Power Minerals (ASX:PNN) has reported high-grade Magnet Rare Earth Oxides (MREO) and Total Rare-Earth Oxides (TREO) results from the first drill hole of its maiden drilling program at the Morro do Ferro project in Minas Gerais, Brazil. Morro do Ferro sits within the Poços de Caldas alkaline complex, a geological formation long recognised for its rare earth enrichment, and has been the subject of historical exploration by multiple operators.

Drill hole MFSR-051 intersected 116 metres at 4.78% TREO from surface, including 31 metres at 10% TREO and 1.58% MREO beginning at 14 metres downhole. Individual drill core samples returned grades of up to 18.12% TREO and 3.66% MREO over a two-metre interval starting at 37 metres. MREO comprises the neodymium, praseodymium, dysprosium, and terbium oxides most valued for permanent magnets used in electric vehicle motors, wind turbines, and defence applications — end markets where Western governments have prioritised supply chain diversification away from dominant Chinese production.

The hole also intersected high-grade gallium — a critical mineral used in semiconductors, LEDs, and advanced defence systems, and included on the U.S. Government's critical minerals list — extending to the end of hole. Analyses showed a consistent pattern averaging 51.7 parts per million (ppm) gallium, with a maximum of 62.4 ppm. Primary gallium supply is currently concentrated in China, which has restricted export of gallium-related products since 2023.

"We are delighted to announce initial results from first drilling at Morro do Ferro. The first hole has delivered standout results," Power Minerals CEO Alistair Stephens said.

"The hole returned exceptionally high gallium concentrations, which further highlight Morro do Ferro's standing as an exceptional emerging critical minerals asset, and align with our U.S.-facing end-market strategy," Stephens added.

"The addition of gallium has the potential to significantly enhance project economics in any future critical minerals producing operation at the project, and will be pursued as we progress our drill-out at the project," he said.

The ongoing drilling program is planned to comprise approximately 25 drill holes totalling around 4,000 metres of diamond core drilling, along with 800 metres of larger-diameter PQ core drilling for metallurgical testwork. A second drill rig has arrived on site and is set to begin operations, while two additional holes are currently awaiting assay results.

"These outstanding results reinforce our confidence in the project as we continue drilling with two shifts currently in operation, and an additional rig set to commence," Stephens told shareholders.

"Our impressive results position us firmly among industry leaders, and we will keep our shareholders updated as we receive further assay results," he added.

Results from MFSR-051 are expected to be integrated into the company's existing geochemical database to support a planned maiden Mineral Resource estimate, which is anticipated before the end of calendar year 2026. A maiden resource at Morro do Ferro would represent a key de-risking milestone for the project, providing the first JORC- or NI 43-101-compliant tonnage and grade estimate for mine planning studies.

Shares of PNN are set to open at 10.5 cents per share today.