Insights

Surge in mining exploration to benefit these small-cap ASX shares: broker

Bell Potter reports a big lift in mining exploration expenditure as commodity prices boom. The broker lists its top small cap ASX shares to watch
The post Surge in mining exploration to benefit these small-cap ASX shares: broker appeared first on The Motley Fool Australia. –

increasing asx share price represented by model construction workers working on increasing pile of coins

Soaring commodity prices have resulted in a surge of capital flood into mining exploration expenditure through 2020 and into 2021, according to Bell Potter. 

Bell Potter released a research report on 12 March which highlighted the allocation of fresh funds into drilling activities and new discoveries. While small-cap ASX shares are speculative in nature, the broker sees significant upside in explorers that are taking a step closer to becoming producers.

Bell Potter rates these ASX shares as a ‘speculative buy’

Chalice Mining Ltd (ASX: CHN) 

Chalice Mining’s assets currently comprise two new and significant discoveries, the Julimar Nickel-Copper-PGE project in Western Australia and the Pyramid Hill gold project in Central Victoria. The company also owns a number of minor exploration projects and royalty interests relating to other metals. 

In late January, Bell Potter noted that the latest drilling infills confirmed a “very significant global scale PGE-Ni-Cu-Co [PGE, nickel, cobalt and copper] deposit with extremely favourable logistics and important shallow oxide zones”. The broker looked forward to ongoing work which will continue to extend and better define mineralisation.

A speculative buy rating with a $5.60 valuation was maintained on 28 January. At the time of writing, the Chalice share price is trading 1.14% higher at $4.45.

Liontown Resources Ltd (ASX: LTR)

Liontown is a battery metals exploration and development company with three core projects.

The company is currently progressing through a definitive feasibility study on its Kathleen Valley lithium project in Western Australia. Kathleen Valley is noted as the only independent, globally significant, spodumene-related, hard rock lithium resource in Australia. An updated pre-feasibility study announced in early October 2020 highlighted strong economics for the project with a net present value of $1.12 billion and development capital costs of ~$325 million. 

The Moora project is still undergoing significant drilling activities for gold, PGE, nickel and copper mineralisation. This project is in its early days but finding success with multiple gold anomalies defined. 

The Buldania lithium project in Western Australia is a relatively new project where work will focus on expanding the existing mineral resource. 

Bell Potter believes that the Kathleen Valley lithium project is the key support for its current valuation. It also believes further exploration success at Moorna could “elevate this project beyond its current early-stage ranking” and the project’s proximity to Chalice Mining’s “world-class Julimar discovery, adds further appeal”.

The broker retained a speculative buy rating with a 55 cent valuation back on 3 March. As of writing, the Liontown share price is trading 0.54% higher at 46.75 cents.

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 Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Surge in mining exploration to benefit these small-cap ASX shares: broker 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!