Whats up with the Australian Strategic Materials (ASX:ASM) share price?

The Australian Strategic Materials Limited (ASX: ASM) share price is rocketing on the ASX as of late, rising 306% in less than 12 months.

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The Australian Strategic Materials Limited (ASX: ASM) share price is rocketing on the ASX as of late.

After listing on the ASX in late July late year, the company’s share price has since risen an impressive 306%.

Currently, the emerging critical mineral manufacturer’s shares are trading for $5.14, 2.3% higher than yesterday’s closing price.

We take a deep dive into what’s been driving the Australian Strategic Materials share price lately.

What does Australian Strategic Materials do?

Australian Strategic Materials produces specialty metals and oxides for advanced technologies and owns 100% of its Dubbo Project.

The Dubbo Project is ready for construction, with all approvals and licences in place. It will process zirconium, rare earths, niobium and hafnium from a long-term resource in the central west of New South Wales.

The company also has a joint venture with South Korea’s Ziron Tech to pilot the production of hafnium and zirconium by combining Australian Strategic Materials’ process with Ziron Tech’s metallisation technology. The first production run from the joint venture with Ziron Tech was successfully completed in July 2020.

Since then, it has had a run of successful purity testing of its materials for different uses, including magnets and 3D printing.

Mad March

Despite many gains and some important announcements, by the end of the Month, the company’s shares had fallen by 9.9%.

In early March, the company announced results from an internal scoping study, which found a strong financial rational to build a metals plant in Korea. The plant would produce high-purity neodymium iron boron powder and titanium powder using the company’s patented low-energy technology. The study found the plant would cost between US$35 million and US$45 million to build. It forecasted it would generate between US$180 million and $190 million in revenue each year.

One week later, Australian Strategic Materials announced it had signed a memorandum of understanding (MoU) with the Korean Government, the Chungbuk provincial government and Cheongju city government. The MoU related to the building of the plant. It also said it would receive a government grant for the plant, but didn’t disclose the value of the grant.

Finally, on 26 March, the company shared it had received commitments to raise $65 million through the placement of 13.5 million shares. Each share would be issued at $4.80, which was 5.7% lower than the company’s share price at the time.

That was the last time we saw important news come from Australian Strategic Metals, although its share price has since risen by 3.6%.

Australian Strategic Materials share price snapshot

Despite a poor 2021, the Australian Strategic Materials share price has performed well on the ASX so far.

The company closed its first day of trading at $1.39, and it has now risen to its current price of $5.13, although it has dropped by 21.43%, year to date.

The company has a market capitalisation of around $676 million, with approximately 142 million shares outstanding.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

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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