Brazilian Rare Earths Limited (BRE) reports a robust scoping study for its Amargosa Bauxite-Gallium Project, alongside a strategic heavy rare earths partnership and a strong cash position to accelerate development.
- Amargosa project boasts 568 Mt JORC resource with 98 Mt direct-ship bauxite
- Scoping study forecasts US$630 million NPV and 1.2-year payback
- Strategic 10-year heavy rare earths offtake and technical partnership with Carester
- Appointment of experienced CFO John Vander Ploeg
- Strong balance sheet with A$162 million cash post $120 million placement
Amargosa Bauxite Project, A Low-Cost, High-Quality Asset
Brazilian Rare Earths Limited (ASX, BRE) has delivered a compelling update on its Amargosa Bauxite-Gallium Project in Bahia, Brazil, revealing a large-scale, low-capital pathway to production. The recent scoping study highlights a 568 million tonne JORC-compliant mineral resource, including 98 million tonnes of premium direct-ship bauxite (DSB) with low reactive silica content, positioning Amargosa as a globally competitive supplier.
The project’s economics are particularly attractive, with an after-tax net present value (NPV) of US$630 million based on an 8% discount rate, an average annual EBITDA of US$102 million, and a swift payback period of approximately 1.2 years. These figures underscore the potential for strong cash flow generation over a 17-year mine life, supported by simple truck-and-shovel mining and efficient road logistics to the established Port of Enseada.
Strategic Location and Expansion Optionality
Amargosa benefits from its strategic location near major highways and bulk export infrastructure, enabling low-cost, reliable transport to market. The project’s shallow, laterally continuous bauxite seams allow for a low waste-to-bauxite strip ratio of 0.7, 1, further enhancing operational efficiency.
Beyond the initial 5 million tonnes per annum (Mtpa) DSB operation, BRE is exploring expansion opportunities, including integration with the FIOL-Porto Sul rail corridor to scale exports to around 15 Mtpa. Independent studies confirm the technical and commercial viability of this rail-linked expansion, which could significantly increase project value with an NPV rising to US$1.7 billion under favourable pricing scenarios.
Heavy Rare Earths Partnership with Carester
In a strategic move to strengthen its rare earths supply chain, BRE has entered into a long-term partnership with Carester SAS, a leading rare earth processing specialist. This alliance includes a binding 10-year offtake agreement for heavy rare earth concentrates, supporting production of dysprosium and terbium oxides at Carester’s Caremag facility in France, one of the largest heavy rare earth separation plants globally.
Carester will also provide engineering and commissioning support for BRE’s planned rare earth separation refinery at the Camaçari Petrochemical Complex in Bahia, accelerating project development and reducing execution risk. This partnership positions BRE to address critical Western supply shortages of heavy rare earths essential for advanced technologies.
Corporate Developments and Financial Strength
BRE has appointed John Vander Ploeg as Chief Financial Officer, bringing over 20 years of experience in listed company reporting and complex transactions, a key addition as the company advances its development pipeline.
Financially, BRE is well positioned with A$162.4 million in cash at the end of December 2025, bolstered by a $120 million placement completed in October 2025. These funds are earmarked to fast-track the development of its rare earth projects and the separation refinery, underpinning the company’s growth ambitions.
Unlocking Shareholder Value
To enhance strategic focus and unlock value, BRE is progressing a de-merger of the Amargosa project, with plans for a spin-out listing targeted for mid-2026. This move aims to crystallise the value of the bauxite asset separately, potentially attracting dedicated investor interest and unlocking capital for further growth.
Meanwhile, ongoing exploration and metallurgical work at the Monte Alto and Sulista rare earth projects continue to support the company’s broader rare earths strategy, with pilot plant construction underway in partnership with SENAI CIMATEC.
Bottom Line?
With strong project economics, a strategic rare earths partnership, and robust funding, BRE is poised for a transformative year ahead.
Questions in the middle?
- How will permitting and financing timelines impact the 2028-2029 production targets for Amargosa?
- What are the prospects and timing for the Amargosa de-merger and its market reception?
- How will global rare earths market dynamics influence the commercial success of the Carester partnership?