Québec critical minerals projects set to be next on investors' shopping list

The ASX-listed rare earths space had its day in the sun during the week thanks to a framework agreement between Canberra and the White House to get behind $13 billion in potential new projects.

The support would initially come with as much as $4.8 billion in equity lines, which means a fire has been lit under a whole bunch of rare earths and critical minerals projects that might not otherwise have seen the light of day.

The intent of the framework is clear – break China’s near monopoly supply on rare earths and other critical minerals, with President Trump’s tit-for-tat tariff war with Beijing providing the impetus for the non-China world to do something.

Australia has more active rare earth projects than you can poke a stick at, maybe as many as 90. But it is not alone in having the potential – and that is all it is at this stage – to make a meaningful dent on China’s dominance in the industry.

There are plenty of deposits capable of making a difference in Canada and Brazil and, to a lesser extent, Europe. Projects in those countries/regions also stand to benefit from the rare earths and critical minerals “war” now underway.

Government support like that being marshalled by Canberra and the White House for projects in Australia is, or will be, marshalled in other parts of the world, because apart from anything else, self-interest is a powerful motivator.

It’s for that reason that after the spectacular share price gains this week for the ASX-listed rare earths hopefuls with projects in Australia, interest in the sector post the Canberra-White House compact will likely spread to ASX stocks with overseas projects.

It is against that backdrop that Mont Royal Resources (ASX: MRZ) has been able to fortuitously time its emergence as a major rare earths player through its previously reported acquisition of the Ashram project in Quebec.

Canada has been hot to trot on building out its critical minerals appeal for years, while the province of Québec has taken it to another level. As a mining investment destination, it has few peers and is intent on capitalising on its critical minerals bounty.

The US could well buy all that comes from new Australian rare earths projects. But it could equally rely on its northern neighbour as well. And besides, Europe and the rest of the world stand as customers equally determined to break China’s stranglehold on supplies.

Mont Royal acquired the Ashram project by merging with the Canadian-listed Commerce Resources, and it has just pulled in $10m from a capital raising to progress development activities and pursue “strategic engagement’’ at the Tier 1 scale project.

Now that the merger is complete, Mont Royal expects to re-commence trading on the ASX at the end of the month. It has gone through a capital consolidation ahead of the relisting and now sports 188.74m shares on issue.

At the capital raise price of 20c, it comes back to the market capitalised at $37.7m. As Mont Royal headlines Ashram as one of the biggest monazite-dominant carbonatite-hosted rare earth projects in North America, project value comparisons at that market cap will be interesting compared with those of other now elevated Australian projects/companies.

Ashram has had $50m spent on it in the past, with the work pointing to the potential for a large-scale development costing $1.5 billion, including $500m for a 130km roadway to the remote site in the north of the province.

As the Canberra-White House compact highlighted, that’s small change in the rare earths and critical minerals space for projects capable of helping to upend China’s current market dominance.

The large-scale resource comes with a potential project revenue kicker in the form of fluorspar (iron-making, aluminium refining and LFP batteries).

Mont Royal itself is now populated with deep rare earths experience, including Nicholas Holthouse (ex-Meteoric and Hastings Technology). A bunch of other true believers in Ashram’s potential have also joined the board and management team.

PMET Resources (PMT)

Talking about critical minerals and things Québécois, PMET Resources (ASX: PMT) managed to hold up well following the release this week of its feasibility study into the development of the CV5 lithium deposit at its Shaakichiuwaanaan project in the James Bay region.

It’s no fun releasing a study with a price deck above the ruling market prices for the underlying commodity. Others that have done so in recent times have been trashed in response. But PMET would be pleased its market value held up.

It was down all right to 38.5c in Thursday’s market from the 43c level before the release of the study. But again, it was nothing like what might have been expected given the base metrics are pinned to lithium prices much higher than they are.

It reflected a maturity by both the local market and PMET’s home market in Canada. Yes, lithium prices remain depressed, but double digit growth in demand means that world-scale projects like Shaakichiuwaanaan will be needed come the turn of the decade when a serious supply deficit begins to open up.

Projects like Shaakichiuwaanaan – capable of multi-decade production at a world-scale 800,000tpa of spodumene concentrate – are very few and far between. It’s why VW took up a 9.9% stake in PMET last December in tandem with a 100,000tpa offtake agreement.

On current planning, Shaakichiuwaanaan could be in commercial production in the first half of 2030. If it were in production today, it would be washing its face at current lithium prices. Plug in higher price expectations and its EBITDA potential takes off.

The same could be said for Pilbara Minerals (ASX: PLS) which has previously guided to FY2026 production from its Pilgangoora operation of 820,000-870,000t of spodumene concentrate, with the potential to go to 2Mtpa with the right conditions.

Pilbara’s market cap is currently $9 billion. PMET is on a pathway to 800,000tpa with a market cap that is quite rightly a fraction of Pilbara’s. Then again, 2030 is not far off now.

Cygnus Metals (CY5)

Consolidation through merger & acquisition activity is not restricted to the goldfields of WA.

Just ask David Southam, executive chair of Cygnus Metals (ASX: CY5), which is advancing its Chibougamau copper and gold project in Québec, no less.

Southam took to the social media airwaves to pass on the information that Canada’s $C9.7 billion IAMGOLD had kicked off a consolidation push in the Chibougamau region through two acquisitions, most notably the $C267 million acquisition of local player Northern Superior.

IAMGOLD has existing interests in the region and said the acquisitions consolidates its position in a rapidly growing premier mining jurisdiction in Quebec.

“These assets are exceptionally close to our holdings that make up the Chibougamau copper and gold project,” Southam said.

He added it validated the acquisition of its project in the first place, which was to be part of and privy to consolidation of a world class precious metals and copper camp.

Cygnus has a resource of 488,000t of copper equivalent at 3.2% copper, or 2.3Moz on a gold equivalent basis at 4.5g/t.

“We are next to Chibougamau, have a mill, power, water, roads…” Southam enthused.

The market was enthused as well, pushing Cygnus shares 11.5% higher to 14.5c in Thursday’s market where gold and copper stocks weren’t exactly the preferred soup du jour.