PNN completes due diligence on Brazilian rare earths project

Our rare earths Investment Power Minerals (ASX: PNN) just completed due diligence on the new rare earths asset it is acquiring in Brazil.

PNN is acquiring the Morro de Forro project in the state of Minas Gerais - within the same caldas complex as ASX rare earth companies Meteoric Resources and Viridis Mining and Minerals:

(source)

The Morro de Forro project is a high grade rare earths project but importantly, it is high grade in the MREO rare earths (magnetic rare earth oxides).

Recently PNN released further results form the due diligence that showed around 80% of the value from the rare earths were from this MREO subset.

This is key because these 4 rare earths (neodymium, praseodymium, dysprosium and terbium oxides) are being specifically sought out.

There are plenty of other “rare earths”, but many are not so valuable as the US looks to set up domesticated processing supply chains to completely remove dependence from China.

So now PNN is moving to “finalise definitive agreement”.

Once PNN takes official ownership of the project, it will be able to begin drilling quickly, as the project area has a special type of permit called a “manifesto”.

So PNN doesn’t need to apply for a drilling work program or require any other local clearances to get action underway here.

We are looking forward to PNN getting deeper drilling and further aircore drilling to expand upon the recently released historical results from the main area and to see how far it expands.

We hope that further drilling will reveal more mineralisation away from the defined area, either through continuity or further satellite type deposits being revealed on the project from undrilled areas.

(source)

Here are a few of the reasons why we like the asset:

• The grades are not only high, but they are high in the specific rare earths that are a focus in the US critical minerals theme
• The project sits on a special permit/license so PNN is able to undertake exploration work without the need for permitting.
• Morro de Forro sits near ASX listed peers which have defined large resources and capped much higher than PNN, historical results for PNN are much higher grade.

Check out our deep dive on the project here: PNN: New Brazil rare earths project. 156 drill holes. High grade hits. SGQ 2.0?

There is also a webinar presentation from recently appointed CEO and REE specialist Alistair Stephens, who appeared ecstatic with the project:

Power Minerals (ASX: PNN) Investor Webinar - South American Project development

What we want to see next from PNN

🔄Deal completion of recently acquired rare earths project (Morro do Ferro)

We want to see PNN complete its due diligence on the project and formally agree to the terms of the option to take ownership of the project, following this we would expect drilling to be not far away.

Today PNN confirmed that it has completed its due diligence on the project, so now needs to implement the formal steps to complete the acquisition, expected within the next week.

Once this is complete we expect PNN to be on the ground and drilling soon after.

🔄Drilling at it’s existing Brazilian rare earths project (Santa Anna)

We want to see PNN doing deeper RC drilling and PNN commenced this program in late January. (source)

We also want to see PNN drill out and define a maiden JORC resource estimate in Brazil to enable comparison to peers, a maiden JORC resource estimate is expected this quarter. (source)

Here are the milestones we are tracking on PNN’s Brazilian rare earths project:

✅ Geophysics/Geochemistry work (geophysics results recently)

✅ Drilling starts (Auger drilling started, RC drilling commenced - today)

🔄 Drilling results

🔲 Maiden JORC resource estimate

🔄Lithium JV deal with Summit for lithium assets

PNN has entered into a non binding term sheet which it aims to turn into a binding agreement within 90 days which would see it form a JV with Summit with PNN retaining 41% control of it and possibly 3 additional projects Summit may bring into the JV.

Summit is capable of providing the DLE extraction and would be tasked with constructing a pilot plant to produce a 5,000t DLE plant and take the JV through to a PFS.

Summit would be able to take entire control of the projects for US$50M, so we await during the 90 day period to see if this deal completes and the final terms of the agreement.