Stock hits 20% upper circuit after it enters rare earth minerals business in Spain

Synopsis: The shares of this small-cap mining company hit 20% upper-circuit after the acquisition news of the Logrosan Tungsten Project in Spain circulated in the market. The project is said to be rich in tungsten and other rare materials, and as it is still unexplored, the findings may be converted into mineral resources in the next 1-2 years. 

The shares of this company, which has deep roots in the mining and exploration sector and has actively pursued gold exploration activities through the adoption of modern methods and the latest technology in all of its exploration prospects, had its shares in momentum today following the acquisition of a project in Spain with potential rare earth material deposits.

With the market cap of Rs 2,071 crore, the shares of Deccan Gold Mines Ltd had hit their intraday high at Rs 106.35, hitting 20 percent compared to their previous day’s closing price of Rs 88.65. The shares have given a return of 530% over the last 5 years. 

About the Acquisition. 

Deccan Gold Mines has made an announcement about a strategic acquisition in which they plan to make an investment in up to a 75% stake in the Logrosan Tungsten Project in Spain, thus foraying into the business of critical minerals and tungsten. The project is in the unexplored phase, but the existing findings may be converted into mineral resources in the next 1-2 years. Deccan Gold is thus joining the league of critical mineral stocks, which is the need of the day.

Geologically, the Logrosan project is sited in an area of Spain known for its richness in tungsten, rare earths, tin, and gold mineralisation, providing the acquisition with considerable multi-commodity potential. Spain is viewed as a mining-friendly jurisdiction owing to its positive administrative conditions in terms of permitting, low operating costs, excellent infrastructure, and the fact that the country does not charge royalties based on production, thus making the project particularly appealing on this ground as well.

Benefits of this Acquisition. 

On a strategic front, the acquisition brings Deccan Gold direct access to the mineral tungsten, which is a critical mineral accepted globally in the defence, aerospace, electronics, cutting tools, and high-temperature alloys sectors. Given the fact that more than 80% of the global extraction of this mineral is from China, this particular acquisition becomes more valuable because it brings Deccan Gold under the strategic metals sector, that is currently getting prominence for securing the supply chain.

From a technical standpoint, the experience that Deccan Gold has had with the exploration, drilling, and estimation of gold could be applied directly to a tungsten deposit, given the same geology. The early drill results that came out, such as 3 m @ 0.42% WO₃, 8 m @ 0.32% WO₃, and high-grade gold intersections of 1 m @ 96.2 g/t, demonstrate that the project is of a very good quality and give a clear indication that further value can be added through exploration.

One of the long-term value-adding aspects of the project is the presence of rare earth elements, which are highly strategic in nature, add value to the project, and are important for EV motors, renewable energy, semiconductors, and military applications. Thus, if the project turns out to be successful, this aspect of the project can position Logrosan as a strategic resource, thereby realising the company’s strategy of becoming a critical mineral producer that supports the resource security strategy of India.

Financials  

The revenue from operations for the company stands at Rs 3 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 4 crores, up by about 33 per cent YoY. The net loss stood at Rs 20 crore in Q2 FY26 and Rs 68 crore in Q2 FY25.

Deccan Gold Mines Limited is India’s only listed gold exploration company with a rich legacy of mineral exploration and mine development. Incorporated in 2003, the company has been at the forefront in discovering and developing gold prospects across India’s key geological belts, including discoveries in the Hutti and Dharwar–Shimoga regions of Karnataka and the completion of a JORC-compliant feasibility study at the Ganajur gold deposit. 

Besides its domestic focus, Deccan Gold is expanding its global footprint through strategic acquisitions in regions such as Kyrgyzstan, Finland, Africa, and Spain, while also diversifying into critical minerals, positioning itself for long-term relevance in sustainable and strategic resource development.

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