News Summary
On December 15, 2025, Homerun Resources announced it has signed a definitive 99-year surface rights agreement for 64 hectares of land in Santa Maria Eterna, Bahia, Brazil. This agreement, which is renewable for another 99 years, grants the company the legal rights to construct its planned industrial complex for silica processing and solar glass manufacturing. This definitive agreement replaces a previously announced non-binding Memorandum of Understanding (MoU) for a municipal land donation. Key terms allow Homerun to use the surface rights as collateral for financing and independently secure permits. The Municipality of Belmonte has also provided a letter of support committing up to USD $400,000 for local infrastructure improvements, including road paving.
Material Impact
This is a material positive development that significantly de-risks the company’s flagship project. While the company announced an MoU for land donation on May 13, 2025, an MoU is a statement of intent and carries no legal weight. This definitive surface rights agreement provides the legal certainty and land tenure required to advance project financing and construction.
Key positive impacts:
– De-risking Project Finance: Securing long-term land control is a critical prerequisite for any major project financing. The ability to use these surface rights as collateral strengthens the company’s position with potential lenders for the substantial capital expenditure required for the processing and manufacturing plants.
– Execution Confirmation: It demonstrates management’s ability to convert a non-binding agreement into a legally enforceable one, a crucial sign of execution capability. This follows a series of positive developments, including closing over C$7.5 million in financing and receiving excellent metallurgical test results in the preceding weeks.
– Government Support: The additional USD $400,000 commitment from the municipality for infrastructure, while modest compared to the overall project cost, provides tangible evidence of local government support, which is critical for permitting and operational success in Brazil.
The news directly addresses a major uncertainty and moves the project from the planning and agreement-in-principle stage to one with secured land tenure, ready for the next phase of development upon completion of the Bankable Feasibility Study (BFS). This is a critical step in the company’s stated timeline.
Catalysts
– Bankable Feasibility Study (BFS): The company engaged DTEC Engineering on November 13, 2025, with a projected completion in Q1 2026. The results of the BFS will be the most significant near-term catalyst, as it will define the project’s capital and operating costs, and overall economic viability.
– Project Financing: Following the BFS, the primary focus will be on securing the large-scale project financing required for plant construction. The July 28 news indicated support from BNDES/FINEP, and updates on formalizing this support into a funding package will be critical. The capex is expected to be substantial (a budgetary offer of €150M was mentioned on July 9).
– Offtake Agreements: Formalizing the non-binding offtake agreements with Sengi Solar (Feb 10) and Balfar Solar (Feb 26) into binding contracts. This is necessary to remove market risk and underpin project financing.
Materiality Conclusion
The signing of the definitive surface rights agreement is a material positive event. It is a fundamental de-risking milestone that provides the legal foundation for the development of the Santa Maria Eterna industrial complex. It demonstrates tangible progress and is a necessary step towards securing the large-scale project financing needed for construction.
