Insights

Not too late to buy these small ASX mining shares for the commodities boom

ASX mining shares have been running hot and bargain hunters will probably need to start looking among small caps shares to find value.
The post Not too late to buy these small ASX mining shares for the commodities boom appeared first on The Motley Fool Australia. –

A happy minner does the thumbs up in front of an open pit copper mine, indicating a surging share price in ASX mining shares

ASX mining shares have been running hot and bargain hunters will probably need to start looking among small caps shares to find value.

The bull run in the sector is triggered by the surge in commodity prices. Iron ore, copper and other metals have either broken new records or are close to setting fresh highs.

This is why the Fortescue Metals Group Limited (ASX: FMG) share price, Rio Tinto Limited (ASX: RIO) share price and BHP Group Ltd (ASX: BHP) share price have outperformed the S&P/ASX 200 Index (Index:^AXJO) in the past year.

Smaller ASX miners could provide better value

But most experts are loath to recommend you chase these big miners higher. Talk about FOMO!

On the other hand, those willing to look at the smaller end of the market could still find a nugget or two.

One possible small ASX miner is the BCI Minerals Ltd (ASX: BCI) share price. While the shares have doubled over the past 12-months, Bell Potter reckons it could go much higher.

Salt and fertilizer provides boost

The broker bolstered it 12-month price target on the BCI share price to $0.57 from $0.50 after management provided an update on its projects.

The miner released its Mardie Salt and SOP project Optimised Feasibility Study (OFS) highlighting a 20% increase in plant throughput capacity.

The upgrade will lift steady-state salt production to 5.35 million tonnes per year (Mtpa) from 4.5Mtpa. SOP production is expected to increase to 140,000 tonnes a year (ktpa) from 120ktpa.

“BCI combines an iron ore royalty-like business with a large scale salt and fertiliser project,” said Bell Potter.

“BCI’s current EV is around 4x its 2022 iron ore EBITDA alone. The optimised Mardie Salt and SOP Project has the potential to add significant value.”

Beating on two fronts

Meanwhile, Macquarie Group Ltd (ASX: MQG) is urging investors to buy the Champion Iron Ltd (ASX: CIA) share price after it posted a better-than-expected quarterly production report.

“Production and shipments of ~2.0mt were above our forecasts in 4QFY21, and cash costs also came in 7% lower than our expectations,” said Macquarie.

“Despite the COVID-19 interruptions in 1QFY21, CIA has produced and shipped at a rate higher than the current nameplate capacity of 7.5mtpa.”

The lower costs are noteworthy as many of its peers are struggling with cost inflation.

Macquarie’s 12-month price target on the Champion Iron share price is $8 a share.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Macquarie Group Limited, and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Not too late to buy these small ASX mining shares for the commodities boom appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!