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Resources Top 5: Ionic clay rare earths stocks are on fire this morning
Mining
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- Minnow Emetals to acquire 469sqkm project prospective for ionic clay (IAC) rare earths
- Advanced IAC stocks Ionic Rare Earths, Australian Rare earths also gain in early trade
- Vimy rejects takeover offer from fellow uranium stock Deep Yellow
Here are the biggest small cap resources winners in early trade, Friday November 19.
EMETALS (ASX:EMT)
The micro-cap explorer has come out of trading halt to announce the acquisition of a 469sqkm project prospective for ionic clay (IAC) rare earths in the Eucla Basin of WA.
Good timing, with prices at decade highs.
The Salmon Gums acquisition is close to EMT’s existing ‘Cowlinya’ REE project. It is also a stone’s throw from recent IAC discoveries made by Mount Ridley Mines (ASX:MRD) (~35km away) and Salazar Gold (~20km away).
IAC deposits are typically found in southern China and are commonly considered to be some of the cheapest and most readily accessible sources of heavy rare earths, as well as making up a significant percentage of the world’s total output.
This acquisition is an educated punt by EMT.
While the applications have no known REE mineralisation, they have only been explored previously for gold and, to a lesser extent, base metals, and uranium.
It is not surprising that there has been no previous exploration for REE in this region as there is practically no outcrop, which lessens to chances of prospectors stumbling across mineralisation, the company says.
Additionally, this ‘China’ style of REE occurrences nearby require a specific soil sampling and drilling target program which has never been carried out on the Salmon Gums ground.
“The Eocene aged sediments of the onshore Eucla Basin in south-eastern Western Australia are increasingly becoming recognized for their RRE potential, in particular the more readily recoverable ionic adsorption clays which have significantly lower capital requirements and processing complexity than conventional hard rock deposits,” eMetals Director Mathew Walker says.
“We are delighted to expand our tenement position in this exciting new and developing critical mineral province.”
The $7.5m market cap stock had $426,000 in the bank at the end of September. It is currently looking to raise $4.375m at $0.0125 per share.
AUSTRALIAN RARE EARTHS (ASX:AR3)
(Up on no news)
The $46m market cap IAC REE stock has been a popular addition to the bourse, gaining 240% on its IPO price of 30c per share since listing in June.
Its Koppamurra project in South Australia and Victoria “is Australia’s largest prospective ionic clay hosted rare earth element deposit”, the company says. It has an Inferred Mineral Resource of 39.9Mt @ 725ppm TREO, defined from less than 2% of the Koppamurra landholding.
A 8000m drilling program kicked off 6th October to confirm regional prospectivity and increase the confidence level of the existing resource. So far, 1,600 samples have been collected and submitted for assay.
AR3 is well funded with $10.5m in the bank at the end of September.
IONIC RARE EARTHS (ASX:IXR)
(Up on no news)
For ages, IXR was the only IAC-focused REE stock on the ASX.
In April, Ionic released the scoping study demonstrating the potential for its ‘Makuutu’ project in Uganda to be one of the lowest cost rare earths operations in the world.
The project represents one of the last large-scale undeveloped ionic adsorption clay (IAC) deposits globally with a 315Mt (and growing) resource grading 650 parts per million total rare earth oxides.
It recently completed the 432-hole Phase 4 drill program to convert more than 250 million tonnes of inferred resources into the higher confidence categories, which will in turn support completion of the feasibility study and submission of a mining licence application.
The company currently holds 51% of Makuutu, though it will move to 60% on completion of the feasibility study before October 2022. It also has the pre-emptive right to acquire the remaining 40% of the project.
$160m market cap IXR is up 160% year-to-date. It had $9.5m in the bank at the end of the September quarter.
BLACK DRAGON GOLD (ASX:BDG)
The dual listed company is raising $2.4m – including a ~$580,000 commitment from a couple of directors — to advance the high grade +1Moz ‘Salave’ gold project in Spain toward development.
~43.392 million new CHESS Depository Interests (CDIs) will be issued under the placement at an issue price of $0.056 per share – a respectable 8% discount to the last closing price.
The proceeds will primarily be used to finalise the Environmental Impact Assessment approval by the Government of the Principality of Asturias in Spain, updating the Preliminary Economic Assessment, and commencing a Definitive Feasibility Study.
The company will also review new acquisition opportunities.
It had an additional $853,000 in the bank at the end of the September quarter.
VIMY RESOURCES (ASX:VMY)
Deep Yellow (ASX:DYL) confirmed this morning that its proposal to acquire VMY via a scheme of arrangement has lapsed after “limited engagement.”
DYL said it has attempted to engage with the VMY board on several occasions since 17 September 2021, with the latest proposal an offer price of 30.25 cents based on a proposed merger ratio of 1 Deep Yellow share for every 3.74 Vimy shares.
This represents a 10% premium to the previous Vimy closing share price.
But DYL said Vimy has allowed the proposal to lapse without any “meaningful engagement” — instead pursuing its second strategic review in 14 months.
“With strong inbound interest, the Board must assess all value creation options for Vimy and will keep shareholders updated as to progress,” VMY said yesterday.
It’s worth noting that VMY’s leadership team has been stripped bare over the past month or so – which might have been an indication that a takeover was on the cards.
During the September Quarter, MD and CEO Mike Young resigned, with Steven Michael taking the helm in the interim.
The company’s CFO Marcel Hilmer also resigned on 1 November with the company engaging Qlarity Corporate Services to provide CFO services.
Company secretary Matthew Foy also stepped down following Hilmers resignation with Sharon Coates taking the role and on 19 October.
$309m market cap VMY is up 275% year-to-date. It had $21.8m in the bank at the end of September.
