If you have a high tolerance for risk and are on the lookout for big returns, then read on.
That's because Bell Potter is tipping one speculative ASX stock to rise more than 200% from current levels.
Let's dig a bit deeper now and see which stock could potentially more than triple your money if everything goes to plan.
Which ASX stock?
The ASX stock in question is Talga Group Ltd (ASX: TLG). It is a battery anode and advanced materials company aiming to accelerate the global transition towards sustainable growth.
Talga's Lulea Anode Refinery is the first of its kind in Europe. It will manufacture sustainable anode material for greener lithium-ion batteries from the high grade natural graphite mined from Talga's own deposits near Vittangi.
According to the note, the broker has retained its speculative buy rating and $2.35 price target on the company's shares.
Based on its current share price of 75 cents, this implies potential upside of 213% for investors over the next 12 months.
To put that into context, a $5,000 investment would become over $15,000 if Bell Potter is on the money with its recommendation.
What is the broker saying?
Bell Potter highlights that Talga has just released an updated Exploration Target (ET) for its Vittangi natural graphite project in Northern Sweden. It said:
The ET lifts from 170-200Mt to 240-350Mt at the same grade range of 20-30% graphitic carbon (Cg). The expanded range was supported by electro-magnetic surveys and conventional field mapping conducted since 2014, which identified significant conductors at depth and along strike from the existing Mineral Resource Estimate (MRE). Management believes the ET aligns with future demand from offtake partners.
The broker believes this project will be operational for a very long time. It adds:
We currently estimate a 24-year LOM on Stage-1, which consists of a 100ktpa mining rate producing ~19.5ktpa of Anode material. Stage-2 (BPe commencing 4 years post Stage-1) lifts production to over 100ktpa of anode material over 14 years. In our view, the updated guidance indicates to potential offtake partners (and strategic equity) that the Vittangi project is a long-life, high-grade and large-scale anode project of strategic significance.
Finally, supporting its speculative buy rating are the following factors. It concludes:
We maintain our speculative Buy rating and our valuation of $2.35/sh fully diluted and funded. Key milestones over the next 12 months which support our thesis for TLG include 1) Environmental permit clearance 2) Binding offtake for ~75% of production, 3) project funding (BPe 60/40 debt/equity) and 4) construction commencement (BPe 2HCY24).
Time will tell if the broker makes the right call on this speculative ASX stock.
