Brazilian Critical Minerals is shaking its own brand of samba magic into the REE space

Brazilian Critical Minerals holds the Ema ionic adsorption clay-hosted REE project in Brazil
Ema currently has a resource of +1Bt grading 793ppm TREO with valuable MREOs making up 31% of the basket
Resource covers a little less than half of the tenement, offering potential for growth through drilling
Metallurgical test work has achieved MREO recoveries averaging ~68%

While companies operating in the rare earth elements space have been in the spotlight due to the expected jump in demand as electric vehicle adoption continues to rise, Brazilian Critical Minerals appears to have gone under the radar.

How else can one explain how Brazilian Critical Minerals (ASX:BCM) is capitalised at just $18.6m while its ASX-listed peers have market capitalisations ranging anywhere from $100m to $370m despite having a giant REE resource with a tonnage in excess of 1Bt.

This despite the growing push to diversify away from Chinese REEs and permanent magnets – the most recent and likely most significant of which is the US announcing a 25% tariff on imports of Chinese permanent magnets from 2026.

However, the company’s market capitalisation does nothing to detract from the value inherent in its Ema project nor its potential to deliver further value for the company.

The Ema project. Pic: Brazilian Critical Minerals

Scale, high-value REE mix and top tier recoveries

So just what is it about Ema that makes it stand out?

For starters, the company has held the tenements in Brazil for some time now when it was previously known as BBX tenements.

It was only in May last year after carrying out exploration on those tenements that the company discovered Ema, which set the stage for its transformation into the critical minerals focused play that it currently is.

“Inside of 12 months since its discovery, we have done a lot of drilling and have now announced a very large mineral resource of over 1 billion tonnes,” managing director Andrew Reid told Stockhead.

And it is not just the tonnage that make the project stand out.

Ema shares almost identical characteristics with other ionic deposits developed over felsic volcanic rocks in southwest China, the world’s largest known ionic clay region.

These are the same ionic clay-hosted (IAC) deposits that typically have much higher percentages of magnet rare earth oxides (MREOs), are easier to explore due to mineralisation being near surface, and therefore cheaper to mine and process.

These factors more than offset the much lower grades that they possess compared to their hard rock counterparts.

Ema is no exception to the general rule that IAC deposits are rich in MREOs.

“The composition of what we call the big four rare earth elements – the MREOs – inside of the 15 REEs that all come naturally bound together make up 31% on average of the entire basket,” Reid noted.

“That is class leading compared to a lot of our peers.”

Comparison of REE recoveries. Pic: Brazilian Critical Minerals

Metallurgical testwork has also proved that clays from Ema are right up there with the best performers of its kind around the world, achieving MREO recoveries of up to 83% – and averaging ~68% using standard weak ammonium sulphate leaching solution with a pH of four at ambient temperatures over a low leach time of just 30 minutes.

“We have already announced some very high recoveries – some of the best in the world – and we have also announced the dosage rate of reagents that goes into the process plant is extremely low,” Reid said.

“That will result in low processing costs as we have low reagent costs and we don’t need to heat the solution or liquor going into the process plant as some other projects need to do.

“We can also produce some very pure, almost 99% pure final mixed rare earths concentrate product that can be sold into the market.”

The Brazilian REE advantage

Operating in Brazil also has its benefits with Reid noting that it is a favourable jurisdiction with very light royalties on its tenure compared to other REE projects in the country.

Beyond the royalties, Brazil has three big advantages, the first being that it is a major mining country with thousands of companies and millions of people who directly or indirectly derive their livelihood from mining.

The country also benefits from low power costs, which make setting up a company and mine extremely attractive.

However, the biggest takeaway is the fact that China manufactures some 96% of the permanent magnets used in electric vehicles and wind turbines, meaning that most of the MREOs are consumed by this market.

“We have to do business with China, we have to sell into China but we also have to get the finance for these type of projects from the West, so a country that has good political relations on both sides of the fence is that much more attractive and Brazil has very good connections with both sides,” Reid added.

“It makes it almost the perfect place to want to do business for these types of projects.”

Room to grow

While the size, high MREO content and recoveries as well as benefits of operating in Brazil make Ema a winner, there is still room for improvement.

For starters, while the current resource of 1.02Bt grading 793ppm TREO is world-class by any measure, it takes up a little less than 50% of the available tenement area.

This means that there is plenty of potential to expand the resource by the simple expedient of drilling the remaining +50% of the tenement.

Reid added that the company talked to its neighbours frequently and there was certainly the opportunity at some stage to do some M&A now that BCM had a large project that it believed would be proven economic once the required baseline studies were completed over the course of the next 2-3 quarters.

For now though, the company wants to focus on developing the project and getting it into production.

“There’s three or four key workstreams that we need to progress and the first is that the existing resource that we have released is only at the inferred level and we need to get it into the indicated category,” Reid explained.

“The current drill spacing is at about 800m centres, we need to bring that down to 200m spacing, and we will drill out the highest grade sections first.”

To meet this, the company has just wrapped up a strategic placement that raised $2m and will use the proceeds to conduct infill and exploration drilling.

Funds will also be allocated towards metallurgical test work that ANSTO is completing in Sydney to evaluate all possible processing flow sheet scenarios.

“That work will continue over the next 1-2 quarters,” Reid added.

“I want to select a scoping study partner to help us to understand and evaluate some of the different options that we believe we have got for processing this sort of project.

“That is a big body of work that will continue, we will find a partner over the next few weeks and then that work should continue until the end of the year into the first quarter of next year.”

Other work that the company intends to progress include environmental permitting and applying for a Preliminary Licence in Brazil.

“We certainly want to move ahead very quickly through the various stages of development,” Reid concluded.