As 2023 comes to an end, we thought we’d recap our best ASX Resources Stocks for 2024!
The 4 best ASX Resources Stocks for 2024
Chalice Mining (ASX:CHN)
It was a tough year for shareholders in Chalice Mining, there is no hiding away from that fact. The only investors attracted to the company were short-sellers, enough for over 5% of its share to be shorted. Most other investors turned off the company after estimates of how much it would cost and how long it would take to bring Julimar into production. The answers are $1.6-2.3bn and over 5 years.
However, even if both those figures are correct, it is not as if there’ll be no news flow out of this company. We wouldn’t be surprised to see M&A activity nd or a PFS study, albeit the latter not until the second half of next year. Although its shares probably ran too high in 2021, we think the sell off in 2023 was well over-done.
Ramelius Resources (ASX:RMS)
Ramеlius Rеsourcеs (ASX: RMS) is sitting on an 86% from for 2023, and there’s little reason to suspect it will retreat in 2024. With volatility in the lithium markets and high inflation, investors have turned their eye to gold miners with quality projects and a proven track record of production.
Ramelius ticks both these boxes more strongly than most other stocks on the ASX. Today, the company is capped at nearly $2bn, has $259.2m in cash and gold, 7.6Moz in Mineral Resources and expects to produce 250,000-275,000 of gold in the upcoming fiscal year.
There’s more upside to come in 12 months with either the commencement of production or the results of feasibility studies on projects it has that are currently pre-production.
Black Rock Mining (ASX:BKT)
Black Rock Mining (ASX:BKT) is developing the Mahenge Graphite Project in Tanzania. It is hoping to capitalise on the hot demand for battery metals such as graphite, aided by Tanzania coming back into favour as a mining investment destination.
Mahenge has a JORC 2012 resource of 212 million tonnes at 7.8% Total Graphitic Content (TGC) and reserve of 70 million tonnes at 8.5% TGC. That reserve is so big, it’s the second largest graphite reserve in the world, while the resource makes it the fourth largest.
The Definitive Feasibility Study (DFS) has laid out the blueprint for an initial mining operation worth US$1.4bn in Net Present Value – taking into account the government’s 16% stake. This represents a 36% IRR and a 61% AISC margin. To top it all off, Black Rock has an offtake agreement with South Korean industrial giant Posco for its graphite, and Posco is a 12% shareholder in the company.
Black Rock’s share price has suffered because it has taken longer to secure funding and to get to production than investors had anticipated. However, we think Black Rock can re-rate in 2024 as the graphite outlook comes to fruition and it secures funding. The target of first production in CY26 was reaffirmed by the company last month, and it has secured an initial US$59.6m from the Development Bank of Southern Africa.
Boss Energy (ASX:BOE)
Uranium is another commodity that has been in the spotlight and is set to have a good 2024, given the decarbonisation thematic. A difference with this sector is that a high proportion of ASX companies aren’t explorers but companies with existing mines that are looking to bring them back into production after they were mothballed due to low prices. With prices at a 15-year high of over US$81 a pound, the time is more than ripe.
Boss Energy is one such company. It has the South Australian Honeymoon Uranium Project since acquiring it 2015. The deposit, which has a JORC Resource of 71.6Mlb at an average grade of 620ppm, has lied dormant for a decade since the previous owners mothballed it due to low prices.
Boss has gradually worked towards bringing it back into production completing feasibility studies, raising capital and undertaking infrastructure construction works at the project.
It is anticipated that the mine can last for 11 years, produce 21.81Mlb, with an IRR of 47.1% and a pre-tax NPV of A$412m (using a US$60/lb spot price and an 8% discount rate). It anticipates low capital costs of just US$80m and US$580m in free cash flow over the life of the project. Oh, and did we mention that production at Honeymoon is just about to start?
On top of all this, the company recently expanded its portfolio, buying 30% of a project in South Texas with a resource of 3.41m pounds at 0.109% and will also enter production in 2024?
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