Aclara Resources Inc. — Capital/Financing Update 2021

Nov 18, 2021

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Aclara Resources Inc. Initial Public Offering of Common Shares

Term Sheet

November 17, 2021

An amended & restated preliminary prospectus dated November 17, 2021 (the “preliminary prospectus”), containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada, other than the Province of Quebec. A copy of the preliminary prospectus, and any amendment, is required to be delivered with this document. The preliminary prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus, and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise . The offering of these securities shall only be completed in those jurisdictions where they may be lawfully offered for sale and, in such jurisdictions, only by persons permitted to sell such securities. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the " U.S. Securities Act "), or any state securities laws and may not be offered, sold or delivered in the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. The prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States. Capitalized terms used but not otherwise defined herein shall have the respective meaning ascribed thereto in the preliminary prospectus. All references to “$” or “dollars” in this document are to Canadian dollars, unless indicated otherwise.

Issuer:	Aclara Resources Inc. (“Aclara” or the “Company”).
Offering:	Initial public offering of ~29.8 million to ~35.0 million common shares (“the “Common
	Shares”), in the capital of the Company (~34.2 million Shares to ~40.3 million if the Over-
	Allotment Option (as defined below) is exercised in full).
Offering Price:	$1.70 - $2.00 per Share.
Offering Size:	Approximately $59.5 million (approximately $68.4 million if the Over-Allotment Option is
	exercised in full).
Over-Allotment	The Company has granted the Underwriters an option (the “Over-Allotment Option”),
Option:	exercisable in whole or in part, at any time, at the sole discretion of the Underwriters, to
	purchase from the Company at the Offering Price, up to an additional number of Common
	Shares equal to 15% of the aggregate number of Shares purchased under the Offering
	for a period of 30 days from and including the Closing Date to cover over-allotments, if
	any, and for market stabilization purposes.
Concurrent	Concurrently with the Offering, in order to maintain their respective pro-rata equity
Private	ownership in the Company on completion of the Offering, each of, Hochschild Mining
Placement:	PLC (“Hochschild”), and Pelham Investment Corporation (“Pelham”), a company
	controlled by Eduardo Hochschild (collectively the “Principal Shareholders”) have
	severally agreed (approximately in proportion to their respective existing ownership in the
	Company) to purchase from the Company, on a private placement basis an aggregate of
	~32.8 million to ~38.6 million Common Shares, for aggregate gross proceeds to the
	Company of ~$65.7 million (assuming no exercise of the Over-Allotment Option).The
	Company has also granted each of the Principal Shareholders the right, but not the
	obligation, to subscribe for an additional ~4.6 million to ~5.4 million Common Shares for
	a period of 30 days from and including the Closing Date, if and only to the extent the
	Underwriters exercise the Over-Allotment Option, in whole or in part. The Concurrent
	Private Placement Option will be exercisable up to the same proportionate size, and at
	the Offering Price, as the exercise of the Over-Allotment Option by the Underwriters.
Use of Proceeds:	Aggregate net proceeds to be received by Aclara from the Offering and the Concurrent
	Private Placement are estimated to be ~$115.6 million (~$124.0 million if the Over-
	Allotment Option is exercised in full and ~$132.8 million if the Over-Allotment Option and
	the Concurrent Private Placement are exercised in full). Aclara expects to use the
	estimated net proceeds from the Offering and the Concurrent Private Placement to
	advance the exploration and development of the Penco Module, for exploration of
	potential new modules, and for working capital and general corporate purposes.

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Aclara Resources Inc. Initial Public Offering of Common Shares

Demerger	In October 2019, Hochschild Mining acquired 100% of the Penco Module. In connection
Transactions:	with and prior to completion of the Offering, Hochschild Mining will undertake certain
	steps to demerge Shares representing 80% of the entire issued share capital of the
	Company.
	On completion of the Demeger Transactions and the Offering, Aclara, including its
	subsidiary, REE Uno, will be separated from Hochschild Mining, by way of dividend in
	specie, which will result in two separately listed companies, each with its own distinct
	investment prospects.
Shares	Upon completion of the Offering, an aggregate of ~150.9 million to ~161.9 million
Outstanding:	Common Shares (~155.3 million to ~167.1 million Common Shares if the Over-Allotment
	Option is exercised in full, and ~159.9 million to ~172.5 million Common Shares if the
	Over-Allotment Option and the Concurrent Private Placement is exercised in full) will be
	issued and outstanding.
Principal	Upon completion of the Demerger Transactions, the Concurrent Private Placement and
Shareholder:	the Offering, assuming no exercise of the Over-Allotment Option, Hochschild and
	Pelham, will directly or indirectly, own or control ~20.0% and ~30.7%, respectively, of the
	issued and outstanding Common Shares, and collectively own or control ~50.7% of the
	issued and outstanding Common Shares (~19.4% and ~29.7%, respectively, and
	collectively ~49.1% if the Over-Allotment Option is exercised in full and ~20.0% and
	~30.7%, respectively, and collectively ~50.7% if the Over-Allotment Option and the
	Private Placement Option are exercised in full).
Lock-up	In connection with the completion of the Offering, each of the directors, officers and other
Arrangements:	insiders of the Company, will be subject to lock-up arrangements for a period of 180 days
	from the Closing Date. In addition, the Principal Shareholders (as described above) have
	agreed not to sell any Shares held by them on Closing and Closing of the Concurrent
	Private Placement, for a period of 12 months after the Closing Date.
Listing:	The Company has applied to have the Shares listed on the Toronto Stock Exchange (the
	‘‘TSX’’) under the trading symbol “ARA”. Listing is subject to the approval of the TSX in
	accordance with its original listing requirements. The TSX has not conditionally approved
	the listing of the Shares and there is no assurance that the TSX will approve the
	Company’s listing application.
Eligibility for	Eligible for RRSPs, RRIFs, RDSPs, deferred profit sharing plans, RESPs and TFSAs.
Investment:
Form of Offering:	Initial public offering under a long-form prospectus filed in all provinces and territories of
	Canada, other than the Province of Quebec. Private placement in the U.S. to “qualified
	institutional buyers” pursuant to Rule 144A of the U.S. Securities Act and internationally
	as permitted by law.
Joint	RBC Capital Markets and Canaccord Genuity Corp.
Bookrunners:
Underwriting Fee:	The Company has agreed to pay the Underwriters a cash commission equal to 6.0% on
	the gross proceeds of the Offering. The Underwriters Fee shall be reduced to 3.5% on
	the gross proceeds of the Concurrent Private Placement to the Principal Shareholders.
Pricing Date:	Expected the week of November 29, 2021
Closing Date:	Expected the week of December 6, 2021 (the “Closing Date”)

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Aclara Resources Inc. Initial Public Offering of Common Shares

There is currently no market through which the Common Shares may be sold and purchasers may not be able to resell Common Shares purchased under the prospectus. This may affect the pricing of the Common Shares in the secondary market, the transparency and availability of trading prices, the liquidity of the Common Shares and the extent of issuer regulation.

An investment in the Common Shares should be considered highly speculative and involves a high degree of risk. There is no guarantee that an investment in the Company will earn any positive return in the short or long-term. An investment in the Company is appropriate only for investors who have the capacity to absorb a loss of all of their investment. There are certain risk factors associated with an investment in the Common Shares. In reviewing the prospectus and in connection with an investment in the Company, a prospective investor should carefully consider the risk factors and other matters described under the heading “ Risk Factors ” and ” Forward-Looking Information ” in the prospectus.

Prospective investors should rely only on the information contained in the prospectus. The Company and the Underwriters have not authorized anyone to provide investors with information different from that contained in the prospectus. The Underwriters are offering to sell and seeking offers to buy the Common Shares only in jurisdictions where, and to persons whom, offers and sales are lawfully permitted. Investors should not assume that the information contained in the prospectus is accurate as of any date other than the date of the prospectus.

Prospective investors are advised to consult their own legal counsel and other professional advisors in order to assess income tax, legal and other aspects of this investment based upon their own personal circumstances.