ASX copper stock surges 25% on new discovery

Niobium is getting this copper explorer's shareholders excited.

| More on:
A woman jumps for joy with a rocket drawn on the wall behind her.

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

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.

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.

Motley Fool contributor James Mickleboro 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 Materials Shares

A man stands with hands on hips surveying construction of three high-rise buildings.
Materials Shares

Building activity on the rise – will ASX materials shares benefit?

New data from the March quarter shows a sharp rise in building activity. 

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Materials Shares

Could these 3 ASX materials shares be set to double?

This broker has buy ratings and aggressive price targets for these holdings. 

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Materials Shares

Rio Tinto shares on watch after naming new CEO

The mining giant has found its new leader.

Read more »

Three miners looking at a tablet.
Materials Shares

How much upside does Macquarie project for South32 shares?

The miner faces more headwinds, but the broker maintains its optimism.

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.
Materials Shares

Why are South32 shares sinking 5% today?

Let's see what is weighing heavily on this mining giant's shares today.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Materials Shares

How much upside does Macquarie forecast for Pilbara Minerals shares?

Is the broker bullish or bearish on this lithium giant? Let's find out.

Read more »