Encounter Resources (ASX:ENR) delivered "strong metallurgical test work results" from its Aileron project and has made a "promising start to exploration" at its Elsa prospect, both located in Western Australia, Euroz Hartleys said in a May 22 note.
Initial metallurgical test work from the Green deposit in Aileron achieved niobium recoveries of 51% to 53% from head-grade feeds, while generating concentrate grades of up to 57% niobium pentoxide following refining, the investment firm said.
The results show that "standard beneficiation and refining methods can be effectively applied, and importantly, the flowsheet is comparable to those used in existing niobium operations, reducing future development risks," Euroz Hartleys said.
Meanwhile, first assays from ongoing reverse circulation drilling at the Elsa prospect intersected a new copper zone with 16 meters at 0.3% copper from 58 meters. Although the grades are modest, the result is still "highly encouraging at this early stage" and supports the presence of a broader system, the equity research firm said.
Euroz Hartleys maintained a speculative buy rating on Encounter Resources with a price target of AU$0.85 per share.
The company's shares gained 2% in recent Monday trade.