Power Minerals (ASX: PNN) has secured a rare opportunity to acquire a high-grade niobium, gallium and rare earths carbonatite-hosted asset in Brazil, with historic assays up to 3.36% Nb, 232.7g/t Ga and 35,473ppm TREO. The imminent results of Power’s recently completed drilling campaign are set to define a JORC exploration target that could reveal a globally significant deposit.
At just $8 million market cap, there is a complete valuation discrepancy between PNN and the $85 million market cap St George Mining (ASX: SGQ), which owns part of the Araxa deposit in Brazil – despite the two projects possessing many similar deposit characteristics and being at a relatively similar stage of exploration.
The Santa Anna Project, located in the heart of the world’s dominant niobium region – Brazil – where 92% of global supply is produced, came with a comprehensive historical drilling database of 192 drill holes for 5,377.45 metres in total, at an average depth of just 28m.
PNN just drilled another 29 RC holes for 2,272 metres to an average depth of 78m, and assays due in July will help confirm and extend the previous significant mineralised sections, while also testing new sections of the complex.
Santa Anna’s carbonatite complex totals 5.8km2, compared to 2.26km2 held by SGQ over part of the Araxa Complex. SGQ announced its acquisition of the Araxa project in August 2024 alongside a $20 million raise, and estimated a maiden resource in April 2025 – without SGQ drilling the project themselves.
From just 67 historical diamond drill holes across 2011 and 2012, which totalled 3,674m and were drilled to an average depth of 60m – SGQ was able to define a JORC Resource of 41.2Mt at 0.68% Nb, 4.07% TREO and 8.3% P₂O₅, while having the market price them at $85m.
SGQ holds less than 13.3% of the Araxa Alkaline Complex, and the resource is limited by their permit boundaries, whereas PNN holds the entire Santa Anna Alkaline Complex – which was only discovered in 2021 and has many high priority targets that are yet to be drilled.
PNN now has a total of 221 drill holes for 7,649m, of which 17 holes for 1,019m were diamond drilling. Upon receiving assays from the recent RC campaign and defining an exploration target, PNN could launch a relatively simple and targeted drilling campaign that defines a maiden JORC resource.
A key target in PNN’s staged payment schedule is delineating a 35Mt at 0.75% Nb resource, which could lead to the market seriously rerating the company, based on what SGQ has been priced at with a similar resource. Longer term, a resource at this grade that supports a long mine life can prove to be immensely valuable when it goes into production. Canada’s niobium mine, which runs a head grade of 0.42% with underground mining, sold for US$530 million in 2015.
Projects of this sort of potential are extremely hard to come by, especially with strategic partnerships like what PNN has formed with Brazilian miner EDEM – but the market is yet to place any value in the opportunity into PNN’s valuation. Its share price is still virtually the same as before the acquisition.
New niobium discoveries typically draw a significant amount of interest from the market. Notable examples include WA1 Resources (ASX: WA1) which hit a $1.5 billion market cap after drilling out a CBMM lookalike in WA, and Encounter Resources (ASX: ENR), which reached almost $400 million market cap as they followed in the same footsteps.
The drilling PNN conducted virtually expanded the total area tested by roughly double, and the depth increased by almost three times, as visualised below:
Source: PNN
Aggressively Mapping Santa Anna’s Size and Grade
Being composed of a 17.2km² total project area containing a 5.8km² high priority alkaline complex zone, but with historical drilling barely covering half of it and to an average of just 28m depth – the Santa Anna Alkaline Complex has certainly been underexplored. Using a very wide 100 metre buffer around the existing drill holes shows 64.3% of the Santa Anna complex has not been drill tested at all. This is especially true when considering it exhibits a similar geology and scale to CBMM’s giant Araxá carbonatite, which spans 4.5km², and supplies more than 80% of the world’s niobium.
In 2011, CBMM was valued at US$13 billion when a group of five Chinese state-owned enterprises acquired a 15% interest in the operation, not long after a consortium of Japanese and South Korean companies did the same thing.
There’s a litany of data points that’s made the Santa Anna Alkaline Complex a worthwhile opportunity for PNN to conduct a due diligence program that will determine if they will acquire the project.
Notable historical niobium drilling results include 14m at 0.71% Nb from 6m, incl. 5m at 1.18% Nb from 14m, 9m at 1.08% Nb from 2m, incl. 4m at 1.62% Nb from 3m and 4m at 0.98% Nb from 18m, incl. 1m at 3.36% Nb from 19m.
The project’s standout niobium hits at Santa Anna can be seen below:
Source: PNN
The project also contains outstanding rare earths drilling results, with 14.95m at 12,434ppm TREO from surface to end of hole, incl. 6m at 22,284ppm TREO from 8m, incl. 1m at 35,473ppm from 11m, all from the clay-rich weathered zone.
There is also likely significant potential to uncover a greater thickness of REE-bearing material. Many existing drill holes contain significant REE mineralisation within the clay-rich, highly weathered zone – which have spanned the entire length of the hole from surface. This drill campaign’s assays will include the breakdown of light and heavy rare earths used in magnets that are contained within the total rare earth oxide grades quoted.
Additionally, drilling within Santa Anna’s central calcium-magnesium rich carbonatite zone has revealed high-grade gallium results, paving the way for PNN to identify similar zones within the wider project area that had yet to be drill tested or sampled prior to the recent drilling campaign – and many of which still require further investigation.
Despite likely being a byproduct, secondary to the focus on niobium – the gallium intersections alone that have been seen at Santa Anna, which include hits such as 14m at 164.1g/t from surface, including 1m at 232.7g/t from 10m, and 51m at 80.2g/t from surface, including 27m at 115.2g/t from surface – are extremely encouraging.
This is especially true when there are companies such as Nimy Resources (ASX: NMY) having an $17 million market cap with an exploration target of 9.6-14.3Mt at 39-78g/t Ga – while PNN is running an $8 million market cap.
The project’s standout gallium and rare earth hits at Santa Anna can be seen below:
Source: PNN
Extremely Encouraging Geology
The deposit sits within the northern end of the Goiás Alkaline Province – the same geological belt that hosts two of the world’s three producing niobium mines. Importantly, Santa Anna is interpreted as analogous to the Morro Preto deposit of the Catalão Complex – a geologically well understood area with a wealth of data that PNN’s expert team have used to select the project, and will continue to use to target the highest grade areas.
Santa Anna shows the same bullseye pattern seen at Morro Preto – a central, calcium-magnesium carbonatite core that captures the niobium and gallium, wrapped by an iron-rich, phosphate ring where most of the rare earths sit.
Field mapping has picked up an altered halo around the plug plus late calcite-dolomite veins that cut through it – which are fluid pathways that, at Morro Preto, helped lift niobium, REEs and gallium toward the surface. In the immediate vicinity of Santa Anna, slender kamafugite dykes mirror those at Morro Preto, pointing to the same volatile-charged mantle source that typically spawns Nb-REE-Ga-rich systems.
The upshot is a two-step upgrade process – hot fluids first push the metals up into fractures near the top of the intrusion, and tropical weathering then takes over, breaking down the rock into a 30-40 m clay blanket. In that soft saprolite, the niobium mineral (pyrochlore) falls apart, nano-scale niobium oxides re-form, and rare-earth ions are absorbed onto the clay.
So with Santa Anna – weathering has done quite a bit of heavy lifting, resulting in an ionic-adsorption style of mineralisation that’s famously simple to process.
Given all of these factors, and with Santa Anna having been confirmed to contain very significant niobium, REO, and gallium concentrations – the assays that will come from PNN’s recent drilling campaign that tested significantly more of the enriched upper weathered zone are extremely exciting. Plus, there is still significant potential upside for additional discoveries of niobium, gallium and REEs in the undrilled areas, and also at depth within the Santa Anna Alkaline Complex.
Niobium and Gallium Market Snapshot
Niobium is a brilliant strengthening agent used in a variety of alloys, especially to strengthen steel and produce superalloys used in cars, oil and gas pipes, bridges and aircraft engines, and to make stainless steel. It’s one of the most critical elements of the steel industry, which makes it vital to the entire global economy.
China has shown strong interest in new niobium discoveries, especially in Brazil. There are only three operating primary niobium mines in the entire world, which collectively account for around 98% of total global supply.
Two of these mines are in Brazil – CBMM, which has a resource of 896 Mt @ 1.49% Nb, and CMOC, which has a resource of 602.9Mt @ 0.43% Nb and was purchased from Anglo American as a part of a US$1.5 billion deal in 2016. There is also Niobec in Canada, with a resource of 419.2Mt @ 0.42% Nb.
Niobec is a particularly exciting case study, given the mine has been in production since 1976 and was acquired in 2015 for US$530 million by a mining private equity fund run by an ex-Barrick CEO. Having a resource that is economic at 0.42% Nb is extremely exciting for explorers like PNN, which has a raft of assays above this mark, and is focused on proving the scale of Santa Anna while maintaining the grade.
Much of gallium’s existence in industry has been driven by technological advancements, and it’s crucial to a whole raft of modern technologies such as efficient photovoltaic (PV) cells, LEDs, high-speed semiconductor chips, and advanced electronic devices that operate at high frequencies and temperatures – which is especially relevant to military and satellite applications.
While the gallium market is relatively small, with annual demand around 750t – this is expected to rise at a 24.5% CAGR between 2025 and 2032. Prices have risen from US$298/kg in 2020 to US$1042/kg in 2025.
Given that most of gallium’s demand comes from tech, renewable energy and the defence sector – China dominating 98% of global output, and their recent ban of its export in 2024, has raised a whole raft of issues that threaten to damage many critical industries.
Virtually all gallium is sourced as a byproduct of alumina production because it is present in bauxite. The recent price rise – more than 200% in just 5 years – and the export ban by China, has directed significant attention towards the potential for alternative gallium production outside of China, especially what those deposits would look like in terms of size and grade.
A Low Risk Option for Massive Upside Potential
This strategic critical minerals play has been executed with very little risk to PNN, having received a $473K investment from Golden Worldwide Holdings Limited – a Shanghai headquartered institutional investment fund with strong expertise in South American critical minerals.
PNN has paid just $83K of cash and scrip for the option, which allows it to drill for an exploration target that will be highly informative in terms of the true potential size of the project. If PNN decides to proceed, its total acquisition price is capped at $8 million of cash and scrip plus a 2% NSR, which would be staged in order of achieving resource upgrades up until 35Mt at 0.75% Nb, as well as completing a bankable feasibility study.
This compares to SGQ’s total purchase price of $33 million of cash and 10% of its issued share capital, $16 million of which was payable upfront – before there was even a JORC resource defined.
PNN has also formed a strategic partnership with Brazilian miner and developer EDEM, which vended Santa Anna into PNN after discovering it in 2021 – and also discovered, developed and currently operates the fifth largest bauxite mine in Brazil. EDEM provided expert technical staff and a drill rig for PNN to complete the recent drilling campaign, and also organised for significantly reduced assay processing costs.
Ultimately, PNN has secured an opportunity to create a significant amount of value in a short period of time – and its valuation has not reflected this at all, leaving a compelling story that will shortly play out.
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