Brazilian rare earths’ shares jumped 8 per cent after the company released its first scoping study for the fully owned Amargosa Bauxite–Gallium Project in Bahia. The assessment offers the clearest view yet of how the deposit could take shape, outlining a large-scale direct-shipping bauxite operation with a 17-year mine life and operating costs positioned in the first quartile globally.
The company has emphasised that scoping studies are preliminary and rely heavily on assumptions tied to cost inflation and operating inputs, meaning more work is needed before the project moves toward feasibility. Even so, the study provides investors with an initial sense of the project’s scale and economic potential.
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Large resource base and early economics stand out
The project’s JORC resource of 568 million tonnes underpins the long-life outlook. Using a spot price of USD 71 per tonne, the study forecasts average annual revenue of about USD 359 million, EBITDA of roughly USD 102 million and free cash flow near USD84 million.
What strengthens the early economics is the relatively modest capital requirement - around USD 119 million - which supports a projected payback period of just 1.2 years. While funding structures will be critical and could affect long-term shareholder value, the study places Amargosa in a favourable starting position.
A key advantage for the project is its location. Amargosa sits close to efficient rail lines connected to the Port of Aratu and to major highways, reducing long-term transport and infrastructure costs. Lower logistics spending directly improves free cash flow and gives the project resilience if commodity markets soften.
For Brazilian rare earths, the Amargosa work feeds into the company’s plan to separate the asset through an in-specie distribution into a new ASX-listed entity in 2026. The demerger would allow the parent company to concentrate on the Rocha da Rocha rare earth province while giving Amargosa its own development pathway.
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