Resouro sees $1B rare earth, titanium project in Brazil

Resouro Strategic Metals (TSX-V: RSM) says a starter operation at its main Tiros rare earths and titanium project in Brazil could be a billion-dollar operation, according to a new preliminary economic assessment. 

The mine would deliver a post-tax net present value of $714.9 million (C$1 billion) at an 8% discount rate and a 44% post-tax internal rate of return, according to the study issued on Monday.

“The project’s robust economics are based on high levels of total rare earth oxides (TREO) and titanium oxide grades,” Resouro CEO Christopher Eager said in a release.  

“Starting with a small high-grade operation will minimize the social and environmental impacts, reduce the time to production and significantly de-risk the project,” Eager said. “Our goal with this staged approach is to support future financing and provide a pathway for larger scale development.”  

Tiros, located in Minas Gerais, is one of the world’s largest combined rare earths and titanium deposits, according to a JORC (Australia rules) resource last year. It hosts 1.4 billion measured and indicated tonnes grading 12% titanium dioxide (TiO2) and 4,000 parts per million TREO. 

Stock rises 

Resouro’s stock closed on Monday 8.7% stronger in Toronto and gained a further 3.2% on Tuesday to 32¢ apiece. The company has a C$34.6-million (US$24.7-million) market capitalization.  

The study envisions a proposed 500,000 tonne per annum operation of approximately 90,000 tonnes TiO2 concentrate and 3,636 tonnes TREO products annually, over an initial 20-year mine life. The proposed starter operation targets less than 1% of the project’s resource, leaving substantial scope for future expansion and long-term growth, Resouro said.  

The project benefits from low-strip, near-surface mineralization, conventional processing and a dual-revenue stream from titanium dioxide concentrate and mixed rare earth carbonate products, the company said. The overall recovery of titanium oxide is 69% and the recovery of rare earth elements to a mixed rare earth carbonate is 67%.