American Resources secures antimony refining contract

FISHERS, IN - American Resources Corporation (NASDAQ:AREC), currently trading near its 52-week low at $0.53 and showing signs of being slightly undervalued according to InvestingPro analysis, has announced a tolling agreement for the refinement of antimony ore, known as stibnite. The company, which currently maintains a market capitalization of $41.19 million, faces significant operational challenges with a weak financial health score of 0.9 out of 5, according to InvestingPro’s comprehensive evaluation system. The agreement involves the initial processing of approximately 500 metric tons of stibnite ore per month with the potential for expansion, aiming to supply the domestic defense and commercial sectors.

ReElement recently completed a successful pilot program at its Indiana facility, refining antimony stibnite ore to a purity level exceeding 99.7% for Antimony(III) sulfide. This development positions the company as a key player in the production of high-purity antimony, a material critical for munitions and other specialized applications.

The tolling agreement is expected to generate annual revenues exceeding $29 million, with a two-year contract that automatically extends - a significant potential boost considering the company’s current revenue challenges, with a 98.13% decline in the last twelve months. The antimony will be processed at ReElement’s central Indiana facilities, with scaling up of refining capacity at its Marion supersite. InvestingPro data reveals that managing this expansion may be challenging, given the company’s current ratio of 0.23 and substantial debt burden of $229.89 million.

Mark Jensen, CEO of American Resources and ReElement, emphasized the importance of the company’s refining capabilities in the context of a global shortage of economically viable refining capacity for critical minerals. Jensen highlighted the recent ban by China on exports of critical minerals to the United States, including antimony, which has underscored the strategic importance of domestic refining capabilities.

Antimony(III) oxide and Antimony(III) sulfide are significant compounds of antimony, used in various applications from ammunition to solar panels. The global Antimony(III) oxide market, valued at approximately $852 million in 2023, is projected to grow to an estimated $1.43 billion by 2034.

American Resources Corporation is recognized for its innovative solutions in the critical mineral supply chain, with a focus on the extraction and processing of metallurgical carbon, iron ore, and critical and rare earth minerals. ReElement Technologies has developed a multi-mineral, multi-feedstock platform technology that refines recycled material from rare earth permanent magnets, lithium-ion batteries, and other sources.

This partnership marks a significant step for American Resources in securing a foothold in the critical minerals refining industry, with implications for the domestic supply chain in light of geopolitical trade tensions. The information in this article is based on a press release statement. For deeper insights into AREC’s financial health and growth prospects, including 15 additional ProTips and detailed financial metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, American Resources Corporation has made significant strides in the production of rare earth elements through its subsidiary, ReElement Technologies. The company has developed a proprietary process to extract mixed rare earth oxides from coal waste, achieving concentrations consistently above 500 parts per million. This advancement is crucial as it provides a sustainable source of rare earth elements, which are vital for technologies such as electric vehicles and electronics. American Resources has access to over 128 million tons of waste material, with a primary focus on 8 million tons from its West Virginia property. ReElement Technologies stands out as the only U.S. producer of magnet-grade heavy and light rare earth oxides, with contracts covering an estimated 70% of the downstream market. The company’s refining process, which includes Ligand Assisted Displacement Chromatography, offers a cost-effective and environmentally friendly alternative to traditional methods. This development comes amidst trade tensions between the U.S. and China, highlighting the strategic importance of a domestic refining capability. Additionally, American Resources has initiated the distribution of shares of ReElement Technologies and American Infrastructure Corporation to its shareholders, further solidifying its investment in critical mineral operations.

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