A unique, scalable and sustainable heavy rare earth project - September 2021
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A unique, scalable and sustainable heavy rare earth project September 2021
2
Welcome to the capital markets presentation on
our rare earth investment
3
Management team
Ramon Barua Rodrigo Ceballos Francois Motte Jorge Lerena Mauricio Alvarez
(Hochschild CFO/Project CEO) (General Manager) (CFO) (Project Manager) (Legal Counsel)
• +10 years serving as CFO of • +20 years of experience in • +10 years of experience in • 20 years of experience • Corporate lawyer with +20
Hochschild Mining molybdenum, rhenium and various financial positions leading engineering years of professional
rare earths markets, in such as corporate finance, projects in USA, Europe and practice in Chile, New York,
• Previously CEO of Fosfatos del
companies such as financial planning, Latin America Paris and Mexico City
Pacifico S.A., General Manager
Molibdenos y Metales S.A management and control,
of Hochschild Mexican • Worked as COO in PENTA • Worked as in-house
operations and Deputy CEO (Molymet) and Mathiesen business development and
Engineering Corporation, counsel for Goldcorp Inc.
and CFO of Cementos Corporation investor relations at
servicing mineral processing (now Newmont
Pacasmayo Hochschild Mining
• Was a member of the Minor industries in USA. Previously Corporation), Codelco and
Metals and Molybdenum worked at the Technical & Lafarge and at law firms,
Committees of the London Commercial Export Carey y Cia. and Cleary
Metals Exchange Department in Spain, Gottlieb, Steen & Hamilton
where he engineered sea
water desalination plants
Specialized consultants:
Aclara 4
Aclara 5
▪ A unique high value, sustainable Ionic Clay rare earth project
▪ Ideally placed to meet exponential rare earth demand underpinning electric revolution
▪ Module one: Attractive-return first step in multi-module growth strategy
▪ Not a commodity play: highly specialized elements, negotiated in illiquid B2B markets
Aclara 6
Agenda
▪ Heavy rare earths are crucial for the electric revolution
▪ Ionic clays are very special and constitute a competitive advantage
▪ Demand for heavy rare earths is exponential
▪ Aclara presents an unparalleld set of competitive advantages
▪ Strategy is simple: start with a minimum viable product, then optimize,
grow and integrate
Aclara 7
Heavy Rare Earths Crucial elements for the electric revolution
What are Rare Earth Elements?
▪ 17 REE with many applications Rare Earth Oxide Prices US$ /kg
▪ We will focus on main drivers behind their value: Terbium HRE 1,310
Lutetium HRE 803
Dysprosium HRE 419
4 REE have permanent magnet power Holmium HRE 151
Praseodymium LRE 98
Neodymium LRE 97
Gadolinium HRE 41
Nd Pr Dy Tb Europium HRE 32
Erbium HRE 31
Neodymium Praseodymium Dysprosium Terbium Ytterbium HRE 16
Yttrium HRE 6
Light Rare Earths Elements Heavy Rare Earths Elements Samarium LRE 2
(LREE) (HREE) Lanthanum LRE 1
Cerium LRE 1
Source: Asian Metals 16/08/2021
HREE: high value & growth fundamentals to support profitable
Aclara 9
business case
Electric Vehicles (EVs) depend on permanent magnets
▪ Rare earths are NOT battery metals
▪ Electric motor moves due to magnetic induction from copper coil energized by
lithium battery
▪ Electric motors with permanent magnets require less energy feed to create same
magnetic field and achieve:
Increased range autonomy
Better use of space and lower weight NdFeB
magnet
Higher power density
Lower battery costs: Reduces lithium, cobalt & nickel content
Permanent Magnet Rotor
Very low cost (0.3%) compared to vehicle’s value
Aclara 10The importance of heavy rare earths (HREE)
▪ HREE are needed in order to complement LREE in a high performance magnet
Operating Temperature Operating Temperature
Up to
> 60°C 240°C
NdFeB Magnet Minor demagnetization: NdFeB Magnet No demagnetization, no
The coercive force declines to 20-
30% of its value
+ change in coercive force
Nd Pr Dy Tb
> 80°C, irreversible demagnetization
25-30% 4%-9% 0.1%-1.2%
EV motor operating temperature varies between 180°C to 240°C
Aclara 11Permanent magnets
Permanent magnets have many incredible applications:
▪ Enable wind turbines to reduce overall weight, cost of other components, maintenance
costs and improves reliability and efficiency
▪ Keep drones in air longer and increase capacity to carry weight
▪ Enable planes to have a better flight control system (improves response of operation of
wing and rudder)
▪ Increase motor strength and reduce energy consumption of home appliances and air
conditioning units
… But, currently you can only buy HREE from China
Aclara 12Rare Earths are not rare! So… why does China dominate the industry?
Why China holds competitive advantage in REE industry?
1. LREE: Majority of global production (≈ 72% of World's NdPr supply including imports
from Myanmar)
2. HREE: Majority of global production from ionic clays complements perfectly well their
LREE feed (≈93% of World's DyTb supply including imports of Myanmar)
3. Value chain: Capacity already depreciated allows Bayan Obo
Biggest LREE mine
them to be extremely competitive (≈35% of World's NdPr
supply)
✓ China is the only existing HREE separator in the
World, with 50% spare capacity
Republic
of China
Myanmar Ionic Clays
Source: Ministry of Land Resources (MLR), China
Aclara 14Ionic Clays: China's main competitive advantage in HREE
▪ Low cost and low capex due to very simple metallurgy
▪ High value: Contains the most valuable REE
▪ No or negligible radioactivity
Chinese informal mining
Straightforward sourcing: much of China´s HREE production comes from
simple informal Ionic Clay mines
Aclara 15Ionic Clays are extremely rare outside China
Hard Rock operations & projects Ionic Clay projects
▪ Mostly LREE ▪ Mostly HREE
▪ REO Grade: Mostly high ▪ REO Grade: Low
▪ Average Basket Price: 25 US$/kg ▪ Average Basket Price: 55 US$/kg
▪ Radioactivity: Very common ▪ Radioactivity: Negligible or none
▪ Commercial Discounts: Very high ▪ Commercial Discounts: Low
Ionic Clays: best alternative to compete with China in HREE market
Aclara 16Demand for HREE is EXPONENTIAL
Increasing global drive to leave fossil fuels behind
Governments committed
Incentives from global powers
to net-zero carbon by 2050
March 21: US$174bn EV package
Renewable power >50% of total electricity
generation capacity by 2025
Proposal to ban the sale of new ICE
inclusive of hybrids from 2035
Ending the sale of new petrol and
diesel vehicles by 2030
“We're running the most dangerous experiment in history right now, which is to see how
much carbon dioxide the atmosphere can handle before there is an environmental
catastrophe” Elon Musk
Aclara 18Demand for EVs is exponential
Global brands committed to the electric
revolution**
EV Demand 2020-2030*
1.4m EV production capacity by 2022
50
VW could surpass Tesla EV sales in 2022
(Deutsche)
40
CAGR 31% 70% Toyota sales EVs by 2030
EV units mm
30
Mercedes all-electric by 2030
40% global sales electric by 2030
20
Goal: 40% electric sales by 2030 & 80%
by 2035 + No ICE by 2040
10
20% sales battery/plug-in hybrid by 2023
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
100% sales EVs by 2030
1 2 3
Passenger BEV Passenger PHEV Commercial EV
2035 Goal: 50% EV mkt share
2020: EVs only ≈1% share of global automotive fleet
Aclara 19
Source: (*) International Energy Agency, (**) Press releases
(1) Battery Electric Vehicles, (2) Plug-in hybrid electric vehicle, (3) Heavy, medium and light EVS (Trucks, buses, vans)Demand for clean wind energy is exponential
2021-30: 12% CAGR in offshore wind capacity additions
Aclara 20
Source: International Renewable Energy AgencyOther applications in early stage of commercial adoption
High-temperature military E-motos, e-bikes, scooters are the
Electric trains, planes & ships are gaining attention due to
grade magnets for guided future of city transportation
environmental impact/carbon footprint
weapons, drones and jets
Aclara 21While supply is limited:
▪ China has been depleting resources for 20 years…
4000 Evolution (2001-2020)*: Global DyTb Production (Tonnes)
3500
Environmental restriction to control illegal mining (from 40% to 15%)
– Argus Media
3000
Dy Tb
2500
2000
1500 Represents 1% of World's
1000
REO production
500
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
China China Unlicensed ** Myanmar Other
Higher cost of production in China due to environmental improvements
Source: Aclara 22
*REO production based on USGS and DyTb distribution based on papers and press releases: DyTb Production is estimated and does not correspond to official numbers
**Argus Media: % of unlicensed productionWhile supply is limited:
▪ New projects outside of China are capex intensive and have difficult metallurgy
Company Projects Country Capex US$m Metallurgy Radioactivity Capex US$m
Aclara Penco Chile 119 Simple Penco
(Aclara)
$119
Serra Verde Serra Verde Brazil 255 Simple
Browns Range
(Northern) $247
Ionic Rare Earths Makuutu Uganda 301** Simple
Serra Verde
(Serra Verde) $255
Northern Minerals Browns Range Australia 247 Complex Low
Bear Lodge
(Rare Element) $290
Rare Element Resources Bear Lodge US 290 Complex R
Makuutu
$301
Texas Mineral Resources Round Top US 350 Complex R (Ionic RE)
Round Top
Peak Resources Ngualla Tanzania 365 Complex Low (Texas) $350
Ngualla
Hastings Tech. Metals Yangibana Australia 372 Complex R (Peak) $365
Yangibana
Pensana Rare Earths Longonjo Angola 423 Complex R (Hastings) $372
Greenland Minerals Kvanefjeld Greenland 505 Complex R Longonjo
$423
(Pensana)
Arafura Resources Nolans Australia 768 Complex R Kvanefjeld
$505
(Greenland)
Australian Strategic Dubbo Australia 1050 Complex R Nolans
(Arafura) $768
Vital Metals Nechalacho Canada n/a Complex R Dubbo
(Aus. Stratigic) $1,050
Rainbow Rare Earths Gakara Burundi n/a Complex Low
Gakara
(Rainbow)
Nechalacho
(Vital) n/a
*Source: Northern Minerals 2015 Browns Range DFS, Greenland Minerals company announcement July 9 th 2019, Arafura Resources company announcement March 16th 2020, Hastings Tech. Metals investor Aclara 23
presentation February 2021, Australian Strategic Materials Dubbo media release June 4 th 2018, Pensana Rare Earths company report April 21 st 2021, Rare Element Resources 2015 PFS, Peak Resources 2017 FS, Texas
Mineral Resources 2019 PEA, Ionic Rare Earths Scoping Study April 29th 2021, Serra Verde Proposed Senior Secured Bond Issue 2021
**Includes expansionsNo credible global solution for HREE demand growth
Expected new demand Expected new supply excluding China
2021-2030 (CAGR %) 2021-2030
Included in demand forecast Operational expansions
▪ EVs: 24%-31%
▪ MP Materials ✓
▪ Lynas Rare Earths ✓
▪ Wind Turbines: 12% Projects
▪ Electronics : 5%
1 ▪ Energy Fuels ✓
▪ Vital Metals ✓
Excluded from demand forecast due to early stage ▪ Hastings Technology Metals ✓
of adoption ▪ Arafura Resources ✓
▪ E-bikes2 : 15%
▪ Pensana Rare Earths ✓
▪ Australian Strategic Materials ✓ ≈
▪ Global Smart Homes3 : 27% ▪ Peak Resources ✓
▪ Defense Drones4 : 27%
▪ Northern Minerals ✓
▪ Aclara ✓ ✓
▪ Commercial Drones5 : 22% ▪ Serra Verde ✓ ✓
▪ Ionic Rare Earths ✓ ✓
Aclara doesn’t compete with MP Materials & Lynas: it complements their NdPr
Source: Aclara 24
(1) Marketwatch, (2) Forbes, (3) Alliedmarketresearch, (4)
Businesswire, (5) MarketwatchDysprosium: Demand vs. Supply
7,000
6,000
5,000
4,000
Tonnes
3,000
2,000
1,000
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Demand not considered in price forecast Demand China Myanmar Other * New Projects**
Big assumptions: (a) Current operations Lynas/MP expand; (b) Top 11 projects start production in next 6 yrs;
(c)≈ 7% CAGR from China & Myanmar production
A substantial portion of the demand will not be met
Aclara 25
Source: CRUGlobal awareness of supply imbalance
▪ Companies need stable sources of environmentally clean supply
“…President Trump signed an executive order declaring
a national emergency and authorizing the use of the
Defense Production Act to speed the development of
mines. The law was used earlier this year to speed
production of medical supplies amid the pandemic.”
Wall Street Journal, 7 Oct 2020
“We cannot afford to rely entirely on third countries - for
some rare earths even on just one country. By
diversifying the supply from third countries and
developing the EU's own capacity for extraction,
processing, recycling, refining and separation of rare
earths, we can become more resilient and sustainable. ”
European Commission, 3 Sept 2020
“Russia plans investment of US$1.5 billion (1.2 billion
pounds) in rare earth minerals, critical to the defence,
telecommunications and renewable energy sectors, as it Source: US Department of Energy
strives to become the biggest producer after China by
2030, a top government official told Reuters.”
Reuters, 12 Aug 2020
Aclara 26China is also aware of this imbalance…
▪ …and of their depleting resources
Company Ops/Proj. Country Major Shareholder 1 Chinese Capital 1 Offtake 2
Mp Materials Mountain Pass US
N/A Ionic Clays Myanmar - -
Serra Verde Serra Verde Brazil N/A
Northern Minerals Browns Range Australia
Greenland Minerals Kvanefjeld Greenland
Arafura Resources Nolans Australia -
Hastings Technology Metals Yangibana Australia
Ionic Rare Earths Makuutu Uganda - -
*Thyssen Krupp trading services: product ends in China for separation
China's clear intent is to maintain its control of the REE market
Aclara 27
Source:
1. Companies shareholding overview: Marketscreener
2. Offtake: companies press releases and investor presentationsHistoric Dy & Tb price
1,800 Start of the electric
revolution
1,600
1,400
1,200
1,000
US$ /kg
800 Market was oversupplied by China whilst demand was still
low
600
400
200
0
ene 16 jul 16 ene 17 jul 17 ene 18 jul 18 ene 19 jul 19 ene 20 jul 20 ene 21 jul 21
Dysprosium Terbium
Aclara 28
Source: Asian MetalsDy price: analyst forecast
Analyst Forecast (Base Case): Dy Price 2021 - 2030
700 100%
636
Last 3yrs increase: Next 10yrs increase: 90%
581
600
123% 61% 533 80%
503
490 483
500 70%
437
411 423
395 Spot (16/08/2021)
395 60%
% increase
400
US$ / kg
50%
52%
300 260
236 40%
200
178 33% 30%
20%
100 12% 10%
10% 9% 9%
4%
10%
3% 3% 3%
0%
0 0%
2018 2019 2020 2021 YTD 2021 Sep- 2022 2023 2024 2025 2026 2027 2028 2029 2030
Dec
Historic annual increase Annual increase (%) Dysprosium - Base
Recent price performance is exponential, demand is exponential and
supply is limited… but price projections are still linear
Aclara 29
Source: Historic price from Asian Metals. Forecast sourced by CRU (the analyst)Introducing Aclara A new source of HREE for the World
Aclara at a glance
1. Same mineralization as the top producing deposits in China
2. Environmentally and socially responsible
a) Simple mining: no use of explosives
b) Simple metallurgy: no use of hazardous reagents, crushing, milling, or acid leaching
c) No radioactivity
3. Premium product: High purity carbonate with abundance of HREE
4. Very attractive exploration potential: Mining Concessions ≈220,000 Ha
5. Located in Chile, a world class mining investment jurisdiction
Aclara 31Aclara's competitive advantages
1. Ionic Clays very similar to the Chinese
✓ Same characterisation of geological units (Zone A, B, C, D).
✓ Penco Zone B and Zone C (economic zones) deepen significantly resulting in higher
production volumes
Weathered Crust South. China Penco
Zone (A)
0 A A
Completely
orebody (m)
Weathered (B)
Depth of
orebody (m)
(High grades) 4 B
Depth of
B 25m
8
Semi-Weathered
Zone (C)
C C 8m
+++++++++++++++++++++++++++++++++++++
+++++++++++++++++++++++++++++++++++++ 12 D
Unaltered +++++++++++++++++++++++++++++++++++++
D
+++++++++++++++++++++++++++++++++++++
Bedrock (D) +++++++++++++++++++++++++++++++++++++
+++++++++++++++++++++++++++++++++++++ 250 500 750 1,000
+++++++++++++++++++++++++++++++++++ 250 500 750 1,000 1,250
Recoverable grade (ppm)
Recoverable Grade (ppm)
Aclara 32
Source: Chi and Tian (2008)Aclara's competitive advantages
2. Environmentally friendly process
▪ No use of explosives ▪ No tailings dam
▪ No crushing ▪ No or negligible radioactivity
▪ No milling ▪ Recycles 95% water
Specialized consultants:
One of the world’s most sustainable REE projects
Aclara 33Aclara's competitive advantages
2. Environmentally friendly process
A. Top mining standards:
Simple extraction method requires only loading and hauling
Aclara 34Aclara's competitive advantages
2. Environmentally friendly process
Leaching with common fertilizer
B. Process flowsheet: Main use: Fertilizer for alkaline soils. Contributing essential nitrogen for plant growth
Desorption Treated Clays
Clays process washing
Washed
Clays
Solution
Impurity Treatment
removal
Water recirculation
Processing Flow REE Carbonate
Carbonation Re-pulping Dryer (92.6% purity)
Design objective: environmentally cleanest possible process not lowest possible cost
▪ No in-situ leaching: fully controlled leaching in tanks
▪ Expensive process to clean and dry clays before transporting them back to site
▪ Maximum recirculation of water and reagents using reverse osmosis
A simple process with low technical risk Aclara 35Aclara's competitive advantages
2. Environmentally friendly process
C. No or negligible amounts of radioactivity:
▪ Carbonates produced at the plant’s expected conditions are classified as “Exempt”
according to the International Atomic Agency (IAA) for transport and for bulk handling
▪ Radioactivity tests by ANSTO included activity concentration analysis for Thorium-
230/232/228, Uranium-238/235, Radium-226/228, Lead-210, Actinium-227, Potassium-40
and Samarium-147
Note: ANSTO is one of Australia’s largest public research organizations and widely
recognised as an international leader in nuclear science and technology
Aclara 36Aclara's competitive advantages
3. Heavy Rare Earths Penco is essentially a Dy and Tb project
Product Distribution – REO (%) Basket value composition (%)
Thulium 0.5% 100%
Lutetium 0.5%
Erbium 4.0% Ytterbium 3.2% Other
Holmium 1.3% 17%
Dysprosium 5.5%
80% Lu 3%
Terbium 0.7% Pr 4%
Gadolinium 3.2%
Europium 0.3% Nd 21%
Samarium 2.6% 60%
Yttrium47.6%
Tb 22% 80% Magnetic
40%
Elements
Neodymium 12.5%
20%
Praseodymium 2.9%
Dy 33%
Cerium 3.8%
Lanthanum 1.1.5%
Purity = 92.6 % 0%
92.6% purity & no radioactivity: our carbonate offers premium solution to
Source: Aclara’s PEA Report demanding clients Aclara 37Aclara's competitive advantages
4. Very large land package of Ionic Clays in Chile secured
Penco Victoria
Resource Statement Unit Victoria North Maite Luna Alexandra
(module 1) South
Measured & Indicated Resources t 20,192,106 2,020,452 5,852,955 7,032,474 1,777,119 3,509,107
Grades (REO) ppm 2,429 2,025 2,826 2,424 1,539 2,461
Contained TREO1 t 49,047 4,092 16,542 17,044 2,734 8,635
Inferred Resources t 1,991,442 339,939 162,655 454,387 310,878 723,583
Grades (REO) ppm 2,287 2,396 2,796 2,476 1,320 2,418
Measured & Indicated Resources = 91% Ionic Clay Projects (ex-China)
Inferred Resources = 9%
3,000
2,500
Aclara
TREO Grade (ppm)
2,000 Module 1 (Penco)
1,500
Contained in 500Ha out of
1,000
220,000Ha (secured) 500
Serra Verde
Makuutu
0
0 100 200 300 400 500
Measured & Indicated Resources (mt)
Aclara 38
Source: Aclara’s PEA Report
1. Total Rare Earth Oxides (TREO) include: La2O3, Ce2O3, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3Aclara's competitive advantages
5. Significant infrastructure advantage
< 6 km from the Port
< 20 km from the AirPort
Santiago < 15 km from Concepción City
< 2km from fresh water
Concepción
< 3 km from energy infrastructure
Next to 1st class motorways
Top professional workforce
Chile Credit Rating: A- (Fitch)
Chile is a world class mining jurisdiction
Aclara 39Our Strategy A 4-phased approach to value creation
Our strategy is simple
▪ Staged approach allowing for de-risking and growth
1 Minimum viable product Produce
2 Optimization Improve
3 Organic growth Expand
4 Vertical integration Value added
Aclara 41Produce
Project Timeline
History Module One - Project Development
Environmental Process Penco Module
Permit Optimization Operation
Discovery of the Filing of the Hochschild Approval Q4 Start up (Q4)
deposit Environmental acquires 100% of
Impact Study the project
2011 2016 2018 2019 2020 2021 2022 2023 2030
PEA Study Feasibility Study
Commissioning of Project Q4
the Pilot Plant reassessment
Increase of Plant Construction
Resources (January)
History
Development of New Modules
Module One: Future Milestones
Organic Growth
Aclara focused on rapidly advancing towards production
Aclara 42Produce
Module one: Penco
Victoria
▪ PEA prepared by Ausenco Norte
▪ Production of a minimum viable product: Victoria Alexandra
REE Mixed Carbonates Sur
Processing
▪ Current LOM: 11yrs Plant
▪ Low project capex: US$119m
▪ Un-optimized NPV: ∼US$152-177m Luna
1 Maite
▪ Annual EBITDA (Avg): ∼US$50m
2
▪ Module
3
1 production: approximately 2% of global Dy production
+ 52% of global Dy production ex-China & Myanmar
Full exposure to REE prices
Source: Financial numbers from Aclara’s PEA Report Aclara 43
1. Does not include first year of project ramp-up
2 & 3. Estimates based on Aclara´s PEA Report average annual production divided between estimated production by country (USGS)Produce
Module 1 key metrics Production of Concentrate REO (tpa)
General 1,200
1,131
Mine Life (yrs) 11.0
Waste Tonnes Mined (kt dry) 7,204
1,000
930
Process Plant Feed Tonnes (kt dry) 18,959
Strip Ratio 0.4 845
784
767
Production 800 745 729
TREO grade (ppm) 2,427
605 615
Metallurgical Recovery (%) 18%
600
533 525
Production REO (t) 8,209
Average Annual Production REO (t) 747
Operating costs 400
Operating Costs (US$/t Processed dry) $13.6
Cash Costs (US$/kg REO) $37
200
AISC (US$/kg REO) $40
Capital costs
Initial Capital (US$m) $119 --
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Land Purchase (US$m) $10
Y2O3 La2O3 Ce2O3 Pr6O11 Nd2O3 Sm2O3 Eu2O3 Gd2O3
Sustaining Capital (US$m) $30 Tb4O7 Dy2O3 Ho2O3 Er2O3 Tm2O3 Yb2O3 Lu2O3
Aclara 44
Source: Aclara’s PEA ReportProduce
Price Sensitivities
Module One: Basket Price Forecast (US$/kg) Module one:
NPV @ 5% (US$ m)
250
308
200 ∼152-177
71
150
US$ / kg
Low Base High
100 Module one:
Avg. Annual EBITDA (US$ m)
78
50
∼50
30
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
High Case Base Case Low Case
Source: Aclara PEA Report Low Base High
▪ Dy price forecast: CRU
▪ La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Y price forecast: Argus Media
▪ Prices projected flat from 2030
▪ Scenarios based on supply availability (assumptions slide 26) Aclara 45Produce
Other Sensitivities
Metallurgical Recoveries % Price Premium
Module One: NPV @ 5% (US$m) Module One: NPV @5% (US$m)
262 277
236
207
194
174
∼152-177
∼152-177
PEA + 1% + 2.5% + 5.0% PEA 10% 20% 30%
Aclara 46
Source: Aclara’s PEA ReportImprove
▪ Geology
• Brownfield continues
• Pit subject to modification as prices improve
▪ Metallurgy
• Current model based on single formula applied to all pits
• Short term: pilot testing expected to improve recoveries
• Medium term: experiment with other reagents and conditions
▪ Engineering
• Evaluate alternatives to reduce transportation costs
• Recycle water from industrial sources
▪ Other sources of upside
• Clays can be used as addition to cement
• Superficial land close to urban areas expected to increase value
Lessons from Module 1 expected to improve future module economics
Aclara 47Expand
Verónica exploration project Catalina exploration project
Penco Penco
500Ha 500Ha
Prospective Ionic clays areas: Prospective Ionic clays areas:
Area 1 - 5,015 Ha, Area 2 - 1,664 Ha, Area 3- 5,440 Ha Area 1 - 1,303 Ha, Area 2 - 2,486 Ha
Potential to accommodate several modules Aclara 48Expand
Potential Future Modules
18,000
16,000
~3,800 ha
Prospective REE Area (hectares)
14,000
~12,100 ha
12,000
10,000
8,000
6,000
PEA Area
4,000
2,000
500 ha
0
Penco Veronica REE Catalina REE
(Module 1) Prospective Areas Prospective Areas
Aclara 49Expand
▪ Development schedule for new modules
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Module 2 Exploration Engineering Construction Operation
Permitting
Permitting
Module 3 Exploration Engineering Construction Operation
Permitting
Permitting
Module 4 Exploration Engineering Construction Operation
Permitting
Module 5 Exploration Engineering Construction Operation
Permitting
Permitting
Accelerated growth plan through the decade Aclara 50
Note: Sequencing for illustrative purposesExpand
Modular strategy
> 30km
▪ Deposit is shallow and covers a large
area
▪ Material hauling is a largest cost and > 20km
limits plant’s influence
100 km
> 50km
▪ Plant capex is very low
Extraction areas
Processing plant
80 km
Mitigates risk: reduces upfront capex allowing for sequenced investing
according to demand Aclara 51Value added
Separation alternatives
▪ China
• Current overcapacity estimate at 50% - expected to increase Potential OEMs interested in long term
supply of traceable HREE
• Most competitive separators in terms of cost
▪ Existing separation plants
• NEO: Sillmet, Estonia
• Toyota: India
▪ New separation plants
• MP Materials: expected in 2023
• Pensana
• Other alternatives including solvent extraction and new
technologies
Separation independence
▪ Build and operate a plant
• Technology available
• Under evaluation
Goal to supply highly demanding clients who value geopolitically
independent, high quality and sustainable product Aclara 524-phased approach to value creation
Phase 4
▪ Vertical integration
Phase 3
▪ Develop new modules
Value
Phase 2
▪ Optimize module 1
Phase 1 (NPV: ∼US$ 152-177m / EBITDA: ∼US$ 50m)
▪ Execute on Penco module 1
▪ Un-optimized: Minimum viable product
Scope of PEA
Timeline
Modular strategy allows capex timing to capture market value as demand
increases Aclara 53Who are our comparables?
1. Only 3 known Ionic Clay HREE projects outside China
a) Serra Verde: Private, in Brazil (BB- Fitch)
b) Ionic RE: Listed in ASX, in Uganda (B Fitch)
2. China & Myanmar: information is confidential, no detail on numbers
3. LREE Operations:
a) Lynas RE: Listed on ASX, operations in Australia and Malaysia
b) MP Materials: Listed on NYSE, mine in US, plant in China
c) Rainbow RE: Listed on LSE, operations in Burundi (No rating)
4. LREE Projects: Not comparable due to mineralization, radioactivity and access to
funding
No obvious comparables for high purity, no radioactivity, stable jurisdiction,
fully traceable HREE product in the World
Aclara 54Peer benchmark: Ionic Clays
Chile Brazil Uganda Southern China
Comparison
of Ionic Clay Aclara Ionic RE Jiangxi Guangxi Fujian
Serra
deposits Guangdong
Verde
Penco Makuutu Xinfen Xunwu Chongzuo Changting
Nd 12.5% 19.3% 23.3% 20.1% 29.6% 22.4% 20.5% 22.0%
Pr 2.9% 5.9% 5.5% 6.0% 7.1% 5.9% 5.6% 7.0%
Dy 5.5% 3.2% 3.7% 4.1% 1.7% 4.3% 5.0% 3.6%
Tb 0.7% 0.5% 0.7% 0.8% 0.5% 0.8% 0.8% 0.6%
Other REE 78.3% 71.1% 66.9% 69% 61% 67% 68% 86%
Basket Price
59.8 52.1 59.8 60.3 53.8 64.3 66.7 56.1
US$/kg REO
*Asian Metals 16/08/2021
Highest percentage of Dy in global Ionic Clays
Aclara 55Peer benchmark: Western projects and operations
Basket Price US$/kg REO (Asian Metals - 16.08.2021)
100
HREE projects LREE projects & operations
80
73.4
60 59.8 59.8
52.1
46.8
40
33.4
29.7
29.0
27.0
23.0
20 18.2
0
Browns Penco Makuutu Serra Verde Yangibana Nechalacho Nolans Bore Longonjo Mt Weld Ngualla Mountain
Range Pass
One of the strongest basket prices of REE projects & operations ex China
Aclara 56
Source: Northern Minerals 2015 Browns Range DFS, Arafura Resources company announcement March 16 th 2020, Hastings Tech. Metals investor presentation February 2021, Australian Strategic Materials Dubbo
media release June 4th 2018, Pensana Rare Earths company report April 21 st 2021, Peak Resources 2017 FS, Texas Mineral Resources 2019 PEA, Ionic Rare Earths Scoping Study April 29 th 2021, Serra Verde Proposed
Senior Secured Bond Issue 2021Trading Comparables
EV / 2021E EBITDA
Rare Earths Average: 11.0x Specialty Materials Average: 19.4x
32.8x
27.1x 27.5x
13.9x
13.1x
8.1x
2.4x
MP Materials Lynas Neo Performance Livent Albemarle Orocobre 1 Hochschild
Aclara 57
Source: Broker consensus per S&P Capital IQ, and market data as at September 3, 2021
1Pro forma merger with Galaxy ResourcesConclusion: The market opportunity
▪ Heavy Rare Earths are very rare and are crucial elements for a transition to an
electric revolution
▪ Ionic Clays are the most competitive source of Heavy Rare Earths and they rarely
found outside of China
▪ The world anticipates a large imbalance in the Heavy Rare Earths market due to
exponential demand, creating pressure for future price increases
▪ The Western World needs dependable sources of Heavy Rare Earths and
sophisticated companies are already looking to secure a traceable, sustainable and
geopolitically independent supply
Aclara 58The Aclara solution
▪ Owns a large deposit of ionic clays, the best source of Heavy Rare Earths in the
world
▪ Approach is to focus on quality and sustainability, providing a unique product
currently inexistent from a western source
▪ Simple and clear strategy to create value through four phases, effectively de-risking
the project and providing significant production growth
▪ Full exposure to rare earth prices, an exponential growth opportunity
ACLARA,
A UNIQUE COMPANY AT THE CENTRE OF THE
ELECTRIC REVOLUTION
Aclara 59A unique company at the centre of the Electric Revolution
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