If you are looking for exposure to booming silver and tin prices, then Bell Potter has an idea for you.
It believes that ASX silver stock Sky Metals Ltd (ASX: SKY) could be worth considering if you have a high tolerance for risk.
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What is the broker saying about this ASX silver stock?
The broker has described Sky Metals as having "a sky full of upside" following an update on its Tallebung Project in New South Wales.
Commenting on drilling at the 100% owned project, Bell Potter said:
SKY's ongoing drill program at its 100% owned Tallebung Project in New South Wales aims to expand recently discovered high-grade tin-silver zones, infill areas to increase geological confidence, and obtain diamond drill core for feasibility study geotechnical and mine design work.
This week, SKY announced assays from an initial 20 holes returned to-date that highlight several shallow, high-grade tin-silver intercepts including drill holes that sit outside the January 2024 Mineral Resource Estimate (15.6Mt at 0.15% tin for 23kt contained tin; 0.03% tungsten trioxide for 4.3kt contained tungsten), such as TBRC274: 3m at 604g/t silver and 0.68% tin from 24m. The deposit remains open in all directions. A third rig will commence drilling in February 2026; we expect the program will complete late in the current quarter.
Bell Potter believes that the ASX silver stock's mineral resource estimate (MRE) will be upgraded substantially in the middle of the year. It adds:
By mid-2026, SKY will release an upgraded MRE and early-stage development study. The MRE will incorporate over 400 drill holes (vs 115 in the January 2024 MRE) and we expect will feature a substantial increase in tonnage along with a maiden silver Resource. The development study will provide a preliminary economic outlook for a potential low-cost, open pit mining operation that could generate three high-value products; tin concentrate, tungsten concentrate, and silver.
Time to buy
In light of the above, the broker thinks investors should be buying this ASX silver stock if their risk tolerance allows for it.
According to the note, the broker has a speculative buy rating and increased price target to 21 cents (from 12 cents).
Based on its current share price of 15.5 cents, this implies potential upside of 35% for investors over the next 12 months.
Commenting on its recommendation, Bell Potter concludes:
Tallebung is emerging as a strategic source of near-term tin, silver and tungsten supply in a stable jurisdiction. SKY is rapidly de-risking the project into development amidst a backdrop of rising tin, silver and tungsten prices. We expect news flow over the coming months to include drill results (ongoing); updated Mineral Resource Estimate (current half); mine development study (current half); flowsheet optimisation (ongoing); and permitting activities (ongoing).
