American Rare Earths : ARR provides an update on La Paz Metallurgy

7 April 2022

American Rare Earths provides an update on

La Paz Metallurgy

American Rare Earths (ASX: ARR, OTCQB: ARRNF, FSE: 1BHA) (ARR or 'the Company') is pleased to announce that the current metallurgical test work on ore from its flagship La Paz project has responded well to conventional processing technology. The results provide further opportunities to reduce operating and capital costs and will help underpin a Preliminary Economic Assessment (PEA) for La Paz, scheduled for the second half of 2022.

Highlights

• • Metallurgical test results from the La Paz project show the ore responds well to conventional processing technology.

• • Capital and operating costs will be reduced with 75% of the gangue (non-mineralised) material removed prior to the floatation circuit.

• • The next testing phase will focus on flotation to further increase Total Rare Earth Oxides (TREO) recoveries.

• • Further potential to significantly cut operating and capital costs for La Paz will be tested using Watts and Fisher's propriety leaching technology.

The new metallurgical testing campaign initiated by the Company has been designed to investigate how composites prepared from diamond drill core produced during 2021 respond to currently used processing technologies.

The campaign follows encouraging beneficiation work completed on surface rock chips involving magnetic separation and flotation combinations at Saskatchewan Research in Canada in 2021.

Planned work will build upon these results to produce a beneficiated concentrate that maximises rejection of acid or alkali consuming gangue minerals.

Significantly, in conjunction with ongoing extraction testwork, these results will contribute to a Preliminary Economic Assessment (PEA), planned for the second half of 2022, which aims to demonstrate the economic viability of the large La Paz resource.

Managing Director, Mr Chris Gibbs, commented: "These recent metallurgical results are incredibly positive and continue to move the La Paz Project forward.

"Metallurgy is key for all rare earth projects, and we are seeing the allanite hosted minerals respond well to widely used ore processing technologies. We are excited to see 75% of the gangue material removed before the flotation circuit. This will significantly help to reduce operating and capital costs for the project.

"We appreciate the work Wood Australia has been conducting on our behalf, as they project manage the metallurgical test work program conducted at Nagrom Laboratories in Perth, Western Australia.

"Significant progress has been made and we look forward to the next round of test work on the flotation and leach stages. Under the guidance of Wood, we are also pleased to be partnering with Watts and Fisher, who have proprietary technology that could be a game-changer for this project."

Program Highlights

Key laboratory results

• • Comminution test work indicates La Paz ore has moderate hardness and competency, making it well suited to semi-autogenous (SAG) milling and High Pressure Grinding Rolls (HPGR) processing.

• • Low yields produced from Low Intensity Magnetic Separation (LIMS) processing indicate little contamination from magnetic minerals, simplifying the flowsheet.

• • Sequential grinding and rougher-cleaner Wet High Intensity Magnetic Separator (WHIMS) effectively reject 75% of silica/silicate gangue minerals, an essential step before employing flotation.

• • Concentrate produced from cleaner WHIMS and flotation processing will be tested using the proprietary Watts & Fisher leaching process, which offers a much less capital-intensive route than conventional rotary kiln acid or alkali bake processing routes.

Program Overview

Nagrom laboratory in Perth, Western Australia, was awarded the testwork program in late 2021.

The program comprises mineralogy, high-intensity magnetic separation and rare earth mineral flotation to upgrade the target rare earth mineral content before extraction testwork.

La Paz's rare earth mineralisation is primarily hosted in allanite, a sorosilicate group mineral related to epidote. As the gangue rocks hosting allanite comprise feldspars and silicates, innovative separation techniques are needed to upgrade the ore.

Four composites are currently under evaluation - three variability (Cataclastite, Gneiss and Dyke) and the main composite reflecting the typical lithologies of the orebody. Main exploratory work is being conducted on a "main" composite, with optimised conditions to be trialled on variability samples.

Mineralogy

Comprehensive QEMSCAN testing has been undertaken to map mineral deportment in selected particles and understand the conditions needed to liberate allanite from non-mineralised waste rocks. A typical image of 0.5 to 1 mm specimens from QEMSCAN is shown in Figure 1.

QEMSCAN confirms that 85% of Rare Earth Element (REE) mineralisation resides in allanite, with 2% in monazite and 7% in synchysite/parisite (fluorocarbonate REE minerals. The balance is found in other REE intergrowths, such as amorphous REE carbonates or intergrowths with manganese minerals. The minerals found in those intergrowths are difficult to differentiate as distinct REE minerals. Fortunately, the proportion of intergrowths at La Paz is very low compared to some other rare earth orebodies.

Allanite is, however, relatively fine-grained and will ultimately require fine grinding to achieve a high degree of liberation from gangue minerals. Still, its magnetic susceptibility does lend itself to initial upgrading with WHIMS.

Figure 1: QEMSCAN Mapping of La Paz Mineral Assemblages

Size by assay analysis indicates enrichment of rare earth metals with increasing fineness of the grind. Figure 2 plots Total Rare Earth Oxides (TREO) assay with particle size for ore crushed to minus 3.35 mm, illustrating this enrichment.

Figure 2: TREO Assay with Particle Size

Comminution Properties

The Main Composite was subjected to comminution testing to understand its suitability for semi-autogenous grinding (SAG) and other comminution methods. Key outcomes were:

• • A Bond ball mill work index value of 18 kWh/t was returned, indicating moderately high ore hardness.

• • A Bond abrasion index value of 0.21 was reported, suggesting below average abrasiveness towards grinding media and liners, which is positive for economics.

• • SAG Power Index (SPI) testing produced a value of 68, which indicates average ore competency.

• • SAG Mill Competency (SMC) testing generated an Axb product of 47.5, suggesting average ore competency. This is typical of ores that respond well to SAG milling and are also expected to be well suited to high pressure grinding rolls processing. The eventual comminution method will depend on the selected processing rate and grind size required for primary beneficiation.

Low Intensity Magnetic Susceptibility

WHIMS is the primary technology employed to concentrate weakly magnetic minerals such as allanite and monazite before being subjected to flotation. Removing stronglymagnetic minerals such as magnetite from the WHIMS feed is important to avoid blocking the magnetic matrix.

To this end, Davis Tube Recovery (DTR) testing was applied to sample milled to eight grind sizes, ranging from 80% passing 25 microns to 500 microns. Minimal mass yield (0.7 to 1.1%) was achieved, which indicates low magnetite content in the ore.

Importantly, this indicates that low intensity magnetic separation (LIMS) is not needed as a processing step before WHIMS, which reduces concentrator complexity.

The recovered little mass was high in TREOs, particularly in the coarser grind sizes, indicating some association of magnetics with rare earth minerals. The TREO grade dropped steadily with increasing fineness, indicating that rare earth minerals were liberated at the finer grind sizes. This was a useful diagnostic test to understand allanite deportment.

High Intensity Magnetic Susceptibility

Sighter Rougher WHIMS Investigations - Main Composite

Batch sighter WHIMS testing was undertaken using a pulsating Wet High Gradient Magnetic Separator (WHGMS) at the same eight grind sizes used for DTR testing. All tests were conducted at a relatively high field of 1.2 Tesla to ensure high recovery of rare earth minerals.

Figure 3 depicts % silica rejection with magnetics TREO grade and recovery. High rejection of silica is possible whilst maintaining high TREO recovery to magnetics. For the bulk rougher WHIMS run, grind size of 80% passing 150 microns was selected, corresponding to 38.5% silica rejection and 87% TREO recovery to magnetics in the batch WHGMS145 unit.

Figure 3: TREO Assay with Particle Size