The Penco Module deposits have been defined as “regolith-hosted REE deposits” or “ion-adsorption deposits” (IAD). These are traditionally formed by tropical or subtropical weathering and decomposition of intrusive rocks with a primary enrichment in either mid/heavy REEs (peralkaline igneous rocks) or light REEs (peraluminous igneous rocks or carbonatites), where REEs are readily liberated by ionic solutions and are hence ion exchangeable (Wang et al., 2015; Dostal, 2017; Borst et al., 2020). Exchangeable REEs are associated with kaolinite and halloysite, the dominant clay minerals in IADs due to their role in adsorbing and fractionating REEs (Wu et al., 1990; Bau, 1991; Jeong, 2000; Bao and Zhao 2008; Williams-Jones et al., 2012; Sanematsu and Watanabe, 2016; Li et al., 2019; Yang, 2019; Borst et al., 2020 and references within).

The regolith profiles in the Project were developed through subtropical weathering of a peraluminous garnet-bearing granitoid, hence richer in LREEs. The regolith ranges between 25 to 48 m in thickness and is more developed in the garnet-rich granitoid than the other granitoids. The primary REE source is hosted in monazite-allanite and lesser xenotime, garnet and ilmenite. A secondary paragenesis formed by a late propylitic hydrothermal alteration (chlorite, sericite, epidoteallanite, locally biotite) replaced monazite with allanite and torite, and was relevant for the subsequent REE fractioning (Dold, 2015).

The exchangeable REE fraction in the Penco Module orebodies was obtained after the destruction of allanite, xenotime, and garnet (not refractory minerals) by weathering. The exchangeable REE is inferred to be weakly adsorbed onto clay minerals, dominantly by kaolinite and less by illite and/or smectite. This primary adsorption is observed by the positive correlation between kaolinite abundance and REE recovery. Further confirming this observation, clay mineralogy from DRX characterization indicates kaolinite as the dominant clay mineral (after halloysite).

Geology and Mineralization
The Project covers an area of 6 km x 3 km, located in the Coastal Range in the Biobio Region in central-southern Chile and is hosted in a carboniferous granitoid batholith complex intruding the eastern metamorphic basement series. Four main rock complexes are recognized: Metapelites (Paleozoic basement), Eastern Concepcion Plutonic Complex (oldest intrusion, east of the project), Penco Granitoid Complex (host of REE-rich ore bodies) and the Quartz-Diorite (youngest intrusion). Locally, REE anomalies were detected through soil analysis, using a portable XRF in roadcut exposures. These findings were better defined by a radiometric flight, NanoTEM and LIDAR topography, confirming that the garnet-bearing granitoid (GG) is strongly correlated with the radiometric anomaly of thorium (Th).

These rocks have the development of an extensive and deeply weathered regolith (+/- 40 m). This regolith contains abundant clay minerals that were locally enriched with REE in the favorable horizons. Aclara carried out a geochemical program in the zone that found significant yttrium (Y), cerium (Ce) and thorium (Th) anomalies.

The regolith profile developed clay minerals with capacity for cation adsorption. Of them, the GG is the source of the REE mineralization and is the richest in exchangeable REE. Other lithologies such as the biotite-bearing diorite (DRT) and metapelites (MP) contain decreasing levels of exchangeable REE, based on proximity to the GG, due to secondary enrichment of REE-rich fluids sourced from the GG following lateral migration under specific geochemical conditions (pH, alteration). Thus, mineralization depends on GG weathering intensity and topography (flatter relief allows for thicker regolith profiles and preserves ore bodies).

The Penco regolith profile is up to 35 m thick and comprises, from the bottom up: Unaltered bedrock (Horizon D), transitional zone (Horizon C2), semi-weathered zone (Horizon C1), completely weathered zone (Horizon B), pedolith and topsoil (Horizon A).

The regolith profile is identified as the biotite-bearing diorite (DRT), metapelite (MP) and garnet-bearing granitoid (GG), the latter was used ahead as the model. Apart from core logging, geochemistry (major elements and total REE), mineralogy, pH, and exchangeable REE with ammonium sulfate were used to define the geologic units.

The Penco Module covers a surface area of approximately 600 ha. However, the property directly involved has a surface area of approximately 250 ha.

Mining Methods
As the aforementioned technical studies for the Preliminary Economic Assessment of the Project were developed, the following outcomes were obtained based on the available information:

• The final sequence obtained, following the plans indicated in the previous point, corresponds to Victoria Sur - Victoria Norte - Luna - Maite - Alexandra.
• A sequential exploitation of the sectors is carried out. Once mining has been completed in one sector, then begins in another.
• Regarding the final pit shells selected by sector.
• Overall pit angles per rock type were used in the pit optimization analysis. No final pit and mining phase designs were generated during this stage of the Project.
• The mining Project consists of 5 pits: Victoria Norte, Victoria Sur, Alexandra, Maite, and Luna. In addition, there are Waste Disposal Facilities called Jupiter and Neptuno plus three temporary topsoil deposits or stockpiles.
• Three types of materials are obtained from mining the deposits: mineralized material, waste, and topsoil, which are destined for processing plants, disposal areas and temporary stockpiles respectively. Mineralized material will be sent to the processing plant, the waste and filtered tailings (mineralized material that have already been processed) will be sent to the Waste Disposal Facilities and the topsoil will be sent to temporary stockpiles.
• The production plan reflects a production rate of 1,765,680 t dry per annum of mineralized material, resulting in a Project life of 12 years considering a ramp-up (75% of the expected process plant feed) and final period of 6 month.
• Together, the Jupiter and Neptuno deposits have a total capacity of approximately 21.2 million cubic meters, therefore, they have 12% of available volume.
• Regarding the temporary topsoil stockpiles, the three projected sectors together have a capacity of 1.5 million cubic meters, while the estimated volume of topsoil to be managed corresponds to approximately 900 cubic meters (without considering the volumes of topsoil for additional infrastructure) corresponding to the mined material from the pits, preparation of disposal zones, and the processing plant foundation area. This volume considers a 50-cm-thick layer and a 12% swelling factor.

The mining method used in each of the mining areas is open pit, the location of the mineralization and low overburden make this option feasible. The exploitation of the deposits (Victoria Norte, Victoria Sur, Luna, Alexandra and Maite) is planned sequentially mainly due to predefined environmental compromises. The mining operation is defined with contractors after a trade-off analysis previously carried out.

Geotechnical Considerations
In general, the residual soil where the Mining Zones will be located is composed of rock and soil units. Geometallurgical units with the following geological characteristics have been defined in this regolith:

UG_GG - D (undisturbed bedrock): granitoid parent rock with altered garnet, below the regolith boundary. At this horizon level, it is possible to recover REE with cation exchange by crushing the rock.

UG_GG - C2 (transition zone): corresponds to the upper part of the bedrock of the saprolite/saprock boundary up to a depth of 45 m, formed in the granitoid with garnet. The constant concentrations in this unit indicate that the REE are enriched by weathering of the primary resource and not by leaching of the saprolite. Clay minerals such as illite-di, vermiculite and kaolinite range from 4- 14%, 10-30% and 18-60%, respectively.

UG_GG - C1 (semi-weathered zone): located between 10 and 35 m from the transition horizon, it corresponds to the bottom part of the saprolite. Anomalous REE concentrations are associated with illite-di and vermiculite with decreasing values (14-7% and 15-8%, respectively), while kaolinite shows opposite values (from 52 to 78%). It is very likely that these concentrations are the product of weathering of the primary resource, but without secondary enrichment.

UG_GG - B2 (fully degraded / enriched zone): corresponds to the middle part of the garnet, granitoid - saprolite zone, varies from 4 to 30 m in depth and represents most of the resources. This horizon has a strong REE enrichment.

UG_GG - B1 (fully weathered zone): It corresponds to the first 4-10 m of the upper part of the granitoid / saprolite zone with fully eroded garnet. Clayey minerals such as illite-di and vermiculite also show positive values, while kaolinite decreases.

UG_GG - A: Corresponds to the pedolith, which includes the iron-rich zone and topsoil.

Pit Optimization
There are limitations to consider in optimizing Project Mineral Resources. These correspond to areas that cannot be affected by mining and become restricted areas for mining operations that must be respected during mining.

The areas that cannot be affected correspond to the Penco Estuary and the Preservation Forest, areas for which a safety distance of 30 meters has been defined to limit mining in the sectors close to the aforementioned areas. Also, for La Ruta Itata it was considered a safety distance of 100 m. As regards the surface area to be considered for mining and the infrastructure to be considered in the implementation of the project, this corresponds to the boundary of the Project's surface property; a margin of 30 meters has been defined with respect to the polygon that encloses the Project's boundary.

It should be noted that the Luna sector does not belong to the polygon that delimits the acceptance area, however, it is incorporated in the Project optimization.

The determination of the final pit and the mining sequence was based on the Lerchs & Grossman algorithm incorporated in the pit optimization module of the Whittle Software. This software performs an economic evaluation of the blocks based on the Mineral Resources contained in each one of them, considering the costs downstream of the mine. Subsequently, an optimization is carried out to analyze the economic contribution of extracting a mineralized block paying for the waste material located on it. This analysis is performed in all directions, based on a previously indicated slope angle and a series of factors that are applied to the NSR of each block and that end up simulating a series of prices.

Overview
The rare earth carbonate production process was designed based on the results obtained in the tests developed by the Universities of Concepcion and Toronto, in addition to the Chapi batch tests.

The Project considers an average production of 1,275 t/a (dry basis) of carbonate of earth rare, where the raw material is an ionic clay mineral containing various lanthanides whose feed to the process is at a rate of 240 wet t per hour.

The mineral in a first stage is selected wet to a defined granulometry <1mm. This mineral under 1 mm is leached with an acidic ammonium sulfate solution (pH =3.0 – 4.0) through a countercurrent process. The leaching solution is not selective, in addition to extracting rare earths, it leaches a series of polluting elements.

This solution enriched with rare earths and pollutants is subsequently treated to precipitate, by chemical reaction, the pollutants, mainly aluminum and iron, by means of an acidic solution of am ........