Broker rates these 3 small cap ASX shares as a speculative buy 

Missed the surging Province Resources Ltd (ASX: PRL) share price last week? Here are 3 small cap ASX shares tipped to rise.

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The small-cap space erupted last week with the Province Resources Ltd (ASX: PRL) share price surging as much as 600% on its move to produce zero carbon-hydrogen.

While the Province Resources ship may have already left the port, here are three small cap ASX shares in the exploration and commodity space that have received a 'speculative buy' rating from broker Euroz Hartleys. 

Sovereign Metals Limited (ASX: SVM) 

Sovereign Metals has a 100% interest in the Kasiya project located in Malawi. Kasiya is a saprolite-hosted rutile deposit, otherwise known as an eluvial deposit. Rutile prices have been increasing recently.

Hartleys believes that Kasiya has all the hallmarks of developing into a significant rutile producer in the medium term. Based on the broker's speculative assumptions, it seems possible the deposit could likely support a production size of 100 to 130 kt pa based on a 10mtpa plant. Despite the project's medium to long term potential, the broker acknowledges its key risks, including project location (Malawi) and potential challenges in obtaining development capital. 

The broker maintains a target price of 60 cents which represents an upside of 42%. 

Tietto Minerals Ltd (ASX: TIE) 

Tietto Minerals continues to de-risk the development of its Abujar gold project, with the aim of becoming "West Africa's next gold mine". The company recently increased ownership in the project to 88% (at the mining stage) and pending its pre-feasibility study (PFS) results in the coming weeks, which will be the first look at the project's economic parameters. 

Hartleys sees significant exploration upside with its current 3 million oz expected to grow. Ongoing drilling is improving resource confidence for optimised mine plans feeding into development studies. News flow from drilling is expected to be strong, and the PFS delivery a key milestone for the ultimate project development.

The Abujar PFS is due late in the first quarter of the calendar year 2021, with the study investigating a potential 3.5Mtpa open operation.

Hartleys coverage rates the company as a speculative buy with a target price of 70 cents per share or an upside of 89% to its current price. 

Legend Mining Limited (ASX: LEG

Legend Mining's early metallurgical test work from the Mawson prospect within the Rockford project, Fraser Range in Western Australia, looks positive with high recoveries for copper and nickel.

Hartleys describes the project as catalyst rich, with a large and growing footprint auguring well for the next major discovery. 

The report cites that although the mineralised intrusive source has not yet been drilled out to economic status, this is just a matter of time. Based on the occurrence of high-grade massive sulphides within ultramafic intrusive rocks, net textures consistent with analogous major deposits and the presence of platinum group elements and gold.

The broker is 'unwavering' in its conviction with a speculative buy maintained and a target price of 30 cents.

Foolish takeaway

Small-cap ASX shares in the mining and exploration sector are fraught with risks as projects attempt to transition closer to producer status.

While Province Resources may have delivered eye-watering returns last week, investors who bought the top would have otherwise found a -40% hole in the pocket. 

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.

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