Encounter Resources' (ASX:ENR) new high-grade niobium discovery at the Joyce prospect further validates the district-scale potential of its Aileron project in Western Australia, Euroz Hartleys said in a Monday note.
The company's air-core drilling returned four meters at 2.4% niobium pentoxide from 40 meters to the end of the hole, and six meters at 1.3% niobium pentoxide from 88 meters to the end of the hole.
"The latest results highlight significant regional upside and the potential to add additional shallow, high-grade niobium resources beyond the main Green resource zone," the equity research firm said.
It added that planned follow-up drilling along strike and at depth is expected to better define the scale of the Joyce discovery, with mineralization remaining open both laterally and at depth. Three rigs remain active, with further Joyce results expected in October.
Euroz Hartleys maintained a speculative buy rating on Encounter Resources, saying that the investment case continues to strengthen as Aileron advances on multiple fronts, with an unchanged target price of AU$0.85 per share.
Encounter Resources shares fell 6% in recent Monday trade.