Many investors might choose to stay away from ASX small-cap stocks.
That's because historically, they can come with increased volatility.
There are more than 2,000 small-cap companies on the ASX.
Many of these are companies that are yet to turn a profit, rely on private or government funding, or have unproven leadership.
Sometimes, they have all of the above.
But a select few of these small-cap stocks will turn into blue-chip companies.
Let's look at CSL (ASX: CSL) for example.
In the early 2000's the company had a market cap hovering around $1.5 billion and a share price just over $10.
Fast forward to today, and the company is one of the top 10 largest companies in Australia with a share price of roughly $184, representing almost a 2000% gain since 2002.
While this is a one-off example, it illustrates the potential long-term upside of identifying profitable small-cap stocks.
This year, there have been two mining companies that have had share price gains of between 180-200%.
This kind of return, regardless of risk-appetite, is worth paying attention to for investors.
Let's look at the two companies.
Predictive Discovery Ltd (ASX: PDI)
The company operates gold and uranium exploration projects in West Africa. According to the company, Its strategy is to identify and develop gold deposits within the Siguiri Basin, Guinea.
After last week's close, its share price is now up 200% in 2025.
Key highlights were the completion of its Definitive Feasibility Study (DFS) which, according to the company, confirms its Bankan Gold Project as a rare gold asset, with large-scale, a long-life production profile, robust margins, and the ability to generate strong returns through the cycle.
However, as with any mine project – this depends on variables like execution, commodity prices etc.
In October, the company announced a merger with fellow Robex Resources (ASX: RXR).
However, Perseus Mining Ltd (ASX: PRU) has now also tabled an offer to Predictive Discovery.
The offer was deemed as a "superior proposal" by the board.
Robex now has five business days, until 10 December 2025, to decide whether to match or exceed that offer.
This decision will be important to watch, as two competing companies are essentially fighting for exposure to Predictive Discovery's assets.
Resolute Mining Ltd (ASX: RSG)
Resolute Mining is also an African-focused gold miner. It has operated for more than 30 years as an explorer, developer and operator.
The company has benefited from surging commodity prices and key increases in production.
In October, the company was granted two new exploration permits. The company said it aims to kick off exploration across these permits in 2026.
This contributed to boosted gold estimates 60% larger than historical estimates at the site.
Its share price has now soared 168.29% in 2025.
