CEO Letter to Aclara Shareholders: 2025 Accomplishments and 2026 Outlook
CEO LETTER TO ACLARA SHAREHOLDERS:
2025 ACCOMPLISHMENTS AND 2026 OUTLOOK
TORONTO, ON, December 31, 2025 – Aclara Resources Inc. (“Aclara” or the “Company”) (TSX: ARA) is pleased
to announce the release of a letter to its shareholders from the Company’s Chief Executive Officer, Ramón Barúa.
“Dear Shareholders,
As we conclude 2025, Aclara reflects a year that represented far more than incremental progress. It marked the
validation of a long-term strategy: to establish a resilient, transparent, and responsible heavy rare earth supply chain
outside China, anchored by ionic clay deposits and fully integrated from mine to magnet.
This strategic validation occurred against a market backdrop that became materially clearer—and more urgent—over
the course of the year. In 2025, the risk of disruption in the supply of rare earths moved from abstraction to reality.
Export restrictions and licensing controls on heavy rare earths, their compounds, and high -performance magnets
containing these elements highlighted how concentrated global supply remains, and how rapidly that concentration
can translate into real constraints for industries wort h trillions of dollars, including electric vehicles, wind turbines,
advanced manufacturing, and other emerging technologies. For industries dependent on dysprosium and terbium,
the consequences of limited access became immediate and tangible.
At the same time, demand drivers broadened and intensified. Beyond electric vehicles and renewable energy
infrastructure, the rapid emergence of robotics, automation, and artificial intelligence as strategic growth sectors
reinforced the long-term, structural need for a secure and scalable heavy rare earth supply. These applications are
foundational to future industrial competitiveness, and they depend disproportionately on precisely those elements
for which supply outside of China remains most constrained.
Pricing dynamics further reinforced this reality. During the year, non -Chinese heavy rare earth supplies commanded
significant premiums—in some cases more than ten times published Chinese prices —reflecting a clear willingness
by customers to pay for securi ty, transparency, and jurisdictional reliability. Government -backed contracts
establishing minimum prices well above historical benchmarks, together with a growing policy consensus —
particularly in the United States —that prevailing Chinese prices are distor tive and “predatory,” reinforced the
conclusion that new supply sources cannot be developed under legacy pricing assumptions.
It was within this environment —defined by supply vulnerability, strategic demand growth, and evolving policy
frameworks—that Aclara’s strategy proved both timely and differentiated. Disciplined execution, selective
partnerships, and sustained engagement wi th governments, academic institutions, and local communities
strengthened Aclara’s position as a leader in sustainable heavy rare earths. As global priorities shifted toward security
of supply, jurisdictional resilience, and sustainability, the Company inc reasingly emerged not simply as a project
developer, but as a platform aligned with long-term industrial, technological, and policy objectives.
This strategic positioning translated into measurable validation during 2025. Early in the year, long -term strategic
investors supported the Company with a financing at a 41% premium to market, reinforcing confidence in Aclara’s
assets, execution capability, and strategic relevance. That confidence was reflected in strong market performance,
with Aclara’s share price increasing by more than 300% during the year.
What did we do in 2025?
At the upstream level, the Carina Project in Brazil continued to distinguish itself as one of the most advanced heavy
rare earth projects globally. The operation of our s emi-industrial pilot plant confirmed the scalability of Aclara’s
proprietary Circular Mineral Harvesting technology and attracted more than 300 visitors from across the global rare
earth value chain, including magnet manufacturers, automotive OEMs, investors, government authorities , academic
institutions, and journalists.
This operational validation culminated in a landmark technical achievement: the declaration of the world’s first NI 43-
101 compliant Mineral Reserves for an ionic clay project. The Pre -Feasibility Study confirmed robust project
economics (NPV of US$1.1 billion and an IRR of 22%) and an estimated average production of 175 tonnes per year
of dysprosium and terbium, equivalent to approximately 1 1% of China’s 202 4 official production, positioning the
project as a globally relevant and responsible source of heavy rare earths.
Through our planned investment in Carina —the largest in our portfolio —we are focused on moving well beyond
conventional mining. Our objective is to implement significant value-added processing to produce a high-purity mixed
rare earth carbonate like nothing available in the market today. This approach enables the creation of skilled jobs and
the development of advanced processing technologies in Brazil, allowing us to deliver not a commodity, but a highly
processed intermediate product that materially simplifies and de -risks the later stages needed to convert the rare
earths into permanent magnets.
The strategic importance of Carina was further underscored by the U.S. International Development Finance
Corporation’s commitment of up to US$5 million in project development funding, including a financing right for the
construction stage. This support ref lects the strong alignment between Aclara’s assets and evolving U.S. policy
priorities, including the DFC’s expanded mandate, which increased its total investment authority by approximately
65%, enabling the agency to deploy significantly larger amounts of capital and assume greater project risk in support
of strategic supply chains.
The Penco Module advanced steadily through the permitting process while continuing to differentiate itself through
innovation and community engagement. During 2025, the project entered the final stage of environmental evaluation,
bringing it closer to deve lopment readiness. The voluntary decision to renounce all local freshwater rights and
operate using 100% recycled industrial water establishes the first fully recycled industrial water industrial project in
the Biobío Region and reinforces Aclara’s commitment to responsible resource development. Social performance at
Penco was further recognized when Aclara received third place from the United Nations Global Compact Chile
Network in the Human Rights category for its Local Suppliers Network, which has incorp orated more than 300
regional suppliers, 95% of which are small and medium enterprises, with women -led businesses representing over
40% of participating companies.
International engagement during the year further underscored the growing global relevance of the Penco Module.
This included a site visit by a European delegation of more than 50 participants, led by the European Union
Ambassador and comprising 11 ambassad ors and diplomatic representatives, as well as binational chambers,
companies, and R&D centers from multiple European countries, who visited Penco to gain firsthand insight into
Aclara’s rare earths initiative.
In parallel, Aclara significantly strengthened its strategic positioning in the United States by advancing a deliberate
downstream integration strategy focused on rare earth processing, including separation and metallization
technologies. By anchoring its core processing capabilities in the U.S., Aclara is positioning itself to serve both
domestic and global customers while aligning closely with U.S. industrial policy, critical minerals objectives, and
supply chain security priorities.
Partnerships with Stanford University and Virginia Tech embedded advanced separation science, artificial
intelligence, and process optimization into Aclara’s development roadmap. As announced during the year, the
collaboration with Virginia Tech is support ing the scale -up of next -generation separation technologies, with a
separation pilot facility currently under construction at the Virginia Tech Corporate Research Center.
These efforts culminated in a defining strategic decision: the development of the first heavy rare earth separation
facility in the United States supplied by two ionic clay sources from Chile and Brazil. This downstream separation
platform, which we have formally named Project Dynamo, will be located in Louisiana and represents an investment
of approximately US$277 million. Project Dynamo is designed to supply more than 75% of U.S. dysprosium and
terbium demand for electric vehicles and has received strong support from the State of Louisiana, including an
estimated US$46.4 million in incentives. The selection of Louisiana resulted from a careful evaluation that included
key factors like access to reagent supplies, permitting readiness, availability of experienced workforce and direct
support from State and local authorities. Together with future metallization and alloys production, Project Dynamo
completes the core of Aclara’s U.S. downstream integration strategy.
Beyond Carina and Penco, Aclara continued to deepen its long-term growth pipeline by advancing multiple exploration
targets across Chile and Brazil to secure additional ionic clay resources. These efforts are supported by the
application of artificial inte lligence to accelerate discovery and enhance targeting accuracy, leveraging Aclara’s
partnership with Stanford University and the Mineral-X initiative.
Looking ahead to 2026: Accelerating toward production
As we enter 2026, Aclara moves into a year of coordinated execution across all elements of its vertically integrated
mine-to-magnet strategy, with a clear emphasis on transitioning projects from validation to construction readiness.
In Brazil, Carina is expected to complete its feasibility study and environmental permitting in the first quarter of 2026,
followed by early works and the start of construction activities in the second half of the year. These milestones will
position Carina as the anchor supply source for Aclara’s integrated platform.
In Chile, the Penco Module is projected to reach a critical inflection point with the anticipated receipt of its
environmental permit, currently expected in the first quarter of 2026. This would be followed by completion of the
feasibility study in the third quarter, alongside continued advancement of detailed engineering and construction
planning.
In the United States, execution will focus on validating and scaling downstream processing capabilities. The rare
earth separation pilot facility at Virginia Tech, which underpins Project Dynamo, is expected to be fully operational in
the first quarter of 2026, enabling the demonstration of Aclara’s separation technology and supporting the completion
of basic engineering by mid-year. In parallel, the metallization project is expected to advance through a Pre-Feasibility
Study in the first quarter, pilot plant commissioning in the second quarter, and completion of the Feasibility Study by
year-end.
By the end of 2026, Aclara expects to have completed the full development phase across its upstream, separation,
and metallization projects, positioning the Company to commence construction at the end of 2026 , subject to
financing, and achieve commercial production by 2028. This milestone will mark the transformation of Aclara into
the first vertically integrated heavy rare earth producer outside China with a secured ionic clay feed.
We thank you for your continued confidence and support and look forward to a new transformational year.
Sincerely,
Ramon Barua
Chief Executive Officer“
About Aclara
Aclara Resources Inc. (TSX: ARA), a Toronto Stock Exchange listed company, is focused on building a vertically
integrated supply chain for rare earths alloys used in permanent magnets. This strategy is supported by Aclara’s
development of rare earth mineral resources hosted in ionic clay deposits, which contain high concentrations of
the scarce heavy rare earths, providing the Company with a long-term, reliable source of these critical materials.
The Company’s rare earth mineral resource development projects include the Carina Project in the State of Goiás,
Brazil as its flagship project and the Penco Module in the Biobío Region of Chile. Both projects feature Aclara’s
patented technology named Circular Mineral Harvesting, which offers a sustainable and energy-efficient
extraction process for rare earths from ionic clay deposits. The Circular Mineral Harvesting process has been
designed to minimize the water consumption and overall environmental impact through recycling and circular
economy principles. 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. Additionally, Aclara through a joint venture with CAP, is advancing its alloy-making
capabilities to convert these refined oxides into the alloys needed for fabricating permanent magnets. This joint
venture leverages CAP’s extensive expertise in metal refining and special ferro-alloyed steels. Beyond the Carina
Project and the Penco Module, Aclara is committed to expanding its mineral resource portfolio by exploring
greenfield opportunities and further developing projects within its existing concessions in Brazil, and Chile, aiming
to increase future production of heavy rare earths.
Forward-Looking Statements
This news release contains “forward-looking information” within the meaning of applicable securities legislation,
which reflects the Company’s current expectations regarding future events, including statements with regard to the
Company’s long-term strategy to establish a vertically integrated heavy rare earth supply chain outside China; the
development, permitting, construction, and timing of the Carina Project in Brazil and the Penco Module in Chile; the
expected timing of feasibility studies, environmental approvals, early works, and construction activities; the
anticipated completion and operation of pilot plants, including separation and metallization pilot facilities; the
development, construction, location, cost, capacity, and performance of a heavy rare earth separation facility in the
United States; the availability, amount, and impact of government incentives, financing arrangements, and strategic
investments; the Company’s ability to secure and integrate multiple ionic clay feed sources; anticipated production
levels, demand coverage, pricing assumptions, and economic outcomes; the application and effectiveness of
artificial intelligence and advanced technologies in exploration and processing; expectations regarding institutional
and governmental support; anticipated timelines for achieving construction readiness, commercial production, and
growth milestones, including the expectation of achieving commercial production by 2028; and plans relating to
expenditures, investments, capital allocation, and the use of financial resources in the near and long term. Forward
looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many
of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the factors
discussed under “Risk Factors” in the Company’s annual information form dated as of March 20, 2025, filed on the
Company’s SEDAR profile. Actual results and timing could differ materially from those projected herein. Unless
otherwise noted or the context otherwise indicates, the forward-looking information contained in this news release
is provided as of the date of this news release and the Company does not undertake any obligation to update such
forward-looking information, whether as a result of new information, future events or otherwise, except as expressly
required under applicable securities laws.
For further information, please contact:
Ramón Barúa Costa
Chief Executive Officer