The RareX Ltd (ASX: REE) share price has surged into the green during afternoon trading.
RareX shares reached 10.5 cents intraday before closing at 9.2 cents apiece, a 13.58% gain on the day.
Let's take a look at the tailwinds behind RareX's share price this Monday.
Quick recap on RareX
RareX is a minerals exploration company that focuses on developing rare earths deposits.
Its major focus is the Cummins Range rare earth project in the East Kimberly region of Western Australia.
The Cummins Range mine contains a high percentage of the rare earth elements Neodymium and Praseodymium.
RareX has a market capitalisation of around $40 million.
Upgrade to Cummins Range resource
In an announcement today, RareX delivered a major resource upgrade at its Cummins Range rare earths project.
It stated the project had realised a 46% increase in deposits in overall tonnes to 18.8 million tonnes, at 1.15% total rare earth oxides (TREO).
The TREO findings included 0.23% Neodymium and Praseodymium, in addition to 0.14% of "potential by-product" niobium pentoxide.
The company also posted a "maiden indicated resource of 11.1 million tonnes at 1.34% TREO and 0.17% niobium pentoxide, with an additional 4.9 million tonnes at 2.11% and 0.23% niobium pentoxide".
Niobium pentoxide is a precursor for many alloys and is even used as a raw material in the production of glass for spectacles.
The company firmly believes Cummins Range has the potential to expand further in terms of overall size and grade.
In the release, RareX managing director Jeremy Robinson said:
Importantly, we believe that there is enormous scope to grow the resource further, both in overall size and grade. We have seen some very encouraging indications from the recent expansionary drilling and we are really looking forward to seeing what the upcoming diamond drilling will reveal.
RareX also announced a new 6,000 metre reverse circulation (RC) drilling program to expand its Cummins Range resource further.
Investors immediately rewarded the RareX shares following the announcement, driving prices up 21% to the intraday high of 10.5 cents.
RareX share price snapshot
The RareX share price has had a choppy year to date, posting a loss of ~19% since January 1.
Despite this loss, RareX shares have gained 10% over the previous 12 months.
However, both of these returns have lagged the S&P/ASX 200 Index (ASX: XJO)'s return of ~21% over the past year.
