Mr. Ramon Barua reports

ACLARA EXPANDS PROJECT DYNAMO TO INCLUDE YTTRIUM, GADOLINIUM AND SAMARIUM SEPARATION

Aclara Resources Inc. is expanding the scope of Project Dynamo, its planned rare-earth separation facility in Louisiana, to incorporate separation capabilities for yttrium (Y), gadolinium (Gd) and samarium (Sm), in addition to the previously planned production of neodymium-praseodymium (NdPr), dysprosium (Dy) and terbium (Tb).

As the first stage of this expansion, Aclara, through its wholly owned subsidiary Aclara Technologies Inc., has commenced the installation of additional solvent extraction (SX) circuits at its rare-earth separation demonstration plant located at Virginia Tech Corporate Research Center in Blacksburg, Va. The new circuits are being designed to demonstrate the separation of Y, Gd and Sm using feedstock representative of the super-pure rare-earth carbonate (SPREC) expected to be produced from Aclara's ionic clay deposits in Chile and Brazil.

Work at the demonstration plant is already under way. Equipment for the new Y separation circuit has arrived at the Virginia Tech facility, and is expected to be installed and commissioned over the coming weeks, with Gd and Sm circuits expected to follow.

To support the expanded program, Aclara has doubled the physical footprint of its demonstration plant and is planning to approximately double the number of technical personnel supporting the facility.

Ramon Barua, chief executive officer of Aclara, commented:

"The expansion of Project Dynamo represents an important advancement of Aclara's strategy. In addition to building a supply chain for the rare earths required for permanent magnets, we are expanding into materials that are becoming critical to power generation, aerospace applications -- including aircraft jet engines -- and the infrastructure supporting artificial intelligence.

"Yttrium is a particularly compelling opportunity. Approximately 50 per cent of the rare-earth composition of our Penco project and 30 per cent of our Carina project is yttrium, giving Aclara a differentiated resource position in a market where Western supply remains highly dependent on imports. Penco has received its environmental approval and is positioned to advance toward construction, subject to securing the required financing.

"The rapid growth of AI and data centres is driving significant investment in power generation infrastructure, including gas turbines, where yttrium plays an important role in high-temperature applications. By combining our resource base with separation capabilities in the United States, we believe Aclara can become an important supplier into these strategic markets."

Expanding Project Dynamo

Project Dynamo was originally designed to separate NdPr, Dy and Tb. The planned expansion will add dedicated separation capabilities for Y, Gd and Sm, broadening the range of high-purity rare-earth products Aclara intends to produce in the United States.

To incorporate the expanded product scope, Aclara is modifying the basic engineering of Project Dynamo to include the additional separation circuits in the industrial-scale facility in Louisiana. As part of this expansion, the number of mixer-settlers in the solvent extraction process is expected to increase from approximately 340 to 478, representing a significant expansion of the plant's separation capacity and complexity.

The expansion is expected to create two complementary rare-earth platforms:

• Magnetic rare earths: NdPr, Dy, Tb and Sm, serving applications including e-mobility and robotics;
• Non-magnetic rare earths: Y and Gd, serving applications across power generation, aerospace applications -- including aircraft jet engines -- and other high performance technologies.

Project Dynamo has secured its state air permit from the Louisiana Department of Environmental Quality and basic engineering for the facility is in its final stages. Aclara is targeting groundbreaking in the first quarter of 2027, subject to securing the required financing.

Yttrium: a strategic growth opportunity

Aclara believes yttrium represents a significant new growth opportunity.

The rapid expansion of AI and cloud infrastructure is driving substantial investment in data centres and associated power generation capacity. Gas turbines are expected to play an important role in supporting this growth, and yttrium is used in advanced high-temperature materials required in turbine applications.

Aclara believes it is particularly well positioned because yttrium represents a significant component of its ionic clay resource base. Based on the current technical reports for the Carina project and Penco module, Aclara expects its mineral projects to have the potential to produce SPREC containing approximately 1,400 tonnes of yttrium per year at full production.

The company is engaged in preliminary discussions with potential customers regarding future supply of yttrium and other rare-earth products from Project Dynamo; no definitive offtake agreement have been entered into.

Collaboration with Virginia Tech and Argonne National Laboratory

Aclara's U.S. separation development program combines the company's proprietary rare-earth processing technology with the capabilities of Virginia Tech and Argonne National Laboratory.

Virginia Tech hosts Aclara's demonstration plant in Blacksburg, where operating data are generated to demonstrate and optimize the company's separation process ahead of commercial-scale deployment at Project Dynamo.

The collaboration with Virginia Tech is also an important component of Aclara's work force development strategy. Rebuilding rare-earth industrialization and processing capabilities in the United States will require experienced engineers, chemists and plant operators with direct operating experience in rare-earth separation.

Aclara is using the demonstration plant as a training platform for the technical work force that will ultimately support Project Dynamo. Engineers, chemists and operators are expected to gain up to two years of hands-on operating experience at the Virginia Tech facility before the Louisiana plant enters production, which Aclara expects to provide a trained and experienced work force to support a faster and lower-risk ramp-up of the commercial facility.

Aclara is also collaborating with Argonne under a co-operative research and development agreement to develop an AI-enabled digital twin of the separation process using operational data from the Virginia Tech facility and Argonne's SolventX modelling platform.

Together, the Virginia Tech and Argonne collaborations are designed to support both the technical optimization of the process and the development of the people and operating capabilities required to scale rare earth separation in the United States.

About Aclara Resources Inc.

Aclara Resources, a Toronto Stock Exchange-listed company, is focused on building a vertically integrated supply chain for rare-earth alloys used in permanent magnets, as well as high-purity rare-earth oxides, including yttrium and gadolinium, for power generation, aerospace and other high performance applications. 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-earth 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.

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