The Vital Metals Limited (ASX: VML) share price is out of form again on Wednesday.
In morning trade, the rare earths explorer's shares are down 5% to 5.4 cents.
This means Vital Metals shares have now lost over 20% of their value since this time last month.
Why is the Vital Metals share price sinking?
There appear to have been a couple of catalyst for the decline in the Vital Metals share price.
One is weakness in the resources sector over the period in question. For example, Vital Metals isn't the only share falling materially.
The Lynas Rare Earths Ltd (ASX: LYC) share price has fallen 13% over the last couple of weeks.
In addition to this, profit taking could be weighing on the Vital Metals share price. After all, its shares are still up approximately 80% in 2021 even after recent declines.
Why are its shares up 80% this year?
Investors have been bidding the Vital Metals share price higher this year amid excitement around its Nechalacho project in Canada.
Earlier this year, the company received formal acceptance from its offtake partner, REEtec AS, for its rare earth carbonate sample.
At the time, Vital Metals' Managing Director, Geoff Atkins, commented: "Customer acceptance from REEtec is a key milestone for the development of the Nechalacho rare earth project and the construction of our Extraction Plant in Saskatoon."
"This achievement demonstrates that we have our processes at Nechalacho working correctly and we can proceed in line with our plans. With the satisfaction of this milestone, the procurement of equipment for our Rare Earth Extraction Plant in Saskatoon will proceed."
If all goes to plan, the company will be supplying REEtec with 1,000 tonnes of rare earth oxides (REO) per year over five years. After which, there is an option to increase the offtake volume by as much as 5,000 tonnes REO annually over 10 years.
However, with a market capitalisation of ~$250 million, judging by its recent share price performance, some investors may believe this is now priced into its shares.
