AUZ – On the verge of a major Ionic Clay rare earth discovery in Brazil

Market capitalisation: $11.34m @ 1.2c

Cash position: $5.7m approximately

Enterprise value: $5.64m

Shares on issue: 945,049,294 as of 24/01/2024

Primary peer:

Brazilian Rare Earths ($BRE): $325.28m market cap @$1.52

Well, that was an interesting announcement justbefore close yesterday (3:51pm) titled “Saprolite Clays & outcroppingCharnockites identified”.

The market may well have missed it due to thetiming following a price query by the ASX where no price sensitive announcementwas declared.

However, let's break down the announcement which inmy opinion demonstrates exceptional potential for the Jequie rare earth projectto be the next major ionic rare earth discovery in Brazil.

Per the announcement, the three components of the target are:

1)1. EnormousThorium anomaly ~ 30km in length and 2.5km in width

We know that the presence of Thorium is a strongindicator for the phosphate mineral Monazite. Monazite is a primary source forhosting rare earth minerals. The geochemistry between Thorium, Monazite andrare earth elements are synergistic.

If you read the second point of the announcement,it states “identified thick, in-situ saprolite and saprolite clay profiles which have the potential to host Ionic Adsorption and / or monazite sand deposits”. The company is making it abdundantly clear that the geological setting for the presence of economic grades of rare earth elements are allthere.

When geologists and geophyscists undertake field exploration, Thorium is one of the primary geochemical indicators for the presence of rare earth elements. They have an almost identical geochemical behaviour profile (ionic radii and chemical properties).

Where Thorium is concentrated, it is almost a given that the geological setting will be enriched with rare earth elements.

We can also consider primary carriers, such as Monazite, Allanite and Xenotime. All three carry Thorium and Rare Earth elements in tandem.

An additional point to note is the weathered Charnockites. These igneous rocks are perfect catalysts for storing thorium and rare earth elements during the final stages of magmatic crystallisation. Perthe company announcement, weathered Charnockites have been identified that have altered and become Saprolite clays.

Source: US Government Geological Surveyhttps://pubs.usgs.gov/publication/70143385

Some examples of Rare Earth deposits and Thorium concentration:

1)1)Mountainpass rare earth mine (US.)

2)2)BayanObo rare earth mine (China)

3)3)Nolanrare earth project (Australia)

4)4)LynasMount Weld (Australia)

5)5)Kvanefjeld(Greenland)

1)6)Nechalacho(Canada)

2)7)LemhiPass (USA)

3)8)Monazitedeposits in India and Brazil

4)9)Bastnasitedeposits in USA, Brazil, China etc.

1)2. OutcroppingLeucogranite and Charnockite

Charnockites are ancient igneous rocks that areformed under high-temperature and high pressure environment in deeper parts ofthe Earth's crust.

Rocks of igneous origin are considered potentialsources of rare earth elements. When the Charnockites are altered and weathered, the rare earth elements are deposited in the resulting saproliteclays.

When you factor the presence of thorium per thethorium anomaly, you come to the conclusion of the presence of Monazite whichis highly prospective for rare earth elements.

Monazite occurs within Charnockites and there is astrong association between the two. Monazite will occur in igneous andmetamorphic rocks.

Monazite and Xenotime, both which are known tocontain rare earth elements occur in Leucogranites. Leucogranites are alsoknown to be subject to transported hydrothermal fluids which deposit REEs inassociation with Leucogranitic magmas.

Additionally, the process of fractionalcrystallisation which commonly occurs in the formation of granitic magmas,create an environment where REEs can become concentrated in the residual melt.Leucogranites are more evolved and highly differentiated end members ofgranitic magmas, which adds to their prospectivity for rare earth elements.

The geological and geochemical setting isdemonstrated for a discovery of Ionic Adsorption rare earths deposit.

(Thorium, Monazite, Leucogranites, Charnockites andresulting Saprolite clays from alteration and weathering process)