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IperionX (ASX:IPX) surged +25% in intraday trades as the company revealed it can access up to US$99 million as part of an American defence grant under a larger ‘seed funding’ pool of cash overseen by Washington.
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That seed funding program is called Small Business Innovation Research, or SBIR. IperionX has snagged a Phase III contract for “Low-Cost Domestic Titanium for Defence Applications.” Titanium is often used in aerospace applications (vehicles) as well as some weapons manufacturing.
In this instance, IperionX will first go ahead with manufacturing titanium fasteners – in other words, high-performance nuts and bolts. The name of the game? High strength, light weight.
While it’s not a US$99M contract in itself, the market didn’t care on Thursday.
The company can now request that much from the US DoD in moving forward with its research program under the Phase III deal. Whether it draws down the full US$99M remains to be seen – but in Australian dollars, that’s $152M.
(Investors will likely be keen to see what, if any, R&D tax rebates may apply.)
In the company’s own words: “The contract establishes a funding mechanism through which qualifying U.S. Government agencies can place project-specific task orders – collectively capped at US$99 million – for the supply of IperionX titanium components and parts.”
“[The contract] validates the performance of our technologies and underscores the Department of Defence’s commitment to reshore an all-American titanium supply chain,” IPX CEO Taso Arima said.
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Mr Arima added: “We look forward to delivering mission-critical components that are lighter, stronger and more cost-effective.”
Another day, another defence stock benefitting from the global remilitarisation thematic.
IPX last traded at $4.68/sh.
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