Both of these ASX mining companies have been downgraded by the brokers that cover them, yet their price targets remain well above their current trading levels.
Let's see what the brokers are saying about them.
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Meeka Metals Ltd (ASX: MEK)
This company has just completed a $40 million capital raise at 10 cents per share, with the money to be used to fund its next phase of growth.
More specifically, the money will be used to fund the company's recent Mt Holland project acquisition, the development of its new Turnberry underground mine which will start in October, additional growth drilling and to strengthen working capital.
Meeka generated $160.8 million in revenue in FY26 and made a net profit of $51.3 million.
Broker Morgans said the company's recent guidance of 7000-7500 ounces of gold recovered in the September quarter was below their estimate of 9800 ounces.
They added:
We maintain our BUY recommendation on MEK with a revised price target of 17 cents per share. MEK is transitioning to a two-mine underground operation, with Turnberry underground (first ore Jan-27) adding a second ore source to Andy Well. While the September quarter miss has tempered near-term expectations, the Turnberry ramp-up, ore sorter performance and drilling at depth are catalysts that could rebuild confidence and narrow MEK's discount to net asset value.
Morgans' price target is 87% higher than the current share price of 9.1 cents (at the time of writing).
American Rare Earths Ltd (ASX: ARR)
This company recently updated the scoping study for its Cowboy State mining project, which estimated an after-tax net present value of US$1.07 billion and a production rate of 2500 tonnes per year of neodymium and praseodymium (NdPr) oxide.
The mine is now expected to run for 26 years, up from 20, and cost US$900 million to bring into production.
American Rare Earths Chief Executive Officer Mark Wall said:
Our ambition is to turn Halleck Creek's resource scale into a long term source of rare earth materials for American industry. This study gives investors a clearer view of the first development phase and the work that is moving it forward. We are now evaluating a mine with 50% greater processing capacity, 36% more annual NdPr oxide production and a longer operating life than the 2025 base case. That is a substantial platform from which to advance the project.
Bell Potter analysts said in their research note on the company that Halleck Creek remains one of the largest rare earth resources in the US.
The broker has a 55 cent price target on the company, which sits well above the current price of 36 cents (at the time of writing).
If achieved, this would represent a 52% return.
