Power Minerals Strikes Record Rare Earth Grades at Morro do Ferro

Record-Breaking Drill Results Confirm Morro do Ferro as a Rare Earth Project of Genuine Significance

Power Minerals Limited (ASX: PNN) has reported another strong drilling result from the Morro do Ferro Rare Earth Project in Brazil, with second diamond drillhole MFSR-052 returning 137 metres at 4.31% Total Rare Earth Oxides (TREO) from surface. Within that broad interval, the company reported 53 metres at 9.87% TREO and 1.69% Magnet Rare Earth Oxides (MREO) from surface, including 26.9 metres at 13.0% TREO with 2.40% MREO from 19 metres.

According to the ASX announcement, the result also included a project-record 2-metre sample grading 19.51% TREO with 3.96% MREO from 39 metres. For investors following rare earths, the significance lies not only in the headline grade, but in the thickness, the near-surface position, and the high proportion of magnet rare earths in absolute whole-rock terms.

What the Latest Drillhole Reported

The latest assay results come from MFSR-052, which was collared 31.5 metres from first hole MFSR-051 on the same drill section. In the report, Power Minerals stated that the new hole confirms continuity of high-grade mineralisation and shows that the approximate 10% TREO core has widened between the two holes.

The key reported intervals are set out below:

These are downhole widths, and the company noted that true thickness is not yet known. Even so, the consistency between the first two diamond holes is a central point in the update.

A comparison of the two holes reported so far shows why the market is paying attention:

In practical terms, both holes started in mineralisation at surface and both delivered long, high-grade intervals. The widening from 31 metres to 53 metres in the roughly 10% TREO zone may support the company's view that the high-grade system is coherent and remains open.

"The results from MFSR-052 mark another important step in establishing the scale, grade and strategic character of Morro do Ferro. The 137m mineralised interval, including 53m at 9.87% TREO and 1.69% MREO, together with the elevated heavy rare-earth content, provides strong continuity with our first drill hole."

— Alistair Stephens, Chief Executive Officer, Power Minerals Limited

Why MREO Matters More Than Many Investors Realise

Rare earth projects are often discussed using total rare earth grade, but not all rare earths carry the same commercial relevance. In the update, Power Minerals placed particular emphasis on MREO, which refers to the four rare earth oxides most used in permanent magnets:

• Neodymium oxide (Nd₂O₃)
• Praseodymium oxide (Pr₆O₁₁)
• Dysprosium oxide (Dy₂O₃)
• Terbium oxide (Tb₄O₇)

These materials are important for electric vehicle motors, wind turbines, industrial equipment, and defence-related electronics. That is why investors generally look beyond TREO and focus on the proportion and concentration of magnet rare earths.

A notable feature of the Morro do Ferro reporting is that MREO is presented as a percentage of whole rock, not just as a percentage of TREO. That distinction matters considerably.

At many rare earth deposits, companies report MREO as a share of total rare earths because the absolute amount in the rock is relatively low. At Morro do Ferro, however, Power Minerals reported 1.69% MREO over 53 metres and 2.40% MREO over 26.9 metres of whole rock. According to the company, the 2.40% MREO result equals 24,034 ppm of magnet rare earth oxides in the rock itself.

For investors, that whole-rock basis is a more direct measure of contained magnet rare earth concentration. Furthermore, if further drilling confirms continuity and metallurgy supports recovery, higher absolute MREO concentrations may have a meaningful effect on future processing and development studies.

Understanding TREO, MREO and Whole-Rock Reporting

For readers new to rare earth investing, three terms are central to this update.

What Is TREO?

TREO stands for Total Rare Earth Oxides. It is the combined grade of all the rare earth oxides measured in a sample and is the most common headline metric in rare earth exploration.

What Is MREO?

MREO stands for Magnet Rare Earth Oxides. This is a subset of TREO and includes the specific rare earths used in high-performance permanent magnets. Because these oxides are often more commercially important than the broader basket, MREO can be more informative than TREO alone.

What Does Whole-Rock Reporting Mean?

When a company reports a percentage of whole rock, it is stating how much of that material exists in every tonne of mineralised rock. This is different from reporting MREO as a share of TREO, which shows relative composition but not absolute concentration.

A simple example helps clarify the distinction:

• If rock contains 10% TREO
• And 20% of that TREO is MREO
• Then MREO equals 2% of whole rock

That is why whole-rock reporting is often easier for investors to interpret when assessing potential scale and value.

The High-Grade Zone Contains the Right Rare Earth Mix

The most closely watched part of the MFSR-052 result may be the 26.9-metre interval from 19 metres to 45.9 metres, which the company described as the highest-grade wide intersection recorded at Morro do Ferro to date.

According to the report, the oxide breakdown for that zone is:

The basket is dominated by neodymium and praseodymium, which are typically the main value drivers in magnet rare earth projects. In addition, the presence of dysprosium and terbium is also relevant because these heavier rare earths are used to improve magnet performance at higher temperatures.

This does not by itself establish economic value, but it does show that the composition of the mineralisation aligns with the products most often discussed in the rare earth supply chain.

Gallium Adds a Secondary Point of Interest

The ASX update also reported the highest reliable gallium result recorded at Morro do Ferro so far, with 2 metres at 87.7 ppm gallium from 83 metres in sample MFP-0206.

Gallium is used in semiconductors, solar applications and specialised electronics, which gives it relevance as a critical mineral. However, Power Minerals noted that gallium assays at Morro do Ferro are affected by laboratory interference caused by very high rare earth concentrations.

As a result, discussions are under way with SGS Geosol to determine the best method for obtaining accurate and reliable gallium analyses. For now, gallium remains a secondary aspect of the story rather than the main investment driver.

Program Update and What Comes Next

In the program update, Power Minerals stated that a second drill rig arrived in late July and that two additional shifts began on 4 August 2026. The maiden diamond drilling program is designed to include about 25 holes for approximately 4,000 metres of HQ core.

The current workstreams are summarised below:

The company also noted delays in assay reporting due to internal laboratory issues unrelated to Power Minerals. That means the near-term news flow is likely to depend on when results for MFSR-053 and later holes are returned.

Why the Results Matter to Investors

At this stage, Morro do Ferro remains an exploration and development story rather than a defined operating project. Even so, several points from the report are likely to matter to investors assessing early-stage rare earth opportunities.

Does Mineralisation Starting at Surface Matter?

Both reported drillholes began in mineralisation from zero depth. That can be important because near-surface mineralisation may, if continuity and economics are confirmed later, support simpler mine development options.

Is the High-Grade Core Widening?

The move from 31 metres of roughly 10% TREO in MFSR-051 to 53 metres in MFSR-052, over just 31.5 metres of spacing, may indicate a broader zone than initially interpreted. This widening trend is a key feature to monitor as further holes are reported.

How Do the Absolute Magnet Rare Earth Grades Compare?

The reported 1.69% MREO over 53 metres and 2.40% MREO over 26.9 metres, both on a whole-rock basis, stand out in the context of rare earth reporting. This is one reason the company has emphasised the distinction between whole-rock MREO and percentage-of-TREO reporting.

Furthermore, according to the announcement, Morro do Ferro is located about 13 kilometres southeast of Poços de Caldas in Minas Gerais, Brazil, and sits within the Poços de Caldas alkaline complex, a large circular geological structure with a mean diameter of about 33 kilometres. The deposit was first identified in 1956, and the company holds a binding agreement to acquire the project through Mineração Terras Raras SA, subject to due diligence and exploration milestones.

Key Catalysts to Watch

Based on the latest drilling update, the main near-term catalysts include:

1. Assay results from MFSR-053 onward
2. Further drilling updates from the two-rig program
3. Metallurgical testwork sampling and results
4. Progress on improved gallium assay methods
5. Better definition of continuity and scale as the 25-hole program advances

The latest report strengthens the geological case that Morro do Ferro hosts a thick, near-surface rare earth system with a high proportion of magnet rare earths. The next stage for investors to watch is whether upcoming holes continue to confirm width, grade and continuity across a broader area.

Want to Be First When the Next Major Mineral Discovery Hits the ASX?

Discovery Alert's proprietary Discovery IQ model scans ASX announcements in real time, instantly alerting subscribers to significant mineral discoveries — including rare earth opportunities like those shaping the critical minerals sector — so you can explore why historic discoveries have generated substantial returns on Discovery Alert's dedicated discoveries page, and begin your 14-day free trial today to position yourself ahead of the broader market.