BAKU, Azerbaijan, September 24. Ferro-Alloy
Resources Limited (FAR), a vanadium producer and developer of the
Balasausqandiq vanadium deposit in southern Kazakhstan, has signed
a non-binding memorandum of understanding (MoU) with US rare earths
separation company Maglut Heavy Industries Inc. for the potential
supply of mixed rare earth concentrate (MREC) from Balasausqandiq
ore, the company said.


Under the MoU, FAR could supply Maglut with up to 1,000 tons of
MREC per year as a by-product of vanadium processing at the planned
Balasausqandiq project.


The companies are also evaluating an intermediate project at
FAR's existing operation that could produce up to 100 tons of MREC
per year, subject to confirmation of its economic viability.


The MREC would be recovered from residual leach solutions
generated after vanadium extraction. This could allow FAR to
recover additional value from the same ore stream without changing
the core vanadium processing flowsheet.


Initial test work by Maglut on a Balasausqandiq ore sample
indicated the potential to separate all 16 rare earth elements
(REEs) present in the sample, including yttrium, neodymium,
praseodymium, dysprosium and terbium.


Purities of more than 99% were achieved for the economically
important REEs within two separation stages. The average overall
recovery during the separation process was approximately 91.4%,
while around 90.25% recovery was achieved in a single precipitation
and calcination step to produce rare earth oxides.


FAR said the test work was aimed at assessing the technical
potential of Maglut's separation platform and was not optimized for
Balasausqandiq material. Further test work, process optimization,
engineering and economic evaluation will be required.


Maglut has developed a proprietary chromatography-based platform
for separating and refining high- and ultra-high-purity rare earth
elements, including yttrium, neodymium and dysprosium, for the US
market.


The proposed initial supply term under the MoU is five years
from first production, with options for successive five-year terms.
The MREC specification and pricing mechanism have yet to be agreed,
while all commercial, technical and other terms remain subject to
definitive agreements.


FAR said it is discussing the next phase of test work and
optimization with Maglut and US strategic partners, including
potential financing support for this work and the Balasausqandiq
vanadium project.


The company has also commissioned SRK Consulting (UK) Limited to
update its existing mineral resource estimate for Ore-Body 1 at the
Balasausqandiq deposit. The initial update will include yttrium,
while other REEs could be incorporated later if a limited-scope
assay program currently being conducted by Intertek Minerals proves
successful.







FAR previously said that historical assays had confirmed the
presence of REEs in Balasausqandiq ore. Based on grades from its
2012 drilling campaign, the company estimated the in-situ value of
yttrium alone in Ore-Body 1 at around $3.6 billion over the life of
mine, or approximately $110 per ton of ore treated.


FAR stressed that this figure represents an in-situ value only
and does not account for metallurgical recovery, operating costs or
downstream processing. It should not be considered an estimate of
revenue, cash flow or project value.


FAR CEO Nick Bridgen said the agreement with Maglut could
position Balasausqandiq as a potential source of rare earths supply
outside China.


"Securing reliable, non-Chinese supply of REEs has become a
strategic priority for the United States and its allies. This MoU
with Maglut is an important step in positioning Balasausqandiq as a
potential future contributor to that supply chain, alongside our
core vanadium business.


What makes this opportunity particularly attractive is its
simplicity. The REEs would be recovered from the leach solutions
that our planned vanadium process already generates, offering the
potential for additional value from the same ore stream without
altering the core flowsheet," Bridgen said.


He added that Maglut's initial test work had shown high purities
and strong indicative recoveries, while further work would be
needed to optimize the process and assess its economic
viability.


FAR said the MoU is non-binding and does not guarantee that
definitive agreements will be signed, that the intermediate project
will proceed or that REE production will be achieved.


Listed on both the London Stock Exchange and the Astana
International Exchange, Ferro-Alloy Resources Limited is a
Guernsey-registered company that, through its wholly owned
subsidiaries, holds the rights to explore, develop and exploit the
Balasausqandiq vanadium deposit in the Kyzylorda Region of southern
Kazakhstan.


Balasausqandiq is a two-phase vanadium project with significant
by-products, targeting a planned annual output of 22,400 tonnes of
vanadium pentoxide.