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- Ionic Rare Earths (ASX: IXR) has entered a non-binding agreement with CHINALCO to advance its Makuutu Project.
- CHINALCO's knowledge on ionic adsorption clays is expected to upgrade and speed up the Makuutu development.
- REEs are in high demand for the manufacturing of EVs, wind turbines, and numerous electronic gadgets.
Australia-based Ionic Rare Earths Limited (ASX: IXR) has signed a groundbreaking pact for the development of its Makuutu Rare Earths Project in Uganda. The non-binding MOU is with Chinalco, which is a global rare earth giant.
Triggered by the significant market update on 7 April, the stock traded higher today, registering an uptick of 3.64% to A$0.057.
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The stocks of the company jumped more than 7 per cent after the miner announced that it has signed a non-binding Memorandum of Understanding (MoU) with China Rare Metals and Rare Earth Co. (CHINALCO) to accelerate production at Makuutu Project.
Makuutu Rare Earths Project Advancement:
Under the terms of MoU, both Ionic and CHINALCO agreed to strategically cooperate for the development of the Makuutu project. Ionic granted a 12-month exclusivity period to CHINALCO. In addition to that, the deal also incorporates the potential for project funding and an offtake agreement.
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CHINALCO is the world's largest rare earth miner based on market cap. It holds rare earth element (REE) separation plants in the Jiangsu province and several subsidiaries that operate in the field of heavy rare earth element mines. CHINALCO's knowledge on ionic adsorption clays will incredibly upgrade and speed up the Makuutu development.
In view of the due diligence work, CHINALCO inferred that the Makuutu project is a wellspring of top-notch REE projects with key critical and heavy REE resources.
IXR received a slew of good news in the current financial year related to this project. During the initial period of the current financial year, the company increased its project stake from 31% to 51%, given an additional potential to hold 60% in the future.
In January this year, the company received two more exploration licences in the project location. In the beginning of March, the miner updated mineral resource estimate of the project with an astonishing increase of 210 per cent. Now, the company expects to release a scoping study for the project this month.
Source: © Edhardream | Megapixl.com
The stock price of IXR is on a growth trajectory since the start of 2021. From A$0.02 in early 2021, the stock now trades at A$0.057. The stock has delivered an excellent 1,040 per cent return in the past one year with more than 235 per cent gain registered in this year only.
The wide applicability of REE in the manufacturing of electric vehicles, wind turbines, and numerous electronic gadgets seems to have aided the stock price.
IXR is not the only company whose stock has gained traction with bloated REE demand, there are other players also like RareX Limited (ASX: REE), Northern Minerals Limited (ASX: NTU) and Australian Strategic Materials Ltd (ASX: ASM).