Mr. Ramon Barua reports

ACLARA INAUGURATES RARE EARTH SEPARATION PILOT PLANT IN VIRGINIA TECH TO ADVANCE U.S. SUPPLY OF HEAVY RARE EARTHS

Aclara Resources Inc. has inaugurated its rare earth separation pilot plant located at Virginia Tech in Blacksburg, Va. The facility represents a major milestone in Aclara's strategy to establish a vertically integrated rare earth supply chain in the western hemisphere and support the development of its planned industrial-scale separation facility in Louisiana.

The pilot plant has been designed to validate and optimize Aclara's proprietary rare earth separation technology using high-purity mixed rare earth carbonates, with high concentration of heavy rare earths, that will be produced from the company's ionic clay deposits in Brazil and Chile. The facility will also generate operational data to support the engineering and ramp-up of Aclara's future industrial-scale plant in the United States.

The inauguration ceremony brought together senior leadership from Virginia Tech, Argonne National Laboratory, L3 Process Development, Aclara and representatives from the U.S. government, including the Department of Energy (DOE) and the U.S. International Development Finance Corporation (DFC), highlighting the strategic importance of establishing domestic capabilities to process heavy and light rare earths currently restricted by China. Last year, Aclara secured $5-million in project development financing from DFC to support the feasibility study for its rare earth project in Brazil.

Executive remarks

Eduardo Hochschild, chairman of Aclara, commented: "Demonstrating that Aclara possesses the technology to separate rare earths -- including Chinese-restricted heavy rare earths -- in the United States represents a major milestone. This achievement is especially significant because Aclara has the heavy rare earth ionic clay deposits needed to supply the process, delivering a sustainable and reliable source of these critical materials to the western hemisphere. Today's event consolidates Aclara's position as a technology-driven company with secured, sustainable feedstock -- positioning Aclara as a key player in reducing Western dependence on restricted global supply chains. We will continue to work to confirm and improve our technology, which, in the medium term, we also plan to apply in Brazil and other countries where we operate."

Christopher Saldana, deputy assistant secretary, Office of Critical Minerals, Materials and Manufacturing, U.S. Department of Energy, commented: "Developing domestic capabilities for critical minerals processing strengthens U.S. energy security and manufacturing competitiveness. Industry, national laboratories, universities and government collaboration is key to building and scaling resilient supply chains for these strategic materials."

David Hester, managing director for project development at DFC, commented: "DFC is pleased that our project development financing is providing vital capital to accelerate the development of Aclara's supply chain in South America. We are thrilled to support such an impactful project that aligns with our priority of building more diverse, resilient critical mineral supply chains, creating jobs in the United States and bolstering economic development among our partner countries."

Aaron Noble, professor and department head of mining and minerals engineering at Virginia Tech, commented: "Aclara's pilot facility represents an important opportunity for collaboration between academia and industry. The project will advance research in rare earth separations while providing hands-on training opportunities for students and researchers at Virginia Tech. Partnerships like this are critical for developing the technologies and work force needed to strengthen domestic critical mineral supply chains."

Claus Daniel, associate laboratory director at Argonne National Laboratory, commented: "Argonne is proud to support this initiative through the development of advanced digital tools and artificial intelligence models that will help optimize rare earth separation processes. The data generated at this pilot plant will contribute to the development of a digital twin capable of improving operational efficiency and accelerating the ramp-up of future industrial facilities."

Tommee Larochelle, managing partner, L3 Process Development, commented: "This facility goes beyond traditional piloting -- it is a true demonstration of an integrated rare earth separation flow sheet, validating the full process and enabling the production of commercial-grade materials. In an industry where development timelines often span several years, this project redefines what is possible. Achieving this level of execution in such a compressed timeline reflects both Aclara's clear vision and the strength of our technical collaboration."

Inauguration highlights

The event was attended by representatives from Virginia Tech, Argonne National Laboratory, the U.S. Department of Energy, the DFC, and other government and industry stakeholders, including:

• Mr. Hochschild, chairman, Aclara Resources;
• Ramon Barua, chief executive officer, Aclara Resources;
• Mr. Saldana, deputy assistant secretary, Office of Critical Minerals, Materials, and Manufacturing, U.S. Department of Energy;
• Mr. Noble, professor and department head, mining and minerals engineering, Virginia Tech;
• Mr. Daniel, director, advanced energy technologies, Argonne National Laboratory;
• Dennis Mesina, acting director for market development, Office of International Affairs, U.S. Department of Energy;
• Allison Bennett, director, supply chain and critical materials research, Argonne National Laboratory;
• Nicolas Burr, chief executive officer, Grupo CAP;
• Mr. Larochelle, managing partner, L3 Process Development;
• Brad Fravel, executive director, LINK, The Center for Advancing Partnerships, Virginia Tech.

Pilot plant highlights

Aclara's separation pilot plant is now commissioned and operational:

• Process designed to produce separated dysprosium (Dy), terbium (Tb) and neodymium-praseodymium (NdPr);
• Fully staffed and prepared for continuous 24-hour-a-day/seven-day-a-week operations since April;
• Operational data already being generated to support development of an AI-driven (artificial intelligence) digital twin, with progress advancing rapidly;
• Dedicated team of Virginia Tech PhD researchers actively engaged in process optimization and advanced technical analysis;
• The facility is expected to produce its first separated light rare earth oxides (NdPr) in May, 2026, and heavy rare earth oxides (Dy and Tb) in August, 2026.

Objectives of the pilot plant

The pilot plant will play a key role in advancing Aclara's U.S. industrial strategy by:

• Validating Aclara's proprietary rare earth separation technology with feedstock from its ionic clay deposits in Brazil and Chile;
• Generating operational data to support the engineering, ramp-up and optimization of the company's commercial separation facility;
• Developing an AI-driven digital twin of the separation process in collaboration with Argonne National Laboratory;
• Training the company's work force in rare earth separation and advanced hydrometallurgical processes.

Integration with Aclara's planned Louisiana commercial facility

The Virginia Tech pilot plant is a critical step toward the development of Aclara's planned rare earth separation plant in Louisiana, which is expected to become the first facility in the United States capable of producing significant volumes of heavy rare earth oxides integrated with ionic clay deposits.

Aclara has selected a site at the port of Vinton in Louisiana for the development of this industrial facility, which is designed to produce high-purity dysprosium, terbium, neodymium and praseodymium oxides used in permanent magnets and advanced technologies.

Key aspects of the Louisiana project include:

• Engineering: Aclara has retained Hatch Ltd. to advance the engineering of the project and co-ordinate the integration with the company's upstream mining operations.
• Capital investment: Approximately $277-million (U.S.) is expected to be invested to develop the commercial separation facility.
• Permitting and incentives: The project is being developed in collaboration with the State of Louisiana, which is supporting the investment through $46.4-million in tax incentives and grants.
• Production timeline: Subject to financing and project development milestones, the company is targeting the start of operations for the Louisiana facility by mid-2028.

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.

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