The American Rare Earths Ltd (ASX: ARR) share price has jumped into the green today.
At one stage this morning, the shares were skyrocketing by 19%. However, at the time of writing they have partially retreated and are swapping hands for 9.4 cents, still a gain of 11.9% on yesterday’s closing price.
The move comes as the company released drilling estimates from its La Paz site earlier today.
Quick refresher on American Rare Earths
American Rare Earths is in the mining and exploration business.
Its geographical footprint lies in the Murray Basin and at Broken Hill, alongside its interests at the La Paz Rare Earth project and the Thackaringa Cobalt project.
American Rare Earths has a market capitalisation of $28.9 million at the time of writing.
What did the company release?
The company outlined drilling at La Paz delivered an “indicated resource estimate increase” of 117%.
Indicated resource estimates exhibited a growth from 16.2 million tonnes (MT) to 35.2MT, whilst JORC compliant resource tonnage increased by 33.1%.
Results of such magnitude demonstrates the La Paz site could be “one of the largest rare earths projects in North America”, according to the company.
Assay results obtained from this site also show it is an “environmentally stable resource” compared to “most other projects on the market”.
Additionally, American believes the announcement “supports the development of US domestic rare earths supply chain”.
Moreover, it also “highlights the strategic value of (the) assets” to the US Government.
Investors have favoured the announcement, pushing the American Rare Earths share price 19% into the green at one point today.
American Rare Earths shares are now exchanging hands at 9.4 cents, well below their 52-week high of 23.5 cents.
American Rare Earths share price snapshot
The American Rare Earths share price has posted a year-to-date return of 9%. It has also gained 317% in the last 12 months.
This has outpaced the S&P / ASX 200 Index (ASX: XJO)’s return of approximately 26% over the past year.
The post Why the American Rare Earths (ASX:ARR) share price soared 19% today appeared first on The Motley Fool Australia.
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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