What in the world of niobium do investors see in ASX rare earth share WA1 Resources?

What's so hot about niobium?

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Key points

  • Niobium explorer WA1 Resources has rocketed more than 5000% higher in a year
  • Niobium is a 'scarce' commodity, one analyst recently highlighted in a YouTube video  
  • WA1 Resources recently reported the highest niobium intersection to date

This ASX rare earths share is exploring niobium, and its shares have soared more than 5,000% in a year.

Shares in WA1 Resources Ltd (ASX: WA1) have had a ripper of a year, exploding by a hefty 5,066% in the last 12 months. At the time of writing, the WA1 Resources share price is trading at $6.20.

So what is it about niobium that investors like, and how is it relevant to this ASX rare earths share?

What's to like about niobium?

WA1 Resources is exploring three projects in Western Australia, including the flagship West Arunta Project.

The company recently reported the highest niobium intersection to date at the West Arunta project. Shallow, high-grade niobium was shown to be present along a 1km stretch.

Niobium is used as an alloy in steel production for jet engines, rockets, oil rigs and building construction.

In a recent Money of Mine YouTube video, Datt Capital founder Emanuel Datt explained that niobium was a "really scarce commodity". He added:

Niobium has always been considered a bit of a niche mineral. Why that is, is historically supply has been really scarce.

Datt explained that incorporating 300 grams of niobium in a tonne of steel could reduce the weight of steel by 25%, so "ultimately, by reducing weight, you reduce cost".

In the case of WA1 Resources, Datt said the company was finding "world-class grades" of niobium via drilling at the West Arunta project:

There's no doubt in mind that this has multi-hundred million dollar tonne potential, which is big call.

In results on 5 June, WA1 highlighted impressive assay results, including 10 metres at 8.3% of niobium pentoxide.

Share price snapshot

The WA1 Resources share price has soared 344% in the year to date and nearly 89% in a month.

This ASX 200 rare earths share has a market cap of more than $243 million based on the latest share price.

Motley Fool contributor Monica O'Shea has no position 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 Scott Phillips.

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