Vertical integration

Through its wholly-owned subsidiary, Aclara Technologies Inc., the Company is further enhancing its product value by developing a rare earths separation plant in the United States. This facility will process mixed rare earth carbonates sourced from Aclara’s mineral resource projects, separating them into pure individual rare earth oxides.
The separation flowsheet concept, based on solvent extraction, was developed in collaboration with the Saskatchewan Research Council. This concept provided the foundation for Hatch to complete a Class 5-AACE CAPEX and OPEX estimate, while also incorporating robust environmental features such as significant waste reduction and zero liquid discharge. The initial results are highly encouraging, and positions Aclara to become the first vertically integrated heavy rare earths company outside of Asia.  
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Technical Study Highlights
• Separation of Key REE: Considers the separation of its mixed rare earth carbonates (“MREC”) to be produced by the Company’s Carina Project and the Penco Module to obtain high-purity NdPr, dysprosium and terbium.
• Proven Technology: The flowsheet process employs solvent extraction technology with hydrochloric acid chemistry.  
• High Purity: Achieves over 99.5% purity for all separated REE.
• Strong Metallurgical Recoveries: Expected metallurgical recoveries of 94% for NdPr, 92% for Dy and 91% for Tb.  
• Environmental Features: Incorporates full water recirculation achieving no liquid discharge.
• Unoptimized CAPEX and OPEX: Initial CAPEX is estimated at US$ 354 million, which includes US$ 244 million for the solvent extraction plant and US$ 110 million to significantly reduce waste and achieve zero liquid discharges. OPEX is estimated at US$ 12 per kg of rare earth oxides (REO).
• Synergies with Circular Mineral Harvesting Process: The development of the separation project has uncovered significant synergies with Aclara’s proprietary circular mineral harvesting process, leading to several new initiatives aimed at (i) reducing CAPEX and OPEX at both mine and separation stages, (ii) minimizing waste management costs, and (iii) maximizing the quality of MREC output from the Carina Project and Penco Module.
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Next Steps
Aclara has begun advancing the following activities as part of the next stage of development of its separation project:
• Trade-off Chemistry: Conducting a trade-off study comparing the base case of hydrochloric acid chemistry to a nitrate-based chemistry for the separation flowsheet process.
• Location Study: Conducting a detailed analysis within the U.S. Department of Commerce’s International Trade Administration to identify an optimal site for the contemplated industrial separation facility, with the goal of maximizing efficiency and minimizing cost and development timeline.
• Metallurgical Testing and Optimization: Executing bench scale and mini-pilot testing to optimize the contemplated separation flowsheet, CAPEX and OPEX. Based on these results, the Company will assess the implementation of an integrated piloting campaign and the development of a Class 3-AACE CAPEX and OPEX engineering study.

We are putting together a team comprised of internal engineers and high-quality consultants, who have begun working on the flowsheet optimization and the development of a separation pilot plant specifically designed for our carbonates. This strategy has provided new opportunities for Aclara, increasing our dialogue with several governments interested in supporting our project. Having the rare earths processing technology, together with a balanced feed between heavy and light rare earths, is a coveted strategic asset within the current complex geopolitical scenario.

The key targeted milestones for 2025 to advance its separation project in the United States include:
• Completion of the plant location study (2025)
• Laboratory test work (Q2 2025)
• Integrated pilot scale testing (Q3-Q4 2025)

Aclara has started to develop its metals and alloys capabilities through a joint venture with CAP S.A., the Company’s strategic partner in Chile. Our goal is to be able to connect all aspects of the production of clean rare earths up to the point where they meet the specification demanded by permanent magnet manufacturers.