Rare Earths Americas CEO weighs in as race to secure rare earth supplies outside China intensifies

Investing.com -- Rare Earths Americas Inc (NYSE: REA) has announced the launch of its Initial Assessment at Constellation in Poços de Caldas, one of the company’s three rare earth projects in Brazil. The assessment will outline an initial mine plan and rare earth annual production potential, with completion targeted for mid-2027. The company has also made progress recently with its initial drill results at Homer-A, that confirmed near-surface rare earth mineralization, with strong enrichment in critical magnet rare earths dysprosium and terbium.

In an interview with Investing.com, CEO Don Swartz shares more on the company’s progress on these projects even as the global race to secure rare earth supplies outside China accelerates.

What do the initial assay results from the Homer Project in Brazil mean for the company’s broader drilling strategy? Is the level of rare earth mineralization as you had hoped for this project?

The initial drill results at Homer are very encouraging. They gave us enough confidence to double the rig count at site, and in exploration you vote with your rig count. Early drilling has intersected near-surface rare earth mineralization across multiple holes, with encouraging levels of heavy rare earths, including dysprosium and terbium. Those matter because they’re among the most supply-constrained rare earths and are critical to high-performance permanent magnets.

Homer was an earlier-stage asset when we went public, and these first results have met our expectations and increased our confidence in the project. It’s still early, though. The on-going drill program is designed to help us understand the scale, continuity and mineralogy of the system as we work toward an initial resource estimate, which we’re targeting for 2027.

What does the company expect to see from the next batch of results? And have there been any shifts in how this project now fits into the company’s broader Brazil portfolio?

The next results should give us a much clearer picture of the system at Homer, particularly how far the mineralization extends laterally and at depth. It’s still exploration, so we let the drill results tell us what we have. We’ve also started metallurgical testing to determine whether the rare earths are hosted in ionic clays or another type of mineralization. We will keep the market up to date on the latest results between now and year-end.

What’s changed is the attention Homer warrants within the portfolio. Alpha and Constellation are our more advanced Brazilian assets with economic studies underway, and Homer gives us another potential source of heavy rare earths at an earlier stage.

China accounts for over 90% of global heavy rare earth supply, and the U.S. doesn’t currently have enough mined heavy rare earth feedstock to support the magnet manufacturing capacity it’s planning. REA is focused on the start of that supply chain, developing the mines that magnet makers will need. With projects in both Brazil and the U.S., we have multiple shots on goal to help close that heavy rare earths supply gap.

What does this update mean for the broader strategic race to build a new heavy rare earth supply chain outside of China? Where does exploration fit into solving the problem?

A lot of capital is now going into separation and magnet manufacturing in the U.S. and allied countries. That’s an important step, and it sits downstream of where REA fits in the mine-to-magnet supply chain. But those facilities need feedstock. You can’t build a secure mine-to-magnet supply chain without new upstream sources of rare earths, particularly heavy rare earths like dysprosium and terbium.

That’s where exploration and development come in, and it’s where REA fits. The industry needs deposits that don’t just contain rare earths, but have the right mix of elements, host minerals the West already knows how to process, and enough scale to potentially become economic. With our more advanced ionic clay projects in Brazil, Alpha and Constellation, and exploration-stage projects at Homer-A in Brazil and Foothills in Georgia, REA is working to become a meaningful source of the rare earths, including heavy rare earths, that a secure Western mine-to-magnet supply chain needs.

With the U.S. government investing billions in rare earth and magnet projects, what are some of the key challenges for upstream supply? What is Brazil’s role in a Western rare earth supply chain?

The key challenge is that you can’t build new mines overnight. Governments and private capital are moving fast on processing and magnet capacity, but the upstream resource base has to grow alongside it. It’s a classic chicken-and-egg problem.

We believe Brazil can be a major part of the solution. It has the world’s second-largest rare earth reserves after China, favorable geology and a number of ionic clay systems, and that last point matters most. Most producing rare earth projects outside China are hard-rock deposits, where the rare earths are locked inside minerals. That rock has to be crushed, ground and concentrated, and then put through more intensive chemical processing. In ionic clays, the rare earths are loosely attached to the surface of clay particles, so they can often be recovered with simpler, potentially lower-cost methods. Ionic clays have also historically been a major source of heavy rare earths from China and Myanmar.

We believe the market is starting to see Brazilian ionic clays as a logical next step in rare earth development outside China. Lynas’s proposed acquisition of Meteoric and USA Rare Earth’s acquisition of Serra Verde show that established players see strategic value in Brazilian ionic clay assets. For us, that reinforces our strategy of building a portfolio across multiple Brazilian projects while advancing our Foothills project in Georgia.

As the U.S. and other countries look to diversify their supply chains, what opportunity does this present to investors over the next few years? What makes an emerging rare earth project stand out as potentially economically viable?

Investors are increasingly recognizing that not all rare earth projects are created equal. Headline grade is only part of the story. You have to look at which elements are actually present, the mineralogy, recoverability, infrastructure and jurisdiction, and ultimately whether the material can be processed economically. Projects that check those boxes, especially ones with heavy rare earths, should be well placed as Western magnet capacity grows. In my view, that’s why established players like Lynas and USA Rare Earth are looking at Brazilian ionic clays. These deposits can be simpler to mine and process than hard rock, and they host the heavy rare earths the West needs to feed a growing magnet manufacturing base.

What does the launch of the initial assessment at the Constellation project mean for the company’s ambitions for the project?

Launching the Initial Assessment at Constellation is an important step toward understanding how the project could potentially be developed and where it fits in our broader portfolio.

Constellation is an ionic clay project in the Poços de Caldas district, one of Brazil’s most active emerging rare earth regions. Poços de Caldas is also home to Meteoric’s Caldeira project, which has drawn significant attention following Lynas’s proposed acquisition last week.

The assessment brings together the geology, metallurgy, infrastructure and potential development parameters, so we can start evaluating the project through an economic lens. It also reflects our portfolio strategy: advance multiple projects at different stages in Brazil, alongside our Foothills district in Georgia, with a focus on scalable sources of the heavy rare earth feedstock the Western supply chain needs.

Original Article

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