If you're not averse to investing in the mining sector, then the ASX stock in this article could be worth considering.
That's the view of analysts at Macquarie Group Ltd (ASX: MQG), which believe that major upside could be on the cards for investors over the next 12 months.
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Which ASX mining stock?
The ASX stock that Macquarie is tipping as a buy is Ora Banda Mining Ltd (ASX: OBM).
It is a gold miner that owns 100% of the Davyhurst Gold mine in the Eastern Goldfields of Western Australia.
Macquarie notes that Ora Banda recently released its fourth quarter update. And while it fell short of its expectations, it feels that the significant share price weakness has created a buying opportunity for investors.
Commenting on the update, the broker said:
Production of ~22koz was an 11% miss vs VA/MQe estimates of ~25koz (mining delays at Riverina UG). Closing cash of ~A $84m was in line (we suspect due to lower capex vs. MQe).
OBM has guided production of 140-155koz at an AISC of A$2,800-2,900oz with growth capex/exploration of A$156m. AISC/ total capex were 34%/100% higher than VA/MQe expectations, with the revised AISC reflecting full-year mining costs/higher SusCap at Sand King, alongside additional third-party processing costs (200-400kt to be toll treated via a third party in FY26). Higher capital (A$156m vs. MQe prior ~A$80m) is also required to advance mine dev/infra projects and fund a large exploration campaign over FY26.
Big potential returns
As mentioned above, Macquarie remains positive on this ASX mining stock and, with all the bad news now baked in, feels that now could be an opportune time to invest.
According to the note, the broker has reaffirmed its outperform rating on the gold miner's shares with a reduced price target of 90 cents (from $1.05).
Based on its current share price of 68 cents, this implies potential upside of 32% for investors over the next 12 months.
Commenting on its bullish view of the stock, the broker concludes:
Outperform. FY26 guidance missed on AISC (partly due to 'toll treating' costs) and total capex while production was in line. A mill expansion to ~3Mtpa could be accretive, but we await more clarity on ore sources which could come via the large FY26 drill spend.
Catalysts: Ongoing exploration success (to back up our already assumed conversion), and delivery of the 3.0Mtpa mill expansion study.
