How this ASX mining stock more than doubled investors' money in 1 month

Some investors will have realised gains of 134% from the ASX mining stock in just three weeks.

| More on:
A young boy sits on his father's shoulders as they flex their muscles at sunrise on a beach

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX mining stock Base Resources Ltd (ASX: BSE) has made shareholders very happy over the past month.

How happy?

Well, one month ago, you could have bought shares in the Australian-owned African mineral sands producer for 12 cents apiece.

Today, those same shares are trading for 26 cents, up 117%.

Investors who bought the ASX mining stock three weeks ago on 19 April, when Base Resources shares were trading for 11 cents, will be sitting even prettier. The stock is up 134% since then.

Here's what's been piquing investor interest.

What's been sending the ASX mining stock through the roof?

The vast majority of the Base Resources share price gains were delivered on a single day.

On Monday, 22 April, the ASX mining stock closed the day up an eye-watering 123.8%.

Investors were snapping up shares after Base Resources reported it had entered into a binding scheme implementation deed with United States-based uranium and critical minerals producer Energy Fuels Inc. (TSE: EFR).

The deal would see Energy Fuels acquire all of Base Resources' shares for an offer price of 30.2 cents per share, some 16% above current levels and a whopping 188% higher than the share price the day before the takeover offer announcement.

Absent a superior proposal, the ASX mining stock's board unanimously recommended shareholders vote in favour of the acquisition.

Commenting on the potential benefits for its Toliara Project, Base Resources managing director Tim Carstens said:

The combined group will have the financial and technical capability to not only build Toliara into one of the best critical mineral projects in the world, but also to develop an integrated value chain for the rare earth elements that are essential to the global energy transition.

Carstens noted that the proposed transaction was "the culmination of 12 months of discussions between Base Resources and Energy Fuels".

Base Resources quarterly update

The ASX mining stock gained another 2% on 30 April following the release of its quarterly update for the three months to 31 March.

Base Resources said the challenging market conditions over the past few quarters stabilised over the previous three months as demand improved and "some downstream re-stocking supported flat pricing across all products".

Turning to the balance sheet, the company held cash of US$83 million and no debt at the end of the quarter.

As for the transaction with Energy Fuels, the ASX mining stock said its independent expert, PwC, has commenced work, as has the independent technical specialist, AMC Consultants.

Motley Fool contributor Bernd Struben 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.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

ASX 200 mining stocks flying higher on 'most relaxed' Chinese stimulus ever

BHP, Fortescue and Rio Tinto shares could all benefit from China’s new stimulus measures.

Read more »

A man closesly watch a clock, indicating a delay or timing issue on an ASX share price movement
Mergers & Acquisitions

BHP shares charging higher as the clock ticks down on the Anglo American takeover

BHP has less than three days before the clock runs down on its $64 billion Anglo American takeover bid.

Read more »

Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie
Resources Shares

2 of the best ASX mining stocks to buy now

Analysts have good things to say about these miners.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
Dividend Investing

Buy 300 shares in this glorious ASX 200 dividend stock and create almost $2,000 in passive income

Atop the juicy passive income, I like this ASX dividend beauty for its potential share price gains.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Resources Shares

Up 51% from their 52-week low, is it too late to buy Mineral Resources shares?

Mineral Resources has been on a tear since mid-January. Do these top brokers think it's too late to buy?

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

ASX 200 mining shares charging higher amid China's $210 billion cash injection

The big three ASX 200 miners are charging higher on Friday even as the benchmark sinks.

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Resources Shares

What this unprecedented short squeeze signals for ASX copper stocks

ASX copper stocks have been benefiting from soaring demand for the red metal amid limited new supplies.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

What's the outlook for ASX iron ore shares after the federal budget?

There may be trouble ahead for the iron ore price according to broker Citi.

Read more »