Viridis Faces Funding Negotiations and Execution Risks Despite Strong Rare Earth Milestones

Strategic Government Backing Accelerates Rare Earth Ambitions

Viridis Mining and Minerals Limited (ASX, VMM) has marked a pivotal quarter with its selection by Brazil’s National Bank for Economic and Social Development (BNDES) and the Federal Agency for Funding Authority for Studies and Projects (FINEP) to access a substantial BRL5 billion (approximately US$903 million) funding pool. This government-backed initiative targets Brazil’s most promising strategic mineral projects, positioning Viridis’ flagship Colossus Rare Earth Project at the forefront of the country’s critical minerals development.

The funding package, still under negotiation, is expected to combine non-dilutive grants, debt financing, and potential equity participation. This financial support aims to accelerate construction, metallurgical testing, engineering feasibility studies, and acquisition of long lead equipment, underpinning a fast-tracked pathway to production.

Operational Milestones and Local Supply Chain Integration

Viridis and its joint venture entity Viridion Pty Ltd achieved a significant operational milestone by delivering Brazil’s first locally sourced magnetic rare earth oxides (Nd, Pr, Dy, Tb) to the CIT SENAI ITR facility in Lagoa Santa. These oxides, recovered from end-of-life magnets sourced from decommissioned MRI machines and wind turbines, were refined using proprietary hydrometallurgical technology at Ionic Technologies’ Belfast facility before being returned to Brazil for magnet manufacturing trials.

This milestone strengthens Viridis’ position within Brazil’s emerging rare earth supply chain, complementing a strategic Memorandum of Understanding with CIT SENAI ITR / FIEMG, operator of Latin America’s first rare earth magnet manufacturing facility. The initiative underscores Viridis’ leadership in establishing a vertically integrated and sovereign rare earth supply chain outside China.

Robust Economics Confirmed in Pre-Feasibility Study

Following quarter-end, Viridis released a detailed Pre-Feasibility Study (PFS) for the Colossus Project, revealing world-class project economics. The study, based on a conservative 20-year life of mine and a cyclical low NdPr price of US$63/kg, delivers a pre-tax NPV8 of approximately US$773 million. Under a base case scenario with a long-term forecast price of US$90/kg NdPr, the pre-tax NPV8 rises to about US$1.41 billion.

Annual operating cash flows are projected at US$128 million at the low price case, increasing to US$197 million under the base case. These figures position Colossus as the lowest-cost rare earth producer globally, with strong resilience across commodity cycles and a clear pathway to commercial viability.

Capital Raising and Strategic Partnerships Strengthen Development

Viridis has bolstered its financial position with a successful AU$11.5 million placement at a 13% premium to the 10-day volume weighted average price, including a cornerstone AU$5 million commitment from JGP Asset Management. This capital injection is expected to fund critical activities through Final Investment Decision (FID) and early project execution.

Additionally, the company signed a binding Memorandum of Understanding with Brazilian asset managers ORE Investments Ltda and Régia Capital Ltda, securing a staged funding pathway of up to US$30 million. This partnership provides essential local capital support and reinforces Viridis’ institutional backing within Brazil.

Leadership and Expansion Plans

Reflecting confidence in its leadership, Viridis appointed Rafael Moreno as Managing Director, effective mid-July 2025. Moreno brings over 23 years of global experience in energy and mining, tasked with steering the Colossus Project through development and production phases.

Looking beyond Brazil, Viridion is advancing plans to expand into the U.S. refining market. An existing scoping study for a U.S.-based rare earth oxide refinery, leveraging Ionic Technologies’ proprietary separation technology, is being updated to align with Colossus’ product profile. This move aligns with growing U.S. strategic interest in securing diversified rare earth supply chains.

Environmental and Stakeholder Progress

Viridis successfully completed a key public hearing for environmental licensing of the Colossus Project, engaging over 250 participants and addressing community and regulatory concerns. The company continues active engagement with municipal, state, and federal governments, as well as international stakeholders, including participation in a CEO roundtable in Tokyo alongside leading Japanese metals and rare earth companies.

Moreover, Viridion secured a strategic industrial land parcel in Poços de Caldas, Minas Gerais, to establish the Centre for Rare Earths Innovation, Technology and Recycling (CRITR). This facility will serve as Latin America’s first rare earth refining and recycling hub, scheduled to commence operations in the second half of 2026.