Construction of the open pit at Penco in Chile. Credit: Aclara Resources
An updated preliminary economic assessment (PEA) for Aclara Resources’ (TSX: ARA) Penco Module rare earths project in Chile almost doubles its post-tax net present value over a 2021 study despite a doubling in initial capital costs. Shares rose.
Penco’s NPV is now estimated at C$344 million ($243 million), compared with pre-production costs of C$244 million ($178 million), Aclara said Monday. The updated NPV uses an 8% discount rate, compared with 5% in the 2021 study, while the update raises life for the open pit mine by three years to 17 years and the internal rate of return by three percentage points to 26.1%.
Aclara attributes the higher NPV partly to a 55% increase in material processed to 30.8 million tonnes, as well as higher forecast rare earth prices. Penco is about 430 km south of Santiago.
“The Penco Module stands out for its significant heavy rare earth content, particularly dysprosium, terbium and yttrium, and its strategic location in one of Chile’s leading industrial regions,” Aclara CEO Hugh Broadhurst said in a release on Monday.
“Looking ahead, the potential integration of Penco with our separation and metals and alloys facilities in Louisiana offers a compelling opportunity to capture synergies across the value chain and strengthen Aclara’s position as a vertically integrated supplier of critical rare earth materials to global markets.”
Developing supply chain
The updated PEA advances Aclara’s plans to establish an integrated rare earth supply chain in the Americas, linking its South American deposits with processing and manufacturing facilities in the United States. Its Dynamo plant in Louisiana, where construction is targeted to begin in early 2027, would process rare earths mined at Penco and Carina Module in Brazil, currently in the permitting stage. Both sites host rare earths in relatively shallow ionic clays which require no blasting, crushing or grinding to mine.
The Export-Import Bank of the U.S. could provide up to $750 million towards Dynamo’s construction, subject to various conditions, the company announced in September. Aclara also operates a rare earth separation demonstration plant in Virginia, where it expects to produce its first separated heavy rare earths in this year’s fourth quarter.
Shares in Aclara gained 3% to C$2.97 apiece mid-day Monday, valuing the company at about C$736.6 million ($522 million). The stock has traded in a 12-month range of C$2.01 to C$5.40.
‘Super pure carbonate’
Though average annual production is forecast to fall about 5% from the 2021 PEA to 732 tonnes of rare earth oxides, Aclara said the new output would include a “super pure rare earth carbonate” comprising such heavy rare earths as dysprosium at 6%, terbium at 0.8%, yttrium at 54.5% and gadolinium at 4.2%.
The new study includes an updated resource of 35.8 million measured and indicated tonnes grading 2,095 parts per million (ppm) total rare earth oxides (TREO) for 75,025 contained tonnes TREO, a 19% rise in contained rare earths. Inferred resources grew 29% to 2.2 million tonnes at 1,768 ppm TREO for 3,848 contained tonnes, a 14% rise.
Aclara received its final environmental approval for Penco in June, ending a process that lasted more than four years. It plans to complete a feasibility study for Penco in the first quarter of 2027. Construction of the mine is expected to be finished in 2028.