Axel REE Advances ISR Field Trials with Enhanced Gallium and Scandium Recovery at Caladão

Woolrich Deposit Set for Pioneering ISR Field Trial

Axel REE Limited (ASX:AXL) has advanced a critical milestone in its rare earth development strategy by selecting the Woolrich deposit within the Caladão Project in Brazil as the site for its inaugural in situ recovery (ISR) field trial. The 128Mt Woolrich deposit, part of a broader 572Mt inferred rare earth resource, exhibits soluble TREO grades averaging 464ppm with a magnet-rich rare earth oxide (MREO) assemblage comparable to operating ISR mines in Asia. Its favourable geological and topographical features, such as low-relief terrain and a well-developed lateritic profile, make it an ideal candidate for gravity-assisted leach solution drainage and containment, essential for ISR operations.

Preparations are underway with infill drilling and 3D geological modelling to refine wellfield definitions, while a multidisciplinary technical team is being assembled to oversee the trial’s design and execution. The field trial aims to generate critical operational data, including permeability, reagent consumption, and hydraulic control parameters, within a 2-hectare test area. Generated pregnant leach solution (PLS) will be processed downstream by Core Resources Australia to produce mixed rare earth carbonate (MREC), testing the full extraction-to-product chain. These efforts build on recent progress where Axel achieved a successful REE pregnant liquor breakthrough in column leach tests, reinforcing the viability of magnesium sulphate leaching under ISR conditions.

Metallurgical Breakthroughs Boost Gallium and Scandium Recovery

Axel has reported a near doubling of gallium extraction to approximately 50% through oxalic acid leaching in metallurgical testwork conducted by ANSTO on Caladão samples. This marks a substantial improvement over previous sulphuric acid-based methods, which achieved only about 25% extraction. Notably, the testwork also confirmed scandium co-leaching under the same conditions, introducing a high-value co-product with a spot price exceeding US$4,000/kg for 99.99% Sc2O3 as of March 2026. This discovery adds a lucrative dimension to Axel's resource, potentially enhancing project economics.

Complementary acid leach tests using hydrochloric acid have demonstrated over 96% recovery of magnetic rare earth oxides (MREO) from portions of the Caladão weathered profile, supporting a dual-pathway development strategy. This approach combines near-term modular ISR targeting ionic clay zones at Woolrich and Paraíso with longer-term acid leach processing to maximise recovery from non-ionic clays. The Paraíso target, validated by magnesium sulphate leach results, emerges as a second potential ISR wellfield, reinforcing the project's scalability and optionality. These findings align with Axel’s broader commercial objectives, as the company engages rare earth traders and supply chain participants to refine product specifications and offtake potential, building on its accelerated ISR mining trials momentum.

Exploration Progress and Corporate Developments

Beyond Caladão, Axel has completed auger drilling across multiple prospects at the Caldas REE Project in Minas Gerais, with geological integration underway to define an initial Exploration Target under JORC 2012 standards. Early drill results have shown promising rare earth grades in saprolite profiles, and ongoing metallurgical studies aim to confirm the applicability of ionic clay leaching methods at Caldas.

On the corporate front, Axel strengthened its board with the appointment of Ian Reid, a geoscience veteran with over 40 years of international experience, including leadership roles at Karoon Energy overseeing Brazilian subsurface projects. This appointment enhances Axel’s technical and governance capabilities as it advances its ISR strategy. Financially, the company ended the quarter with $6.6 million in cash, supporting ongoing exploration and development activities. Exploration expenditure for the quarter was $448,000, reflecting disciplined capital management well below Prospectus estimates.