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Rare earths developer Aclara Resources (TSX: ARA) has filed a new environmental impact assessment for its Penco module project in Concepción, Chile, that it believes will address deficiencies found in its first EIA.
Aclara’s previous environmental assessment was knocked back by Chile’s environmental agency after it was revealed that the project area contains a vulnerable native species of trees known as “naranjillo” — which the assessment did not account for.
The company has since revised its permitting strategy to address those concerns without substantially affecting the project’s development timeline. To do so, it decided to “split” the project by submitting two separate EIAs that collectively cover the full life of the project.
The new EIA covers the first six years of the project and will encompass three extraction zones (Victoria Norte, Luna and Maite), one deposition zone (Neptuno) and the anticipated production facilities of the project. The “new” project excludes the Jupiter deposition zone and modifies other components to avoid the areas where the naranjillo trees were found.
“The EIA presents a smaller but more robust project that maintains the positive aspects of the previous EIA such as a fully recycled water source, revegetation with native species and the generation of over 2,000 direct and indirect jobs,” said Aclara’s EVP Jose Augusto Palma in a news release.
Located in the Bio-Bio region of Chile, the Penco module covers a 6-sq.-km area hosting an ionic clay deposit rich in heavy rare earths, with measured and indicated resources totalling 27.5 million tonnes grading 2,292 parts per million total rare earth oxides (TREO), for 62,900 tonnes of contained TREO.
The planned project doesn’t have a tailings facility for waste. After processing, Aclara will place washed clays into deposition zones and revegetate them.
As part of the project redesign, Aclara has also launched a reforestation program that aims to donate roughly 8,000 naranjillo trees, followed by other species such as pitao and queule trees, in the Bio-Bio region and other areas in Chile.
With the modifications, the project is still expected to cover the payback period of its initial capex, Aclara noted.
The company expects that the review period for the EIA to take around 18 months. The study was also reviewed by CAP SA, its new strategic partner in Chile who is expected to invest $80 million into the project.
In a research note on Tuesday, Canaccord Genuity analyst Katie Lachapelle said that assuming Chile’s environmental agency requests more information after the new EIA is submitted, and after a project construction period of about 12 months, first production could start at Penco as soon as 2027.
A second EIA will be prepared once the company is ready to expand its production to zones not covered by the current application (i.e., Victoria Sur, Alexandra Oriente, and Alexandra Poniente) based on the availability of new deposition zone(s). At the same time it will also apply for a permit to reactivate the Jupiter zone as well as evaluate potential for purposes of the second EIA.
As part of the second EIA, the company anticipates increasing the future production plant’s capacity. It plans to study that possibility this year.
Shares in Aclara Resources traded at C$0.54 apiece at the end of the day, for a market capitalization of C$89.9 million ($65m).
