Ares restarts US fluorspar output after Pentagon deal

Ares Strategic Mining (CSE: ARS; US-OTC: ARSMF) said it has restarted the Lost Sheep fluorspar mine in Utah after landing a major U.S. government contract to supply the obscure mineral used in the lithium battery, semi-conductor and uranium industries.

The Vancouver-based company plans to start processing fluorspar in the fourth quarter to meet a $169-million supply deal it signed with the U.S. Department of Defense in January as the government pushes domestic production of a mineral that’s fallen off the radar in recent years. The junior could receive up to $250 million through future orders under its five-year contract with the DOD, Ares said.

“All mining infrastructure and equipment have been installed and are operational and we have started mining activities,” Ares CEO James Walker told The Northern Miner by email on Wednesday. “We have already stockpiled several thousand tonnes of fluorspar ore at the surface ready for processing.”

Ares’ Lost Sheep in the Spor Mountain mining district is the only permitted fluorspar mine in the U.S., where buyers imported 440 of 445 tonnes consumed or sold in 2024, according to the United States Geological Survey. Domestic supply had shuttered as buyers favoured inexpensive imports but rising foreign prices are creating local opportunities. The mine development and government contract are pushing the company to list on Nasdaq this year.

Plant construction

Ares’ ore-crushing plant is due to come online in the next couple of months, while its flotation system facility in nearby Delta is to start later this year, Walker said. That plant will process the mined fluorspar to 97% purity, known as acidspar, used to make hydrofluoric acid, which is essential for producing aluminum, lithium-ion batteries, refrigerants and enriched uranium.

Corkscrew ramp installations at the mine, together with offshoot adits, will see output of 45,400 to 54,500 tonnes of final product each year including acidspar and metspar, an 85% fluorspar used mostly in steel production, he said.

“This could potentially be increased substantially by opening up new mining operations at the Spor Mountain site,” Walker said on Wednesday

The Pentagon contract is transformative for Ares as the government revitalizes the long-neglected role of fluorspar in the supply chain, the CEO said.

“Our flotation plant is now a top-priority build,” Walker said last month in a statement. “With strong government support, market demand, and financing in place, we’re pushing forward to ensure on-time delivery under our DoD contract and to support our uplist plans for later this year.”

Prices rise

Import prices for fluorspar, which doesn’t trade on an official exchange, were $469 per tonne in the U.S. and $563 per tonne in Canada in 2025’s third quarter, according to New York-based consultant Imarc Group. Prices have jumped 52% from $309 per tonne in 2020, according to the USGS. They are expected to continue climbing due to their use in electric vehicles, which require about 1 kg of fluorspar for every kilowatt hour in lithium battery power, and as AI data centres increase demand for semiconductors and nuclear power.

An average Tesla Model Y, one of the world’s most-popular EVs, uses 83 kg of fluorspar for a 75-kWh lithium battery. Tech giants Meta and Alphabet are considering small modular reactors for their power needs that would require enriched uranium processed with fluorspar.

China provided 64% of the 9.5 million tonnes of fluorspar produced globally in 2024. Its growing lithium battery industry has seen demand outpacing supply in recent years. The Asian giant’s recent push toward export controls on critical minerals has also created supply chain uncertainty, driving the U.S. to begin stockpiling fluorspar.

Past-producer

The Lost Sheep mine produced 154,000 tonnes of fluorspar from 1948 to 2014, according to a 2021 technical report. Ares purchased the mine in 2020, after the U.S. listed fluorspar as a critical element in 2018. 

Ares didn’t complete feasibility studies at the mine, instead relying on historical engineering work and production data, geological reports, and engineering work to advance development, it said.

On the heels of its defence department contract, Ares said in January that it has launched a C$10-million private placement following a C$10.4-million offering that closed in October.

Shares in Ares Strategic Mining have gained 1.1% this year to C46¢ apiece on Thursday after a spike to C74¢ on the Pentagon contract news Jan. 20. The company has a market capitalization of C$109.5 million.

Uranium enriching

Ares was also included as a Department of Energy subcontractor in December 2024 under a $3.4-billion initiative aimed at increasing domestic supplies of low-enriched uranium.

Under the program, Ares will fill acidspar orders with energy department contractors, which would manufacture hydrofluoric acid and fluorine for use in uranium enrichment.

Fluorspar mines elsewhere in North America are also looking to cash in on the U.S. security efforts. Dutch private equity firm Renova Capital started output last year from the St. Lawrence mine in Newfoundland. It acquired the mine from an insolvent Canada Fluorspar which closed the operation in 2022.

Renova is targeting the U.S. as its major market. Ottawa also listed the mineral as critical to national security in November.