The Vital Metals (ASX:VML) share price is down 20% in a month. What’s happening?

This rare earths explorer’s shares are falling again…
The post The Vital Metals (ASX:VML) share price is down 20% in a month. What’s happening? appeared first on The Motley Fool Australia. –

The Vital Metals Limited (ASX: VML) share price is out of form again on Wednesday.

In morning trade, the rare earths explorer’s shares are down 5% to 5.4 cents.

This means Vital Metals shares have now lost over 20% of their value since this time last month.

Why is the Vital Metals share price sinking?

There appear to have been a couple of catalyst for the decline in the Vital Metals share price.

One is weakness in the resources sector over the period in question. For example, Vital Metals isn’t the only share falling materially.

The Lynas Rare Earths Ltd (ASX: LYC) share price has fallen 13% over the last couple of weeks.

In addition to this, profit taking could be weighing on the Vital Metals share price. After all, its shares are still up approximately 80% in 2021 even after recent declines.

Why are its shares up 80% this year?

Investors have been bidding the Vital Metals share price higher this year amid excitement around its Nechalacho project in Canada.

Earlier this year, the company received formal acceptance from its offtake partner, REEtec AS, for its rare earth carbonate sample.

At the time, Vital Metals’ Managing Director, Geoff Atkins, commented: “Customer acceptance from REEtec is a key milestone for the development of the Nechalacho rare earth project and the construction of our Extraction Plant in Saskatoon.”

“This achievement demonstrates that we have our processes at Nechalacho working correctly and we can proceed in line with our plans. With the satisfaction of this milestone, the procurement of equipment for our Rare Earth Extraction Plant in Saskatoon will proceed.”

If all goes to plan, the company will be supplying REEtec with 1,000 tonnes of rare earth oxides (REO) per year over five years. After which, there is an option to increase the offtake volume by as much as 5,000 tonnes REO annually over 10 years.

However, with a market capitalisation of ~$250 million, judging by its recent share price performance, some investors may believe this is now priced into its shares.

The post The Vital Metals (ASX:VML) share price is down 20% in a month. What’s happening? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Vital Metals right now?

Before you consider Vital Metals, 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 Vital Metals 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 August 16th 2021

More reading

Smartgroup (ASX:SIQ) share price soars 17% on TPG Global takeover bid
Afterpay (ASX:APT) and Zip (ASX:Z1P) share price falls as Mastercard opens up the BNPL sector
Confirmed: APRA is planning action on home loans, ASX 200 banks drop

Why is the Prospect Resources (ASX:PSC) share price up 11% this month?
Li-S Energy (ASX:LIS) share price up another 3% in second day of trading

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 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!