If you are looking to balance your portfolio out with some exposure to the mining sector and have a high tolerance for risk, then it could be worth listening to what Bell Potter is saying.
That's because it has just put a speculative buy rating on an ASX mining stock and is predicting very big returns for investors.
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Which ASX mining stock?
The stock that Bell Potter is tipping as a buy is WA1 Resources Ltd (ASX: WA1).
It is the mineral exploration company that owns the Niobium focused West Arunta project, located on the border of Western Australia and the Northern Territory in the Arunta region.
Bell Potter notes that since listing, WA1 Resources has focused on an aggressive drill-out program at West Arunta, targeting the Luni carbonatite structure.
Niobium is a niche commodity, primarily micro-alloyed into structural steel to improve strength and reduce weight in applications. The broker notes that supply is largely (~80%) controlled by Brazilian producer CBMM through the Araxa deposit in Brazil. It is considered a critical mineral by both the United States and European Union due to supply concentration and economic importance.
What is the broker saying?
Bell Potter highlights that the ASX mining stock has released a series of drill results for the Luni deposit.
It was pleased with the results and believes it demonstrates that West Arunta is top-tier asset and likely to be home to the highest-grade niobium project outside Brazil.
In light of this, the broker thinks that recent share price weakness has created an attractive buying opportunity for investors. It said:
WA1 has traded 26% lower MoM in-line with a critical minerals sell-off. In our view, this presents an attractive opportunity to gain exposure to a top-tier asset (likely the highest-grade Niobium project ex-Brazil), and management team, focused on rapidly de-risking Luni towards development. We believe there is upside risk to our valuation and estimates which should be highlighted in an upcoming initial study (BPe CY26).
Opportunities include: 1) Niobium pentoxide optionality (a higher margin product than ferro-niobium, first produced in Aug-25 at bench scale), and 2) optimised capital and operating costs driven by mine plan optimisation and sequencing (e.g. sizing and expanding the plant capacity in-line with grade as Lynas (LYC, Sell $9.60/sh) did with Mt Weld in 2010).
According to the note, the broker has retained its speculative buy rating with a $24.80 price target. Based on its current share price of $15.16, this implies potential upside of 64% for investors over the next 12 months.
It concludes:
We retain our Speculative Buy recommendation on WA1 and a $24.80/sh valuation (previously $25.70). We see the potential for Luni to be a globally significant niobium project, capable of generating on average A$485m in annual EBITDA.
