Meteoric Resources Shares (ASX:MEI) Drop as Brazil Project Approval Faces Setback

Meteoric Resources shares (ASX:MEI) tumbled today after the company reported an irregularity in the approvals process for its Caldeira Ionic Clay Rare Earth Project in Brazil, raising concerns about project timelines. The uncertainty surrounding the key environmental permits triggered a sharp sell-off, with the MEI share price dropping 14.81% to close at A$0.12, breaching the A$0.14 support level.

This pullback offsets some of the strong year-to-date performance, which still stands at +27.78%, outperforming broader market indices.

The core issue revolves around a vote by the Council of Management of the Pedra Branca Conservation Area (CONGEAPA). A member representing the Caldas Municipal Council for Environmental and Development (CODEMA) reportedly voted against express written instructions to support the project’s consent within the conservation area’s buffer zone. Caldas City Hall has declared the vote invalid and is reviewing the matter. Meteoric has received written support from Caldas Mayor Ailton Goulart and CODEMA.

Despite this setback, Meteoric Resources emphasized that the Minas Gerais Environmental Protection Agency (EPA) has confirmed the CONGEAPA vote will not impact the analysis of the Preliminary Environmental Permit (LP). The EPA’s review is at an advanced stage. The company has invested approximately $30 million since 2023 in the Caldeira Project. The company aims to obtain the Construction License by December 2025 and commence production in 2027.

“Meteoric continues to receive strong and unwavering support from all levels of Brazilian government,” said Managing Director, Stuart Gale. “Whilst procedural irregularities can occur in the complex, multi-layered approval processes, the key point is the issues are quickly identified and corrected – as is the case here. Based upon a strong working relationship with the Mayor of Caldas, together with legal and environmental advice, Meteoric remains confident of Project timelines. This is further supported by the EPA confirming the LP approval timeline will not be affected, which provides a strong vote of confidence in the Project and reflects the importance which is placed on the Project in Brazil.”

Analysts have recently adjusted their price targets for Meteoric Resources. Macquarie reduced its target by 5.6% to A$0.34 per share, while Bell Potter decreased its target by 5.9% to A$0.16 per share. The average target of A$0.30 would represent a healthy upside, yet execution will need to be on point in order to unlock this perceived value.