Penco Module

CORFO

Aclara received a certification from CORFO for its patented method of extracting Rare Earth Elements, known as "Circular Mineral Harvesting." This recognition highlights Aclara's work, focusing on researching various operational variables and boundary conditions to develop a highly innovative system for processing Rare Earth Elements from ionic clay deposits in Chile.

CORFO is a Chilean Government agency under the Ministry of Economy, Development, and Tourism, dedicated to supporting entrepreneurship, innovation, and competitiveness in the country while strengthening human capital and technological capabilities. Its main objective is to promote a society with more and better opportunities for all, contributing to the economic development of the nation.

The certification also includes a tax rebate of approximately US$2.1 million for expenses related to the installation and operation of Aclara's Pilot Plant. This financial support reflects CORFO's acknowledgment of Aclara's significant contribution to innovation and sustainability in the mineral extraction sector.

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At Aclara we feel part of Biobío. From an early stage we have been actively linked to the regional development ecosystem, with the desire to turn the area into a center of scientific development in the field of rare earths.

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We are developing our project with a collaborative approach, co-designing and finding a shared value with the Penco community and the region.

Aclara has taken the following steps in an action plan to engage and build relationships with local stakeholders and authorities:

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- 100% recycled water: Our process will only use water from a recycled source. After the community uses fresh water, it will be processed by the city's water utility company and acquired by Aclara, instead of being disposed in the ocean. In this way, Aclara does not take any fresh water that would be used by the community. What is more; our process will recirculate 95% of the water used to minimize its need for this precious resource.

- Training: Aclara has signed an agreement with the largest Higher Education Institution in Chile (“INACAP”) to train 20 Penco residents at a pilot plant that has been set by Aclara for its innovative mineral production process. This collaboration is a first step towards helping the community gain skilled workers and consequently, this training would result in a potential job at the company's future operations.

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- Investing in human capital: Aclara is opening a Rare Earth Demonstration Center to show the operation of its proprietary process. To date, Aclara has hired more than 60 locals from Penco and surrounding cities who are training to work at the center.

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- Open House and Community Workshops: Aclara held several Open Houses in March 2023, inviting the local community to learn more about the project, and to share their feedback on the design of the project. The objective is to gain sociocultural relevance for the Penco Module development.

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- Local Reach Out: To date, Aclara has provided information to 7,750 homes in Penco and has contacted more than 85 organizations in the area, including neighborhood associations, religious communities, and NGOs.

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- Support to victims of wildfires in Biobío in February-March 2023: Aclara supplied several cistern trucks to assist the work of firefighters and brigade members, and donated food for those who worked to extinguish the fire. At the same time, it joined the collection campaign led by the Regional Government, to deliver mattresses, hygiene products and food supplies for the affected families.

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Aclara announced an updated Resource for the Penco Module on December 1, 2022. Following drilling campaigns carried out during 2021 and 2022, a total of 5,298 m from 175 new drill holes were completed and incorporated into the updated resource. This work resulted in both the definition of a new resource area, Alexandra Poniente, as well as an increase in the Mineral Resources within the Project area.

The exploration and infill drilling program resulted in:

• The addition of Measured, Indicated, and Inferred Mineral Resources at Alexandra Poniente, a new area within the Project area to the north-west of Alexandra Oriente.
• The conversion of Inferred Mineral Resources from Luna, Victoria Norte, Alexandra Oriente, Victoria Sur, and Maite into Measured and Indicated Mineral Resources.

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Notes:

1. NSR cut-off value = US$13/t
2. TREO = Total Rare Earth Oxides (La₂O₃, CeO₂, Pг₆0₁₁, Nd₂O₃, Sm₂0₃, Eu₂0₃, Gd₂O₃, Tb₄0₇, Dy₂0₃, H0₂0₃, Eг₂0₃, Tm₂0₃, Yb₂O₃, Lu₂0₃) + Yttrium (Y₂O₃).
3. Mineral Resources are not Mineral Reserves, as they do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors.
4. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resources.
5. Mineral Resources are classified in accordance with the CIM (2014) Standards and Definitions of Mineral Resources.
6. The results are presented in-situ and undiluted, are constrained within optimized open pit shells, and are considered to have reasonable prospects of economic viability.

Our Pilot Plant: A Technical And Local Communications Success

Explore our unique process by watching a guided tour of our facility, along with a step by step overview provided by Ricardo Sepulveda, our Process Assistant Manager:

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The Pilot Plant run from June to August 2023. The operation's workforce consisted of 60 local workers, 40% of whom were women.

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Success from the piloting operation shows that our patented Circular Mineral Harvesting process results in attractive recoveries of heavy rare earths, while minimizing the Penco Module's associated environmental footprint. Completion of this test work materially de-risks the metallurgical attributes of the Project.

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Demonstrating the flowsheet and process design through the pilot plant facility has met the following objectives:

• Validating the closed-circuit flowsheet with a continuous operation at a semi-industrial scale
• Confirming the processing parameters and process flowsheet design for a future full-scale plant design
• Enhancing certain parameters and design of the process flowsheet to achieve higher efficiency and lower costs
• Generating a high purity HREE concentrate for separation trials in support of future off-take agreements
• Generating processed clays to confirm that they are chemically stable when returned to the field
• Confirming the amenability of the clays to support the revegetation of the reclaimed site through the reintroduction of native plant species
• Demonstrating to relevant stakeholders the environmental sustainability of the process design

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While the pilot plant was active, Aclara welcomed community members, educational institutions, local authorities, investors and our board members to learn first hand how our process works and answer their questions.

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Watch more of our Pilot Plant visits' videos here.

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Location and Infrastructure ‍

Aclara’s concessions are located in the Maule, Ñuble, Biobío and Araucanía regions of Chile, covering an extensive 451,985 hectares of land (1,1 million acres). Aclara is currently developing the Penco Module, which extends across 600 hectares (1,483 acres) about 15 kilometers from Chile’s second most important city: Concepción.

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