Star Metro - Aclara Receives Second Tranche Payment of US$12.5 Million From Cap's Strategic Investment in Chile

Transaction Summary: CAP's Strategic Investment in REE Uno

• A US$29.1 million capital contribution by CAP into REE Uno, Aclara's Chilean subsidiary which owns the Penco Module and all of Aclara's mining concessions in Chile, in exchange for a 20% equity participation in REE Uno. Payments will be made in three tranches with the initial tranche of US$9.7 million to be made upon closing of the Transaction, the second payment of US$12.5 million in January 2025 and the remaining balance of US$6.9 million to be made in January 2026.

• An option to invest an additional US$50 million in REE Uno for an additional 20% equity interest in REE Uno once the requisite environmental permit is secured for the Penco Module. Upon completion, this additional investment would allow CAP to attain a 40% equity interest in REE Uno.

• A three-year option to invest up to 19.9% in Aclara by participating in any private placement or public offering of shares that Aclara may make during the next 36 months, including a residual top-up right to maintain pro rata voting rights. Any subscription to such private placement or public offering will be made on the same terms offered by Aclara to other investors. CAP will have the right to nominate one board member upon attaining and for so long as its equity interest in Aclara amount to at least 15% of the issued and outstanding common shares of Aclara. In addition, CAP holds a one-time demand subscription right to invest up to an aggregate of 19.9% in Aclara, exercisable upon the satisfaction of certain conditions and continuing for a maximum period of 18 months counted from the end of the initial 3-year option.

• The formation of a 50/50 joint venture to develop metals and alloys for the rare earths permanent magnet industry. CAP will invest US$3.0 million in exchange for its 50% of the shares of the newly established joint venture company. Aclara will own the other 50% of the shares.

Valuation

The CAP´s strategic investment of US$29.1 million represents a pre-money valuation of REE Uno of US$116.5 million. In addition, Aclara will own 50% of the newly established joint venture company, which has a valuation of US$3.0 million. In total, the Transaction represents a value for Aclara of US$119.5 million, which reflects Aclara's pre-money valuation at the IPO. It's noteworthy that Aclara's Brazilian subsidiary, Aclara Mineracao, which oversees the Carina Module and all mining concessions in Brazil, and Aclara Technologies, which oversees Aclara´s separation project in the United States, are not part of this transaction nor included in the valuation mentioned above.

About CAP

CAPS.A., a company with more than 77 years of history and listed in the Chilean Stock Exchange since 1987, is the parent company of the CAP Group, a Chilean conglomerate operating in various industries including iron ore mining (CMP), with mines and industrial operations in the north of the country, as well as in Concepcion, very close to the Penco Module. CAP is one of the leading high-grade iron ore producers in the world with four operating mines in Chile. In addition, CAP has several steel product manufacturing plants in Chile, Peru and Argentina. It operates five ports, a seawater desalination plant and has vast industrial infrastructure in the Biobio region. CAP has a strong connection with the people of the Biobío region, where it has been a major employer for several decades, contributing directly to the development of the south of Chile.

About Aclara

Aclara Resources Inc. (TSX:ARA), 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 Goiás, Brazil as its flagship project and the Penco Module in the Bio-Bio 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 S.A., 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.

Forward-Looking Statements

This press release contains "forward-looking information" within the meaning of applicable securities legislation, which reflects the Company's current expectations regarding future events, including statements with regard to: the Company's strategic investments and partnerships and the current and future valuation of the Company and its subsidiary. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control. Such risks and uncertainties include, but are not limited to risks related to operating in a foreign jurisdiction, including political and economic risks in Chile and Brazil; risks related to changes to mining laws and regulations and the termination or non-renewal of mining rights by governmental authorities; risks related to failure to comply with the law or obtain necessary permits and licenses or renew them; cost of compliance with applicable environmental regulations; actual production, capital and operating costs may be different than those anticipated; the Company may be not able to successfully complete the development, construction and start-up of mines and new development projects; risks related to fluctuation in commodity prices; risks related to mining operations; and dependence on the Penco Module and/or the Carina Project. Aclara cautions that the foregoing list of factors is not exhaustive. For a detailed discussion of the foregoing factors, among others, please refer to the risk factors discussed under "Risk Factors" in the Company's annual information form dated as of March 22, 2024, filed on the Company's SEDAR+ profile. Actual results and timing could differ materially from those projected herein. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this press release is provided as of the date of this press release and the Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

For further information, please contact:
Ramon Barua
Chief Executive Officer
[email protected]

SOURCE: Aclara Resources Inc.

View the original press release on ACCESS Newswire

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