Looking for a small-cap ASX mining stock with outsized growth potential?
Then you may want to dig into Viridis Mining and Minerals Ltd (ASX: VMM).
That's according to the team at Ord Minnett, who note that a speculative investment in this small-cap stock is a higher risk play for potentially higher rewards.
At time of writing in today's intraday trading, Viridis shares have recouped earlier losses and are currently back where they were yesterday, changing hands for $1.17 apiece.
That sees shares in the ASX mining stock up a whopping 234% so far in 2025.
A lot of those gains are being driven by increased interest among western nations, particularly the United States, in securing critical rare earths outside of China, which remains the world's dominant source.
"VMM's share price has surged circa. 70% in the wake of the landmark US DoD – MP Materials deal, which has lit up of the rare earth sector," Ord Minnett noted.
ASX mining stock on the growth path
Ord Minnett said that the big uptick in the Viridis share price came at an opportune time for Viridis to help shore up its balance sheet.
According to the broker:
The timely increase in its share price has facilitated VMM conducting an A$11.5mn capital raise, its largest since listing on the ASX in early 2022. This has dealt with our immediate concerns of small capital raises that may have diluted shareholders, supressed VMM's share price, and slowed its rate of project development.
The small-cap ASX mining stock will use the funds in the ongoing development of its flagship joint venture Colossus Rare Earth Project, located in Brazil.
Commenting on the successful capital raise on 30 July, Viridis managing director Rafael Moreno said, "This funding ensures we are well-capitalised beyond FID and into early project execution."
Moreno added:
The strengthening of our balance sheet through the A$11.5 million placement, alongside our strategic partnership with ORE and Régia, and selection for the BNDES/FINEP Joint Support Plan, marks a pivotal inflection point for Viridis as we advance into accelerated development of the Colossus Project.
Atop that $11.5 million placement, Ord Minnett said, "Additional financial support is under negotiation with Brazilian private equity (PE) and BNDES / FINEP."
And the broker noted that the ASX mining stock's joint venture with Viridion is gaining momentum. Among recent developments, Ord Minnett said, "The municipality of Poços de Caldas has awarded a strategic land plot for Viridion's proposed rare earth refining and recycling hub."
Connecting the dots, Ord Minnett said, "We consider VMM well-capitalised to advance Colossus' development. Our near-term funding woes are quashed."
The broker has a speculative buy rating on the ASX mining stock with a $1.60 price target. That's more than 36% above current levels.
