We initiate on Encounter Resources (ENR) with Speculative Buy recommendation and $0.90 per share Price Target. ENR controls the most expansive ground position over the emerging West Arunta region. WA1 Resources (ASX:WA1, Speculative Buy, PT:$25.45 ) was the first to define a potentially economic deposit within the region, and we believe ENR will follow close behind. Exploration results to date indicate high-grade niobium mineralisation across multiple areas. We scope a hypothetical niobium project development treating a modest inventory of 14Mt grading 1.80% Nb2O5 at a recovery of 50%. Exploration drilling remains ongoing across multiple prospects. We expect ongoing niobium exploration success in the West Arunta to continue to drive ENR’s share price upward. Unlike WA1 Resources’ Luni project, which is now becoming a study and permitting story, ENR’s new flow will maintain its early-stage exploration focus. Exposure to copper exploration at ENR’s other regional projects provides further discovery upside.
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