This ASX mining share's exploded 264% this year, but it's not too late to buy

Expert lets us in on his secret rocket that he's riding to the moon.

| More on:
A boy stands firm on a rocky cliff holding a rocket in each hand and looking up toward the sky, anticipating flying into space.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The trouble with buying into "junior" mining companies is that your money could turn into $0 just as well as it could deliver you a massive windfall.

Their future prospects are entirely dependent on finding a reserve in the ground of whatever mineral they're looking for.

But what if you can grab a mining share just as it has found something, but before the rest of the world has woken up?

Datt Capital chief investment officer Emanuel Datt may well have found a stock in that situation:

Only 3 mines on the planet produce this valuable mineral

The WA1 Resources Ltd (ASX: WA1) share price started this year at $1.60.

It has since rocketed 318% to close Monday at $5.83.

What's the catalyst? It has found a source of niobium.

According to Datt, niobium is "a future-facing, extremely rare critical mineral". 

"Prices for niobium are relatively high at circa US$45,000 a tonne, reflecting the scarcity of the mineral," he said.

"WA1 has potentially made a tier-1 niobium discovery in the remote Arunta region of WA."

The find is stunning because currently, only three mines in the entire world extract niobium.

"Two major mines [are] in Brazil, albeit under full or partial Chinese ownership, and dominated by the giant Araxa deposit."

The element, with attributes similar to nickel, is used to make high-strength, low-allow (HSLA) steel.

HSLA steel can get away with a lower weight for the same amount of strength compared to conventional steel.

The material, according to Datt, was used to make the massive Oresund Bridge that connects Denmark and Sweden.

Ready for a Godfather offer

The opportunity for WA1 Resources is huge.

"The use of niobium in steel has primarily, we believe, been constrained by the supply of niobium concentrated in the hands of small private companies," said Datt.

"New supply is essential to increase the penetration rate of niobium usage in steel production."

Niobium, he added, would "bring significant reductions to construction costs and scope three emissions regarding climate change targets, including electric vehicle batteries".

There is high potential that a large mining company buys WA1 Resources' niobium asset.

"Particularly amongst the iron ore producers, given existing marketing networks could be utilised to quickly increase the market penetration of niobium into the steel market," said Datt.

"In addition, a potential X factor could be the commercialisation of niobium batteries, which are demonstrating vastly superior outcomes versus present battery technologies albeit at the laboratory level."

Motley Fool contributor Tony Yoo 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.

More on Resources Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Why did the Fortescue share price fall 7% in October?

Let's review what happened with the ASX 200 mining giant in October.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Resources Shares

Why did the BHP share price get hammered in October?

ASX 200 investors sent BHP shares sharply lower in October. But why?

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Resources Shares

Gina Rinehart's empire raked in another $5.6 billion. Here's how

Resources and mining continue to dominate the Australian market.

Read more »

two men in business suits sit across from each other at a table with a chess board on it. Both hold their hands to their chins and look down in serious contemplation of their next move.
Resources Shares

'Not ruled out': Could BHP still buy Anglo-American?

This mega-deal might not be as dead as it looks.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Mineral Resources share price rockets 16% on $1.1 billion news!

ASX 200 investors appear thrilled with Mineral Resources' latest news.

Read more »

Miner looking at a tablet.
Resources Shares

Here are the latest share price forecasts for Fortescue

Let’s unearth what analysts think could happen with this iron ore miner.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
Resources Shares

Lake Resources share price sinks on quarterly cash flow news

Let's take a look at the highlights of the company's Q3 update.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Resources Shares

Why today is a big day for BHP shares

Guess why everyone’s talking about BHP shares today.

Read more »