If you are wanting exposure to the mining sector, then read on!
That's because analysts at Macquarie Group Ltd (ASX: MQG) have just named one ASX mining stock that could rise materially from current levels.
Let's see what the broker is recommending to clients.
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Which ASX mining stock?
The stock that Macquarie is tipping as a buy is Ramelius Resources Ltd (ASX: RMS).
It is gold mining and production company with its primary production being focused on the Mt Magnet gold mine in Western Australia.
Its shares were on the rise yesterday after reporting a very strong finish to the financial year. The ASX mining stock's quarterly gold production came in at 73,454 ounces, which was ahead of its upgraded guidance range of 62,000 ounces to 72,000 ounces.
This went down well with the team at Macquarie. Commenting on the update, the broker said:
RMS reported production of ~73koz in 4QFY25. This was 7%/14% stronger than VA/MQe, and sees RMS beat the upper end of its upgraded guidance target of 62-72koz. Total FY25 production is now ~302koz (2%/3% above VA/MQe), with the company also now expecting full-year AISC to be at the lower end of the previously upgraded guidance range of A$1,550-1,650oz. We now forecast FY25 AISC of A$1,560/oz.
Also coming ahead of expectations was the ASX mining stock's cash and bullion balance. It adds:
The company ended FY25 with ~A$810m of cash and bullion on hand. The cash & bullion build of A$153m QoQ was stronger than ourq forecast of A$110m.
In light of the above, the broker has upgraded its earnings estimates for the gold miner. Macquarie explains:
The stronger FY25 production result (3% beat) drives a 7% EBITDA improvement, flowing through to an 8% EPS uplift for FY25.
Big return potential
According to the note, the broker has retained its outperform rating and $3.10 price target on the ASX mining stock.
Based on its current share price of $2.42, this implies potential upside of 28% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into approximately $12,800 if Macquarie is on the money with its recommendation.
Commenting on its outperform recommendation, Macquarie concludes:
The 4QFY25 production result beat RMS' own expectations (which we were anchored to) and continued to demonstrate strong cash generation. In the near term our valuation relies on completion of the SPR deal and key study results.
