Now could be the time to buy the ASX mining stock in this article.
That's the view of analysts at Macquarie Group Ltd (ASX: MQG), which are forecasting big potential returns for investors.
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Which ASX mining stock?
The mining stock that the broker is feeling positive about right now is 29Metals Ltd (ASX: 29M).
It owns a portfolio of copper-focused assets located in Australia and Chile. This includes the Golden Grove copper/zinc/lead/gold/silver mine in Western Australia, Capricorn Copper in Queensland, and the Redhill exploration project in Chile.
Macquarie notes that the company recently released its quarterly update. It was pleased with 29Metals' performance during the three months, highlighting that production was in line and its costs were lower than expectations. It said:
2QCY25 quarterly production of 5.6kt was in line with Visible Alpha (VA) and Zn/Au/Ag production was 25%/7%/1% lower.
Raw operating costs of A$98.1m were 18%/20% lower than VA/MQe driven by lower mining, processing, and TCRC costs at Golden Grove. QoQ mining costs reduced from A$63.1m to A$60.4m, processing costs from A$27.4m to A$24.3m, and TCRC from A$13.4m to A$9.3m. AISC increased QoQ from US$2.07/lb to A$3.29/lb but this was largely driven by lower byproducts (~A$26m) and lower stockpile movement credits (~A$14m).
And while it acknowledges that a strong second half will be required to meet some guidance, it remains very positive and continues to see significant value in the ASX mining stock at current levels.
Big return potential
The note reveals that Macquarie has maintained its outperform rating and 40 cents price target on 29Metals' shares.
Based on its current share price of 31 cents, this implies potential upside of 29% for investors over the next 12 months.
Commenting on its outperform rating and potential catalysts, the broker said:
Maintain Outperform: 29M has had soft 1H, and requires a strong 2H to meet the mid-point of guidance (expected to be driven by a ramp up of Xantho Extended ore tonnes), nevertheless we see value in the name as it is trading at a cheap valuation at ~3.7x EV/Ebitda in CY25e (3.2x at spot prices).
Catalysts: Continued operational improvements at Golden Grove (ramp up of Xantho Extended ore tonnes in 2HCY25), Capricorn TSF3 application (3QCY25), and first ore from GV (2HCY26).
All in all, Macquarie appears to believe this could make this ASX mining stock one to consider if you are looking for exposure to this side of the market.
