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Australian Strategic Materials added to S&P/ASX 300 index in rebalance
The benefit to stock prices on inclusion in the index is significant because all the ETF’s that track or try to emulate the S&P/ASX 300 must take positions and buy stock in the company.

Australian Strategic Materials Ltd (ASX:ASM) and Imugene Limited (ASX:IMU, OTC:IUGNF) are major beneficiaries of the recent S&P Dow Jones Indices rebalance announcement of the S&P/ASX 300 index.

Both the companies will be added to the index with effect from the open of trading on September 20, 2021.

S&P indices are one of the most widely followed indices in the world and index funds and other investment vehicles tracking the S&P/ASX 300 index must take positions and buy stock in the companies.

10-fold jump in share price

ASM shares have surged about ten-fold to A$12 currently from about A1.26 in September 2020.

The company’s shares recently hit an all-time high after signing an agreement with a consortium of South Korean investors to subscribe for a 20% equity interest in the Dubbo Project along with offtake from the company's Korean Metals Plant.

Under the agreement, a consortium fund will invest US$250 million in Dubbo Project holding company Australian Strategic Materials (Holdings) Ltd (ASMH) and will include provision for a 10-year offtake agreement for up to 2,800 tonnes per annum of neodymium-iron-boron alloy from the Korean Metals Plant (KMP).

The volumes outlined in the proposed offtake agreement anticipate 100% of the neodymium oxide planned to be produced at the Dubbo Project in NSW being the primary source of feed to the KMP in South Korea post the completion of construction.

“Exciting new phase” in ASM growth

ASM managing director David Woodall said after signing the agreement: “In opening a financing pathway for the Dubbo Project, this agreement heralds an exciting new phase in ASM’s growth and puts us one step closer to executing our ‘mine to metal’ strategy.

“We are delighted our new South Korean partners have recognised the mutual value of the strategic investment opportunity represented by our integrated manufacturing capability that offers a new, cleaner source of critical metals and alloys to a rapidly expanding market.

"Cementing our ties with South Korea’s advanced manufacturing sector represents an incredible opportunity to create value from our Dubbo Project.”