Longtime niobium darling WA1 Resources (ASX:WA1) has jumped into the green on Monday after producing niobium oxide from its Western Australian-based Luni project.
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The move is, in some ways, a vindication moment for the company. WA1 was an early mover on niobium after that metal was subject to trade curbs – kind of like the antimony before antimony – and greatly assisting it was the fact that it found one of the largest known niobium deposits outside of Brazil.
The production of niobium oxide, now, is a kind of evidence of Australia’s capacity – or WA1’s – to produce niobium powders domestically. Niobium oxide was produced at 96.8% purity, and according to the company, feed concentrate wasn’t subject to prior refining.
What that means, in essence, is a lower cost profile for production.
“A total of 0.5kg of niobium concentrate from a bulk beneficiation program was used as the sample input for this testwork,” the company wrote.
It continued: “This testwork consisted of the concentrate sample being leached and subjected to solvent extraction to produce a niobium-rich liquor. The stripped liquor was then precipitated to produce a hydrated oxide, which was filtered, dried and calcined to form niobium oxide.”
That’s neither here nor there – but it’s good news for the company’s share price, which jumped out the gate on Monday.
Of course, WA1’s post-explorer valuation has well and truly already been priced in; in fact, on Monday, one-year returns in the company are up less than +4%.
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This suggests the stock might need to produce more than 0.5kg of oxide if it wants to push that price up higher.
Still, in late 2022, the stock was priced at 16cps.
WA1 last traded at $15.67/sh.
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