This struggling microcap has picked up a niobium play. Can it be the next WA1 Resources?

Long-term holders of RareX (ASX:REE) likely aren’t too happy with the company at this current time.

Long story short, one year returns are down -68.5%, from 4.6cps this time last year to 1.5cps at open on Thursday.

However, there was some relief in the first hour of Thursday trades – the quiet stock has jumped 50% to 2.2cps.

This was in response to RareX highlighting it has acquired a “district-scale” niobium project in WA made up of six tenements over the Albany-Fraser Oregon – a geological feature not rarely mentioned in WA explorers’ announcements.

While the 50% jump in RareX shares was on relatively thin trades of $193,000 according to a service that ports Morningstar data, the excitement does have its precedent.

Niobium is the same metal that has turned former microcap WA1 Resources (ASX:WA1) into a relative behemoth with shares over $20/sh.

Niobium hasn’t been able to generate as much hype as uranium and copper in 2024 YTD, but for those junior-miner-watchers out there, WA1 is probably on the radar.

The stock is one of the best success stories the ASX has clocked in years, and all on the back of niobium (as well as fortunately high grades and a large deposit at a time where critical mineral enthusiasm is palpable from the government.)

So, it’s probably unsurprising RareX’s acquisition has created interest. But can the stock be the next WA1?

Ultimately, it will most likely come down to drill results to determine whether or not there’s enough good quality geodata to kick off sentiment-based momentum.

But there are observations one can make – like the fact RareX only paid $100K for the project, along with 9.8M in shares and a 2% royalty to the vendor. One tenement permit has been granted and five are pending.

Additionally, RareX spoke of a recent “self-brokered raise” for $1.5M with no discounts or options attached and 62% of shares going to existing holders.

In its most recent available quarterly, the company had just over $1.5M in cash. So it’s clear the stock isn’t exactly flush with funds, while the company has 684M shares issued.

However, the company noted on Thursday that it’s picked up a project which has brownfield elements. Existing drillwork has sunk holes previously across the project’s tenements with a focus on gold – meaning half of those existing assets have not been tested for niobium or REEs.

According to RareX, the exploration team will proceed with a “rapid exploration plan targeting areas of elevated niobium” on-site.

It’s likely shareholders (and traders) will be foremost interested in whether RareX can do so while on a budget of $1.5M.

“This acquisition is tremendously exciting for us. The new Khaleesi Project is well endowed with geological data from large-company programmes that were mainly gold-focused and never properly tested or evaluated the extensive niobium anomalies,” RareX chief James Durrant said.

“Through our due diligence we’ve identified the opportunity for a district-scale niobium project and will immediately commence a highly targeted exploration program.”

REE last traded at 2.2cps.

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