There have been some very big returns in the gold sector over the past 12 months.
But that doesn't mean the gains are over. In fact, Bell Potter believes one ASX gold stock could jump almost 90% from where it trades today.
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Which ASX gold stock?
The gold stock that Bell Potter is bullish on is Santana Minerals Ltd (ASX: SMI).
It is a New Zealand-based gold explorer and developer focused on the Bendigo-Ophir Gold Project (BOGP) near Queenstown in New Zealand.
This project is 90km northwest of OceanaGold's world-class Macraes Gold Mine, which is New Zealand's largest active producing gold mine.
What is the broker saying?
Bell Potter notes that the ASX gold stock has raised funds to support the development of the BOGP. It said:
SMI has completed the first tranche of a $130m institutional share placement, with a retail Share Purchase Plan (SPP) targeting to raise up to a further A$30m. […] The funds raised are expected to meet SMI's equity finance component of construction and pre-strip phases of the development of its 100%-owned Bendigo Ophir Gold Project (BOGP) in New Zealand.
Specifically, this includes commencement of early infrastructure civil works, further exploration of high-priority, near-mine and regional targets and the procurement of long-lead plant and infrastructure items. The funding will accelerate the project development timeframe and enable an immediate start on the receipt of final project consents, with the Fast Track Approval decision due on 29 October, 2026.
Bell Potter believes this is a strong endorsement and de-risks things materially. It adds:
This is a strong endorsement of SMI management and the BOGP. Assuming a fully subscribed SPP ($30m) and Tranche 2 ($17m) being approved, SMI will hold cash of ~$240m following the placement. Pre-production CAPEX for the BOGP is A$277m (incl. 10% contingency) as per the July 2025 Pre-Feasibility Study (PFS) update. We anticipate the BOGP easily supporting debt financing of 60% (A$170m), thereby positioning SMI as fully funded with this equity placement.
We view the de-risking of the equity portion of project funding as an excellent outcome for SMI, seven months ahead of the scheduled FTA decision. With this update we have also incorporated our latest gold price forecasts, an allowance for freehold land acquisitions and associated reduced royalty rates. These changes drive a net increase to our valuation for SMI, with the biggest driver being our updated gold price forecasts.
Big potential returns
According to the note, the broker has retained its speculative buy rating on the ASX gold stock with an improved price target of $1.70 (from $1.50).
Based on its current share price of 91 cents, this implies potential upside of 87% for investors over the next 12 months.
Commenting on its buy recommendation, Bell Potter said:
SMI is well funded and has successfully submitted its FTA development application for the BOGP, for which a decision is due on 29 October 2026. The BOGP is one of the most advanced and highest margin greenfield gold projects on the ASX. Our valuation is increased by 13%, to a rounded $1.70/sh. We retain our Speculative Buy recommendation.
