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2 promising small-cap resources shares to watch

While the majority of investors out there will be very familiar with mining giants such as BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), I suspect they will be less familiar with the two resources shares listed below.

These two fledgling companies may not be well known, but they certainly have significant potential in my opinion. Here they are:

Alderan Resources Ltd (ASX: AL8)

Alderan has a large holding of claims over the Pruess and San Francisco mining districts in Utah, United States, which is host to three deposits with historic mining and previous drilling programs.

The company’s own drilling has so far revealed the potential for a significant resource underground with world class potential. Although it is early days and there’s still a long road ahead, I think Alderan is certainly one to keep a close eye on.

Avz Minerals Ltd (ASX: AVZ)

Like Alderan, it may still be some time before Avz Minerals commences production at its Manono lithium project in the Democratic Republic of Congo. But early drilling results at the site have certainly got investors excited and led to its share price rising an incredible 278% in just three months.

Those results have revealed the presence of high-grade lithium mineralisation underground. Considering demand for lithium is expected to grow strongly over the next decade, I feel it is fair to say that the company could be sitting on an extremely valuable asset. While I believe the company could have a very bright future, it is still a high risk investment and therefore unsuitable for the average investor.

If resources shares are too high risk for your liking then I would suggest you check out these quality growth shares instead.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

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