Forget BHP shares, this ASX mining stock could surge 18% higher

Let's see why this mining stock could be a buy according to analysts at Bell Potter.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you are looking for exposure to the mining sector, then BHP Group Ltd (ASX: BHP) shares are likely to be front of mind.

However, investors could get bigger returns by looking elsewhere.

For example, the ASX mining stock in this article has been tipped to surge significantly higher than where it trades today by the team at Bell Potter.

Three miners stand together at a mine site studying documents with equipment in the background.

Image source: Getty Images

Which ASX mining stock?

The mining stock that has been given the thumbs up by Bell Potter is Develop Global Ltd (ASX: DVP).

It operates under a hybrid model as an underground mining contractor and the operator of two mining assets. The latter are the Woodlawn Zinc-Copper Mine and the Sulphur Springs Zinc-Copper Project.

Bell Potter notes that the ASX mining stock recently released its quarterly update and was pleased with what it saw. It said:

Mining Services division update: Quarterly Mining Services revenue was $51.0m (BPe $51.5m), consistent QoQ and up 14% YoY. FY25 revenue was $212m, exceeding the company's $200m guidance. DVP is currently in discussion with prospective clients regarding upcoming mining services contract tenders.

Woodlawn production ramps-up: First shipments of copper, zinc and lead concentrate were delivered with production ramped up to near nameplate capacity. Quarterly concentrate production was 12,689t for: 969t of Cu; 2,340t of Zn; 545t of Pb; 68koz of Ag; and 812koz of Au metal. Recoveries are tracking in line with DVP's expectations, with peak recoveries achieved for Cu 85%; Zn 84%; and 65% for Pb, Ag and Au.

Big potential returns

According to the note, the broker has retained its buy rating on the ASX mining stock with an improved price target of $5.30 (from $5.00).

Based on its current share price of $4.50, this implies potential upside of 18% for investors over the next 12 months.

Bell Potter is feeling positive about the company due to the Woodlawn operation nearing nameplate capacity. Commenting on its buy recommendation, it said:

With Woodlawn production approaching nameplate capacity by the December 2025 quarter, commercial derisking is now in focus (i.e. cash flow generation and profitability). Upcoming catalysts should maintain the momentum in DVP's share price: Sulphur Springs development updates; Woodlawn and Sulphur Springs exploration updates; and positive commercial outcomes from Woodlawn.

Overall, this could make Develop Global a good alternative (or complement) to BHP shares right now for Aussie investors looking for exposure to the mining sector.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Two workers on site discuss the next stage of this civil engineering job.
Materials Shares

Is takeover tension sending this ASX steel stock soaring?

Strong fundamentals and takeover speculation have pushed this share up 42%.

Read more »

Smiling worker in metal landfill.
Materials Shares

Another US milestone, another share price drop: What's going on with this ASX stock?

Metallium hits another US milestone, but shares slip again on Tuesday.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face.
Materials Shares

Which ASX mining stock could rise 120% according to a leading broker?

Bell Potter thinks this mining stock could be seriously undervalued.

Read more »

Male building supervisor stands and smiles with his arms crossed at a building site with workers behind him.
Materials Shares

Down 25%! Is this resurgent ASX 200 stock a strong buy?

Analysts at Morgans see more than 60% upside ahead.

Read more »

A man wearing a suit holds his arms aloft, attached to a large lithium battery with green charging symbols on it.
Materials Shares

Should I buy PLS Group shares in April?

Can the ASX lithium share continue charging higher?

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX rare earths share sinking 13% today?

What's going on with this share today? Let's dig deeper into things.

Read more »

A construction worker leaps high in the air on a building site.
Materials Shares

Why are James Hardie shares storming higher today?

After a steep sell-off, investors may start to see strength and long-term potential.

Read more »

Young successful engineer, with blueprints, notepad, and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Which ASX rare earths company's shares are trading higher on new funding news?

Two major government finance agencies have signed on.

Read more »