Bell Potter just slapped a buy rating on this ASX mining stock

The broker believes the company could be sitting on a globally significant tier one asset.

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WA1 Resources Ltd (ASX: WA1) shares have been on fire over the last 12 months.

During this time, the ASX mining stock has risen over 800%.

This has been driven by excitement over its West Arunta Niobium project.

Niobium is a critical metal with properties that make it essential as the world transitions to a low-carbon economy. It is primarily used as a micro-alloy in steelmaking, providing significant improvements in strength, corrosion resistance, and heat resistance on the alloyed steel.

Can this ASX mining stock keep rising?

The good news is that Bell Potter's analysts still see plenty of upside for investors.

According to a note this morning, the broker has initiated coverage on the niobium explorer's shares with a speculative buy rating and a $17.65 price target.

This implies a potential upside of 36% for investors over the next 12 months.

The broker believes that the Luni deposit at the West Arunta Niobium project has the potential to be a globally significant tier-1 asset. It said:

We initiate on WA1 with a Speculative BUY recommendation and a $17.65/sh valuation. WA1 is advancing the West Arunta Niobium project which includes the Luni prospect, in North-Western Australia.

Luni has the potential to be a globally significant Tier-1 asset characterised by its high-grade and scale (BPe Inferred +100Mt at +1% Nb2O5). We believe a maiden Indicated Resource for Luni will support initial development studies, with further expansion looking to support a long-life (BPe ~30 year) globally significant project like Lynas Rare Earths (LYC, Buy $7.20/sh) Mt Weld deposit in the rare earths sector. WA1 are targeting the release of a Maiden Mineral Resource estimate (MRE) in 4QFY24, which we expect will be supportive of our investment thesis.

Bell Potter believes the ASX mining stock could be "generating on average A$427m in annual EBITDA" once Luni is commissioned.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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