It has been an incredible 12 months for Mineral Resources Ltd (ASX: MIN) shares.
During this time, the mining and mining services company's shares have risen over 200%.
Does this mean it is too late to invest? Let's see what Bell Potter is saying about the company.
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What is the broker saying?
Bell Potter notes that Mineral Resources has announced plans to construct a flotation plant and underground development which will boost its lithium spodumene production. It said:
The Mt Marion Joint Venture (50% MIN / 50% Ganfeng) has announced a Final Investment Decision for the construction of a flotation plant and underground development. The $490m capital cost estimate (100% basis) will be spent across two years with ramp-up targeted for 2H FY28. The investment will extend Mt Marion's life by six years, improve recoveries towards ~70% (currently ~60%), increase production capacity to ~600ktpa SC6e (currently ~500ktpa SC6e) and result in production of a single SC5 product.
MIN has also announced the restart of its 100% owned Bald Hill mine (140ktpa SC6e capacity) for capex and working capital of around $20m with ramp up to full capacity expected in the December 2026 quarter.
Despite this investment, the broker believes that dividends could be returning next year thanks to its balance sheet reset. It adds:
In 2H CY26, the US$765m POSCO transaction is expected to complete. At spot market prices (SC6 US$2,580/t; iron ore 62% Fe US$107/t; AUDUSD 0.71) and post-POSCO selldown, we estimate MIN could generate annual EBITDA of over $3b. In 1H FY27, net leverage is expected to fall below the company's 2x target, increasing flexibility to execute on its capital allocation priorities including debt reduction, organic and inorganic growth opportunities, and the potential reinstatement of fully franked dividends.
The Wodgina JV is evaluating a potential US$310-410m (100% basis) expansion to increase production by 30%, with any investment decision subject to prevailing market conditions.
Should you buy Mineral Resources shares?
According to the note, the broker has retained its buy rating with an improved price target of $80.50 (from $75.00). Based on its current share price of $70.81, this implies potential upside of 14% for investors over the next 12 months.
Commenting on its investment thesis, Bell Potter concludes:
Completion of the US$765m MIN-POSCO lithium transaction will accelerate balance sheet deleveraging paired with cash flows from persistent iron ore and lithium market prices. MIN's mining services platform delivers a stable earnings stream that is expected to expand with internal and third-party volume growth. The company is well positioned to execute its next phase of growth with potential to reinstate fully franked dividends.
