Brazil selects Viridis for slice of $1.37B critical metals fund
ASX-listed Viridis Mining & Minerals has landed a major financial coup by being selected for a potential slice of Brazil's R$5 billion (A$1.37 billion) strategic minerals funding program aimed at fast-tracking the country's clean energy transition.
The company's flagship Colossus rare earths project in Brazil's Minas Gerais region, together with associated refining and recycling facilities, will receive support under a prestigious government agency initiative.
The Brazilian National Bank for Economic and Social Development (BNDES) and the country's Federal Agency for Funding Authority for Studies and Projects (FINEP) have teamed up in a joint scheme to invest in key energy-transition materials, such as rare earths and permanent magnets.
Viridis says its selection marks a massive vote of confidence in the company, as it pushes to build the world's first fully integrated rare earths supply chain outside of China.
Management is now gearing up to lock in the deal, with funding set to flow through a mix of grants, debt and, possibly, a strategic equity slice.
As China tightens the screws on rare earth exports, putting global supply chains on edge, Viridis' funding news appears particularly well timed.
Through its joint venture (JV) entity with fellow listed partner Ionic Rare Earths – dubbed Viridion – Viridian hit a major milestone in May when it produced its first batch of recycled high-purity neodymium, praseodymium, dysprosium and terbium oxides.
The JV was established to investigate options for in-country magnet metals recycling.
The material was delivered for testing to the not-for-profit FIEMG's Innovation and Technology Centre of Minas Gerais (CIT SENAI) in Lagoa Santa city. The centre's Lab Fab facility is the first of its kind in Latin America.
The oxides, which are vital ingredients for permanent magnets, were recovered from old magnets and wind turbines in Brazil using cutting-edge technology developed at Ionic's Belfast facility.
In addition to the initial R$5B program, Brazil unleashed a second R$3B (A$542M) war chest to target downstream technology and innovation hubs to aid the country's efforts with the energy transition and decarbonisation.
Having ticked the box with successful oxide deliveries, Viridis says Viridion is well-positioned to tap into this next wave of government support.
Viridis Mining is riding high after unveiling a blockbuster scoping study in February for its Colossus rare earths project in Brazil, forecasting a whopping US$2.28 billion (A$3.59B) in EBITDA over a 20-year mine life.
The lion's share of the annual US$114 million (A$180M) EBITDA will come from neodymium and praseodymium production, using spot prices of about US$60 per kilogram.
Operating costs at Colossus are projected to come in at just US$6/kg of total rare earth elements, leading to what Viridis believes could become one of the lowest-cost rare earth operations on the planet.
As well as hosting a sizeable neodymium-praseodymium resource, Colossus also contains the world's highest measured and indicated grades of dysprosium and terbium of any current ionic clay deposits.
The study quietly revealed plans to churn out 146 tonnes of those heavy hitters annually for the first five years, and 156 tonnes each year afterafter.
The deposit is also stacked with 6285t samarium, 4125t gadolinium and 13,553t yttrium, which are all included on China's banned list.
Meanwhile, the company is advancing a pre-feasibility study with engineering firm Hatch, due to be completed this quarter, and working to secure key environmental licences and offtake agreements.
For Viridis, the potential backing from BNDES and FINEP puts it in rarefied company. Meteoric Resources and Ionic are the only two other Australian companies to get the nod for the Brazilian funding.
As the global hunt for critical minerals heats up, Viridis appears to be shaping up as a serious contender to redraw the rare earths supply chain, with Colossus fast emerging as the jewel in its crown.
With government backing, world-class grades and ultra-low operating costs, the company is gaining real traction in its mission to supply the metals that drive EVs, wind energy and next-generation defence technology.
Is your ASX-listed company doing something interesting? Contact:
matt.birney@wanews.com.au
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