Aclara Resources Inc. announced that it has incorporated a U.S. based subsidiary, Aclara Technologies Inc. to develop its rare earths separation capabilities in the United States. This development will allow Aclara to better position itself to carry out all of the stages leading up to the production of metal and alloys for high performance permanent magnets, following the recent announcement that the Company has entered into a joint venture with CAP to develop metal and alloys capabilities. As a result, Aclara is positioned to become the first vertically integrated heavy rare earths company outside of Asia.

The decision to integrate vertically responds to the need for creating a geopolitically independent supply chain for permanent magnets, a much-needed performance enhancer for the motors of electric vehicles, wind turbines, robotics and other applications associated with the decarbonization of planet. Aclara Technologies is expected to source high purity mixed rare earths carbonates from Aclara's extraction modules in Chile and Brazil. These carbonates will be then converted into individual rare earths oxides in the separation facility.

For this purpose, Aclara Technologies has awarded a contract to the Saskatchewan Research Council to develop a production flowsheet specially designed for its premium carbonate, and to Hatch Ltd. to work on the engineering of the proposed separation facility. Under the terms of the agreement, SRC will develop a conceptual Solvent Extraction separation process, which will serve as the basis for Hatch to conduct a Class 5-AACE CAPEX and OPEX estimation for the rare earth separation facility. The aim of this conceptual analysis is to design a plant capable of processing Aclara's mixed rare earth carbonates into separated neodymium and praseodymium (NdPr) oxide (with a purity of 99.0-99.9% by weight) and dysprosium (Dy) and terbium (Tb) oxides (with a purity of 99.5-99.99% by weight).

The engineering study is expected to be completed by the end of the third quarter of 2024. The Company notes that the final decision to build the separation facility will depend on the completion of a thorough analysis of costs, logistics and time to permitting. Alternative locations currently under consideration include Brazil and Chile.

The following senior engineers from SRC and Hatch will lead the separation engineering study: · SRC: Baodong Zhao (PhD, P.Eng) has more than 25 years of experience in the metallurgical engineering and project management, especially in rare earth mineral processing and hydrometallurgy. He was previously an independent metallurgical consultant at REE Metallurgical Consulting and the Vice President of Metallurgy at Great Western Minerals Group Ltd. Over the past eight years, Baodong has worked on many rare earth projects by leading and participating in all aspects of laboratory and pilot plant test work, as well as preliminary economic assessments covering sample preparation, mineralogical characterization, beneficiation, hydrometallurgy and rare earth element separation using solvent extraction technology. Baodong is a reviewer for the Canadian Metallurgical Quarterly.

HATCH: Rob Fraser has more than 30 years hydrometallurgical experience including operations, design, study management, commissioning, and technology commercialization. He obtained operations experience at Cawse Nickel (HPAL, SX, EW) and within Nyrstar at the Hobart and Cockle Creek Smelters. Major projects have included Voisey´s Bay nickel in Canada, where a hydrometallurgical demonstration plant (POX, SX, EW) was built before the commercial plant was taken to feasibility level and Goro Nickel Project, where he provided metallurgical support at the Yabulu refinery.

Rob held roles, from Technical Manager and Deputy Project Manager on the commercial plant feasibility study, through to Lead Process, Module Construction Manager and Process Commissioning Lead on the demonstration plant. Rob is Hatch´s Global Hydrometallurgy Lead. In parallel, Aclara will start to develop its metals and alloys capabilities through REE Alloys SpA, its recently established joint venture company with CAP S.A. Aclara's goal is to be able to connect all aspects of the production of clean rare earths up to the point where they are able to be received by a permanent magnet manufacturer.

The company expects that by approaching this effort under one company will be able to capture synergies, reduce costs and expedite time to market. Aclara's patented extraction of heavy rare earths is quite unique, considering its low carbon footprint, very high levels of water recirculation (>95%) and circular economy principles. It does not involve blasting, crushing, or milling, and it does not generate any solid or liquid residues, thus eliminating the need for a tailings storage facility.

The ionic clay feedstock is amenable to leaching with a common fertilizer, ammonium sulfate. Further, harmful levels of radionuclides, typical of hard rock rare earth deposits, are not concentrated within the Aclara flowsheet. Finally, the Company aims to revegetate all impacted areas.