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By Team Ace Investors
Company Overview
Viridis Mining and Minerals Limited (VMM) is a mineral exploration company focused on rare earth elements. Rare earth elements (REEs) are a group of 17 metallic elements, including the 15 lanthanides (atomic numbers 57-71), as well as scandium and yttrium. These elements are known for their unique magnetic, luminescent, and catalytic properties, making them crucial for various high-tech applications. In August 2023, Viridis acquired 100% Rare Earth Element (REE) rights to the Colossus IAC (Ionic Adsorption Clay) Project. Ionic Adsorption Clays (IACs), also known as Ion Adsorption Deposits (IADs), are deposits where rare earth elements (REEs) are adsorbed onto the surface of clay minerals like kaolinite and halloysite. Since then, Viridis has pursued an aggressive exploration program, which has positioned Colossus to potentially become amongst the highest grade IAC projects in the world. The Phase I & II Drill programs at Colossus have delivered world-class intercepts of IAC REE mineralisation, with significant weighting towards magnet rare earths. On 4th June 2024, the company announced a globally significant Maiden Mineral Resource Estimate (‘MRE’) of 201Mt @ 2,590ppm total rare earth oxide ('TREO') at a 1,000ppm TREO cut-off, with Magnet REO (‘MREO - Nd, Pr, Dy, Tb’) content of 668ppm. The Colossus IAC REE Project is located in the State of Minas Gerais, Brazil, and comprises a total of 228.62 km2 licenses within and around the prolific Poços De Caldas Alkaline Complex, which is home to some of the highest-grade IAC intercepts recorded globally. The company also announced an exceptional metallurgical test, with results from Phase I of Mixed Rare Earths Carbonate (MREC) leach testing from Northern Concessions have delivered incredible recoveries of Neodymium & Praseodymium at 76% and Dysprosium & Terbium at 65%, using an industry-standard Bulk Ammonium Sulphate (AMSUL) wash. In addition, the company also owns several other projects, viz., Kitikmeot Project, Boddington West Project, Bindoon Project, Poochera, and Smoky.
Investment Rationale
Achieved exceptional MREO recoveries, with overall MREO recoveries from ore to MREC of 78%
On 12th Dec’2024, the Company announced the production of its maiden Mixed Rare Earth Carbonate (‘MREC’) from the Southern Complex, a critical milestone validating the Project’s economic potential and processing flowsheet. During the half-year that ended on 31 Dec 2024(H1 FY25), the company engaged the Australian Nuclear Science and Technology Organisation (‘ANSTO’) to execute a detailed work program metallurgical test work conducted in collaboration with the Australian Nuclear Science and Technology Organisation (‘ANSTO’) from its Southern Complex (Cupim South and Centro Sul) to form ideal conditions in a practical flowsheet design that produces an MREC product from clay. The test work delivered the highest known recoveries for all the valuable Magnetic Rare Earth Oxides (‘MREO’) in an MREC product, using a low-cost ammonia-based flowsheet with leaching performed at pH 4.5, 0.3M Ammonia Sulphate (‘AMSUL’), room temperature and 30-minute residence time. The test work achieved exceptional MREO recoveries, with overall MREO recoveries from ore to MREC of 78%. The test work processed a 41kg bulk sample from Cupim South and Centro Sul prospects, which confirmed a pH of 4.5 with a 40% lower reagent concentration (0.3M ammonium sulfate (‘AMSUL’)). The final MREC product contained 58% Total Rare Earth Oxides (‘TREO’), with 38% classified as MREOs. The superior proportion of MREOs in the MREC product delivers a premium and high-quality basket value, whereby MREOs account for 93% of the overall value in the MREC. The phenomenal MREC production from both Northern Concessions and Southern Complex has positioned the project on track to deliver a premium MREC product from multiple concessions, supporting a long-life and high recovery operation, ranking Colossus amongst the leading rare earth projects globally in multiple aspects.
Announced a 140% increase in MRE to 493Mt @ 2,508ppm total rare earth oxide (‘TREO’) at a 1,000ppm TREO cut-off for the Colossus project
On 22nd Jan’2025, the company announced a 140% increase in Mineral Resource Estimate (‘MRE’) to 493Mt @ 2,508ppm total rare earth oxide (‘TREO’) at a 1,000ppm TREO cut-off for its flagship Colossus project, positioning the project as the leading Ionic Adsorption Clay (‘IAC’) Rare Earth Element (‘REE’) Project. The updated MRE for the Colossus Project marks a significant milestone, incorporating substantial advances across the Northern Concessions and the Southern Complex, reinforcing Colossus’ position as one of the world’s leading IAC rare earth projects, combining resource scale with exceptional grade. In the Northern Concessions, the resource now stands at 170Mt @ 2,435ppm TREO and 614ppm MREO in the Measured and Indicated categories, solidifying its role as a key contributor to the overall project. Meanwhile, the Southern Complex, representing a major portion of the total resource, delivers an impressive 157Mt @ 2,947ppm TREO and 708ppm MREO in Indicated regolith resources, highlighting its strategic importance for producing high-grade feedstock. The Tamoyo Prospect also contributed 18Mt @ 2,896ppm TREO with 770ppm MREO (regolith and transitional ore), enhancing the project's high-grade feed plan and economic outlook. The upgraded MRE for the Colossus Project sets a global benchmark in the rare earth sector. With a Measured & Indicated resource of 329Mt @ 659ppm MREO, the project represents the largest and highest-grade accumulation of critical magnet rare earth oxides (Nd, Pr, Dy, Tb) among IAC projects worldwide. MREO content is the key factor determining the profitability of a rare earth operation, rather than TREO. These highly sought-after elements have higher values than other rare earth elements and are the primary drivers of basket value for most IAC REE projects. With IAC industry-leading MREC recoveries from a cost-effective and environmentally friendly flowsheet, coupled with the largest and highest-grade MREO Measured & Indicated resource among IAC projects, the Colossus Project is poised to redefine the cost curve. The resource expansion potential at Colossus remains tremendous, with the resource update only formed from 11% of the total Colossus Project area, leaving substantial room for further exploration and growth.
The recently released scoping study established Colossus as one of the highest-margin and lowest-cost rare earth producers globally.
On 25th Feb’2025, the company announced the results of the Scoping Study (‘Study’) for its flagship Colossus Project in Poços De Caldas, Brazil. The Study confirmed the Colossus Project as one of the highest-margin and lowest-cost rare earth producers globally, with outstanding project economics based on a 20-year Life of Mine (‘LoM’), at both current spot pricing and long-term average forecast price (‘Base Case’). The Scoping Study has delivered a Pre-tax NPV8 of approximately US $1.43 billion (AUD 2.26 billion) based on a conservative long-term average forecast price assumption of US $90/kg NdPr for its Base Case which is significantly lower than its industry peers and a Pre-tax NPV8 of approximately US $719 million (AUD 1.13 billion) based on a spot price of $60/kg NdPr for its Current Spot Case. The project is estimated to deliver an annual production of 9.5ktpa TREO across the LoM and 3.5ktpa MREO (comprising 36% NdPr Oxides and 2% DyTb Oxides) at the rate of 5Mtpa and deliver an Annual EBITDA of approximately US$ $114 million (AUD 180 million) at the spot price of $60/kg NdPr. The project is estimated to have an initial capital expenditure of approximately US$ $287M (excluding contingency), LoM average C1 OPEX of US$ $6.0/kg TREO, and AISC of US$ $8.8/kg TREO underpinned by its simple flowsheet design and high “Ore to MREC” metallurgical recoveries. The study was based on the updated Mineral Resource Estimate announced on 22 January 2025 and assessed the development of an initial 5 Mtpa rare earth production facility with a 20-year mine life. The Measured and Indicated mineral resources identified from only the Northern Concessions and the Cupim South section of the Southern Complex, which make up less than 13% of the total tenement package held by Viridis and only 20% of the global JORC resource of 493Mt. There exists a significant high-grade resource expansion upside with only 20% of the JORC-compliant resource of 493Mt at 2508ppm TREO and 601ppm MREO included in the study.
Next steps: On 4th Feb’2025, the company received firm commitments to raise A$3.5 million at an issue price of $0.33 (per New Share) to new and existing investors through the placement of approximately 10,606,061 New Shares. Funds will be used to accelerate work on the Colossus Project's critical path, including the Pre-feasibility Study, the next phase of environmental approvals, and metallurgical test work to optimise the flowsheet. The critical path runs through the environmental approval process. With unwavering support from the state and local government representatives, environmental permitting remains on track per the Colossus development timeline. The company is expected to deliver a nameplate production of 1,000 units in 2028.
ACE’s Recommendation
Viridis Mining and Minerals Limited (VMM) is a mineral exploration company focused on rare earth elements. On 12th Dec’2024, the Company announced the production of its maiden Mixed Rare Earth Carbonate (‘MREC’) from the Southern Complex. The test work delivered the highest known recoveries for all the valuable Magnetic Rare Earth Oxides (‘MREO’) in an MREC product, using a low-cost ammonia-based flowsheet with leaching performed at pH 4.5, 0.3M Ammonia Sulphate (‘AMSUL’), room temperature and 30-minute residence time. The test work achieved exceptional MREO recoveries, with overall MREO recoveries from ore to MREC of 78%. On 22nd Jan’2025, the company announced a 140% increase in Mineral Resource Estimate (‘MRE’) to 493Mt @ 2,508ppm total rare earth oxide (‘TREO’) at a 1,000ppm TREO cut-off for its flagship Colossus project, positioning the project as the leading Ionic Adsorption Clay (‘IAC’) Rare Earth Element (‘REE’) Project. The upgraded MRE for the Colossus Project sets a global benchmark in the rare earth sector. With a Measured & Indicated resource of 329Mt @ 659ppm MREO, the project represents the largest and highest-grade accumulation of critical magnet rare earth oxides (Nd, Pr, Dy, Tb) among IAC projects worldwide. MREO content is the key factor determining the profitability of a rare earth operation, rather than TREO. On 25th Feb’2025, the company announced a Scoping Study (‘Study’) on its flagship Colossus Project in Brazil. The Study confirmed Colossus as one of the highest-margin and lowest-cost rare earth producers globally, with outstanding project economics based on a 20-year Life of Mine ('LoM'), at both current spot pricing and long-term average forecast price (‘Base Case’). The study has delivered a Pre-tax NPV8 of ~ US$ $719 million (AUD 1.13 billion), even based on the current depressed spot NdPr price of US$ $60/kg. We believe that the recently announced Scoping Study on Colossus has de-risked the project and underpinned its development case. The stock closed the day at A$ 0.285/sh and presents an investment case from a long-term perspective. So, we would like to recommend a BUY rating on the stock.
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