Heavy Rare Earths

Overview

Demand for rare earth elements (REEs) is rapidly increasing. These minerals are necessary to manufacture permanent magnets, auto and fluid cracking catalysts, and are also used in emerging technologies. Much of the world’s REE comes from China, making countries investing in clean energy largely reliant on Chinese supply. However, Australia is quickly ramping up production and was the fourth-largest REE miner in 2021, providing the market with 22,000 tonnes. The country also has the fifth largest reserves globally, with 4 million tonnes.

The Cowalinya Project has a JORC-compliant inferred mineral resource of 28 million tonnes at 625 parts per million (ppm) total rare earth oxides (TREO). The resource has an ideal composition of 25 percent magnet REEs and 23 percent heavy REEs, and importantly also contains low concentrations of radioelements.

The company has also confirmed a substantial new body of rare earth mineralisation at Cowalinya. Assays from 215 holes from HRE’s 441-hole rare earth exploration and resource expansion drilling program in 2022 have revealed multiple high-grade REE intercepts (up to 7222 ppm TREO) and the project’s thickest mineralised intercept to date at 42 meters @ 790 ppm TREO from 12 meters in hole AC226 – within a substantial new Western Zone of rare earth mineralisation.

Heavy Rare Earths’ second project, Duke, is located in the Northern Territory and close to both road and rail. The Company plans to commence exploring the asset for heavy REE-enriched deposits similar to the Browns Range project in Western Australia in the middle of 2023.

A management team with extensive experience in the natural resources sector leads the company, with expertise in rare earth exploration and development, financial management and corporate administration. HRE’s leadership team creates confidence in its ability to bring new REEs to market to support the energy transition.

Company Highlights

• Heavy Rare Earths is an Australian exploration and development mining company focusing on rare earth assets to support the clean energy transition.
• The company has 100 percent mineral rights ownership of two assets in premier mining jurisdictions, Western Australia and the Northern Territory.
• The flagship Cowalinya Project has a JORC-compliant inferred resource of 28 million tonnes at 625 ppm TREO with the highly sought-after composition of 25 percent magnet rare earths and 23 percent heavy rare earths.
• Heavy Rare Earths has confirmed a substantial new body of rare earth mineralisation at Cowalinya in 2023.
• An experienced management team leads Heavy Rare Earths with a range of expertise throughout the mining sector, including project management, corporate administration, and rare earth exploration and development.

Key Projects

The Cowalinya Project

The clay-hosted Cowalinya Project’s three tenements cover 250 square kilometers in Western Australia and is located 110 kilometers from the Port of Esperance. The project's clay-hosted mineralisation is shallow, flat-lying supergene concentrations of REEs similar to the world’s primary source of heavy rare earths in southern China. Drilling is ongoing to define the extent of rare earth resources in the company’s tenements.

Metallurgical test work on these deposits delivered encouraging results, indicating high proportions of sought-after REEs can be isolated and recovered.

Project Highlights:

• Strong Mineral Resource Estimate: The 2021 drilling program was followed by an independent estimate of mineral resources that outlined 28 million tonnes at 625 ppm TREO in inferred resources. The estimate demonstrates a composition of 25 percent magnet rare earths and 23 percent heavy rare earths.*
• Thickest mineralised intercept at Cowalinya to date – The 2022 drill program reported assays from 215 air core holes with the thickest mineralised intercept of 42 meters @ 790 ppm TREO from 12 meters in hole AC226 – within a substantial new Western Zone of rare earth mineralisation.

* Competent Persons Statement

The Exploration Results contained in this announcement were compiled by Mr. Richard Brescianini. Mr. Brescianini is a member of the Australian Institute of Geoscientists (AIG). He is a director and full-time employee of Heavy Rare Earths Limited. Mr. Brescianini has more than 35 years’ experience in mineral exploration and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 JORC Code.

The Mineral Resources contained in this announcement have been extracted from the Independent Geologist’s Report included in the Company’s Initial Public Offering (IPO) Prospectus, a copy of which was lodged with the Australian Securities and Investments Commission (ASIC) on 5 July 2022. The Company confirms that it is not aware of any new information or data that materially affects the Mineral Resources as contained in the Company’s IPO Prospectus. All material assumptions and technical parameters underpinning the Mineral Resources in the Company’s IPO Prospectus continue to apply and have not materially changed.

The Duke Project

The Duke Project is located in the Northern Territory and is 50 kilometers northwest of Tennant Creek on the Darwin-Adelaide rail line. The two project tenements cover 255 square kilometers.

Project Highlights:

• Unexplored for REEs: The Duke Project has not been explored for REEs, with previous work focusing on uranium and copper-gold. However, the project area shows geological potential to host heavy REE-enriched deposits similar to Browns Range in Western Australia.

Management Team

John Byrne - Non-executive Chairman

John Byrne has 40 years of experience in the natural resource industry as a financial analyst, investor and mine developer. He has been chairman and CEO of numerous successful resource companies, including Western Coal Corp, which was capitalized at less than C$1 million when he joined and was sold for C$3.3 billion in 2010. Beginning with net assets of GBP£1.4 million in 2002, John established and mentored Cambrian Mining Plc, which amassed net assets of GBP£149 million before its acquisition in 2008. Byrne is currently a chairman of Lions Bay Capital Limited and Fidelity Minerals Limited, both of which are listed on the Toronto Ventures Exchange. He is also a director of unlisted companies in Australia.

Richard Brescianini - Executive Director

Richard Brescianini has qualifications in geology and geophysics and commenced his career in mineral exploration with BHP Minerals in 1987, working in teams focused on the discovery of base and precious metal deposits across Australia and North America. Brescianini’s more recent experience includes his time as the director of the Northern Territory Government’s Geological Survey and 14 years on the executive management team for rare earths developer Arafura Rare Earths.

Ryan Skeen - Non-executive Director

Ryan Skeen has a background in financial and economic markets, with expertise in providing investment and strategic advice to emerging companies. Skeen is largely focused on the exploration of gold, rare earths and base metals. He is currently chief executive officer of a junior gold and base metals explorer with projects in Victoria and Western Australia.

Justin Mouchacca - Company Secretary & Financial Controller

Justin Mouchacca is a chartered accountant and fellow of the Governance Institute of Australia with over 15 years of experience in public company responsibilities, including statutory, corporate governance, and financial reporting requirements. Since July 2019, Mouchacca has been principal of JM Corporate Services and has been appointed company secretary and financial officer for a number of entities listed on the ASX and unlisted public companies.