The Australian Strategic Materials Ltd (ASX: ASM) share price is surging to fresh all-time highs on Friday, up 13.16% to $9.80.
ASM is an integrated critical metals business, hoping to become an independent, net zero-carbon supplier of critical metals.
The company owns the Dubbo project in Western Australia, with hopes of leveraging the project's rare earths and oxide production to supply its strategic plants around the world that produce high-purity metals.
What's driving the ASM share price?
There's been a lot of hype around the lithium and renewables sector, with household names such as Galaxy Resources Limited (ASX: GXY), Pilbara Minerals Ltd (ASX: PLS), Orocobre Limited (ASX: ORE) and Lynas Rare Earths Ltd (ASX: LYC) all making fresh record highs in the past month.
The sector has been supported by a stream of positive news such as President Joe Biden's executive order aimed at making at least half of all new vehicles sold in 2023 electric and higher spot prices for critical metals such as lithium and rare earths.
This narrative bodes well for the ASM share price, which aims to produce highly relevant materials from the Dubbo project including titanium, zirconium and rare earths. And transform these raw materials including powders, alloys and magnets.
ASM enters major framework agreement with South Korean investors
The last piece of price-sensitive news from ASM was its conditional exclusive framework agreement with a consortium of South Korean investors on 21 July.
The agreement would see three respected South Korean private equity firms, Cerritos Holdings Co. Ltd, Kamur Partners LLC and ACE Equity Partners LLC establish a consortium fund to subscribe to a $20 equity interest stake in ASM.
The agreement also included a ten-year offtake agreement of up to 2,800 tonnes per annum of neodymium-iron-boron alloy from ASM's Korean Metals Plant.
The funding will support ASM's goal of developing the Dubbo project.
The ASM share price surged 8.78% to $8.05 on the day of the announcement.
Between 21 July and 12 August, ASM shares would trade sideways, retreating from highs of $8.95 and bouncing off lows of $8.
After this brief period of consolidation, ASM would stage the breakout we're seeing today, surging 12.37% to $9.73.
