Riversgold shares rise as company farms into Corcel-run WA Mt. Weld rare earths JV

Smallcap explorer Riversgold Limited (ASX:RGL) shares were up 7% in the first hour of trade on Wednesday on the back of its farm-in and Joint Venture (JV) agreement the company signed with UK-based Corcel PLC. 

Riversgold and Corcel are to jointly develop a Rare Earth Element (REE) play in WA’s Mt. Weld region. 

The partnership sees drilling commencing this quarter, but that is not an absolute guarantee. 

The farm-in component of the deal underpinning the ownership structure of the JV sees Riversgold adopt a 50% share of the project with an optional right to boost that share to 70%. 

UK technology metals partner

If the context of who Riversgold is partnering with flies over the radar, it may be worth recapping. 

Corcel PLC is a battery metals explorer and project developer headquartered in London and managing operations in Papua New Guinea, Canada, the UK, and Australia.

While the company’s main aim is lithium (which is also true for Riversgold,) large amounts of rare earths are required in the manufacturing of EV batteries, the cars themselves, and even wind turbines. 

A wind turbine engine uses up to 650kg of high value magnetic rare earths praseodymium and neodymium. 

Corcel, it is also worthy to note, is listed on the London Stock Exchange. 

Its share price is down -84% over the last year, outlining its lack of resistance to a conflation of factors that smashed world stocks in 2022 (read: war in Ukraine, Covid-borne supply chain issues, labour shortages, and inflation.)

Nearology perspective

The Mt. Weld REE project is located 1.4km away from Lynas Rare Earth’s (ASX:LYC) Mt. Weld mine, near the mining hub of Laverton. 

Separated only by a brief section of haul road, the company’s two operations overlay the same geological region down to the local level. 

Riversgold and Corcel’s REE play, however, is greenfield.

“The rare earth global markets are very strong at present and as this tenement is already granted, we aim to be drilling Mt Weld this quarter,” company chief Julian Ford said. 

Smallcap caution 

Investors ought to note Riversgold is a smallcap company with a market cap of $28m (as at 11AM AEST Wednesday 4 January) which means price movements are likely to be exaggerated. 

The stock is also somewhat illiquid and is not covered by brokers. 

However, over the last year, the company has proven its ability to retain market participants. 

Defying the odds of 2022, Riversgold’s 1 year performance is up 106% and the company is currently outperforming the ASX200 on that same timeline. 

A look at Riversgold's three month charts

Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Riversgold was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.