As the world's largest gold miner, Newmont Corporation (ASX: NEM) is one of the first places that investors look when they want exposure to gold.
But being the biggest doesn't necessarily mean it is the best ASX gold stock to buy.
Right now, Bell Potter believes one smaller player in the sector could be destined to deliver material returns to investors over the next 12 months.
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Which ASX gold stock?
The gold stock that the broker is bullish on is Waratah Minerals Ltd (ASX: WTM).
It is a New South Wales based gold-copper exploration and development company.
Bell Potter highlights that Waratah Minerals' flagship project is its 100%-owned Spur gold-copper project, which is an advanced stage, pre-resource exploration project in the Lachlan Fold Belt.
This is close to the Cowal Gold Mine owned by Evolution Mining Ltd (ASX: EVN).
The broker points out that the ASX gold stock is ramping up its drilling program. It said:
WTM has ramped up an 80,000m drilling program planned for 2026 which now comprises 10 active drill rigs. The program's objective is to deliver rapid resource growth and high-grade discoveries at the Spur and Consols Zones. To date, the program has expanded known mineralisation, infilled existing zones and discovered new high-grade shoots beyond previously drilled areas. These results support the view that the Spur Project may host a major epithermal-porphyry gold system comparable to the known world-class deposits in the East Lachlan region.
The good news is that initial met testing shows high gold recoveries according to the broker, which bodes well for the future. The broker commented:
WTM has received successful early-stage metallurgical test work results from the Spur Zone, achieving gold recoveries of 90-97% via gravity and conventional cyanide leaching. This is a material initial de-risking milestone for WTM, pointing to a straightforward, conventional process route likely centred on a gravity circuit followed by carbon-in-leach (CIL) or similar. These conventional processing methods typically imply lower processing costs, lower capital requirements as well as reduced technical and operability risks.
Should you invest?
According to the note, Bell Potter has retained its speculative buy rating on the ASX gold stock with an improved price target of $1.05 (from 95 cents).
Based on its current share price of 70 cents, this implies potential upside of 50% for investors over the next 12 months.
Commenting on its speculative buy recommendation, Bell Potter said:
The Spur project is showing strong indications of delivering a gold-copper deposit of substantial scale and grade in a strategic setting. We see potential for the delineation of a regionally significant gold Resource of 2.5-3.0Moz at competitive gold grades between 0.8-1.0g/t Au. This informs our valuation, which is based on a 50:50 blended EV/Resource ounce multiple and risk-adjusted notional mining scenario. We increase our Valuation to $1.05/sh and retain our Speculative Buy recommendation.
