Are you wanting to diversify your portfolio with some exposure to the mining sector?
If you are, then it could be worth considering the ASX 200 mining stock in this article.
That's because the team at Bell Potter believes it could generate a return of almost 30% over the next 12 months.
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Which ASX 200 mining stock?
The mining stock in question is Paladin Energy Ltd (ASX: PDN).
It is a uranium production and exploration company with a focus on the Langer Heinrich Mine (LHM) in Namibia and exploration projects in Australia and Canada.
Bell Potter is feeling positive on the ASX 200 mining stock ahead of the release of its quarterly update later this month.
Commenting on its expectations for the fourth quarter, the broker said:
We're in-line with consensus, which is likely conservative (production 0.78Mlbs, sales 0.78Mlbs) heading into the 4Q result, given the last six months of operating performance, creating a low hurdle bar for PDN to exceed. We estimate production of 0.8Mlbs (+6% QoQ) and sales of 0.7Mlbs based on mill downtime of 25% and processed material of 1.1Mt at an average grade of 404ppm. We believe PDN's achieved uranium price would have declined over 4QFY25, as the CNNC spot linked contract was likely flexed lower.
It also notes that the mining stock has announced a change of leadership. The broker is supportive on the move, it adds:
PDN announced that COO Paul Hemburrow will take over as CEO & MD effective 1 Sept 25. Ian Purdy will remain in an advisory capacity through to mid-Dec 25. We view the transition as positive, with Mr Hemburrow having the requisite skillset to progress PDN, and particularly Langer Heinrich, through is next evolution.
Big return potential
According to the note, the broker has retained its buy rating on the ASX 200 mining stock with an improved price target of $9.20 (from $6.50).
Based on its current share price of $7.13, this implies potential upside of 29% for investors over the next 12 months.
Commenting on its buy rating, the broker said:
We have upgraded our price target to A$9.20/sh (previously $6.50) and maintain our Buy recommendation. We believe PDN will re-rate over the coming quarters, as the business shakes off negative earnings sentiment over FY25, predicated on fresh ore processing outperforming the stockpile issues which plagued FY25. Coming out of the 4QFY25 result we should have a better understanding of mining rates, ore performance and sales contracts, which, when combined with a reshuffle in CEO's, should provide positive sentiment heading into FY26.
