South32 Ltd (ASX: S32) has seen its share price gain more than 5% in late trading today, although shares are still down more than 6% for the week and roughly 30% since spinning out of BHP Billiton Limited (ASX: BHP) in May 2015.

Still, existing shareholders will be cheering that the price is 65% off its lows of just 87 cents at the current price of $1.44.

To recap, South32 basically holds all the commodities and assets that BHP no longer wanted, with the larger miner focusing on its core portfolio of five resources being iron ore, petroleum and potash, copper and coal.

South32 ended up with commodities including alumina, energy and metallurgical coal, manganese, nickel, silver, lead and zinc.

Some investors may have revisited the miner’s half year results and discovered that the company had US$1.69 of net tangible assets on its balance sheet – roughly A$2.23 at today’s exchange rate of US 75.6 cents – or 55% higher than the current share price.

In simple terms, if South32 could liquidate its assets, and pay off all its debts it would be left with roughly A$2.23 in cash. Now who wouldn’t want $2.23 worth of value and pay just $1.44 for it?

There’s just one problem with that.

South32’s net assets may not be worth the value shown on the balance sheet. Some assets might be incredibly difficult to sell or not at all, while others might require huge discounts to the asking price to get a sale. That’s exactly what the market thinks while South32’s share price languishes below its tangible net assets value. South32 was forced to writedown the value of its assets by US$1.7 billion earlier this year.

The other potential reason is that a number of commodities are rising on London markets, including aluminium, lead and zinc. Some investors might see this as a sign of improvement and the start of a recovery in commodity prices, and are trying to jump on board before the train gathers steam.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.