Axel REE (ASX: AXL) has announced significant metallurgical test work results from its Caladão project, with ANSTO confirming up to 100% MREO recovery using **hydrochloric acid **(HCl).
The tests were performed on samples from two diamond holes, located approximately 2km apart, designated Area A and Area B.
The results showed that HCl delivered stronger extraction of magnet rare earth oxides (MREO) compared to sulphuric acid (H2SO4) under comparable conditions.
Recoveries improved with increased acidity and longer durations, up to 72 hours at 50C with a starting pH around 1.
Additionally, the testwork indicated gallium recovery reached up to ~30% under these conditions.
Reinforces Dual-Pathway Strategy
These metallurgical results strongly reinforce Axel Ree’s two-pathway development strategy for its Caladão project.
The company plans for near-term modular in situ recovery (ISR), specifically targeting ionic clay zones using magnesium sulphate (MgSO4).
The longer-term approach includes optional acid-leach processing for non-ionic zones.
This dual strategy is designed to provide a pathway to low-capex, scalable production, while preserving long-term processing upside.
The company views acid-leach as a viable option to revisit as the Caladão project progresses.
ISL and Gallium Focus
Axel Ree has been actively advancing its processing understanding at Caladão. Previous testwork has highlighted strong soluble Total Rare Earth Oxide (TREO) with high MREO and neodymium-praseodymium (NdPr) content.
This supports the concept of modular in situ leach (ISL) development across multiple wellfield domains at Caladão.
Earlier ANSTO tests on Caladão composites also significantly improved gallium extraction, doubling it to approximately 50% using oxalic acid.
Further work confirmed scandium co-recovery into solution under the same conditions, opening potential for gallium-scandium co-product streams.
Caladão hosts a substantial resource base, including 572 Mt of Rare Earth Elements and 439 Mt of Gallium.
Development and Execution Risks
While promising, the acid-leach results are currently limited to two holes.
The economics, permitting requirements, and long-term operating costs associated with this processing route remain unproven.
Axel Ree also faces near-term execution risk related to the scale-up of its ISR operations and the deployment of processing plants.
The company has previously noted significant regulatory and permitting risks specific to operating in Brazil.
Furthermore, successfully translating bench-scale ISL results to pilot and commercial field-scale recoveries presents an ongoing execution challenge.
Optionality and Execution
The latest ANSTO testwork for Axel Ree's Caladão project demonstrates significant MREO recovery using hydrochloric acid, strengthening the company's proposed dual-pathway development strategy.
While these metallurgical results enhance the project's potential for near-term ISR and long-term acid-leach processing, investors will closely monitor the execution of the ISR scale-up and the overcoming of Brazil's regulatory hurdles.
