ASX mining shares are capable of producing strong returns if we buy them at a good price.
Certainly, many resource prices are cyclical because of changing supply and demand.
But when sentiment and demand is low, it can be a good time to invest. Conversely, when resource prices are high, it might be worth considering if it's wise to wait for a better price.
With that in mind, I think the following three ASX mining shares are worth investing in after the latest changes in their share prices.
Mineral Resources Ltd (ASX: MIN)
Mineral Resources is one of the most interesting resource businesses in my opinion. It's a leading mining services business but it is also aiming to grow both its iron ore and lithium production.
It is sometimes called the cheapest ASX lithium miner on the ASX. Mineral Resources also wants to become a top five hydroxide producer, with "full vertical integration – [a] pit to battery manufacturer".
The ASX mining share is also working on its transition to becoming a large, low-cost iron ore producer, with a goal of reaching more than 90 mt per annum in a few years.
In FY24, it could generate $16 of earnings per share (EPS), putting it at under six times FY24's estimated earnings, according to Commsec. It may also pay an annual dividend per share of $6, translating into a potential grossed-up dividend yield of 9.6%.
Aeris Resources Ltd (ASX: AIS)
This is a relatively small company that is predominately a copper miner. However, it also produces gold, zinc, and silver.
Aeris is working on the Stockman project in Victoria, which will unlock another source of production and cash flow for the business. This is a copper and zinc project.
The business is working hard on cost management while aiming to increase its production over time. It continues to spend millions on exploration to try to find its next project.
In FY24, this ASX mining share could generate 15 cents of EPS, which would put the Aeris share price at under five times FY24's estimated earnings, according to Commsec.
I don't think the market is fully appreciating how much profit this company could generate in the next few years. It could also turn into a good dividend payer at this share price.
Pilbara Minerals Ltd (ASX: PLS)
The Pilbara Minerals share price has recovered most of the ground that it lost at the end of 2022.
I think the ASX lithium share has demonstrated enough over the last few months to justify the excitement.
It's still generating a lot of cash flow. At the end of December 2022, it finished with a huge cash balance of $2.2 billion.
Profitability is very strong. In the three months to 31 December 2022, it saw production rise 10% quarter over quarter to 162,151 dry metric tonnes (dmt). The average realised sales price was up 33% quarter over quarter to US$5,668 per dmt. The unit operating cost was down 5% quarter over quarter to A$579 per dmt.
I like the company's plans to increase its lithium production and also gain exposure to more of the lithium value chain. I'd have preferred to buy it at a cheaper price, but I still think it has long-term potential with how many electric vehicles are expected to be produced.
Based on Commsec estimates, Pilbara Minerals shares are valued at under eight times FY24's estimated earnings.
