MRG Metals Confirms District-Scale Rare Earth Potential at Fotinho Project

MRG Metals Drills Up to 7.69% THM as Fotinho Results Confirm District-Scale Heavy Mineral Potential

MRG Metals Limited (ASX: MRQ) has reported assay results from 57 auger drillholes at its Fotinho Rare Earth Project in Mozambique, with 26 holes returning more than 3.0% total heavy minerals (THM) across the full drilled interval. According to the ASX announcement dated 1 July 2026, the results add to earlier drilling at Fotinho and the adjacent Adriano licence, supporting the company's view that a broad alluvial heavy mineral system may extend across the combined 396.42 sq km Adriano-Fotinho area.

The latest batch also included a peak result of 7.69% THM over 1.0 metre in hole FHA26058, while deeper intersections such as 4.76% THM over 3.0 metres in FHA26044 and 4.46% THM over 3.0 metres in FHA26046 suggest that higher-grade mineralisation is not limited to a thin near-surface layer.

For investors following rare earth and mineral sands exploration, the key point from the update is that MRG is moving beyond isolated target generation toward a wider test of scale and continuity.

What Do the Latest Fotinho Drilling Results Show?

In the announcement, MRG said the weighted grade average across all 57 holes, using no cut-off, was 2.95% THM over an average thickness of 1.38 metres. That figure is relevant because it captures the overall tenor of the programme rather than only a selection of standout intercepts.

Several holes delivered materially higher grades than that average. The more prominent results are set out below.

The report also noted that many holes ended either at the water table or in coarser alluvial material that the hand auger could not penetrate. In practical terms, that means some holes may not have reached the full base of the alluvial sequence, so current depths should be treated as incomplete in parts of the system.

That limitation matters. It does not confirm additional mineralisation below the drilled depth, but it does indicate that the current programme may understate the vertical extent in some areas. Furthermore, MRG has flagged follow-up work to test this.

What Did Management Say About the Results?

"Each phase of work is adding confidence to the geological model. The new south-east drilling not only reinforces the strength of the alluvial system, but also aligns with the mapped pegmatite trend and the historic high-grade stream results," said Chris Gregory, Non-Executive Director.

"What we are now seeing across Adriano and increasingly toward Fotinho is a coherent, connected mineralised pathway within a shared drainage system. If assays confirm this linkage, it would represent the foundations of a genuine district-scale rare earth corridor."

Are Adriano and Fotinho One Connected Alluvial System?

The 57-hole Fotinho update is not a standalone result. In the report, MRG said the data adds to an initial 32-hole auger programme at Fotinho, previously reported on 11 June 2026, as well as 46 auger holes across five alluvial targets at Adriano, released between October 2025 and March 2026.

Taken together, the company believes those drilling datasets support a single exploration model across the two licences. The core concept is that heavy minerals may have accumulated within a shared river and stream drainage network, rather than in isolated pockets.

For investors, this is one of the more important features of the update. Early exploration success can sometimes be localised and difficult to repeat. A broader connected system, if confirmed by tighter-spaced drilling, is generally more relevant when assessing whether a project may progress toward a resource definition stage.

MRG has not yet defined width and strike continuity across the system. The company's own cautionary language makes that clear. The current auger work remains target generation drilling, and the announcement states that the dataset does not yet provide information on the possible full width and strike of the alluvial deposits.

However, the combination of repeated THM results from multiple target areas and the expanding geographic footprint appears to be strengthening the company's corridor interpretation.

Why Mineralogy Matters More Than THM Alone

THM results indicate how much heavy mineral is present in a sample, but investors also need to know what those heavy minerals actually are. A deposit with elevated THM is not automatically valuable if the mineral mix is dominated by low-value or non-commercial material.

That is why the previously reported heavy mineral concentrate (HMC) mineralogy from Adriano is relevant to the Fotinho Rare Earth Project update. According to MRG, a composite HMC sample from Adriano returned 32.2% valuable heavy minerals (VHM).

The mineral breakdown reported by the company was as follows.

The presence of monazite is particularly relevant to the rare earth investment case because monazite is a recognised host mineral for total rare earth oxides (TREO). In simple terms, that means it can carry rare earth elements that are used in permanent magnets, electronics and some energy transition technologies.

MRG said mineralogical investigations of HMC from Fotinho will now take place, alongside more detailed lithology-based mineralogy work at Adriano. That next stage should help determine whether Fotinho shares a similar valuable mineral profile to Adriano.

Understanding THM, HMC and VHM

For non-specialist investors, these terms are central to reading alluvial heavy mineral announcements.

What Is THM?

THM stands for Total Heavy Minerals. It measures the percentage of heavy minerals in the relevant sample fraction. In this programme, laboratory work determined THM on the minus 1mm plus 45 micron fraction using density separation. A higher THM percentage means more heavy minerals are present in the sampled sediment.

What Is HMC?

HMC means Heavy Mineral Concentrate. This is the concentrated heavy mineral portion separated from the original sample for further analysis. It allows geologists to assess the mineral mix more accurately.

What Is VHM?

VHM means Valuable Heavy Minerals. This is the commercially useful subset of the HMC, such as ilmenite, rutile, zircon, leucoxene and monazite. VHM is important because it narrows the focus from total mineral content to minerals that may have economic significance.

Monazite is one of the more important minerals in this context because it can host rare earth elements as well as thorium. Where monazite is present in meaningful quantities, it can support a rare earth exploration model, subject to further chemical and metallurgical testing.

Alluvial deposits are accumulations of sediment laid down by water in rivers, streams and floodplains. In heavy mineral exploration, these environments can concentrate denser minerals over time. That is why auger drilling has been targeting river and stream systems within the Fotinho Rare Earth Project and Adriano licences.

For investors assessing announcements like this, THM is the starting point, not the final answer. The broader value proposition depends on scale, continuity, depth, mineralogy and ultimately whether future studies indicate a potentially economic concentration.

What Does the Company Plan to Do Next?

In the ASX update, MRG outlined a series of follow-up steps intended to move the projects from reconnaissance drilling toward a more systematic understanding of size and geometry.

The planned work includes:

1. Grid-based auger drilling to define the width, strike and depth potential of the alluvial heavy mineral deposits
2. Mineralogical investigation of HMC from Fotinho
3. More detailed lithology-based mineralogical work from Adriano
4. Geological mapping and outcrop sampling
5. Ridge and spur soil sampling around the primary granite target area, following high rare earth values from stream sediment sampling
6. Pitting and sonic drilling where the water table or coarse material limits hand-auger penetration

This next phase is important because target generation alone does not establish a resource. Grid drilling is typically used to tighten spacing between holes and test whether broad geological interpretations hold up when examined more systematically.

"With additional drilling completed, further samples heading to the laboratory and fieldwork expanding into new parts of the licence, we are steadily advancing our understanding of what may become a district-scale rare earth opportunity," said Andrew Van Der Zwan, Chairman.

What Matters Most for Investors Now?

The latest results from the Fotinho Rare Earth Project appear to add consistency to MRG Metals' heavy mineral exploration story in Mozambique. Several aspects stand out from an investor perspective.

First, the company has reported repeat THM results above 3.0% across a meaningful number of holes, rather than relying on a single isolated high-grade intercept. That supports the view that the alluvial system may be widespread.

Second, the programme has produced some stronger-grade intervals, including 7.69% THM and 7.15% THM, as well as multi-metre intersections above 4.0% THM. These kinds of results can be useful indicators when planning the next phase of systematic drilling.

Third, the Adriano mineralogy results suggest that at least part of the broader corridor hosts commercially relevant heavy minerals, including monazite. The pending Fotinho mineralogy work will be important in testing whether that pattern extends across the wider licence area.

Fourth, the combined 396.42 sq km footprint provides room for additional target growth. At the same time, the present dataset is still early stage, and the company has been clear that width, strike and full depth remain to be better defined.

The market focus is therefore likely to shift toward three near-term questions:

• Can grid drilling confirm continuity across the interpreted corridor?
• Will Fotinho mineralogy show a similar VHM profile to Adriano?
• Can deeper methods such as sonic drilling test zones where auger holes were stopped early?

Why MRG Metals Is One to Watch

According to the 1 July 2026 ASX announcement, MRG Metals is building a growing exploration dataset across Adriano and Fotinho that points to significant alluvial heavy mineral potential in Mozambique. The latest 57-hole programme returned a 2.95% THM weighted average, with 26 holes above 3.0% THM and a top result of 7.69% THM over 1.0 metre.

The current work does not yet define a resource, and the company's report makes clear that further drilling is required to establish deposit dimensions. Even so, the combination of repeated Fotinho results, earlier Adriano drilling and encouraging Adriano mineralogy is beginning to provide a more coherent exploration framework.

For investors, the next phase is likely to be more decisive than the first. If grid drilling confirms continuity and Fotinho mineralogy supports the rare earth-bearing heavy mineral model, the Adriano-Fotinho corridor may attract closer attention as an emerging alluvial rare earth and mineral sands opportunity within the ASX small-cap exploration space.

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