ASX materials stocks have largely performed well in 2025.
The team at Bell Potter has identified Viridis Mining and Minerals Ltd (ASX: VMM) as one set for increased growth.
It is a resource exploration and development company with assets in Brazil, Canada, and Australia.
This year, it has already flown 294.29% higher.
For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is up 20% in the same span.
At the time of writing, this ASX-listed materials stock is trading at $1.38 per share.
The team at Bell Potter has a speculative buy rating on Viridis shares.
Let's see what is behind the optimism.
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Momentum building
In August of 2023, Viridis acquired 100% Rare Earth Element (REE) rights to the Colossus IAC (Ionic Adsorption Clay) Project.
The Colossus IAC REE Project is located in the State of Minas Gerais, Brazil, and comprises a total of 228.62km2 licenses within and around the prolific Poços De Caldas Alkaline Complex.
In a report from Bell Potter yesterday, the broker highlighted strong near-term catalysts and continued support from secular demand for rare earths, maintaining a positive outlook on Viridis.
Noteably, Bell Potter recently visited Vulcan Minerals' Colossus rare earth project in Brazil, where they reviewed the regional geology, proposed processing design, metallurgical results, permitting progress, ESG considerations, and the development of the demonstration plant.
The broker highlighted that processing risks appear lower than for peers due to favourable mineralogy and local operational experience, and there could be upside to both payability (above 70%) and operating costs (currently estimated at US$11.8 per tonne, compared with Bell Potter's estimate of US$15.2 per tonne).
Press filter risks are likely to be less concerning than peers due to favourable mineralogy, and existing experience from current operators within the Caldeira, whilst opportunities exist beyond our base case for payabilities (BPe 70%) and Opex (BPe US$15.2/t ore processed, VMM US$11.8/t).
Upside for ASX materials stock
Bell Potter maintains its speculative buy rating on this ASX materials stock.
The broker also increased its price target to $2.65 (previously $1.55).
The updated price target from Bell Potter indicates an upside of approximately 92%.
Our recommendation and valuation are based on a 40% risked assessment of estimated FCF for the Colossus ionic adsorption clay project in Brazil. Near-term catalysts, along with a strong secular tailwind, are likely to continue to support VMM.
