Vital Metals Limited (ASX: VML) share price was up 24.6% today – hitting a 5-year record of 8.6 cents in morning trade. The rise coming after the company announced the production of a rare earth carbonate.
As of writing, shares had slightly retreated to sit at 7.1 cents each. This is still nearly 16% above yesterday's close of 6.9 cents per share. In comparison, the S&P/ASX All Ordinaries Index is up only 0.6%.
Let's take a closer look at what's affecting the company's share price.
What did Vital Metals announce and how is it affecting its share price?
In a statement released to the ASX, Vital Metals declared it had produced a "12kg sample of rare earth carbonate…". Vital Metals produced the sample at its Nechalacho project in Canada. The company expects rare earth mineral production at the site to begin in Q4 of FY21.
Construction at the Nechalacho project should begin by the end of March.
Vital Metals also announced rare earth expert, George Bauk, who was only recently appointed as an advisor, would be leaving the company. Bauk stated that:
It is with great disappointment that due to unforeseen circumstances I am no longer able to fulfil the role of Strategic Advisor to Vital. During my short time working with the Vital team, I have been extremely impressed by the quality of the Nechalacho project, the management and Board of Vital.
He added:
My time with the team has left me in no doubt that Vital are well on track to successfully bringing the Nechalacho project into production in 2021 to become Canada's first rare earth operation.
What are rare earth elements?
According to Geoscience Australia, rare earth elements (RRE) is a collective term for 15 different elements. Despite the name, they are not particularly rare. They are called rare because the elements are usually concentrated in specific parts of the earth's crust. RRE is used in a range of products, including magnets, batteries, and fibre optic cables.
Neodymium, an RRE found at the Nechalacho Project, is trading at USD 885,000 a tonne – up 24.7% on last month.
Vital Metals share price snapshot
This time last year, shares in Vital Metals were trading at 0.8 cents each. An investor would be sitting on a generous 690% return on investment if they bought into the company 12 months ago.
The market capitalisation of Vital Metals is $197.9 million.
