Hello thanks for tuning into Kalkine TV, I’m Sage and this is the Hot Performers – a
show where we take a look at stocks and sectors that could be heating up.
Today we have ASX-listed company American Rare Earths under the spotlight.
So, lets get started.
Geologically, Australia is a resource-rich economy, having an abundance of resources
such as iron ore, nickel, zinc, uranium, gold, etc.
It’s no surprise that Aussie mining companies are the cornerstone of the Australian economy,
contributing more than 8% to the country’s GDP.
It also has an abundance of Scandium, which is one of the rare earths elements but none
of them are currently mined.
Although it is not a rare element, commercially viable pure-Scandium producing mines are not
common.
One company that is striving to make its presence felt in the rare earths space and has already
zoomed over 2.5X this year is American Rare Earths.
In today’s episode we look at how well is American rare earths ltd.
faring in the market and what have been its prospects.
Let us look at its stock Performance.
American Rare Earths has become one of the hottest stocks of 2022.
It’s been 20 days into 2022, and its shares have already become one of the best performers
on the Australian bourse.
The stock has more than doubled in the last five trading sessions alone, all thanks to
its near-vertical rally.
As of 20 January 2022, American Rare Earths shares have skyrocketed to deliver a staggering
year-to-date return of appx 160.61% to the last traded price of AU$0.43.
The massive rally has also been supported by a sudden buying interest, as denoted by
volume spikes on the chart.
The price gain and volume spikes have been so erratic that the ASX has also sent a price
and volume query to the company to seek any information that could possibly explain this
price action.
Well, lets glance at American Rare Earths’ business side.
American Rare Earths is an NSW-based exploration company, which has a focus on rare earths,
especially in the US.
After the acquisition of the La Paz Scandium and Rare Earths Project in August 2019, it
became the first ASX-listed explorer with exposure to the US rare earths market.
La Paz Scandium is a bulk deposit containing high-value light rare earths and very low
penalty elements such as radioactive uranium and thorium.
So, what’s driving this buying frenzy for American Rare Earths?
In the first week of 2022, the company announced the appointment of Sten Gustafson as a Non-Executive
Director.
Gustafson has a rich experience of over 25 years and has advised on over 100 corporate
transactions around the world for over US$100 billion of the transaction value.
Investors were cheerful after the announcement and the same day, American Rare Earths stock
closed ~3% up to AU$0.175.
In mid-December 2021, investors also flocked to the company’s shares after it announced
that it had received exploration permits to undertake ground-disturbing activities at
“La Paz” in Arizona and at “Halleck Creek” in Wyoming.
This was one major step towards starting drilling activities at these two key rare earths projects.
With both the funds and permits secured to commence drilling activities at projects in
Arizona and Wyoming, investors have become extremely bullish on the company’s future.
And to wrap up the show.
Currently, American Rare Earths is focusing on the development of the La Paz Scandium
and Rare Earth Project in Arizona.
These projects have the potential to be the largest, rare earths project in North America.
In its quest to meet US demand for rare earths, the company has expanded its portfolio to
include the Laramie Rare Earths Project in Wyoming.
That’s all for now.
We will be back again with the exclusive Hot Performer stock tomorrow.
Till then, keep watching Kalkine TV for the latest market updates and related insights.
I am Sage, signing off.