Can Axel REE’s Caldas Project Break China’s Rare Earth Monopoly?

Expanding the Caldas Footprint

Axel REE Limited (ASX, AXL) has announced further positive results from its ongoing auger drilling program at the Caldas Project, situated within the globally significant Poços de Caldas Alkaline Complex in Minas Gerais, Brazil. The latest data confirm widespread, near-surface rare earth element (REE) mineralisation across multiple prospects, reinforcing the project's potential as a district-scale ionic adsorption clay (IAC) discovery.

Following these encouraging outcomes, Axel has initiated a new phase of drilling at the Caldas South prospect, targeting REE mineralisation along the external margin of the Caldera. This expansion beyond the previously explored Caldas Central area aligns with the company’s strategy to delineate a comprehensive Exploration Target across the 228 square kilometre project area.

Significant Drill Results and Geological Context

Auger drilling at the Caldas North and East prospects has yielded substantial intercepts, including intervals with total rare earth oxide (TREO) grades exceeding 1,500 ppm. Notably, hole CAL-079 intersected 6 metres averaging 1,370 ppm TREO with elevated proportions of magnetic and heavy rare earth oxides (MREO and HREO), elements critical for high-performance magnets and advanced technologies.

The mineralisation occurs within thick, clay-rich saprolite horizons developed over weathered granitic and gneissic basement rocks. This geological setting is analogous to Chinese-style ionic clay deposits, where tropical weathering facilitates REE enrichment. Axel’s results suggest that favourable conditions for IAC-style mineralisation extend well beyond the central alkaline complex, enhancing the project's scale and prospectivity.

Towards an Exploration Target and Metallurgical Insights

Axel plans to integrate current and forthcoming drilling data to establish an Exploration Target compliant with the JORC Code (2012). This will define the lateral continuity, thickness, and grade distribution of REE-enriched saprolite across the Caldas Project. Concurrently, metallurgical testwork is underway on composite samples to evaluate processing routes typical for ionic adsorption clay deposits, aiming to optimise recovery of critical REEs such as neodymium, praseodymium, dysprosium, and terbium.

Non-Executive Chairman Paul Dickson emphasised the strategic importance of the project, highlighting its role in diversifying global critical mineral supply chains away from China. He noted that the shallow auger program is successfully demonstrating lateral continuity of REE-enriched horizons and significant proportions of high-value magnet rare earths, setting the stage for resource definition and value creation.

Strategic Positioning in Brazil’s REE Landscape

The Caldas Project is part of Axel’s broader Brazilian portfolio, which covers over 1,000 square kilometres of tenure in a country ranked third globally for REE reserves. The Poços de Caldas Alkaline Complex is a well-recognised geological feature associated with REE and uranium mineralisation, making it a compelling exploration frontier.

Axel’s ongoing exploration complements activities by other juniors such as Meteoric Resources and Viridis Mining, who are also advancing ionic clay REE projects within the Caldera. Axel’s focus on metallurgical testing and Exploration Target definition positions it well to advance towards resource delineation and potential development.