers, due to the high contribution of the high
value critical rare earth elements, the substantial capital and
operating cost benefits provided by existing infrastructure, and the
simple mineralogy that allows ambient temperature and pressure
processing.”

PEA Financial Highlights Include:

        --  $1,464 million before-tax value (NPV at 10% discount rate);
        --  49.6% before-tax Internal Rate of Return (IRR);
        --  Before-tax payback period of 2.6 years;
        --  $5.3 Billion in revenue over the first 20 years and $10.9
            billion over the 40 year life of mine;
        --  Initial capital expenditures of $290 million (including
            contingency of $66.82 million or 30%);
        --  Average annual operating expenses of $74.3 million or $10.93
            per kg of mixed TREO concentrate;
        --  Conservative basket price of US$51 per kg versus current China
            FOB basket price of US$184.85;

Key Project Attributes:

        --  REE recoveries of 80% and byproduct zirconium recoveries of
            60%;
        --  Average annual mixed TREO concentrate production of 6,800
            tonnes including 290 tonnes of dysprosium oxide (Dy2O3), 43
            tonnes of terbium oxide (Tb2O3), 773 tonnes of neodymium oxide
            (Nd2O3) and 2,360 tonnes of yttrium oxide (Y2O3), in mixed
            concentrate form;
        --  Average annual production of 15,000 tonnes of zirconium
            carbonate concentrate (on a 100% ZrO2 basis);
        --  70% of the projected economic value of the project (86% of TREO
            revenue) is expected to be derived from the production of Norra
            Karr's four critical rare earth elements (CREE), dysprosium,
            terbium, neodymium and yttrium;
        --  New "In Pit" mineral resource estimate of 41.6 Mt at 0.57% TREO
            with 51% HREO/TREO% and 1.70% Zr2O (Indicated), and 16.5 Mt at
            0.64 % TREO with 49% HREO/TREO% and 1.70% Zr2O (Inferred);
        --  40 year mine life;
        --  Low start-up capital costs due to the excellent existing
            infrastructure at Norra Karr;
        --  Proximal to operating ports with rapid access to the European
            market;
        --  Simple process flow sheet and high recoveries due to success in
            bench scale metallurgical testing.

Preliminary Economic Assessment

Tasman’s 100% owned Norra Karr project is the only NI 43-101 compliant
REE resource in mainland Europe, located in mining-friendly Sweden. 
Norra Karr lies 15km NNE of the township of Gränna and 300km SW of the
capital Stockholm in mixed forestry and farming land.

The PEA for Norra Karr was completed by leading independent mining
consultants “Pincock, Allen & Holt” (PAH) of Denver, Colorado. 
Metallurgical process design was completed by Mr John Litz of JE Litz
and Associates, Colorado, on the basis of data provided from process
testing of Norra Karr mineralization completed by SGS Canada Inc. (SGS)
in Lakefield, Canada, and the Geological Survey of Finland (GTK) in
Outokumpu, Finland.

The project is proximal to road, rail, power and operating ports, plus
skilled personnel, minimizing the need for offsite infrastructure to be
built by the Company.  Development of the project will occur as an open
pit mine, with crushing, grinding, beneficiation and mineral
dissolution occurring in the immediate vicinity of the pit.  High
purity precipitates of a mixed rare earth carbonate concentrate and a
zirconium carbonate concentrate will be produced.

A summary of the operating assumptions and financial model for Norra
Karr can be found in Tables 1 – 2 below:


                 Table 1: Norra Karr Project, Annual Operating Summary

                                                                     Year
                                                      Year 3-20     21-40
    Production       Units      Year 1     Year 2       (avg)       (avg)

    Total
    Tonnes
    mined
    (ore+waste)        Mt        2.91       2.54         2.82        2.58

                    Waste :
    Strip Ratio       Ore        2.86       1.24         0.87        0.75

    Tonnes
    processed          Mt         752      1,133         1,504      1,458

    Grade TREO          %        0.53       0.56         0.58        0.60

    Grade ZrO2          %        1.61       1.60         1.64        1.77

    Recovery
    TREO                %         80%        80%          80%         80%

    Recovery
    ZrO2                %         60%        60%          60%         60%

    Mixed TREO
    concentrate     Tonnes      3,165      5,067         6,946      7,004

    Zirconium
    Carbonate
    concentrate     Tonnes      7,260      10,893       14,831      15,492

     Table 2: Norra Karr Project, Summary of Projected Revenue,Expenditure
                                  and NPV    

                                       First 20 Years     40 Year Mine Life
                                      ($ million CAD)       ($ million CAD)

    Total Revenue                             5,275.3              10,858.5

    Initial Capital Expenditures                290.2                 290.2
    (including contingency)

    Sustaining Capital                           74.1                 217.1
    Expenditures

    Royalty Payments                             13.2                  27.2

    Mine Reclamation Costs                       10.9                  10.9

    Total Before-tax Cash Flow                3,419.4               7,376.1
    (undiscounted)

    Before-tax NPV @ 10%                      1,214.7               1,464.1

    Before-tax NPV @ 12%                      1,015.9               1,168.0

    Before-tax NPV @ 14%                        855.0                 949.4

    Before-tax IRR (%)                          49.6%                 49.6%

    Before-tax Payback Period                     2.6                   2.6
    (years)

    Long-term Average REE Basket             US$51.00              US$51.00
    Price

    REE Basket Price Discounted              US$31.60              US$31.60
    for Refining

“When in production, the project will make a very significant
contribution to the availability of heavy rare earth elements outside
of China, and provide long term security of these metals for Europe”
said Mark Saxon.  “With this encouraging independent assessment in
hand, Tasman shall accelerate progress during 2012, with additional
drilling, further refinement of our metallurgical process, extensive
work on permitting and initiation of a full Pre-Feasibility Study
(PFS)”.

Geology and Mineralization

Norra Karr is a zirconium and rare earth element enriched peralkaline
(agpaitic) nepheline syenite intrusion which covers 350m x 1200m in
area.  The deepest extents of the mineralized intrusion have not been
delineated, but exceed 320m.  The rock units comprising the Norra Karr
intrusion are uncommon on a global scale, and include mineral phases
that are comprised of or associated with REE’s, Zr, Nb, Y and Hf. The
most abundant intrusion present is grännaite, a medium grained syenite
consisting of alkali feldspar, nepheline, aegirine, natrolite,
eudialyte and catapleite. Lesser units include lakarpite
(arfvedsonite-albite nepheline syenite), pulaskite
(microcline-arfvedsonite-albite nepheline syenite) and kaxtorpite
(eckermannite-microcline-aegirine-pectolite-nepheline syenite).
Intervals of irregular coarse grained pegmatite schlieren with
equivalent mineralogy to the grännaite are also commonly developed. The
Norra Kärr intrusion is hosted by granitoide rocks which close to the
contacts (0-25m) exhibit signs of fenitization (metasomatic
alteration).

The rare earth and zirconium bearing minerals at Norra Karr comprise
almost exclusively the zirconosilicates: eudialyte and catapleiite. 
Rare mosandrite, rosenbushite and cerite have been described locally. 
Eudialyte and catapleiite are both soluble in moderate strength
sulphuric acid at room temperature and pressure, which has allowed for
development of a simple flow sheet with low consumption of both
reagents and energy.  The bulk sample used in concentrate preparation
showed eudialyte comprised approximately 6% of the rock, and typically
contained between 5 and 10 weight % TREO.

Spatial distribution of rare earth minerals at Norra Karr is very
consistent.  TREO grade, mineral grain size and HREO/TREO% varies only
slightly across the deposit in a concentric manner.  REE bearing
minerals have not been noted to vary with either strike or depth to any
significant degree.

Uranium (U) and thorium (Th) levels at Norra Karr are considered low for
an REE-enriched intrusion and do not significantly exceed background. 
The thorium (average value 7 ppm) and uranium (average value 14 ppm)
present in the Norra Karr deposit are believed disseminated within the
REE minerals.

Updated Mineral Inventory and “In-Pit” Mineral Resource Estimate

In 2011, Tasman completed two extensive drill programs with the goal of
increasing the overall size of the resource as well as increasing the
confidence level in the existing NI 43-101 compliant estimate.  In
conjunction with the release of this PEA, Tasman is pleased to announce
a revised NI 43-101 compliant estimate for Norra Karr. The resource
estimate was prepared by Pincock Allen & Holt (“PAH”) /
Minarco-Mineconsult (both subsidiaries of Runge Ltd)

A block model mineral inventory showing grade and tonnage relationships
at five geological cutoff grades for percent total rare earth oxides
(%TREO) is presented in Table 3.  At a geological cutoff grade of 0.4
%TREO, the Norra Karr deposit contains a mineral inventory of 69.1
million tonnes at 0.60% TREO and 1.82% ZrO2.  The ratio of HREO/TREO
for this tonnage is 52%.  Both grade and total tonnage have increased
over the NI43-101 compliant estimate of November 2010.

Table 3: Norra Karr Project – March 2012 Block Model Mineral Inventory
and REO Distribution

     _________________________________________________________________
    |      |      |    |    |    |      |                  LREO       |
    |      |______|____|____|____|______|_____________________________|
    |Cutoff|Tonnes|TREO|HREO|LREO|HREO/ |La203|Ce203|Pr203|Nd203|Sm203|
    | TREO |______|____|____|____|______|_____|_____|_____|_____|_____|
    |  %   |   MT |  % |  % |  % |TREO %|   % |   % |   % |   % |   % |
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
    | 0.20 |148.8 |0.42|0.24|0.19| 56 % |0.037|0.083|0.011|0.044|0.012|
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
    | 0.30 | 85.0 |0.55|0.29|0.26| 53 % |0.052|0.116|0.015|0.060|0.016|
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
    | 0.40 | 69.1 |0.60|0.31|0.29| 52 % |0.058|0.131|0.017|0.067|0.018|
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
    | 0.50 | 58.8 |0.63|0.33|0.30| 52 % |0.059|0.136|0.018|0.070|0.019|
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
    | 0.60 | 38.8 |0.67|0.35|0.32| 52 % |0.062|0.144|0.019|0.076|0.021|
    |______|______|____|____|____|______|_____|_____|_____|_____|_____|
     _______________________________________________________________________________
    |      |      |    |                                          HREO              |
    |      |______|____|____________________________________________________________|
    |Cutoff|Tonnes|TREO|Eu203|Gd203|Tb203|Dy203|Ho203|Er203|Tm203|Yb203|Lu203|Y203 |
    | TREO |______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    |  %   |   MT |  % |   % |   % |   % |   % |   % |   % |   % |   % |   % |   % |
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    | 0.20 |148.8 |0.42|0.002|0.014|0.003|0.021|0.005|0.015|0.002|0.015|0.002|0.159|
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    | 0.30 | 85.0 |0.55|0.002|0.018|0.004|0.025|0.006|0.017|0.003|0.017|0.002|0.200|
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    | 0.40 | 69.1 |0.60|0.002|0.019|0.004|0.027|0.006|0.018|0.003|0.017|0.002|0.215|
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    | 0.50 | 58.8 |0.63|0.002|0.020|0.004|0.028|0.006|0.018|0.003|0.017|0.002|0.224|
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|
    | 0.60 | 38.8 |0.67|0.003|0.022|0.004|0.029|0.006|0.019|0.003|0.018|0.002|0.240|
    |______|______|____|_____|_____|_____|_____|_____|_____|_____|_____|_____|_____|

Notes:

      1. Total Rare Earth Oxides (TREO) includes: La2O3, Ce2O3, Pr2O3,
         Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3,
         Yb2O3, Lu2O3, Y2O3
      2. Heavy Rare Earth Oxides (HREO) includes: Eu2O3, Gd2O3, Tb2O3,
         Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3
      3. The block model mineral inventory was completed by Mr Geoffrey
         Reed, Senior Consulting Geologist of Minarco-Mineconsult
         (Australia), and is based on geological and geochemical data
         supplied by Tasman, audited by Mr Reed. Mr Reed is an independent
         qualified person for the purposes of NI 43-101 standards of
         disclosure for mineral projects of the Canadian Securities
         Administrators and has verified the data disclosed in this
         release. A Technical Report with the estimate will be filed on
         SEDAR within 45 days.
      4. Cut-off grades are geological cut-offs and not based on economics.
      5. Block model mineral inventories are not mineral resources because
         the reasonable prospects of economic extraction standard has not
         been satisfied.
      6. The resource estimate is based on:
         o A database of 49 diamond drill holes completed by the Company
           since December 2009 where samples were composited on 2m lengths.
           Assays were completed at ALS Chemex, with check sampling
           completed by ACME Laboratories Ltd.
         o Specific gravity (SG) used the overall mean of 2.70 g/cc from
           179 SG readings.
         o Block model was estimated by inverse distance squared
           interpolation method on blocks 100m x 20m x 20m.

For the purposes of the PEA and following a supply and demand study of
the heavy REE market, PAH was requested to optimize the resource and
pit that would allow for the production 6,000 – 7,000 tonnes of
separated rare earth oxides per annum over an initial mine life of 20
years.  This production rate was chosen due the globally significant
output of the heavy REE’s dysprosium, yttrium and terbium that will be
produced from Norra Karr under this scenario.

Using this production rate and duration guidance provided by Tasman, PAH
produced a Whittle pit model to estimate the in-pit Mineral Resource as
provided in Table 4.  Expansion of the annual production rate or
extending the mine life beyond 20 years will be reviewed in the
upcoming PFS.


    Table 4: Norra Karr Project, NI43-101CompliantMarch2012 "In-Pit"
    MineralResource1Estimate  

    Classification Tonnes   TREO   LREO   HREO   HREO/TREO   ZrO2   Tonnes of
                     Mt      %      %      %         %        %     Contained
                                                                      TREO

    Indicated       41.6    0.57   0.28   0.29      50.8     1.70    237,120

    Inferred        16.5    0.64   0.33   0.31      48.4     1.70     94,050

Notes:

      1. Mineral resources that are not mineral reserves do not have
         demonstrated economic viability. Mineral Resource estimates do not
         account for mineability, selectivity, mining loss and dilution.
         The Preliminary Economic Assessment includes inferred mineral
         resources which are considered too speculative geologically to
         have the economic considerations applied to them that would enable
         them to be categorized as Mineral Reserves. There is no certainty
         that the results projected in the Preliminary Economic Assessment
         will be realized and actual results may vary substantially.
      2. Total Rare Earth Oxides (TREO) includes: La2O3, Ce2O3, Pr2O3,
         Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3,
         Yb2O3, Lu2O3, Y2O3.
      3. Heavy Rare Earth Oxides (HREO) includes: Eu2O3, Gd2O3, Tb2O3,
         Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3.
      4. "In-pit" Mineral Resources were estimated by PAH using the Whittle
         pit optimization software and scoping level economic parameters
         for commodity prices, metal recoveries and current operating
         expenses as presented in the PEA and summarized in this press
         release.
      5. Mineral Resources are reported at a marginal cutoff grade of
         0.285% TREO.

Mine Design Considerations

Mine design consists of a single open pit with single entry ramp.  As
the Norra Karr deposit is covered by only a thin (typically less than 1
metre) layer of soil, no significant pre-strip is required.  Below this
soil layer the rock is unweathered, therefore no consideration need be
given to variation in mineralogy or grade relating to weathering.  A
two year ramp up period is anticipated to full production, with a total
modeled mine life of twenty years.

Mining will be carried out using dump trucks and excavators as mining
equipment with haulage via the access ramp to the nearby processing
facility. The life of mine open pit strip ratio is estimated to be
0.85:1 (waste:ore) with a mine life of 40 years. The mill feed at full
operation is 1.5 million tonnes per year, or approximately 4,100 tonnes
per day.

Beneficiation and Processing Considerations

Flow sheet design within this PEA incorporates the results from ambient
temperature/pressure leach testing and roast/leach testing of whole ore
completed at SGS during late 2010 and 2011 under the guidance of Mr Les
Heymann; and beneficiation and ambient temperature/pressure leach
testing of mineral concentrate completed at GTK during 2011 under the
guidance of Mr John Litz.  Metallurgical test work was undertaken on
two approximately 100 kg samples.  These samples were comprised of
drill core intervals selected from across the Norra Karr deposit to
represent both the resource grade at a 0.4% TREO cut-off (grade of
0.54% TREO) and the range of ore types encountered.  The samples can be
considered representative based on the current understanding of the
project.

The rare earth and zirconium bearing minerals at Norra Karr comprise
almost exclusively the zirconosilicates: eudialyte and catapleiite. 
Both minerals are soluble in moderate strength sulphuric acid at room
temperature and pressure, which has allowed for development of a simple
flow sheet with low consumption of both reagents and energy.

The simplified ore processing modeled under the PEA at Norra Karr
consists of:

Crush & Grind

        --  Crushing and grinding to approximately 90 µm in sequential
            semi-autogenous and ball/rod mills;

Beneficiation

        --  Magnetic separation to exclude a non-magnetic
            feldspar/nepheline fraction;
        --  Flotation to exclude aegirine (clinopyroxene);
        --  Excluded fractions (25-35% of original volume) will be diverted
            to tailing storage, and considered for other commercial
            options;

Hydrometallurgy

        --  Sulphuric acid digestion of the REE mineral concentrate;
        --  Thickening and solid/liquid separation to divert REE-bearing
            pregnant solution;
        --  Stepwise precipitation of REE and Zr carbonate through addition
            of sodium carbonate;
        --  Calcination to yield final >90% pure mixed REE carbonate and Zr
            carbonate products for bagging and sale;
        --  Contaminants and undissolved solid phase will be neutralized
            with limestone slurry and diverted to a tailings storage;
        --  Acid in the liquid phase shall be recycled where possible, the
            balance neutralized with limestone;
        --  Process water will be purified with a reverse osmosis plant to
            ensure suitable for discharge and efficient reuse;

Transport of Final REE and Zr Products

        --  Saleable products (mixed REE carbonate and Zr carbonate) shall
            be transported off site by existing road and rail networks;

Under the planned PFS, process optimization shall include testing of
individual ore types, review of nepheline/feldspar co-product value and
saleabilty, testing of additional digestion and precipitation
mechanisms to reduce reagent and effluent streams.

Capital Cost Estimate

The capital cost estimate for the start up of the Norra Karr project is
CA$290 million, which includes a 30% cost contingency as outlined in
Table 5.  Costs considered include all equipment needed for mining and
processing, including a tailings facility, warehouses, offices and
upgrades to existing power and road infrastructure, plus any additional
infrastructure required for the Norra Karr project based on achieving a
PEA Study with an accuracy of +/-35%. Indirect costs such as
engineering, procurement, construction management and owner’s costs are
incorporated in the costing of the consolidated capital items.

Access to water and power are considered to be available on or very
close to site respectively.  A major highway lies 0.5km from the
project, and rail within 25km which are considered suitable for
transport in and out of all required materials and products.  Villages
and towns in the immediate region provide sources of skilled and
semi-skilled labor including those with mining industry experience, and
construction of accommodation is not considered necessary.


        Table 5: Norra Karr Project, InitialCapitalCostItems  

                                                 ($ million CAD)

    Mining                                                  18.2

    Processing                                             120.0

    Tailings and Management Facilities                      75.0

    Other Infrastructure                                    10.0

    Total                                                  223.2

    Contingency (30%)                                       66.8

    Total Initial Capital Cost                             290.0

Operating Cost Estimate

The Operating Cost estimates for the mining operation were developed by
PAH with contribution from Golder Associates, Sweden.  The operating
costs for the metallurgical process operations were developed by
consulting metallurgist, Mr. John Litz of JE Litz and Associates,
Colorado. The Operating Cost for the mining and metallurgical
operations cover all stages up to the shipment of REE and Zr
concentrates, as well as water management, tailings disposal, transport
of material to and from site, general and administration fees along
with associated infrastructure and services.

The project operating estimate is based on the following assumptions:

        --  Average of 1.5 million tonnes of ore mined per year following
            ramp up;
        --  Average of 1.2 million tonnes of waste rock mined per year
            following production ramp up;
        --  Approximately 6,950 tonnes of mixed REO concentrate produced
            per year following production ramp up;
        --  A total of 250 employees required for all operations.

Overall Operating Costs at Norra Karr are estimated to be $74.4 million
per year or $10.93/kg of mixed TREO concentrate output. A summary of
the costs is shown in Table 6.


              Table 6: Norra Karr Project, Operating CostItems      

                   Average Annual  Average Cost Per kg Average Cost Per
                        Cost          ofMixed TREO       Tonne of Ore
                   (Thousands $/y) concentrate ($/kg)    Milled ($/T)

    Mining                  10,224                1.52            3.801

    Processing              60,256                8.84            41.48

    Closure Cost
    Accrual                    272                0.04             0.19

    General and
    Administrative           3,632                0.53             2.50

    Total                   74,383               10.93                 

      1.     Mining costs based on per tonne of ore andwaste  

Output of the various REE’s based on the operating scenario above is
provided in Table 7.  Note that output quantity is given in oxide
equivalent form.  Mine-gate output is as a mixed rare earth carbonate. 
The financial model for Norra Karr under this PEA assumes no revenue
from Ho, Er, Tm, Yb and Lu due to the small market size and lack of
robust historical pricing.


                   Table 7: Norra Karr Project, Annual REEProduction Output
                                   (MixedConcentrate,Tonnes)

    REO Name                                                                  Year
                            % of Ore     Year 1     Year 2   Year 3-20       21-40
                           (Average)   (Tonnes)   (Tonnes)   (Average)   (Average)

    Lanthanum      La2O3       10.01        317        507         695         701

    Cerium         Ce2O3       22.52        713      1,141       1,564        1577

    Praseodymium   Pr2O3        2.86         91        145         199         200

    Neodymium      Nd2O3       11.31        358        573         786         792

    Samarium       Sm2O3        2.98         94        151         207         209

    Europium       Eu2O3        0.37         12         19          26          26

    Gadolinium     Gd2O3        3.16        100        160         219         221

    Terbium        Tb2O3        0.63         20         32          44          44

    Dysprosium     Dy2O3        4.25        135        215         295         298

    Holmium        Ho2O3        0.93         29         47          65          65

    Erbium         Er2O3        2.87         91        145         199         201

    Thulium        Tm2O3        0.45         14         23          31          32

    Ytterbium      Yb2O3        2.73         86        138         190         191

    Lutetium       Lu2O3        0.37         12         19          26          26

    Yttrium        Y2O3        34.55       1094      1,751       2,400        2420

    Total                     100.00    3,165 T    5,066 T     6,945 T     7,003 T

REE and Zr Pricing and Market Considerations

In the development of the price deck for this PEA, much effort was
expended by Tasman and PAH to ensure the price forecast was realistic
and conservative.  Price forecasts were compiled and studied from
industry groups including Roskill and IMCOA, as well as financial
analysts including Dundee Securities, Cormark Securities, Euro Pacific
Canada, CIBC World Markets, and Global Hunter Securities.  Also taken
into consideration were previously published PEA and PFS studies from
competing REE projects including, Avalon Rare Metals, Quest Rare
Mineral, Hudson Resources, Matamec and Frontier Rare Earths.   The
three year trailing price average for China FOB pricing from Asian
Metals was also reviewed.

Price forecasts between the various analysts and competing REE projects
differ substantially, with particular divergence in the forecast for
cerium and lanthanum.  The Norra Karr deposit provides little exposure
to cerium and lanthanum (approximately 3% of annual revenue), and this
divergence plays only a minor role in the financial modeling within. 
The majority of industry analysts expect an increase in consumption of
rare earth elements, particularly those considered to be in the
critical rare earth oxide (CREO) category as defined in the August 2011
report issued by Technology Metals Research.  These CREO elements
include Tasman’s major revenue drivers of dysprosium, yttrium, terbium,
neodymium, and europium.

This PEA is based upon the production of a mixed REE concentrate, as
modeling of separation of this concentrate into individual rare earth
oxides was considered beyond the scope of the study.  For separation,
Tasman is exploring multiple options, which include outsourcing,
partnerships, and new technologies. For the scope of this report,
modeled pricing is at a discount of 38% to the final separated oxide selling price given in Table 8 to account for the cost of separation by a third party. The
undiscounted REE basket price used in the PEA analysis was US$51.00 and
therefore the corresponding long term discounted basket price was
US$31.60.

Zirconium carbonate shall be produced with the rare earth products based
on the current metallurgical process design. Zirconium carbonate is an
important input into the rapidly growing zirconium chemicals industry,
with zirconium carbonate being the pre-cursor material from which other
zirconium chemicals are manufactured.  The end products from zirconium
carbonate include: antiperspirant actives, paint driers, leather
tanning products, paper coatings and automotive catalysts.  Currently,
the majority of zirconium carbonate is sourced from zircon, which
requires extensive processes and chemical cracking operations to
separate zirconium. According to data published by independent
consulting firm TZ Minerals International, the zirconium chemicals
market is the fastest growing segment of the zirconium market and is
estimated to account for 18% of the zirconium market in 2012 or
approximately 250,000 tonnes.  Price forecasts and current spot pricing
for zirconium carbonate was not available and as such, the price of
zirconia or zirconium oxide has been used as a proxy.  As a result, a
conservative price forecast of $3.77 per kg was used in the model, in
line with competitor PEA pricing.

The price deck used in the PEA is illustrated in Table 8.


    Table 8: Rare Earth Oxide and Zirconia Equivalent "Price Deck" Assumed
                              for Norra Karr PEA

                                   Tasman    Feb 2012 China Norra Karr - %
                                 Estimated     FOB Price1      of TREO
                                 Long-term      (US$/kg)       Revenue
                                Market Price                (Based onAvg.
                                  (US$/kg)                   Production)

    Lanthanum             La2O3        10.00          35.00           1.9%

    Cerium                Ce2O3         5.00          31.00           2.2%

    Neodymium             Nd2O3        75.00         165.00          16.6%

    Praseodymium          Pr2O3        75.00         160.00           4.2%

    Samarium              Sm2O3        10.00          71.00           0.5%

    Europium              Eu2O3       500.00       3,375.00           3.6%

    Gadolinium            Gd2O3        40.00         100.00           1.9%

    Terbium               Tb2O3       975.00       2,550.00          12.1%

    Dysprosium            Dy2O3       520.00       1,500.00          43.4%

    Yttrium               Y2O3         20.00         155.00          13.6%

    Norra Karr REE
    "BasketPrice"                      51.00         184.85               

    Basket Price with 38%
    Discount                           31.60                              

    Zirconia Equivalent   ZrO2          3.77          7.152               

    Note: no value applied to Ho, Er, Tm, Yb, or Lu due to lack of
    available historical prices
    1. Feb 2012 China FOB price quoted as average prices fromAsian Metals.
    2. Zirconia prices quoted as average prices from Industrial Minerals

Economic Analysis and Technical Assumptions

For the analysis, the Norra Karr deposit was analyzed based on an open
pittable recoverable resource of 58.1Mt million tonnes grading 0.59%
TREO (50.0% HREO/TREO) and 1.70% ZrO(2), in the inferred and indicated categories. This resource provides for a
greater than 20 year mine life, however if the entire deposit were to
be included at the current estimated processing rate, the project would
have a mine life of approximately 100 years.

The current mining and processing assumptions are for a mining rate of
1.5 million tonnes per year with average TREO recoveries of 80% and
average ZrO(2) recoveries of 60%. The project’s mining and process assumptions are
listed in Table 9.  No provision is made for inflation, and the capital
invested is assumed to be sourced as equity.

Based upon the total capital cost estimate of $290 million over a 1.5
year construction period, the before tax NPV at 10% discount rate as
determined by PAH is $1,464 million as detailed in Table 2 above.
Payback on the project is within 3 years from the start of production,
and generates a pre-tax IRR of 49.6%.


                Table 9: Norra Karr, Mining and Processing Assumptions

    Item                                          Unit       BaseCase Value

    Total Ore Mined (40 year mine
    life estimate)                             M tonnes             58.1

    Processing Rate                        Tonnes / year        1,500,000

    Life of Mine                                 years              40.0

    Average Process Recovery for REOs               %                 80

    Average Process Recovery for Zr                 %                 60

    Average Mining Cost                 ($ / tonne mined)           3.80

    Average Processing Cost             ($ / tonne milled)         41.48

    Average General &
    AdministrationCosts                 ($ / tonne milled)          2.50

    Average Closure Cost Accrual        ($ / tonne milled)          0.19

In addition to the direct capital expenditures, it is estimated that the
working capital requirement at time of mine start-up is to be $9.0
million and reclamation costs at the end of the 40 year project life is
expected to be $10.9 million.

Sensitivity Analysis

Beyond the base case analysis, a sensitivity analysis was performed on
the economic model to assess the impact for changes in the REE price
deck as well as changes to the operational costs. The results of the
sensitivity analysis are provided in Table 10, 11 and 12, which
demonstrate that the economic model is most sensitive to changes in the
REO basket prices followed by initial capital expenditures and finally
increases or decreases in operational costs.


       Table 10: Norra Karr, Sensitivity Analysis of Cost Assumptions
                   under PEA - Change in REO BasketPrice 

    Selling Price of REO Basket NPV @ 8%    NPV @ 10%  NPV @ 12%   IRR

    US$ 66.30/kg Increase 30%   $2,619,276 $2,062,558 $1,665,924 63.4%

    US$ 61.20/kg Increase 20%   $2,372,801 $1,863,059 $1,499,932 58.9%

    US$ 56.10/kg Increase 10%   $2,126,327 $1,663,560 $1,333,939 54.3%

    US$ 51.00/kg Base Case      $1,879,852 $1,464,060 $1,167,947 49.6%

    US$ 45.90/kg Decrease 10%   $1,633,378 $1,264,561 $1,001,955 44.8%

    US$ 40.80/kg Decrease 20%   $1,386,903 $1,065,062   $835,962 39.9%

    US$ 35.70/kg Decrease 30%   $1,140,429   $865,563   $669,970 34.8%

       Table 11: Norra Karr, SensitivityAnalysis of Cost Assumptions
                                under PEA -
             Change in Initial Capital Expenditure           

    Initial CapitalExpenditure NPV @ 8%    NPV @ 10%  NPV @ 12%   IRR

    $348,024 Increase 20%      $1,821,848 $1,406,056 $1,109,943 42.7%

    $319,022 Increase 10%      $1,850,850 $1,435,058 $1,138,945 45.9%

    $290,020 Base Case         $1,879,852 $1,464,060 $1,167,947 49.6%

    $261,018 Decrease 10%      $1,908,854 $1,493,062 $1,196,949 54.1%

    $232,016 Decrease 20%      $1,937,856 $1,522,064 $1,225,951 59.6%

    Table 12: Norra Karr, Sensitivity Analysis of Cost Assumptions under
                     PEA - Change in Operational Costs

    Operating Costs/kgTREO Output   NPV @ 8%  NPV @ 10%  NPV @ 12%   IRR

    $13.12           Increase 20% $1,705,676 $1,322,431 $1,049,619 46.0%

    $12.03           Increase 10% $1,792,764 $1,393,246 $1,108,783 47.8%

    $10.93              Base Case $1,879,852 $1,464,060 $1,167,947 49.6%

    $9.84            Decrease 10% $1,966,941 $1,534,875 $1,227,111 51.4%

    $8.75            Decrease 20% $2,054,029 $1,605,690 $1,286,275 53.2%

Environmental Assessment

The Swedish Mining Act provides a clear pathway to resource development,
and Tasman has hired a skilled team of staff and consultants to move
the project forwards through appropriate legislation as quickly as
possible.

Environmental and archeological baseline studies were conducted during
2011 by consulting group Mirab AB which provides adequate information
for the submission of a Mine Lease application during Q2 2012.  Golder
Associates Sweden are currently preparing the application document. 
Tasman is completing a program of thorough community, government agency
and other stakeholder engagement in line with this process.

NI 43-101 Compliance

The technical information in this news release has been prepared in
accordance with Canadian regulatory requirements by, or under the
supervision of, Mr Craig Horlacher and Mr Paul Gates of Pincock Allen &
Holt, Mr Geoff Reed of Runge Ltd and Mr John Litz of JE Litz and
Associates all of whom are independent Qualified Persons as defined
under National Instrument 43-101 Standards of Disclosure for Mineral
Projects.

Samples submitted by Tasman Metals Ltd used with the resource
calculation quoted above were analyzed by the ME-MS81 technique by ALS
Chemex Ltd’s laboratories in Pitea, Sweden and Vancouver, Canada, where
duplicates, repeats, blanks and known standards were inserted according
to standard industry practice. Where over-range for ME-MS81, Zr was
determined using the ME-XRF10 technique. The qualified person for the
Company’s exploration projects, Mark Saxon, President and Chief
Executive Officer of Tasman and a member of the Australasian Institute
of Mining and Metallurgy and Australian Institute of Geoscientists
oversaw this data collection.  Metallurgical products produced during
research by the Geological Survey of Finland (GTK) were analyzed by the
XRF technique in the laboratories of Labtium Oy in Finland.  Labtium Oy
is an independent consulting laboratory, fully accredited to industry
standards.

The qualified person for the Company’s exploration projects, Mark Saxon,
President and Chief Executive Officer of Tasman and a Member of the
Australasian Institute of Mining and Metallurgy and Australian
Institute of Geoscientists, has reviewed and verified the contents of
this release.

About Tasman Metals Ltd. 

Tasman Metals Ltd is a Canadian mineral exploration and development
company focused on Rare Earth Elements (REE’s) in the European region
and is listed on the TSX Venture Exchange under the symbol “TSM” and
the NYSE-AMEX under the symbol “TAS”.  REE demand is increasing, due to
the metals unique properties that make them essential for high
technology and environmentally-beneficial applications.  Since over 95%
of REE supply is sourced from China, the European Union is actively
supporting policy to promote domestic supply of REE’s, to ensure the
security of high-tech industry.  Tasman’s exploration portfolio is
uniquely placed, with the capacity to deliver “high-tech” metals from
politically stable, mining friendly jurisdictions with developed
infrastructure.

The Company’s Norra Karr project in Sweden is one of the most
significant heavy REE resources in the world, and the only NI43-101
compliant REE resource in mainland Europe.  The resource is unusually
low in radioactive metals relative to peer projects, with less than 15
ppm each of uranium and thorium.

For more information regarding rare earth elements, see the Rare Metal
Blog at www.raremetalblog.com or Resource Stock Digest at
http://strategicmetalstocks.resourcestockdigest.com

On behalf of the Board,

“Mark Saxon”  
Mark Saxon, President & CEO

The TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange), the
American Stock Exchange or the Frankfurt Stock Exchange accepts
responsibility for the adequacy or accuracy of this news release.

Cautionary Note to U.S. Investors Concerning Estimates of Inferred
Resources
.  This news release uses the term “inferred mineral resource.”  We
advise U.S. investors that this term is not recognized by the U.S.
Securities and Exchange Commission.  The estimation of inferrred
resources involves far greater uncertainty as to their existence and
economic viability than the estimation of other categories of
resources.  U.S. investors are cautioned not to assume that estimates
of inferred mineral resources exist, are economically minable, or will
be upgraded into measured or indicated mineral resources.

Cautionary Statements. Certain statements found in this release may constitute
forward-looking statements as defined in the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements reflect the
speaker’s current views with respect to future events and financial
performance and include any statement that does not directly relate to
a current or historical fact. Such statements reflect the current
risks, uncertainties and assumptions related to certain factors
including, without limitations, competitive factors, general economic
conditions, customer relations, relationships with vendors and
strategic partners, the interest rate environment, governmental
regulation and supervision, seasonality, technological change, changes
in industry practices, and one-time events.  Should any one or more of
these risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially from
those described herein. Forward-looking statements cannot be guaranteed
and actual results may vary materially due to the uncertainties and
risks, known and unknown, associated with such statements. Shareholders
and other readers should not place undue reliance on “forward-looking
statements,” as such statements speak only as of the date of this
release.

 

SOURCE Tasman Metals Ltd.


Source: PR Newswire