When it comes to investing in the Australian mining sector, the likes of BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) gain the most attention from investors
But what if you want to invest outside the status quo?
Well, Bell Potter thinks the two ASX mining stocks listed below could be great picks. Here's what you need to know about them:
Paladin Energy Ltd (ASX: PDN)
The first ASX mining stock that Bell Potter is bullish on is Paladin Energy. It is one of Australia's leading uranium miners.
Bell Potter is feeling particularly positive about the company's outlook because of a proposed acquisition that could be a bit of a game-changer. It said:
PDN has announced its intention to acquire Athabasca developer, Fission Uranium in an all-scrip deal. We see this transaction as transformative for PDN, with the potential to make the business a leader in uranium production across two sites and thus alleviating our concerns around future growth. With the recent pull-back in the stock we see this as an opportunity to gain exposure to a high-quality uranium producer.
The broker has a buy rating and $15.70 price target on its shares.
Santana Minerals Ltd (ASX: SMI)
Another ASX mining stock that could be a buy is Santana Minerals. It is a precious metal explorer with a focus on the Bendigo-Ophir Project in New Zealand.
It is a one hour drive east of Queenstown's international airport in the Central Otago goldfields, just 90 kilometres northwest of Oceana Gold's world-class Macraes gold mine.
Bell Potter has been impressed with the company's scoping study for the project and sees potential for a high quality operation. It commented:
SMI has reported Scoping Study results for an initial Bendigo-Ophir Gold Project. Key metrics from the study include: (1) a post-tax Net Present Value (NPV) of A$852m, using a 10% discount rate, at a US$2,340 gold price, and 0.66 AUD:USD exchange rate (A$3,545/oz), (2) total gold production of 1.12Moz, averaging 110koz per annum over a 10-year mine life, after (3) initial capital costs of A$233m (A$130m processing plant and infrastructure, and A$103m pre-production mining costs), at (4) life of mine total production costs of A$1265/oz (real 2024 dollars).
The broker also suspects that its shares will start to re-rate higher as milestones are reached. It adds:
We anticipate that SMI will continue to be re-rated as it achieves the Project's milestones, with key environmental approval submissions expected in 4QCY24. SMI has significant additional value over the Scoping Study results from underground Resources not included in the Scoping Study, and the underexplored prospectivity of the 30km long Project, which is analogous to the Macraes Gold Mine from which over 5Moz has been mined.
Bell Potter has a speculative buy rating and $2.15 price target on its shares.
