Transcription of The Stock Network Interview with Axel REE (ASX:AXL), Non-Executive Chairman, Paul Dickson
Lel Smits: Axel Ree is advancing its wholly owned rare earth projects in Minas Gerais in Brazil, led by the district-scale Caladao project. Recent test work confirmed very high-grade rare earth recoveries, while ongoing drilling has rapidly grown the project’s resource base, including significant gallium credits. With two potential in-situ recovery areas emerging and pilot-scale work planned, Axel Red is now moving from exploration toward a clear development pathway.
I’m joined today by non-executive chairman Paul Dixon to discuss the latest results and also what lies ahead for the company. Paul, welcome to the Stock Network.
Paul Dickson: Thank you. Thanks for your time.
Lel Smits: Now, recent metallurgical test work showed very high recoveries of key magnetic rare earths. How important are these results? And also, what do they say about Caladao’s potential to become a future rare earths producer?
Paul Dickson: Yes, well, we’ve had good test results, metallurgical test results, since November last year. I’d like to focus on those received in the Woolwich deposit in area B, where we had up to 42% magnetic rare earth oxides in solution. And these are really important because they show the market that we’ve got a genuine iron-fossil-chemical system. And that then leads in us potentially to becoming a producer because it allows us to use a method of mining called in-situ leaching or ISL.
And that type or style of mining is low capex and low opex. We also have an excellent comparison or analogue that is the Geric Malaysian ISL mine. And it has similar size, grade and recoveries to those that we’ve achieved in this area B Woolwich deposit.
Lel Smits: Excellent. Now, test works at Paris and Woolwich continues to support a magnesium sulphate in-situ recovery approach. How does this low-cost modular development model work? Paul, can you outline why it can be a game changer for the project?
Paul Dickson: Sure. Well, as I mentioned, the best analogue is Geric. Now, that capex there was US$20 million and they had produced a net impact of $10 million, only producing 4,000 tonnes per annum of rare earth oxide. So, at our Woolwich area alone, we have the potential to have up to 12 individual wellfields, each producing 1,000 tonnes per annum of rare earth oxide.
And you would actually use a hub and spoke processing wellfield design. And magnesium sulphate, I just want to point out, is Epsom salts. So, it’s very environmentally friendly.
Lel Smits: I absolutely love some show and tell. So, thank you very much, Paul, as well. I wish we had more of that, especially when it comes to mining companies and it makes it so tangible.
So, in terms of next steps, Caladao has delivered strong rare earth and gallium resource growth and really still covers only part of the total landholding. How much upside do you think remains here also when it comes to key milestones? What do you think investors should be watching as the company moves towards this pilot scale field trials in the year ahead?
Paul Dickson: Sure. So, we’ve drilled only 35% of the project area at the moment.
Now, bear in mind that’s 420 square kilometres. It’s a very large area. It’s district scale.
Now, in that area alone, we’ve got Area A and Area B, and the combined resource is 572Mt at 1,506 ppm TREO, and also 439Mt at 38 ppm for gallium. So, there’s plenty of upside. Our focus, though, is really going to be on the Woolridge deposit, which is 128Mt at 1,013 ppm TREO and 35 ppm gallium.
As I said, that has proven size, metallurgical similarities to that profitable mine in Malaysia, the Gerrick mine. As for key milestones, well, what we’ll be doing from here on, I would say, is expanding the metallurgy, and we’ll be using magnesium sulphide, I mentioned before, in leach and column tests. As well as that, we’ll be doing infill drilling, and that would be on the 50mx50m trial area that we’re going to be using.
That helps you understand the geology better, the deposit better. And equally, we’ll be searching for those coarse-weathered granites, which are permeable, and that actually helps when you’re doing in-situ mining, because you’re flooding these hills with what’s called a lixiviant that contains a magnesium sulphide. And as it goes down the hilltop with gravity and pressure, it actually leaches out the rare earths.
So that would be the main sort of steps that we’ll be doing over the next 6 to 12-months. Understanding the ore body by drilling it out will help you design the well field. And in designing the well field, you design where you put the injection wells, and where the fluid flows, and how it drains down to the bottom, and then you extract the pregnant liquor solution with the rare earths in at the bottom.
Lel Smits: Well, I really appreciate the update. It’s certainly a very busy period for the company, and look forward to seeing how things unfold in the year ahead.
Paul Dickson: Thank you very much, Lel. I appreciate your time.
Ends