Magnum Mining Extends Due Diligence on Brazil Rare Earths Acquisition to March
Magnum Mining & Exploration Limited has extended its due diligence period for acquiring Palmares Estudos Geologicos LTDA, aiming to complete by March 31, 2025, amid regulatory and ESG documentation delays. The company plans a capital raise to support development of its substantial rare earth projects in Brazil.
- Due diligence period extended to March 31, 2025
- Acquisition of 100% shares in Palmares Estudos Geologicos LTDA
- Palmares holds 1,549 km² of rare earth exploration licences in Brazil
- Capital raising planned to fund project development
- Ongoing discussions for green steel pig iron production partnerships
Acquisition Progress and Due Diligence Extension
Magnum Mining & Exploration Limited (ASX: MGU) has announced an extension of the due diligence period for its acquisition of Palmares Estudos Geologicos LTDA, a key landholder in Brazil's emerging rare earth elements (REE) sector. Originally scheduled to complete by January 31, 2025, the due diligence process will now extend to March 31, 2025. This extension reflects the complexity of securing necessary documentation from Brazilian government agencies and fulfilling environmental, social, and governance (ESG) requirements through local stakeholder engagement.
Despite the delay, Magnum remains confident in successfully completing the acquisition, which will grant it 100% ownership of Palmares and its extensive portfolio of mineral exploration licences. The company emphasizes that the holiday season contributed to the slower pace but does not anticipate any fundamental obstacles to closing the deal.
Strategic Importance of Palmares Rare Earths Projects
The acquisition includes two major project areas: the Azimuth Project and the Palmares Project, collectively covering approximately 1,549 square kilometres across the Brazilian states of Minas Gerais, Goias, and Bahia. These greenfield exploration sites are situated in highly prospective geological settings known for hosting ionic clay REE deposits, including heavy rare earth elements critical for green technologies.
The Azimuth Project spans 72 granted claims over 1,201 km² along the Azimuth 125º Lineament, a significant crustal feature associated with exotic intrusives and mineralisation. Nearby, major players such as Fortescue Metals Group have secured landholdings, underscoring the region's growing strategic value.
The Palmares Project, with 18 granted claims covering 348 km² in Bahia State, lies within the Jequie Belt, a carbonatite and alkaline intrusive corridor known for high-grade REE mineralisation. This area is tightly held by ASX-listed companies Equinox Resources and Brazilian Rare Earths, highlighting the competitive landscape Magnum is entering.
Financial and Corporate Implications
Under the acquisition agreement, Magnum will pay US$100,000 in cash and issue 190 million shares to Beko Invest Limited, subject to shareholder approval. Additional shares will be issued to intermediaries involved in facilitating the deal. The shares issued to Beko will be subject to a 12-month voluntary escrow period.
To support the development and growth of these strategic projects, Magnum intends to undertake a capital raising. The company is also actively pursuing partnerships and investment opportunities in the green steel pig iron sector, leveraging its directors’ and consultants’ networks. Notably, negotiations are underway regarding the HIsmelt technology, with potential implications for global green steel production.
Next Steps and Market Outlook
Magnum’s board is currently reviewing funding options and planning a shareholder meeting to approve the share issuance related to the acquisition. The company aims to complete due diligence, secure necessary approvals, and settle the acquisition by the end of March 2025. These milestones will be critical in positioning Magnum as a significant player in Brazil’s rare earths sector, a market gaining increasing attention due to the global push for green technologies and supply chain diversification.
While exploration results to date have not been independently verified by Magnum, the extensive geological work completed by Palmares and the presence of an experienced in-country team provide a solid foundation for advancing these projects.
Bottom Line?
Magnum’s extended due diligence and planned capital raise set the stage for a pivotal expansion into Brazil’s rare earths market, with potential ripple effects across green technology supply chains.
Questions in the middle?
- What are the detailed exploration results and resource estimates for the Azimuth and Palmares projects once due diligence is complete?
- How will Magnum structure its upcoming capital raising, and what impact might it have on existing shareholders?
- What progress will be made in securing joint venture partners or investors for the green steel pig iron initiatives?
