Aclara completes metallurgical work for metals project

Mr. Ramon Barua reports ACLARA ANNOUNCES SIGNIFICANT PROGRESS IN ITS METALS AND ALLOYS PROJECT Aclara Resources Inc., through its 50/50 joint venture Aclara Metals SpA with CAP SA, has completed the technological development and metallurgical processes for its rare earth metals and alloys project, designed to supply high-purity rare earth metals and alloys to permanent magnet manufacturers. Consistent with Aclara's vertical integration strategy, the project is expected to be supplied with oxides separated from Aclara's heavy rare earth separation facility in the state of Louisiana in the United States. In alignment with environmental best practices and strict technical specifications provided by leading permanent magnet producers, the company has finalized the design of the production processes intended to support the proposed industrial development. Technical development An internal prefeasibility study (PFS) is targeted for completion by the end of March, 2026, and is expected to include, among other items: Detailed production process design; Modular development strategy for the industrial facility, aligned with Aclara's projected separated oxide production; Class 4 capex (capital expenditure) and opex (operating expenditure) estimates for each development stage; An economic analysis considering various scenarios and sensitivities. Upon completion of this study, the company expects to finalize an internal feasibility study (FS) by the end of 2026. Demonstration plant to produce rare earth metals and alloys In parallel with the completion of the PFS, the company expects to begin the implementation of a demonstration plant. This facility is intended to produce rare earth metals and alloys using molten salt electrolysis technology: This demonstration plant will be able to produce 175 kilograms per day of a neodymium-praseodymium alloy with greater-than-99.5-per-cent purity, which constitutes a full-industrial-scale design -- equivalent to the units planned for Aclara Metals' future commercial facility -- thereby mitigating scale-up risk. The detailed design of the industrial-scale electrolysis cell has been developed entirely in-house and constitutes proprietary technology of the company. With no established industrial standards for this metallurgical process outside of China, Aclara Metals' internally developed know-how represents a high-value technological asset. Key equipment and consumables have already been defined and procured. The demonstration plant is expected to operate in four campaigns, each lasting between five and 20 days, depending on technical variables and operational objectives, commencing during the second half of 2026 and for a total period of three months. The objective of these campaigns is to demonstrate the ability to produce metals and alloys meeting customer-required quality specifications under stable and continuous operating conditions. Also, gaining first-hand operational experience on a commercial industrial setting as well as being able to train operators will be key factors for the success of the future industrial process. Operational data generated during these campaigns will support the conclusion of a digital process model aimed at further optimizing performance. Once the NdPr production stage is controlled, the company is also considering moving into a second demonstration stage that includes adding dysprosium oxide in order to produce a more sophisticated alloy. Results based on real-world data from the demonstration plant are also expected to provide critical technical and operational inputs for the FS, for which Aclara Metals has also developed the conceptual technology to produce terbium metal through a vacuum reduction process, a step that will not be part of the demonstration process. Ramon Barua, chief executive officer of Aclara, commented: "For Aclara, this is a highly relevant step to continue delivering on the permanent magnets value chain strategy. The collaboration with CAP to advance the metals and alloys production segment is already showing strong signs of meaningful progress. Our goal is to have the mining, concentration, separation and alloying technologies under one roof, allowing us to be a cost-efficient, reliable and sustainable solution for the supply of heavy and light rare earth products. We expect to have a project ready for construction at the end of this year, supported by proven technology and with a secured feed from our Louisiana separation plant and our mines in Chile and Brazil." Nicolas Burr, chief executive officer of CAP, commented: "As shareholders of Aclara Resources and partners in the development of the metallization and alloys project, we highly value the technical progress achieved through this initiative. For us, it is important to contribute with our metallurgical expertise to the development of a rare earth value chain that is becoming increasingly strategic at the global level." About Aclara Resources Inc. Aclara Resources, 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 Goias, Brazil, as its flagship project and the Penco module in the Biobio 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, Chile and Peru, aiming to increase future production of heavy rare earths. We seek Safe Harbor.