ARSMF - Ares Strategic Mining Completes Conceptual Mine Planning

(TheNewswire)

• - Independent analysis concludes the project is highly financiallyattractive based on existing parameters.

  - Ares completes operation roadmap, from mining to finished product,identifying all required equipment and personnel.

  - Optimized mining methods designed to reduce total OPEX.

  - Low CAPEX requirements for a mining operation.

  - Significant expansion plans built into the Company’s operation.

  - Large inventory of targets identified.

Vancouver, B.C. March 8th, 2021 — Ares Strategic Mining Inc.(“Ares” or the “Company”) (TSXV:ARS) (OTC:ARSMF) (FRA:N8I1),is pleased to announce, the Company has completed its conceptual mineand operating plan, incorporating: mining and processing engineering,logistics, metallurgy, plant designs, site layouts, labor andcontractor considerations, haulage, reclamation, CAPEX AND OPEX,permitting, mining techniques, drilling and geophysics, productionexpansion plans, financial projections, market analysis, mineralogy,land acquisitions, and production products.

Project conceptual Capital and Operating cost analyses were generatedbased on economic and marketing parameters. The Project analysisresults determined the project is financially attractive based on theproject’s CAPEX and OPEX, fluorspar pricing, operating parameters,market factors, and assumptions. A summary of the conceptual projectproduction is presented in Figure 1.

Figure 1 - Conceptual Production Schedule

The Operation

The underground mine operating plan will employ sublevel longholemethods as the main mining method. Initial underground mining will beundertaken by a mining contractor, with the Company assuming totakeover mining work once the operation and processing is developedand optimized.

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Figure 2 – Adit Designs for Deeper Deposits

Fluorspar material mined from the pipes will betransported from the mine site by conventional highway haulage trucksto the processing facility located at the city of Delta, where processwater and other utilities are readily available. The process plantdesign capacity is 500 tpd. The process plant will produce twoproducts: a medium-purity 90% grade fluorite (CaF 2 ) met-spar product forpyro-metallurgical applications, and ahigh-purity 97% grade fluorite (CaF 2 ) acid-spar product for acid process applications and thealuminum industry.  Process plant fluorspar recovery is scheduled tobe minimum of 80%. The process plant will consist of:

1. 1) A crushing circuit consistsof jaw and cone crushing processes, following by a ball mill grindingcircuit

2. 2) Multi-stage high-intensityconditioning

3. 3) Rougher and cleaner flotationcircuits with a regrind circuit to increase Fluorsparrecovery

The met-spar products will be dewatered and dried forpackaging to meet consumers requirements.  The final fluorsparproducts will be shipped to the consumers by either rail or truck fromthe Delta process plant. The tailings will be thickened, filtered, anddried for transportation back to the mine site to be deposited in themined-out fluorspar pipes to mitigate tailings surface storage.

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Figure 3 – Processing Plant Facility

Metallurgical test work was undertaken to determine theoptimum process plant flowsheet and to produce met-spar and acid-sparspecific products. Concentrate multi element analysis determined theconcentrate produced was very clean and free of deleteriouscontaminants.

Ares’ fluorspar operation is expected to directlyemploy 58 people, not including contractors. All projected costsincorporate labour and employee costs as determined by industrystandards and averages.

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Figure 4 – Industrial Site Processing Operation

Ongoing exploration costs are estimated at /yr to replace themined Fluorspar.  Over 100 targets have been identified at surface(see Figure 5), with the Bell Hill Claims at the south of the SporMountain currently identified as the likely candidate for theCompany’s second mining operation site. Exploration on the Bell Hillclaims is scheduled to begin in April 2021. The Company has alreadyobtained exploration permits.

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Figure 5 – Fluorspar Pipe Inventory

A sustaining CAPEX cost allowance has been included in the cashflow tocover the ongoing project improvements and to reduce the operatingcosts. Expected CAPEX is demonstrated in Figure 6. The operating costestimate for the mining operation is presented in Figure 7.

Figure 6 – CAPEX Costs

Figure 7 – OPEX Costs

Operating costs were developed based on:

• - Estimated labour requirements for an effective plantoperation;

  - Power and fuel from equipment power rating andestimated machinery usage;

  - Reagent consumption rates;

  - Wear, maintenance, and other consumables; and

  - Support equipment usage values.

Labour rates for the facility were taken from similar industry sectorplants in North America, with burden rates based on communicationswith a recruitment firm in Colorado. Electrical power rates, fuelcosts and water rates were supplied by the specific utility providerfor each service. Crushing and grinding consumables are based on thework-index of the feed material. Reagent consumptions are calculateddirectly from the best laboratory results, with unit costs provided bychemical suppliers. Natural gas consumption is computed from thedrying requirements for both tails and product. Maintenance and otherconsumables are scaled from process plant equipment costs andmaintenance labour, respectively. Support equipment requirements andannualized costs are best estimates based on facilities of this sizeand scope. Mining costs were developed on known industry standards forunderground contractors providing similar commercial services.

Expansion

If exploration drilling proves successful, it would be possible toexpand the process plant capacity. A secondary production circuit,which would be a mirror image of the primary production circuit, canbe installed, resulting in a 100% fluorspar production increase.Financial analysis indicates that if the expansion is scheduled inproduction year five, the resultant Project revenue is expected toincrease from US$40M/yr to US$80M/yr from year five thereafter.  Fora 10-year LOM, the after-tax IRR is estimated to increase to 104% andthe after tax NPV at an 8% discount rate is estimated to increase toUS$85M. The Company is also currently negotiating for 60 acres ofindustrial land in Utah for its expansion projects.

James Walker, President and CEO stated: “Completing the conceptualmine plan is the largest step the Company has taken towards itsproduction goals. We now have a roadmap considering every crucialcomponent necessary to expand the existing mine into one of theworld’s notable global fluorspar producers, as well as the onlyproducer in the United States. In tandem with these plans the Companywill launch its metallurgical lumps operation to achieve earlyoperation and revenue. The Company has enormous support from bothgovernment – due to its Critical Mineral status – and privatefinancial institutions, as well as huge interest in its products fromindustry, both domestic and international.”

In 2018 the U.S. government classified fluorspar as a CriticalMineral, “deemed critical to U.S. national security and theeconomy”. Fluorspar remains the only non-metallic Critical Mineralwhich is 100% imported in the entire country. Fluorspar’sclassification as a Critical Mineral in the United States translatesto a faster permitting period, enabling mining operations to initiatemore quickly than operations for conventional minerals.

Raul Sanabria, P.Geo., is a qualified person as definedby NI 43-101 and has reviewed and approved the technical contents ofthis news release.  Mr. Sanabria is not independent to theCompany as he is a Director and shareholder.

Disclosure: Companies typically rely on comprehensive feasibilityreports on mineral reserve estimates to reduce the risks anduncertainties associated with a production decision. Some industrialmineral ventures are relatively simple operations with low levels ofinvestment and risk, where the operating entity has determined that aformal prefeasibility or feasibility study in conformance with NI43-101 and 43-101 CP is not required for a production decision. TheCompany has not completed a feasibility study on, nor has the Companycompleted a mineral reserve or resource estimate at the Lost SheepMine and as such the financial and technical viability of the projectis at higher risk than if this work had been completed. Based onhistorical engineering work, geological reports, historical productiondata and current engineering work completed or in the process by Ares,the Company intends to move forward with the development of thisasset. The Company further cautions that it is not basing anyproduction decision on a feasibility study of mineral reservesdemonstrating economic and technical viability, and therefore there isa much greater risk of failure associated with its productiondecision. In addition, readers are cautioned that inferred mineralresources are considered too speculative geologically to have economicconsiderations applied to them that would enable them to becategorized as mineral reserves. The development of a mining operationtypically involves large capital expenditures and a high degree ofrisk and uncertainty. To reduce this risk and uncertainty, the issuertypically makes its production decision based on a comprehensivefeasibility study of established mineral reserves. The Company hasdecided to proceed without established mineral reserves, basingdecision on past production and internal projections.

Lost Sheep Fluorspar Project – Delta, Utah

• - 100% owned – 2,100 acres – 108 Claims

  - Located in the Spor Mountain area, Juab County, Utah, approximately214 km south-west of Salt Lake City.

  - Fully Permitted – including mining permits.

  - NI 43-101 Technical Report identified extensive high-grade fluorsparwith low levels of impurities.

  - Mining plan approved by BLM 1

First approved by Rex Rowley – Area Manager, Bureauof Land Management – 24th August 1992.

Renewed by Paul B. Baker – Minerals ProgramManager, Bureau of Land Management – 12th December 2016.

ON BEHALF OF THE BOARD OF DIRECTORS OF

ARES STRATEGIC MINING INC.

James Walker
Chief Executive Officer and President

For further information, please contact Mark Bolin byphone at 604-781-0535 or by email at mbolin@aresmining.com

Neither the TSX Venture Exchange norits Regulation Service Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release. No stock exchange, securitiescommission or other regulatory authority has approved or disapprovedthe information contained herein.

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