Korab Resources shares closed Friday trading for 2.7 cents and are currently trading for 3.4 cents apiece, up 25.9% after earlier posting gains of more than 30%.

So, what's driving investor interest in this tiny ASX mining share?

Why is the Korab Resources share price leaping higher?

Korab Resources shares are off to the races today after the ASX mining share reported its exploration license for a 172 square kilometre tenement in the Northern Territory was renewed through to 31 July 2024.

The tenement forms part of the Batchelor Project, located 70 kilometres south of Darwin.

The ASX mining share is likely leaping higher as the Bachelor Project hosts lithium mineralisation, with lithium star performer Core Lithium Ltd (ASX: CXO) among the miners owning and operating neighbouring tenements.

Investors are keeping a keen eye on developments in the lithium space, with demand for the lightweight, conductive metal widely forecast to remain strong over the coming decade amid a surge in global EV production.

In today's release, Korab Resources noted:

At the nearby Litchfield Pegmatite Belt, and the Finniss Lithium Project, lithium-bearing pegmatites are found within the same Burrell Creek Formation adjacent to and within aureole of I-type and S-type granites as the source of LTC pegmatites.

The ASX mining share said the geological setting of the broader Batchelor Project, and within its newly renewed tenement lease, is broadly similar.

Atop lithium, the tenement also has the potential to host rare earth oxides mineralisation. Korab said it has commenced a review of the existing exploration data. The results of that review will be reported as they become available.

How has this tiny ASX mining share been tracking?

As a microcap stock, trading in Korab Resources tends to be thin. The ASX mining share is also prone to some large price swings.

With more of those swings in the positive direction than negative over the past full year, Korab Resources shares are up 70%. That compares to a 12-month loss of 7% posted by the All Ordinaries Index (ASX: XAO).

The post Guess which tiny ASX mining share just rocketed 30% on lithium news? appeared first on The Motley Fool Australia.

At the time of writing, the magnesium miner's shares are fetching for 9.3 cents a pop, down 7%. It's worth taking note that regardless of being heavily down on Tuesday, its shares have rocketed 290% since last month.

Why are Korab shares falling today?

A strong catalyst behind the Korab share price taking a negative turn could be attributed to investors taking a profit.

After reaching a record high and breaking the psychological barrier of 10 cents yesterday, its shares appeared to be overbought. This led to the relative strength index (RSI) from 75 back down to normal levels.

The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price.

What did Korab recently announce?

Just yesterday, Korab released a positive update in relation to a magnesium metal export deal with Darwin Port Operations Pty Ltd (DPO).

The Heads of Agreement (HoA) will see up to 30,000 tonnes per annum of magnesium metal and other magnesium compounds exported through the port.

The 3-year deal gives Korab access to use DPO facilities to export its products. DPO facilities include a truck dump, ship loader and conveyor, and unloading of (mining and plant construction) equipment.

All labour to operate the DPO facilities when handling the product will be responsible by Korab. In addition, regulatory approvals are required to be obtained to use the DPO's services.

Korab stated that the deal will see large quantities of high purity magnesium metal shipped into Europe, the United States, and Asia. The critical metal has reportedly been suffering constant shortages and supply interruptions, which are likely to continue.

Short haulage distance on existing roads from mine to port will have minimal capital costs and low operating costs for Korab. The company's Winchester magnesium project is located at Batchelor in the Northern Territory.

Korab share price summary

In the past year, Korab shares have surged by around 550%, with year-to-date sitting at 600%.

Korab has a market capitalisation of around $33.4 million, with more than 367 million shares on its registry.

The post Korab Resources (ASX:KOR) share price plunges but remains up 290% in a month appeared first on The Motley Fool Australia.

Following on from a strong showing yesterday, these companies are rocketing again in early trade. This follows a joint call from multiple industries across Europe to address what could become a 'catastrophic' shortage of magnesium.

Let's take a look at the latest development.

No plans for China to ramp up production

As we previously covered, the sudden boom in interest for magnesium miners follows the fall in output of the alloy element from China. Unfortunately, the world has a substantial reliance on China's production of magnesium which accounts for 87% of the world's annual magnesium production.

With China's efforts to curb domestic power consumption, magnesium supply has dwindled. The side-effect is that Europe is believed to only have enough supply to last a few weeks.

The resulting ramifications could be extensive given that magnesium is a commonly used alloy in car parts, building products, and food packaging.

Despite the impending crunch, an article from China's Global Times, published last night, isn't promising for Europe's magnesium prospects.

According to the publication, China is inclined to rollout restrictions on magnesium operations in the future — regardless of whether there is an energy shortage or not. It seems that's sending ASX magnesium miners higher today.

Furthermore, many Chinese companies have resumed operations as normal since early October. However, magnesium miners have been instructed to operate at 40% of their normal capacity.

This is likely due to the material's extremely high energy intensity needed for production. It is estimated that it takes 35-40 megawatt-hours to produce one tonne of magnesium.

ASX magnesium miners today

It seems the shortfall in supply is unlikely to be filled by China following its remarks on magnesium production. As a result, investors are speculating that ASX magnesium miners could be set to benefit from an imbalance in supply and demand.

Here are today's big movers in the magnesium market:

• Magontec Ltd (ASX: MGL) up 20.83% to 58 cents per share
• Latrobe Magnesium Ltd (ASX: LMG) up 28.3% to 6.8 cents per share
• Korab Resources Ltd (ASX: KOR) is in a trading halt pending an announcement regarding a capital raising

Korab Resources appears to be making use of the heightened interest in the sector. The $9 million company has touted a "shovel-ready" magnesium deposit near Darwin.

All eyes are on the ASX magnesium miners as to what the next move is from here.

The post Why are ASX magnesium miners getting so much love this week? appeared first on The Motley Fool Australia.

This follows reports of mere weeks' worth of magnesium available across Europe. In turn, the unmet demand has sent the price of magnesium figuratively to the moon, taking just about any publicly traded company with magnesium exposure along with it.

What is causing the magnesium shortage?

Investors of ASX-listed magnesium shares are rejoicing while the price of the element takes flight. Though, many might be wondering, what is setting this into motion? Well, the "catastrophic" shortage across Europe appears to be the byproduct of China's efforts to curb domestic power consumption.

China accounts for 87% of the world's magnesium production. This puts immense importance on the upkeep in output from the country. Unfortunately, with the reduction in industrial energy usage, China's magnesium production has been relatively non-existent recently.

In response, a joint call to action has been made across Europe's industry associations. In this online publication, it is reported that Europe is at imminent risk of production shutdowns. This is due to magnesium's essential role in being an alloy material, improving the workability of aluminium and reducing density.

In addition, Europe relies on China's magnesium exports almost entirely, typically being 95% of its supply. As a result, the entire European continent is expected to run out of magnesium stockpiles by the end of November.

If this were to occur, industry associations fear the consequences would be far-reaching. Overall, it could result in the degradation of entire European Union value chains, including end-use sectors such as automotive, construction, and packaging.

Inevitably, if unresolved, the shortage could lead to business closures and job losses.

ASX magnesium shares riding the price hike

Though the shortage is bleak, investors were today looking for companies that might rise to prominence because of the shortage.

By the end of the session on Tuesday a handful of ASX shares had caught the magnesium hype bug, these included:

• Korab Resources Limited (ASX: KOR) up 178% to 7.5 cents per share;
• Latrobe Magnesium Ltd (ASX: LMG) up 61% to 5.3 cents per share; and
• Magontec Ltd (ASX: MGL) up 50% to 48 cents per share.

Additionally, the letter pointed out that magnesium prices had reached a mind-boggling $10,000 to $14,000 per tonne. For comparison, only a year ago the price was roughly $2,000 per tonne.

The post ASX magnesium shares are going gangbusters. What's happening? appeared first on The Motley Fool Australia.

Korab shares were are on the move today despite no major price-sensitive information out of the company's camp.

However, there appeared to be underlying forces at play, which help explain the enormous spike in trading of Korab shares on Tuesday.

What's fuelling the Korab Resources share price today?

In the absence of any price-sensitive information, we have to look to the underlying commodity markets Korab sells into in order to decipher what's behind today's gains.

The price of magnesium – the key alloy used in the metals production industry – has shot up by over 200% this year to date.

It has since cooled off as we left September, but not before jumping over 130% across the span of the month.

Consequently, magnesium has come off an all time high of $14,857.65/tonne on 23 September to now trade at $9,853/tonne.

What's causing the massive run up in the price of magnesium?

It all boils down to recent government policy out of China, in its efforts to curb power production and noxious emissions.

The Shaanxi and Shanxi provinces, considered the premier magnesium hubs of the world, have seen 25 of their plants shut down this year, whereas the remaining facilities have slashed production by 50% in response to the policy.

Europe, which buys 95% of its magnesium from China, is expected to run out of magnesium stocks by the end of November, according to Trading Economics.

What does this mean for Korab?

It is on this backdrop that brings us back to Korab Resources. The mining company has previously stated in its last few earnings reports that it is working on the development of the "Winchester Magnesium Deposit" located near Darwin, NT.

According to an announcement today, Korab stated the "Winchester deposit is amenable to low cost open cut mining using blast and shovel method and has a high-grade magnesium mineral resource reported in accordance with the JORC Code".

The company is in discussions with magnesium metal users and buyers – including carmakers Fiat and Daimler –regarding supply from the Winchester deposit.

It is adamant that no agreements have been made, and that all discussions "are at an early stage and are incomplete…details of these discussions would be premature and speculative".

Given the scene that has been set, built from the urgency for magnesium users to replenish their stockpiles and Korab's speculative Winchester deposit, a picture begins to form as to why investors are bidding up its share price today.

As a result of these gains, the Korab Resources share price has soared over 500% this year to date, having gained 260% in the last week.

The post Why did the Korab Resources (ASX:KOR) share price rocket 178% today? appeared first on The Motley Fool Australia.