If you were lucky enough to own Meteoric Resources NL (ASX: MEI) shares one year ago, you will no doubt be in a state of disbelief today as you held tightly to your investment.
That's because this time last year, things were not looking great for this ASX resources stock.
At that point, rare earths weren't even on the menu for the company and it was well and truly in penny stock territory with a share price under 2 cents.
In fact, it stayed that way until late November before starting to break out in December.
The catalyst for this breakout was a binding agreement to acquire the Caldeira Project for a total cash consideration of US$20 million. It is a tier one Ionic Clay Rare Earth Element (REE) project in the Minas Gerais State of Brazil.
Its purchase was funded from the sale of its Juruena Gold Project for US$17.5 million. And what a swap this appears to have been for shareholders of this ASX resources stock!
Big gains from this ASX resources stock
Over the last 12 months, the company's diamond drilling at the Caldeira Project has been incredibly successful.
So much so, management highlights that its first diamond hole assays confirm "the Caldeira Project's status as the World's highest grade Ionic Clay REE." Management also adds:
The Caldeira Project is clearly significantly higher grade than any other IONIC clay REE yet documented. When coupled with the excellent metallurgical recoveries document by previous explorers this is potentially a disruptive asset in the global rare earth market.
This has unsurprisingly put a rocket under the Meteoric Resources share price over the last 12 months. As a result, its shares are now up 2,200% over the period.
To put this into context, if you had invested $2,000 into this ASX resources stock a year ago, your investment would have grown to be worth $46,000 today.
Though, it is worth remembering that a year ago Meteoric Resources was arguably as speculative as it gets on the share market. And most penny stocks will never deliver returns of this nature. So, it wouldn't be advisable to sink your hard-earned money into similar stocks today with the hope they do the same.
