Ionic Rare Earths (ASX:IXR) and Viridis Mining and Minerals (ASX:VMM) have been selected by development institutions the Brazilian National Bank for Economic and Social Development (BNDES) and the Federal Agency for Studies and Projects (FINEP) for a joint support plan.
The initiative will deploy R$5 billion ($1.37 billion) towards the joint venture, Viridion, into its next phase for fast-tracking the development of the Colossus Project, located in Minas Gerais, Brazil.
Funding is expected to comprise non-dilutive grants, debt financing, and potential equity participation, as Viridion also integrates downstream refining and recycling technologies from funding.
Viridion will be required to meet BNDES programs and credit lines, as well as equity investment requirements, and FINEP’s non-reimbursable resources requirement.
The institutions have also allocated an additional R$3 billion to support technology development and innovation hubs in a February funding round, which Viridis intends to tap into.
Viridis Managing Director Rafael Moreno says this joint support plan is a major milestone for the company, encouraging the technical quality and economic viability of the Colossus Project.
“This recognition positions us at the forefront of establishing the first fully integrated rare earths supply chain outside China, a goal that now moves significantly closer,” Moreno says.
“With global demand for rare earths accelerating amid rising geopolitical and supply chain risk, Colossus stands out as one of the very few Western projects with realistic near-term production potential and compelling economics, even at current pricing.”
Ionic executive Chairman Brett Lynch says this achievement solidifies Brazil’s potential to become a major rare earth production centre.
“Ionic Rare Earths via Viridion is rapidly moving to become a leader in the Brazilian market, based on our patented magnet recycling technology, which offers Brazil the potential for a secure, sustainable and sovereign rare earth supply chain,” Lynch says.
“Recycling and refining is key to our strategic offering and we aim to fulfill a key need in an emerging supply chain for this South American giant, adding to our international expansion across the UK/Europe, North America and Asia.”
Meanwhile Viridis has also signed a memorandum of understanding with ORE Investments and Régia Capital, offering a cornerstone investment of up to US$30 million through a private placement.
Funding will be delivered over four tranches for a maximum of 36 months, with the initial US$5 million committed following the execution of definitive agreements.
The first tranche will issue around 8.33 shares at a price of $0.91 per share, before the remaining three tranches return the remaining funds in one US$5 million and two US$10 million installments.
The second installment will mark shares higher than the 30-day volume weighted average price (VWAP) less than 5% discount at $0.91, before the third and fourth tranches offer shares at $1.5.
“This strategic alliance marks a transformative moment for Viridis,” Moreno adds.
“Both firms are deeply embedded within the Brazilian investment and mining landscape and bring significant strategic value in navigating regulatory frameworks, managing local stakeholder engagement, and unlocking logistical and operational synergies.
“Their endorsement validates the technical and economic fundamentals of the Colossus Project, and their local insight and financial networks will be instrumental in accelerating the permitting, project financing, infrastructure buildout, and development stages of the project”
Depending on their claims in Viridis, investors will be eligible to nominate up to two directors with one for a 5% ownership stake and two for 15% or more.
This funding intends to push the project towards a financial investment decision before the first phase of project execution.
Viridion is an evenly split joint venture between Ionic and Viridis, which involves Ionic’s wholly owned subsidiary, Ionic Technologies to recycle magnets and develop rare earth oxides produced at the Colossus Project.
Write to Maddison Elliott at Mining.com.au
Images: Viridis Mining and Minerals
