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Significantly Upgraded Round Top Preliminary Economic Assessment

$1.56 Billion NPV, 70% IRR, 1.4 Year Payback

August 20, 2019

Texas Mineral Resources Corp. (TMRC), an exploration company targeting the heavy rare earths and a variety of other technology metals and industrial minerals, and USA Rare Earth, LLC, its funding and development partner, are pleased to announce highlights of the expanded and updated NI 43-101 Preliminary Economic Assessment (PEA) on the Round Top Project in Sierra Blanca, Texas. The full version of the updated PEA, completed by Gustavson Associates of Lakewood, Colorado, is posted on the TMRC website (

Highlights of the PEA Include:

Net Present Value (NPV): $1.56 Billion at a 10% discount rate, pre-tax.

Internal Rate of Return (IRR): 70%.

Payback Period: 1.4 years

Capital Cost: $350.4 Million, including a complete on-site rare earth oxide (REO) and mineral separation plant, and a 25% contingency provision of $65.7 Million

Current Spot Market Pricing Assumptions: Yields 70% IRR.

Mining Rate: 20,000 tonnes per day (TPD).

All mineral processing at site: Deployment of conventional ion exchange and ion chromatography (CIX/CIC) technology to generate high purity individual rare earth oxides at the site as well as technology metals and industrial minerals.

REO Production: Averaging 2,212 tonnes per year (TPY) total, including approximately 174 TPY of Neodymium (Nd) and 65 TPY of Praseodymium (Pr).

New Lithium Resource: Estimated 8,956 TPY lithium carbonate production

Heap Leach Processing Technology: Proven conventional technology utilizing leach pads built to Texas Environmental Standards.

Economic Mine Life: 20 years, based on mining only 14% of the existing Mineral Resource Estimate, implying overall potential mine life of 140 years.

Direct Employment: 179 employees.

Ease of Shipping Access: Only 3 miles north of Interstate Highway 10 and within 3 miles of a major railroad. 85 miles southeast of El Paso, Texas.

Located on State Property: 6.25% Net Smelter Royalty (NSR) owed to Texas General Land Office (GLO).

“The completion of this expanded PEA is a key milestone in our mission to establish Round Top as not only a robust and reliable provider of the full range of rare earths, but also a supplier of critical tech metals and industrial minerals from the same deposit,” said Dan Gorski, President and CEO of TMRC. “We believe that the new PEA confirms our vision that a low-cost open pit heap leach operation is as applicable to Round Top’s unique mineralogy in the rare earths and tech metals sectors as it has been to gold and copper operations. As a result of its unique geology and mineralogy, the Round Top deposit should be ideally suited for high volume, low cost surface mining and heap leaching. This combined with the essentially zero stripping ratio, the availability of nearby flat and even topography for leach fields and the presence of nearby rail facilities, power and water, creates an operational and logistical opportunity. Given that we’ve expanded this PEA to assess not only Round Top’s rare earths, but the deposit’s projected production of lithium, uranium, beryllium, gallium, hafnium and zirconium – all of which are on the U.S. Government’s Critical Minerals List – we’re pleased that it appears we can recover such a wide range of critical minerals with an overall estimated CapEx of only $350 million.”

“This updated and expanded PEA not only confirms potential robust economics and an optimistic outlook for the Round Top project, but also could provide the United States and its allies a means for fulfilling their stated goal of providing a long-term source of critical materials required for defense applications and advanced technology manufacturing capabilities, without the sole reliance on China to provide these materials,” said Pini Althaus, Chief Executive Officer of USA Rare Earth. “The tech metals at Round Top, including lithium, also provide a domestic option for the electrical vehicl

e sector and clean technology and energy storage applications.”

Overview of the Round Top Project and PEA

The PEA has been completed based on the Measured, Indicated and Inferred Resource Estimate Technical Report originally filed on June 22, 2012 by Texas Rare Earth Resources and updated with the publication of this PEA. The resource was estimated by Gustavson Associates of Lakewood, Colorado. The resource incorporated into the current mine plan totals 364,000 measured and indicated tonnes and an additional 735,000 inferred tonnes of a combination of rare earth minerals, technology metals and industrial minerals.

Initial capital costs include all costs required to bring the facility to production, including full processing facilities. The ongoing life of mine sustaining capital costs are estimated to be $252M over the initial 20-year mine life.

Mineral Pricing and Marketing Considerations

In developing rare earth pricing assumptions, Texas Mineral Resources utilized currently available spot prices of rare earth oxides, tech metals and industrial minerals derived from Asian Metal Pages July 2019 prices, Alibaba June 2019 prices and industry communication. Certain rare earth oxides, although produced, will not be marketed for sale due to poor market conditions and are NOT included in the economics of the PEA. Instead they will be warehoused until such time as market conditions improve.

In summary, “we are encouraged by the results of the updated PEA and plan to move aggressively forward to complete a pre-feasibility study followed shortly thereafter by a bankable feasibility study. At current mineral pricing the Round Top project continues to demonstrate favorable economics. The revised PEA significantly diversifies TMRC’s expected revenue stream and maintains strong potential profitability while lessening the dependence on any single stream to achieve project success,” commented Anthony Marchese, chairman. “We should have the ability to satisfy the urgent need in the U.S. to establish a rare earth supply chain, provide an inroad into supplying technology metals into the electric vehicle and green energy market and utilize Round Top’s proximity to rail and road transport to supply industrial minerals into the domestic U.S. market. Given the projected 100+ year mine life, Round Top has the unique potential to serve as a reliable long-term partner to both the U.S. government and multiple essential industries.”

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