DEF 14A 1 trerc14a.htm trerc14a.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______)
 
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¨      Soliciting Material Pursuant to § 240.14a-12
 

TEXAS RARE EARTH RESOURCES CORP.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
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TEXAS RARE EARTH RESOURCES CORP.
304 Inverness Way South, Suite 365
Englewood, Colorado 80112
(303) 597-8737
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
To all Stockholders of Texas Rare Earth Resources Corp.:
 
 
You are invited to attend the 2012 Annual Meeting of Stockholders (the “Annual Meeting”) of Texas Rare Earth Resources Corp. (the “Company”).  The Annual Meeting will be held at The Denver Marriott South, Salon A, 10345 Park Meadows Drive, Littleton, Colorado 80124, on February 15, 2012 at 10:00 a.m. (Mountain standard time).  The purposes of the Annual Meeting are:
 
 
1.
The election of the nominees to the Company’s Board of Directors to serve until the Company’s 2013 Annual Meeting of Stockholders or until successors are duly elected and qualified; the following are nominees for election as directors: K. Marc LeVier, Anthony Marchese, Daniel E. Gorski, General Gregory Martin, James J. Graham and Graham A. Karklin;
 
 
2.
Ratification of the appointment of the Company’s independent registered public accounting firm for the fiscal year of 2012;
 
 
3.
Ratify an increase in the number of shares of common stock available for grant of options under the Company’s Amended and Restated 2008 Stock Option Plan.
 
 
4.
Any other business that may properly come before the Annual Meeting.
 
The Board of Diectors has fixed December 21, 2011, as the record date for the Annual Meeting.  Only stockholders of the Company of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.  A list of stockholders as of December 21, 2011, will be available at the Annual Meeting for inspection by any stockholder.  Stockholders will need to register at the Annual Meeting to attend the Annual Meeting.  If your shares of common stock are not registered in your name, you will need to bring proof of your ownership of those shares to the Annual Meeting in order to register to attend and vote.  You should ask the broker, bank or other institution that holds your shares of common stock to provide you with a valid proxy card to permit you to vote at the Annual Meeting.  Please bring that documentation to the Annual Meeting.
 
IMPORTANT
 
Whether or not you expect to attend the Annual Meeting, please sign and return the enclosed proxy promptly.  If you decide to attend the Annual Meeting, you may, if you wish, revoke the proxy and vote your shares of common stock in person.
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on February 15, 2012.  The proxy statement and the 2011 annual report to stockholders are available at www.trer.com.
 
By Order of the Board of Directors,

/s/ Wm. Chris Mathers
Wm. Chris Mathers
Corporate Secretary
Texas Rare Earth Resources Corp.
 
December 28, 2011

 
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TEXAS RARE EARTH RESOURCES CORP.
304 Inverness Way South, Suite 365
Englewood, Colorado 80112
(303) 597-8737
Proxy Statement
for
Annual Meeting of Stockholders
 
To Be Held February 15, 2012, 10 a.m. Mountain Standard Time
Denver Marriott South
Salon A
10345 Park Meadows Drive
Littleton, CO  80124
(303) 728-5957
 

 
Unless the context requires otherwise, references in this statement to “Texas Rare Earth Resources,” “TRER,” the “Company,” “we,” “us” or “our” refer to Texas Rare Earth Resources Corp.
 
The Annual Meeting of Stockholders of Texas Rare Earth Resources (referred to as the “Annual Meeting”) will be held on February 15, 2012, at The Denver Marriott South, Salon A, 10345 Park Meadows Drive, Littleton, Colorado 80124, at 10 a.m. Mountain standard time.
 
We are providing the enclosed proxy materials and form of proxy in connection with the solicitation by the Company’s Board of Directors (referred to as the “Board”) of proxies for this Annual Meeting.  The Company anticipates that this Proxy Statement and the form of proxy will first be available to holders of the Company’s shares of common stock (Texas Rare Earth Resources shares of common stock referred to as “shares” and the whole class of common stock referred to as the “common stock”) on or about January 6, 2012. A notice of the availability of this Proxy Statement and the form of proxy will first be mailed to holders of the common stock on or about this date.
 
You are invited to attend the Annual Meeting at the above stated time and location.  If you plan to attend and your shares are held in “street name” – in an account with a bank, broker, or other nominee – you must obtain a proxy issued in your name from such broker, bank or other nominee.
 
You shares by completing a proxy card online, completing and returning a proxy card provided to you by mail or e-mail or, if you hold shares in “street name,” by completing the can vote your voting form provided by the broker, bank or other nominee.
 
A returned signed proxy card without an indication of how shares should be voted will be voted FOR the election of all directors, FOR the ratification of the appointment of the Company’s independent registered public accounting firm and FOR the amendment to the Amended and Restated 2008 Stock Option Plan.
 
Our common stock is the only type of security entitled to vote at the Annual Meeting. Our corporate bylaws define a quorum as a majority of the issued and outstanding voting stock entitled to vote at the Annual Meeting.  The Company’s Articles of Incorporation do not allow cumulative voting for directors.  The nominees who receive the most votes will be elected.  A majority of the voting power of the voting shares present, whether in person or by proxy, is required to ratify the appointment of the Company’s independent registered public accounting firm and approve the amendment to the Amended and Restated 2008 Stock Option Plan.
 
 
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QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING
 
 
Why am I receiving this Proxy Statement and proxy card?
 
You are receiving this Proxy Statement and proxy card because you were a stockholder of record at the close of business on December 21, 2011 and are entitled to vote at the Annual Meeting.  This Proxy Statement describes issues on which the Company would like you, as a stockholder, to vote.  It provides information on these issues so that you can make an informed decision.  You do not need to attend the Annual Meeting to vote your shares.
 
When you sign the proxy card you appoint Marc LeVier, Chief Executive Officer to the Company and Wm. Chris Mathers, Chief Financial Officer to the Company, as your representatives at the Annual Meeting.  As your representatives, they will vote your shares at the Annual Meeting (or any adjournments or postponements) as you have instructed them on your proxy card.  With proxy voting, your common stock will be voted whether or not you attend the Annual Meeting.  Even if you plan to attend the Annual Meeting, it is a good idea to complete, sign and return your proxy card in advance of the Annual Meeting, just in case your plans change.
 
If an issue comes up for vote at the Annual Meeting (or any adjournments or postponements) that is not described in this Proxy Statement, your representatives will vote your shares, under your proxy, at their discretion, subject to any limitations imposed by law.
 
When is the record date?
 
The Board has fixed December 21, 2011, as the record date for the Annual Meeting.  Only holders of common stock as of the close of business on that date will be entitled to vote at the Annual Meeting.
 
How many shares are outstanding?
 
As of December 21, 2011, the Company had 34,935,009 shares of common stock issued and outstanding.
 
What am I voting on?
 
You are being asked to vote on the following:
 
 
1.
The election of the nominees to the Company’s Board to serve until the Company’s 2013 Annual Meeting of Stockholders or until successors are duly elected and qualified; the following are nominees for election as directors: K. Marc LeVier, Anthony Marchese, Daniel E. Gorski, General Gregory Martin, James J. Graham and Graham A. Karklin;
 
 
2.
Ratification of the appointment of the Company’s independent registered public accounting firm for the fiscal year of 2012;
 
 
3.
Ratify an increase in the number of shares of common stock available for grant of options under the Company’s Amended and Restated 2008 Stock Option Plan (the “Option Plan Share Increase”);
 
 
4.
Any other business that may properly come before the Annual Meeting.
 
How many votes do I get?
 
Each share is entitled to one vote.  No cumulative rights are authorized, and dissenters’ rights are not applicable to any of the matters being voted upon.
 
The Board recommends a vote FOR each of the nominees to the Board, FOR the ratification of the appointment of the Company’s independent registered public accounting firm and FOR the ratification of the Option Plan Share Increase.
 
 
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How do I vote my shares?
 
You have several voting options. You may vote by:
 
–  
Completing your proxy card over the Internet at the following website: www.shareholdervote.infoUH;
 
–  
Downloading or requesting a proxy card (as detailed below), signing your proxy card and mailing it to
 
Securities Transfer Corporation ;
Attn: George Johnson
2591 Dallas Parkway
Suite 102
Frisco, Texas 75034
 
–  
Signing and faxing your proxy card to Securities Transfer Corporation at the number provided on the proxy card or
 
–  
Attending the Annual Meeting and voting in person.
 
If your shares are held in an account with a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in a “street name” and these proxy materials are being forwarded to you by that organization.  The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting.  As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account.  You are also invited to attend the Annual Meeting.  However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy card from your broker, bank, or other nominee.
 
Can stockholders vote in person at the Annual Meeting?
 
The Company will pass out written ballots to any stockholder who wants to vote at the Annual Meeting.  If you hold your shares through a brokerage account but do not have a physical share certificate, or the shares are registered in someone else’s name, you must request a legal proxy from your stockbroker or the registered owner to vote at the Annual Meeting.
 
What if I want a paper copy of these proxy materials?
 
Please send a written request to our offices at the address below, email us at nwakely@trer.com or call us at 303-597-8737 to request a copy of the proxy materials.
 
Send requests to:
 
Texas Rare Earth Resources Corp.
304 Inverness Way South, Suite 365
Englewood, Colorado 80112
Attention:  Nadine Wakely

 
What if I change my mind after I return my proxy?
 
You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting.  You may do this by:
 
–  
Signing another proxy with a later date and mailing it to the attention of: Wm. Chris Mathers, Corporate Secretary, at 304 Inverness Way South, Suite 365, Englewood, Colorado 80112, so long as it is received prior to 5:00PM Mountain standard time on February 13, 2012;
 
 
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–  
Delivering a written notice of the revocation of your proxy to the attention of: Wm. Chris Mathers, Corporate Secretary, at 304 Inverness Way South, Suite 365, Englewood, Colorado 80112, so long as it is received prior to 5:00PM Mountain standard time on February 13, 2012; or
 
–  
Voting in person at the Annual Meeting.
Beneficial stockholders should refer to the instructions received from their stockbroker or the registered holder of the shares if they wish to change their vote.
 
How many votes do you need to hold the Annual Meeting?
 
To conduct the Annual Meeting, the Company must have a quorum, which means that a majority of the outstanding voting shares of the Company as of the record date must be present at the Annual Meeting.  The Company’s common stock is the only type of security entitled to vote at the Annual Meeting.  Based on 34,935,009 shares outstanding as of the record date of December 21, 2011, 17,467,505 shares must be present at the Annual Meeting, in person or by proxy, for there to be a quorum.  Your shares will be counted as present at the Annual Meeting if you:
 
–  
Submit a properly executed proxy card (even if you do not provide voting instructions); or
 
–  
Attend the Annual Meeting and vote in person.
 
What if I abstain from voting?
 
Abstentions with respect to a proposal are counted for the purposes of establishing a quorum.  Since the Company’s by-laws state that matters presented at a meeting of the stockholders must be approved by the majority of the voting power of the voting shares present at the meeting, a properly executed proxy card marked ABSTAIN with respect to a proposal will have the same effect as voting AGAINST that proposal.  However, as described below, election of directors is by a plurality of the votes cast at a meeting.  A properly executed proxy card marked WITHHELD with respect to the election of directors will not be voted and will not count FOR any of the nominees for which the vote was withheld.
 
What effect does a broker non-vote have?
 
Brokers and other intermediaries, holding shares in street name for their customers, are generally required to vote the shares in the manner directed by their customers. If their customers do not give any direction, brokers may vote the shares on routine matters, but not on non-routine matters. Since the election of directors under this Proxy Statement is uncontested, the election of directors is considered a non-routine matter and brokers may not vote shares held in street name for their customers in relation to this item of business. Similarly, the Option Plan Share Increase is a non-routine matter.  The ratification of the appointment of the Company’s independent registered public accounting firm for the fiscal year of 2012 is considered a routine matter and brokers will be permitted to vote shares held in street name for their customers.
 
The absence of a vote on a non-routine matter is referred to as a broker non-vote. Any shares represented at the Annual Meeting but not voted (whether by abstention, broker non-vote or otherwise) will have no impact in the election of directors, except to the extent that the failure to vote for an individual results in another individual receiving a larger proportion of votes cast for the election of directors. Any shares represented at the Annual Meeting but not voted (whether by abstention, broker non-vote or otherwise) with respect to the Option Plan Share Increase or the proposal to ratify the appointment of the independent registered public accountant, will have the same effect as a vote against such proposal.
 
How many votes are needed to elect directors?
 
The nominees for election as directors at the Annual Meeting will be elected by a plurality of the votes cast at the Annual Meeting.  The nominees with the most votes will be elected until all six director positions have been filled.  A properly executed proxy card marked WITHHELD with respect to the election of directors will not be voted and will not count FOR or AGAINST any of the nominees for which the vote was withheld.
 
How many votes are needed to ratify the appointment of the independent registered public accountant?
 
The ratification of the appointment of the independent registered public accountant will be approved if a majority of the voting power of the voting shares present at the Annual Meeting votes FOR the proposal.  A properly executed proxy card marked ABSTAIN with respect to this proposal will have the same effect as voting AGAINST this proposal.
 
 
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How many votes are needed to approve the Option Plan Share Increase?
 
The Option Plan Share Increase will be approved if a majority of the voting power of the voting shares present at the Annual Meeting vote FOR the proposal. A properly executed proxy card marked ABSTAIN with respect to this proposal will have the same effect as a vote cast AGAINST this proposal.
 
Will my shares be voted if I do not sign and return my Proxy Card?
 
If your shares are held through a brokerage account, your brokerage firm, under certain circumstances, may vote your shares; otherwise your shares will not be voted at the Annual Meeting.  See “What effect does a broker non-vote have?” above for a discussion of the matters on which your brokerage firm may vote your shares.
 
If your shares are registered in your name, and you do not complete your proxy card over the internet or sign and return your proxy card, your shares will not be voted at the Annual Meeting unless you attend the Annual Meeting and vote your shares in person.
 
Where can I find the voting results of the Annual Meeting?
 
The Company will publish the final results in a current report filing on Form 8-K with the Securities and Exchange Commission (SEC) within four (4) business days of the Annual Meeting.
 
Who will pay for the costs of soliciting proxies?
 
The Company will bear the cost of soliciting proxies.  In an effort to have as large a representation at the Annual Meeting as possible, the Company’s directors, officers and employees may solicit proxies by telephone or in person in certain circumstances.  These individuals will receive no additional compensation for their services other than their regular salaries.  Additionally, the Company may hire a proxy solicitor to help reach the quorum requirement.  The Company will pay a reasonable fee in relation to these services.  Upon request, the Company will reimburse brokers, dealers, banks, voting trustees and their nominees who are holders of record of the Company’s common stock on the record date for the reasonable expenses incurred for mailing copies of the proxy materials to the beneficial owners of such shares.
 
When are stockholder proposals due for the 2013 Annual Meeting of Stockholders?
 
In order to be considered for inclusion in next year’s 2013 proxy statement, stockholder proposals must be submitted in writing to the Company’s Secretary, Wm. Chris Mathers, at 304 Inverness Way South, Suite 365, Englewood, Colorado 80112, and received no later than September 10, 2012, provided that this date may be changed in the event that the date of the Annual Meeting of Stockholders to be held in calendar year 2013 is changed by more than 30 days from the date of the Annual Meeting of Stockholders to be held in calendar year 2012.  Such proposals must also comply with the requirements as to form and substance established by the SEC if such proposals are to be included in the Company’s Proxy Statement and form of proxy.
 
Similarly, stockholder proposals not submitted for inclusion in the proxy statement and received after November 26, 2012 will be considered untimely pursuant to Rule 14a-5(e)(2) of the Securities and Exchange Act of 1934, provided that this date may be changed in the event that the date of the Annual Meeting of Stockholders to be held calendar year 2013 is changed by more than 30 days from the date of the Annual Meeting of Stockholders to be held in calendar year 2012.
 
 
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How can I obtain a copy of the 2011 Annual Report on Form 10-K?
 
The Company’s 2011 Annual Report on Form 10-K, including financial statements, is available on the internet with this Proxy Statement at www.shareholdervote.info. The Form 10-K is also available through the SEC’s website at http://www.sec.gov.
 
At the written request of any stockholder who owns shares on the record date, the Company will provide to such stockholder, without charge, a paper copy of the Company’s 2011 Annual Report on Form 10-K as filed with the SEC, including the financial statements, but not including exhibits.
 
If requested, the Company will provide copies of the exhibits for a reasonable fee.
 
Requests for additional paper copies of the 2011 Annual Report on Form 10-K should be mailed to:
 
Texas Rare Earth Resources Corp.
304 Inverness Way South, Suite 365
Englewood, Colorado 80112
Attention:  Nadine Wakely
 
 
 
 
 
 
 
 
 
 
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PROPOSAL 1 — ELECTION OF DIRECTORS
 
GENERAL QUESTIONS
 
 
What is the current composition of the Board?
 
The Company’s current bylaws require the Board to have no less than one and no more than ten directors, and may be increased or decreased from time to time, exclusively by resolution approved by the affirmative vote of a majority of the Board.  The current Board is composed of six directors.
 
Is the Board divided into classes?  How long is the term?
 
No, the Board is not divided into classes.  All directors serve one-year terms until their successors are elected and qualified at the next Annual Meeting.
 
Who is standing for election this year?
 
The Board has nominated the following six directors for election at the 2012 Annual Meeting, all of whom are currently directors, to hold office until the 2013 Annual Meeting:
 
·  
K. Marc LeVier
 
·  
Anthony Marchese
 
·  
Daniel E. Gorski
 
·  
General Gregory Martin
 
·  
James J. Graham
 
·  
Graham A. Karklin
 
What if a nominee is unable or unwilling to serve?
 
Should any one or more of these nominees become unable or unwilling to serve, which is not anticipated, the Board may designate substitute nominees, in which event the proxy representatives will vote proxies that otherwise would be voted for the named nominees for the election of such substitute nominee or nominees.
 
How are nominees elected?
 
Directors are elected by a plurality of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting.
 
The Board recommends a vote FOR each of the nominees.  All proxies executed and returned without an indication of how shares should be voted will be voted FOR the election of ALL nominees.
 
 
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INFORMATION ON THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS, AND KEY EMPLOYEES
 
 
The following table sets forth certain information with respect to our current directors and executive officers.  The term for each director expires at our next Annual Meeting or until his or her successor is appointed and qualified.  The ages of the directors and officers are shown as of December 21, 2011.
 
Directors and Executive Officers
 
Name
Age
Current Office with Company
Positions Held Since
K. Marc LeVier
62
President, Chief Executive Officer, and Director
May 2011
Daniel E. Gorski
74
Director
Chief Operating Officer
January 2007
May 2011
Anthony Marchese
55
Chairman of the Board, Director
December 2009
General Gregory Martin
63
Director
February 2011
Graham A. Karklin
62
Director
March 2011
James J. Graham
65
Director
April 2011
Wm. Chris Mathers
52
Chief Financial Officer, Secretary and Treasurer
December 2010

K. Marc LeVier -  Mr. LeVier was appointed as the Company’s president, chief executive officer and as a director in May 2011.  With 40 years experience in advanced process engineering, Mr. LeVier spent the last 22 years prior to May 2011 with Newmont Mining Corporation (“Newmont”) in several professional capacities.  As head of Metallurgical Research and Development, he led the development of processes for resources which have become Newmont’s primary producing properties today.  These include the development of the Gold Quarry refractory ore treatment plant (ROTP) at the Carlin Trend in Nevada, the Batu Hijau porphyry copper-gold mine in Indonesia, the heap leach operations at Minera Yanacocha in Peru, the Ahafo operations in Ghana, the Phoenix operation in Nevada, and the Boddington operation in Australia.  Additionally, Mr. LeVier led teams in the development of the former operations at Minahasa in Indonesia and the Zarafshan-Newmont Joint Venture heap leach operation in Uzbekistan. Prior to Newmont, Mr. LeVier worked for Exxon Minerals Company, Joy Manufacturing Corporation and Derrick Manufacturing Corporation.  He served in the U.S. Army Corps of Engineers during the Vietnam era.

Mr. LeVier has served on Industrial Advisory Boards at Montana Tech, South Dakota School of Mines & Technology, Virginia Tech, Michigan Tech, and the University of Arizona.  He has also served on the AMIRA BOD, which is an international collaborative research group based in Australia, and the Society for Mining, Metallurgy and Exploration BOD.   Mr. LeVier is a member of the Mining and Metallurgical Society (MMSA) and served as its President for four years.  Mr. LeVier holds both a Bachelor’s and Master’s degree in Metallurgical Engineering from Michigan Technological University.  

Mr. LeVier’s extensive experience in leading development teams in the mineral industry towards the development of large mineral operations throughout the world is key to the Company’s current business plans in relation to the exploration and potential development of the Company’s Round Top project in Texas.  Mr. LeVier’s knowledge of how to assemble and manage an exploration and development team combined with his educational background in metallurgical engineering permits him to provide the Board with unique insights and advise on moving the Company’s Round Top project forward.  Accordingly, the Board believes that Mr. LeVier should continue to serve on the Board.

Daniel E. Gorski -  Mr. Gorski has severed as a director of the Company since January 2006 and as the Company’s chief operating officer since May 2011.  Prior thereto, Mr. Gorski served as the Company’s president and chief executive officer from January 2007 to May 2011.  From July 2004 to January 2006, Mr. Gorski was the co-founder and vice president of operations for High Plains Uranium Inc., a uranium exploration and development company that went public on the Toronto Stock Exchange in December 2005.  Between June 1996 to May 2004, Mr. Gorski served as an officer and director of Metalline Mining Co., a publicly traded mining and development company with holdings in the Sierra Mojada Mining District, Coahuila, Mexico.  From January 1992 to June 1996, Mr. Gorski was the exploration geologist under contract to USMX Inc. and worked exclusively in Latin America.  Mr. Gorski earned a BS in 1960 from Sul Ross State College, in Alpine, Texas and an MA in 1970 from the University of Texas in Austin, Texas.  Mr. Gorski has over forty-three years of experience in the mining industry.

 
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Mr. Gorski’s extensive technical knowledge and experience in the mining industry combined with his historical relationship with the Company’s principal property, the Round Top project, permits Mr. Gorski to provide the Board with valuable insight to the exploration and development of the Round Top project. Accordingly, the Board believes that Mr. Gorski should continue to serve on the Board.

Anthony Marchese -   Mr. Marchese has served as a director since December 2009.  Since May 2011, Mr. Marchese has served as a Senior Vice-President with Axiom Capital Management, Inc., a New York City based FINRA member broker/dealer.  Mr. Marchese also serves as the general partner and chief investment officer of the Insiders Trend Fund, LP, an investment partnership whose mandate is to invest in those public companies whose officers and/or directors have been active acquirers of their own stock.  Mr. Marchese’s prior experience includes Monarch Capital Group, LLC (President and Chief Operating Officer – 2003 to 2011), Laidlaw Equities (senior vice president - April 1997 to March 2002), Southcoast Capital (senior vice president – May 1988 to April 1997), Oppenheimer & Co (limited partner – September 1982 to May 1988), Prudential-Bache (vice president – July 1981 to August 1982) and the General Motors Corporation (analyst – June 1980 to June 1981).  Mr. Marchese served in the military with the Army Security Agency and the U.S. Army Intelligence and Security Command.  Mr. Marchese received an MBA in Finance from the University of Chicago.

Mr. Marchese provides the Board with exceptional leadership and management knowledge, having gained extensive management and corporate finance experience during the course of his career. Mr. Marchese’s specific experience, qualifications, attributes and skills described above led the Board to conclude that Mr. Marchese should serve as a member of the Board of Directors.

General Gregory Martin - General Martin (retired) has served as a director of the Company since February 2011.  General Martin graduated from the United States Air Force Academy in 1970 and served as an Air Force officer for more than 35 years before retiring from the Air Force in 2005.  Since retirement, General Martin has served as a consultant and board member for several private aerospace and defense sector corporations.  He has also served as a course facilitator and senior mentor for several universities and for the Joint Forces Command and the National Defense University. While on active duty, General Martin flew fighter aircraft in Southeast Asia during the Vietnam conflict and then continued to lead and command operational forces in the field up to and including the United States Air Forces in Europe and the NATO Air Forces Northern Europe Commands in support of Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom.  His last assignment was as the Commander, Air Force Materiel Command at Wright- Patterson AFB, Ohio. In that capacity, he led nearly 80,000 personnel responsible for the Air Force Research Laboratory, all Air Force Acquisition support and Test and Evaluation operations, as well as the three Air Force Air Logistics Centers, responsible for the Air Force’s Major Repair and Overhaul (MRO) activities.  As the Commander of three fighter wings and two Major Commands in the United States Air Force, General Martin was responsible for managing and supervising comptrollers responsible for executing financial plans and budgets with up to $40 billion of obligation authority.   

General Martin’s experience in consulting for private aerospace and defense sector companies provides the Board with unique expertise in dealing with these potential customers in the rare earth industry.  As the Company moves towards development of its Round Top project, contacts within the industries that purchase rare earth minerals, including the defense contractor industry, will be key for the Company’s plan of operation.  Further, Mr. Martin’s experience as commander in the military brings invaluable leadership to the Board.  Accordingly, the Board believes that General Martin should continue to serve on the Board.

 
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Graham A. Karklin -  Mr. Karklin was appointed as a director in March 2011.  Mr. Karklin has been a mineral processing consultant since April, 2008.  Mr. Karklin served in project development management with Newmont Mining Corporation from 1996 to March, 2008, during which time Mr. Karklin provided technical services to projects and operations in Canada, Peru, Bolivia, Indonesia, Ghana, Uzbekistan and Russia.  Mr. Karklin served as a director of metallurgical services for Echo Bay Mines Ltd from 1988 to 1996, which tenure included management of mining operations, development of new projects and mergers and acquisitions.   Early in his career, Mr. Karklin spent six years working for Tantalum Mining Corporation in rare earth operations.  Mr. Karklin's experience includes metallurgical development and process in the areas of rare earths, base metals and precious metals.  Mr. Karklin is a Professional Metallurgist, Qualified Person.  Mr. Karklin serves on the board of directors of Dot Resources Ltd. and Alhambra Resources Ltd.  

Mr. Karklin’s extensive experience as a mineral processing consultant and as a project development manager with Newmont bring valuable experience to the Board as it oversees the exploration and development of the Company’s Round Top project.  Further, Mr. Karklin’s management experience in the metallurgical development and process in rare earths brings a needed expertise to the Board.  Accordingly, the Board believes that Mr. Karklin should continue to serve on the Board.

James J. Graham - Mr. Graham was appointed as a director in April 2011.  Mr. Graham currently serves as the chief executive officer of Nuclear Fuel Cycle Consulting providing services for the front end of the nuclear fuel cycle. From 1993 to 2009, Mr. Graham served as president and chief executive officer of ConverDyn, a partnership between Honeywell International and General Atomics where he managed the global marketing of conversion services and oversight of Honeywell’s Metropolis Facility in Metropolis, Illinois. ConverDyn is one of four primary converters in the world which provide a service that chemically changes the form of uranium oxide (yellowcake or U3O8) to uranium hexafluoride (UF6).  In addition to his position at ConverDyn, Prior thereto, Jim was a Senior Vice President of General Atomics and responsible for the company’s nuclear fuel cycle activities from 1992 until 2004.  During this period he was responsible for developing the Beverley ISL uranium mine in South Australia over a four and a half period. Beverley was the first ISL in Australia and the first mine to reach mining agreements with both the Native Title groups and the South Australian government.  As senior management, Jim oversaw the acquisition and operation of the Cotter operations in Colorado and was deeply involved in the Wismut operation in former East Germany as well as the uranium activities in both Texas and New Mexico for General Atomics.  Prior to General Atomics, Jim held the position of president and chief operating officer for NUEXCO Trading Company, which at the time was the world’s largest uranium trading and brokerage group.  Before joining NUEXCO, Jim spent nine years with the French oil company, TOTAL S.A., as Executive Vice President of its upstream activities and as President and CEO of its North American mining entities which included coal operations in Kentucky, Pennsylvania and Wyoming plus uranium operations in Texas and Wyoming and gold activities in South Dakota, Canada and Australia. During this period between 1983 and 1992 Mr. Graham was involved in growing the uranium business through several key acquisitions and joint ventures.

Mr. Graham is a former member of the Nuclear Energy Institute (NEI) Board of Directors, served as Chairman of the Board of Governors for the World Nuclear Fuel Market (WNFM) and is the past Chairman of the NEI’s Nuclear Fuel Supply Forum. Jim also Co-Chaired the World Nuclear Association’s 2007 Global Nuclear Fuel Market study in London.  Mr. Graham’s 40 year career spans nuclear, mining in potash, coal, gold and uranium using ISL, open pit and underground methods as well as working with corresponding plant, milling and ISL recovery facilities.  Mr. Graham received his bachelor’s degree in metallurgical engineering in 1970 from Michigan Technological University.

Mr. Graham’s experience in the evaluation, acquisition, design and construction, operation, management and trouble-shooting for various types of properties and facilities in the uranium, gold and coal industries brings valuable insight to the Board as it contemplates the evaluation, design and construction of its development of the Round Top project. Accordingly, the Board believes that Mr. Graham should continue to serve on the Board.    

 
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Wm. Chris Mathers - Mr. Mathers was appointed as the Company’s chief financial officer in November 2010.  From 2000 through 2010, Mr. Mathers was involved in providing contract chief financial officer and consulting services to a wide variety of privately and publicly held companies.  From 1993 through 1999 Mr. Mathers served as CFO to InterSystems, Inc. (AMEX:II). Mr. Mathers began his career in public accounting with the international accounting firm of PriceWaterhouse.  Mr. Mathers holds a BBA in accounting from Southwestern University located in Georgetown, Texas, and is also a certified public accountant.

Key Employees

Anthony Garcia – Senior Vice President of Project Development - Mr. Garcia was appointed as Senior Vice President of Project Development on August 9, 2011.  Prior to joining the Company, Mr. Garcia served as Value Assurance Senior Director for Newmont Mining, where he oversaw the review of 35 projects in Newmont’s pipeline. Earlier in his career, Mr. Garcia progressed through a series of promotions at Bechtel Mining and Metals.
Mr. Garcia has more than 20 years of project/engineering management, design, and field experience in the mining and metals industry. He has been involved with studies, detailed design, construction, and the commissioning of a wide range of metals and mining projects around the world. He hasworked on remediation of uranium mine and mill operations as a member of an engineering design/construction team required to regularly interface with state and federal regulators. Mr. Garcia also has experience working in in-situ recovery uranium projects at the Palagena Mine in Southwest Texas. He earned his BS, Master’s degree in Engineering, and an MBA in Industrial Engineering from Colorado State University.
 
Arrangements between Officers and Directors
 
To our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which the officer was selected to serve as an officer.
 
Family Relationships
 
None of our Directors are related by blood, marriage, or adoption to any other Director, executive officer, or other key employees.
 
Other Directorships
 
Except as listed below, no directors of the Company are also directors of issuers with a class of securities registered under Section 12 of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or which otherwise are required to file periodic reports under the Exchange Act).
 
Graham A Karklin
Alhambra Resources Ltd.
 
DOT Resources Ltd.

Legal Proceedings
 
No director or officer of the Company is a party adverse to the Company or any of its subsidiaries, or has a material interest adverse to the Company or any of its subsidiaries.  During the past ten years, no director or executive officer of the Company has:
 
(a)        
filed or has had filed against such person, a petition under the U.S. federal bankruptcy laws or any state insolvency law, nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which such person was a general partner, at or within two years before the time of filing, or any corporation or business association of which such person was an executive officer, at or within two years before such filings;
 
 
-13-
 
(b)     
been convicted or pleaded guilty or nolo contendere in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offences);
 
 
(c)        
been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting such person’s activities in any type of business, securities, trading, commodity or banking activities;
 
 
(d)       
been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any U.S. federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business, securities, trading, commodity or banking activities, or to be associated with persons engaged in any such activity;
 
 
(e)
been found by a court of competent jurisdiction in a civil action or by the U.S. Securities and Exchange Commission (the “SEC”), or by the U.S. Commodity Futures Trading Commission to have violated a U.S. federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
 
 
(f)      
been the subject of, or a party to, any U.S. federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any U.S. federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
 
 
(g)    
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the U.S. Commodity Exchange Act (7 U.S.C.1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

CORPORATE GOVERNANCE
 
 
Board of Directors Structure
 
The Company’s current bylaws require the Board to have no less than one and no more than ten directors, and may be increased or decreased from time to time, exclusively by resolution approved by the affirmative vote of a majority of the Board.  The current Board is composed of six directors.
 
Director Independence
 
The Company has six directors as of December 21, 2011, including four independent directors, as follows:
 
–  
Anthony Marchese
 
–  
General Gregory Martin
 
–  
Graham A. Karklin
 
–  
James J. Graham
 
 
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An “independent” director is a director whom the Board has determined satisfies the requirements for independence under Section 803A of the NYSE Amex Company Guide.
 
Meetings of the Board and Board Member Attendance at Annual Meeting
 
During the fiscal year ending August 31, 2011, the Board held two (2) meetings of the Board.  None of the incumbent Directors attended fewer than 75% of the board meetings.
 
Board members are not required to attend the Annual Meeting.  We did not hold an Annual Meeting last year.
 
Communications to the Board
 
Stockholders who are interested in communicating directly with members of the Board, or the Board as a group, may do so by writing directly to the individual Board member c/o Wm. Chris Mathers, Corporate Secretary, at 304 Inverness Way South, Suite 365, Englewood, Colorado 80112. The Company’s Secretary will forward communications directly to the appropriate Board member.  If the correspondence is not addressed to the particular member, the communication will be forwarded to a Board member to bring to the attention of the Board.  The Company’s Secretary will review all communications before forwarding them to the appropriate Board member.
 
Board Committees
 
The Board has established three board committees: an Audit Committee, a Compensation Committee, and a Corporate Governance and Nominating Committee.
 
The information below sets out the current members of each of the Company’s board committees and summarizes the functions of each of the committees in accordance with their mandates.
 
Audit Committee and Audit Committee Financial Experts
 
The Company has a standing Audit Committee and audit committee charter, which complies with Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the NYSE Amex. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is comprised of three (3) directors all of whom, in the opinion of the Board, are independent (in accordance with Rule 10A-3 of the Exchange Act and the requirements of Section 803A the NYSE Amex Company Guide) and financially literate (pursuant to the requirements of Section 803B of the NYSE Amex Company Guide): Anthony Marchese (Chairman), General Gregory Martin and Graham Karklin.  Mr. Marchese is a “financial expert” as defined under Item 407(d)(5) of Regulation S-K and meets the requirements for financial sophistication under the requirements of Section 803B of the NYSE Amex Company Guide.
 
The Audit Committee is responsible for the oversight of the Company’s accounting and financial reporting processes.  This includes the selection and engagement of the Company's independent registered public accounting firm and review of the scope of the annual audit, audit fees and results of the audit.  
 
The Audit Committee meets with our management and our external auditors to review matters affecting financial reporting, the system of internal accounting and financial controls and procedures and the audit procedures and audit plans. The Audit Committee reviews our significant financial risks, is involved in the appointment of senior financial executives and annually reviews our insurance coverage and any off-balance sheet transactions.
 
The Audit Committee monitors the Company’s audit and the preparation of financial statements and all financial disclosure contained in the Company’s SEC filings. The Audit Committee appoints the Company’s external auditors, monitors their qualifications and independence and determines the appropriate level of their remuneration. The external auditors report directly to the Audit Committee. The Audit Committee has the authority to terminate the Company’s external auditors’ engagement and approve in advance any services to be provided by the external auditors that are not related to the audit.
 
 
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During the fiscal year ended August 31, 2011, the Audit Committee did not meet. A copy of the Audit Committee charter is available on the Company’s website at www.trer.com.  The information on or accessible through the Company’s website is not a part of this Proxy Statement.
 
Audit Committee Report
 
The Company’s Audit Committee oversees the Company’s financial reporting process on behalf of the Board.  The Committee has three (3) members, each of whom is “independent” as determined under Rule 10A-3 of the Exchange Act and the rules of the NYSE Amex. The Committee operates under a written charter adopted by the Board.
 
The Committee assists the Board by overseeing the (1) integrity of the Company’s financial reporting and internal control, (2) independence and performance of the Company’s independent auditors, (3) and provides an avenue of communication between management, the independent auditors and the Board.
 
In the course of providing its oversight responsibilities regarding the audited annual financial statements for the year ended August 31, 2011, the Committee reviewed the audited annual financial statements for the year ended August 31, 2011, which appear in the 2011 Annual Report to Stockholders, with management and the Company’s independent auditors. The Committee reviewed accounting principles, practices, and judgments as well as the adequacy and clarity of the notes to the financial statements.
 
The Committee reviewed the independence and performance of the independent auditors who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, and such other matters as required to be communicated by the independent auditors in accordance with Statement of Auditing Standards 61, as superseded by Statement of Auditing Standard 114 – the Auditor’s Communication With Those Charged With Governance, as modified or supplemented.
 
The Committee meets with the independent auditors to discuss their audit plans, scope and timing on a regular basis, with or without management present. The Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board for independent auditor communications with Audit Committees concerning independence, as may be modified or supplemented.
 
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in the Annual Report to the Securities and Exchange Commission on Form 10-K for the year ended August 31, 2011. The Committee and the Board have also recommended the selection of LBB & Associates Ltd., LLP as independent auditors for the Company for the fiscal year ending August 31, 2012.
 
Submitted by the Audit Committee Members
 
–  
Anthony Marchese (Chairman)
 
–  
General Gregory Martin
 
–  
Graham Karklin
 
Compensation Committee
 
The Company has a Compensation Committee comprised of three (3) directors, each of whom, in the opinion of the Board, are independent (under Section 803A of the NYSE Amex Company Guide): Anthony Marchese, Gregory Martin and Graham Karklin.
 
The Compensation Committee charter that complies with the requirements of the NYSE Amex.  The Compensation Committee is responsible for considering and authorizing terms of employment and compensation of executive officers and providing advice on compensation structures in the various jurisdictions in which the Company operates. The Company’s Chief Executive Officer may not be present during the voting determination or deliberations of his or her compensation; however, the Compensation Committee does consult with the Company’s Chief Executive Officer in determining and recommending the compensation of directors and other executive officers.
 
 
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In addition, the Company’s Compensation Committee reviews both our overall salary objectives and significant modifications made to employee benefit plans, including those applicable to executive officers, and proposes awards of stock options.  The Compensation Committee has determined that the Company’s compensation policies and practices for its employees generally, not just executive officers, are not reasonably likely to have a material adverse effect on the Company.
 
The Compensation Committee does not and cannot delegate its authority to determine director and executive officer compensation.  Our Compensation Committee and management did not engage the services of an external compensation consultant during fiscal year 2011.
 
During the fiscal year ended August 31, 2011, the Compensation Committee did not meet. A copy of the Compensation Committee charter is available on the Company’s website at www.trer.com.
 
Compensation Committee Interlocks and Insider Participation
 
There were no Compensation Committee or Board interlocks among the members of the Company’s Board.
 
Corporate Governance and Nominating Committee
 
General
 
The Company has a Corporate Governance and Nominating Committee composed of 3 directors, each of whom, in the opinion of the Board are independent (under Section 803A of the NYSE Amex Company Guide): Anthony Marchese, General Gregory Martin and Graham Karklin. We have a Corporate Governance and Nominating Committee charter that complies with the requirements of the NYSE Amex.
 
The Company’s Corporate Governance and Nominating Committee is responsible for developing the Company’s approach to corporate governance issues. The Committee evaluates the qualifications of potential candidates for director and recommends to the Board nominees for election at the next annual meeting or any special meeting of stockholders, and any person to be considered to fill a Board vacancy resulting from death, disability, removal, resignation or an increase in Board size. The Committee has not adopted a formal policy which sets forth the criteria the Board will assess in connection with the consideration of a candidate.  Instead the Committee considers a multitude of qualifications and characteristics, including the candidate’s integrity, reputation, judgment, knowledge, independence, experience, accomplishments, commitment and skills, all in the context of an assessment of the perceived needs of the Board at that time.
 
During the fiscal year ended August 31, 2011, the Corporate Governance and Nominating Committee did not meet. A copy of the Corporate Governance and Nominating Committee charter is available on the Company’s website at www.trer.com.
 
Board Diversity
 
The Company does not have a formal policy regarding diversity in the selection of nominees for directors.  The Corporate Governance and Nominating Committee does, however, consider diversity as part of its overall selection strategy.  In considering diversity of the Board as a criteria for selecting nominees, the Corporate Governance and Nominating Committee takes into account various factors and perspectives, including differences of viewpoint, professional experience, education, skills and other individual qualities and attributes that contribute to Board heterogeneity, as well as race, gender and national origin. The Corporate Governance and Nominating Committee seeks persons with leadership experience in a variety of contexts. The Corporate Governance and Nominating Committee believes that this conceptualization of diversity is the most effective means to implement Board diversity. The Corporate Governance and Nominating Committee will assess the effectiveness of this approach as part of its annual review of its charter.
 
 
-17-
 
Recommendations to the Board
 
The Committee will consider recommendations for director nominees made by stockholders and others if these individuals meet the criteria for consideration. For consideration by the Committee, the nominating stockholder or other person must provide the Corporate Secretary at the Company’s principal offices with information about the nominee, including the detailed background of the suggested candidate that will demonstrate how the individual meets the Company’s director nomination criteria. If a candidate proposed by a stockholder meets the criteria, the individual will be considered on the same basis as other candidates.
 
No stockholder or stockholders holding 5% or more of the Company’s outstanding stock, either individually or in aggregate, recommended a nominee for election to the Board at this Annual Meeting. All of the nominees included on the proxy card accompanying this Proxy Statement were nominated by the Corporate Governance and Nominating Committee and were recommended by the Company’s current Board.
 
Board Leadership Structure
 
The Board has reviewed the Company’s current Board leadership structure in light of the composition of the Board, the Company’s size, the nature of the Company’s business, the regulatory framework under which the Company operates, the Company’s stockholder base, the Company’s peer group and other relevant factors.  Considering these factors the Board has determined to have a separate Chief Executive Officer and Chairman of the Board.  The Chairman of the Board is a non-executive position.  The Board has determined that this structure is currently the most appropriate Board leadership structure for the Company.  The Board noted the following factors in reaching its determination:
 
·  
The Board acts efficiently and effectively under its current structure.
 
·  
A structure of a separate Chief Executive Officer and non-executive Chairman of the Board puts the Company in the best position efficiently handle major issues facing the Company on a day-to-day and long-term basis, and still ensure that the Board is in the best position to have an independent director identify key risks and developments facing the Company and have those risks and developments brought promptly to the Board’s attention.
 
·  
This structure eliminates the potential for confusion and duplication of efforts at the highest executive level.
 
·  
Companies within the Company’s peer group utilize similar Board structures.
 
The Company’s non-executive Chairman of the Board acts as a lead independent director.  Given the size of the Board, the Board believes that having a non-executive Chairman of the Board combined with the presence of three other independent directors out of the six directors on the Board and independent directors sitting on all of the Board’s committees is sufficient independent oversight of the Chief Executive Officer.  The independent directors work well together in the current board structure and the Board does not believe that selecting a lead independent director outside of the non-executive Chairman of the Board would add significant benefits to the Board’s oversight role.
 
The Board of Director’s Role in Risk Management Oversight
 
The understanding, identification and management of risk are essential elements for the successful management of the Company. Risk oversight begins with the Board and the Audit Committee. The Audit Committee consists of Anthony Marchese, General Gregory Martin and Graham Karklin, each an independent director.
 
 
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The Audit Committee reviews and discusses policies with respect to risk assessment and risk management. The Audit Committee also has oversight responsibility with respect to the integrity of the Company’s financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.
 
At the management level, an internal audit provides reliable and timely information to the Board and management regarding the Company’s effectiveness in identifying and appropriately controlling risks. Annually, management presents to the Audit Committee a report summarizing the review of the Company’s methods for identifying and managing risks.
 
Additionally, the Company’s Corporate Governance and Nominating Committee reviews the risks related to succession planning and the independence of the Board.  The Compensation Committee reviews the risks related to the Company’s various compensation plans.
 
In the event that a committee is allocated responsibility for examining and analyzing a specific risk, such committee reports on the relevant risk exposure during its regular reports to the entire Board to facilitate proper risk oversight by the entire Board.
 
Based on a review of the nature of operations, the Board does not believe that any areas of the Company have incentive to take excessive risks that would likely have a material adverse effect on the Company’s operations.
 
 
 
 
 
 
 
 
 
 
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EXECUTIVE COMPENSATION
 
The following summary compensation tables set forth information concerning the annual and long-term compensation for services in all capacities to the Company for the years stated for those persons who were, at August 31, 2011 named executive officers.  “Named Executive Officer” means: (a) each Chief Executive Officer, (b) each Chief Financial Officer, (c) each of the three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year; and (d) each individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of that financial year.
 
Summary Compensation Table
 
Name and principal position
(a)
Year
(b)
Salary
(US$)
(c)
OptionAwards
(US$)
(f)
Total compensation
(US$)
(j)
Marc Levier
Chief Executive Officer
2011
$75,000
$694,428
$769,428
Wm. Chris Mathers
Chief Financial Officer
2011
$50,004
$166,668
$216,672
Daniel Gorski
Chief Operating Officer
2011
2010
2009
$55,008
$0
$0
$0
$0
$0
$55,008
$0
$0
 
Executive Compensation Agreements and Summary of Executive Compensation
 
Report on Executive Compensation
 
During the year ended August 31, 2011, the Board and the Company’s Compensation Committee, was responsible for establishing a compensation policy and administering the compensation programs of the Company’s executive officers.
 
 
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Salary
 
The amount of compensation paid by the Company to each of the Company’s officers and the terms of those persons’ employment is determined by the Compensation Committee. The Compensation Committee evaluates past performance and considers future incentive and retention in considering the appropriate compensation for the Company’s officers.  The Company believes that the compensation paid to the Company’s directors and officers is fair to the Company.
 
Stock Incentive Awards
 
The Compensation Committee believes that the use of direct stock awards is at times appropriate for employees, and in the future intends to use direct stock awards to reward outstanding service or to attract and retain individuals with exceptional talent and credentials. The use of stock options and other awards is intended to strengthen the alignment of interests of executive officers and other key employees with those of our stockholders.
 
In this regard, during the fiscal year ended August 31, 2011, Compensation Committee and the Board authorized the issuance of 2,900,000 stock option awards.  The following stock option issuances to Named Executive Officers were made in the ordinary course of business: K Marc LeVier: 2,500,000; Wm Chris Mathers: 400,000.
 
Executive Compensation Agreements
 
Agreement with Mr. LeVier
 
In May 2011, the Company entered into a three-year employment agreement with Marc LeVier, pursuant to which Mr. LeVier will serve as chief executive officer of the Company.  Pursuant to the agreement, Mr. LeVier will be paid a base salary of $225,000 per year, and will be eligible to receive bonuses at the discretion of the Board in an amount not to exceed 50% of Mr. LeVier’s base salary.  The agreement also entitles Mr. LeVier the right to participate in the Company’s benefit plans.  Pursuant to the agreement, the Company granted to Mr. LeVier a 10-year option to purchase 2,500,000 shares of the Company’s common stock at an exercise price of $2.50 per share.  Should Mr. LeVier be terminated without cause or should he resign for good reason, the agreement provides for a severance payment equal to the greater of (i) one year of base compensation and (ii) remaining base compensation owed to Mr. LeVier during the term of the agreement.  The agreement contains confidentiality provisions consistent with his fiduciary duty obligations owed to the Company.
 
Agreement with Mr. Gorski
 
In May 2011, the Company entered into an at will employment arrangement with Dan Gorski, the Company’s chief operating officer, pursuant to which he will be paid an annual salary of $110,000. 
 
Agreement with Mr. Mathers
 
 In May 2011, the Company entered into an employment arrangement with Wm. Chris Mathers, the Company’s chief financial officer.  In March 2011, we granted to Mr. Mathers a five year option to purchase up to 400,000 shares of our common stock at an exercise price of $2.50 per share.  Mr. Mathers’ option vests 1/36 each month provided Mr. Mathers’ is employed by the Company on the vesting dates.
 
 
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Outstanding Equity Awards At Fiscal Year-End
 
 
The following table sets forth the stock options granted to the Company’s Named Executive Officers as of  August 31, 2011. No stock appreciation rights were awarded.
 
   
Option Awards
Name
  
Number of Securities Underlying Unexercised Options
(#)
Exercisable20
    
Number of Securities Underlying Unexercised Options
(#)
Unexer-cisable21
    
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
    
Option Exercise Price
($)
  
Option Expiration Date
(a)
  
(b)
    
(c)
    
(d)
    
(e)
  
(f)
Marc Levier
Chief Executive Officer
     694,444       1,805,556       --     $ 2.50  
4/30/20
Wm. Chris Mathers
Chief Financial Officer
     133,333       266,667       --     $ 2.50  
2/28/16
Daniel Gorski
Chief Operating Officer
     0       0       --     $ 0  
$0


Nonqualified Deferred Compensation

The Company does not offer nonqualified deferred compensation to any of its named executive officers.
 
Potential Payments upon Termination or Change-in-Control.

Should Marc LeVier or Chris Mathers be terminated without cause or should either resign for good reason, their employment agreement provides for a severance payment equal to the greater of (i) one year of base compensation and (ii) remaining base compensation owed to Mr. LeVier and Mr. Mathers during the term of the agreement.   Except for Mr. Levier and Mr. Mathers, the Company has not entered into any agreement pursuant to which it has agreed to pay any of its named executive officers following or in connection with any termination, resignation, severance, retirement, change in control, change in the named executive officer’s responsibilities, or any other similar event.
 
 
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DIRECTOR COMPENSATION
 
 
The following table sets forth the compensation granted to our directors during the fiscal year ended August 31, 2011.  Compensation to directors that are also executive officers is detailed above and is not included on this table.
 
Name
Option
Awards
($)
Total
($)
(a)
(d)
(h)
Anthony Marchese
$1,217,935
$1,217,935
General Gregory Martin
$266,996
$266,996
Graham Karklin
$266,996
$266,996
James Graham
$266,996
$266,996
Cecil Wall
$422,886
$422,886
 
Compensation of Directors
 
In July 2011, we issued to Anthony Marchese a five year options to purchase up to 45,000 shares of common stock at an exercise price of $2.60.  In May 2011, we issued to Anthony Marchese a five year option to purchase up to 175,000 shares of common stock at an exercise price of $4.15. In March 2011, we issued to Anthony Marchese a five year option to purchase up to 150,000 shares of common stock at an exercise price of $2.50 per share.

In April 2011, we issued to Cecil Wall a five year option to purchase up to 90,000 shares of common stock at an exercise price of $4.70.  The option vests 1/3 each year, with 30,000 shares vesting immediately upon the issuance of the option, and the remaining 60,000 vesting equally on the second and third anniversary following the issuance date.

In connection with the appointment of Mr. Graham in April 2011, the Company and Mr.  Graham entered into a director’s agreement pursuant to which the Company granted to Mr. Graham an option to purchase 60,000 shares of common stock as compensation for services to be provided by Mr. Graham as an independent director, exercisable at $4.00 per share.  In July 2011, we granted to Mr. Graham an option to purchase 45,000 shares of common stock as compensation for services to be provided by Mr. Graham as a member of certain Board committees, exercisable at $2.60 per share.

In connection with the appointment of Mr. Karklin in March 2011, the Company and Mr.  Karklin entered into a director’s agreement pursuant to which the Company granted to Mr. Karklin an option to purchase 60,000 shares of common stock as compensation for services to be provided by Mr. Karklin as an independent director, exercisable at $2.50 per share. In July 2011, we granted to Mr. Karklin an option to purchase 45,000 shares of common stock as compensation for services to be provided by Mr. Karklin as a member of certain Board committees, exercisable at $2.60 per share.

 
-23-
 
In connection with the appointment of General Martin in February 2011, the Company and General Martin entered into a director’s agreement pursuant to which the Company granted to General Martin an option to purchase 60,000 shares of common stock as compensation for services to be provided by General Martin as an independent director, exercisable at $2.50 per share. In July 2011, we granted to General Martin an option to purchase 45,000 shares of common stock as compensation for services to be provided by General Martin as a member of certain Board committees, exercisable at $2.60 per share.

Each of our directors are reimbursed reasonable out of pocket expenses associated with attending our board meetings.
 
OTHER GOVERNANCE MATTERS
 
 
Code of Business and Ethical Conduct
 
The Company has adopted a corporate Code of Business and Ethical Conduct administered by its President and Chief Executive Officer, Marc LeVier. The Company believes its Code of Business and Ethical Conduct is reasonably designed to deter wrongdoing and promote honest and ethical conduct, to provide full, fair, accurate, timely and understandable disclosure in public reports, to comply with applicable laws, to ensure prompt internal reporting of code violations, and to provide accountability for adherence to the code. The Company’s Code of Business and Ethical Conduct provides written standards that are reasonably designed to deter wrongdoing and to promote:
 
–  
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
 
–  
Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
 
–  
Compliance with applicable governmental laws, rules and regulations; and
 
–  
The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
 
–  
Accountability for adherence to the code.
 
The Company’s Code of Business and Ethical Conduct is available on its web site at www.trer.com.  A copy of the Code of Business and Ethical Conduct will be provided to any person without charge upon written request to the Company at its executive offices: 304 Inverness Way South, Suite 365, Englewood, Colorado 80112.  We intend to disclose any waiver from a provision of the Code of Business and Ethical Conduct that applies to any of the Company’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions that relates to any element of the Company’s Code of Business and Ethical Conduct on the Company’s website. No waivers were granted from the requirements of the Code of Business and Ethical Conduct during the year ended August 31, 2011, or during the subsequent period to the date of this Proxy Statement.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers, directors, and persons who beneficially own more than 10% of the Company’s common stock (“10% Stockholders”), to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Such officers, directors and 10% Stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms that they file.
 
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, the Company believes that during fiscal year ended August 31, 2011, the filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with.

 
-24-
 
NAME & NATURE OF AFFILIATION
LATE REPORTS (TRANSACTIONS)
REPORTS NOT FILED
Marc Levier, President, Chief Executive Officer
Form 3, Form 4 (one), Form 5
Form 5
Wm. Chris Mathers, Chief Financial Officer
Form 4 (one)
N/A
Graham Karklin, Director
Form 3, Form 5
Form 3 and Form 5
James Graham, Director
Form 3, Form 5
Form 3 and Form 5
General Gregory Martin,
Form 3, Form 5
Form 3 and Form 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-25-
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The following tables set forth information as of December 21, 2011, regarding the ownership of the Company’s common stock by:
 
–  
each named executive officer, each director and all of the Company’s directors and executive officers as a group; and
 
–  
each person who is known by us to own more than 5% of the Company’s shares of common stock
 
The number of shares beneficially owned and the percentage of shares beneficially owned are based on 34,841,259 shares of common stock outstanding as of December 21, 2011.
 
Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. Shares subject to options that are exercisable within 60 days following December 21, 2011 are deemed to be outstanding and beneficially owned by the optionee for the purpose of computing share and percentage ownership of that optionee but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them.
 
Name and Address of Beneficial Owner
Number of Shares of Common Stock Beneficially Owned
Percent
Of Class Beneficially Owned
Daniel E. Gorski
4,800,000
13.7%
Marc LeVier
694,444(1)
1.9%
Anthony Marchese
1,139,750(3)
3.2%
Chris Mathers
133,333(4)
*
General Gregory Martin
105,000(5)
*
Graham A. Karklin
105,000(5)
*
James Graham
105,000(6)
*
All directors and executive officers as a group (9 persons)
8,772,528
23.8%
     
Libra Fund LP
777 Third Avenue, 27th Floor
New York, NY  10017
3,560,00(7)
10.3%
Libra Advisors LLC
4,000,000(8)
10.2%
G.W. McDonald
5,066,750
14.5%
Libra Associates LLC
4,000,000(8)
10.2%
Ranjan Tandon
4,000,000(8)
10.2%
Thomas C. Pritchard
2,250,000(9)
6.4%
Mark Brewer
2,250,000(9)
6.4%
RLR Services Partnership(10)
3,442,950
10.6%
Highline Capital International, Ltd.(11)
One Rockefeller Center, 30th Floor, New York, NY 10020
2,969,960(12)
8.2%
* Less than 1%.

(1)  
Consists of a ten year option to purchase up to 2,500,000 shares of common stock at an exercise price of $2.50 per share.  The option vests 1/36 each month provided Mr. LeVier’s is employed by the Company on the vesting dates.
 (2)  
Represents (i) 600,000 shares of common stock held by entities of which Mr. Wall has voting and investment control and (ii) 90,000 shares underlying a five-year option exercisable at $4.70 per share.
 (3)  
Represents (i) the following securities registered in the name of Mr. Marchese (a) 362,500 shares of common stock, (b) 62,500 shares of common stock underlying Class A Warrants, (c) 31,250 shares of common stock underlying Class B Warrants, (iv) a five year option to purchase up to 150,000 shares of common stock at an exercise price of $2.50 per share,(v) a five year options to purchase up to 45,000 shares of common stock at an exercise price of $2.60, and (vi) a five year option to purchase up to 175,000 shares of common stock at an exercise price of $4.15 per share; and (ii) the following securities registered in the name of the Insiders Trend Fund, LP., an entity in which Mr. Marchese serves as general partner and chief investment officer (x) 125,500 shares of common stock, (y) 125,500 shares of common stock underlying Class A Warrants, and (z) 62,500 shares of common stock underlying Class B Warrants.
 (4)  
Mr. Mathers was issued a five year option to purchase up to 400,000 shares of common stock at an exercise price of $2.50 per share.  The option vests 1/36 each month provided Mr. Mathers’ is employed by the Company on the vesting dates.
 (5)  
Consists of (i) a five year option to purchase up to 60,000 shares of common stock at an exercise price of $2.50 per share and, (ii) a five year option to purchase up to 45,000 shares of common stock at an exercise price of $2.60.
 (6)  
Consists of (i) a five year option to purchase up to 60,000 shares of common stock at an exercise price of $4.00 per share and, (ii) a five year option to purchase up to 45,000 shares of common stock at an exercise price of $2.60.
 (7)  
Represents 3,560,000 shares of common stock directly owned by Libra Fund.  The warrants issued to Libra Fund in connection with the January 2011 Private Placement include a provision whereby Libra Fund may only exercise the warrants to the extent such exercise does result in Libra Fund owning in excess of 9.99% of the shares of Company common stock issued and outstanding.  As a result, the 3,560,000 shares of common stock underlying the five-year warrants exercisable at $2.50 per share have not been included for purposes of determining beneficial ownership.
 
 
-26-
 
 (8)  
Represents 4,000,000 shares of common stock held in the accounts of two private investment funds (the “Funds”), including Libra Fund, the investments of which are managed by Libra Advisors, LLC and/or Libra Associates, LLC, each of which Ranjan Tandon is the managing member.  The warrants issued to the Funds in connection with the January 2011 Private Placement include a provision whereby the Funds may only exercise the warrants to the extent such exercise does result in the Funds owning in excess of 9.99% of the shares of Company common stock issued and outstanding.  As a result, the 4,000,000 shares of common stock underlying the five-year warrants exercisable at $2.50 per share have not been included for purposes of determining beneficial ownership.  Each of Libra Advisors, LLC, Libra Associates LLC, and Mr. Tandon disclaim beneficial ownership with respect to the securities directly owned by Libra Fund except to the extent of their pecuniary interest therein.
 (9)  
In July 2011, Brewer & Pritchard, P.C. (“B&P), counsel to the Company, assigned to Thomas Pritchard 1,500,000 shares of Company common stock and to Mark Brewer 1,500,000 shares of Company common stock pursuant to written agreement.  Messrs. Pritchard and Brewer are shareholders of B&P, and have voting and investment control over the shares held by B&P.  As a result, each of Messrs. Brewer and Pritchard may be deemed to have beneficial ownership over the shares held by the firm.  The number reflected in the table therefore represents 2,250,000 shares held individually by each of Messrs. Pritchard and Brewer and 750,000 shares held by B&P.  Each of Messrs. Brewer and Pritchard disclaim beneficial ownership over the shares held by B&P, except to the extent of their pecuniary interest therein.
 (10)  
Anthony Kamin shares voting and investment control over the shares held by RLR Services Partnership with a family member.
 (11)  
Highline Capital Management, L.L.C. (“Highline Management”) serves as the investment manager of Highline Capital International, Ltd., and may be deemed to have beneficial ownership over the securities held by Highline Capital International, Ltd.  Jacob W. Doft is the managing member of Highline Management, and as the sole managing member has voting and investment control over securities held by Highline Capital International, Ltd.
 (12)  
Represents (i) 1,484,980 shares of common stock, and (ii) 1,484,980 shares of common stock underlying a five year warrant exercisable at $2.50 per share.
 
It is believed by the Company that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table and the footnotes thereto. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
 
The Company is not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.
 
Change in Control
 
The Company is not aware of any arrangement that might result in a change in control in the future. The Company has no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Reportable transactions with related parties, including named security holders, during the two fiscal years ended August 31, 2011 and 2010 are as follows.
 
 
-27-
 
Except as indicated herein, no officer, director, promoter, or affiliate of the Company has or proposes to have any direct or indirect material interest in any asset acquired or proposed to be acquired by the Company through security holdings, contracts, options, or otherwise.  In cases where we have entered into such related party transactions, we believe that we have negotiated consideration or compensation that would have been reasonable if the party or parties were not affiliated or related.
 
Loans

During the fiscal year ending August 31, 2008, Mr. Gorski advanced $62,000 to the Company.  In July 2010, Mr. Gorski was paid $37,500 in reduction of the note.  In July 2010, the Company entered into an amended and restated note agreement with Mr. Gorski pursuant to which three promissory notes issued to Mr. Gorksi during 2009, having aggregate principal amount of $24,500 and accrued interest of $13,356, were renewed, extended, and consolidated.  In December 2010, all principal and interest due to Mr. Gorski was paid in full.

During the fiscal years ending August 31, 2008 and 2009, Mr. McDonald advanced an aggregate of $86,000 to the Company.  In July 2010, the Company paid Mr. McDonald $37,500.  In August 2010, the Company entered into an amended and restated note agreement with Mr. McDonald pursuant to which four promissory notes issued to Mr. McDonald and related parties during 2009, having an aggregate principal amount of $48,500 and accrued interest of $4,094, were renewed, extended, and consolidated.  In December 2010, all principal and interest due to Mr. McDonald was paid in full.

Issuance of Stock

In February 2011, we sold to Libra Fund LP 712,000 shares of common stock and five year warrants to purchase up to 712,000 shares of common stock exercisable at $2.50 per share.  As additional consideration for the purchase of the shares and warrants, we issued to Libra Fund LP an option to purchase (i) up to 2,848,000 shares of common stock exercisable at $2.50 per share and (ii) a warrant to purchase up to 2,848,000 shares of common stock at an exercise price of $2.50 per share.  In July 2011, Libra Fund LP exercised its option and was issued 2,848,000 shares of common stock and five-year warrants to purchase up to 2,848,000 shares of common stock exercisable at $2.50 per share.  The warrants issued to Libra Fund LP include a provision whereby Libra Fund LP may only exercise the warrants to the extent such exercise does result in Libra Fund LP owning in excess of 9.99% of the shares of Company common stock issued and outstanding.

Also in January 2011, we sold to Highline Capital International, Ltd. 296,996 shares of common stock and five year warrants to purchase up to 284,823 shares of common stock exercisable at $2.50 per share.  As additional consideration for the purchase of the shares and warrants, we issued to Highline Capital International, Ltd. an option to purchase (i) up to 1,187,984 shares of common stock exercisable at $2.50 per share and (ii) a warrant to purchase up to 1,187,984 shares of common stock at an exercise price of $2.50 per share.  In May 2011, Highline Capital International, Ltd. exercised its option and was issued 1,023,000 shares of common stock and five-year warrants to purchase up to 982,080 shares of common stock exercisable at $2.50 per share.  The warrants issued to Highline Capital International, Ltd. include a provision whereby Highline Capital International, Ltd. may only exercise the warrants to the extent such exercise does result in Highline Capital International, Ltd. owning in excess of 9.99% of the shares of Company common stock issued and outstanding.

In November 2010, in connection with our private placement, the Company sold RLR Services Partnership, a five percent stockholder, 37,500 shares of common stock, Class A Warrants to purchase up to 37,500 shares of common stock, and Class B Warrants to purchase up to 18,750 shares of common stock for gross proceeds of $15,000, the terms of which were identical to those offered to other investors in the Company’s private placement.

In January 2010, the Company entered into an agreement with Mr. Marchese pursuant to which the Company issued to Mr. Marchese 300,000 shares of common stock as compensation for serving as a member of the Company’s board of directors.  In October 2009, in connection with our private placement, the Company sold Mr. Marchese, prior to his appointment as a director, 62,500 shares of common stock, Class A Warrants to purchase up to 62,500 shares of common stock, and Class B Warrants to purchase up to 31,250 shares of common stock for gross proceeds of $25,000, the terms of which were identical to those offered to other investors in the Company’s private placement.  In October 2009, in connection with our private placement, the Company sold Insiders Trend Fund, LP, an affiliate of Mr. Marchese,125,000 shares of common stock, Class A Warrants to purchase up to 125,000 shares of common stock, and Class B Warrants to purchase up to 62,500 shares of common stock for gross proceeds of $50,000, the terms of which were identical to those offered to other investors in the Company’s private placement.
  
 
-28-
 
Policy for Review of Related Party Transactions
 
The Company has a policy for the review of transactions with related persons as set forth in the Company’s Audit Committee Charter and internal practices. The policy requires review, approval or ratification of all transactions in which the Company is a participant and in which any of the Company's directors, executive officers, significant stockholders or an immediate family member of any of the foregoing persons has a direct or indirect material interest, subject to certain categories of transactions that are deemed to be pre-approved under the policy - including employment of executive officers, director compensation (in general, where such transactions are required to be reported in the Company's proxy statement pursuant to SEC compensation disclosure requirements), as well as certain transactions where the amounts involved do not exceed specified thresholds.  All related party transactions must be reported for review by the Audit Committee pursuant to the Audit Committee’s charter and the rules of the NYSE Amex.
 
Following its review, the Audit Committee determines whether these transactions are in, or not inconsistent with, the best interests of the Company and its stockholders, taking into consideration whether they are on terms no less favorable to the Company than those available with other parties and the related person's interest in the transaction. If a related party transaction is to be ongoing, the Audit Committee may establish guidelines for the Company's management to follow in its ongoing dealings with the related person.
 
Our policy for review of transactions with related persons was followed in all of the transactions set forth above and all such transactions were reviewed and approved in accordance with our policy for review of transactions with related persons.    
 
 
 
 
 
 
 
 
 
-29-
 
EQUITY COMPENSATION PLANS
 
In September 2008, the board of directors adopted the Company’s 2008 Stock Option Plan (the “2008 Plan”), which was also approved by the Company’s stockholders in September 2008.  In May 2011, the board of directors adopted an amendment to the Company’s 2008 Plan (the “Amended 2008 Plan”), which was also approved by the Company’s stockholders in August 2011. The Amended 2008 Plan increased the number of shares available for grant from 2,000,000 to up to 5,000,000 shares of common stock for awards to the Company’s officers, directors, employees and consultants.  Other provisions of the Amended 2008 Plan remain the same as under our 2008 Plan.

As of August 31, 2011, a total of 575,000 shares of common stock remained available for future grants under the Amended 2008 Plan.  The following table sets forth certain information as of August 31, 2011 concerning common stock that may be issued upon the exercise of options or warrants or pursuant to purchases of stock under the Amended 2008 Plan:

Plan Category
(a)
Number of Securities to be Issued Upon the Exercise of Outstanding Options and Warrants
(b)
Weighted-Average Exercise Price of Outstanding Options and Warrants
(c)
Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by stockholders
4,425,000
$2.52
575,000
Equity compensation plans not approved by stockholders
--
N/A
--
       
Total
4,425,000
$2.52
575,000
 
 
 
 
 
 
 
-30-
 
PROPOSAL 2 — RATIFICATION OF
 
THE APPOINTMENT OF THE
 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
What am I voting on?
 
The Audit Committee has selected LBB & Associates Ltd., LLP to be the Company’s Independent Registered Public Accounting Firm for the current fiscal year ending August 31, 2012.
 
This proposal seeks stockholder ratification of the appointment of LBB & Associates Ltd., LLP.
 
Will a representative of LBB & Associates Ltd., LLP be present at the Annual Meeting?
 
The Company does not expect that a representative of LBB & Associates Ltd., LLP will be present at the Annual Meeting.
 
INFORMATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
LBB & Associates Ltd., LLP was the Independent Registered Public Accounting Firm for the Company in the fiscal year ended August 31, 2011.
 
The Company’s financial statements have been audited by LBB & Associates Ltd., LLP, independent registered public accounting firm, for the years ended August 31, 2010 and 2011.
 
The following table sets forth information regarding the amount billed to us by our independent auditor, LBB & Associates Ltd., LLP for our two fiscal years ended August 31, 2011 and 2010, respectively:
 
   
Years Ended August 31, 2011
  
   
2011
    
2010
  
Audit Fees
   $ 57,505     $ 13,350  
Audit Related Fees
   $ 0.00     $ 0.00  
Tax Fees
   $ 0.00     $ 0.00  
All Other Fees
   $ 0.00     $ 0.00  
Total
   $ 57,505     $ 13,350  

 
Audit Fees
 
Consist of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements.
 
Audit Related Fees
 
Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees”.
 
Tax Fees
 
Consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.
 
 
-31-
 
All Other Fees
 
Consist of fees for product and services other than the services reported above.
 
Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors
 
The Audit Committee has adopted procedures requiring the Audit Committee to review and approve in advance, all particular engagements for services provided by the Company’s independent auditor. Consistent with applicable laws, the procedures permit limited amounts of services, other than audit, review or attest services, to be approved by one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided the Audit Committee is informed of each particular service. All of the engagements and fees for 2011 were pre-approved by the Audit Committee. The Audit Committee reviews with LBB & Associates Ltd., LLP whether the non-audit services to be provided are compatible with maintaining the auditor's independence.
 
The Board recommends a vote FOR the ratification of the appointment of the independent registered public accounting firm.  All proxies executed and returned without an indication of how shares should be voted will be voted FOR the ratification of the appointment of the independent registered public accounting firm.
 
 
 
 
 
 
 
 
 
 
 
 
 
-32-
 
PROPOSAL 3 — APPROVAL OF THE OPTION PLAN SHARE INCREASE
 
What am I voting on?
 
The Board has approved an increase in the number of shares authorized for issuance under the Company’s Amended and Restated 2008 Stock Option Plan (the “Plan”). The Board determined that is was in the best interests of the Company and the stockholders for the Company to increase the number of shares available for issuance under the Plan, to aid Company’s management in attracting and retaining qualified persons as the Company grows its management and key employees in order to develop its Round Top project. Currently, the Company’s Plan as approved by the stockholders provide for the issuance of up to 5,000,000 shares of common stock for stock options.
 
Based on 34,596,259 shares issued and outstanding as of August 31, 2011, the Board has recommended an increase of 2,000,000 shares of common stock to the shares available for issuance of options under the Plan. Following the amendment, the Plan will provide for 7,000,000 shares of common stock for all awards representing 20% of the outstanding shares as at December 21, 2011.
 
This proposal is to ratify the Option Plan Share Increase was approved by the Board.
 
Who is eligible to participate in the Plan?
 
Any employee, officer, director, consultant, independent contractor, or director of or providing services to the Company or any parent, affiliate, or subsidiary of the Company is eligible to be designated a participant in the Plan.
 
Currently, this includes, but is not limited to, the following directors and officers:
 
·  
Marc LeVier, Chief Executive Office, Director;
 
·  
Wm. Chris Mathers, Chief Financial Officer;
 
·  
Daniel Gorski, Chief Operating Officer, Director;
 
·  
Anthony Garcia, Senior Vice President of Project Development;
 
·  
Stanley Korzeb, Vice President;
 
·  
Anthony Marchese, Director
 
·  
General Gregory Martin, Director;
 
·  
Graham Karklin, Director;
 
·  
James Graham, Director
 
In total there are approximately 9 officers, directors, and employees eligible under the Plan
 
What benefit amounts will be received under the Plan?
 
Benefit amounts will be determined by the Committee. Currently, the Board has not authorized the issuance of options covered by the Option Plan Share Increase. The following is a summary of the current options issued under the Plan to current officers and directors:
 
Directors &
Officers
Number of options
granted
Number of vested
options
Marc LeVier
2,500,000
694,444
Wm. Chris Mathers
400,000
133,333
Daniel Gorski
0
0
Stanley Korzeb
0
0
Anthony Marchese
370,000
370,000
General Gregory Martin
105,000
105,000
Graham Karklin
105,000
105,000
James Graham
105,000
105,000
 
 
-33-
 
The following is a description of the material provisions of the Plan.
 
General Administration of the Plan

The Plan is administered by the Company’s Compensation Committee, or in the event no Compensation Committee is formed, then it shall be administered by the entire Board.  The Committee will be authorized to grant to key employees and consultants of the Company awards in the form of stock options, stock appreciation rights, performance stock and shares of common stock.

It is intended that the Committee shall at all times be comprised solely of at least two members who are both “non-employee directors” as defined in Rule 16b-3 of the Exchange Act, and “outside directors” as defined as a member who satisfies Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”); provided, however, that in the event two such directors are not available to serve in such roles, the failure to meet this requirement shall not affect the validity of any grants under this Plan.

The Committee has authority to amend awards and to accelerate vesting and/or exercisability of awards, provided that it cannot amend an outstanding option to reduce its exercise price or cancel an option and replace it with an option with a lower exercise price.
 
Eligibility

The Committee will select grantees from among the key employees, officers, directors and consultants of the Company and its subsidiaries.  The eligible participants will be those who, in the opinion of the Committee, have the capacity for contributing in a substantial measure to the successful performance of the Company.  No member of the Committee may receive any award under the Plan if to do so would cause the individual to not be a “non-employee director” or “outside director.”  The Board may designate one or more individuals who shall not be eligible to receive any award under the Plan.

Shares Subject to the Plan

Subject to adjustment as described below, a maximum of 5,000,000 shares of Company common stock may be issued under the Plan.  If an award terminates or expires without shares of Company common stock being issued, then the shares that were subject to the award will again be available for grant.  The shares may be authorized and unissued shares or treasury shares.  In the event of a stock split, stock dividend, spin-off, or other relevant change affecting the Company’s common stock, the Committee shall make appropriate adjustments to the number of shares available for grants and to the number of shares and price under outstanding grants made before the event.  Shares withheld in order to cover tax withholding obligations shall reduce the number of shares of common stock available for issuance under the Plan.  The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting, and make adjustments pursuant to the Plan.  The maximum number of shares that may be covered by options or stock appreciation rights (“SARs”) (other than a substitution award) issued to an eligible person in any calendar year may not exceed 3,000,000 shares.

Types of Awards Under the Plan

Stock Options

The Committee may grant awards in the form of options to purchase shares of the Company’s common stock.  With regard to each such option, the Committee will determine the number of shares subject to the option, the manner and time of the exercise of the option, and the exercise price per share of stock subject to the option; provided however, that the exercise price of any “Incentive Option” (as defined in the Plan) may not be less than the greater of (i) 100% of the fair market value of the shares of Company common stock on the date the option is granted, or (ii) the aggregate par value of the shares of stock on the date the option is granted.  In the case of any 10% stockholder, the price at which shares of stock may be purchased under an Incentive Option shall not be less than 110% of the fair market value of the common stock on the date of grant.  The exercise price may, at the discretion of the Committee, be paid by a participant in cash, shares of Company common stock or a combination thereof.  The period of any option shall be determined by the Committee, but no Incentive Option may be exercised later than 10 years after the date of grant.  In the case of a 10% Stockholder, no Incentive Option shall be exercisable after the expiration of five years from the date of grant.  The aggregate fair market value, determined at the date of grant of the Incentive Option, of Company common stock for which an Incentive Option is exercisable for the first time during any calendar year as to any participant shall not exceed the maximum limitation as provided in Section 422 of the Code.  Unless expressly provided for in the option grant, an option shall terminate three months after severance of employment, other than for death or severance for disability.  Upon death or severance for disability the option shall terminate on the earlier of the expiration date or six months after the death or disability.

 
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Stock Appreciation Rights

The Plan also authorizes the Committee to grant SARs.  Upon exercising a SAR, the holder receives for each share with respect to which the SAR is exercised, an amount equal to the difference between the exercise price (which may not be less than the fair market value of such share on the date of grant unless otherwise determined by the Committee) and the fair market value of the Company common stock on the date of exercise.  At the Committee’s discretion, payment of such amount may be made in cash, shares of Company common stock or a combination thereof.  Each SAR granted will be evidenced by an agreement specifying the terms and conditions of the award, including the effect of termination of employment (by reason of death, disability, retirement or otherwise) on the exercisability of the SAR.  No SAR may have a term of greater than 10 years.  Unless expressly provided for in the SAR, a SAR shall terminate three months after severance of employment, other than for death or severance for disability.  Upon death or severance for disability the SAR shall terminate on the earlier of the expiration date or six months after the death or disability.

Reload Options

Under the plan, the Committee may grant stock reload options to a holder who tenders shares of common stock to pay the exercise price of a stock option or arranges to have a portion of the shares otherwise issuable upon exercise withheld to pay the applicable withholding taxes. The Committee determines the terms, conditions, restrictions and limitations of the stock reload options, provided that any reload option (a) shall be for a number of shares equal to the number of shares surrendered as part or all of the exercise price of the original option; (b) shall have an expiration date which is the greater of (i) the same expiration date of the original option the exercise of which gave rise to the reload option or (ii) one year from the date of grant of the reload.  Any reload option shall have an exercise price which is equal to one hundred percent (100%) of the fair market value of the common stock subject to the reload option on the date of exercise of the original option.   A reload option which is an Incentive Option and which is granted to a 10% Stockholder shall have an exercise price which is equal to one hundred ten percent (110%) of the fair market value of the common stock subject to the reload option on the date of exercise of the original option and shall have a term which is no longer than five (5) years.

Common Stock

Under the Plan, the Committee may award restricted or unrestricted shares of the Company’s common stock to eligible persons from time to time and subject to certain restrictions as determined by the Committee.  The nature and extent of restrictions or vesting on such shares, the duration of such restrictions or vesting, and any circumstance which could cause the forfeiture of such shares shall be determined by the Committee.  The Committee will also determine the effect of the termination of employment of a recipient of shares of common stock (by reason of retirement, disability, death or otherwise) prior to the lapse of any applicable restrictions. The Committee may award shares of stock, without any cash payment for such shares or without any restrictions, to designated eligible persons for services rendered to the Company. The stock may be awarded at, above or below the fair market value on the date of grant.  The designation of a stock award shall be made by the Committee in writing at any time after such eligible person has provided value to the Company (or within such period as permitted by IRS regulations).  The Committee reserves the right to make adjustments in the amount of an award if in its discretion unforeseen events make such adjustment appropriate.  The Company may award shares, without any cash payment for such shares without restrictions, to eligible persons for services rendered to the Company

 
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Performance Shares

The Plan permits the Committee to grant awards of performance shares to eligible persons from time to time.  These awards are contingent upon the achievement of certain performance goals established by the Committee.  The length of time over which performance will be measured, the performance goals, and the criteria to be used in determining whether and to what degree the goals have been attained will be determined by the Committee.  The Committee will also determine the effect of termination of employment of a grantee (by reason of death, retirement, disability or otherwise) during the performance period. No individual may receive performance stock awards in any calendar year covering more than 300,000 shares of common stock.

Change in Control

In order to preserve the rights of participants in the event of a Corporate Transaction (as defined in the Plan), an unexercised option may be accelerated, at the discretion of the Board of Directors, so that they shall immediately prior to the specified effective date for the Corporate Transaction become 100% vested and exercisable; provided however, that any unexercised option shall not accelerate if and to the extent such option is, in connection the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or be replaced with a  comparable award by the successor corporation.  All outstanding options may be canceled by the Board of Directors as of the effective date of any Corporate Transaction.  After a merger of one or more corporations into the Company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each eligible person may have his Restricted Stock and shares earned under a Performance Stock Award appropriately adjusted based on the manner the stock was adjusted under the terms of the agreement of merger or consolidation.  The Committee will make similar adjustments, as appropriate, in outstanding Stock Appreciation Rights.

Amendment and Termination of the Plan

The Board of Directors at any time terminate, and from time to time may amend or modify the Plan provided, however, that no amendment or modification may become effective without approval of the stockholders of the Company if stockholder approval is required to enable the Plan to satisfy any applicable statutory or regulatory requirements, of if the Company, on the advice of counsel, determines that stockholder approval is otherwise necessary or desirable.  Except as specifically provided otherwise, no such amendment, modification, or termination of the Plan shall affect adversely in any material way any award previously granted without the written consent of the person holding such award.

Federal Income Tax Consequences

Under current U.S. federal tax law, the following are the U.S. federal income tax consequences generally arising with respect to awards made under the Plan.

Exercise of Incentive Option and Subsequent Sale of Shares

A participant who is granted an Incentive Option does not realize taxable income at the time of the grant or at the time of exercise.  If the participant makes no disposition of shares acquired pursuant to the exercise of an Incentive Option before the later of two years from the date of grant or one year from such date of exercise (“statutory holding period”) any gain (or loss) realized on such disposition will be recognized as a long-term capital gain (or loss).  Under such circumstances, the Company will not be entitled to any deduction for federal income tax purposes.

However, if the participant disposes of the shares during the statutory holding period, that will be considered a disqualifying disposition.  Provided the amount realized in the disqualifying disposition exceeds the exercise price, the ordinary income a participant shall recognize in the year of a disqualifying disposition will be the lesser of (i) the excess of the amount realized over the exercise price or (ii) the excess of the fair market value of the shares at the time of the exercise over the exercise price; and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by such participant.  The ordinary income recognized by the participant is not considered wages and the Company is not required to withhold, or pay employment taxes, on such ordinary income.  Finally, in addition to the ordinary income described above, the participant shall recognize capital gain on the disqualifying disposition in the amount, if any, by which the amount realized in the disqualifying disposition exceeds the fair market value of the shares at the time of the exercise, and shall be long-term or short-term capital gain depending on the participant’s post-exercise holding period for such shares.

 
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Special tax rules apply when all or a portion of the exercise price of an Incentive Option is paid by delivery of already owned shares, but generally it does not materially change the tax consequences described above.  However, the exercise of an Incentive Option with shares which are, or have been, subject to an Incentive Option, before such shares have satisfied the statutory holding period, generally will result in the disqualifying disposition of the shares surrendered.

Notwithstanding the favorable tax treatment of Incentive Options for regular tax purposes, as described above, for alternative minimum tax purposes, an Incentive Option is generally treated in the same manner as a nonqualified stock option.  Accordingly, a participant must generally include as alternative minimum taxable income for the year in which an Incentive Option is exercised, the excess of the fair market value of the shares acquired on the date of exercise over the exercise price of such shares.  However, to the extent a participant disposes of such shares in the same calendar year as the exercise, only an amount equal to the optionee’s ordinary income for regular tax purposes with respect to such disqualifying disposition will be recognized for the optionee’s calculation of alternative minimum taxable income in such calendar year.

Exercise of Nonqualified Stock Option and Subsequent Sale of Shares

A participant who is granted a nonqualified stock option does not realize taxable income at the time of the grant, but does recognize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired on the date of exercise over the exercise price of such shares; and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by such participant.  The ordinary income recognized by the participant is considered supplemental wages and the Company is required to withhold, and the Company and the participant are required to pay applicable employment taxes, on such ordinary income.

Upon the subsequent disposition of shares acquired through the exercise of a nonqualified stock option, any gain (or loss) realized on such disposition will be recognized as a long-term, or short-term, capital gain (or loss) depending on the participant’s post-exercise holding period for such shares. As a result of Section 409A of the Code, nonstatutory stock options granted with an exercise price below the fair market value of the underlying stock on the date of grant must have fixed exercise dates or meets another exception permitted by Section 409A to avoid early income recognition in the year of vesting.

Lapse of Restrictions on Restricted Stock and Subsequent Sale of Shares

A participant who has been granted an award of restricted stock does not realize taxable income at the time of the grant.  When the restrictions lapse, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares; and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by such participant.  The ordinary income recognized by the participant is considered supplemental wages and the Company is required to withhold, and the Company and the participant are required to pay applicable employment taxes, on such ordinary income.  Upon the subsequent disposition of the formerly restricted shares, any gain (or loss) realized on such disposition will be recognized as a long-term, or short-term, capital gain (or loss) depending on the participant’s holding period for such shares after their restrictions lapse.

Under Section 83(b) of the Code, a participant who receives an award of restricted stock may elect to recognize ordinary income for the taxable year in which the restricted stock was received equal to the excess of the fair market value of the restricted stock on the date of the grant, determined without regard to the restrictions, over the amount (if any) paid for the restricted stock.  Any gain (or loss) recognized upon a subsequent disposition of the shares will be capital gain (or loss) and will be long-term or short-term depending on the post-grant holding period of such shares.  If, after making the election, a participant forfeits any shares of restricted stock, or sells restricted stock at a price below its fair market value on the date of grant, such participant is only entitled to a tax deduction with respect to the consideration (if any) paid for the restricted stock, not the amount elected to be included as income at the time of grant.

 
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SARs, Performance Shares and Stock Awards

A participant who is granted a SAR does not realize taxable income at the time of the grant, but does recognize ordinary income at the time of exercise of the SAR in an amount equal to the excess of the fair market value of the shares (on the date of exercise) with respect to which the SAR is exercised, over the grant price of such shares; and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by the such participant.

A participant who has been awarded a performance share or a stock award does not realize taxable income at the time of the grant, but does recognize ordinary income at the time the award is paid equal to the amount of cash (if any) paid and the fair market value of shares (if any) delivered; and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by such participant.

The ordinary income recognized by a participant in connection with a SAR, performance share or a stock award is considered supplemental wages and the Company is required to withhold, and the Company and the participant are required to pay applicable employment taxes, on such ordinary income.

To the extent, if any, that shares are delivered to a participant in satisfaction of either the exercise of a SAR or the payment of a performance share or stock award, upon the subsequent disposition of such shares any gain (or loss) realized will be recognized as a long-term, or short-term, capital gain (or loss) depending on the participant’s post- delivery holding period for such shares.
 
The Board recommends a vote FOR the ratification of the Option Plan Share Increase.
 
 
 
 
 
 
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OTHER MATTERS
 
As of the date of this Proxy Statement, management does not know of any other matter that will come before the Annual Meeting.

APPENDICES

A.           Form Proxy Card

 
By Order of the Board of Directors,


/s/ Wm. Chris Mathers
Wm. Chris Mathers
Corporate Secretary
Texas Rare Earth Resources Corp.

December 28, 2011

Please sign and return the enclosed form of proxy promptly.  If you decide to attend the Annul Meeting, you may, if you wish, revoke the proxy and vote your shares in person.




 
 
 
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Appendix A
 
 
 
 
Using a black ink pen, mark your votes with an X as shown in this example: x  Please do not write outside the designated areas.
 
Annual Meeting Proxy Card
 
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
 
A     Proposals

The Board of Directors Recommends                                                                                                           The Board of Directors Recommends
a Vote “FOR ALL NOMINEES” in Item 1.                                                                                                           a Vote “FOR” Items 2 and 3.

Item 1. ELECTION OF DIRECTORS.
Items 2 and 3.
 FOR ALL NOMINEES
 
 WITHHOLD AUTHORITY FOR ALL NOMINEES*
 
 
 
NOMINEES
  K. Marc LeVier
  Anthony Marchese
  Daniel E. Gorski
  General Gregory Martin
  James J. Graham
  Graham A. Karklin
 
Vote FOR an individual nominee by filling in the appropriate box above.
 
Item 2. Ratification of the Appointment of Independent Registered Public Accounting Firm
Item 3. Option Plan Share Increase
 
 
FOR  AGAINST ABSTAIN
 
        
 
 
 
        
 
 
 
 
 
INSTRUCTION:  By marking “Withhold Authority for All Nominees” your shares will not be voted FOR or AGAINST any Nominee.  However, your shares will still be counted for the purposes of establishing quorum at the annual meeting.
 
INSTRUCTION:  To withhold authority to vote for any individual nominee(s), strike through the name of the individual nominee(s).
______________________________________________
To change the address on your account, please check this box  and indicate your new address in the space below.  Please note that changes to the registered name(s) on the account may not be submitted via this method.
______________________________________________
 
______________________________________________
 
______________________________________________
 
If this proxy is properly executed and returned, the shares represented hereby will be voted in accordance with the votes marked hereon.
 
A vote to ABSTAIN will not be voted FOR or AGAINST any Item, but your shares will still be counted for the purposes of establishing a quorum at the annual meeting.  However, because an affirmative vote of a majority of the Company’s issued and outstanding voting securities is required for ratification of Item 2 and Item 3, an ABSTENTION will have the same effect as a vote AGAINST the proposal.
 
If votes are not specified on a returned proxy, a vote FOR ALL NOMINEES in Item 1 and FOR Items 2 and 3 will be voted at the annual meeting.
 
Cumulative voting rights are not authorized for the election of directors.
 
MARK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING:

B     Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
 
Please date this proxy and sign it exactly as your name or names appear on your share. If signing as an attorney, executor, administrator, guardian or trustee, please give full title as such. If a corporation, please sign full corporate name by duly authorized officer or officers.
 
Date (mm/dd/yyyy) — Please print date below.
  
Signature 1 — Please keep signature within the box.
  
Signature 2 — Please keep signature within the box.
         
             /           /
        
 
 
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Proxy — TEXAS RARE EARTH RESOURCES CORP.
 
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD WEDNESDAY, FEBRUARY 15, 2012
 
This proxy is solicited on behalf of the Board of Directors
 
The undersigned hereby appoints K. Marc LeVier and Wm. Chris Mathers and each of them (with full power to act without the other), as proxies, each having full power to substitute, to represent and to vote, as designated below, all shares of stock of Texas Rare Earth Resources Corp. which the undersigned would be entitled to vote if personally present at the Annual Meeting of the Company to be held Wednesday, February 15, 2012, at The Denver Marriott South, Salon A, 10345 Park Meadows Drive, Littleton, Colorado 80124, on February 15, 2012 at 10:00 a.m. prevailing local time, and any adjournment thereof, with respect to matters set forth below and described in the Notice of Special Meeting and Proxy Statement dated December 28, 2011.
 
All other proxies heretofore given by the undersigned to vote shares of stock of Texas Rare Earth Resources Corp. which the undersigned would be entitled to vote if personally present at the Special Meeting or any adjournment thereof are hereby expressly revoked. This proxy may be revoked at any time prior to the voting hereof as set forth in the Proxy Statement.
 
Please sign and date this proxy and return in promptly whether you expect to attend the meeting or not. If you do attend the meeting you may vote in person.
 
 
 
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Electronic Voting Instructions
 
You can vote by Internet or telephone! Available 24 hours a day, 7 days a week!
 
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
 
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
 
Proxies submitted by the Internet or telephone must be received by 12:00 a.m., Central Time, on February 14, 2011.
 
Vote by Internet
·   Log on to the Internet and go to www.shareholdervote.info
·   Follow the steps outlined on the secured website.
 
Vote by fax
 
·       Fax proxy to 469-633-0088
 
 
 
 
 
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