From Mining to Manufacturing: How Ares Strategic Mining (CSE:ARS) is Transforming the Fluorspar Market

The Lost Sheep Mine. Source: Ares Strategic Mining

Ares Strategic Mining (CSE:ARS) has gone through a large and long evolution, transforming from a project-focused mining company to an emerging force in manufacturing fluorspar—a mineral critical to various U.S. industries. Ares, the only permitted fluorspar mine in the U.S., is positioning itself as a domestic solution to growing national and global demand for this essential resource.

The company’s beginnings reflect a targeted approach to projects that could quickly yield revenue without excessive capital investment. Ares found its fluorspar project already operational on a small scale, with artisanal miners bagging fluorspar directly from the ground. This unusual scenario signaled that processing the mineral would require a simpler facility than most large mining operations, reducing both costs and time to production. Over the years, the company has expanded significantly, acquiring a 50-acre site complete with two large manufacturing plants, a rail spur, and the necessary mining equipment. It has evolved from a mere prospect into a fully-fledged mining and manufacturing enterprise with customers actively placing orders for its products.

We spoke with Ares Strategic Mining CEO James Walker about the company’s past, present and future plans:

Can you give us a brief history of ARES Strategic Mining and how it has evolved over the years?

The company began from a desire to locate projects which could be accelerated quickly to production and revenue, while requiring relatively less capital. When the fluorspar project was located it was already licensing and artisanal miners were bagging fluorspar for sale straight from the ground, that’s almost never seen anywhere in mining. This was a clear indication that any processing facility would not need to be as comprehensive as typical large plants, meaning a less expensive and time-consuming path to production. 

Over the recent years, the project has evolved from a prospective project, through geophysics, drilling, LiDAR, and metallurgy, to become a project with a 50-acre industrially zoned site with two owned large manufacturing plants, buildings, its own rail spur, heavy mining equipment all purchased, mineworks and ramps all installed, and customers putting in orders for products. It’s been a profound transformation. 

ARES is known for being the only permitted fluorspar mine in the U.S. Can you explain the significance of fluorspar to American industries?

Fluorspar is one of the most ubiquitously required industrial minerals in industry. It is also a critical mineral, vital to the economic security of the country. Metallurgical grade (metspar) fluorspar constitutes approximately 35–40% of global production, primarily used in steel production as a flux that lowers melting temperatures and aids impurity removal. Metspar is also used in the manufacture of cement and glass industries. Acid grade fluorspar (acidspar), accounting for about 60–65% of production, is essential for aluminum production and hydrofluoric acid manufacturing—the primary source of all fluorochemicals. Lithium-ion batteries (integral to defense technologies like Uninterruptible Power Supply (UPS) modules for C5ISR suites, and the shift to electric vehicles (EVs)), require substantial amounts of fluorspar. Fluorspar is also essential to uranium enrichment, whereby natural uranium (U3O8) is converted into uranium hexafluoride (UF6), a gaseous form of uranium that is suitable for enrichment.

With the transition from mining to manufacturing, what opportunities and challenges do you foresee for ARES in the coming years?

The opportunities are huge. Ares could have involvement in more Department of Defence-related contracts as it would provide a domestic source of a mineral vital to the defense industry, even being part of larger funding and defense programs. This would also be possible under Department of Energy contracts, whereby contracts for major projects have their bids strengthened by having a domestic supply chain over international reliances. 

The challenges will of course come, in the form of sourcing the right people, managing the expansion competently, and shifting focus from building to customer relations, quality control, and export logistics. Either way these are challenges we’re excited to face as we transition to become manufacturing company. 

The Lost Sheep Mine in Utah is a key asset for ARES. Can you tell us more about the project’s progress and its current stage of development?

We have now installed over 700 ft of ramp installation to bring us to the target depth needed to pull out ore. This structure has also been shotcreted, rock bolted, and reinforced by steel. We have bought all the heavy mining equipment needed to mine, and the put in place all necessary permissions and procedures to begin mining. We also have two large plots, a processing site, customers, utilities and buildings. We have made huge progress since we took this project on.

Are there any other mining projects or explorations that ARES is currently focusing on or plans to develop in the future?

We want to turn the company into a large domestic producer and supplier for fluorspar, catering to several major industries. Part of our expansion will involve secondary and tertiary mine sites at our Utah mining site, but there are other prospective fluorspar targets around the United States, which were previous producers, that can be revived and commissioned. We have the knowledge and expertise to revive these former operations and expand the company greatly. 

ARES is on the verge of becoming a manufacturing company. What does this transition mean for the company and its stakeholders?

For our stakeholders and shareholders, this will mean a fundamentally different way investors and markets will view our company, as it will be a manufacturing company instead of an exploration company. This will attract a new type of investor and allow for new types of investment based on production and revenue. For the Company it will mean a shift in priorities, from development to manufacturing, and a shifting focus to optimal output and product quality control. 

How do you see ARES contributing to the growing demand for domestic critical minerals in the U.S.?

Ares has an opportunity to be an intrinsic part of many significant and vital supply chains which support the country, from uranium enrichment for civil and defense programs, to steel for infrastructure, to products for the chemical industry, to components for the transition to electric vehicles. All of these areas are growth industries, and Ares has the opportunity to grow alongside all of these industries as it expands its operations to deliver the products they need. 

What steps is ARES taking to ensure long-term growth and sustainability in its operations?

ARES Strategic Mining is taking several strategic steps to ensure long-term growth and sustainability in its operations, focusing on operational efficiency. One of the key pillars of ARES’s approach is vertical integration, where the company is working to control every aspect of the fluorspar supply chain—from mining to processing. By investing in manufacturing facilities and infrastructure, ARES aims to reduce reliance on external suppliers, streamline its operations, and enhance its ability to meet market demand efficiently. This vertical integration also allows the company to capture more value from its products and maintain better control over production costs, positioning it for sustained growth as demand for fluorspar rises in industries such as defense, energy, and electric vehicles.

ARES is also focusing on strategic partnerships and financing to fuel its growth. The company has secured significant investments, including from institutional investors, which will provide the necessary capital to scale operations and complete essential projects. Moreover, by leveraging initiatives like the Listed Issuer Financing Exemption (LIFE), ARES can access additional funding efficiently, ensuring a steady flow of capital to support expansion and modernization.

Lastly, ARES is deeply committed to market diversification. The company’s fluorspar products cater to a wide range of industries, including steel production, aluminum manufacturing, and the burgeoning electric vehicle and renewable energy sectors. This diversification reduces ARES’s exposure to market volatility in any one sector, ensuring more stable revenue streams over the long term. By continually expanding its customer base and exploring new applications for fluorspar, ARES is positioning itself for sustained growth in both domestic and international markets.

Recently, ARES welcomed an institutional investor as a new equity partner. How will this partnership support the company’s growth strategy?

ARES Strategic Mining’s recent partnership with an institutional investor as a new equity partner is set to significantly bolster the company’s growth strategy. This partnership brings a vital infusion of capital that will support the expansion of ARES’ manufacturing capabilities and further development of its mining infrastructure. With these increased financial resources, the company can enhance its production capacity, acquire additional equipment, and optimize its operations, ensuring it meets the growing demand for fluorspar, especially within the U.S. market. Beyond financial benefits, the involvement of an institutional investor enhances ARES’ credibility in the industry, potentially attracting more investors and opening doors for further strategic partnerships. This backing also aligns with ARES’ long-term goal of vertical integration, allowing the company to manage its entire supply chain, from mining to manufacturing, more efficiently. Ultimately, the institutional partnership provides both the capital and the industry validation necessary to drive ARES’ expansion and solidify its position as a leading domestic supplier of fluorspar.

You recently closed the first tranche of a private placement offering. Can you explain the purpose of this offering and how the funds will be utilized?

ARES’ recent closing of the first tranche of a private placement offering is aimed at raising capital to support its ongoing expansion and operational initiatives, particularly as the company transitions from purely mining to processing and manufacturing high-grade fluorspar products. This capital injection will be instrumental in completing infrastructure projects, enhancing processing facilities, and potentially acquiring more advanced mining equipment, all of which are crucial to scaling production and meeting increasing market demand.

Additionally, the funds raised through the private placement are likely to be allocated toward advancing ARES’s vertical integration strategy, which includes building and optimizing its fluorspar manufacturing plants. This will allow the company to process raw fluorspar into products ready for various industrial uses, such as hydrofluoric acid production, aluminum manufacturing, and applications in the growing lithium-ion battery market. The private placement also positions ARES to strengthen its balance sheet, giving it the financial flexibility to explore new market opportunities, expand its customer base, and ensure its operational resilience amid fluctuating economic conditions. By securing these funds, ARES can continue its trajectory toward becoming a key player in the domestic and global fluorspar markets, while maintaining control over its production and supply chain.

There’s been news about the Listed Issuer Financing Exemption. How does this initiative align with ARES’s broader financing strategy?

The Listed Issuer Financing Exemption (LIFE) initiative provides a valuable financing mechanism that aligns well with ARES’ broader strategy of securing capital efficiently to support its growth. The LIFE initiative allows publicly listed companies to raise funds without the need for a prospectus, making it a more streamlined and cost-effective way to access the capital markets. This is particularly advantageous for companies like ARES, which are in the process of scaling their operations and require continuous funding to expand their mining and manufacturing capabilities.

For ARES, this exemption aligns with its strategy of minimizing capital expenditure while maximizing operational growth. By utilizing LIFE, ARES can raise necessary funds without the extensive regulatory requirements and costs typically associated with traditional public offerings. This enables the company to access capital more quickly and with fewer legal and administrative hurdles, allowing management to focus on executing its business plan. The funds raised through this initiative can be directed toward key projects, such as enhancing their fluorspar processing infrastructure, increasing production capacity, or acquiring new equipment to meet the growing demand for fluorspar in various industries.

The fluorspar market is critical but not widely understood. How do you see market demand for fluorspar evolving, both domestically and internationally?

The fluorspar market, while critical to many industries, often flies under the radar in public discussions about strategic minerals. Domestically, the demand for fluorspar is poised to increase significantly, driven by its essential role in key sectors such as steel production, aluminum manufacturing, and the growing electric vehicle (EV) industry. As the U.S. pushes for more domestic production of critical minerals and less reliance on foreign supply chains, fluorspar, which is vital for producing hydrofluoric acid and fluorochemicals, will play a larger role in national economic security. This is particularly relevant given its application in manufacturing lithium-ion batteries, a cornerstone of the electric vehicle revolution. Furthermore, fluorspar is critical in uranium enrichment for the nuclear industry, underscoring its importance to defense technologies and energy independence. With the U.S. government placing increased emphasis on securing domestic sources of critical minerals, the demand for fluorspar is expected to grow, positioning ARES as a key supplier in meeting these needs.

Internationally, the fluorspar market is also evolving. As global industries, particularly in Asia and Europe, continue to expand their capacities in steel production, electronics, and renewable technologies, the demand for fluorspar will likely rise. Countries like China, which has traditionally been a dominant producer, are beginning to limit exports to safeguard their own domestic supplies, creating opportunities for other producers to fill the gap in the global market. Additionally, the global shift toward decarbonization and the development of green technologies will further drive demand for fluorspar, particularly its role in producing high-performance materials for clean energy applications. This opens new avenues for international trade and partnerships for fluorspar producers, who will need to respond to the increasing demand for high-quality, sustainable sources of the mineral. In this context, ARES is well-positioned to capitalize on both domestic and international market trends, ensuring a stable supply of fluorspar to industries that are critical to the future economy.

What impact do you anticipate from current geopolitical and economic shifts on the fluorspar supply chain and ARES’s operations?

Current geopolitical and economic shifts are likely to have a significant impact on the fluorspar supply chain and ARES’ operations. One of the most prominent factors is the increasing push for economic nationalism and securing critical mineral supply chains within national borders. The U.S., for instance, has made it a priority to reduce reliance on foreign sources for strategic materials like fluorspar, which is crucial for industries such as defense, energy, and advanced manufacturing. This shift could work in ARES’s favor, as the company operates the only permitted fluorspar mine in the U.S., positioning it as a key domestic supplier in a market that is likely to see increasing demand due to government policies encouraging the use of domestic resources. As international tensions rise, particularly with China reducing exports of key minerals to prioritize its domestic needs, companies like ARES stand to benefit from increased focus on securing local supply chains.

On the economic front, global inflation, fluctuating commodity prices, and disruptions in trade flows caused by conflicts or sanctions could lead to higher costs and uncertainties for fluorspar production and transportation. However, ARES’s vertical integration strategy, which aims to oversee the entire process from mining to manufacturing, will help mitigate some of these risks. By having more control over its supply chain and processing capabilities, ARES can better manage costs and reduce its vulnerability to global price shocks. Moreover, as industries such as electric vehicles, renewable energy, and defense continue to expand, demand for fluorspar is expected to remain robust, offsetting some of the potential economic challenges. In this landscape, ARES is well-positioned to adapt to shifting geopolitical and economic conditions, leveraging its domestic presence and growing infrastructure to ensure continued operational success and market relevance.

What message do you have for current and potential investors in ARES?

We are excited to share the remarkable progress ARES has made and to invite you to join us on this journey of growth and opportunity. As the only permitted fluorspar mining company in the United States, we are positioned at the forefront of a critical industry, supplying a mineral that is essential to steel, aluminum, electric vehicles, and even defense technologies. Our focus on vertical integration, innovation, and sustainability sets us apart, allowing us to control the supply chain from the mine to high-quality products ready for the most demanding markets.

We have great momentum —our facilities are expanding, customers are placing orders, and institutional investors are recognizing our potential. With the continued support of investors like you, we are unlocking new opportunities to strengthen domestic supply chains, fuel the renewable energy transition, and drive forward American industry. Our recent capital raises, strategic partnerships, and commitment to long-term sustainability are just the beginning of what we know will be a transformational future for ARES.

The global demand for fluorspar is rising, and ARES is leading the way in delivering high-quality, domestically produced resources that are critical to the future of technology and industry. Together, we will capitalize on the immense potential of this market and solidify our position as a leader in the strategic minerals sector.

How do you plan to create continued value for shareholders as the company moves into its next phase of development?

Operational Expansion and Vertical Integration: ARES is expanding its operations by not only increasing fluorspar mining activities but also developing its processing and manufacturing capabilities. By controlling the supply chain from mine to market, we aim to capture greater value at each stage of production. This vertical integration will allow us to reduce costs, improve efficiency, and better meet the growing demand for fluorspar in critical industries, such as steel, aluminum, and renewable energy technologies.

Strategic Partnerships and Market Diversification: We are actively pursuing strategic partnerships and customer agreements that will ensure a steady demand for our products across a range of industries. With fluorspar being a vital mineral in various applications—from hydrofluoric acid production to electric vehicles and lithium-ion batteries—our diversified customer base will help stabilize revenues and reduce exposure to market fluctuations. By expanding into new international markets, we are also opening additional avenues for growth and revenue.

Sustainability and Innovation: Our commitment to sustainability is key to our long-term strategy. As demand for critical minerals used in clean energy technologies continues to rise, ARES is uniquely positioned to support the transition to a low-carbon economy. Through environmentally responsible mining practices and the development of high-quality fluorspar products essential for renewable technologies, we are aligning ourselves with global sustainability trends, which will increase both demand for our products and the value we provide to shareholders.

Capital Efficiency and Growth-Focused Financing: We are strategically leveraging financing tools to efficiently raise capital while minimizing dilution for our shareholders. These funds will support our operational expansion and ensure that we are well-capitalized to execute our growth strategy. By maintaining a disciplined approach to financing and capital allocation, we are ensuring that shareholder value is prioritized as we scale the business.

Robust Market Position and Industry Leadership: As the only permitted fluorspar mining operation in the U.S., ARES holds a unique and highly valuable market position. With increasing attention on securing domestic supply chains for critical minerals, we are well-placed to benefit from government support and growing industry demand. By continuing to strengthen our leadership in the U.S. fluorspar market, we aim to deliver sustainable, long-term growth and increased value for our shareholders.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.