Ucore's Louisiana Rare Earth Refinery is Strategically Aligned with the United States' Objectives on Western Supply Chain Resilience

Rhea-AI Summary

Ucore Rare Metals announced that its Louisiana Rare Earth Refinery aligns strategically with US government efforts to bolster the American electric vehicle (EV) market. On May 14, 2024, the White House introduced a 100% tariff on EV imports from China and a new 25% tariff on permanent magnets, critical for EV motors, primarily controlled by China. Ucore's Alexandria, Louisiana facility aims to process up to six different sources of US-friendly feedstock, enhancing supply chain resilience. The facility plans to escalate production from 2,000 tonnes to 7,500 tonnes per annum. This development supports the US objective of reducing dependency on Chinese imports and fostering a robust domestic supply chain.

Positive

• Introduction of a 100% tariff on Chinese EV imports, protecting US manufacturers.
• New 25% tariff on permanent magnets, essential for EV motors, reducing reliance on China.
• Ucore's Louisiana facility can process up to six different US-friendly feedstock sources.
• Facility will support heavy and light rare earth element (REE) separation, important for resilience.
• Planned production increase from 2,000 tonnes to 7,500 tonnes per annum.
• Facility's development aligns with US government objectives to enhance supply chain resilience.

Negative

• Increased tariffs could lead to higher costs for US consumers and businesses.
• Dependence on new supply chains may introduce initial logistical challenges.
• Any delays in the facility's development could impact projected production targets.
• Potential geopolitical tensions may affect the stability of US-friendly feedstock sources.

Halifax, Nova Scotia--(Newsfile Corp. - May 15, 2024) - Ucore Rare Metals Inc. (TSXV: UCU) (OTCQX: UURAF) ("Ucore" or the "Company") is pleased to comment on the US Government's announcement to strengthen the developing American electric vehicle ("EV") market through increased tariffs on imports from the People's Republic of China ("PRC") to protect American workers and businesses. On May 14, 2024, the White House announced:

"With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China's exports of EVs grew by 70% from 2022 to 2023-jeopardizing productive investments elsewhere. A 100% tariff rate on EVs will protect American manufacturers from China's unfair trade practices."

Simultaneously, the US Trade Representative issued a statement on Section 301 tariffs recommending a series of steps to eliminate the PRC's unfair trade practices, which include:

"… (4) continuing to assess approaches to support diversification of supply chains to enhance our own supply chain resilience."

and a new 25% tariff on permanent magnets^[1].

Permanent magnets are the essential component inputs for EV motors that are currently 90% plus controlled by China. Therefore, these government EV policy developments strategically align with Ucore's heavy and light rare earth element ("REE") separation facility, which is advancing in Alexandria, Louisiana. At total nameplate capacity, the Louisiana Strategic Metals Complex ("SMC") is designed to simultaneously process up to six different sources of US-friendly feedstock from all corners of the Western world. This diverse supply chain, coupled with Ucore's focus on both heavy and light REEs, will help ensure Ucore's resiliency from any single geopolitical or natural instability as the nascent North American rare earth market takes root over the remainder of the decade.

Mike Schrider, P.E., Vice President and Chief Operating Officer of Ucore, stated: "As US tariffs are implemented to level the commercial playing field by the US, our strategic ability to supply and support OEM EV manufacturers by processing heavy and light feedstock from a multitude of different Western sources essential to permanent magnet manufacturing, gives us the flexibility to grow and prosper at our Louisiana SMC. We expect this to be of significant benefit as we increase production from 2,000 tonnes per annum to our planned total nameplate production of 7,500 tonnes per annum^[2] over our first few years of production and subsequently expand our footprint across North America."

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About Ucore Rare Metals Inc.

Ucore is focused on rare- and critical-metal resources, extraction, beneficiation, and separation technologies with the potential for production, growth, and scalability. Ucore's vision and plan is to become a leading advanced technology company, providing best-in-class metal separation products and services to the mining and mineral extraction industry.

Through strategic partnerships, this plan includes disrupting the People's Republic of China's control of the North American REE supply chain through the near-term establishment of a heavy and light rare-earth processing facility in the U.S. State of Louisiana, subsequent Strategic Metal Complexes in Canada and Alaska and the longer-term development of Ucore's 100% controlled Bokan-Dotson Ridge Rare Heavy REE Project on Prince of Wales Island in Southeast Alaska, USA.

Ucore is listed on the TSXV under the trading symbol "UCU" and in the United States on the OTC Markets' OTCQX® Best Market under the ticker symbol "UURAF."

For further information, please visit www.ucore.com.

Forward-Looking Statements

This press release includes certain statements that may be deemed "forward-looking statements." All statements in this release (other than statements of historical facts) that address future business development, technological development and/or acquisition activities (including any related required financings), timelines, events, or developments that the Company is pursuing are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance or results, and actual results or developments may differ materially from those in forward-looking statements.

Regarding any disclosure in the press release above about the US Department of Defense or the Government of Canada Programs and the expected successful progress and resulting milestone payments from these Programs, the Company has assumed that the Programs (including each of their milestones) will be completed satisfactorily. For additional risks and uncertainties regarding the Company, the CDF, the Demo Plant and ongoing Programs (generally), see the risk disclosure in the Company's MD&A for Q3-2023 (filed on SEDAR on November 20, 2023) (www.sedarplus.ca) as well as the risks described below.

Regarding the disclosure above in the "About Ucore Rare Metals Inc." section, the Company has assumed that it will be able to procure or retain additional partners and/or suppliers, in addition to Innovation Metals Corp. ("IMC"), as suppliers for Ucore's expected future Strategic Metals Complexes ("SMCs"). Ucore has also assumed that sufficient external funding will be found to complete the Demo Plant demonstration schedule and also later prepare a new National Instrument 43-101 ("NI 43-101") technical report that demonstrates that the Bokan Mountain Rare Earth Element project ("Bokan") is feasible and economically viable for the production of both REE and co-product metals and the then prevailing market prices based upon assumed customer offtake agreements. Ucore has also assumed that sufficient external funding will be secured to continue the development of the specific engineering plans for the SMCs and their construction. Factors that could cause actual results to differ materially from those in forward-looking statements include, without limitation: IMC failing to protect its intellectual property rights in RapidSX™; RapidSX™ failing to demonstrate commercial viability in large commercial-scale applications; Ucore not being able to procure additional key partners or suppliers for the SMCs; Ucore not being able to raise sufficient funds to fund the specific design and construction of the SMCs and/or the continued development of RapidSX™; adverse capital-market conditions; unexpected due-diligence findings; the emergence of alternative superior metallurgy and metal-separation technologies; the inability of Ucore and/or IMC to retain its key staff members; a change in the legislation in Louisiana or Alaska and/or in the support expressed by the Alaska Industrial Development and Export Authority ("AIDEA") regarding the development of Bokan; the availability and procurement of any required interim and/or long-term financing that may be required; and general economic, market or business conditions.

Neither the TSXV nor its Regulation Services Provider (as that term is defined by the TSXV) accept responsibility for the adequacy or accuracy of this release.

CONTACTS

Mr. Michael Schrider, P.E., Ucore Vice President and Chief Operating Officer, is responsible for the content of this news release and may be contacted at 1.902.482.5214.

For additional information, please contact:

Mark MacDonald
Vice President, Investor Relations
Ucore Rare Metals Inc.
1.902.482.5214
mark@ucore.com

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^[1] Many permanent magnets contain the rare earth elements praseodymium, neodymium, terbium, and dysprosium - the core planned rare earth oxide products of the Louisiana SMC.

^[2] Excluding cerium and yttrium.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209252

FAQ

What is Ucore's Louisiana facility's strategic alignment with US objectives?

Ucore's Louisiana Rare Earth Refinery aligns with US efforts to enhance supply chain resilience by reducing dependency on Chinese imports and supporting the American EV market.

How will the new US tariffs impact Ucore's business?

The 100% tariff on Chinese EV imports and 25% tariff on permanent magnets are expected to benefit Ucore by reducing competition from China and supporting domestic manufacturing.

What is the planned production increase for Ucore's Louisiana facility?

Ucore plans to increase production from 2,000 tonnes per annum to 7,500 tonnes per annum at its Louisiana facility.

How does Ucore's facility enhance supply chain resilience?

Ucore's Louisiana facility enhances supply chain resilience by processing up to six different US-friendly feedstock sources, reducing dependency on any single geopolitical or natural source.

What are the potential risks associated with Ucore's new facility?

Potential risks include higher costs due to tariffs, logistical challenges with new supply chains, development delays affecting production targets, and geopolitical tensions impacting feedstock sources.