Axel REE’s Metallurgical Advances Could Cut Costs but Resource Risks Remain

Caladão Project Delivers Exceptional Mineralisation

Axel REE Limited has reported a continuation of outstanding exploration results from its flagship Caladão REE-Gallium Project in Brazil’s Lithium Valley. The company’s recent drilling campaigns across Area A and Area B have revealed high-grade gallium and rare earth element (REE) mineralisation exhibiting remarkable lateral continuity over a combined footprint exceeding 65 square kilometres. Notably, the mineralised zones remain open at depth, with only 20% of the total 430 square kilometre project area tested to date.

Gallium intercepts have been particularly impressive, with assays showing grades up to 124 grams per tonne of Ga2O3 near surface. These results underscore the potential for Caladão to emerge as a significant supplier of gallium, a critical metal increasingly sought after for advanced electronics and renewable energy technologies.

Encouraging Metallurgical Test Work Supports Low-Cost Extraction

Post-quarter-end metallurgical testing conducted by Australia’s Nuclear Science and Technology Organisation (ANSTO) has confirmed the presence of ionic adsorption clay (IAC) style REE mineralisation and demonstrated positive recoveries using simple, low-cost leaching methods. Both sodium chloride and ammonium sulfate leaching at mild acidity (pH 4) yielded promising extraction rates for REEs.

Further acid leach tests have also shown encouraging gallium recoveries, with up to 25% extraction achieved under preliminary conditions. Axel is exploring a novel two-stage heap leach process that could significantly reduce environmental impact and operational costs by eliminating the need for drilling, blasting, crushing, milling, and tailings dams. This approach aligns well with global ESG standards and could enhance project economics by producing gallium as a valuable co-product alongside REEs.

Progress on Resource Estimation and Corporate Strategy

Axel is advancing its maiden JORC (2012) Mineral Resource Estimate for both gallium and REEs at Area A, with a report from independent consultants SRK expected imminently. Parallel drilling and assay programs continue to support the definition of a second resource at Area B.

On the corporate front, the company has undertaken a strategic leadership restructure to bolster operational capacity in Brazil and strengthen its Australian-based executive team. This transition reflects Axel’s evolution from a pure exploration entity toward a developer poised to unlock the value of its REE and gallium assets. The issuance of 23 million options to Bell Potter Securities, CPS Capital, and Evolution Capital aims to support investor relations and corporate advisory efforts as Axel pursues offtake and strategic partnerships globally.

Expanding REE Footprint at Caldas Project

In addition to Caladão, Axel’s Caldas REE Project within the Poços de Caldas Caldera has delivered high-grade REE intercepts from shallow auger drilling. The results confirm continuity of ionic adsorption clay REE mineralisation over thick weathered profiles, with grades enriched in magnet rare earths critical for permanent magnets. This positions Axel to build a district-scale REE exploration portfolio in one of Brazil’s most prospective REE regions.

Financial Position and Outlook

Axel maintains a robust cash position of $8.7 million at quarter end, providing ample runway to advance exploration, metallurgical testing, and environmental baseline studies. The company’s disciplined capital management and focused strategy aim to deliver a compelling rare earth and gallium development story in the months ahead.