Meteoric’s Caldeira at front of rare earths development queue

Caldeira is considered one of the standout rare earths deposits globally and would likely make money even at current depressed metal prices.

Caldeira has a resource of 1.1 billion tonnes at 2413 parts per million total rare earth oxides (TREO), including 589 million tonnes at 2655ppm TREO in the measured and indicated categories.

The resource, last updated in March, will feed into a prefeasibility study, which is due any day now.

An updated scoping study, released in October 2024, outlined a 5Mt per annum, 20-year operation to produce 9679t per annum of REO, including around 3200tpa of neodymium-praseodymium, at operating costs of just US$6.74 per kilogram of recovered TREO in a mixed rare earths carbonate (MREC).

The project has a pre-tax net present value of US$1.4 billion and an internal rate of return of 40.4%.

The project’s capital cost of US$403 million is forecast to be paid off in 2.2 years, or 3.7 years at current spot pricing.

Argonaut forecasts a 5Mtpa operation costing US$420 million starting in the 2029 financial year, expanding to as much as 10Mtpa in FY34.

“At peak production the operation could produce upwards of 19,000t of TREO in mixed rare earth carbonate with an assumed payability of 70% and yielding more than US$300 million in annual revenues,” analyst George Ross said.

Assuming long-term pricing of US$80/kg NdPr, US$514/kg dysprosium and US$1800/kg terbium, Argonaut forecasts a build-date NPV of US$923 million.

Earlier this week, Meteoric signed a memorandum of understanding with MTM Critical Metals after MTM completed flash joule heating test work on a Caldeira MREC sample.

The work demonstrated the potential to develop a chloride-based refining method which could recover high-value magnetic elements from MREC, upgrade MREC values by removing low value elements and increase magnetic REO content of the MREC to 72% of TREO from 30%.

Strategic project

Despite a lack of movement in price, there has never been more interest in rare earths.

Rare earths have made mainstream headlines this year, due to the return of Donald Trump as US president.

From wanting to buy Greenland to get exposure to rare earths deposits, to signing a minerals deal with Ukraine, Trump has kept the spotlight on rare earths.

When China announced further export restrictions on rare earths in April amid the ongoing trade war with the US, Meteoric was quick to highlight the strategic nature of Caldeira.

In March 2024, even before the release of any project studies, Meteoric received a US$250 million letter of support from the Export-Import Bank of the United States.

Meteoric has non-binding offtake agreements with Canada’s Neo Performance Materials and Ucore Rare Metals, the latter of which has US government funding support, covering about two thirds of proposed production.

Meteoric has enjoyed the support of all levels of government in Brazil since acquiring the project with permitting progressing to plan.

Last week, the company announced Caldeira had been included in the Brazilian Financial Agency for Studies and Project (Finep) and the National Bank for Economic and Social Development (BNDES) Strategic Minerals funding program.

Meteoric has applied to Finep for funding to develop a pilot plant, downstream rare earth separation, and scaling and debottlenecking of the project, with grants to be awarded next month.

Momentum building

While Meteoric shares are trading well below their early 2024 high of A29c, the stock has doubled since March to A12c, giving the company a market capitalisation of A$263 million.

Argonaut was the latest broker to initiate coverage of Meteoric last week with a speculative buy rating and A22c price target.

Ross said Caldeira was one of the world’s standout rare earths development projects.

“The scale and grade of Caldeira’s deposits position MEI to become a low-cost and long-lived producer, representing one of a handful of deposits likely profitable within a depressed REE pricing environment,” he said.

“MEI’s REE basket has a good proportion of heavy REEs compared to many projects which improves attractiveness.

“Recent geopolitical moves by China to restrict trade in REEs has highlighted the vulnerability of Western magnet supply chains to supply disruption. In our view MEI is well positioned to be the beneficiary of US led strategic funding initiatives for critical metals.”

Canaccord Genuity head of research Reg Spencer is more bullish, naming Meteoric as among the firm’s best ideas in the sector with a speculative buy rating and price target of A35c,

“We believe recent the developments in the rare earths market underscore the strategic value of MEI’s Caldeira project,” he said.