Aussie rare earths explorer Rarex Ltd [ASX:REE] has had a bumper end to the month of May, its share price is up 100% over the last 30 days.
The rise in the REE share price has been spurred on by an announcement regarding drill results at its Trundle project and exploration recommencing at its Cummins Range project.
Upon further news from Cummins Range, REE’s share price is up 7.14% to trade at six cents per share.
Drilling to recommence at Cummins Range
REE’s Cummins Range project is thought to be one of only two known rare earth bearing carbonatites in Australia — the other being Mt Weld owned by Lynas Corp Ltd [ASX:LYC].
Drilling was due to begin in April before the outbreak of the COVID-19 pandemic, resulting in bans of intrastate travel in WA.
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Further specific restrictions were also imposed in the Kimberley region of Western Australia, where Cummins Range is located.
As of 18 May 2020, the WA Government has begun to relax restrictions with further changes expected to be announced in the coming weeks.
Meaning REE will now begin drilling in July.
Why the share price reaction?
Cummins Range has an inferred resource of 13 megatons at 1.13% total rare earth oxides for a contained 147 million kilograms.
This inferred resource occupies only a small area on the project, approximately two by two kilometres, which offers the potential to expand the known resource.
This morning, REE announced it had been reviewing historical drilling results at the project in preparation for the renewed exploration effort in July.
Historical samples contained high Neodymium-Praseodymium (NdPr) content of 22.1%.
RareX noted the NdPr content was comparable with other similar known deposits including LYC’s Mt Weld project.
NdPr, along with other rare earthers, are seen as critical minerals in many countries due to their necessity in electric vehicles, wind turbines, and military applications.
What’s the market for rare earths like?
With tensions with China increasing across the globe, there has been a push to develop rare earth deposits outside of the country, which currently dominates the space.
US Senator Ted Cruz introduced legislation recently to facilitate the revival of the industry in the US.
The legislation included tax breaks for mine developers and manufacturers — similar legislation has not been mentioned here in Australia.
Rare earth prices can be extremely prone to geopolitical events and associated perceived supply shocks.
REE said it anticipates rare earth prices will continue to increase as geopolitical tensions continue to rise, citing heightened geopolitical hostilities regarding COVID-19.
For example, in 2011 NdPr prices jumped to US$280/kg following China’s ban on rare earth exports to Japan, resulting in diplomatic dispute between the two nations.
The NdPr oxide price is currently attracting around US$38 per kilogram.
REE seems to have plenty of interesting projects on its plate at the moment, with news regarding its Trundle Gold Project expected to be announced soon.
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