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Here’s why 25-bagger Latin Resources (ASX:LRS) is making news today

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The Latin Resources Ltd (ASX: LRS) share price is making big news today. Latin Resources shares are, at the time of writing, up 3.92% to 5.3 cents a share.

That doesn’t sound all too impressive. But consider that Latin Resources shares are now up 60.6% over just the past 5 days, and up almost 2,550% since its last 52-week low. A 25-bagger! Put simply, this is a company that would have made some investors extremely happy over the past 12 months.

So what’s going on here? Why is this company exploding in value this week?

Who is Latin Resources?

Latin Resources is a mineral exploration company. It owns several projects across both Australia and Latin America. These include a gold project in NSW, a copper project in Peru and a lithium opportunity in Argentina as well as Brazil.

It’s some of these projects which have spurred the rapid price appreciation we have seen in Latin Resources shares over the past few months in particular.

Back in early November, for instance, the company told investors it had acquired a new exploration license in the NSW Lachlan Ford Belt, very close to Newcrest Mining Limited‘s (ASX: NCM) world-class and highly valued Cadia mine. That announcement precipitated a surge of interest in Latin Resources shares.

But that project isn’t why Latin Resources is in the news today.

The Kaolin master

Back in late November, Latin Resources told investors that it had started ‘air-core drilling’ at its Noombenberry Halloysite-Kaolin project in Western Australia. The drilling was designed to “outline the extent of a known sub-outcrop of kaolinitic clays and halloysite” at the site.

Kaolin and halloysite are both materials best described as clays. Kaolin is used as the primary ingredient in the manufacture of porcelain and fine china. Halloysite can also be used for this purpose. Although it has more industrial applications, most prevalently in the refining of petroleum.

Yesterday morning, Latin Resources told investors that this drilling has been completed, and has resulted in the discovery of significant deposits of “bright, white” kaolin clay “up to 50m thick” across the 18sqkm area.

Samples are now being sent to “laboratories in Perth and Adelaide” for further testing.

Latin Resources exploration manager Tony Greenaway had this to say on the news:

Our initial observations from drill cutting are very encouraging… [and] will bode well for any potential future development. We are now able to significantly advance the Noombenberry project to the next stage…

The whole team at Latin Resources is very excited by our initial observation at Noombenberry, and the potential that this emerging project is showing at such an early stage.

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Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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