Up 52% this year, why is this ASX All Ords stock halted today?

Another update in this company's growth story.

| More on:
Man covered in snow wearing big thick coat

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As the ASX All Ordinaries Index (ASX: XAO) pushes less than 1% into the green this past week, one All Ords stock continues its impressive run.

Shares in WA1 Resources Ltd (ASX: WA1) shares have skyrocketed 250% in the past 12 months and are up 52% this year.

They were valued at $18.84 per share before the open on Wednesday, right before the company requested a trading halt of its securities.

The reason? A market-sensitive announcement regarding an update at its Luni carbonatite asset, located in Western Australia. Let me explain.

Why is this ASX All Ords stock on ice?

WA1 Resources shares are frozen today after a company request before the market opened.

The ASX All Ords stock announced it has completed the initial mineral resources estimate (MRE) for its Luni asset, located within the company's West Arunta Project in WA.

The Luni deposit has been identified as "the most significant niobium discovery in over 70 years", according to WA1.

Niobium is a metal highly resistant to corrosion. Consequently, it is favoured in the production of various alloys, such as stainless steel.

The initial MRE for Luni showed an intersection of 200 million tonnes (Mt) at 1.0% Niobium (Nb2O5). Assays contained a high-grade subset of 53 Mt at 2.1% Nb2O5 as well.

This estimate is based on drilling completed up to the end of 2023. It will guide further resource definition drilling within the same vicinity for the ASX All Ord stock.

WA1 managing director Paul Savich emphasised the strategic importance of Luni, saying:

This mineral resource estimate confirms Luni as the most significant niobium discovery globally in over 70 years. This is a remarkable achievement within two years from discovery in an entirely greenfield belt in the West Arunta.

The shallow, high-grade nature of the deposit, coupled with the recently announced initial metallurgy results, indicates the deposit may be amenable to conventional processing techniques and reinforces Luni as a highly strategic critical mineral asset.

Brokers are optimistic

Aside from today's update, metallurgical test work completed at Luni saw investors start a feeding frenzy for the ASX All Ords stock last month.

The program produced high-grade niobium concentrates that are comparable to industry recovery rates.

As a result, analysts at Bell Potter see a significant upside for this All Ords stock, saying WA1 passed "a significant de-risking hurdle" with the above results.

The broker also believes the Luni project could generate $514 million in annual pre-tax earnings, valuing the ASX All Ords stock at $5.6 billion.

It upgraded its price target on the company to $28.00, suggesting a potential upside of 48% at the time of writing.

Motley Fool contributor Zach Bristow 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.

More on Resources Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

2 'highly attractive' sold-off ASX mining shares to buy

These stocks could be worth digging into, according to one fund manager.

Read more »

happy mining worker fortescue share price
Share Gainers

Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months

This ASX rare earths stock has more than doubled in less than half a year. But how?

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Resources Shares

BHP share price marching higher amid legal cost sharing agreement with Vale

BHP and Vale face class actions in multiple nations relating to the 2015 Fundao Dam collapse in Brazil.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Will the BHP share price keep falling?

Can things get even worse for the ‘Big Australian’?

Read more »

A young man wearing a backpack in a city street crosses his fingers and hopes for the best.
Resources Shares

Here 3 ASX lithium shares to watch for FY25

Brokers see light in the ASX lithium sector.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Resources Shares

I'd buy Fortescue shares today to generate $2,000 of monthly passive income

After the past five months’ sell-down, I think Fortescue shares provide a strong long-term passive income opportunity.

Read more »

Two fists connect in a surge of power, indicating strong share price growth or new partnerships for ASC mining and resource companies
Resources Shares

Why did ASX uranium shares like Boss Energy have such a bumper day?

Australia's uranium producers continue their rally in 2024.

Read more »

rocket taking off indicating a share price rise
Share Gainers

Why did this ASX mining stock just explode 203%?

Investors are sending the ASX mining stock to the moon on Thursday. But why?

Read more »