Why is this ASX rare earths stock rocketing 36% today?

Meteoric Resources NL (ASX: MEI) shares are having a day to remember on Monday.

At the time of writing, the ASX rare earths stock is up 36% to 19 cents.

Why is this ASX rare earths stock rocketing?

Investors have been scrambling to buy the company's shares today after it made a major announcement relating to its Caldeira Rare Earth Ionic Clay Project in Brazil.

According to the release, the company has obtained a preliminary environmental licence (LP) for the project.

It was voted on by the State Council for Environmental Policy (COPAM) at a meeting on Friday in Belo Horizonte. The application received unanimous support from COPAM council members who accepted the favourable recommendation by technicians from the Environmental Foundation of the State of Minas Gerais (FEAM).

The critical approval

The ASX rare earths stock advised that in Brazil, the LP is the first stage of the licensing process required for projects that have an environmental or social impact.

And while it is only the first stage, it is also the critical approval. That's because it confirms the project's environmental viability, approves the location, as well as establishing basic requirements and conditions that must be met in the next phases.

The LP area covers the first phase of the project and includes resources and reserves located within the southern licences of Capão do Mel, Soberbo, and Figueira.

This receipt allows the ASX rare earths stock to progress with all other stages of its permitting and licencing process to deliver the Caldeira Project.

'Strong validation'

Commenting on the big news, the company's managing director, Stuart Gale, said:

We are very pleased to have obtained the LP without restriction. This is strong validation for the Caldeira Project and allows us to quickly move to the next stage of the licensing process to obtain the LI for construction of the Project. We appreciate the strong, ongoing support received from the Municipality of Caldas, the State of Minas Gerais and FEAM, together with our advisors and our exceptionally hard-working team. Together with the recent opening of the Pilot Plant, obtaining the LP caps off an extremely productive year for Meteoric.

Gale also confirmed that the company is on track to make a decision on the project in the middle of next year. He adds:

We delivered a Pre-Feasibility Study, announced our maiden reserve, progressed key engineering and metallurgical programs to support the feasibility study, continued to build our ionic clay intellectual property and maintained key Project delivery timelines. This ensures Meteoric is well positioned to secure final approvals, negotiate binding offtake agreements, complete the feasibility study and progress to Final Investment Decision, by the middle of 2026.

The post Why is this ASX rare earths stock rocketing 36% today? appeared first on The Motley Fool Australia.

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