If you are hunting for ways to gain exposure to copper and gold outside the giants of BHP Group Ltd (ASX: BHP) and Newmont Corporation (ASX: NEM), then it could be worth considering the ASX stock in this article.
This is especially the case given how Bell Potter believes its shares could rise by over 200% between now and this time next year.
Image source: Getty Images
Which ASX copper and gold stock?
The stock that has caught the eye of Bell Potter is LinQ Minerals Ltd (ASX: LNQ).
It is a Perth based gold-copper exploration and development company whose primary asset is the Gilmore Gold-Copper Project.
Bell Potter highlights that it hosts the full suite of Macquarie Arc intrusive related copper and gold systems and is prospective for a range of economic deposits including analogues to the nearby Northparkes, Cadia, and Cowal systems.
The broker was pleased with the ASX stock's recent drilling results. It said:
These are strong first pass results from a maiden drill program that has delivered a 3 from 3 strike rate so far. The copper equivalent grades (and constituent gold and copper grades) are competitive with the Resource grades of large-scale copper-gold mines operating in Australia (Carrapateena, Northparkes and Cadia) and development projects such as Evolution Mining's (EVN, Buy, TP $16.60/sh) Marsden.
The testing of Monza is at an early stage and results from a further 5 holes from the maiden program are anticipated in the coming weeks. Further strong results could materially upgrade the prospectivity at Monza, see it prioritised by LNQ and gain recognition in the market.
Speculative buy with major upside potential
According to the note, in response to the drilling results, the broker has retained its speculative buy rating and 90 cents price target on the ASX copper and gold stock.
Based on its current share price of 28 cents, this implies potential upside of 220% for investors over the next 12 months.
To put that into context, a $2,000 investment would be worth $6,400 by this time next year if Bell Potter is on the money with its recommendation.
Commenting on its investment thesis, the broker said:
Our valuation is based on a blended EV per Resource ounce multiple and a risk adjusted notional mining scenario, both developed under conservative assumptions. We see the foundations of a competitive development project that is undervalued by the market. Current and planned drilling programs have the potential to highlight this and catalyse a re-rating. We retain our Speculative Buy recommendation.
