Can Axel REE’s Low-Cost Leaching Unlock Caladão’s Rare Earth Potential?

Metallurgical Breakthrough at Caladão

Axel REE Limited has announced encouraging first-stage metallurgical test results from its Caladão Rare Earth Elements (REE) and gallium project in Brazil. The tests, conducted on samples from two diamond drill holes spaced 2 kilometres apart, demonstrate strong recoveries of high-value magnetic rare earth oxides (MREO) and gallium using simple, low-cost leaching techniques. This marks a significant step forward in validating the project’s economic potential.

The initial test work, performed by the Australian Nuclear Science and Technology Organisation (ANSTO), confirmed that a considerable portion of the rare earth elements at Caladão are adsorbed onto clays. This ionic adsorption clay (IAC) style mineralisation allows for effective recovery through straightforward leaching with sodium chloride (NaCl) and ammonium sulfate (AMSUL) solutions at a mildly acidic pH of 4. Recoveries of key magnet rare earths such as neodymium, praseodymium, dysprosium, and terbium reached up to 52% in first-pass tests, aligning with efficiencies seen in other global ionic clay deposits.

Gallium – A Valuable Co-Product

Beyond rare earths, the Caladão Project has revealed promising gallium recoveries, achieving up to 25% extraction through acid leaching. Notably, gallium occurs in a novel geological setting; weathered laterite over granite; distinct from traditional sources like bauxite residues. This supergene enrichment near the surface offers a unique opportunity for hydrometallurgical extraction, potentially enabling gallium to be produced as a co-product alongside rare earths. Axel’s ongoing partnership with Brazil’s mineral technology research centre CETEM aims to refine gallium concentration and recovery methods, including magnetic separation techniques.

Towards a Low-Cost, Environmentally Friendly Operation

Axel is advancing the development of a simple two-stage heap leach process designed to minimise capital and operating costs while reducing environmental impact. This process leverages readily available reagents and avoids complex mining activities such as drilling, blasting, crushing, or milling. The gravity-fed system for collecting the pregnant leach solution eliminates the need for tailings dams, aligning with global environmental, social, and governance (ESG) expectations.

Non-Executive Chairman Paul Dickson highlighted the strategic significance of these results, noting that the combination of high-grade mineralisation and low-cost extraction methods positions Caladão as a potentially world-class rare earth and gallium project. He also emphasised the importance of supply chain diversification amid global geopolitical tensions, suggesting Caladão could become a key player in the critical minerals market.

Next Steps and Outlook

Looking ahead, Axel expects to release a maiden JORC Inferred Resource estimate for Area A of the Caladão Project by late July or August 2025. Further metallurgical test work continues with ANSTO and CETEM to optimise leaching recoveries, impurity removal, and precipitation processes. Infill drilling and baseline environmental studies are also planned to support resource classification upgrades and expedite permitting.

While these initial results are promising, they are based on a limited number of samples and cannot yet be extrapolated across the entire project area, which spans over 65 square kilometres. Nonetheless, the findings provide a compelling foundation for Axel’s strategy to develop a low-capital, low-operating cost operation with strong environmental credentials in a region with significant rare earth potential.