Eclipse Metals: Is the Greenland Rare Earths Story Worth Buying After 300% Rally?

Eclipse Metals (ASX: EPM) has surged more than 300% over the past 12 months, making it one of the ASX’s standout small-cap performers. Trading around $0.019 after hitting a 52-week high of $0.039, the stock has captured investor attention following a transformational resource upgrade and the recent engagement of BGR Group, a top-tier US government relations firm. The company has now completed its 2025 diamond drilling programme at the Ivigtût Project in Greenland, confirming a polymetallic, rare earth element-fertile system with significant carbonatite-related alteration. For investors weighing whether to chase this momentum, the question is whether the strategic narrative justifies current valuations or if the easy gains have already been made.

What are the Best ASX Mining Stocks to invest in right now?

Check our buy/sell tips

Eclipse Positions Greenland Assets for Western Supply Chain

Eclipse’s flagship Ivigtût-Grønnedal project in south-west Greenland sits at the heart of growing geopolitical interest in rare earth supply diversification. The Grønnedal deposit now hosts an inferred resource of 89 million tonnes at 6,363 parts per million total rare earth oxides (TREO), representing a more than seventyfold increase from the original estimate. With an average grade exceeding 6,000 ppm, this position ranks Grønnedal among the world’s highest-grade rare earth deposits.
What makes this strategically compelling is the mineralogy. The deposit is dominated by synchysite, bastnasite, and monazite, ideal for neodymium-praseodymium permanent magnet feedstock used in electric vehicles, wind turbines, and defence applications. With China controlling most global rare earth processing, Western governments are actively seeking alternative suppliers.
Eclipse recently engaged BGR Group, a pre-eminent US strategic advisory and government affairs firm, to support engagement with the US government, defence, and strategic materials agencies. This signals management’s ambition to secure non-dilutive funding and strategic partnerships as the US accelerates its critical minerals strategy.

2025 Drilling Confirms Resource Potential

The recently completed drilling programme delivered encouraging results. Eclipse has completed more than 700 metres of diamond drilling at Grønnedal, confirming continuous carbonatite mineralisation from surface to depths approaching 190 metres. This supports the existing 89 Mt resource and suggests further expansion potential.
Eclipse believes the current resource estimate represents just 6% by volume of the estimated carbonatite rock mass at the Grønnedal Complex, with indications of continuous mineralisation extending to depths exceeding 500 metres. If validated, this could position the project for significant future upgrades.
In October, the company raised $4 million through a placement to fund drilling, laboratory assays, metallurgical test work, and progress towards a potential NASDAQ listing. A dual listing could broaden investor access and strengthen visibility among US institutional investors.

The Investor’s Takeaway

Despite the compelling strategic narrative, investors should approach EPM with clear eyes on the risk profile:

• • No revenue: This remains an early-stage explorer with zero revenue generation
  • Modest cash position: As of June 2025, Eclipse had approximately AUD 2.1 million in cash with zero debt and a trailing twelve-month cash burn of around AUD 924,000. The recent $4 million raise provides additional runway
  • Stretched valuation: The stock exhibits a price-to-sales ratio exceeding the industry average for ASX industrial metals and mining stocks
  • Scale comparison: With a market cap of around $60 million, Eclipse remains tiny compared to Lynas Rare Earths’ $14.8 billion valuation, highlighting both the upside potential and the early-stage risk

Catalysts to watch:

• • Assay results from the 2025 drilling programme
  • Progress towards NASDAQ listing
  • US government partnerships or funding announcements
  • Further resource expansion at Grønnedal

Our view: Eclipse Metals offers genuine strategic appeal for investors seeking exposure to Western-aligned rare earth supply chains. The high-grade resource, favourable mineralogy, and US engagement strategy are legitimate positives. However, after a 300%+ run, much of the near-term upside may already be priced in. For existing holders, the momentum case remains intact. For new buyers considering chasing this rally, patience may be rewarded; waiting for a pullback or clearer commercial milestones could provide a more favourable entry point. This is a speculative opportunity suited only to investors with high risk tolerance.