Axel REE’s Caladão Project: 572Mt Rare Earths and Gallium Resource in Focus

Caladão Project, A Rare Earths and Gallium Powerhouse

Axel REE Limited (ASX, AXL) has unveiled a comprehensive update on its flagship Caladão Project in Brazil, signalling a decisive move towards commercial in situ recovery (ISR) mining. The project boasts a substantial inferred mineral resource estimate of 572 million tonnes at 1,506 parts per million total rare earth oxides (TREO), alongside a significant gallium resource of 439 million tonnes at 38 parts per million. These figures place Caladão among the world’s more sizeable rare earth element (REE) deposits, with the added distinction of hosting Brazil’s only defined primary gallium resource.

The company’s focus on ISR; a mining technique that involves leaching minerals directly from ore bodies without traditional excavation; reflects a strategic choice to leverage a low capital expenditure (CAPEX) and operational expenditure (OPEX) model. This approach is inspired by proven Chinese ISR operations, which dominate approximately 70% of global rare earth production and are known for their environmental advantages and cost efficiencies.

From Pilot Pods to Production, The Strategic Roadmap

Axel REE’s roadmap outlines a phased development plan beginning with pilot pods in 2027, ramping up to steady-state pods by 2029 capable of producing between 100 to 1,500 tonnes of rare earth oxides annually per pod. The company plans to commence field recovery trials in 2026, focusing initially on the Woolrich Deposit and Paraíso Prospect; two key areas within the Caladão Project with extensive mineralised footprints and high-grade soluble TREO and gallium concentrations.

These trials aim to validate site hydrology, optimise reagent use, and establish environmental baselines, all critical to demonstrating the commercial viability of ISR mining at Caladão. The modular ‘pod’ concept allows for scalable and replicable operations, potentially connecting multiple wellfields to centralised processing hubs to drive down unit costs further.

Gallium, A Strategic Differentiator

Beyond rare earths, Axel REE is positioning its gallium resource as a strategic asset amid global supply constraints. With gallium prices exceeding US$2,100 per kilogram and 98% of supply controlled by China, the Caladão Project’s gallium offers a rare non-Chinese source for this critical metal, essential for defence, solar energy, electric vehicles, and next-generation semiconductors powering AI data centres.

This dual-resource strategy provides Axel REE with optionality and potential leverage in attracting government and technology sector interest, aligning with broader Western efforts to diversify critical mineral supply chains.

Valuation and Market Positioning

Despite its resource scale and innovative approach, Axel REE’s market valuation remains modest at approximately A$16 million, with a cash balance of A$7.1 million as of December 2025. This contrasts sharply with Brazilian peers who trade at significantly higher enterprise value to contained rare earth oxide metrics. The company attributes this disconnect to its early-stage inferred resource status and the ongoing generation of feasibility-level ISR data.

Axel REE’s management team, featuring seasoned industry figures such as Chairman Paul Dickson and founder Pat Volpe, is focused on de-risking the project through metallurgical testwork, pilot trials, and strategic partnerships. The company is fully funded to advance these milestones, with commercial mixed rare earth carbonate (MREC) product testing already underway.

Looking Ahead

As Axel REE moves into 2026, the upcoming ISR field trials will be pivotal in validating the project’s technical and economic assumptions. Success here could accelerate the pathway to production and re-rating, while the unique gallium resource adds a compelling dimension to the company’s strategic narrative. Investors and industry watchers will be keenly observing how Axel navigates regulatory approvals, operational challenges, and market dynamics in the critical minerals sector.