PNN steps out southeast with 91m of high grade rare earths

Our rare earths Investment Power Minerals (ASX: PNN | OTCQB: PEIMF) just hit more ultra high grade rare earths at its project in Brazil.

This new hole sits southeast of prior drilling and while still early into the current drill program, PNN is now stepping out and starting to show some scale.

The grades from today start from surface and quickly increase across more good widths to become eye opening:

(source)

One 2m sample included 22.6% TREO (total rare earth oxide), the second highest individual sample ever recorded at the project.

And these are not just high overall grades either (rare earths combine several different elements, some rarer and in more demand for specific uses, so are currently much more valuable than others).

A big slice of the hit is MREOs - Magnet Rare Earth Oxides - specifically neodymium, praseodymium, terbium and dysprosium.

These are the less common, more in demand, higher value subset used in the magnets inside robots, EVs and military hardware:

Here is the cross section, showing a large chunk above 10% TREO in purple:

(source)

And a plan view of the drilling so far:

(source)

The ending to this hole (plus more from other holes) are still at the lab, ahead of a maiden JORC resource estimate targeted for this quarter, or Q1 next year.

Today’s assay result tested ground to the south east of the prior results, and supports PNN's Exploration Target model that mineralisation continues at depth and extends to the southeast.

We covered the Exploration Target set from that here, a 9.2 to 10.7mt at 7.8% to 9.2% TREO (Total Rare Earth Oxides) with an estimated 1.3% to 1.6% MREO (Magnet Rare Earth Oxides).

Not massive from a tonnage perspective, BUT very high grade and similar in size to ASX listed Brazilian Rare Earths.

Brazilian Rare Earths market cap is ~$682M and the company has a scoping study for its project demonstrating a Net Present Value of ~US$6BN.

(source)

PNN is capped at $57M, a fraction of Brazilian Rare Earths.

PNN’s project is at a lot earlier stage with no defined resource yet.

So PNN still has a fair bit of work to do to catch up to Brazilian Rare Earths from both an exploration and development sense and a valuation sense.

BUT given PNN’s project sits on a “Manifesto de Mina” it’s actually not that far away from being development ready.

The special permitting regime over PNN’s project means to get the project developed, PNN only needs to get environmental approvals.

Hypothetically PNN could close the gap to Brazilian Rare Earths from a development stage relatively quickly.

Western producers are hunting new supply

In the US, ~$11BN MP Materials produces high grade TREO, but generally "light" rare earths and it has flagged it is looking for heavy rare earth feedstock for its own facility under development.

(source)

Then there is ~$12BN Lynas, which just lobbed a ~$968M takeover offer for PNN's neighbour Meteoric Resources:

(source)

We covered what that could mean for ~$57M capped PNN in a Deep Dive article 2 weeks ago here: PNN’s neighbour gets ~$1BN takeover offer... What now?.

What's next for PNN?

🔄 Results from current drill program

Here are the milestones we are tracking:

1. 🔄 More drilling (two rigs currently drilling through to December)
2. 🔄 Assay results (partial assays remain from a few holes, plus the next 16 holes). (source)
3. 🔄 Metallurgical test work drilling (samples have been sent for testing. (source)

🔲 Maiden JORC resource estimate

Expected Q4 26/Q1 27 (should the drilling data allow it) - this is the big one for us.

(source)

🔲 Ionic clay potential tested at Morro do Ferro (MDF)

The "free shot" at the style of deposit that made PNN's neighbours worth a combined ~$1BN.

This one is especially relevant now after the recent news with Lynas’s takeover of Meteoric.