This ASX small-cap mining stock is tipped to rocket 160% higher

The Meteoric Resources NL (ASX: MEI) share price is flat in Thursday morning trade, at 15 cents a piece. It's welcome news for the ASX small-cap, rare-earths-focused Australian mineral exploration company. Its shares have plummeted 39% from their annual peak of 25 cents in mid-October.

The shares are still trading a whopping 90% higher than this time last year.

Just last week, the developer announced it has produced its first batch of mixed rare earth carbonate (MREC) from its recently constructed pilot plant for the Caldeira Rare Earth Project in Brazil. It's a significant production milestone.

After a site visit to the Caldeira Rare Earth Project, analysts at Macquarie Group Ltd (ASX: MQG) have updated their stance on the small-cap stock.

Macquarie's rating on the ASX small-cap stock

In a note to investors, the broker has confirmed its outperform rating and 39 cents target price on Meteoric Resources shares. At the time of writing, this implies that the share price could jump 160% higher over the next 12 months.

"Despite recent permitting setbacks, MEI continues to execute its development plan with steady progress. We see value in the company, which is currently trading at an implied NdPr price of <US$80/kg," the broker said in its note.

Meteoric Resources' pilot plant is ramping up

The team at Macquarie explained that it recently visited Meteoric Resources' Caldeira ionic clay rare earths project in Brazil. The site visit followed news that the plant has begun production.

The plant is located at the company's research centre at Poços de Caldas, with close proximity to the Caldeira deposit. Macquarie added that the pilot plant was completed on time and under the budget of $2.2 million from the pre-feasibility study.

The plant operates using local water and hydro-power, and most reagents are sourced from within Brazil. 

"The pilot plant has a designed nameplate capacity of ~2 kg/day of MREC, supported by ore throughput of 25 kg/hour," Macquarie's analysts explained in the note.

"We believe continued rampup of the plant will enable MEI to initiate off-take discussions with downstream customers, a critical near-term catalyst.

"Near-term priorities include improving product quality, followed by volume ramp-up. We believe this approach is appropriate for a chemical facility where price realisation is highly dependent on product quality."

Preliminary Licence approval for the Caldeira Project is scheduled for review by the State Council for Environmental Policy (COPAM) on 19 December. Macquarie's analysts said that mining activity is already well-established in the region.

The post This ASX small-cap mining stock is tipped to rocket 160% higher appeared first on The Motley Fool Australia.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy</a>. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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