Auxico Resources to Build Rare Earth Refinery in Santa Marta Free Zone, Colombia

Auxico Resources of Canada announced that it plans to build a 10,000 square meter rare earth refinery with the capacity to process 36,000 tons of ore per year in the Free Trade Zone in Santa Marta, Colombia. Auxico signed a lease agreement and has an option to purchase four parcels of land in the Zona Franca Tayrona Industrial Park. The projected capital expenditure for the refinery is US$116.2 million.

The refinery, which Auxico describes as the first rare earth refinery in the Western Hemisphere, will combine standard metallurgical processes with innovative extraction technologies that will reduce energy consumption, significantly shorten and improve the cost-effectiveness of the processing cycle, and reduce the overall environmental impact. Rare earth concentrates will be sourced from Auxico's currently developed properties in Colombia and the Democratic Republic of Congo. Other concentrates will come from properties in Brazil and Bolivia, where Auxico is finalizing supply agreements.

Over the past 12 months, Auxico has completed a series of metallurgical tests using the Ultrasonic Assisted Extraction process (UAEx) for mineral extraction, for which the company signed a technology license agreement earlier this year. These tests have shown that the UAEx process of the rare earth refinery is very effective on high-value rare earth samples, achieving recoveries of more than 80% of selected rare earth elements over leaching times of up to two hours.

The UAEx process is a sustainable metallurgical process that uses ultrasonic technology to refine key minerals. Laboratory results have shown that when combined with certain acids and used at different frequencies, this ultrasonic process breaks down the ore into fine particles in a much faster time than conventional methods. This significantly reduces the cycle time for ore leaching, resulting in lower operating and capital costs.

Colombian competitive free trade regime was established to promote the industrial processing of goods and services primarily for export and is managed under a special customs, foreign exchange, and fiscal regime that offers a variety of benefits to businesses. The Santa Marta Free Trade Zone is one of the country's 12 free trade zones, located near the port of Santa Marta on the Caribbean Sea in the Magdalena Department in northern Colombia.

Auxico Resources also announced that it has granted 450,000 stock options to the company's advisors. These options have an exercise price of $1.39, no vesting period, and an expiration date of November 24, 2026.

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