Shares in Summit Minerals (ASX:SUM) were up by as much as +27% in the first twenty minutes of trade on Tuesday, driven by positive niobium hits.
Strong market reaction towards a metal which not long ago you could fairly call “obscure” is due to one factor: the rise of WA1 Resources (ASX:WA1).
While the stock has fallen from its highs at over $20/sh in late May – not surprising, given how hard the stock was being run – niobium has pushed WA1 to boasting +165% returns YoY.
The former minnow also now boasts a market cap of just over $1B, so, it isn’t hard to see why traders are looking for the next WA1.
Enter Summit Minerals’ announcement on Tuesday. But there’s one big difference between Summit and WA1 – the latter has a resource while Summit today announced finding niobium in rockchips.
By their nature, rockchip samples are always higher than what later-stage drill intercepts can turn over, and for this reason initial strong reactions from the market can quickly dissipate.
At any rate, Summit flagged rockchips grading up to 41% niobium, along with tantalum and “partial rare earth oxides.”
Tantalum is most often seen as an indicator mineral for lithium, and the company has been targeting pegmatites – which you likely know the name of due to battery metal mining.
All in all, it’s early days for Summit at its Brazilian Equador Project, the landholding from which rockchip results were highlighted on Tuesday. Fieldwork remains ongoing with spotting and logging pegmatites the foremost activity of interest.
In its quest to become a niobium producer, the company’s in a good spot. Brazil holds over 90% of the world’s known niobium reserves.
This is also in part why WA1 causes so much fuss – globally, its niobium JORC MRE, based in Western Australia, is one of the world’s largest outside South America.
“The highly encouraging assays from Equador thus far has further solidified the prospectivity of the project and has given us tremendous confidence,” Summit MD Gower He said.
“We eagerly anticipate the results of further rock chip assays and look forward to keeping the market updated.”
SUM last traded at 36cps at the time of writing.