Mr. James Walker reports

ARES STRATEGIC MINING LOCATES THE GERMANIUM AND GALLIUM MINERALS AT THE CENTRE OF THE US-CHINA TRADE DISPUTE AT ITS UTAH FLUORSPAR PROJECT

Ares Strategic Mining Inc. has detected germanium and gallium in its fluorspar, following assaying conducted by SGS. Both minerals play a crucial role in developing and sustaining the tech industry. China was the principal source of the United States' germanium and gallium, but both minerals have now been restricted from export.

• Ares tests previous assays from its Utah fluorspar project and finds the rare earth minerals: germanium and gallium.
• China is restricting exports of two niche metals -- germanium and gallium -- that are key to manufacture electronics and semiconductors, as the tech battle with the United States and Europe heats up.
• China produces 60 per cent of the world's germanium and 80 per cent of gallium, according to the Critical Raw Materials Alliance.

Ares located germanium and gallium in its fluorspar located at the Spor Mountain at its Utah fluorspar project. The company is concentrating its efforts currently on building processing facilities to achieve production at its operation but plans to further explore the rare-earth discovery when it conducts further drilling. The minerals were located through an RC drilling program, and further work using core drilling with be used to develop a better understanding of the rare earths located at the Spor Mountain project.

China is restricting exports of two niche metals that are key to manufacture electronics and semiconductors, as the tech battle with the U.S. and Europe heats up. Germanium and gallium are the two metals in the spotlight. China and the U.S. have been locked in a technology trade war that has been escalating since 2019. The U.S. has used trade blacklists and sweeping export restrictions to cut China off from key technology components and semiconductors or chips, and China has responded with restricting exports of germanium and gallium.

About gallium

Gallium is found in trace amounts in zinc ores and in bauxite, and gallium metal is produced when processing bauxite to make aluminium. Around 80 per cent is produced in China, according to the CRMA.

Gallium is used to make gallium arsenide for use in electronics. China exported 94 metric tons of gallium in 2022, up 25 per cent on the prior year, according to Chinese customs. U.S. imports of gallium metal and gallium arsenide (GaAs) wafers in 2022 were worth about $3-million and $200-million, respectively, according to USGS.

About germanium

Germanium ores are rare and most germanium is a byproduct of zinc production and from coal fly ash. China produces around 60 per cent of the world's germanium, according to European industry association Critical Raw Materials Alliance (CRMA), with the rest coming from Canada, Finland, Russia and the United States. China exported 43.7 metric tons of unwrought and wrought germanium last year, according to Chinese customs. Roughly $39-million worth of germanium was consumed last year, up 10 per cent from 2021, according to the U.S. Geological Survey (USGS).

James Walker, chief executive officer and president of the company, said: "It's an extremely interesting find to locate both germanium and gallium at our fluorspar project, right at the time when the trade war is promising to interfere with the supply of minerals vital to the production of microchips and electronics needed to sustain the tech industry. We are currently building our production facility in Utah, and upgrades could be incorporated into the operation to retrieve the minerals, provided further investigation justifies the expanded recovery operation. As we continue our construction work, we will investigate this discovery, examining the possibility of commercialization."

In 2018 the U.S. government classified fluorspar as a critical mineral "deemed critical to U.S. national security and the economy." Fluorspar remains the only non-metallic critical mineral, which is 100-per-cent imported in the entire country. Fluorspar's classification as a critical mineral in the United States translates to a faster permitting period, enabling mining operations to initiate more quickly than operations for conventional minerals.

Lost Sheep fluorspar project -- Delta, Utah

• 100 per cent owned -- 5,982 acres -- 353 claims;
• Located in the Spor Mountain area, Juab county, Utah, approximately 214 kilometres southwest of Salt Lake City;
• Fully permitted -- including mining permits;
• National Instrument 43-101 technical report identified extensive high-grade fluorspar with low levels of impurities;
• Mining plan approved by Bureau of Land Management.

First approved by Rex Rowley -- area manager, Bureau of Land Management -- Aug. 24, 1992.

Renewed by Mike Gates -- minerals program manager, Bureau of Land Management -- Dec. 12, 2016.

We seek Safe Harbor.