Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months

ASX rare earths stocks have garnered plenty of attention in recent years as the West continues to secure sources of the critical elements outside of China.

If you’re not familiar, rare earths elements (REEs) are core ingredients across a range of high-tech devices. Those include phones, EVs and military equipment. They’re also used for high-power magnets, which you’ll find in equipment like wind turbines.

While Lynas Rare Earths Ltd (ASX: LYC) gets much of the media coverage in this space, there are some fast-rising stars you might want to consider aside from this S&P/ASX 200 Index (ASX: XJO) rare earths miner.

Namely Brazilian Rare Earths Ltd (ASX: BRE).

And when I say fast-rising star, that’s no hyperbole.

On 24 January, the ASX rare earths share closed the day trading for $1.52. Yesterday, the small-cap miner ended the day trading for $3.13 a share.

That sees the Brazilian Rare Earths share price up 105.9% in less than six months.

Here’s what’s been piquing investor interest.

What’s driving the ASX rare earths stock to the moon?

Brazilian Rare Earths only listed on the ASX on 21 December.

While shares have been up strongly since the listing, the sustained rally kicked off in early February.

That rally was initially spurred by promising assay results from an early diamond drilling program at the ASX rare earths miner’s Monte Alto Rare Earths Project, located in Brazil.

Results from the initial exploratory campaign included wide intervals of high-grade rare earth elements, niobium and scandium mineralisation (+10% TREO) recorded in four holes and ultra-high-grade mineralisation (+20% TREO) recorded in an additional six holes.

 “These exceptional high-grade assay results validate Monte Alto as a world-class rare earth exploration project with some of the highest grades ever reported globally,” Brazilian Rare Earths CEO Bernardo da Veiga said at the time.

On 22 February, investors sold the shares down heavily. But they bounced back over the following days, after the miner reported it had exercised its option to acquire the advanced Sulista Rare Earth Project in Bahia, Brazil. The option saw the miner secure more than 100 square kilometres of highly prospective exploration licences across the southern extension of the Rocha da Rocha Rare Earth Province.

Shares surged again on 25 March on the back of more strong assay results from across the Rocha da Rocha Rare Earth Province. The ASX miner also reported on a new rare earth discovery, the Pelé Project, located 60 kilometres from Monte Alto.

And the good times continued into June.

On 6 June, the Brazilian Rare Earths share price closed up 10.7% after the latest batch of drill results confirmed “ultra-high rare earth grades” at the miner’s Sulista Project.

And the miner is well capitalised to accelerate its exploration and development activities, having completed a $80 million share placement raising on 13 June. The company issued the new shares for $3.30 apiece, 9.6% below the prior trading day’s closing price.

That put that ASX rare earths stock under some selling pressure, with shares still down just more than 13% since the cap raise.

The post Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position 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 Scott Phillips.