Aclara soars on Carina rare earths project upgrade

An update for Aclara Resources’ (TSX: ARA) Carina project in Brazil has lifted most of the deposit to the indicated category and raised grades for its four rare earths compared to the previous estimate. Shares jumped.

The update converts 79% of the inferred resource from last year’s preliminary economic assessment (PEA) to 236.3 million indicated tonnes, Aclara reported Wednesday. Grades rose at least 3% to 293 parts per million (ppm) neodymium praseodymium (NdPr), 43 ppm dysprosium and 6.8 ppm terbium for 371,492 tonnes of total rare earth oxides (TREO). Carina is in the central state of Goiás.

“The quality of the Carina deposit has been affirmed,” Aclara chief operating officer Hugh Broadhurst said in a release. “Grades of both heavy and light rare earths remain strong, tonnage is consistent, and results continue to demonstrate the stability and continuity of mineralization.”

Upcoming PFS

The company is focused on delivering a pre-feasibility study (PFS) for Carina within 45 days and a feasibility study in next year’s second quarter, Broadhurst added.

Aclara shares rose 11% to close at C$2.88 on Wednesday afternoon, just below the all-time high of C$2.90 reached last week. The company has a market capitalization of C$633.97 million.

$5M for feasibility

The Vancouver-headquartered Aclara last month received backing from the U.S. International Development Finance Corporation (DFC) for up to $5 million (C$6.97 million) to support Carina’s feasibility study. Classified as funding for project development, the support can be converted into future equity in Aclara. It’s part of a U.S. government push earmarking $1.5-billion for mining rare earths in Latin America.

Rare earths are essential components in magnets and technologies needed for the green energy transition, though China controls most of their mining and processing.

Wednesday’s update leaves 48 million tonnes in Carina’s inferred category grading 236 ppm NdPr, 41 ppm dysprosium and 6.4 ppm terbium for 61,675 TREO.

The resource update is based on 24,564 metres of drilling across 1,682 holes, which represents six times more drilling than was done for last year’s estimate, Aclara said.

Carina’s huge potential

Aclara, which is 57% owned by Hochschild Mining (LSE: HOC.L), is also developing an ionic clay rare earths deposit in Chile, though Carina is its main focus. CEO Ramón Barúa has said he believes Carina’s output could represent about 13% of China’s annual rare earth production.

The project could generate as much as 191 tonnes of dysprosium and terbium annually, heavy rare earths that are essential to electric vehicle motors, wind turbines and various defence and medical technologies, according to the PEA. The study estimated a mine life of 22 years and a net present value of $1.5 billion, using an 8% discount rate, with an internal rate of return of 27%.

Carina is among just a few advanced rare earths projects in Brazil. They include Serra Verde’s Pela Ema producing mine, also in Goias, and Meteoric Resources’ (ASX: MEI) PFS-stage Caldeira project in Minas Gerais state.