Power Minerals Secures High-Grade Morro do Ferro Rare Earths Project in Brazil

Power Minerals Locks In High-Grade Brazilian Rare Earths Play as Global Demand for Magnetic Elements Intensifies

Power Minerals acquires Morro do Ferro rare earths project in Brazil, formalising a deal that was entered into via a Binding Letter of Intent just weeks prior. Power Minerals Limited (ASX: PNN | OTCQB: PEIMF) has completed the acquisition of the Morro do Ferro (MDF) Rare Earths Project in southern Minas Gerais state, completing comprehensive corporate, financial, and technical due diligence that confirmed the project's exceptional rare earth credentials and strategic fit with Power's existing Brazilian asset portfolio.

The MDF Project is not merely another rare earths landholding. Historical drilling by the previous project owners has returned some of the most striking Total Rare Earth Oxide (TREO) intercepts seen in the sector — grades that extend from surface to end of hole across multiple diamond core drillholes. With mineralisation confirmed open at depth and along strike, and a structured exploration programme now ready to launch, Power Minerals is moving fast to define what could become a significant Mineral Resource.

Why Morro do Ferro Stands Out: The Grades Tell the Story

At the heart of the MDF acquisition is a dataset that would draw attention in any rare earths jurisdiction. The project's previously drilled intercepts — conducted by the prior project owner — reveal grade continuity and depth potential that management describes as genuinely exceptional.

Selected full-length diamond core drillhole results are presented in the table below:

These are not narrow, high-grade spikes. These are weighted average results across the full length of each drillhole, from surface to end of hole — a distinction that speaks to the depth and consistency of mineralisation at MDF.

Furthermore, drillhole MFSR-36, drilled to 100.05 metres depth, returned a final 2.05-metre sample at 28,674 ppm (2.87%) TREO from 98 metres downhole — confirming that mineralisation does not diminish as depth increases, and that the system remains open.

The Real Value Driver: Magnetic Rare Earth Oxides

"The Project represents a well-validated, high-grade, rare-earth asset in an emerging global rare-earth hub in Brazil and is an ideal complement to our Brazilian project portfolio."
— Mena Habib, Managing Director, Power Minerals

Not all rare earth oxides are created equal. The total rare earth (TREO) grade is important, but what truly drives the economics of a rare earths project is the proportion of magnetic rare earth oxides — and MDF's profile here is compelling.

What Are Magnetic Rare Earth Oxides (MREOs)?

MREOs are a subset of the rare earth element family specifically used in the manufacture of permanent magnets — the kind found in electric vehicle motors, wind turbine generators, and defence applications. The four key MREO elements are:

• Neodymium (Nd) — the dominant component of NdFeB permanent magnets
• Praseodymium (Pr) — used in combination with neodymium in magnet alloys
• Dysprosium (Dy) — a critical additive that improves magnet performance at high temperatures
• Terbium (Tb) — used in small quantities to significantly enhance magnet coercivity

Power uses the definition: MREO = [Nd₂O₃] + [Pr₆O₁₁] + [Tb₄O₇] + [Dy₂O₃]

These four elements alone account for more than 80% of the total market value generated by all rare earth elements — making the MREO cut of any deposit the most commercially relevant metric for investors to track.

MDF's drilling results show significant MREO concentrations embedded within the high-grade TREO system:

The standout single intercept across all drilling is 35,332 ppm MREO (3.53% of whole rock) over a 2-metre interval in drillhole MFSR-47 — a figure that illustrates just how concentrated the magnetic rare earth endowment can be within this system.

A Strategically Located Asset in an Established REE Province

MDF sits within the Poços de Caldas Alkaline Complex in the southern Minas Gerais state of Brazil — a geological setting that is internationally recognised as a premier rare earths province. The complex hosts several advanced rare earths projects, providing infrastructure precedent and technical knowledge applicable to MDF's development pathway.

For Power Minerals, the acquisition is also a geographic fit. The company already holds lithium brine resources in Argentina and REE, niobium, and other critical mineral assets in Brazil, meaning MDF slots directly into an existing regional operational and technical framework.

Structure of the Acquisition: Key Terms at a Glance

The acquisition was executed via the purchase of 100% of the issued capital in MTR — the private company holding the MDF Project — rather than a direct asset transfer. This corporate structure approach is common in Latin American jurisdictions and provides continuity of existing permits and property arrangements.

Key financial terms of the Definitive Agreement include:

The milestone-based instalment structure is notable for investors. The first deferred payment — totalling $5,000,000 in combined cash and scrip — is triggered either by the passage of 12 months or by Power achieving a specific resource milestone: a maiden JORC-compliant Mineral Resource of 10Mt at 2.5% TREO. This directly aligns vendor payment with project de-risking and exploration execution.

What Comes Next: Accelerated Exploration Programmes

Power Minerals has outlined a clear and immediate set of next steps for the MDF Project, centred on an accelerated fieldwork programme designed to both expand upon existing knowledge and identify new targets across the broader tenement.

Near-Term Exploration Plan

1. Deep Diamond Core and RC Drilling (>200m depth) — targeting the main high-grade deposit, where mineralisation remains open both at depth and along strike in the northeast and southwest directions. This drilling will be designed to substantially build upon the intercepts generated by the previous project owner.

2. Aircore Drilling of Surrounding Areas — planned to cover areas outside the main deposit, including infill of historical shallow auger drilling (~10m depth) and extension drilling into new target zones. This programme is focused on identifying additional priority REE targets that have not yet been tested.

The key geological driver for expansion is that drilling conducted to date has only partially tested the known extent of MDF's main deposit — leaving meaningful upside to the northeast and southwest that systematic exploration is now designed to test.

The ultimate goal of the near-term programme is, consequently, the delivery of a maiden JORC-compliant Mineral Resource Estimate (MRE), which would serve as both a commercial milestone and the trigger for the first deferred acquisition payment.

Understanding the Path to a Mineral Resource Estimate

What Is a JORC-Compliant MRE and Why Does It Matter?

A Mineral Resource Estimate (MRE) is a formal, independently verified calculation of the quantity and grade of mineralisation present in the ground, prepared in accordance with the JORC Code (Joint Ore Reserves Committee) — the international standard governing resource reporting for ASX-listed companies.

An MRE transforms exploration data into a recognised, bankable figure that underpins project valuation, attracts institutional interest, and provides the foundation for subsequent economic studies. For MDF, the maiden MRE milestone is directly embedded in the acquisition's financial structure — the first deferred instalment becomes payable on delivery of a 10Mt at 2.5% TREO maiden resource. This means exploration progress is not just operationally important; it is contractually and financially consequential.

The Investment Case: High-Grade, High-Value Elements, in the Right Place

Several factors converge to make the MDF acquisition a material development for Power Minerals' investment profile:

• Grade quality that stands apart: Full-hole TREO intercepts ranging from ~3% to nearly 9% — from surface — represent a grade profile that underpins strong project economics before a single dollar of mine development is spent.

• MREO-rich system: The emphasis on neodymium, praseodymium, dysprosium, and terbium — the elements that account for the majority of commercial rare earths value — means MDF's grade profile is skewed toward the most economically meaningful end of the rare earths spectrum.

• Deposit remains open: The existing drill coverage has only partially delineated the main deposit. Both depth and strike extensions remain untested, leaving genuine resource growth potential as drilling progresses.

• Established jurisdiction: The Poços de Caldas Alkaline Complex is a proven rare earths province in Brazil, reducing geological risk and providing operational context through neighbouring advanced-stage projects.

• Milestone-linked deal structure: The acquisition's deferred payment terms tie financial obligations to resource delivery — meaning the company's near-term exploration efforts are directly aligned with triggering the next stage of the transaction.

• Rapid execution: From Binding LoI to completed Definitive Agreement in under two months, the pace of execution reflects both management conviction and vendor confidence in the project's credentials.

Power Minerals acquires Morro do Ferro rare earths project in Brazil, securing a genuinely high-grade, MREO-rich asset in one of Brazil's most established rare earth provinces — and has done so quickly, with deal terms that tie deferred payments to resource delivery milestones. With mineralisation confirmed open at depth and along strike, and an accelerated drilling programme now in motion, MDF represents a tangible near-term catalyst for the company as it works toward a maiden JORC Mineral Resource Estimate. Investors focused on the magnetic rare earths supply chain — particularly those tracking neodymium, praseodymium, dysprosium, and terbium — should keep a close watch on Power Minerals' upcoming exploration newsflow from the MDF Project.

Glossary of Key Terms

Want to Know More About Power Minerals' High-Grade Brazilian Rare Earths Project?

Power Minerals (ASX: PNN | OTCQB: PEIMF) has moved decisively to secure one of Brazil's most compelling rare earths assets, with drill results that speak for themselves and an exploration programme designed to rapidly deliver a maiden JORC Mineral Resource Estimate. For investors seeking exposure to the magnetic rare earths supply chain through a high-grade, strategically located project with clear near-term catalysts, the Morro do Ferro acquisition warrants serious attention. Visit www.powerminerals.com.au to learn more about Power Minerals, the MDF Project, and the company's broader Brazilian critical minerals portfolio.