Mr. Ramon Barua reports

ACLARA SELECTED BY THE U.S. DEPARTMENT OF ENERGY FOR FEDERAL FUNDING TO ADVANCE AI-DRIVEN HEAVY RARE EARTH PROCESSING

Aclara Resources Inc.'s U.S. subsidiary, Aclara Technologies Inc., has been selected by the U.S. Department of Energy (DOE) to receive federal funding, terms and timing subject to award negotiations, under the DOE's Genesis Mission: Transforming Science and Energy with AI initiative.

Aclara's phase I project, titled "AI-Enabled Process Optimization for Multi-Feed Rare Earth Separation," was selected under Challenge Area -- Securing America's Critical Minerals Supply through Extraction and Processing Technologies. The project aims to apply artificial intelligence to optimize the multifeed separation of rare earth elements, improving process efficiency, product quality and operational stability while accelerating the commercialization of domestic rare earth processing technologies.

"This selection by the U.S. Department of Energy is an important milestone for Aclara and validates our vision of combining advanced process engineering with artificial intelligence to strengthen the critical minerals supply chain," said Ramon Barua, chief executive officer of Aclara. "The project will help accelerate the development of next-generation operating tools for heavy rare earth separation while reinforcing our broader strategy of building a secure, resilient and technologically advanced rare earth supply chain across the Americas."

Aclara's project will develop and validate an AI-assisted (artificial intelligence) digital twin capable of optimizing complex rare earth solvent extraction circuits under dynamic operating conditions. The project will leverage operational data generated at Aclara's rare earth separation pilot plant at Virginia Tech and combine them with advanced process simulation capabilities developed by Argonne National Laboratory. The resulting platform is expected to improve process stability, increase recovery and product purity, reduce operator intervention, and accelerate the scale-up of domestic rare earth separation technologies.

The project will be executed through a collaboration between Aclara Technologies, Argonne National Laboratory and Virginia Tech, combining industrial expertise, national laboratory capabilities and academic research to demonstrate the application of artificial intelligence in commercial-scale rare earth processing.

The Genesis Mission is a historic national initiative led by the U.S. Department of Energy that is building the world's most powerful integrated science discovery platform. By bringing together government, industry and academia, the initiative seeks to accelerate breakthroughs in energy, scientific discovery and national security through the integration of artificial intelligence, supercomputing, quantum systems and advanced scientific instruments. Phase I projects are intended to demonstrate transformative AI-enabled scientific workflows, with successful projects having the opportunity to advance to phase II for additional federal funding.

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, 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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