Australian Strategic Materials set for further growth after stellar start on ASX

Australian Strategic Materials Ltd (ASX:ASM) has had a stellar start since listing on the ASX five months ago setting it up for further growth in 2021 by adding further value to critical materials from the flagship Dubbo Project in Central West New South Wales. The company has been a major ASX success story in the second half of the year. From 84 cents on August 4, shortly after listing on July 30, shares have risen more than eight-fold to a new record of $6.84 today while the market cap also continues to shine and today sits at approximately $802.4 million. Success has largely come from the technology of Korean subsidiary ZironTech which is being used to produce high-quality metals for use in developing technologies, such as those increasingly in demand for electric vehicles, sustainable green energy production & storage and new-age magnets. Program for next six months Continuing its focus on progressing the Dubbo Project, the company aims to complete project optimisation in the next six months. The flagship project has a long-term resource of critical materials including zirconium, rare earths, niobium and hafnium, used mainly in sustainable technologies, new manufacturing industries, renewable energy and EV production. ASM, together with its partners, is advancing oxide separation and metallisation technologies to create a range of value-added materials from the project. At the same time, it will progress offtake and strategic partner discussions while finalising EPC/EPCM financing for the project. Korean plant Building on recent success in producing high-purity metal alloys of different dimensions and weights at a pilot plant, the company will also accelerate the development of a larger metals plant in Korea through its agreement with Dongkuk Refractories and Steel Co Ltd (DK R&S). The plant is designed to produce 250 kilograms of neodymium-praseodymium (NdPr) metal, which can be turned into sintered permanent magnet samples in partnership with the Korean Institute of Rare Metals (KIRAM) for the Korean market. ASM’s metallisation process and pilot plant have significant environmental advantages over industry-standard processes, emitting far less energy. THE ASM and ZironTech teams in South Korea. Future work to consolidate success The company, through its patented technology, aims to engage countries like Korea which are moving away from less sustainable traditional production methods. This is in line with the Korean Transition Independent Supply Chain Strategy which is expected to be completed by mid-2023. By this time, ASM also expects to have completed construction of the Dubbo Project and be in the process of ramping up production with commissioning targeted for 2024. Niche high-value segments The company aims to provide value-added materials to produce rare earth permanent magnets, for which demand and production is likely to more than double in the next 10 years following the increased adoption of renewable energy and EVs. The company has divided its business into three broad high-value categories - rare earth, titanium and critical metals. In the rare-earth segment, the company is working towards long-term stable, secure and sustainable supply with the potential to provide strip metal alloy for permanent magnets while being part of a permanent magnet solution for the industry. With the titanium segment, ASM strives to be an independent, lower cost, environmentally responsible supplier of titanium metal, metal alloys and powders with potential to integrate into 3D manufacturing. In the critical metal segment, the company will supply zirconium and hafnium metal for present and future demand while ensuring uninterrupted supply of critical metals including niobium. Investor support ASM’s strategy of sourcing its metals for products such as neodymium magnets from its fully-owned Dubbo Project has proven very successful and investors have demonstrated confidence in the company’s capabilities since listing. This confidence is evident from the fact that the company’s share prices have jumped more than three-fold in the current quarter.