If you think nuclear power is the future and have a higher than average risk tolerance, then it could be worth considering the ASX uranium stock in this article.
That's because the team at Bell Potter believes this ASX penny stock could rocket significantly higher over the next 12 months if everything goes to plan.
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Which ASX uranium stock?
The stock that Bell Potter is tipping as a speculative buy is Alligator Energy Ltd (ASX: AGE).
It is an exploration and development company with a focus on the Samphire uranium project, which is southeast of Whyalla in South Australia.
Bell Potter notes that the ASX uranium stock conducted a scoping study in 2023 confirming amenability for in-situ-recovery (ISR) mining similar to that utilised by Boss Energy Ltd (ASX: BOE) at Honeymoon. Samphire has a targeted initial project of ~1.2Mlbspa U3O8 production over a 12-year mine life.
Bell Potter recently visited the Samphire uranium project and was pleased with what it saw. It said:
We attended a site visit to the Samphire Uranium project, southeast of Whyalla,which is in the process of conducting a Field Recovery Trial (FRT). The FRT aims to de-risk technical aspects of Samphire and provide data into the upcoming Bankable Feasibility study (BFS). The FRT is being conducted across two wellfields (A & B), with differing grade and permeability characteristics to provide a representative sample of expected operations.
The broker highlights that there is now a pathway to approvals and ultimately production. It adds:
The data collected in the FRT will be utilised in the upcoming BFS (1HCY27), alongside additional drilling being conducted at Samphire, aimed at increasing resource confidence and expanding the Mineral Resource Estimate. AGE obtained a Retention Lease (RL) to conduct the FRT, which laid out a pathway towards an eventual Mining lease (ML) application.
The team believes this process helped to build on community and stakeholder engagement, identify the key environmental risks and commence collection of environmental baseline studies. With this knowledge in process they believe the regulatory approvals process may be streamlined.
Big potential returns from this ASX penny stock
According to the note, Bell Potter has retained its speculative buy rating on the ASX penny stock with a 7 cents price target.
Based on its current share price of 3.7 cents, this implies potential upside of almost 90% for investors over the next 12 months.
Commenting on the company and its recommendation, Bell Potter said:
We maintain our Speculative Buy recommendation and $0.07/sh valuation for AGE. Samphire is being de-risked through to an eventual Final Investment Decision, which could see first production towards the end of the decade. We model Samphire as a standalone 1.2Mlbpa producer, with optionality from additional Resource discovery providing an upside scenario to our production base case or extending the ~12 year life of Mine.
