Axel REE Limited Set To Advance Brazil Rare Earth Projects With July Listing

Noel Ong
Jun 29, 2024
5 min read

Updated: Jul 13

Axel REE Set to Unlock Brazil’s Rare Earth Potential

Axel REE LimitedTakes on Brazil with ASX Listing

Brazil-focused critical minerals explorer Axel REE Ltd (ASX:AXL) has begun trading on the ASX following the completion of an IPO that raised A$13.3 million.

The Victoria-based debutante is focused on the discovery and development of critical mineral resources, primarily rare earth elements (REE), in Brazil.

The company listed on July 23, 2024 losing 32% of its value with an opening price of A$0.135 with nearly 9.4 million shares changed hands.

Consequently, Axel’s enterprise value now stands at A$7 million.

Figure 1: AXL share price chart for opening day.

Focus on Brazilian REE Projects

Axel REE’s portfolio comprises over 1,000 square kilometres of REE projects in Brazil, located amongst globally significant mines and REE discoveries, positioning the company strategically within the sector (Figure 2).

Axel’s REE Projects are:

1. The Caladão Project is located in northern Minas Gerais, in the Lithium Valley region, approximately 30 kilometres from Sigma Lithium Corp. Initial exploration has revealed shallow total rare earth oxide (TREO) intercepts up to 2 metres at 7,612 parts per million (ppm) and a 35% high-value magnetic rare earth oxide (MREO) proportion.

2. The Caldas Project is situated in the Poços de Caldas Alkaline Complex, an area known for significant ionic adsorption clay (IAC) REE discoveries, including the high-grade Caldeira Resource by Meteoric Resources NL (ASX: MEI).

3. The Itiquira Project in Mato Grosso presents potential as a new carbonatite intrusive discovery spanning 20 kilometres in diameter, which may host REE and niobium.

4. The Corrente Project is a grassroots initiative over a saprolite clay zone in the Corrente Municipality, Piaui State.

Figure 2: Location of Axel’s Projects in Brazil (Source: Axel REE Website)

Utilisation of IPO Funds

The funds raised by the IPO will be primarily used to advance Axel’s exploration portfolio, focusing on drill programs at the Caladão and Caldas Projects.

Axel is fully funded to fast-track the Caladão Project towards a maiden resource and to commence extensive drilling at the Caldas Project in the Poços de Caldas Alkaline Complex.

Additional exploration activities will be conducted at the Itiquira and Corrente Projects, with funds also allocated for working capital.

“With a clear exploration strategy in place and a highly experienced board behind it, we are now fully funded to commence extensive drilling programs and we look forward to delivering strong results for our supportive shareholders,” said Chairman Paul Dickson.

“Next Major Player”

Axel Non-Executive Chairman Paul Dickson said: “The REE sector in Brazil is growing rapidly following significant discoveries of high-grade ionic adsorption clay-hosted mineralisation in recent years.

“Axel has an opportunity to become the next major player in the Brazilian REE exploration sector with plans to advance two major clay-hosted REE projects (Caladão and Caldas) whilst completing preliminary work on a further two REE projects showing significant upside potential.”

Board of Directors

The Axel Board of Directors comprises an experienced management team with a proven track record in pioneering resource discoveries and extensive experience in capital markets and resource development.

Paul Dickson – Non-Executive Chairman: A finance and corporate advisory professional with over 30 years of experience in the finance services industry, Paul Dickson is also the Non-Executive Chairman of Alligator Energy Limited (ASX ) and a founding director at Paradigm Capital, a boutique corporate advisory firm.

Dr. Fernando Tallarico – Managing Director: Based in Brazil, Dr. Tallarico has over 30 years of international experience in minerals exploration and grassroots discoveries for junior exploration companies. Previously, he was the Managing Director of Aguia Resources (ASX ), where he played a key role in developing its phosphate and copper portfolio in Southern Brazil.

Pat Volpe – Non-Executive Director: The founder of Axel REE, Pat Volpe has over 38 years of experience in minerals and metals exploration, with an extensive history in Brazil. He has been the founder and Chairman of unlisted supply-critical metals exploration companies in Brazil and has developed strong relationships with local explorers and governments.

Ian Kiers – Non-Executive Director: With over 27 years of experience in the private equity sector, specialising in mergers and acquisitions (M&A), Ian Kiers is currently the Non-Executive Chairman of SI6 Metals Limited (ASX ) and was the Chief Executive Officer of GBM Group (a Smorgon Private Family Office) for 19 years.

REE Sector in Brazil

The REE sector in Brazil has seen significant growth in recent years, following the discovery of ionic adsorption clay (IAC) mineralisation in the State of Minas Gerais by several mining exploration companies.

Brazil, along with Russia, was ranked as the third-largest country globally in terms of REE resources in 2023, each hosting 21 million tonnes (Mt) of REE resources, according to the US Geological Survey.

China and Vietnam are the first and second largest, with 44Mt and 22Mt of resources respectively.

In 2022, China dominated global REE production with a 78% market share, followed by the United States’ Mountain Pass project at 15%, and Australia’s Mt Lynas contributed 6%.

The remaining 1% came from various other projects worldwide, including those in Myanmar, India, Malaysia, and elsewhere.

In Brazil, primary REE mineralisation is predominantly associated with carbonatite and granitic rocks. Economic deposits are concentrated through secondary processes including weathering, ionic adsorption, and sedimentation.

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