Mr. Ramon Barua reports

ACLARA AND VAC STRENGTHEN MINE-TO-MAGNET COLLABORATION DURING VISIT TO ACLARA'S PILOT PLANT IN BRAZIL

Aclara Resources Inc. hosted representatives from eVAC Magnetics LLC and Vacuumschmelze (VAC) at its Carina project pilot plant facility this week, strengthening the continuing collaboration between both companies to design and implement a fully integrated, ESG-focused (environmental, social and governance) rare earths supply chain for permanent magnets.

The visit provided VAC's technical and commercial teams with a first-hand look at the advances achieved at Aclara's pilot operations for the Carina project in Goias, Brazil, which produced approximately 150 kilometres of high-purity mixed rare earth carbonates (MREC) through the company's proprietary circular mineral harvesting process.

Aclara's high-purity MREC is planned to be further refined into individual rare earth oxides at its recently announced separation facility in Louisiana, United States. In addition, Aclara envisions developing metals and alloys processing capabilities at the same site to convert these oxides into the specialized alloys required for magnet production.

The visit provided a valuable platform for in-depth technical discussions on product specifications, process scalability and integration pathways with VAC's magnet manufacturing operations in the United States and worldwide, including the eVAC magnet production facility, which opened this year in South Carolina, United States.

Jose Palma, executive vice-president of Aclara, commented: "VAC's visit to our pilot facilities represents another tangible step toward realizing our shared vision of an integrated, transparent and sustainable mine-to-magnets supply chain. Aclara is uniquely positioned to supply significant quantities of heavy rare earth elements by mid-2028, perfectly aligning with VAC's growth plans in the United States and globally. Together, we are building a pathway that not only strengthens the western hemisphere's independence in critical minerals but also sets a new standard for environmental and social responsibility in the industry."

Scott Pelhank, vice-president, VAC, sales, and officer, eVAC Magnetics, commented: "We were thrilled to visit the Carina project this week and discuss our shared goal of establishing a revolutionary mine-to-magnet supply chain in the western hemisphere. eVAC's phase II upstream process extension to metallization, scheduled for early 2027 in South Carolina, aligns perfectly with Aclara's downstream expansion of its oxide separation facility in Louisiana. We greatly value our strategic partnership with Aclara, and we are excited to see their continued progress in developing a sustainable, reliable and scalable rare earth supply chain, driven by their mining operations in Brazil and by our respective investments in the United States."

Strengthening the Aclara-VAC alliance

The visit reinforces the memorandum of understanding (MoU) signed between Aclara and VAC in 2024, which formalized the parties' intent to jointly develop a sustainable mine-to-magnets solution for OEMs (original equipment manufacturers) in the electric vehicle, renewable energy, robotics and advanced manufacturing sectors.

Under the MoU, Aclara and VAC agreed to:

• Collaborate technically and commercially to establish a cost-effective and geopolitically independent supply chain for rare earth permanent magnets;
• Jointly engage with automakers and industrial customers to present an ESG-compliant one-stop-shop solution for securing permanent magnets produced outside Asia;
• Align product specifications and cost models, ensuring compatibility between Aclara's rare earth oxides, alloy and magnet, and VAC's magnetic manufacturing requirements.

Advancing vertical integration

Aclara's partnership with VAC builds upon its broader strategy to vertically integrate the rare earth value chain. The company's developments now span from:

• Two ionic clay deposits rich in heavy rare earths (HREEs) in Brazil and Chile;
• A U.S.-based separation plant to be located in Louisiana, which will become the first dedicated heavy rare earth separation facility in the United States with secured access to HREEs from ionic clay deposits;
• A metals and alloys joint venture with CAP SA to produce high-performance rare earth alloys, key feedstock for VAC's permanent magnet production lines.

Aclara and VAC stand as cornerstone players in building a resilient Western supply chain for heavy rare earths and permanent magnets, advancing the global energy transition while supporting supplier diversification and compliance requirements in North America and Europe. Aclara expects its mining operations to be ready by mid-2028, with construction of its Louisiana separation facility scheduled for completion by the fourth quarter of 2027.

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 and Chile, aiming to increase future production of heavy rare earths.

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