Power Minerals reveals scale and record grades at Morro do Ferro

Morro do Ferro drilling delivers Power’s strongest intersections

Power Minerals Limited (ASX:PNN) has put numbers around the scale of its Brazilian rare earths project, but the immediate investor question is how quickly it can fund the next stage. The company ended the September quarter with A$4.5 million in cash, estimated only 1.5 quarters of funding, and said it was in a trading halt seeking capital through a strategic investment.

“Location of Morro do Ferro Project, north of São Paulo, southern Brazil.”

That financing pressure arrives as Morro do Ferro produces its most striking assays to date. Hole MFSR-057 returned 111 metres at 8.25% total rare earth oxides (TREO) from surface, including 51 metres at 15.42% TREO and 15 metres at 20.42% TREO. A 1.2-metre sample within the hole graded 40.5% TREO and 7.73% magnet rare earth oxides (MREO), the highest individual sample reported from the project.

The result adds to a run of thick, high-grade intersections. Hole MFSR-056 returned 119 metres at 4.94% TREO from surface, including 10 metres at 12.31% TREO, while MFSR-055 delivered 91 metres at 7.7% TREO, including 23.1 metres at 17.5%. The latter hole also contained a two-metre sample grading 22.6% TREO, described by Power as the project’s second-highest individual sample. The company’s 91m high-grade drill zone had previously highlighted the same MFSR-055 result.

Exploration Target points towards a maiden resource

Power’s maiden Exploration Target covers approximately 9.2 million to 10.7 million tonnes at 7.8% to 9.2% TREO, with estimated MREO of 1.3% to 1.6%. Between 5.2 million and 6.4 million tonnes are supported by drilling; the remaining 3.9 million to 4.4 million tonnes comes from a projected extension into undrilled ground.

That distinction matters. The target is conceptual, not a Mineral Resource, and Power says there has been insufficient exploration to estimate one. The projected component extends the interpreted mineralised envelope along a 116-degree trend and 18-degree plunge, with a maximum 200-metre step-out in the southern lobe. It may not be realised. Reported intersections are downhole widths and may not represent true widths.

Two rigs are working through a planned 25-hole, approximately 4,000-metre diamond drilling program, with completion expected in six weeks. Assays from the remaining holes should provide the next test of whether the target can be converted into a resource estimate. Earlier drilling had already extended mineralisation to 242m, although the geometry and economic significance of those deeper zones remain unproven.

Metallurgy and regulatory support move ahead

Power has begun mineralogical and metallurgical work on more than 100 kilograms of drill samples. Early analysis identified bastnäsite-group minerals and cerianite, while testwork is examining liberation, recovery, reagent requirements, impurity management and the possibility of concentrating the critical rare earths neodymium, praseodymium, dysprosium and terbium.

The company plans PQ-diameter drilling to generate larger samples for metallurgical testing planned for 2027. Minas Gerais authorities have also granted Morro do Ferro priority-project treatment, directing environmental licensing towards specialised review. The agreement provides government support and a clearer pathway, but it does not grant preliminary, installation or operating licences, tax exemptions, project finance, offtake or a construction timetable.

Santa Anna advances while Salta lithium venture ends

At Santa Anna in Goiás, a study of 38 drill-core samples confirmed niobium-rich pyrochlore. An electron probe analysis of 118 grains returned an average composition of 68.8% Nb₂O₅ and a maximum of 73.9% Nb₂O₅. Power stressed that these figures describe the niobium concentration within pyrochlore grains, not the grade of the whole rock.

The company has also terminated its non-binding joint venture with Summit Explore Corporation for the Salta Lithium Project in Argentina and is assessing other development options. Across the quarter, it spent A$2.06 million on exploration, largely at Morro do Ferro, while operating and investing cash outflows totalled A$2.93 million.

Funding becomes the next project milestone

The exploration story is gathering momentum, but the balance sheet is less forgiving. Power says it expects to maintain its current level of net operating cash flows and believes it can continue operations on existing reserves plus the proposed funding steps. No size, structure or terms for the strategic investment were disclosed in the report.

That leaves a clear sequence of tests: the trading halt must produce funding, remaining assays must support the conceptual target, and metallurgical work must show whether the impressive grades can translate into a workable process. Until then, Morro do Ferro remains a promising exploration story rather than a defined resource or development project.