If you are not averse to investing in the mining sector, then the ASX stock in this article could be worth considering.
That's because the team at Macquarie Group Ltd (ASX: MQG) believes it could rise more than 50% from current levels.
Which ASX mining stock?
The stock in question is Vault Minerals Ltd (ASX: VAU).
Vault Minerals is the gold miner that was formed when Red 5 and Silver Lake Resources merged last year. It has a collection of strategic long-life assets in the prolific Leonora district in Western Australia.
Macquarie notes that the ASX mining stock released its quarterly update this week. While the update was a bit of a mixed bag, the broker remains positive on the investment opportunity here. It said:
FY25 sales in line with expectations, but softer in 4Q: VAU reported headline FY25 sales of 385koz, which was in line with VA/MQe expectations overall (1% below consensus). On a quarterly basis, 4QFY25 sales of ~96koz were a 5% miss vs VA of ~100koz (7% below MQe); primarily from a 9%/14% miss on KOTH sales vs MQe/VA (noting Mt Monger/Deflector in line). Costs and physicals have not been released (due later this month).
VAU delivered 37koz into its hedge book at an average price of A$2,781/oz (in line with VA). We continue to forecast the company closing out these commitments fully by 1QFY27 (~133koz remains).
In response to the update, the broker has reduced its earnings estimates for FY 2025, but retains all other estimates out to FY 2027. It explains:
Earnings changes: Incorporating the lower 4QFY25 sales figures sees a 2% reduction in FY25 revenue (costs not released yet). As a result our FY25e EPS reduces by 10%. No changes thereafter.
Big returns potential
This morning, Macquarie has retained its outperform rating and 63 cents price target on this ASX mining stock.
Based on its current share price of 40.5 cents, this implies potential upside of 55% for investors over the next 12 months.
Commenting on its outperform rating, the broker concludes:
Outperform: While headline FY25 sales were in line with expectations, sales in the 4QFY25 were softer primarily driven by KOTH. Mt Monger & Deflector were in line.
Catalysts: FY26 guidance. Timely delivery of the expansions at KOTH as well as increasing mining volumes remain important longer-term. Potential M&A, noting recent reports of VAU in data rooms, could also be a catalyst.
