LKY chasing new rare earths target areas - as close as possible to MP Materials rare earths mine …

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 4,945,000 LKY Shares at the time of publishing this article. The Company has been engaged by LKY to share our commentary on the progress of our Investment in LKY over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs.

Trump called it last year...

He said on one of the most widely watched podcasts in the world (Joe Rogan) that we have “areas in California with incredible raw (rare) earth materials” “and I’m going to open it up” (source)

(source)

We can only assume he was talking about the ground in and around America’s only rare earths mine - owned by $20BN US listed MP Materials...

We hope this is right - because we are Invested in the $48M capped Locksley Resources (ASX:LKY | OTC: LKYRF), that has big parts of the ground next to MP Materials:

LKY already has rare earth drill targets on its smaller blocks surrounded by MP (to the south).

And this morning LKY announced they are now trying to work up some rare earth targets on the much larger blocks to the north, two of them as close as possible to MP Materials mine:

(Source: LKY announcement)

LKY will now run structural and geological mapping, plus geophysics programmes on the areas shown above (we circled them in green).

Hopefully we get to see some nice looking rock chip samples as part of this field work too.

Taking a closer look one of LKY’s target areas, it is ~1.4km north of MP Materials rare earth mine:

(Source: LKY announcement)

It would be great if LKY's target generation work here yields some drill targets...

But remember, just because LKY is in close proximity to MP Material’s mine doesn’t mean that they will find any rare earth drill targets.

Before today’s announcement LKY’s main rare earths targets were in their other block that sits INSIDE MP Materials’ ground (more on this shortly).

Today LKY announced they are looking for NEW rare earth targets in the ground to the north-east of MP Materials mine, that are currently mainly prospective for antimony (also a very useful critical metal to find).

So hopefully this ground could also contain rare earth targets - we should know more in the coming weeks...

For anyone catching up on what's been happening with LKY’s neighbour MP Materials:

The US Department of Defence (the Pentagon) invested US$400M into MP Materials.

Then tech giant Apple announced a US$500M offtake deal with MP.

Then Apple upsized that commitment with another US$100M and Apple’s CEO Tim Cook did a joint press conference with Donald Trump specifically talking about MP:

(Watch it here - Source)

The region around the MP Materials’ Mountain Pass mine is a big part of the Trump Administration and the US tech industry’s solution to securing the USA’s rare earth supply chain.

Rare earths are essential for permanent magnets and critical to power future AI-driven robots and drones - key technologies for industry and defence.

Without rare earth raw materials and magnet processing capacity, the US can't advance AI and can't build robots or drones...

Right now China controls most of the world’s supply chain of permanent magnets and rare earth materials.

Which is why the Department of Defence deal with MP is to expand magnet production facilities.

That 10x expansion to processing capacity means MP also needs to find the raw materials to feed that plant.

And according to MP’s latest earnings call last week, the 10x facility is already 100% sold out to the Department of Defence.

(Source, MP Materials Earnings Call Transcript)

So there is more scope for larger facilities and more domestic production or rare earths and permanent magnets for future tech industries.

(We listened to the earnings call and MP Materials Chairman & CEO James Litinsky sounded pretty pumped about being unofficially anointed as the ‘US national champion’ for rare earth materials)

A few weeks back, the Wall Street Journal reported that finding that raw material wouldn’t be so easy (again because most of the raw materials come out of China).

(Source)

That’s why we are Invested in the $48M capped LKY.

Just in case they find a rare earth deposit so close to the USA’s emerging rare earth and battery production champion, MP Materials.

This is early stage exploration so we appreciate the chances of this are low, however the potential reward could be high.

LKY has permits in place for both its blocks in the area and will be drilling before the end of the year.

Before then we will get mapping and geophysical survey data which could get the market even more interested in the ground (assuming LKY can find high priority rare earth targets on its Northern blocks).

Any whiff of a discovery here could be extremely valuable given its proximity to MP Materials.

It could also catapult LKY into the minds of the US investors who might be willing to back a project that brings more rare earth raw materials to market inside the US...

We already know what can happen when Trump mentions an ASX listed company’s project - Trump’s mention in a Truth Social post was what triggered Dateline Resources ~50x move inside ~60 days:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

LKY’s project is also in extremely close proximity to Dateline Resources as well:

The US wants rare earths supply, LKY is drilling for rare earths this quarter

The US Administration has explicitly said it would keep investing in US critical minerals - especially rare earths projects...

(Source)

As part of the program to encourage more rare earths supply the Trump Administration held a ‘behind closed doors’ meeting with the top 10 rare earths companies in the US...

As well as the CEOs of some of the top tech companies in the US (including Apple and Microsoft).

(Source)

The tech industry right now is pouring billions of dollars into winning the race for AI dominance, and Tim Cook is in the White House talking about rare earths.

We think that the search for rare earths could be the common goal that links the mining and tech industries, and brings a lot more traditional tech investors into the space.

We have covered this topic extensively, read more here: ASX Miners Catching US Attention

What does the next few months look like for LKY?

Over the next 6-8 weeks we want to see LKY:

1. Define rare earth drill targets on its northern blocks ~1.4km away from MP Materials - this could be rock chip samples with high grade rare earths or “geophysical anomalies” that show there may be valuable metals under the ground (those “colorful blobs” you see on exploration company announcements).
   
   
2. Permits granted for LKY’s expanded Plan of Operations (expected in September 2025).
   
   
3. A JORC exploration target - LKY explicitly said it will look to put together an exploration target ahead of drilling - this could increase market interest in the projects...
   
   
4. Drilling - the one we are all waiting for. We want to see LKY get a rig on site and start drilling its key targets (rare earths and antimony) ahead of first results next quarter.
   
   

Read our deep dive on LKY’s targets here: LKY is drilling for rare earths and antimony

Hopefully in the lead up to LKY’s drill program, MP’s share price keeps going up.

(like it did overnight)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

A rising share price and big US attention on MP Materials close to LKY’s drilling program can only be good for LKY.

If the next door neighbour is capped at $20BN - then the risk/reward on offer for a company drilling next door becomes a lot more attractive.

LKY at its last close price of 20c is capped at ~$48M and has ~$6M in cash after the recent capital raise. (Source)

Again - there’s no guarantee that LKY makes an economic discovery, LKY’s share price can go down as well as up. LKY is a small cap, high risk investment.

Macro momentum keeps building for LKY

US critical minerals as an emerging macro thematic has had one of the most rapid rises we have seen...

Helped along by the number of mentions, urgency and funding from major US companies and the US government in the last few weeks.

Directly related to LKY, inside the last two months we have seen the following happen:

• JUNE 18th: NEWS: Battery makers say antimony ban is starting to bite and antimony prices hit all time highs at US$60,400/tonne (Source: Reuters)
  
• JULY 4th: President Trump’s Big Beautiful Bill passes, allocating US$7.5BN to "Enhancement of Department of Defense Resources for Munitions and Defense Supply Chain Resiliency", US$1BN for the "identification, leasing, development, production, processing, transportation, transmission, refining, and generation" of critical minerals projects and US$1BN for the Defense Production Act (Source)
  
• JULY 10th: The Pentagon makes a direct US$400M investment into US critical minerals producer MP Materials. (Source)
  
• JULY 15th: Tech giant Apple cuts a US$500M offtake deal with MP Materials. (Source)
  
• JULY 16th: US Department Of Defence officials say that the Pentagon will keep investing in US critical minerals projects - specifically rare earths projects. (Source)
  
• JULY 16th: US government guarantees a rare earth's price floor for MP Materials. (Source)
  
• AUGUST 1st: Trump administration says “we want Operation Warp Speed levels of urgency to develop US critical metals” (Source)
  
• AUGUST 1st: US government officials urge more tech companies to invest in rare earths space directly, either through seed investing or by making buyouts. (Source)
  
• AUGUST 7th: Apple increased its commitment to US manufactured products to US$600M (increase by another US$100M) and specifically mentioned US made rare earth magnets in its press conference. (Source)
  
• AUGUST 10th: US Office for Strategic Capital provides first US$150M loan drawdown to MP to add heavy rare earth separation capabilities to its Mountain Pass processing facility (next door to LKY). (Source)
  

And we think we are still early into the macro thematic - with stage 4 of our macro momentum chart still to come:

(See our weekend note on macro thematic momentum here)

10 Reasons why we are Invested in LKY

The list below is from our LKY Initiation Note released on the 1st of August 2025, which you can read here.

1. “US Critical Minerals” is an emerging thematic right now - ASX listed companies with US projects are being re-rated on market and are finally getting access to capital to drill test their projects. We think US investors haven’t fully caught on yet.
   
   
2. LKY’s project is directly next to Mountain Pass, owned by $16BN capped MP Materials - MP’s project is the only producing rare earths mine in the USA and just did large deals with the Pentagon and tech giant Apple.
   
   
   UPDATE: MP Materials has added on a lazy $4BN in market cap in the weeks since we wrote this (noting also that past performance is not an indicator of future performance).
   
   
   
3. LKY could deliver early stage nearology re-rates like RML - Our last US critical metals investment before LKY was RML. RML sits next to a project that is set to become the USA’s only domestic source of antimony. RML is up over 480% from our Initial Entry Price. LKY sits next to the only rare earths mine in the USA.
   
   
4. LKY acquired the ground BEFORE US Critical Minerals theme was hot - LKY picked up its project in 2023, way before broad based market interest in US based critical minerals projects OR MP Materials. We like first and early movers in an emerging theme.
   
   
5. Drilling permits in place, drilling this quarter - LKY has permits in place for drilling on two of its projects. Drilling is expected to start this quarter.
   
   
6. One of LKY’s projects has produced antimony in the past - LKY’s largest blocks to the north-east of MP Materials is home to an old antimony mine and a small antimony smelter. We think that is a good sign there could be more antimony mineralisation on these blocks.
   
   
7. Institutional investors are backing LKY, cornerstoned by Tribeca - Tribeca Investment Partners have $1.7BN in funds under management, and have had a history of success in the mining sector. Tribeca cornerstoned LKY’s 9.5c placement (source).
   
   
   UPDATE: Following Tribeca’s investment into LKY, Tribeca Capital was appointed as a strategic advisor to LKY. We like it when major institutions support their investments like this.
   
   
   
8. LKY is listed in the USA via the OTC - LKY has been OTC listed for the last 6 weeks. When the US critical metals theme starts gaining more traction in the US, it’s possible more US investors invest in LKY via OTC (OTC: LKYRF).
   
   
9. LKY is looking to go downstream (mineral processing) right now - LKY has explicitly said in past investor presentations that it is looking at a “downstream” and processing strategy. Finding and mining the critical minerals is one thing, but processing them is another big national security issue.
   
   
10. The US Government plans to adopt “vaccine development during the pandemic” levels of urgency to boost US critical minerals (source)
    
    

What’s next for LKY?

Drilling (this quarter) 🔄

LKY expects drilling to start next quarter, with first results expected before the end of this year.

Right now LKY is waiting for its expanded plan of operations to be approved (which is LKY expanding the size of its currently permitted drill program).

(Source)

Permitting for Phase 2 Drilling 🔄

LKY has lodged permits for an expanded Phase 2 drilling program on the Northern Block.

In the map below:

• Light blue stars = phase 1 drill program (fully permitted)
• Dark blue stars = phase 2 drill holes (permit pending)

Update on downstream initiative 🔄

LKY also flagged that it is actively looking at downstream opportunities.

Hopefully we see some newsflow on what the company has planned downstream in the near term.

Ideally, LKY’s downstream strategy will be in place before the upcoming drill program.

(Source)

What are the risks?

LKY hasn’t started drilling yet and just raised capital so the main risk here is “permitting risk”.

LKY just lodged an “expanded plan of operations” to increase the size of its already permitted drill program.

There is no guarantee that this expanded program is approved.

Now with mapping and sampling work starting, there is an element of “exploration risk” too.

It is possible that LKY finds nothing worth following up on the upcoming exploration programs.

Exploration risk

There is no guarantee that LKY’s upcoming drill programs are successful. LKY may fail to find economic deposits of rare earths or antimony in which case we would expect the share price to re-rate lower.

Source: “What could go wrong with LKY?” - LKY Investment Memo 1 August 2025

For the full set of risks we have identified and accepted in making our Investment in LKY, see our LKY Investment Memo below.

Other Risks

The company's primary asset is a pre-discovery antimony and rare earth elements exploration project in California, and it is possible that LKY makes no economic discovery despite the proximity to the producing Mountain Pass mine.

LKY is highly sensitive to fluctuations in antimony and rare earth element prices.

While current geopolitical tensions have supported these prices, any easing of US-China trade restrictions or alternative supply sources could materially impact the project's economic viability and the market’s interest in exploring the project.

While LKY does have current drilling approvals in place, there is no guarantee the expanded plan of operations the company recently submitted is approved. There is also no guarantee of timely regulatory approvals which could mean delays for the planned drilling program.

Finally, despite high-grade surface samples (up to 12.1% TREO and 46% antimony), these results may not be representative of broader mineralisation at depth, and the company has yet to conduct any drilling to verify continuity.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our LKY Investment Memo

You can read our LKY Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our LKY Investment Memo covers:

• What does LKY do?
• The macro theme for LKY
• Our LKY Big Bet
• What we want to see LKY achieve
• Why we are Invested in LKY
• The key risks to our Investment Thesis
• Our Investment Plan