Insights

Australian Strategic Materials (ASX:ASM) share price is surging 16%

The critical metals producer has just secured key funding for its flagship mine.
The post Australian Strategic Materials (ASX:ASM) share price is surging 16% appeared first on The Motley Fool Australia. –

The Australian Strategic Mtrls (Hldngs) Ltd (ASX: ASM) share price is surging on Wednesday, up 16.76% to $8.64.

The ASM share price entered into a trading halt on Monday, pending a “material investment into the Company’s Dubbo Project”.

On Tuesday, the company revealed a major framework agreement with a consortium of South Korean investors to fund the development of Dubbo.

What’s driving the ASM share price?

The ASM share price is rallying to record highs after the company entered into a conditional exclusive framework agreement with a consortium of South Korean investors to subscribe for a 20% equity interest stake for US$250 million (A$340 million).

Included in the agreement is the provision for a ten-year offtake agreement for up to 2,800 tonnes per annum (tpa) of neodymium-iron-boron alloy from ASM’s Korean Metals Plant.

The investing partnership will see three respected South Korean private equity firms, Cerritos Holdings Co. Ltd, Kamur Partners LLC and ACE Equity Partners LLC, establish a consortium fund to acquire the 20% stake in ASM.

Alongside private equity investors, the consortium is also expected to include strategic investment from major Korean industrial companies.

What’s the funding for?

According to today’s announcement, the funds will be used to progress the development of the Dubbo Project.

ASM has described the Dubbo Project as a “large in-ground polymetallic resource of rare earths, zirconium, niobium, hafnium, tantalum and yttrium”.

As it stands, the project has “all major approvals and licences in place” and is “ready for construction, subject to financing”.

ASM said that today’s framework agreement “represents an important contribution of financial support for the Dubbo Project”.

In addition, on 28 June, the company received conditional finance support from Export Finance Australia for $200 million of debt funding. The additional funding announcement helped push the ASM share price 2.6% higher on the day.

What did management say?

ASM Managing Director David Woodall hailed the milestone:

In opening a financing pathway for the Dubbo Project, this Agreement heralds an exciting new phase in ASM’s growth and puts us one step closer to executing our ‘mine to metal’ strategy.

We are delighted our new South Korean partners have recognised the mutual value of the strategic investment opportunity represented by our integrated manufacturing capability that offers a new, cleaner source of critical metals and alloys to a rapidly expanding market. Cementing our ties with South Korea’s advanced manufacturing sector represents an incredible opportunity to create value from our Dubbo Project

ASM share price joins the $1 billion club

If the ASM share price can hold current levels, the company will hit a $1 billion valuation for the first time on record.

The ASM share price has rallied an extraordinary 107% from $4.17 on 24 March to a record high of $8.68 on Wednesday.

From a year-to-date perspective, the company’s shares are up 34%.

The post Australian Strategic Materials (ASX:ASM) share price is surging 16% appeared first on The Motley Fool Australia.

Should you invest $1,000 in Australian Strategic Materials right now?

Before you consider Australian Strategic Materials, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Australian Strategic Materials wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

What these 5 outperforming ASX shares have in common

Australian Strategic Materials (ASX:ASM) share price stilled by trading halt
Shares in Australian Strategic Materials (ASX:ASM) end their miraculous run
Up 63% this month, Australian Strategic Materials (ASX:ASM) share price rockets higher

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!