ASX-listed Resouro Strategic Metals says it has delivered on a “major milestone” with the completion of preliminary economic assessment (PEA) for a starter operation at its flagship Tiros rare earths and titanium project in Minas Gerais, Brazil, which confirms the potential for a billion-dollar operation.

“The project’s robust economics are based on high levels of total rare earth oxides (TREO) and titanium oxide (TiO2) grades,. We believe that starting with a small high-grade operation will minimise the social and environmental impacts, reduce the time to production, and significantly derisk the project.

“Our goal with this staged approach is to support future financing and provide a pathway for larger scale development,” says CEO Christopher Eager.

The PEA indicates an after-tax net present value of $714.9-million and an after-tax internal rate of return of 44.2%.

The proposed operation contemplates yearly processing throughput of 500 000 t/y over an initial mine life of 20 years for a total run of mine feed of 9.5-million tonnes of high grade at 26.3% TiO2, 10 832 ppm TREO and 2.7 strip ratio.

The operation targets a high-grade area of mineralisation comprises less than 1% of the company’s previously announced 1.4-billion tonne measured and indicated resource.

The PEA shows significant expansion potential supported by a very large titanium and rare earth mineral resource.

It also indicates simple open-pit mining with free digging near-surface mineralisation.

The proposed processing flowsheet incorporates grinding and sizing beneficiation, calcination, magnetic separation/electrostatic separation and gravity separation, acid leach, sulphation/water leach, hydrolysation, precipitation and solid liquid separation.

The overall recovery of titanium dioxide is 68.7% (recovered to two products: coarse TiO2 and fine TiO2) and the recovery of the rare earth elements to a mixed rare earth carbonate product is 67%.

The PEA reveals a dual-revenue model based on titanium dioxide and rare earth product streams.

It also highlights an environmentally conscious design, assuming dry-stack tailings.

Minas Gerais is also outlined as a favourable jurisdiction, with established infrastructure.