Highlights  

• Size Potential: The mineralized area of the Carina Module spans approximately 1,400 hectares, with potential for lateral expansion. In contrast, the mineralized area of the Company’s Penco Module in Chile covers approximately 140 hectares.

• Prospective Grades: The drilling results shows the potential for high Total Rare Earth Oxides (1) (“TREO“) with average grades at 1,229 ppm. From an average drilling depth of 7.2 meters, 71.2% of the drillholes include 5.7 meters with TREO average grades at 1,367 ppm and Desorbable Rare Earth Oxides (2) (“DREO“) at 449 ppm.  

• Rich in HREE and LREE: The desorbable results demonstrate an outstanding distribution of HREE and Light Rare Earth Elements (“LREE“). In particular, 71.2% of drillholes reveal desorbable dysprosium (“Dy2O3 D“) and terbium (“Tb4O7 D“) grades at 18.1 ppm (≈4.1% of the rare earths basket distribution) and 3.1 ppm (≈0.7% within the rare earths basket distribution), respectively. In addition, desorbable neodymium oxide (“Nd2O3 D“) and praseodymium oxide (“Pr2O3 D“) grades show a summed value of 123 ppm (≈27.5% of the rare earths basket distribution).  

• Metallurgical Compatibility: The metallurgy of the Penco Module, which utilizes an ammonium sulfate leaching solution, is well-suited for the Carina Module's ionic clays. 71.2% of drillholes show an average exchangeable fraction (3) for TREO of 36.6%, with the highest value recorded at 78%; total dysprosium oxide (“Dy2O3 T“) exhibits an average exchangeable fraction of 46%, with the highest value at 78%, and Terbium oxide (“Tb4O7 D“) exhibits an average exchangeable fraction of 52%, with a peak at 91%.

• Depth Potential: The average drill depth of the auger drilling campaign was 7.2 meters, which did not allow us to consistently reach the bottom limits of the lower Pedolith and Saprolite. However, over 70% of drillholes indicate a high anomalous exchangeable fraction in the last interval, suggesting that the deposit remains open at depth.

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Exploration

The results of the initial auger drilling campaign at Carina Module, which was comprised of 1,693 meters of drilling within 236 drill holes, demonstrate the discovery of a new HREE deposit hosted in ionic clays. While the initial auger drilling campaign was shallow, with an average depth of 7.2 meters, it has unveiled a potential for expansion, both laterally and at depth, accompanied by the prospect of enhancing HREE grades.

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The distribution of the exchangeable REE fractions obtained from the auger drilling campaign are also plotted in the A-A´ and B-B´ cross-sections, indicating that the deposit is open to depth and laterally (some drill holes are pending analytical results). The drillholes shown in the A-A´ and B-B´ cross-sections have not intercepted the whole regolith profile. The exchangeable REE fractions show good values open to depth. A reverse circulation drilling campaign will be executed here to understand the full potential of the deposit at depth.

Geological Overview

The dominant lithologies of the Project are pink porphyritic monzogranite composed of quartz, oligoclase, microcline, and annite as essential minerals. Leucosienogranite is the secondary lithology, characterized by quartz, albite, and microcline. Using the historical and present auger drilling results, a thick regolith development has been interpreted ranging from 45 to 60 meters in thickness. This hypothesis will be tested with the execution of the upcoming reverse circulation drill campaign.

Next Steps

The results from the initial auger campaign have provided Aclarawith a basis to further pursue the Project, which is expected to include thefollowing activities:  

- The issuance of a maiden mineral resource estimate duringQ4 2023

- The issuance of a NI 43-101 Preliminary EconomicAssessment during Q1 2024

- The execution of a 1,500-meters reverse circulation drillcampaign to confirm the mineralized potential at depth. The campaign isexpected to start at the end of October 2023 and is the initial phase of areverse circulation campaign of 7,590 meters within 253 drillholes to convertthe full potential of the deposit to an inferred mineral resource category

- The execution of a pilot test campaign during Q1 2024 inour fully owned pilot plant in Chile, utilizing a 25-ton sample of clayextracted from the Project area. This campaign will aim to demonstrate on asemi industrial scale the feasibility of processing the ionic clays extractedfrom the Carina Module. Additionally, it will serve the purpose of producingcommercial samples and further enhancing the value chain development effortsthat were initiated with the Penco Module samples.  

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Comparison: Carina Module vs. Penco Module

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Location and Infrastructure ‍

The Carina Module is located in the north-eastern part of the State of Goiás, in central Brazil. The site can be accessed via paved roads from Goiânia (the capital of the Goiás state) or Brasília (the national capital of Brazil). Both Goiânia and Brasília are major cities with modern infrastructure and services and offering commercial airports for domestic and international flights.

From a district perspective, access to the site is via a 50km gravel road and the supply of electricity, water, and sanitation is provided by the Brazilian government utilities. At the site, domestic water is obtained from wells, and electrical supply can be obtained from an electrical substation located 90km from the Project.

The State of Goiás is also the home of the ion-adsorption clay project managed by Mineração Serra Verde, which has successfully obtained the required environmental and operating permits needed to construct and operate their mine and processing facility and which recently commenced commercial production. This demonstrates that the Goiás State has a positive track record in evaluating projects of this nature and could play an important role in the potential development of the Carina Module.

Footnotes:

(1) TREO: Considers all rare earths elements represented in oxide form (Lanthanum - La2O3, Cerium - Ce2O3, Praseodymium - Pr6O11, Neodymium - Nd2O3, Samarium - Sm2O3, Europium - Eu2O3, Gadolinium - Gd2O3, Terbium - Tb4O7, Dysprosium - Dy2O3, Holmium - Ho2O3, Erbium - Er2O3, Thulium - Tm2O3, Ytterbium - Yb2O3, Lutetium - Lu2O3).

(2) DREO: Desorbable Rare Earth Oxide is the recoverable fraction of the total contained rare earths ( TREO) using the Penco Module´s ammonium sulfate based metallurgical process.

(3) Exchangeable fraction: The exchangeable fraction refers to the percentage (%) of recoverable grade from TREO using the Penco Module´s ammonium sulfate based metallurgical process

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