Viridis puts Colossus on the construction track with US$1.2bn after-tax NPV

Colossus clears the feasibility hurdle

Viridis Mining and Minerals Limited (ASX:VMM) is no longer presenting Colossus as merely a promising Brazilian exploration story. Its FY2026 report describes a project approaching construction, backed by a 25-year production case, a 200.1 million tonne Ore Reserve and an after-tax NPV8 of US$1.196 billion. The reported after-tax IRR is 36.4%, with payback estimated at 2.7 years.

Those figures come from the Definitive Feasibility Study completed after the June year end, rather than from the statutory accounts themselves. The study assumes a 5Mtpa operation and estimates development capital of US$449 million including contingency, or US$405 million before contingency. Viridis says the Production Target is supported entirely by Ore Reserves, although the economics remain dependent on assumptions for rare earth prices, recoveries, costs, permitting, construction and financing.

Demonstration plant provides operating evidence

The most tangible technical milestone was the commissioning of the Colossus Demonstration Plant at the company’s Rare Earths Research and Processing Centre in Poços de Caldas. The facility produced its first mixed rare earth carbonate in May 2026 and moved into continuous operation, with reported average recoveries of 78.7% for magnetic rare earth oxides and 64.0% for total rare earth oxides.

Viridis says those results exceeded the assumptions used in its earlier studies and supported equipment selection, product qualification and the DFS. The distinction matters: a demonstration plant can supply useful operating data, but it is not the same as a commissioned commercial mine and processing facility. The company’s own risk disclosures note that ore variability, reagent use, impurity removal, product specifications and commercial-scale performance may differ from demonstration results.

Funding has improved, but the capital stack is unfinished

The balance sheet looked substantially better at 30 June 2026 than a year earlier. Cash stood at A$20.49 million, compared with A$1.15 million, after equity raisings including a heavily oversubscribed A$25 million placement. The company reported a net loss of A$6.94 million for the year, while investing cash outflows reached A$22.70 million as spending shifted towards plant, infrastructure and project development.

After year end, Viridis announced commitments for up to approximately US$120 million of strategic equity funding and subsequently issued 30.88 million shares at A$3.79 each, raising A$117 million before costs. That substantially addresses the indicative equity component of the company’s targeted 70% debt and 30% equity funding structure for the US$449 million development case. It also comes with dilution: the annual report records 129.7 million ordinary shares on issue at 30 June, before the later placement.

The BNDES approval for a R$77.5 million facility adds a further funding source for eligible research, development and innovation expenditure at the Brazilian processing centre. It is not, however, the senior construction debt required for the commercial Colossus development. Export credit and development finance support disclosed in the report also remained subject to due diligence, approvals and financing conditions rather than constituting committed project debt.

Permitting and commercial contracts are the next gates

Viridis received the Preliminary Licence for the Northern Concessions in December 2025 and submitted its Installation Licence application in May 2026. Approval of that second-stage licence would authorise the relevant site development and construction activities, but the company does not yet have it in hand. The report identifies the licence, senior debt, EPCM mobilisation, long-lead procurement and a Final Investment Decision as principal remaining workstreams.

The proposed Solvay relationship is similarly advanced but not yet definitive. The non-binding letter of intent covers potential long-term offtake and technical cooperation, with product samples sent to Solvay’s La Rochelle facility for qualification. Viridis says key commercial terms had been finalised by the DFS, but binding documentation was still being progressed. Until those agreements and financing are completed, the project’s attractive study economics remain a development case rather than operating cash flow.

Resource confidence rises as the project gets more expensive

Drilling lifted the Measured Resource to 31Mt within a 473Mt total Mineral Resource, compared with less than 1Mt of Measured material in the earlier estimate. The updated resource was slightly smaller overall and carried a marginally lower average MREO grade, but the increase in geological confidence was relevant to mine planning and the Reserve conversion.

That conversion produced 27.4Mt of Proved Ore Reserves and 172.7Mt of Probable Reserves. The reserve tonnage was broadly unchanged from the maiden estimate, while average TREO grade increased. The annual report’s numbers therefore show a project becoming more technically defined, but not one that has escaped the normal risks of a first-of-kind construction and commissioning program in a foreign jurisdiction.