Resources Top 5: Chinese producer grabs ownership of junior explorer Peak Rare Earths

Shenghe Resources’ Ganzhou Chenguang signs binding agreement to acquire junior explorer Peak Rare Earths.

PEK set for takeover by Shenghe subsidiary in signed scheme deal. Pic: Getty Images

• China's Shenghe Resources to snap up Peak Rare Earths in entitlement deal 

• Brightstar fires up another round of ore processing under its agreement with Genesis Minerals at Laverton 

• RMI, NIM and OMX all up on no news 

These are your standout small cap resources stocks for Thursday, May 15, 2025.

Peak Rare Earths (ASX:PEK)

Shenghe Resources’ subsidiary, Ganzhou Chenguang Rare Earths New Material Co, has agreed to acquire PEK under a binding scheme implementation deed with the junior explorer.

Under the deal, the Chinese partly state-owned rare earths producer will buy PEK for $15.05m, plus an amount equal to the funds raised under a proposed ~A$7.5 million entitlement offer.

If the full amount of ~$7.5 million is raised pursuant to the entitlement offer and the scheme is implemented, PEK shareholders will receive ~35.9c per PEK share in cash, a mega 199% premium to PEK’s closing share price of 12c per share on May 9.

US$2.9b market cap company Shenghe Resources is listed on the Shanghai stock exchange and is an existing shareholder in PEK, with binding off take rights to rare earths production from the Ngualla rare earth project in which PEK holds an 84% interest.

Shenghe is also the largest importer of rare earth concentrate into China with its operations spanning rare earth mining, beneficiation, refining, trading and alloy and metals production.

The two companies signed a non-binding term sheet in July 2024 covering an integrated investment, funding and development solution for Ngualla, with the proposed transaction entailing Shenghe investing ~A$96m to subscribe for a 50% interest in Peak’s wholly owned subsidiary, Ngualla Group UK (NGUK).

Since that time, PEK and Shenghe have made significant progress toward finalising binding transaction terms for the NGUK transaction. However, recent geopolitical and regulatory changes have heightened the risks associated with establishing a formal joint venture.

In response, PEK and Shenghe have evaluated other deal structures that could offer greater clarity and certainty for the project, with the goal of achieving a more favourable outcome for both companies and their investors.

PEK believes the scheme delivers a superior outcome compared to the NGUK transaction for several reasons –

• the scheme has the potential to provide a significantly higher value outcome for PEK shareholders on a risk-weighted basis, with an implied value for PEK of A$150.5 million (pre-entitlement offer), compared to A$96m for Peak’s interest in Ngualla under the NGUK transaction;
• the scheme is unlikely to give rise to the same geopolitical and regulatory risks that ultimately resulted in the parties agreeing to discontinue the NGUK transaction; and
• PEK shareholders will have an opportunity to realise an attractive price for their shares and avoid potential risks around the development, operation and funding of Ngualla.

PEK’s Ngualla asset in Tanzania is one of the largest and highest grade undeveloped rare earth deposits in the world with a multi-generational resource of 214Mt over an initial 24-year mine life.

Brightstar Resources (ASX:BTR)

Under its ore purchase agreement with Genesis Minerals, Brightstar Resources has launched a second processing campaign at the Laverton Hub, taking advantage of elevated gold prices.

The May campaign will process the ~55,000t of ore grading more than 2g/t gold that has been delivered to the Laverton mill ROM pad.

It follows the first parcel of 56,449t of ore which reconciled at a blended head grade of 2.51g/t gold – higher than the initial blended estimate of +2g/t gold – and achieved a strong recovery rate of 94.25% to deliver 4297oz of gold.

With no hedging contracts in place, the company stands to benefit directly from gold’s current high price levels of roughly US$3,185 (A$4,955) per ounce.

READ MORE: Brightstar Resources to line its pockets with Laverton gold in second processing round

Resource Mining Corporation (ASX:RMI)

(Up on no news)

As part of its exploration program at the Mpanda copper-gold project, RMI has initiated lab testing on soil and auger samples collected from the Stalike and Kabungu prospects.

Combined with previous results from auger drilling, trenching, rock chip and soil sampling for the two prospects, the objective is to generate high potential drill targets.

Previous results from the project have returned impressive gold and copper grades from rock samples up to 36.7g/t gold and 11.89g/t copper from Kabungu and 13.58% copper and 3.24g/t gold from Stalike.

RMI executive chairman Asimwe Kabunga said a targeted drilling program is planned for the Stalike and Kabungu prospects following completion of this current soil and auger sample analysis work stream.

“Mpanda is clearly a richly endowed mineralised system,” he said.

“The extensive number of small-scale operations demonstrate that systematic, modern exploration has the potential to define larger scale copper-gold systems.”

Nimy Resources (ASX:NIM)

(Up on no news)

Nimy still has a wind in its sail following the announcement yesterday of a Phase 2 drilling campaign for the development of a JORC resource at the Block 3 gallium discovery in WA.

The Block 3 prospect covers an area of 3km x 1.5km, with the current exploration target of 9.6Mt to 143.Mt at an average grade ranging from 39ppm to 78ppm gallium only covering the Eastern segment of this zone.

Critical mineral gallium is key component of many advanced technologies including high-speed semiconductors, LEDs, solar cells and defence systems.

Gallium is typically produced as a by-product of alumina and zinc refining, with China accounting for 98.4% of global gallium production in 2024.

NIM’s drilling program is expected to take three weeks with assays due as soon as feasible.

Orange Minerals (ASX:OMX)

(Up on no news)

Although OMX has no news to report today, the company carried out a field mapping program at the Calarie project in Forbes, NSW, last month after recently securing land access agreements.

The land access agreements allowed for exploration to begin over newly accessed ground at the Bald Hill, Mary’s Dream/ Toss a Penny, McMillans and Nibblers Hill prospects.

The Calorie asset boasts an inferred resource of 0.87Mt at 1.83 g/t gold, containing 50,796oz of gold with previous drill results returning 10.6m at 5.63m g/t gold and 4.6g/t gold from 39.1m.

A targeting review is also underway with detailed drone-based magnetic surveys planned across the Mary’s Dream and Nibblers Hill prospects to better delineate key structural trends.

Previous drilling at these prospects was shallow and did not adequately test the potential for primary mineralisation.

Further drilling will be considered following the completion of the targeting review.

At Stockhead we tell it like it is. While Brightstar Resources and Nimy Resources are Stockhead advertisers, they did not sponsor this article.

Originally published as Resources Top 5: Chinese producer grabs ownership of junior explorer Peak Rare Earths