The Hastings Technology share price has rocketed 24% in a week. What’s going on?

The Hastings Technology Metals Ltd (ASX: HAS) share price has soared in the past week.

Shares in the rare earth explorer have jumped almost 24% from $4.39 at market close on 23 August to $5.44 at today’s close.

Let’s take a look at why Hastings Technology shares have leapt this past week.

Rare earths deal

Hastings Technology is a rare earths company exploring the Yangibana and Brockman projects in Western Australia.

Investors bought up Hastings Technology shares amid acquisition news and a $150 million investment from Wyloo Metals. Wyloo Metals is part of Andrew ‘Twiggy’ Forrest’s investment holding company Tatterang.

Hastings Technology is proposing to acquire a 22.1% share of Neo Performance Materials Inc (TSX: NEO). Neo is a rare earths processing company and permanent magnets producer listed on the Toronto Stock Exchange. Hastings has entered into a binding share purchase agreement to acquire 8,974,127 shares in Neo.

To fund this acquisition, Wyloo Metals has committed to invest $150 million in Hastings via exchangeable notes. These can be converted to Hastings shares for $5.50 each. Wyloo will also be able to nominate a director to the Hastings board as part of the deal.

Commenting on the news, Hastings executive chairman Charles Lew said:

The acquisition of the Neo stake represents an important strategic milestone for Hastings…

We are also thrilled to welcome the support of and strategic investment by Wyloo Metals.

Meanwhile, Datt Capital chief investment officer Emanuel Datt has recently named Hastings among five ASX shares that could rise if China restricts rare earths supply to countries it disagrees with in the future. China currently supplies 80% of the world’s rare earths.

Share price snapshot

The Hastings Technology share price has surged 36% in the past year, while it has climbed nearly 5% year to date.

In the past month, Hastings shares have lifted 33%.

Hastings has a market capitalisation of about $552 million based on the current share price.

The post The Hastings Technology share price has rocketed 24% in a week. What’s going on? appeared first on The Motley Fool Australia.

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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.

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