Broker-backed Dreadnought Resources expands REE acreage by 230%, posts high-grade samples

Fri 27 Jan 23, 1:12pm (AEST)
A road stretching to the horizon in the Australian outback beneath a blue sky
Source: Unsplash

Key Points

  • Five brokers currently rank Dreadnought Resources a “Buy” according to Market Index’s broker consensus scan
  • The company has effectively expanded its prospective Rare Earth Element (REE) acreage by a factor of 230%
  • Drilling is soon to be underway in 2023

ASX-listed and broker-tipped Dreadnought Resources (ASX:DRE) confirmed the expansion of rare earth targets on-site its Mangaroon Project by 230% on Friday.

Not only that, but the company is today logging in high REE grades in its latest assay results. 

This comes as the observed size of prospective ironstones present on-site has grown with proof of extensions to the system locked in. That proof is in the detail of Dreadnought’s most recent surface sampling activity at the project. 

Previously, Dreadnought had 13km of ironstones to sniff out for REEs. 

Now, it’s looking at 43km of ironstone. 

Using Market Index’s free broker consensus scan, 5 brokers rank the company a “Buy” with one broker ranking the company a “Hold.”

Explainer before grade discussion

Generally, most junior Rare Earth Element (REE) projects in Australia encounter grades around 0.50%. 

While surface samples (read: rock chips) are typically at higher grades than intersected underground, it’s worth considering the above when looking at today’s results. 

The company also provides a breakdown of the concentration per result of neodymium-praseodymium (NdPr), the two dominant high-value magnetic rare earths needed for everything from MRI machines to wind engine turbines. 

Surface results are given the descriptor Total Rare Earth Oxides (TREO). 

So what did they find? 

Dreadnought reports samples at the following concentrations: 

  • 4.68% TREO (48% NdPr) 

  • 5.65% TREO (45% NdPr) 

  • 4.05% TREO (25% NdPr) 

  • 3.77% TREO (29% NdPr) 

  • 5.12% TREO (44% NdPr) 

  • 8.00% TREO (21% NdPr)

“These results further emphasise the ever-increasing scale of the critical metals at Mangaroon,” Dreadnought chief Dean Tuck said. 

In a January research note, Macquarie Bank analysts noted price for neodymium-praseodymium were continuing to rise through early 2023. The bank expects this to continue.

Busy year ahead

“With over 43kms of mineralised ironstones, a multi-metal, regional source at C3 and six more potential source carbonatites, we are extremely excited about what the drill rigs will deliver for us in 2023,” Tuck added. 

The presence of mineralisation in surface samples does not absolutely guarantee that mineralisation extends downward in such a manner drilling will prove its existence. 

The company held $8.5m in cash at the end of the September quarter, it spent $5.2m in opex over that same period. 

Cash flows from financing activities were at $11.5m. 

Dreadnought Resources' one year charts
Dreadnought Resources' one year charts


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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