The Australian Strategic Materials (ASX:ASM) share price is sliding 7% on Monday

Australian Strategic Materials shares have slipped into the red on Monday.

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The Australian Strategic Materials Ltd (ASX: ASM) share price is firmly in the red during early afternoon trade on Monday.

Australian Strategic shares are now exchanging hands at $10.88 apiece, a 9.41% drop from the open.

Despite this, Australian Strategic has been on a run of fundamental momentum lately that has weighed in on its share price.

Let’s investigate further.

What’s been driving the Australian Strategic Materials share price lately?

Australian Strategic Materials has aspirations to be a top level rare earths and critical metals supplier. As such, it has exposure to these assets already, which have been fetching a premium in the commodities markets lately.

Strengths in the broader commodity markets for metals to which the company has exposure is no doubt a key driving force for the Australian Strategic Materials share price lately.

Aside from this, the company advised it had entered into an exclusive framework with a consortium of South Korean investors. Under the agreement, the consortium has acquired an equity stake in the company.

Funds raised will be used to support the development of the company’s Dubbo project.

This is important because the Dubbo project is the major source of fuel in the company’s growth engine right now.

As a result, the Australian Strategic Materials share price soared to its all time high on the day of this announcement.

Adding to the momentum is that Australian Strategic Materials was added to the S&P/ASX 300 Index (ASX: XKO) after its quarterly rebalance.

The inclusion is no doubt a big move for the company’s shares, which would have met a number of tests.

Australian Strategic Materials share price snapshot

The Australian Strategic Materials share price has climbed 74% this year to date, extending the gain over the last 12 months to 457%.

Both of these results have outpaced the S&P/ASX 200 index (ASX: XJO)’s return of around 25% over the past year.

Should you invest $1,000 in Australian Strategic Materials right now?

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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