Bell Potter has run the ruler over the projects and has actually reduced its price target on Forrestania shares, while maintaining a very bullish outlook for the company.

I'll get to that price target shortly. First, let's look at what Forrestania is proposing.

Mining projects working through central hub

The company plans to develop four mining projects, which all process their ore through the Edna May processing facility.

The developments are costed with an assumed gold price of $5500 per ounce, compared to the current price of gold, which is $6130 per ounce.

The Edna May project alone is expected to generate $728.7 million in cash flow over a 10-year mine life, while costing only $98 million to develop.

Using a gold price of $6,140 per ounce, the cash flow figure rises to $961 million.

Forrestania said there is potential upside from upgrading inferred mineral resources within the current pit shell, which are currently treated as waste and excluded from the production target.

Forrestania Chairman David Geraghty said:

The Edna May Ore Reserve and Pre-Feasibility Study provide a strong technical and economic basis for the redevelopment of this established gold operation. The study benefits from substantial existing infrastructure, a proven processing facility and a long operating history, while identifying a clear pathway to restart and future production. With a 400,000-ounce Probable Ore Reserve underpinning 100% of the production target and strong projected cash generation at the PFS gold price assumption, Edna May is expected to form a key part of Forrestania's Westonia Hub strategy.

Three other mining projects will also feed into Edna May. These are the British Hill, Tycho, and Johnson Range projects.

ASX gold shares looking cheap, broker says

Bell Potter said in its research note to clients that the cost of gold production came in higher than they had expected at $3,329 per ounce.

The broker added:

On a filled two-hub configuration we see a pathway to improving on this figure, offering valuation upside. We anticipate further reserve announcements on the remaining deposits and those that incorporate Lake Johnston in due course. FRS is sufficiently funded to first production, subject to completing the proposed $100m facility. FRS remains underrated, in our view, with significant upside through a dual processing hub and >200koz steady state capabilities.

Bell Potter has a $1.05 price target for Forrestania, compared with the current price of 33 cents.

The company is valued at $802.9 million.

The post 4 reasons this ASX gold stock could more than triple appeared first on The Motley Fool Australia.

What did Forrestania Resources report?

• Offer to acquire all ordinary shares in Zenith Minerals remains open until 7 September 2026.
• This is the fifth extension of the bid period since the original offer was made in June 2026.
• Zenith shareholders who accepted previously now have new withdrawal rights if they wish to reconsider.
• The offer remains subject to certain defeating conditions, as detailed in Forrestania's latest notice.

What else do investors need to know?

Forrestania's bid for Zenith Minerals has experienced several extensions, reflecting an ongoing process subject to regulatory orders and unresolved conditions. ASIC has granted Forrestania relief under two ASIC Instruments specific to this bid, and the Takeovers Panel has issued interim orders currently restricting Forrestania from declaring the offers unconditional.

Shareholders who have already accepted the offer can withdraw their acceptance within a one-month window, following the announcement of the extended bid period. Withdrawal is available by written notice and further details are provided by Forrestania for shareholders seeking guidance.

What's next for Forrestania Resources?

Forrestania Resources intends to keep the offer for Zenith Minerals open until 7 September 2026, unless it is withdrawn or extended further. The company continues to encourage Zenith shareholders to review the latest terms and, if needed, seek professional advice before acting.

With the status of certain bid conditions still pending, Forrestania's approach remains cautious as it awaits developments from ASIC and the Takeovers Panel. Investors should watch for any further updates on both the offer itself and regulatory responses.

Forrestania Resources share price snapshot

Over the past 12 months, Forrestania Resources shares have risen 136%, significantly outperforming the All Ordinaries Index (ASX: XAO).

View Original Announcement

The post Forrestania Resources extends Zenith Minerals takeover offer again appeared first on The Motley Fool Australia.

What did Forrestania Resources report?

• The recent British Hill drill program comprised six reverse circulation holes totalling 1,940 metres.
• Key high-grade intersections include 29 metres at 3.91 g/t gold, 26 metres at 2.06 g/t gold, and 32 metres at 1.42 g/t gold.
• Additional notable hits were 14 metres at 2.81 g/t and 35 metres at 1.08 g/t gold.
• Drilling targeted depth and strike extensions, improving geological understanding of the deposit.
• The British Hill project is situated on a granted mining lease with access to established processing infrastructure.

What else do investors need to know?

The drilling campaign at British Hill not only expanded the known extent of high-grade gold mineralisation, but also provided improved detail on the geology and structure of the system. Consistent grades from deeper sections of the deposit suggest solid potential for resource growth.

British Hill's location on a granted mining lease and its proximity to Forrestania's processing facilities may smooth the way for future development. The company's broader strategy continues to focus on establishing two regional hubs in Western Australia, leveraging multiple gold assets to underpin long-term production.

What did Forrestania Resources management say?

Executive Chairman David Geraghty said:

These results reinforce our view that British Hill has the potential to develop into a meaningful gold asset within Forrestania's growing project portfolio. The consistency of mineralisation across the recent drilling, together with the outstanding results returned from deeper portions of the system, provides strong encouragement for further resource growth. Importantly, British Hill benefits from excellent development fundamentals, including a granted Mining Lease and proximity to our processing facility, enhancing its strategic value.

What's next for Forrestania Resources?

Forrestania is progressing with further development studies at British Hill, aiming to convert Inferred Resources to Indicated Resources through infill drilling and ongoing exploration. The company is also advancing mine planning and metallurgical test work as part of its staged development approach.

Investors can expect continuing news flow as Forrestania looks to secure milling options for British Hill ore and pursues additional resource extensions. The project's strong fundamentals and supportive infrastructure align with the group's wider plans to build a substantial Western Australian gold business.

Forrestania Resources share price snapshot

Over the past 12 months, Forrestania Resources shares have risen 122%, outperforming the All Ordinaries Index (ASX: XAO).

View Original Announcement

The post Forrestania Resources reports high-grade gold intersections at British Hill appeared first on The Motley Fool Australia.

What did Forrestania Resources report?

• Upgraded JORC Mineral Resource Estimate for British Hill: 2,620,900 tonnes at 1.50 g/t gold for 126,290 ounces (0.5g/t cut-off), a 131% increase from the previous MRE.
• Significant jump in Indicated category: 1,878,500 tonnes at 1.43 g/t for 86,080 ounces, representing a 180% uplift.
• Recent drilling: 19 new holes (4,764m), including 693m diamond tails, supported the resource update.
• Another 100-hole drilling program approved and underway, with three RC rigs focused on resource extension.
• Planning underway for mining studies and metallurgical test work to inform future development.

What else do investors need to know?

The British Hill resource upgrade is part of Forrestania Resources' broader plan to scale its presence in Western Australia. The company's Forrestania Hub benefits from strong regional infrastructure and proximity to historic gold fields, supporting future development options for British Hill.

With three drilling rigs currently operating, Forrestania aims to further expand and derisk the resource base. The company says its additional 100-hole drill program has been approved and is now targeting new areas with the potential to grow the resource both along strike and down-dip.

What did Forrestania Resources management say?

Chairman David Geraghty said:

Forrestania's British Hill continues to expand, with a more than doubling of the previous Mineral Resource Estimate and a material increase in the proportion of higher-confidence Indicated Resources. The combination of resource growth, ongoing drilling success and excellent regional infrastructure positions British Hill as a key asset within our broader Forrestania gold strategy.

With three RC drilling rigs on site and drilling continuing, we believe there remains significant opportunity to further expand the resource base and enhance project economics as we progress technical studies and evaluate future development pathways.

What's next for Forrestania Resources?

Looking forward, Forrestania Resources plans to accelerate further resource drilling at British Hill, with the goal of converting additional Inferred ounces to Indicated status and unlocking further growth. The company is progressing mine studies and metallurgical work as it explores development pathways, including possible processing options within its Western Australian hub.

Management intends to keep strengthening its resource inventory across key locations, aiming to support long-term production and create shareholder value through technical excellence and disciplined capital use.

Forrestania Resources share price snapshot

Over the past 12 months, Forrestania Resources shares have risen 57%, outperforming the All Ordinaries Index (ASX: XAO), which has risen 3% over the same period.

View Original Announcement

The post Forrestania Resources lifts British Hill gold resource by 131% appeared first on The Motley Fool Australia.

What did Forrestania Resources report?

• British Hill drill program completed: 8 reverse circulation (RC) holes for 1,858 metres
• High-grade gold results including 4m at 7.46g/t Au and 7m at 5.69g/t Au from surface
• Multiple zones of significant gold mineralisation confirmed up-dip and at depth
• Drilling aims to expand the British Hill Mineral Resource Estimate, due in coming weeks
• Ore from British Hill already being trucked to the Lake Johnston processing hub

What else do investors need to know?

Forrestania's latest drilling program at the British Hill Project confirms gold mineralisation extends further than previously known, both closer to surface and deeper underground. Standout intersections included 1 metre grading 22.98g/t gold and other wide zones with good grades.

The company's strategy revolves around building up its gold resource base in Western Australia through disciplined exploration and developing a scalable production platform. British Hill is already on a granted mining lease, supporting the company's near-term production efforts.

What did Forrestania Resources management say?

Commenting on the news, the company's executive chair, David Geraghty, said:

These latest results continue to reinforce our confidence in the British Hill deposit, with drilling successfully extending mineralisation both up-dip and at depth while returning multiple high-grade gold intercepts… As we continue to expand the Mineral Resource Estimate over the coming weeks, we see increasing potential for British Hill to become another valuable source of ore within our regional development strategy.

What's next for Forrestania Resources?

Investors can look forward to a revised Mineral Resource Estimate for British Hill in the next few weeks, which could further underpin Forrestania's growth plans. The company has also applied for further drilling approvals and intends to commence additional drilling once granted.

Management remains focused on converting resources into reserves and supporting longer-term production via its two processing hubs at Edna May and Lake Johnston. Ongoing exploration and potential acquisitions will also be part of the company's wider growth strategy.

Forrestania Resources share price snapshot

The Forrestania Resources share price has been among the best performers on the ASX over the past 12 months. During this time, the gold miner's shares have risen approximately 185%.

View Original Announcement

The post Forrestania Resources strikes more high-grade gold at British Hill appeared first on The Motley Fool Australia.

ASX small-cap shares outperformed in FY26. The index rose 5.46% and delivered a total return, including dividends, of 8.11%.

This compares with a 2.43% rise and a 5.69% total return for the S&P/ASX All Ordinaries Index (ASX: XAO).

This week, experts are calling time on three ASX small-cap shares.

Let's find out why (courtesy The Bull).

Judo Capital Holdings Ltd (ASX: JDO)

The Judo share price is 95 cents, up 1.3% on Monday and down 39% over 12 months.

The ASX small-cap bank share took a big hit last month after Judo issued a profit guidance downgrade.

Mark Elzayed from Investor Pulse explains his sell recommendation on Judo Capital shares:

Judo recently cut profit before tax guidance in fiscal year 2026 to between $163 million and $169 million from a previous range of between $180 million and $190 million.

It was primarily driven by a higher cost of risk now expected to range between $116 million and $122 million following specific provisions against three exposures across different sectors.

Profit before tax guidance of between $210 million and $220 million in full year 2027 was below market expectations of $255.1 million.

In our view, market reaction reflects more than a one-off potential earnings downgrade.

Provisioning risk remains elevated, so we retain a sell on Judo Capital.

Forrestania Resources Ltd (ASX: FRS)

The Forrestania Resources share price is 38 cents, down 3.8% today but up 192% over 12 months.

Elzayed also gives this ASX small-cap materials share a sell rating, and commented:

FRS is a gold exploration and development company focusing on building quality projects across Western Australia's mining districts.

FRS announced on July 1 it had received binding commitments to raise about $310 million for the Edna May Gold Hub. The company's objective is to have Edna May fully commissioned and operational in the first half of 2027.

An institutional placement of 775 million shares was priced at 40 cents. The placement is shareholder dilutive and gold prices remain under pressure, in our view.

The shares have fallen from 64 cents on May 18 to trade at 39 cents on July 15.

Readytech Holdings Ltd (ASX: RDY)

The Readytech share price is $1.61, down 0.3% today and down 33% over 12 months.

Nathan Lodge from Securities Vault explained his sell rating on this ASX small-cap tech share:

An unsolicited, non-binding indicative proposal to acquire ReadyTech Holdings was rejected by the RDY board on June 1, 2026.

The RDY board concluded that the $2 a share cash scheme arrangement and a parallel off market bid of $1.75 a share didn't reflect the company's inherent value and wouldn't be executable. The shares were trading at $1.61 on July 15.

ReadyTech has built a quality software business with recurring revenue across education, workforce management and government solutions.

However, I believe much of the company's long term growth potential is already reflected in the share price, limiting scope for further upside in the near term. ReadyTech operates in highly competitive markets.

The post Sell Judo shares and 2 other ASX small caps: experts appeared first on The Motley Fool Australia.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 to fall

The Australian share market looks set for a subdued session on Tuesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 8 points or 0.1% lower. In the United States, the Dow Jones dropped 0.25%, the S&P 500 fell 0.8%, and the Nasdaq tumbled 1.55%.

Magellan shares upgraded

Magellan Financial Group Ltd (ASX: MFG) shares have been upgraded by analysts at Morgans. According to the note, the broker has upgraded the fund manager's shares to an accumulate rating with an $11.26 price target. It said: "With the recent pullback in the share price, we now have more upside (~13%) to our price target and move to an ACCUMULATE recommendation (from Hold)." 

Oil prices jump

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a strong session after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 9.2% to US$78.00 a barrel and the Brent crude oil price is up 9.5% to US$83.25 a barrel. Traders were bidding oil higher after US President Donald Trump reinstated a blockade on Iran.

Gold price sinks

It is likely to be a tough session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price sank overnight. According to CNBC, the gold futures price is down 2.55% to US$4,008.7 an ounce. Surging oil prices have increased interest rate hike expectations.

Buy Forrestania shares

The team at Bell Potter is bullish on Forrestania Resources Ltd (ASX: FRS) shares. This morning, the broker has retained its speculative buy rating with an improved price target of $1.25. Bell Potter was pleased with its acquisition of the Edna May Gold Hub for $300 million. It said: "This is a transformational transaction for FRS. The acquisition of a second permitted processing hub at Edna May, combined with the 3.2Mtpa Lake Johnston plant, establishes FRS as a dual-hub operator with targeted combined milling capacity of 6.1Mtpa by H1 CY27."

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

But one ASX gold stock that could have huge upside potential according to Bell Potter is named below.

ASX gold stock tipped to triple

The gold stock that Bell Potter is positive on is Forrestania Resources Ltd (ASX: FRS).

Bell Potter notes that the company has just signed a transformational deal with Ramelius Resources Ltd (ASX: RMS) for the Edna May Gold Hub. It commented:

FRS has entered into a binding agreement to acquire 100% of the Edna May Gold Hub from Ramelius Resources Limited (ASX: RMS, not rated) for total consideration of A$300m, comprising A$210m in cash and A$90m in FRS scrip (225m shares at A$0.40/sh) (Transaction). The Transaction is accompanied by a A$310m two-tranche equity raising at A$0.40/sh. 

Edna May comprises a 2.9Mtpa conventional CIL processing plant (C&M since April 2025), 945koz Au Mineral Resource Estimate (MRE), ~1,000km² of tenements including the Tampia and Symes satellite deposits, a 185-room accommodation village, airstrip, tailings storage facility and grid power connection. The Transaction is conditional on FRS shareholder approval, regulatory approvals (potentially ACCC), assignment of third-party agreements including the Evolution Mining SPA, and completion of the equity raising. Completion is targeted for September 2026.

'Transformational transaction'

The broker believes this positions the gold stock to grow its production to 200,000 ounces per annum within 18 months. It explains:

This is a transformational transaction for FRS. The acquisition of a second permitted processing hub at Edna May, combined with the 3.2Mtpa Lake Johnston plant, establishes FRS as a dual-hub operator with targeted combined milling capacity of 6.1Mtpa by H1 CY27. On a pro-forma basis, FRS will have a MRE base of approximately 2.7Moz (incl. Dulcie, ZNC), and a contiguous tenure position spanning the Southern Cross, Forrestania, Westonia and Eastern Goldfields regions. 

The enlarged entity has a credible pathway to steady-state production of >200kozpa across both hubs within 12-18 months, assuming successful commissioning and ramp-up at both plants. FRS will hold pro-forma cash of A$132m and a proposed A$100m debt facility to sufficiently fund the ramp-up period across both hubs.

Big potential returns

According to the note, Bell Potter has retained its speculative buy rating with an improved price target of $1.25. 

Based on its current share price of 38 cents, this implies potential upside of approximately 230%.

Commenting on its investment thesis, Bell Potter said:

The Transaction consideration implies an EV/Resource multiple of approximately A$317/oz based on the 945koz Edna May MRE (or A$100/t installed milling capacity). Adjusting for the ~A$300m replacement value of the existing plant and infrastructure (per FRS), the implied acquisition cost of the resource ounces is effectively negligible on a look-through basis, in our view. Incorporating the Edna May transaction, dualhub production profile, and revised cost and CAPEX assumptions, we raise our Valuation to $1.25/sh and maintain our Speculative Buy recommendation.

The post This ASX gold stock could rocket 200%+ after 'transformational' deal appeared first on The Motley Fool Australia.

After a rough start to 2026, the ASX gold stock is climbing after announcing a $300 million deal to sell its Edna May Gold Hub in Western Australia.

At the time of writing, the Ramelius share price is up 3.81% to $3.00 apiece. By comparison, the S&P/ASX 200 Index(ASX: XJO) is up 0.1% to 8,775 points.

That still leaves the stock down around 28% since the start of the year, although it remains 20% higher over the past 12 months.

Let's take a closer look at the deal.

Ramelius sells Edna May

According to the release, Ramelius has entered into a binding agreement to sell the Edna May Gold Hub to Forrestania Resources Ltd (ASX: FRS).

Forrestania shares last traded at 42.5 cents before the company was placed in a trading halt.

The deal is worth $300 million upfront, made up of $200 million in cash and $100 million in Forrestania shares.

Ramelius has already received a $20 million deposit, with the rest of the cash and shares payable once the transaction is completed.

Edna May has been part of Ramelius since 2017, when it was acquired from Evolution Mining Ltd (ASX: EVN). Since then, the operation has produced around 760,000 ounces of gold.

However, the mine is not currently producing. It has been on care and maintenance duties from April 2025.

Ramelius managing director Mark Zeptner described the sale as "a logical transaction" for both companies.

Why buyers are returning today

The positive share price reaction suggests investors are happy to see Ramelius unlock value from Edna May.

The company is receiving a sizeable cash payment from an asset that is no longer producing. It also keeps some exposure to Edna May through its Forrestania shareholding.

That could be very useful if Forrestania can get the processing plant running again and build a larger regional gold business around the asset.

Ramelius said it is now focused on the transformation of its Mt Magnet operations and the development of Rebecca-Roe.

What happens next

Although the sale appears to be moving forward, keep in mind that the deal isn't done just yet.

Forrestania still needs to secure at least $200 million in binding commitments under its proposed equity raising.

And on top of that, its shareholders also need to approve the issue of shares under the agreement.

If those conditions are met, Ramelius expects the transaction to complete in the September quarter of 2026.

The post This beaten-down ASX gold stock is jumping on a $300 million deal appeared first on The Motley Fool Australia.

Transformational gold opportunity

Under the deal, Forrestania will pay Ramelius $200 million in cash and $100 million in its own shares for the hub, which includes the 2.9 million tonne per annum Edna May mill, associated infrastructure, and the existing 945,000 ounce gold resource.

The company said the deal complements its Lake Johnston processing hub, which is currently undergoing refurbishment.

Forrestania Chair David Geraghty said regarding the deal:

This transaction upholds Forrestania's strategy to consolidate the proven and prospective gold assets in the Forrestania region. Approximately 12 months ago, Forrestania embarked on an aggressive M&A strategy to consolidate stranded high-quality gold assets and underexplored tenure surrounding Edna May. This strategy has been incredibly successful and set Forrestania up for today's acquisition. Forrestania believes it has the proven development and delivery team that is ready to refurbish, upgrade and commission the 2.9Mtpa Edna May Mill going forward. This work will be completed in conjunction with Forrestania's commissioning of Lake Johnston which is on-track for late 2026.

Forrestania said it was targeting a restart of the Edna May mill in the first half of 2027.

Forrestania shares were in a trading halt on Monday while the company completed a $300 million capital raise to fund the deal.

The company said it was targeting more than 6 million tonnes of ore processing capacity by the first half of 2027, with the Lake Johnston facility on track for commissioning in the fourth quarter of 2026.

Building a bigger WA footprint

The company added:

With Forrestania already holding significant tenure and JORC Resources surrounding Edna May, the acquisition builds-out its dual processing hub-and-spoke network, increasing Forrestania's operational flexibility and ensuring the right ore goes to the right mill. With a permitted and existing processing plant and associated infrastructure, Edna May presents a compelling near-term restart opportunity and allows Forrestania to avoid the approvals burden, development timeline and increased capital intensity associated with greenfield developments.

Forrestania shares, which last changed hands for 42.5 cents, are expected to remain in a trading halt until Wednesday, July 1.

The company is currently valued at $569.2 million.

Ramelius shares were up 3% on the news.

Ramelius said in a statement to the ASX, "the transaction provides Ramelius with an opportunity to crystallise value from a non-core asset and further focus resources on its core business'', while also retaining exposure to Edna May through its equity in Forrestania.

The post This ASX gold company's aggressive M&A program continues with $300 million deal appeared first on The Motley Fool Australia.

Dividends and shares to flow

The gold miner has announced that it will return about $30.4 million to its shareholders in the form of a 10-cent-per-share, fully-franked special dividend, along with a distribution of shares in fellow gold company Forrestania Resources Ltd (ASX: FRS).

To give you an idea of the scope of the capital return relative to the company's size, Beacon itself was worth $257.5 million at the close of trade on Wednesday.

Beacon Minerals Managing Director Graham McGarry said regarding the return to shareholders:

Beacon has consistently focused on generating strong cash flow, maintaining a robust balance sheet and delivering value to shareholders. The Board is pleased to reward shareholders through a significant fully franked cash dividend together with the distribution of our Forrestania Resources shareholding. This dividend package reflects the strength of Beacon's operations, the benefits of our disciplined capital management strategy and our confidence in the Company's future. The in-specie distribution dividend also provides shareholders with direct exposure to Forrestania Resources while allowing Beacon to continue focusing on its core objective of growing gold production and shareholder returns.

The company has delayed the ex-dividend date for the shareholder return until Monday, 13 July, to allow option holders to exercise their options and take part. This also allows new shareholders to buy in.

Beacon was granted 36 million shares in Forrestania following a deal struck in February under which it sold a package of tenements in the Coolgardie region of Western Australia to the latter company.

Beacon was also paid $5 million as part of that deal.

ASX gold sector consolidating

Forrestania, for its part, just last week launched a takeover bid for Zenith Minerals Ltd (ASX: ZNC).

The Zenith board is recommending the bid, under which Zenith shareholders would receive one Forrestania share for every 4.3 Zenith shares held.

Zenith said the Forrestania offer followed a strategic review process it started on May 7, and the Zenith board, which owns about 4.5% of the company, was unanimously recommending the offer.

The company said:

The Zenith Board believes the Transaction represents an attractive strategic and financial outcome for Zenith shareholders, providing a premium to recent trading prices while enabling shareholders to retain exposure to the future value potential of Zenith's assets through ownership in Forrestania.

The post This ASX gold stock is rewarding shareholders with cash and shares, and it's not too late to buy in appeared first on The Motley Fool Australia.

Global conflict pushed investor sentiment firmly towards defensive and safe-haven assets.

However, despite history telling us this would continue, many ASX gold stocks have since tumbled. 

Many investors were likely left scratching their heads about where to turn next amidst an extended period of volatility. 

One ASX gold stock that has ignored the noise and powered ahead this year has been Forrestania Resources Ltd (ASX: FRS). 

Company overview and acquisition news

Forrestania Resources operates as a mineral exploration and development company focused on gold, lithium, and nickel discoveries. Its projects include Forrestania Gold, Lithium and Nickel, Southern Cross Gold, and Leonora Gold.

In the last 12 months, its share price has risen by more than 600%, including an impressive 53% in 2026 alone. 

It was making headlines yesterday after it tabled a takeover offer to Zenith Minerals Ltd (ASX: ZNC). 

In summary, Forrestania Resources has agreed to acquire 100% of Zenith Minerals through a recommended takeover using shares rather than cash. 

Zenith's key asset is the Consolidated Dulcie Gold Project in Western Australia, which contains an estimated 0.7 million ounces of gold and is located within FRS' existing Southern Cross Hub area.

By adding the new project, FRS will increase its total gold resource base from approximately 1.0 million ounces to 1.7 million ounces.

The takeover values Zenith at approximately A$81 million, compared with its current market capitalisation of about A$63 million, representing a premium of roughly 29%. 

Overall, the acquisition strengthens FRS' gold portfolio and expands its resource base with a project that fits well alongside its existing assets.

What is Bell Potter's view?

Following this announcement, the team at Bell Potter provided updated guidance on this ASX gold stock. 

The broker views the acquisition as highly strategic because it gives FRS control of an important land package within its Southern Cross Hub, alongside several of its existing gold deposits. 

The Dulcie Gold Project is close to FRS' Lake Johnston processing plant and also within trucking distance of Ramelius Resources Ltd (ASX: RMS)'s Edna May plant, providing potential future processing options.

The addition of 0.7Moz represents a material uplift to the resource base that strengthens FRS' development pathway and mine life visibility. The Transaction is consistent with FRS' established M&A playbook of disciplined, value-accretive regional consolidation.

The broker subsequently lowered its price target to $1.15 (previously $1.25) and maintained its speculative buy recommendation. 

Despite the slight downgrade, the broker's price target still indicates 127% upside from current levels. 

The post This ASX gold stock is expected to double in the next year appeared first on The Motley Fool Australia.

Board backing it in

The Zenith board is recommending the bid, under which Zenith shareholders would receive one Forrestania share for every 4.3 Zenith shares held.

This would value Zenith shares at 13.2 cents, compared to the 9.9 cents they were changing hands for on Tuesday morning, up 10%.

Zenith said the Forrestania offer followed a strategic review process it started on May 7, and the Zenith board, which owns about 4.5% of the company, was unanimously recommending the offer.

The company said:

The Zenith Board believes the Transaction represents an attractive strategic and financial outcome for Zenith shareholders, providing a premium to recent trading prices while enabling shareholders to retain exposure to the future value potential of Zenith's assets through ownership in Forrestania.

Zenith said the combination of the two companies had many benefits, including the potential to accelerate its Dulcie gold project, which had experienced "transformational growth" and now had a mineral resource of 675,000 ounces of gold.

Zenith shareholders would also be able to get rollover tax relief from capital gains tax, provided Forrestania gained control of at least 80% of Zenith shares.

Zenith Managing Director Andrew Smith said:

The proposed combination with Forrestania represents a significant milestone for Zenith and follows a period of transformational growth across our portfolio, particularly at the Consolidated Dulcie Gold Project. Over the past two years, Zenith has successfully consolidated the broader Dulcie corridor and defined a JORC (2012) Inferred Mineral Resource of 675,000 ounces of gold across a ~6 kilometre mineralised trend within the Forrestania Belt. We believe this work has established Dulcie as one of the most significant emerging gold development projects in the district. The Board believes the combination with Forrestania provides Zenith shareholders with exposure to a larger and more diversified gold company, with enhanced funding capacity, technical capability and a regional operating platform that has the potential to accelerate the development of Zenith's assets.

The offer is subject to a minimum acceptance condition of 50.1%.

Already a significant shareholder

Forrestania told the ASX in a statement that it had so far acquired a 9.72% stake in Zenith.

Forrestania shares fell 9.7% on Tuesday morning to 46.5 cents, but are up 528% over the past 12 months, valuing the company at $680.7 million.

Zenith is valued at $54 million.

The post Up more than 140% over a year, this ASX gold stock has just fielded a takeover offer appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Atlas Arteria Group (ASX: ALX)

The Atlas Arteria share price is up almost 14% to $4.92. Investors have been buying the toll road operator's shares after it received a takeover offer. The company revealed that IFM has made an unsolicited offer at $4.75 per share in cash. However, it has also "indicated that the price will be increased to A$5.10 per security if the bidder's relevant interest in Atlas Arteria securities is 45% or more prior to the close of the Offer." Outside that, this is IFM's best and final offer. Atlas Arteria advised that it will consider and evaluate the offer and will update shareholders in due course.

Forrestania Resources Ltd (ASX: FRS)

The Forrestania Resources share price is up 2.5% to 51.7 cents. This has been driven by the release of drilling results for the gold explorer's British Hill, Mt Palmer and Johnson Range projects. The good news is that high-grade gold results were returned across all projects. Forrestania Resources' chair, David Geraghty, commented: "These encouraging results are improving our understanding of the geology and metallurgy across each project and support the next phase of drilling, as we move with intent to increase the size and potential of the British Hill, Johnson Range and Mt Palmer Mineral Resource Estimates."

Megaport Ltd (ASX: MP1)

The Megaport share price is up over 6% to $9.46. This morning, this network solutions company revealed that it has secured a three-year compute and storage contract with a total value of approximately US$25.1 million (A$35.4 million). Megaport's CEO, Michael Reid, said: "Securing a contract of this size reflects both the scale of the opportunities we see in the compute market, and our disciplined approach to deploying capital. We will continue to evaluate similar opportunities, investing alongside committed customer demand at compelling paybacks, ensuring capital is deployed after rigorous analysis while supporting the long-term growth of these markets."

WA1 Resources Ltd (ASX: WA1)

The WA1 Resources share price is up almost 7% to $16.17. This follows the release of the niobium developer's quarterly update. That update revealed that the company ended the period with a cash balance of $131 million. It also confirmed that all data inputs have been received for a mineral resources estimate update that is expected in the June quarter.

The post Why Atlas Arteria, Forrestania, Megaport, and WA1 shares are charging higher today appeared first on The Motley Fool Australia.

Businesses with smaller market capitalisations could be compelling businesses to look at because they may have longer-term growth potential and the market hasn't priced in their long-term potential.

Fund managers from Wilson Asset Management (WAM) have picked out two businesses from the WAM Active Ltd (ASX: WAA) portfolio that could deliver good returns.

EchoIQ Ltd (ASX: EIQ)

WAM describes Echo IQ as an Australian medical technology company focused on improving decision-making in cardiology by using artificial intelligence (AI) to detect structural heart disease from echocardiograms.

The fund manager noted that the company received US Food and Drug Administration (FDA) approval for severe aortic stenosis, with additional FDA clearance for heart failure detection expected in the near term.

WAM pointed out that the EchoIQ share price rose by 47% in March after an announcement of an expanded resale and distribution agreement with the Mayo Clinic for EchoSolv HF. The fund manager said that the agreement provides "meaningful clinical validation and materially de-risks the FDA pathway".

The investment team expects further FDA clearance for the ASX share in the coming weeks, which would significantly expand EchoIQ's US addressable market and support early revenue generation.

WAM concluded:

We believe additional hospital signings and strategic partnership discussions with multiple Australian and US-based parties remain key near-term catalysts for further share price re-ratings.

Forrestania Resources Ltd (ASX: FRS)

The other ASX share that WAM highlighted from the WAM Active portfolio was Forrestania Resources, a Perth-based mineral exploration company targeting gold, lithium, nickel, and copper deposits, primarily in Western Australia's Eastern Goldfields, Forrestania, and Southern Cross greenstone belts.

WAM noted that the Forrestania Resources share price declined in March amid a 10% decline for the gold price.

The wider mining sector saw weakness during the month amid forced liquidations and broader macroeconomic volatility, including rising Treasury yields and a stronger Australian dollar.

WAM said it still owns this ASX share in its portfolio because it views recent events as "macro-driven dislocations, rather than a deterioration" of its investment thesis.

The fund manager decided to increase its stake in the ASX share during the March sell-off.

WAM's investment team concluded its thoughts on the business with the following:

Forrestania Resources remains a compelling, undiscovered gold opportunity on the ASX, led by David Geraghty, who spent 21 years at Mineral Resources Ltd (ASX: MIN) and played a key role in its success. With minimal institutional coverage and broker sponsorship, we see potential for a share price re-rating as near-term catalysts emerge.

The post 2 undervalued ASX shares to buy that experts think could deliver strong returns appeared first on The Motley Fool Australia.