Valuation Gap Looms as Axel REE Advances Low-Cost ISR Mining in Brazil

Caladão Project’s Significant Resource Base

Axel REE Limited has announced a major update on its flagship Caladão Project in Brazil’s Lithium Valley, revealing an inferred rare earth element (REE) resource of 233 million tonnes at 2,143 parts per million total rare earth oxides (TREO), alongside a discrete 100 million tonnes inferred gallium resource at 42ppm. This dual commodity resource is notable not only for its scale but also for its unique profile, with gallium mineralisation occurring in surface lateritic soils, a first for Brazil.

The Caladão Project benefits from a shallow, permeable regolith profile ideally suited to low-cost in situ recovery (ISR) mining methods. The project’s location in Minas Gerais, a tier 1 mining jurisdiction with excellent infrastructure and government support, further enhances its development prospects.

Innovative In Situ Recovery Approach

Axel is advancing a staged ISR trial mining program scheduled to commence in 2026. This approach involves leaching rare earths and gallium directly from the orebody via wells, avoiding traditional open-pit mining and its associated environmental footprint. The company’s preliminary metallurgical test work, conducted in partnership with ANSTO and SGS, has confirmed recoveries exceeding 50% for REEs and up to 25% for gallium using mild acid leaching techniques.

The ISR method promises lower capital expenditure and operating costs compared to conventional mining, with modular wellfields and closed-loop reagent systems that support a strong environmental, social, and governance (ESG) narrative. This positions Axel as a potential supplier of responsibly sourced critical minerals, aligning with global efforts to diversify supply chains away from dominant Chinese producers.

Strategic Positioning and Market Potential

Gallium, a critical technology metal essential for semiconductors, solar energy, electric vehicles, and defence applications, is predominantly controlled by China, which imposed export bans in 2024. Axel’s Caladão Project hosts Brazil’s only defined primary gallium resource, offering strategic optionality and attracting interest from governments and technology manufacturers seeking secure, non-Chinese sources.

Financially, Axel’s enterprise value relative to contained TREO is significantly lower than its Brazilian REE peers, suggesting a valuation anomaly. The company is fully funded to progress through trial mining and feasibility studies, with a clear catalyst chain that could drive a re-rating as it validates its commercial model and advances towards production.

Looking Ahead

Axel’s near-term milestones include upgrading the mineral resource estimate for Area B by December 2025, commencing ISR field trials in 2026, and continuing metallurgical optimisation. The production of saleable mixed rare earth carbonate (MREC) and gallium products during trial mining will provide real-world data to underpin economic modelling and strategic partnerships.

With a strong management team experienced in mineral exploration and development, Axel is poised to transform from an explorer to a developer of critical minerals essential for the energy transition and advanced technologies.