Encounter Resources Ltd (ASX: ENR) shares are having a very strong start to the week and are rocketing higher.
In early trade, the ASX copper stock was up as much as 25% to 58 cents.
As a comparison, the ASX 200 index is up 0.5% at the time of writing.
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Why is this ASX copper stock surging?
Investors have been scrambling to buy the mineral exploration company's shares this morning following the announcement of a new discovery.
However, the discovery isn't copper, it is niobium that has been unearthed by the company.
Niobium is a critical metal with unique properties that make it essential as the world transitions to a low-carbon economy.
The primary niobium product is ferroniobium (FeNb, ~65% Nb). It accounts for approximately 90% of an estimated 100,000tpa market. Ferroniobium is utilised as a micro alloy in the steel industry to improve the mechanical properties of steel.
In addition, niobium pentoxide (Nb2O5) represents a key growth market, with significant recent developments in lithium-ion battery technology to utilise niobium to substantially reduce charge times down to six minutes while enhancing battery life.
What did the company announce?
According to the release, recent aircore drilling has intersected further shallow, high grade niobium-REE mineralisation across multiple targets at the 100% owned Aileron project in the West Arunta region of Western Australia.
Management believes these latest results provide further validation of the abundant fertility of this new carbonatite mineral province.
It notes that the extensive footprint of carbonatites that contain +2% Nb2O5 drill intercepts continues to grow with each drill program. And, importantly, high grade niobium intersections are repeatedly being achieved in wide spaced, first pass drilling. Follow-up drilling will then delineate the better mineralised parts of these complexes.
Management commentary
The ASX copper stock's executive chairman, Will Robinson, was pleased with the news. He said:
Encounter's Aileron project in the West Aruna hosts multiple bodies of high-grade, near-surface niobium oxide mineralisation. Crean is shaping up as a coherent body of thick, high-grade niobium mineralisation. Green contains a large, laterally mineralised zone with frequent high-grade niobium intercepts (+2% Nb2O5) defined in broad spaced aircore drilling.
Beyond these discoveries, with new results such as at Joyce, we are continuing to validate our targeting model, which focuses on major regional faults which have the capacity to host mineralised carbonatites over considerable strike length. Finding and delineating high-grade zones, with mineable dimensions, along these mineralised corridors, is an immediate priority.
Following today's strong gain, the company's shares are now up 70% since the start of the year.
