If you are looking for exposure to lithium, then it could be worth skipping PLS Ltd (ASX: PLS) shares and looking at the ASX lithium stock in this article.
That's because if Bell Potter is on the money with its recommendation, this stock could more than double in value between now and this time next year.
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Which ASX lithium stock?
The stock that has caught the eye of Bell Potter this week is Ioneer Ltd (ASX: INR).
It is the 100% owner of the fully permitted Rhyolite Ridge lithium-boron project in Nevada, United States.
Bell Potter notes that the project is designed to produce +24kt per annum lithium carbonate equivalent (LCE) and +135kt per annum boric acid over the first 25 years.
However, it may not stop there. The broker highlights that ore reserves could support an 82-year project life at this initial production rate.
Furthermore, in the ASX lithium stock's most recent economic update, it outlines low all-in sustaining costs of US$4,628 per tonne of LCE, benefiting from boric acid co-production.
The company has binding lithium offtake contracts with Ford, Toyota, Panasonic, and EcoPro.
What is Bell Potter saying?
Bell Potter highlights that the ASX lithium stock recently raised funds. It believes the company now has sufficient cash to see it through 2026. Importantly, this includes the completion of its Rhyolite Ridge strategic partnering process to a final investment decision. The broker said:
INR recently completed a $72m equity placement at $0.18/sh, taking its pro forma December 2025 cash position to around $90m. The placement ensures that INR is fully funded through 2026, including the completion of its Rhyolite Ridge strategic partnering process to a Final Investment Decision. It will fund long lead items and early works and support development permitting and general corporate working capital.
Importantly, the funding strengthens INR's negotiating position with potential partners, which we expect will likely include a consortium of strategic offtake counterparties and private equity groups. INR also is in a strong position to retain a majority equity stake in Rhyolite Ridge on completion of the partnering process.
Big potential returns
In response to the fund raising, the broker has retained its speculative buy rating on the ASX lithium stock with a trimmed price target of 39 cents.
Based on its current share price of 14 cents, this implies potential upside of almost 180% for investors over the next 12 months.
Commenting on the stock, the broker said:
The Rhyolite Ridge sell-down should materially de-risk INR's project development equity funding requirements. Lithium markets have recently strengthened; we expect supply chain restocking will coincide with growth in underlying demand, and support lithium chemicals prices over the medium to long term. Rhyolite Ridge is large-scale and low cost, and has expansion potential beyond its Stage 1 development. Our INR valuation is now $0.39/sh (previously $0.46/sh), factoring in the balance of improved project economic assumptions offset by dilution from the recent capital raise.
However, it warns that "INR is an asset development company with forecast cash flows only; our Speculative risk rating recognises this higher level of investment risk and share price volatility." As a result, Ioneer would only be suitable for investors with a high tolerance for risk.
