Encounter Resources' (ASX:ENR) latest drill results at the Aileron project in Western Australia show substantial upside to the existing Green deposit mineral resource estimate, with strong potential to increase resource grade and expand resource size, Euroz Hartleys said in a Thursday note.

The company reported its best drill intersection at the project to date, with step-out drilling at the Green deposit returning an "outstanding" 51 meters at 5% niobium pentoxide from 63 meters, the equity research firm said.

The result was returned at grades substantially above the current resource average, and the standout Green intercept delivered a grade-thickness of 255, positioning it among the strongest niobium drill results reported in the West Arunta, Euroz Hartleys said.

Aileron appears well positioned for further growth, and Encounter Resources continues to offer significant re-rating potential, especially if ongoing drilling yields additional resource growth and grade improvement, it added.

The investment firm maintain a speculative buy rating and AU$0.85 per share price target on Encounter Resources.

The company's shares jumped 14% in recent Thursday trade.