Barry FitzGerald: Forget US critical minerals, this rampaging explorer is targeting the EU

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

Osmond Resources (ASX:OSM) has become something of an excitement machine of late as it works towards confirming the world-class potential of what it calls its Orión EU Critical Minerals Project in southern Spain.

The excitement is reflected in the stock’s 158% year to date gain to $1.07 for a market cap of $133 million ($271m fully diluted). But if the company is right about Orión’s potential, the stock won’t be stopping there.

Potentially at least, Orión could provide the European Union with a quick fix for its critical minerals needs across titanium, rare earths, zircon and hafnium. The EU currently produces little or none of the critical minerals.

And like the rest of the non-China world, the EU is determined to build out its own supply chain for the type of critical minerals Orión could deliver, with all of the above appearing on its strategic/critical minerals lists.

That opens up the potential for Orión to be in line for the same sort of government support critical minerals projects have been receiving elsewhere in the non-China world, including from Canberra, but most notably, from the White House.

It is why Osmond has artfully included “EU” and referenced critical minerals in its full project name for Orión.

More than a name

But it takes more than a name to fire up investor interest and on that front, Osmond has been ticking the boxes.

It currently stands as a project with the potential to be a large scale producer of three critical minerals  – zircon, rutile and rare earths (monazite) – each with the potential to individually cover a project’s operating costs, making for a fat margin project.

That potential is indicated by the super high grades encountered in the bulk sampling of distal outcrops of the extensive seams of mineralisation deposited millions of years ago by ancient shallow seas that came and went in the region.

In the case of rutile, think of a grade three and half times what is currently considered best in class, twice for the zircon. The rare earths grade is not up there with those two but again, potentially economic itself. In other words, the rutile and zircon could come for free.

For good measure, Osmond is also thinking about options to monetise the main waste stream. Quartz (silica) contributes about 50% of the bulk and could be delivered as silicon metal, another critical material listed by the EU.

Star performer

As previously suggested, Osmond’s share price performance this year has reflected building excitement over Orión’s potential and the role it could play in helping meet the EU’s critical minerals needs.

But there is work to do to confirm the continuity, grade and scale of the heavy mineral seams laid down with the sand in the (multiple) ancient shallow seas all those years ago. To that end, Osmond has kicked off a drilling program at the Andalusian project.

Osmond announced on Wednesday that the first drill hole has been completed and that seven prospective layers had been identified, including one of 5m thickness from 106.5m. Critical assays results are expected in 3-4 weeks.

Garimpeiro, for one, wants to be around should the assay results match or even come close to the super high-grade results previously reported from bulk sampling work of outcrops. And you can bet bustling Tolga Kumova will want to be around.

He owns about 10% of Osmond and has a formal strategic adviser role with the company.

Meanwhile, a second drill rig has arrived at Orión and will initially test for the continuity of the prospective stratigraphy about 1.7km from the first drill hole in the southern reaches of the project.

Newsflow with this one will be as strong as it gets.

The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.