What led to Aclara Resources demerging from Hochschild Mining to create a standalone company?

Aclara Resources originated from a strategic decision by Hochschild Mining’s leadership to challenge the management team to think differently about our business and the future. Through our network of contacts, we were able to find, invest in and then acquire the BioLantánidos Ionic Clay Rare Earth deposit from Chilean private equity firm, Mineria Activa. As we gained more knowledge about ionic clays, three very distinctive advantages came to light – the metallurgy is extremely simple which allows for a simple and environmentally friendly method of mining; it contains highly coveted heavy rare earths, especially those that have magnetic properties; and ionic clays do not contain radioactive material which is normally associated with rare earths. We started aggressively developing the BioLantánidos deposit, which eventually started competing with Hochschild’s gold and silver business. The board therefore made the decision to separate its REE business from its PM business and Aclara Resources was established.  

The company decided to list on the TSX as we believe that North America in general understands the importance of rare earths, and Canada in particular understands the dynamics of early stage projects such as ours.

Can you elaborate on the type of heavy rare earth elements (HREE) that Aclara is looking to produce?

Dysprosium (Dy), Terbium (Tb), Neodymium (Nd) and Praseodymium (Pr) are rare earth elements that have magnetic attributes and are critical components in the production of high-performance permanent magnets, which are important in a world transitioning towards an electric economy. Aclara’s objective is to become a strategic supplier of these critical REEs, all of which are required to manufacture the permanent magnets that are required to enable the widespread use of renewable energy technologies and the increased adoption of EVs globally. We aim to produce HREE carbonates with approximately 92% purity that have an exceptionally low environmental and social footprint.

Our deposits are very shallow at approximately 30 m deep, but cover large extensions of land. Our intention is to stake prospective lands with ionic clay deposits in Chile with the view of finding opportunities where we can replicate what we are currently doing in Penco, where we intend to develop Aclara’s first production facility.

How do you plan to develop, construct and operate the Penco Module asset?

Aclara has initiated the development of its approximately 600-hectare first resource through the Penco Module. The Penco Module has various differentiating attributes – it does not require explosives as the clays can easily be shovelled; no crushing and milling activities with subsequently no tailings dam as the clays will be returned to the quarries they came from after processing; although operating in an area where water is abundant, our water consumption is extremely low and we will be recycling 95% of the water; and most importantly, we do not need to deal with radioactivity. Today, there is artificially grown pine and eucalyptus on our land, and our aim is to replace this with a native natural forest once the processed clays are repositioned in the quarries.

The simplicity of our operations make it feasible for us to operate in Chile. Our Penco project is located 9 km from Concepción and we have great access to motorways, energy, an airport and a port. We will not have to build a camp as people will be able to commute to the quarries and the plant.

On February 14^th, China's official rare earth price index hits record high. To what extent have you seen the urgency from countries in the west to develop new deposits?

Over the past few decades, the western economies have been focused on services whereas China has been focusing more on the industrial side of things. China today still has the advantage and dominates the REE market, but the west is catching up. Technology or capital is not going to be a restriction, but rather the nature of the deposits from which REEs are extracted. Many REE projects have to deal with radioactivity, which is a major constraint in terms of sustainability and attaining permitting. Aclara has the advantage of being able to produce rare earths without having a significant impact on the environment, consequently becoming a premium producer of HREE, providing a high-value, non-China based alternative for diversification to the EV supply chain, wind turbines and other green technologies.

We are encouraged by the arrival of Gabriel Boric and his government as we believe Aclara’s method of mining is aligned with his views surrounding sustainability, diversity and inclusion. Currently, 35% of Aclara’s workforce is women, and we aim to continuously grow this number.

What are Aclara Resources’ priorities for 2022?

Aclara’s ultimate goal for 2022 is to complete a feasibility study which will allow us to start construction. We will do pilot testing and brownfields exploration to develop our resource and also work towards obtaining environmental permits. We benefit from Hochschild Mining’s demonstrated track record of operational success, sustainability-focused culture, and high standards of corporate governance to move us forward.