Power Minerals has repositioned around two Brazilian critical minerals projects, led by Morro do Ferro’s thick, high-grade rare earth intersections and a conceptual 10.7Mt Exploration Target. The shift comes with stronger funding and no borrowings, but the audited accounts warn that further financing remains essential.
- Morro do Ferro Exploration Target of 9.2Mt to 10.7Mt at 7.8% to 9.2% TREO
- Drilling returned up to 137m at 4.31% TREO and 88m at 6.33% TREO
- A$19.5 million raised during FY2026 and A$7.47 million cash held at year-end
- Santa Anna acquisition adds niobium and rare earth exposure in Brazil
- A$10.05 million net loss and material going concern uncertainty disclosed
Morro do Ferro Becomes Power’s Lead Asset
Power Minerals Limited (ASX:PNN; OTCQB:PEIMF) has made Brazil the centre of its strategy after acquiring the Morro do Ferro rare earths project in Minas Gerais and reporting a run of unusually broad, high-grade drill intersections. The project’s maiden Exploration Target stands at 9.2 million to 10.7 million tonnes grading 7.8% to 9.2% total rare earth oxides (TREO), with estimated magnet rare earth oxide grades of 1.3% to 1.6%.
The company stresses that the Exploration Target is conceptual, is not a Mineral Resource and may not lead to one. Even so, the drilling that underpins the target has produced striking results. Hole MFSR-052 returned 137 metres at 4.31% TREO from surface, including 26.9 metres at 13.0% TREO and 2.40% magnet rare earth oxides. MFSR-054 delivered 88 metres at 6.33% TREO from surface, with mineralisation extending to a project-record depth of 186 metres.
The reported grades matter because Power is targeting neodymium, praseodymium, dysprosium and terbium rather than simply maximising total rare earth volumes. The company says mineralogical work indicates the valuable magnet rare earths are mainly hosted in bastnäsite, while lower-value cerium occurs in separate cerianite mineralisation. That distinction could influence future beneficiation and product planning, although no economic or processing outcome has yet been established.
Brazilian Portfolio Expands Beyond One Deposit
Power completed its acquisition of the Santa Anna niobium and rare earths project in Goiás during the year, adding a second Brazilian asset with exploration upside. Due diligence drilling identified niobium and rare earth mineralisation in both weathered material and fresh carbonatite, while historical drilling has recorded niobium grades of up to 3.36% Nb2O5.
Santa Anna is not yet a defined resource, but Power’s auger campaign returned intervals including 5 metres at 1.40% TREO and 8 metres at 0.96% TREO. The company has also entered a strategic partnership with Brazilian mining group EDEM, which supplied drilling and technical support at reduced costs. Power plans to focus on the project’s niobium and rare earth potential, while EDEM is expected to assess phosphate opportunities.
Capital Strength Improves While Funding Risk Remains
The balance sheet is considerably stronger than a year earlier. Power raised A$19.52 million through placements during FY2026, ended 30 June with A$7.47 million in cash and had no borrowings. Exploration and evaluation assets rose to A$30.59 million, reflecting project acquisitions and increased exploration expenditure, including A$7.17 million spent during the year.
Those figures do not remove the central risk facing the company. Power recorded a A$10.05 million net loss, while operating activities consumed A$2.99 million in cash. BDO gave an unmodified audit opinion but highlighted a material uncertainty related to going concern, noting that the company’s ability to fund planned exploration and capital projects depends on future third-party financing. The accounts also recognised A$4.84 million in share-based payment expense and a further A$2.30 million in impairment charges.
Resource Estimate Is the Next Test
Power’s immediate priority is to finish drilling at Morro do Ferro, complete mineralogical and metallurgical testwork and work towards a maiden Mineral Resource Estimate targeted for the first half of 2027. The company has appointed Alistair Stephens as chief executive officer, bringing prior rare earth development experience, and added New York-based Israel Benchemhoun to its board after year-end to strengthen North American investor relationships.
Salta remains part of the portfolio, but its development pathway is less settled. Power is assessing a proposed joint venture with Summit Explore covering five Argentine lithium salars, with Power potentially retaining a 41% interest. The framework is non-binding, and the proposed partner also has an option to acquire the Salta project for US$50 million during the feasibility period.
For now, the investment case rests on whether Morro do Ferro can convert impressive exploration numbers into a properly constrained resource, a workable flowsheet and a financeable development plan. The company has momentum and a larger Brazilian platform, but the next round of drilling, metallurgy and funding decisions will determine how much of that promise survives contact with the balance sheet.
Bottom Line?
Morro do Ferro has given Power Minerals a compelling technical focal point, but the planned 2027 resource must arrive before the company’s funding runway becomes the dominant story.
Questions in the middle?
- Can further drilling convert the conceptual Morro do Ferro Exploration Target into a maiden Mineral Resource without materially reducing its reported grades?
- Will metallurgical testwork demonstrate a commercially credible pathway for separating and recovering the targeted magnet rare earths?
- How much additional capital will Power require to advance Morro do Ferro and Santa Anna while maintaining its Salta lithium interests?