Power Minerals Limited (PNN) Earnings Call Transcript
September 24, 2026
Earnings Call Speaker Segments
Hello, and welcome to the Power Minerals Investor Webinar, and thank you to everyone who has joined us today. We're joined by Managing Director, Mena Habib, Chief Executive Officer, Alistair Stephens; and Global Exploration Manager, Steven Cooper, who will take us through the latest developments at Power's Morro do Ferro Rare Earth Project Rare Earths project in Brazil. Today's webinar will focus on the recently announced initial exploration target for Morro do Ferro, with Alistair providing further details on the geological, geophysical, and drilling data supporting the exploration target. I'll now hand you over to Alistair.
Thank you, and good morning, everyone. Thanks for joining this webinar. Which is focused around the exploration target release that we've just made for the Morro do Ferro project in Brazil. So I just wanted to set the scene. So with this first slide of Morro do Ferro exploration target, what is an exploration target compared to a mineral resource estimate. It's a very different set of circumstances. There's a lot more creativity and artistic work that goes into it. What it really does is it sets the scene for what we think we're going to have with the mineral resource estimate later in the day when more drill hole comes, more assay data is available. So this is a view like a window into what we're expecting to announce in an MRE. It's not an MRE though. It's just a target. And I'll explain why. It's where the areas are solid in terms of its estimation and very artistic in terms of its creativity about where we think we should be going. Important aspect here is it's independent. It's not done internally by the company. We went out and outsourced this to an independent consultant and said, "Hey, what's your opinion on this? Can you give us some guidance on what the mineralization shell looks like? How do we target additional drilling to actually improve the value proposition of the money going into the ground, so it's about return on drilling rather than just drilling for drilling's sake? And what do you think the estimations look like?" So from an independent perspective, I think we've come back with a fantastic outcome. So this is released based on the -- release on the 22nd of September on 2026. So this webinar is a follow-up for people to appreciate and understand our position and where we're going forward with the drilling program. So this is a disclaimer, which is a standard for all ASX releases. So I just want to touch on this is. Power has 3 major assets. It's got the Salta Lithium brine assets in Argentina. It has the Santa Anna Niobium & Rare Earths Project in Brazil in Goias and then the fantastic Morro do Ferro Rare Earth Project in Minas Gerais. I'd like to point out this transaction, the acquisition happened on the 26th of April. So we're approaching our 6-month birthday. So what we've achieved so far is quite fundamentally fantastic in terms of project development activities compared to most other projects, which can take years, and years, and years to actually get to the point where we are now. So great credit to the team and Steven Cooper and his tough guys in Brazil who have really hit this hard with drilling, and they've been very effective with the drilling as well. So it's a great outcome. Recap on Morro De Ferro. This is a mining license. It's called Manifesto de Mina, right? So it's been allocated in 1946. Important aspects of that is it's a mining license in perpetuity. It also means we have landowner rights as well as mineral rights in perpetuity. So this is one of the most unusual mining titles. So it comes down from being grandfathered into current constitution and mining law from, basically, crown allocations of mining licenses prior to the 1950 constitution in Brazil. So this is a particularly unique strategic advantage we have in this, we have a mining license. It's a very high-grade, very high-quality rare earth. So not only have we got fantastic tenor of grade, the value of the rare earths in that mineralization is particularly high. So when I first got to this, I said to Steven, "I think you made a mistake, shouldn't that 3.5% MREO be 30%? Is that the ratio?" And he said, "No. This is the absolute value of medium rare earths -- magnetic rare earths in mineralization." That was remarkable. There's very few projects in the world that can quote an absolute grade of MREO. So we're not disguising beyond ratios. This is an actual value proposition of high-grade, high-value rare earths. And we've got a great team put together. Just the fact that we've actually been able to do so much drilling so quickly and get a program with results so far in 6 months is a great accolade to the focus we have on valuing or getting that shareholder value by returning good results from Morro do Ferro. And this is happening, and this will continue to happen, and I'll talk about that at the end, of what the future looks like. So it's a rapid development strategy. So here's the exploration target. So what is different about this is it's a range. So it's a range of tonnes and a range of grades. It's not an absolute value of tonnage and grades that you get in MREO. So the independent [ geo ] said, well, you've got something like 9.2 million to 10.7 million tonnes. It's in that range. You've got a range of 7.8% to 9.2% TREO, so it's total rare earth oxide, including a range of about 1.3 to 1.6 magnetic rare earth content. Magnetic rare earth content is NdPr plus TbDy. That's the valuable component. That's where all the value will become when we get to being a producer. They are particularly high grades. There's nothing -- there's very, very few projects like this globally. Call it between gentlemen, you can say it's 10 million tonnes, it's something like 8% with around about 1.4%, 1.5% MREO. You have to go to Brazilian Rare Earths who have got a much smaller tonnage but high grades. I think it's 3 million to 3.4 million tonnes at just a bit over 11%. Then there is daylight to any other project, which are at 1% to 2%. And the differentiator with us is the mining license, right? So a clear path to actually being a producer on a granted mining tenement with great tonnage that's, call it, 10 million tonnes. And if we were to do a 0.5 million tonne per annum operation, that's 20-year mine life. That's plenty. You could do 1 million tonne per annum on this if you wanted to, at particularly high grade at particularly high value. That's the differential we have here. So just go to the table. Now the independent geo said that supported by drilling, about 57% at that 9.2% grade is supported by drilling and he's made a projection that there's probably another 4 million tonnes at the grade range or about 9.2 million, which would require additional drilling. So that becomes the strategy for Steven and the team to say, okay, in this area that this independent geos identified, this is where we need to actually drill to get those tonnes defined by drilling. And if you use the 7.8% grade range, it's something very similar. It's about 60% is supported by drilling and around about 40% by additional drilling needed to actually define it. So that's what this strategy around the exploration target is. It helps the team focus their drilling programs accurately to actually get tonnes and return assay values in drilling. It also gives us a window of what we think might be the MREO towards the end of the year once we get the drilling done. So if I look at this from a plan perspective, the purple outline there or the pink outline is the grade boundary with that high-grade mineralization. So that's, basically, what defines something like 10 million tonnes at 8%. There's a couple of remarkable things about this to note is that there's a big gap between the 2 pink circles. So that's the first area we'd like to actually go in and have a look and see if we can join that pink area. It seems logical that it would be, but drilling needs to be done to do that. There's a couple of holes there, but they're probably not targeted in the right area. So we need to go back and have a look at that. There's certainly an open area in that top left-hand corner where there's some mineralization that's open to that left-hand side, but there seems to be a lot more opportunity down in that bottom right-hand corner of that diagram where all those red arrows are saying it's very much open. So there's an extension down towards that southern and eastern area plus opportunities to actually go east.
Sorry, Alistair, just to cut you off there. Sorry, you're not sharing your screen. You just might -- sorry to cut you off. I just know that you're alluding to a slide there.
Well it says I'm sharing.
I can see.
I can stop and I'll go back to sharing it again.
I could see it.
You could see it? All right. So we're back on the table?
Correct. It's now showing on the screen.
Okay. And there's the plan with the outline of the MRE, correct?
Correct. It's now being shown.
Okay. So do you want to say it all again?
No, no, we heard you fine. It -- we could just now see the picture, that's all.
Okay. So just to reiterate, a couple of blobs of high-grade mineralization defining 10 million tonnes at around about 8%. We have plenty of opportunity to extend this to the Northwest, to the Southeast, and obviously at depth. So what does it look like at depth? Well, here's the cross-section. Now this cross-section tells us a lot of things about the mineralization. There's a really high-grade pod of greater than 5% to 10% -- greater than 10% mineralization in TREO value in that first surface area around all these holes at the surface here. If I go to a pointer, my laser working, I hope, that mineralization through there is particularly high grade. And then we've got lower grade mineralization below it. One of the things that's really important is the topography, right? So this Morro do Ferro is a topographic high. This means that this is most likely going to be an open pit operation. In fact, it'd be daft if it was anything else, but open pit operation. But you can see from this that the amount of waste that you'd actually mined compared to the ore is extremely low. And in fact, this particular area here, you could probably have an open pit of substantial life without having any strip ratio of waste whatsoever. So there's an advantage. We know the material is particularly soft. The field -- I've worked in explosives before, and I feel that this is probably not a drill-and-blast operation initially. It's probably just a free dig mining operation, but we'll get to the test work that will prove that. So this will be particularly low in terms of its operating cost in mining. It will be particularly low in terms of the capital cost because we have no need for waste stripping prior to operation. So this tells you -- this section gives you a lot of insight into the opportunities and where mining will occur. So the planned section will tell you about potentially what the pit shell will look like. This section tells you what the mine will look like as we dig down into those high-grade zones. So there's a lot of opportunity here for extending the mineralization beyond surface expression, laterally, but there's also a depth extension. We do have an intersection right down at depth, which hasn't completed its assays at the moment. There's still assays pending. There's a grade intersection, which is going up to 8% rare earths down deep. I think that's very important from the geologist perspective of understanding what the mineralization looks like geometrically and what the source is. It's not so important in terms of our capital development operating environment because there's so much mineralization sitting on surface that there's an extended mine life and high-value proposition in all these high-grade materials. So that's a great outcome that the guys have now found what is potentially a feeder to this system, but we'll be focusing on that surface area to actually define our high-grade resource into our future programs. So now if I come back to this diagram, what's the plan going forward? Well, the next part of the drill program is that we'll be targeting extensions or clarification to the mineral -- the exploration target estimate we have so that we have a really efficient targeted drill program that will result in an MRE towards the end of the year. Next thing we're doing is, I think Steven's got some guys out there to do some geophysics. This is called ground gravity survey, passive gravity, which will help in also defining the mineralization for the mineral resource estimate to be compatible with the drilling data that we have. We have some metallurgical test samples that are in the laboratory at the moment. So metallurgical test work is underway, and there will be an announcement about that very shortly. So we're still on target at this point in time for a mineral resource late this year, maybe early next year. I hope to have some metallurgical test work completed by that time frame as well to go into the mineral resource estimate. So let's recap what we have here. This is an amazing value proposition. In 6 months, Steven's team has been able to define a resource of around about 10 million tonnes of superior grade material on a global perspective. We have a mining license where we know we don't need to go through the approval process for mining. We just need the environmental licensing approvals. We have a metallurgical test work program on target for a scoping study sometime in the middle of next year. So in 6 months, the achievement has been substantial. In the next 6 months, we'll be in a position to be able to actually put a value proposition and economic parameter around what this resource looks like. It's not too hard to draw parallels between this and something like BRE or some of the other projects around globally in terms of its value proposition, what's likely outcome will be. I can't tell you what I think that would be because you need to go through the process of actually defining the resource and the metallurgical test work. We can see a real clear path here of how our market capitalization, our value, becomes entrenched very quickly within the next 6 months to something comparable to our peers. So I think this is probably the best project. And to go back a step, I've been in rare earth 22 years now. This by far is by -- the most exciting, rare earth project I've ever seen. And while I've been working for other companies, I've had a look at other companies and maybe felt a bit jealous or -- about some of the quality that you see in other operations, I can't see anyone better than this at the moment. This is one of the most outstanding, globally significant rare earth projects in the world with high-value rare earths, which are desperately in need of development. So that high value of terbium, praseodymium, dysprosium, and neodymium in this project is fundamentally important for the modern world. So that's all I have to say at the moment unless Steven or Mena wants to contribute any other thing into the webinar.
I'm just -- the entire team is just really keen to get more drilling done. We're actually looking at putting an extra rig in. We've been evaluating that because we just want to get more results now. It's so exciting.
Yes. From my end, having really different conversations in terms of potential funding partners, offtake partners. So we're in discussions with groups out of the U.S., major groups, and also in discussions out of Asia. I think from our end, we're going to bring the best -- whatever the best value is in terms of the deal structure to bring these projects into development, is what we're working on in the background. And things will start to transpire in terms of how that looks, but the conversations are advanced. And it's a different conversation now when you've got an exploration target that is going to fine-tune into that MRE. But I think Alistair summed it perfectly. You're one of a handful of projects with this sort of premium high-grade. So we're in a fortunate position now when we sit at the table and have these conversations with people across the globe. You mean -- you're in discussions and people throw out the names of Mountain Pass and so forth. So the important thing for us now is we know we're going to have a high-grade viable project from surface internally. That's our opinion. And the key is that it is from surface. So the CapEx and so forth, we do our back of the envelope numbers, and we're really excited by that. But what it means for us and our shareholders moving forward is a really different proposition that will come from a partner. And also what it means in terms of having someone like BRE really be the market leader. They're the only one on the ASX with that sort of grade. So it's us and them now. So they've paved a clear path in terms of what we need to do. We need to kick off the met works, which we're internally confident about. We need to -- that will lead into the MRE and the scoping study. And the pilot plans and all that will come. That's all the nature of the business. So we're not far off. The fact that we've got the project at this grade from surface is confirmed. You've got an independent consultant coming in and saying, "Guys, this is a range. This is what it's going to look like." It changes the dynamics from us internally. So it's a really exciting time. We've had this -- myself and the team have this discussion and the share price hasn't moved. That's fine. We have been in this industry for a long time. And if you look at the Lindian with Alistair, it took a while to crack that $0.03, but then it's going non-stop to $0.10. So that's all noise to us. But what we do now is focused on execution and the rest will follow. So very confident in terms of our path forward. And I'd say that there's a lot of talk as well on the met works and what's going to -- there are going to be issues. I think it's probably a good opportunity, Alistair, to talk about how you see the met works playing out. You're in conversation with the consultants that are going to do it. You had a few shareholders say, what's happening with the thorium? Is that an issue? So I think it's a good opportunity to talk to that because we're obviously taking the steps, but it's just something that I want to flesh out for shareholders that have concern. And then we can obviously validate that once the mets are done, which will be hopefully by the end of the year.
Yes. I'm not all that overly concerned about the thorium. It's a different mineral. So when you look at metallurgical processing, you're looking at a chemical regime that recovers the minerals that you want and you deport or get rid of the minerals that you don't want, so the gangue materials. So that's the orientation of the program. Clearly, the thorium is a different mineral and is not going to be associated or a problem in terms of our metallurgical test work regime flow sheet, I suspect. So I'm very confident that what we're doing at the moment is going to be fundamentally a flow sheet that probably replicates what we see at Mountain Pass. It's the same sort of bastnasite mineralogy.
Yes. And in terms of the storage, we've got a path and a strategy in place, and it will play out. I'd love to talk about it now and say this is what we're doing, but you just got to finalize things first. So have faith in us that everything is being addressed. These thorium and these are part of most deposits. We don't think it's going to be an issue. I hope this has been recorded, so when we do tick that box, you can come back and tell us well done. But you've got a very focused team here. You've got a plan, you're executing. There's things happening in the background. So it should be a strong finish to 2026, and that will follow through into the new year, and we'll have that scoping study, and it will be a different beast by then. So stay tuned. Thanks for your support and reach out. We're going to be doing a lot of work in terms of taking this project to the world. A lot of travel, a lot of presentations. We've got a world-class project, and it warrants a lot of educating and profiling. So that's what it's about now. We've got the project. Let's get it out there. So stay tuned. And thanks again.
Thank you, Mena, Alistair, and Steven, for taking the time to give us an overview of the exploration target. MDF is certainly an exciting project with plenty of news flow to come. Thank you for everyone online who joined us today. A recording of the webinar will be available on Power's LinkedIn and X channels, and a replay will also be e-mailed to registered attendees later today. Thank you, everyone, for your time. See you next time. Bye.
Thank you.
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