Aclara delivers a positive PEA for its Carina Project in Goiás, Brazil After-tax NPV8 of US$1.2 billion and IRR of 29%
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Aclara delivers a positive PEA for its Carina Project in Goiás, Brazil
After-tax NPV8 of US$1.2 billion and IRR of 29%
TORONTO, ON, January 23, 2024 – Aclara Resources Inc. (“Aclara” or the “Company”) (TSX: ARA) is pleased to
announce the results of a preliminary economic analysis (the “PEA”) on its regolith-hosted ion adsorption clay
project located in the State of Goiás, Brazil, known as the Carina Module (the “Project”).
The technical report titled “ Preliminary Economic Assessment - Carina Rare Earth Element Project - Nova Roma,
Goiás, Brazil” (the “Report” or “Carina Module PEA”) and dated January 12, 2024 and was prepared in accordance
with National Instrument 43 -101- Standards of Disclosure for Mineral Projects (“NI 43-101”) by G21 Consultoria
Mineral (“GE21”), a specialized, independent mineral consulting company located in Belo Horizonte, Brazil . The
Report, which has an effective date of November 3, 2023, supports the disclosure made by Aclara in its December
12, 2023 press release announcing the maiden mineral resources estimate (MRE) for the Project (“December
2023 Press Release”) . There are no material differences in the mineral resources or results of the preliminary
economic assessment as described in the Report and the results disclosed in the December 2023 Press Release.
The Report has been filed, and can be found under the Company’s profile, on SEDAR+ (www.sedarplus.ca) and on
Aclara’s website (www.aclara-re.com).
Highlights
• Robust economics
o After-tax Net Present Value of ~US$1.2 billion using an 8% discount rate
o 29% internal rate of return over the 17-year life of mine
o Low initial capital costs of US$576 million with a payback period of 3.6 years
o Average annual1 net revenue and EBITDA of US$474 million and US$340 million, respectively
o Low average production cost of US$13.1 per tonne
o Long-term rare earth price forecasts provided by Argus Media and Adamas Intelligence,
underpinned by compelling supply/demand fundamentals
• Significant production of magnetic REEs
o Average annual1 production of 208 tonnes DyTb representing approximately 13.7% of China’s
2023 official production2
o Average annual1 production of 1,190 tonnes NdPr contributing to a balanced mix of light and
heavy REEs in the final product
• High product quality
o Concentration of REEs in the mixed carbonate of 91.9%3
1 Annual average does not consider the first year of ramp-up and the last year of ramp-down.
2 The Chinese Ministry of Industry and Information Technology published their 2023 rare earth oxides quotas for mining production in China
at 255,000 tonnes (235,857 tonnes for light REEs and 19,143 tonnes for heavy REEs). The resulting production of DyTb is approximately
1,520 tonnes.
3 Purity is expressed as REO equivalent.
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o Very high content of DyTb and NdPr at 4.7% and 26.4%, respectively
o High purity product facilitates further separation and recoveries
• Low environmental impact
o Process designed to minimize environmental impact: it does not use explosives; there is no
crushing nor milling; approximately 95% of the water used is recirculated; the main reagent is a
common fertilizer; no liquid residue is produced, negating the need of a tailings dam
o Minimal CO2 footprint is supported by a combination of low energy consumption and a high
percentage of renewable energy within the Goiás power grid
• Expedited path to early production
o The pilot plant, currently in operation, de-risks metallurgical recoveries
o The State of Goiás has fully approved another ionic clay REE producer (Serra Verde), thereby
establishing a significant precedent that provides a positive permitting background for new
projects in this State
o Commissioning estimated to commence in 2029
• Upside potential
o Drilling campaign underway to increase mineral resources
o Metallurgical optimizations have been identified
Aclara CEO, Ramon Barua, commented:
“We extend our gratitude to our dedicated team for the swift progress achieved in bringing the Carina Project to this
pivotal stage. As a company committed to making a lasting impact in the rare earths market, our strategic focus on
sustainability and responsible production aligns with the success seen in the Project PEA. The positive results of the
Carina Module PEA showcase a robust economic profile with an after -tax NPV of US$1.2 billion and an IRR of 29%,
setting a strong foundation for the module’s future development.
We recognize the importance of minimizing environmental impact. The Project design emphasizes eco -friendly
practices, avoiding explosives and milling, maximizing water recirculation, and employing a common fertilizer as the
main reagent. With a process designed to minimize its CO2 footprint, we are dedicated to ensuring that our operations
align with sustainable practices and global environmental standards.
As we embark on an ambitious drilling campaign and identify metallurgical optimizations, our sights are set on
maximizing the upside potential of the Project. Permitting, a key aspect to be addressed in our expedited path to
production, is expected to be well supported by our patented flowsheet, our focus on social development and
maintaining a close relationship with the forward-looking State of Goiás. With commissioning estimated by 2029, we
are confident that the Project will play a pivotal role in meeting the growing demand for high -quality rare earths,
further solidifying our position as a key supplier of these critical elements.”
On Tuesday January 23rd, 2024, Aclara will host a conference call to discuss the Carina Module PEA.
The call will include remarks from Aclara Resources' CEO Ramon Barua, and other members of the Company's
management team. It will also feature a question-and-answer session.
REGISTER HERE: https://register.gotowebinar.com/register/7962331592457482332
DATE: Tuesday January 23rd, 2023.
TIME: 11:00 am Eastern Time/ 8:00 am Pacific Time
A replay of the call, together with supporting presentation slides, will be made available on Aclara's website
at www.aclara-re.com. After registering, you will receive a confirmation email containing information about
joining the webinar.
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Key Project Parameters
Table 1 lists the relevant parameters associated with the Project’s operating and financial metrics.
Table 1: Key Project Operating & Financial Parameters
Unit Total Annual
Average*
Mining and Processing
Life of Mine years 17 -
Total Process Plant Feed million tonnes (dry) 149.5 9.6
Total Waste Mined million tonnes (dry) 43.3 2.6
Strip Ratio - 0.3 0.3
Production
Total Rare Earth Oxides tonnes 70,307 4,498
Neodymium & Praseodymium (NdPr) tonnes 18,546 1,190
Dysprosium (Dy) tonnes 2,802 178
Terbium (Tb) tonnes 479 30
Financials
Net Revenue US$ million 7,355 474
Net Smelter Return US$/t 49.2 -
Production Cost US$ million 1,965 125
Unit Cost US$/t 13.1 -
EBITDA US$ million 5,243 340
EBITDA Margin % 71 -
Income Tax US$ million 1,532 101
Effective Tax Rate % 36.2 -
Initial Capital US$ million 576 -
Royalty Purchase Cost US$ million 6.5 -
Sustaining Capital US$ million 106 -
Financial Returns
Pre-Tax Net Present Value (8%) US$ million 1,880 -
Pre-Tax Internal Rate of Return % 35.7 -
Post-Tax Net Present Value (8%) US$ million 1,186 -
Post-Tax Internal Rate of Return % 28.6 -
Payback Period years 3.6 -
*Note: Annual average does not include the first year of ramp-up and the last year of ramp-down
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Figure 1: Projected Life of Mine post-tax free cash flow – base case price scenario
Sensitivity Analysis
A sensitivity analysis was undertaken to evaluate the impact on NPV by varying the following attributes:
• basket list price
• discount rate
• CAPEX
• OPEX
• metallurgical recoveries
The discount rate was evaluated by varying its value from 4 to 12% while the remaining attributes were evaluated
by varying their values from 80 to 120% (Figure 2).
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Figure 2: Sensitivity analysis testing the impact on net present value of varying the five attributes
Mineral Resource Statement
The mineral resource has been estimated using the results obtained from 201 auger drill holes (1,630 m) and
1,418 samples. At a US$7.4/t NSR cut-off, the mineral resource is estimated to contain 168.1 million tonnes (“Mt”)
in the Inferred category @ 1,510 ppm TREO containing an average Dy and Tb grade of 42.1 ppm and 6.9 ppm,
respectively (Table 2). The mineral resource is reported in accordance with the requirements of NI 43 -101.
Table 2. Carina Module Inferred Mineral Resource Estimate (Effective November 3, 2023)
Mineral Classification Mass
(Mt)
Total Oxide Grade (ppm) Oxide Content (t)
TREO NdPr Dy Tb TREO NdPr Dy Tb
Inferred 168.1 1,510 296.5 42.1 6.9 253,853 49,832 7,077 1,163
Total 168.1 1,510 296.5 42.1 6.9 253,853 49,832 7,077 1,163
Notes:
1. CIM (2014) definitions were followed for mineral resources.
2. Mineral resources are estimated above a net smelter return value of 7.4 US$/t.
3. Mineral resources are estimated using average long term metal prices and metallurgical recoveries (see Carina Module PEA for
details).
4. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Project Description
The Project is based on standard open pit extraction techniques using conventional hydraulic excavators and 44-
t payload haulage trucks to extract and deliver the clays to the process plant. The process plant has been located
close to the centre of mass of the mining operation to minimise the total haulage distance over the life of the
mine. Given the friable nature of the clays and the shallow depth of the extraction zones, no aggressive nor energy-
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intensive techniques such as drilling and blasting are required to extract the clays from the pits. Table 3 list the
key input parameters used in the mine design.
Table 3: Key Mine Design Parameters
Description Unit Value
Pit Optimization
Overall Slope Angle degree 25
Reference Mining Cost US$/t mined 2.13
Mining Recovery % 95
Mining Dilution % 5
Processing Cost US$/t processed 10.46
Selling Cost US$/kg REO 7.032
Federal Royalty % of revenue 2
REO Price US$/kg REO variable by REO
Pit design
Bench Height m 4
Berm Width m 3.5
Bench Slope Angle degree 38
Ramp Width m 12
Ramp Gradient % 10
Scheduling
Minimum Operational Area m 25
Plant feed Mt/year 9.5
Mining Recovery % 98.5
Mining Dilution % 1.5
Once the clay is delivered to the process plant, it will be washed using an ammonium sul fate solution to extract
the REEs from the clay surfaces. No crushing, grinding nor milling is needed to free the REEs from the clays as
they are extracted through a non-invasive ion-exchange reaction process whereby ammonium sulfate ions replace
REE ions on the surface of the clay thereby liberating the REEs into solution. The REEs in solution are then removed
through a pH-adjusted precipitation process and then passed through a high -pressure filter to remove any
remaining liquids, resulting in the production of a high -purity REE carbonate ready for shipment to a separation
facility. The process plant will have an average production rate of 4,498 t/year of REO within the concentrates.
Any unwanted impurities such as aluminium and calcium that have been extracted from the clays during the ion
exchange process are similarly removed through a precipitation process and then recombined with the washed
clays before being transported to a dry stacking storage facility for the first five years of the life of mine. Beginning
in Year 6 , the washed clays will be back-filled to the mined-out extraction zones to initiate the mine closure
process.
A water recovery system integrated into the process plant cleans and regenerates the remaining process liquors
such that they can be reintroduced into the feed . The treated water is reused in a closed circuit to reduce water
consumption thereby preventing the release of process water into the environment. This allows the process plant
to operate with the minimum of make-up water and allows the main reagents to be regenerated and reused within
the process plant.
Before the barren clays exit the process plant, they are washed with clean water within standard plate-and-frame
filter presses. This will remove any residual ammonium sulfate from the clays before they are returned to either a
dry stacking facility or used to back-fill the extraction zones to be safely used during revegetation.
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The Project include the necessary infrastructure to provide of make-up water for the process plant, supply power
to the site, and provide a road network to service the operation, amongst others.
Electrical power for the processing plant, truck shop, administration offices, and other facilities will be supplied
by the national power utility through overhead power transmission lines from a sub-station located approximately
90 km from the Project site.
REE Market Outlook4
Vehicle electrification, wind turbines and the transition to renewable energy sources will continue to drive demand
for REEs in terms of volume and , especially, value. This will primarily affect the REEs used in alloys to fabricate
permanent magnets: Dy, Nd, Pr, and Tb. The supply of clean heavy REEs, especially Dy, has become problematic
because few projects target heavy REE deposits. For the medium term, the ma rket will continue to rely on China
and Myanmar for heavy REE feedstocks.
The near-term forecast is for further price gains and the average prices of permanent magnet REEs are expected
to be 15 –25% higher in 2024 than 2023. In the medium to long term, Argus Media expects permanent magnet
REE prices to increase steadily for the remainder of the decade, with the possibility that they could pick up more
quickly in the early 2030s without more supply from new projects. Dy prices are expected to continue to
outperform the general permanent magnet REE market due to a significant supply/demand imbalance in the early
2030s (Table 4, Figure 3).
Table 4: Dysprosium Price Forecast
2022 2023 2025 2028 2033
Price (US$/kg) Base Case 384 330 415 510 945
Price (US$/kg) Optimistic 384 330 435 520 1,140
Price (US$/kg) Pessimistic 384 330 395 465 760
Total supply (1,000 t REO) 1.9 2.8 3.1 3.8 4.0
Total demand (1,000 t REO) 2.8 3.4 4.3 5.3 7.0
Surplus/deficit index (2018=100) 98 97 93 84 60
Figure 3: Basket price scenarios forecast
4 Argus Media
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Two external factors could affect future REE prices, both with the potential to push prices upwards : so-called
‘green’ premiums ; and critical material policies (especially in Europe and the US A). While there is currently no
system or regulation for green premiums in the REE sector, Europe’s Carbon Border Adjustment Mechanism
(CBAM) is pointing the way in terms of carbon emissions. There will be a gradual phase-in of the CBAM from 2026
to 2034 the effect of which can already been seen in steel pricing forecasts.
Perhaps even more relevant to future REE pric es are the critical materials policies/regulations being enacted
globally, specifically the EU Critical Raw Materials Act and the US Inflation Reduction Act. These
regulations/legislations are focussed on creating raw material supply chains that are not reliant on China, which
should provide advantages to non -Chinese suppliers of REEs in terms of market access and, potentially, pricing
premiums. In May 2023, the US Department of Energy identified Dy as the most critical mineral in terms of its
importance to the energy sector and the risks of supply chain disruption.
Targeted Development Timeline
The permitting process is already underway and the t echnical development of the Project will continue with a
bankable feasibility study scheduled to be delivered in 2026 and the commencement of operations in 2030 (Table
5).
Table 5: Project Development Timeline
2024 2025 2026 2027 2028 2029 2030
Milestone H1 H2 H1 H2 H1 H2 H1 H2 FY FY FY
Technical Development
Inferred Mineral Resource Drilling
Semi-Industrial Scale Piloting
Updated Mineral Resources and PEA
Prefeasibility Study
M&I Mineral Resource Drilling
Feasibility Study
Permitting
Environmental Baseline
EIA Evaluation Process
Construction and Operation
Construction
Ramp-up and Operation
Proposed Next Steps
• Q1 2024: produce REE carbonate samples by processing the Project’s ionic clays at Aclara’s pilot plant in
Chile
• Q1 2024: initiate environmental baseline, radiography, archeological, speleological (cave) and
hydrogeological studies
• Q2 2024: commence prefeasibility study
• Q2 2024: complete a 9,090-meter reverse circulation drilling campaign across the Project’s mineral
resource to test the extension of the mineralization at depth. Currently, 1,374 meters within 52 drill holes
have already been executed with an average saprolite mineralization depth of 22 meters