Canadian predicts R$955 million for rare earth and titanium project in MG

Canadian Resouro Strategic Metals published, last Tuesday (16), a preliminary economic assessment for the Tiros rare earth and titanium project in Minas Gerais.

The study foresees an initial operation with an investment of US$ 191.1 million, the equivalent of around R$ 955 million, considering the exchange rate of R$ 5 used by the company itself in the document.

The Tiros project is located in Minas Gerais and is presented by the company as a large-scale asset, with potential for the production of rare earths and titanium dioxide.

Resouro states that the project has 1.4 billion tons in measured and indicated resources, with an average content of 12% titanium dioxide. The deposit also has 4,000 ppm of rare earth oxides, or 0.4% of the analyzed material. Within this group, 1,100 ppm, or 0.11%, correspond to the so-called magnetic rare earths, considered more valuable because they are used in the production of permanent magnets for electric motors, wind turbines and electronic equipment.

Despite the size of the mineral resource, the company proposes to start with a smaller operation, concentrated in a high-grade area.

The initial plan foresees the processing of 500 thousand tons per year for 20 years, with a total supply of 9.5 million tons of ore. This area represents less than 1% of the measured and indicated resource already announced by the company.

The study indicates that this first phase would have an average content of 26.3% titanium dioxide and 10,832 ppm of rare earth oxides, equivalent to around 1.08% of the material analyzed. This means that Resouro intends to start the project in a richer area of the deposit, with a concentration of rare earths well above the general average for the resource.

The operation would be open pit, with mineralization close to the surface and, according to the company, with mining considered simple, without the initial need for complex dismantling.

Resouro also states that the environmental design considers the use of dry-stacked waste.

The preliminary economic assessment, known by its acronym in English as PEA, is an initial stage in the studies of a mineral project.

It serves to estimate, even conceptually, whether a project can be economically viable. The PEA is not equivalent to a definitive feasibility study, does not declare mineral reserves and still needs to be followed by more advanced phases, such as pre-feasibility and feasibility studies.

In the case of Resouro, the document itself highlights that the assessment is preliminary and has an estimated accuracy of more or less 50%. In other words, the project is still far from commercial production and will depend on new engineering stages, metallurgical tests, environmental licensing, financing and commercial agreements.

Even with these reservations, the numbers presented by the company are strong. The PEA indicates post-tax net present value of US$714.9 million, with a discount rate of 8%, and an internal rate of return of 44.2%. Before taxes, the net present value rises to US$1.138 billion, with a return of 62.7%. The return on investment period, in the post-tax scenario, was estimated at 1.9 years.

Resouro's strategy is to develop an operation with two sources of revenue: one linked to titanium dioxide and the other to rare earths. The anticipated processing would result in TiO₂ concentrates and a mixed rare earth carbonate.

According to the company, the next steps include new surveys in the areas planned for the initial pit, generation of additional samples, new metallurgical tests, optimization of the processing route, environmental studies, engagement with communities and advancement of licensing.

Resouro is a company incorporated in Canada and listed on the Australian and Canadian stock exchanges. In Brazil, in addition to the Tiros project, the company also has the Novo Mundo gold project. The rare earth and titanium asset, however, is today the company's main strategic project in the country.

The announcement comes amid increasing global competition for critical minerals, especially rare earths, used in chains such as clean energy, electric vehicles, wind turbines, electronic equipment and defense applications. Brazil has been observed by foreign companies and Western governments as a possible alternative supplier in chains currently concentrated in China.

Despite the positive numbers, the project is still in its initial phase.

Source: CNN