PNN confirms high value magnet rare earths at Brazilian project

Our rare earths Investment Power Minerals (ASX: PNN) just reported magnet rare earth oxides (MREO) grades from its project in Brazil.

Typically, rare earths projects report grades in TREO's (total rare earth oxides).

Basically measuring the grades of ALL rare earth in an intercept.

Today, PNN reported grades from previous drilling on its deposit measuring MREO - “magnet rare earths oxide”.

A measure of the high value magnet making rare earths in the drilling - neodymium, praseodymium, dysprosium and terbium oxides.

These are the four elements essential for the permanent magnets used in EVs, wind turbines, defence systems and electronics.

The key point is that MREO’s account for more than 80% of the total rare earth market value from the total rare earths reported here.

So this is where the economics may begin to look attractive, the “basket” of rare earths from these results contains over 80% of valuable MREO’s.

(source)

The standout result was from hole “MFSR-47” - which returned 3.53% MREO.

(source)

The two key takeaways for us were:

1. How high the concentration of the rare earths used in magnets are for PNN’s new project, (for context Lynas’s Mount Weld has 106.6Mt at 4.12% TREO (source)… PNN’s has similar grades but as MREO only), looking at the individual parts of LYC’s resource, there is only ~1.55% MREO.

and

2. The high grade MREO’s are consistent across -14 holes, from surface.

(source)

PNN’s project also has a few belters when reported in TREO, too (up to ~8.92% in some holes):

(source)

PNN just recently announced the acquisition of this project (which we covered here - PNN: New Brazil rare earths project. 156 drill holes. High grade hits. SGQ 2.0?).

The project sits in the “Poços de Caldas Alkaline Complex” in Minas Gerais state, Brazil - one of the world’s leading rare earth precincts.

It’s the same part of the world where ASX listed Viridis Mining and Minerals & Meteoric Resources sit:

(source)

One technical point that the market may have missed…

Another thing we like about PNN’s new project is related to its “topography” - basically where it sits geographically.

The main deposit area sits on the crest of a steep hill “with over 100m of topographic relief” - in mining speak that makes it a good candidate for cheap and simple open-pit mining.

The mineralisation starting from surface also helps with that:

(source)

The project also has a ‘manifesto de mina’ title, which gives PNN direct ownership rights over the land and simplifies the permitting process.

In a Webinar last week new CEO Alistair Stephens went into a little bit of detail on both points- especially around permitting.

Alistair was previously the MD and CEO of Arafura Rare Earths (ASX: ARU) between 2004 and 2009 - during that time its market cap went from ~$4M to $400M.

And more recently he was CEO at Lindian Resources (ASX: LIN) - another rare earths company (in Africa) which is now going into the construction stage with Lindian’s market cap sitting at ~$1.3BN.

Check out our recent coverage on this appointment and also have a look at the webinar replay below:

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.

🔄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

🔄Regain control of the Rincon lithium asset

PNN will now need to repay US$1M to the previous Joint Venture partner (Navigate Energy) which it plans to do soon following the recent raise to take 100% ownership of the Rincon asset.

(source)

PNN hasn’t confirmed it has made the payment as of yet.

🔄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.