LKY doubles landholding next door to $16BN US rare earths national champion

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.

The US urgently needs to onshore its critical mineral supply chains.

Especially critical minerals that are used in things like fighter jets, tanks, drones and AI infrastructure - like rare earths and antimony...

At the moment there is only one rare earths producer in the US - the $19BN capped MP Materials.

MP operates the Mountain Pass rare earths mine in California, with a processing facility next door.

Our Investment Locksley Resources (ASX:LKY) was one of the first ASX listed company to see what was coming and secured ground around MP back in 2023.

Today LKY doubled its landholding next to MP Materials, and now has it surrounded.

MP wants to 10x its facility - and the Pentagon (soon to be Dept of War?) and tech giant Apple are backing MP with a combined ~US$1BN in funding.

Right now MP’s project and the ground around it is some of the hottest property on the ASX small cap market...

But LKY has pole position directly next door to MP, has the giant surrounded, after just doubling its landholding.

Back in 2023, when LKY first entered the region, it was way before the Pentagon invested in MP and before Apple did its deals with MP.

It was also a very big contrarian play - at the time no one cared about US critical minerals and especially rare earths.

LKY would have been able to look around MP and take what it believed was the best ground.

LKY has also had a two year headstart on every other ASX small cap and so should understand the area geologically too.

It's also picked up new ground to the north of $856M Dateline Resources.

Over the past few months we have seen a bit of a rush into this part of the US from other ASX small cap listed stocks.

One of those was up over 600% just because it picked up some ground to the north of LKY.

Another is up over 400% on its most recent capital raise and again is north of LKY.

Both have come in extremely late into the area AFTER all the big MP Materials news came out earlier in the year.

(unlike LKY which has been there for over two years now)

LKY, having come into the area way before it was hot, is one of the main reasons why we are Invested in the company.

And we are hoping that headstart means LKY has the best ground in the area.

Which we will get to find out pretty soon.

LKY’s first drill campaign targeting antimony and rare earth targets is expected next quarter.

(drilling will be on the blocks picked up in 2023, where target generation has already been completed)

LKY is also going downstream for antimony

Alongside exploration drilling, LKY is also working on developing a downstream part to its business.

LKY is developing an environmentally friendly, bio-degradable processing solution that can take antimony feedstock and produce defence-grade and energy-grade antimony products domestically in the US.

Yesterday, LKY progressed to the downstream part of its business by signing a Non-Binding Heads of Agreement with EV Resources.

The deal with EV Resources is to purchase antimony concentrate from EV’s project in Mexico that can then become feedstock for the tech partnership with Rice University:

(Source)

IF the deal with EV Resources is converted into a binding ore sales agreement (basically an offtake deal) then LKY would also invest into EV Resources via a $750K direct investment.

The deal essentially, looks a lot like LKY putting its foot on a company that it sees as a potential third party ore supplier for its downstream business.

(in addition to anything that LKY can produce and supply to its downstream unit)

Even if LKY can produce its own antimony, the deal with EV means it can add scale by using third party ore sources...

We note LKY’s project was once an antimony mine and even had an old artisanal smelter on site.

AND LKY will be testing these antimony targets again as part of its next round of drilling in later this year.

Here is how everything from yesterday’s deal and the downstream strategy all fit into place:

LKY’s downstream partner Rice University has a solid track record

LKY’s downstream strategy is through a legally binding partnership with Texas based Rice University which has developed the DeepSolvTM process.

Learn more about Deep Eutectic Solvents here: LKY: Fast tracking USA antimony mining AND now antimony processing too?

Rice University has been associated with some of the most successful industrial projects on the ASX in the last few years including:

• ~$530M capped Weebit Nano ReRAM semiconductor technology and
• ~$500M capped Metallium Flash Joule Heating technology.

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.

Rice University has also collaborated with the U.S. Department of Energy, Department of Defence and other industry partners.

Now Rice University is working with LKY.

Given its experience and track record in turning lab experiments into commercial reality we are really looking forward to seeing what LKY’s partnership with them can deliver.

We like that LKY is supporting the US critical minerals agenda both through exploration and extraction of valuable minerals AND now also through advancing processing technologies.

LKY’s strategy opens the doors to multiple different funding opportunities

We like that LKY is supporting the US critical minerals agenda both through exploration and extraction of valuable minerals AND now also through advancing processing technologies.

We think that the dual approach opens up more doors from a funding perspective for LKY.

A few weeks ago, LKY engaged Washington DC based strategic advisory group GreenMet - led by Drew Horn.

Horn worked in the Defence and Energy departments during Donald Trump’s first term and, after the 2020 election, founded GreenMet.

According to the following Bloomberg article from August 9th, Horn’s GreenMet is a “company that arranges deals between the US government and the private sector around critical minerals”.

Read that full article here: Greenland’s Rare-Earth Dreams Are Luring Trump Allies.

With the US government showing its willingness to back US critical minerals projects and the recent announcement by the DoE for US$1BN (mostly aimed at processing tech), we are hoping LKY with the help of GreenMet can bring US government interest into its projects.

The ultimate win here for LKY would be to secure non-dilutive funding, loans and/or offtake agreements across US agencies like the:

• Department of Energy (DoE) - the DOE was recently given US$1BN of which more than half is for “minerals recycling and processing applications” (Source),
• Department of Defence (DoD),
• Export-Import Bank of the United States (EXIM) - LKY is in discussions with EXIM already (Source),
• Development Finance Corporation (DFC), and;
• Department of Interior (DOI) - LKY is also in discussions with the DOI. (Source)

We also note that LKY has also applied for a membership with the US Critical Materials Institute (CMI).

(Source)

By engaging relationships with the US government early, LKY is positioning itself as a company that can support the US critical minerals demands.

What could re-rate LKY next?

Between now and the end of the year we think that LKY could re-rate higher off one of the four catalysts:

1. Make an antimony discovery over its project (which was previously mined for antimony)
   
2. Make a rare earths discovery right next door to MP Materials, the only rare earths mine in America.
3. Use innovative technology with Rice University to develop US-based, low cost antimony processing technology.
4. Any surprise funding announcement where LKY receives non-dilutive funding to advance either exploration on its projects or its downstream business.

No guarantees of course, this is speculative small cap investing and success is no guarantee.

Ultimately, we think that in the short term, the catalyst that has the most predictable timeline is drilling - which is a big part of our LKY Big Bet:

Our LKY Big Bet

“LKY to re-rate to $200M market cap on the back of strong drill results and maiden resource, plus continued interest and capital flows into the USA critical metals thematic”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our LKY Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What’s next for LKY?

Drilling (next quarter) 🔄

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

Right now LKY is waiting for its expanded Plan of Operations (“POO”) to be approved (which is LKY expanding the size of its currently permitted drill program).

Here is where LKY’s initial drilling program is scheduled:

(Source)

With the rare earths drill program, LKY plans to test areas where a number of high grade rock chip samples were found, grading 1.20% to 6.87% TREO (rare earths).

With the antimony drill program, LKY plans to test for the extent of mineralisation near the historical antimony mine.

Over 24 surface samples 8 had over 17% antimony and 18 had over 1.4% antimony - these are very high grades for antimony projects.

Here is a video of Julian Woodcock, Technical Director of LKY talking through LKY’s upcoming drilling plans:

(watch the video)

Permitting for phase two drilling 🔄

LKY has lodged permits for an expanded Phase two drilling program on the North Block.

In the map below:

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

Secure licence agreement with Rice University 🔄

Now that LKY has signed a partnership agreement with Rice University, the next stage will be to secure a larger licence deal over whatever technology is developed from the R&D agreement.

This will take some time to work out the IP sharing and mutual development of the technology.

Updates on potential funding opportunities🔄

With LKY’s appointment of GreenMet we would like to see progress on US funding pathways.

Identify rare earth targets on the northern blocks 🔄

LKY is 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.

LKY will 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.

Read our full take on this news here: LKY chasing new rare earths target areas - as close as possible to MP Materials rare earths mine

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