Alvo Minerals (ASX: ALV) Locks In Bluebush Deal as Drilling Extends Rare Earth Footprint

Alvo Minerals has signed the definitive agreement governing its staged acquisition of the Bluebush heavy rare earth project in central Brazil, while reporting broad, near-surface mineralised intercepts from a review of diamond and auger drilling.

The contract allows Alvo to earn up to 80% of project owner Mata Azul by funding exploration through a maiden Mineral Resource Estimate, scoping study and pre-feasibility study. Payments across those three stages total US$2.6 million, with the milestones due within 18, 30 and 48 months respectively.

Alvo can then acquire the remaining 20% for a price linked to the discounted net present value in the pre-feasibility study, capped at US$20 million. Payments may be made in cash or Alvo shares by mutual agreement. Existing Mata Azul shareholder loans totalling US$800,000 are also due to be repaid across the second and third stages.

The agreement gives Alvo a defined path to ownership as it works towards Bluebush’s first resource estimate. The broader project tenure now covers 9,859 hectares on the northern part of the Serra Dourada granite.

Near-surface results led by Boa Vista

Alvo has completed 448 holes for 3,708 metres across Bluebush, comprising six diamond holes and 442 truck-mounted or handheld auger holes. Boa Vista has returned the most consistent and highest grades among the prospects tested.

Reported diamond results include 5 metres at 1,390 parts per million total rare earth oxide from surface in BLD002, including 2 metres at 2,040 parts per million from 3 metres. That internal interval contained 123 parts per million combined dysprosium and terbium.

Another hole, BLD004, returned 19.5 metres at 1,324 parts per million total rare earth oxide from 0.5 metres, including 3.5 metres at 2,691 parts per million from 4.1 metres. The BLD004 result was previously reported.

Auger drilling included 6 metres at 2,537 parts per million from surface in BLG0008, ending in mineralisation. This contained 3 metres at 3,415 parts per million from 3 metres. Other results included 11 metres at 1,032 parts per million from surface and 12 metres at 1,062 parts per million from 4 metres, both also ending in mineralisation.

Across 162 significant intercepts, combined dysprosium and terbium averaged about 26 parts per million on a length-weighted basis and represented approximately 14.2% of magnet rare earth oxide content. Alvo said many auger holes stopped before testing the full clay profile.

Processing tests remain a key hurdle

Previous testwork confirmed ionic adsorption clay mineralisation, with total magnet rare earth oxide extraction of up to 83% and an average of 56%. However, no new extraction results were released with this update.

Samples are now undergoing diagnostic and column-leach testing at ANSTO. Alvo is assessing vat, heap and in-situ recovery routes, but permeability at Bluebush has not yet been measured, leaving the viability of in-situ recovery unproven.

The next program includes infill drilling at Boa Vista, São Bento and Praia for a maiden resource estimate, alongside further metallurgical and field permeability testing. Bluebush lies on the same granite system as the operating Serra Verde ionic clay mine about 40 kilometres to the south, which was acquired by USA Rare Earth for approximately US$2.8 billion.