Key Highlights

•  The Indicated ultra-high grade resource grew 41% to 3.5 million tonnes at 10.7% TREO above a 1% TREO cut-off.

•  Including Inferred material, the total ultra-high grade resource is 4.4 million tonnes at 9.9% TREO, up 29%.

•  The upgrade does not establish economic viability, with the feasibility study, capital costs, permitting and rare earth prices among the key uncertainties.

Brazilian Rare Earths (ASX:BRE) has released an updated mineral resource estimate for the ultra-high grade portion of its Monte Alto rare earths deposit in Bahia, Brazil. According to a company release dated 26 October 2026, the Indicated resource has grown by 41%, adding geological confidence to the material the company wants to mine first under a fast-tracked development plan. Monte Alto is the flagship project of Brazilian Rare Earths, which is also quoted on the US OTCQX market under BRELY.

The updated resource

Reported above a cut-off grade of 1% total rare earth oxides (TREO), the Indicated ultra-high grade resource now stands at 3.5 million tonnes grading 10.7% TREO. Including Inferred material, the total ultra-high grade resource is 4.4 million tonnes at 9.9% TREO, an increase of 29%.

The Indicated category accounts for about 87% of the contained TREO in the ultra-high grade resource, with Inferred material making up the remaining 13%. Inferred resources carry lower geological confidence and cannot be converted directly to ore reserves without further drilling.

A notable driver was Monte Alto South, where Indicated tonnes rose by roughly 200% to about 1.9 million tonnes. The estimate draws on more than 43,000 metres of diamond drilling from 255 holes.

The release reported grades only as TREO and did not break out individual rare earth elements such as neodymium, praseodymium, dysprosium or terbium. The company also did not define "ultra-high grade" beyond the reporting cut-off. No ore reserve has been declared.

Why confidence matters

Converting Inferred material into the Indicated category matters because only Measured and Indicated resources can be used to define ore reserves in a feasibility study. The upgrade therefore supports the company's plan to move Monte Alto towards production.

Chief executive Bernardo da Veiga said the upgrade "strengthens the foundation for a longer-life Monte Alto operation". He added that mineralisation "remains open to the south", where drilling beyond the current resource boundary could extend the deposit.

The development strategy

Brazilian Rare Earths is pursuing what it describes as a fast-tracked, low-capital plan to produce and export a high-grade concentrate by direct shipment, using conventional mining and dry processing. This is the subject of a Monte Alto Concentrate Sales Feasibility Study now under way.

The company has previously cautioned, in an ASX announcement dated 18 August 2026, that this concept is preliminary and indicative, is not based on a completed feasibility study, and remains subject to further work and approvals. The intention is for early concentrate cash flow to help fund a planned rare earths refinery at Camaçari, also in Bahia, which would follow as a later stage.

The strategy reflects a wider push to develop rare earths supply outside China. High-grade deposits can potentially reduce processing requirements, although product quality, metallurgy, offtake terms and pricing remain key variables for any direct-shipping model.

Risks and next steps

The resource upgrade does not establish economic viability. Key uncertainties include the outcome of the feasibility study, capital costs, permitting, the acceptance of a concentrate product by buyers, and rare earth prices, which have been volatile. The release did not state the company's ownership percentage in Monte Alto or provide a breakdown of rare earth elements, both of which investors may want to see in future disclosures.

The company has outlined several next steps. A 5,000-metre drilling programme is under way to extend recent high-grade additions, particularly to the south. It plans to complete the concentrate sales feasibility study and stage capital commitments accordingly, alongside feasibility-level mine planning and economic studies. The Camaçari refinery is intended to follow once concentrate production is established.

The company also pointed to regional upside across the wider district, noting that mineralisation remains open in all directions.