Aclara Announces the Closing of the Transaction with Cap and the Receipt of Initial Payment of Us$9.7M as Part of the US$29.1M Strategic Investment - Seite 2

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Transaction Benefits to Aclara

Funding

The US$29.1 million initial capital injection from CAP into REE Uno will support the ongoing development of the Penco Module throughout its permitting, community relations, and feasibility study phases. This allocation will allow Aclara Resources to reallocate its current cash reserves towards advancing its Carina Module project in Brazil.

The option for an additional US$50 million investment post-receipt of the environmental permit is intended to cover a significant part of the equity portion associated with the construction of the Penco Module. This provision mitigates financing risks linked to the module's construction for Aclara.

Permitting

Drawing upon CAP's extensive experience in environmental permitting from multiple mining projects in Chile, Aclara anticipates strengthened support for the forthcoming Environmental Impact Assessment permit application in respect of the Penco Module. CAP's involvement includes a thorough review and constructive contributions to the application preparation, as well as accompanying Aclara throughout the review and approval process by Chilean environmental agencies.

Vertical Integration

Furthermore, the establishment of a metals and alloys company represents a crucial step of Aclara's strategic vision to vertically integrate its rare earths concentrate production towards the manufacturing of permanent magnets. The newly formed joint venture company will harness CAP's substantial expertise in metal refining and ferro-alloyed special steels, synergizing with Aclara's thorough understanding of the rare earths and permanent magnet industry. The joint venture with CAP is intended to supplement the Company's efforts in developing independent rare earth separation capabilities in the United States through its U.S. subsidiary, Aclara Technologies Inc., as previously announced on April 10, 2024, and to further position Aclara as a source of geopolitically independent alternative supply of permanent magnets to the global market.

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Valuation

The transactions contemplated under the Investment Agreement (the "Transaction") reflects the valuation of Aclara at the time of the Company's initial public offering (the "IPO") and is indicative of the belief both parties have in establishing Aclara as a leading producer of clean rare earths.

Upon closing, REE Uno has been valued at US$116.5 million on a pre-money valuation. 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 an aggregate valuation reflecting the Company's pre-money valuation at the IPO of US$119.5 million.