Axel REE Advances ISR Mining Trials at Brazil’s Caladão Project with Strategic Gallium Upside

Pilot ISR Wellfield Trial to Validate Low-Cost Extraction

Axel REE Limited (ASX:AXL) is gearing up to commence pilot-scale in situ recovery (ISR) field trials at its Woolrich deposit within the Caladão Project, Brazil’s emerging Lithium Valley. This trial represents a critical step in validating a modular, low-impact mining approach that bypasses traditional open pit methods, potentially slashing capital costs and environmental footprint.

The Woolrich deposit, covering about 2,000 hectares, boasts soluble total rare earth oxide (TREO) grades up to 464ppm, aligning closely with operating ISR mines in Asia. The company aims to confirm reagent use, recovery rates, and environmental performance through these trials, which are fully funded and scheduled for 2026 execution. This initiative builds on recent breakthroughs in leach testwork that demonstrated strong rare earth element extraction under magnesium sulphate conditions, a proven and industry-standard lixiviant for ionic clay deposits.

Axel’s strategy draws parallels with the successful Gerik ISR mine in Malaysia, valued at approximately A$205 million after a US$20 million development phase, underscoring the potential for a rapid, capital-efficient pathway to production. The company’s modular wellfield model allows scalable growth by adding independent pods, each targeting steady-state production of 0.5 to 1.5 kilotonnes of rare earth oxides annually.

District-Scale Resource Growth and High-Value Rare Earth Composition

Caladão’s inferred mineral resource estimate has surged by 73% in six months to 572 million tonnes at 1,506ppm TREO, containing 861,000 tonnes of rare earth oxides. Notably, the resource includes a magnet-rich assemblage with approximately 42% of soluble TREO as magnet rare earth oxides (MREO), including neodymium-praseodymium (NdPr) and dysprosium-terbium (DyTb), critical for permanent magnets in electric vehicles and renewable energy technologies.

Beyond Woolrich, the Paraíso deposit offers significant expansion potential with nine identified wellfields over a 1,000-hectare footprint. Paraíso’s grade-thickness values, reaching up to 13,705 gram-metre TREO, indicate stacked, laterally coherent mineralised clay horizons with soluble MREO averaging around 41–42%. These metrics surpass typical commercial benchmarks for ionic clay ISR, reinforcing the project’s scalability.

Such resource growth and composition place Axel REE in a strong position relative to Brazilian peers, particularly given its faster ISR development pathway and modular wellfield strategy. The company’s valuation leverage is further enhanced by being fully funded to deliver pilot wellfield data that could unlock significant upside.

Gallium Resource Adds Strategic Optionality Amid Supply Risks

Axel REE’s Caladão Project uniquely hosts Brazil’s only defined primary gallium resource, a metal critical to defence, solar energy, electric vehicles, and next-generation semiconductors for AI data centres. With 98% of global gallium supply controlled by China and export bans imposed since 2024, this resource presents a rare opportunity to secure a non-Chinese supply source.

Independent metallurgical testwork led by ANSTO confirms promising recovery pathways for gallium and co-recovery of scandium, potentially enabling a multi-commodity critical minerals development. This parallel development path could attract strategic partnerships with governments and technology manufacturers seeking to diversify supply chains.

Axel’s gallium and scandium optionality complements its core rare earth ISR project, offering a unique value proposition in a market increasingly focused on responsible sourcing and supply chain security.

Corporate Strength and Strategic Roadmap

With a market capitalisation of approximately A$12.7 million and a cash balance of A$6.6 million as of March 2026, Axel REE maintains a low enterprise value relative to its resource base. The board and management hold 37% of shares, with 42% of shares escrowed until July 2026, aligning interests with shareholders.

The company’s strategic roadmap envisions a phased ISR deployment starting with field-scale validation at Woolrich, progressing through pilot and ramp-up pods, and eventually reaching steady-state production. This approach aims to deliver commercial-spec mixed rare earth carbonate (MREC) product for customer testing and accelerate discussions on strategic partnerships.

Axel’s approach is underpinned by a team with deep experience in minerals exploration, geoscience, and capital markets, including Non-Executive Chairman Paul Dickson and founder Pat Volpe, who bring decades of expertise in critical minerals discovery and development.

This update aligns with recent progress reported in the company’s Woolrich leach breakthrough and advances in gallium and scandium recovery, reinforcing the technical foundation for the upcoming field trials.