Viridis Mining boosts Brazilian rare earths war chest with US$50m funding
- Craig Nolan
- 14 hours ago
- 4 min read
Viridis Mining and Minerals (ASX: VMM) has won the support of Australia’s export credit agency, Export Finance Australia (EFA), securing a Letter of Support (LOS) for up to $US50 million ($A77 million) towards a financing package to develop the company’s Colossus rare earths project in Brazil.
The non-binding and conditional deal bolsters the overall debt financing on offer to the company, adding further weight to the funding stack already taking shape. It complements earlier backing from export finance agencies, including Export Development Canada (EDC), France’s Bpifrance and a joint support program from Brazil’s BNDES and FINEP.
The EDC recently stepped up to the plate, offering to stump up a maximum of US$100 million (A$153 million) in debt financing for the development of the mammoth project, which sits in the Brazilian state of Minas Gerais. Colossus’ rare earths project is an ionic adsorption clay (IAC) style of mineralisation.
News of EDC’S letter-of-interest financing last November came hot on the heels of a Letter of Support from France’s export credit agency, Bpifrance.
With Australia’s export agency now also likely to join the financing party, it appears to signify that the Colossus rare earth project is of global importance, with Western nations looking to lock in supply chains for the vital critical mineral.
Viridis’ prefeasibility study estimated Colossus’ development capital expenditure at $US286 million ($US356M) with a 25 per cent contingency.
The support from EFA now rounds out the required financing for the project, enabling the company to put plans for its project funding and Final Investment Decision into overdrive.
Management says it’s now pushing to appoint a mandated lead arranger to take the reins, corralling lenders and steering the project through the full suite of financing and due diligence hurdles needed to get the mine up and running.
Notably, the EFA’s financing support will include a requirement for a level of Australian content to be involved in the supply of services contracts for the project’s development.
Securing a non-binding Letter of Support from EFA represents the final cornerstone in our Colossus debt financing strategy. Support from one of the world’s most respected export credit agencies further strengthens the Colossus project as a globally strategic rare earth development, reinforcing the international backing already received from EDC, Bpifrance and BNDES.
Viridis Mining and Minerals Managing Director Rafael Moreno
Management says Colossus attracted strong interest from a wide range of export agencies, institutional investors and industry groups across North America, Europe, Brazil and Australia. That appetite has been driven by the project’s large-scale magnetic rare earth oxides reserve and low-cost flowsheet, expected to deliver strong returns even at today’s somewhat subdued prices.
Colossus lies in Brazil’s mineral-rich Poços de Caldas region and houses one of the highest-grade ionic adsorption clay rare earths deposits found anywhere outside China.
The 200.6 million tonnes ore reserve contains an average magnetic rare earth oxide grade of 740 parts per million (ppm), within a broader total rare earth oxide resource grading 2640ppm at the project.
The company believes its stash of the four key magnetic rare earths, neodymium, praseodymium and the more valuable heavy minerals, dysprosium and terbium, lays the foundation for strong project economics without the need for government-initiated artificial floor pricing levels.
Back in July last year, Viridis and its joint-venture (JV) entity, Viridion, revealed a coveted joint support plan with two leading Brazilian agencies, opening the door to significant funding assistance from the Brazilian government.
Brazil’s BNDES and FINEP confirmed that the company and JV entity Viridion are eligible to proceed with a joint support plan under the government’s strategic minerals initiative. This has opened up a pathway for the company to access potentially transformative non-dilutive grants, debt financing and possible equity participation to develop its Colossus rare earths project.
Viridion is a joint venture (JV) between Viridis and ASX-listed Ionic Rare Earths. Ionic is providing the JV with its patented and proven high-tech refining and recycling technology, potentially adding another string to Viridis’ rare earths bow.
Adding further momentum to Colossus’ development, Viridis has signed a binding memorandum of understanding with Brazilian asset managers ORE Investments Ltda and Régia Capital Ltda, paving the way for potential staged private placement funding of up to US$30 million (A$45 million).
Private equity group ORE Investments invests only in the mining sector, where it has deep experience in the technical, operational and financial sectors of the industry. Asset manager Régia Capital provides sustainable investments strongly aligned with environmental, social and governance criteria.
Two weeks ago, Viridis’s share price jumped by a stellar 39 per cent to a high of $1.39 on news of a Preliminary Environmental License (PL) for the Colossus project. Obtaining the green light clears the biggest regulatory hurdle in the project’s development path, following a unanimous vote by state authorities.
The approval by the Brazilian state of Minas Gerais two weeks ago formally endorses Colossus’s environmental credentials. It will enable the company to progress to the next stage of approval - the Installation License - which allows for construction to kick off.
Viridis appears to be well down the path to developing Colossus, which may well produce a collective sigh of relief from many Western nations that are intent on securing a solid slice of critical rare earth minerals.
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