Down 55% in 10 weeks, is it time to cut and run on Locksley Resources shares?

Locksley Resources shares peaked at 69 cents in late September. Today, they are worth 31 cents.

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Key points

  • Growth Potential: Locksley Resources is positioned favorably as a US-focused critical minerals explorer with its flagship project near the only actively producing rare earths mine in the US, aligning with rising geopolitical and market demands for rare earths and antimony, crucial for tech and defence industries.
  • Current Developments: The company is advancing its maiden drilling programs at El Campo and DAM, strengthening its strategic position with recent partnerships, including a collaboration with Columbia University and Rice University to enhance rare earths recovery and antimony processing.
  • Investment Outlook: Despite a recent share price drop following remarkable gains earlier in the year, one analyst suggests maintaining current holdings as Locksley continues to execute its strategic programs, leveraging its proximity to Mountain Pass and market demand for non-Chinese critical mineral sources.

Locksley Resources Ltd (ASX: LKY) is a US-focused critical minerals explorer targeting high grade rare earths and antimony in California.

Aussie investors are excited about this ASX mineral explorer amid growing interest in rare earths due to China's dominance as a supplier.

Rare earths are used in wind turbines, electric cars, robotics, defence systems, and everyday tech gadgets like smartphones.

China has restricted its exports, which prompted the US to do a $US8.5 billion deal with Australia to secure more supply in October.

Meanwhile, investors are learning much more about antimony, a key input in defence systems, semiconductors, and metal alloys, amid a global defence spending surge and high demand for semiconductors due to expanding investment in artificial intelligence (AI).

Locksley Resources is sitting pretty amid all these developments.

Its flagship project in California's Mojave Desert sits 1.4km from America's only actively producing rare earths mine, Mountain Pass.

Mountain Pass is owned by MP Materials Corp, and Aussie mining baroness Gina Rinehart just became its biggest shareholder.

Rhinehart invested more than $200 million in MP Materials last month, giving her a 5.3% stake.

Locksley's Mojave Project encompasses the El Campo rare earths deposit and the historical Desert Antimony Mine (DAM).

DAM last operated in 1937. Currently, the US has no domestic antimony production and demand for the metal is rising strongly.

Based on surface sample results, Locksley Resources says DAM is "one of the highest-grade known antimony occurrences in the US".

Locksley sees a bright future ahead, commenting last week:

Locksley's North American position is further strengthened by rising geopolitical urgency to diversify supply chains away from China, the global leader in both REE & antimony production.

With its maiden drilling program planned, the Mojave Project is uniquely positioned to align with U.S. strategic objectives around critical mineral independence and economic security.

Outlook for Locksley Resources shares

Locksley Resources shares peaked at an all-time high of 69 cents per share on 22 September.

At the time, that represented an astounding 3,959% capital gain for 2025 and a 2,350% uplift over 12 months.

That month, Niv Dagan from Peak Asset Management warned that short-term profit-taking was likely after such incredible gains.

He was right.

Since 22 September, the Locksley Resources share price has more than halved to 31 cents today.

What should investors do now?

Analyst's view on Locksley Resources shares

Dagan maintains a hold rating on Locksley Resources shares.

On The Bull this week, Dagan commented:

On November 17, the company announced a partnership with Columbia University, which it expects to strengthen its rare earth recovery capability amid expanding the mine-to-market critical minerals platform.

This latest development complements LKY's existing green DeepSolv antimony processing partnership with Rice University.

LKY's active engagement comes at a time when the US is expanding critical minerals development.

What's the latest news from Locksley Resources?

Last week, Locksley Resources announced operational commencement of its maiden five-hole diamond drilling program at El Campo.

It also announced final approval for an expanded drilling program involving up to 16 drill holes at DAM.

Drilling will occur sequentially, with the diamond drill rig commencing at El Campo, then moving to DAM.

Locksley Resources said this would ensure a continuous flow of exploration news and data throughout 1Q and 2Q CY26.

Meanwhile, the company is fast-tracking a mine-to-market strategy for antimony.

In partnership with Rice University in Texas, it's also developing a faster processing method for antimony called DeepSolv.

Locksley Resources recently announced the casting of the first 100% US-made antimony ingot metal in decades.

Kerrie Matthews, Managing Director and CEO, commented last week:

We are finishing 2025 with strong momentum.

By commencing operations at El Campo and finalising the bond for DAM, we have effectively opened two fronts for exploration.

Locksley Resources reported cash of approximately $7.24 million at the end of the September quarter, with 4.57 quarters of funding left.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended MP Materials. 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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