The ASX small-cap stock Aeris Resources Ltd (ASX: AIS) could still be a bargain, in my view, despite rising by 26% in September to date.
The ASX mining share has been through a difficult period and now it looks like a good long-term opportunity to me at the current valuation.
Aeris describes itself as a mid-tier base and precious metals producer. Its mining portfolio is focused on copper, with two operating assets, a mine on care and maintenance, a long-life development project and a highly prospective exploration portfolio.
The company says it has a strong pipeline of organic growth projects and an "aggressive" exploration program. The ASX small-cap stock also continues to investigate strategic merger and acquisition opportunities.
Let's take a look at what is attractive about the business.
Image source: Getty Images
Strong FY25
The company said its costs were well managed across the company, enabling it to benefit from strong commodity prices, across copper and gold (which it also produces).
Aeris Resources reported revenue growth of 7%, operating profit (EBITDA) growth of 78%, operating cash flow growth of 109% and earnings per share (EPS) growth of 262% to 4.7 cents.
Its balance sheet also improved, with the cash balance improving 14% to $28.2 million and net assets growing by 17% to $317.8 million.
Good outlook
The company is reinvesting its operating cash flows into capital and exploration, including the Murrawombie open pit construction, the Constellation drill program and the Budgerygar paste fill plant at Tritton. It's these sorts of initiatives that can help the business become larger and more profitable.
The ASX small-cap stock can't control what happens with resource prices, but its operations look set for another good year in FY26. It's focused on lifting production at the Tritton project, extending the mine lives at both Tritton and Cracow, adding value to its projects and divesting non-core assets.
While there could be volatility with copper prices, I'm optimistic on the long-term because of the ongoing global electrification efforts as well as there being limited high-quality copper projects coming online in the foreseeable future. Gold prices remain strong and could strengthen even further if global uncertainty increases.
Low valuation
Despite the rapid rise of the Aeris Resources share price, I think it's still valued very attractively.
At the current valuation, the ASX small-cap stock is priced at a price/earnings (P/E) ratio of 6. If the business can grow its profit over time, then this will seem like a very cheap valuation, in my opinion.
