PNN completes acquisition of its Brazilian rare earths project
Our rare earths Investment Power Minerals (ASX: PNN) just announced it has completed the acquisition of its Brazilian rare earths project.
PNN will now hold 100% of the project - in exchange for a $500k cash payment (which will be paid from PNN’s existing cash) and $1M in PNN stock (at the higher of 9c or the 20 day VWAP (volume weighted average price), which is yet to be distributed.
Over the last few months, PNN has completed several rounds of shallow aircore drilling on the project and recently said that its theory of a hard rock intrusion has been validated:
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PNN’s exploration model for the project is that its project covers a mineralised hard rock carbonatite - similar in terms of geology to the structures that host $16BN MP Materials’ project, $15BN Lynas Rare Earths core asset and another of our ASX small cap Investments, SGQ’s…
At this stage, we know there are rare earths in the shallow parts of PNN’s project.
Next we want to see PNN drill a few deeper holes and confirm that the rare earths extend at depth.
The deeper drilling will be what confirms PNN’s exploration model.
PNN expects the first 2,000m (of a bigger 10,000m RC drill program) to start in December ahead of a maiden resource estimate on the project targeted for Q1-2026.
One of the main reasons we like this project is because, IF PNN’s exploration model is proven correct, then the company holds the ground that covers the entire carbonatite complex.
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And our other Brazilian rare earths Investment St George Mining (ASX: SGQ) has re-rated by over over 400% this year (and was briefly up by 700%+ from our Initial Entry Price with its ownership of a portion of a larger complex:
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Update on the US heavy rare earths acquisition
Yesterday PNN also advised the market is has decided not to proceed with the acquisition of the Gamma rare earth project in the USA, which was subject to due diligence by PNN to its satisfaction and other Conditions Precedent.
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This followed Friday’s Annual General Meeting, where PNN’s shareholders voted against issuing consideration shares to the project vendor.
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A big part of the reason we first Invested in PNN was for the US rare earths project which we thought complimented the Brazilian rare earths asset in a big way.
Now with the company choosing to focus on the Brazil asset and not proceed with the acquiring the USA project, we will review our Investment Thesis and look at resetting our expectations for what PNN will do next.
What’s next for PNN?
🔄Drilling at Brazilian rare earths project
We want to see PNN start deeper RC drilling this month.
We also want to see PNN drill out and define a maiden JORC resource estimate in Brazil to enable comparison to peers.
Here are the milestones we are tracking on PNN’s Brazilian rare earths project:
Milestones:
🔲 Geophysics/Geochemistry work
🔄 Drilling starts
🔄 Drilling results
🔲 Maiden JORC resource estimate
