OD6 Metals (OD6) has been trading around 65 per cent up on its IPO price after it joined the ASX half a year ago in June.
The company debuted in what has proven a difficult year for new listings, but OD6’s management puts its early success down to pre-planning and being drill ready at listing for its clay-hosted rare earth elements projects, which lie within 150 kilometres of Esperance in Western Australia.
Managing Director and CEO Brett Hazelden said the company had raised $8 million through its IPO, and it was ready to begin final earthworks and drilling by the time it joined the market.
By November, rare earths results began to flow in, and the share price spiked.
“We knew from the historic drilling that there were some great rare earth results, so we planned out the drilling to confirm and extend on these areas and had it all approved before we listed on the ASX,” Mr Hazelden said.
“Being able to hit the ground running and get a drill rig spinning was a key priority for us, which then enabled us to announce some outstanding drilling results not long after listing, so the price had a good run afterwards.
“If you list too early and are waiting for drill rigs and permits to drill, your share price just lags off.”
Drilling revealed grades up to 6729 parts per million (ppm) total rare earth oxides (TREO), with almost half the holes assayed having grades greater than 750 ppm TREO.
“We had a plan which we achieved this year, and we’ve got a plan for next year, so we are looking forward to some good news flow and the share price should obviously reflect that,” Mr Hazelden said.
OD6 completed an airborne electromagnetic survey covering the company’s entire 4800 sqkm tenement area. The survey results, released this month, identified 253 sqkm of combined clay basin targets that will see the drilling program expand its current prospect areas significantly.
Mr Hazelden said the extent and consistency of the shallow, thick, high-grade clays had resulted in four “significant prospects being identified that are between four and seven kilometres in width, which are open in length”.
“These initial rare earth assay results are outstanding and represent some of the highest grades and thickest clay-hosted rare earth intersections seen in Australia,” he said.
“The scale of these clays is hard to comprehend when you start talking multiple kilometres in one direction at a thickness of between 10 to 30 metres. The potential is massive.”
The Splinter Rock and Grass Patch tenements have good access to key infrastructure such as sealed roads and Esperance port.
OD6 shares have spiked as high as 70 cents. Today they’re trading at 31 cents at 3:13 pm AEDT.