Top broker Macquarie has revealed which ASX mining stocks it expects to outperform over the next 12 months.
The broker's stock picks come after 22 ASX mining companies presented at last week's Macquarie Conference in Sydney.
Let's take a look at some key mining themes that emerged at the conference and which stocks Macquarie tips for growth.
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10 ASX mining stocks set for growth: broker
Future-proofing in the gold sector
In a new note, Macquarie said ASX gold miners were looking to future-proof their businesses amid a recent record high gold price.
The broker commented:
The gold sector, fresh from record highs, is flush with cash.
Some appear to be preparing for a lower pricing environment by investing in capex and mine development to expand margins, extend life and grow whilst the market can support it.
Macquarie mentioned Vault Minerals Ltd (ASX: VAU), which presented at the conference and discussed its optionality of a Stage 2 expansion of the KOTH plant funded by its strong balance sheet.
Macquarie has an outperform rating on Vault Minerals shares with a 12-month price target of 60 cents.
The Vault Minerals share price is currently 42 cents, down 5.6%.
Other ASX gold mining stocks that scored an outperform rating from Macquarie were Newmont Corporation (ASX: NEM) with a price target of $94 and Bellevue Gold Ltd (ASX: BGL) with a target of $1.20.
Newmont shares are currently $78.41, down 3%, while Bellevue Gold shares are 88 cents, down 8.4%.
Eye to growth in base metals
The broker described a mixed outlook for base metals and noted Indonesia's recent dominance in China-backed nickel production.
The broker's top ASX nickel stock picks include Nickel Industries Ltd (ASX: NIC) with a price target of 80 cents.
The Nickel Industries share price is currently 64 cents, up 0.8%.
Macquarie also likes ASX copper mining stock Capstone Copper Corp CDI (ASX: CSC) with a 12-month price target of $11.60.
Capstone Copper shares are currently $8.20, up 3.1%.
Macquarie also likes Chalice Mining Ltd (ASX: CHN), which produces nickel, copper, cobalt, and platinum group elements (PGE).
The broker has a 12-month price target of $1.60 on Chalice shares. The stock is trading at $1.13, down 1.1% on Tuesday.
Shift in focus for ASX lithium mining stocks
Macquarie said lithium miners were shifting focus from growth to productivity and optimisation to drive future returns.
The broker's top ASX lithium mining stock picks are IGO Ltd (ASX: IGO) with a target of $5.50, Pilbara Minerals Ltd (ASX: PLS) with a target of $2.40, and Patriot Battery Metals Inc. (ASX: PMT) with a target of 52 cents.
The IGO share price is currently $4.42, up 1.4%. Pilbara Minerals shares are up 4.8% to $1.62. Patriot shares are 25 cents, up 2%.
The broker commented:
… PLS is looking to fixed-cost dilution beyond its 850ktpa nameplate.
IGO is blessed with a tier-one asset, but is looking at systematic planning, value optimisation to get more out of its fixed capital base.
PMT keeps ticking its permitting steps.
Rare earths becoming critical
The broker noted that rare earths have become a key part of trade tensions between the US and China.
Macquarie said: "Even despite the volatility this brings to supply chains, a long run constructive demand outlook exists".
Among ASX rare earths mining stocks, Macquarie has an outperform rating on Iluka Resources Ltd (ASX: ILU) shares.
The broker's 12-month share price target is $6.50.
Iluka shares are trading at $4.18, up 0.7% on Tuesday. The broker's forecast implies a potential 55% upside from here.
Iluka mines mineral sands, including zircon and rutile, and rare earth-bearing minerals, monazite and xenotime.
The company is building a rare earths refinery at its Eneabba mine in Western Australia.
