Axel REE (ASX: AXL) is making steady progress at its flagship Caladão project in Brazil, advancing towards critical in-situ recovery (ISR) test work. With column and pilot field trials expected to occur throughout 2026, the company is focused on de-risking its rare earth elements (REE) and gallium development pathway.
This progression reflects the company’s strategic efforts to convert its large, near-surface Inferred REE and gallium resources into a financeable development. Operating in a market where secure, non-China supply chains are increasingly prioritised, Axel REE positions itself to address the growing global demand for critical minerals.
Strategic Non-China Supply Opportunity
Axel REE is operating within a strategic metals regime where supply-chain security is becoming just as important as near-term price signals. The company’s strategy is geared towards a magnet-REE-rich basket, bolstered by meaningful gallium optionality.
With Western markets and global tech manufacturers actively seeking to diversify their critical mineral supply chains away from Chinese dominance, the Caladão project represents a compelling "non-China supply" narrative. This macro backdrop provides a supportive tailwind for Axel REE as it seeks to prove the viability of its Brazilian assets in a tightening global market for magnet rare earths.
Robust JORC Resource Foundation
The foundation of Axel REE's development strategy is its district-scale JORC (2012) Inferred Mineral Resource at Caladão, comprising a total rare earth base of 572 million tonnes (Mt) alongside a distinct gallium resource of 439 Mt. The rare earth inventory includes 233 Mt at 2,133 ppm Total Rare Earth Oxides (TREO) in Area A, featuring a strong magnet rare earth (MREO) profile of approximately 22%, and a combined 349 Mt across Area B's zones. Additionally, the shallow lateritic profile hosts one of the largest known global gallium deposits not tied to alumina or bauxite processing, containing 100 Mt at 42.0 ppm in Area A and 339 Mt at 36.6 ppm in Area B.
ISR Concept and Modular Processing
To monetise this resource base, Axel REE is pursuing a development concept of in-situ recovery (ISR). The proposed model involves a low-capex, modular "pod" wellfield feeding into a central processing hub to produce mixed rare earth carbonate (MREC). If successful, this scalable extraction route will offer a cost-effective pathway to production. Furthermore, the ISR method relies on circulating a mild lixiviant (such as magnesium sulphate) through the orebody to extract the target minerals, resulting in a substantially reduced surface disturbance and environmental footprint compared to traditional hard-rock open-pit mining. ## Near-Term Catalysts and Trials. Over the next 6 to 12 months, Axel REE's trajectory will be driven primarily by technical proof points rather than just incremental resource growth. The core focus is on demonstrating that the ISR concept can work effectively and economically at a column and field scale.
Investors will be closely watching for column and pilot/field trial results planned throughout 2026. These tests are essential gating items designed to demonstrate repeatable, soluble REE recoveries, acceptable extraction kinetics, and predictable reagent consumption. Successfully proving these hydrogeological and metallurgical parameters—alongside containment and regulatory pathways for ISL in Brazil—will materially de-risk the project and could serve as a notable re-rating catalyst for the ~$10 million market capitalisation company.
Financial Position and Future Outlook
As a pre-revenue critical minerals explorer, Axel REE is currently equity-funded as it navigates the capital-intensive phases of metallurgical testing and pilot trials. The company reported a cash balance of A$8.71 million at the end of June 2025, providing a runway to execute its upcoming testing programs and manage its burn rate.
While funding remains equity led, this financial capacity is important for maintaining momentum at Caladão. In tandem with its flagship work, the company is also maintaining portfolio optionality through its Caldas project - an early-stage REE exploration option within the Poços de Caldas alkaline complex.
Axel REE is positioned to advance its Caladão project towards a definitive development pathway, marked by the upcoming column and field recovery trials. With a clear focus on proving its low-capex ISR model in a favourable macro environment for critical minerals, the company is aiming to unlock the potential of its Brazilian asset portfolio.
