Rule Investment Media proprietor Rick Rule has shared his top three ASX mining stocks.
In an interview with the Investing News Network at this year's Rule Symposium, the veteran investor and speculator underlined his appreciation for companies focusing on “off-the-radar” sectors.
“I love tier-one deposits in out-of-favour commodities,” he explained.
Read on for the three ASX companies that Rule listed as his favourites.
1. Meteoric Resources (ASX:MEI)
Meteoric Resources' flagship asset is the Caldeira rare earth ionic clay project.
The Brazil-based property has a global mineral resource estimate of 740 million tonnes at 2,572 parts per million (ppm) total rare earth oxides (TREO) at a 1,000 ppm TREO cut-off grade.
Through the project, the company aims to become the world’s lowest-cost producer of rare earths products.
“I believe Meteoric holds a deposit of at least AU$20 billion in-situ reserves and resources, set to be constructed in the best quartile worldwide,” Rule explained in the interview.
Rule said Brazil is relatively stable, and noted that Caldeira is in proximity to roads, power, workers and water.
However, he warned that Meteoric is a risky investment that requires patience.
“Bottom line on this, I could easily lose half my money if I'm wrong, and there's going to be lots of volatility,” he said. However, Rule believes that if things go right, Meteoric could provide a 10, 20 or 30 to one return.
2. Sovereign Metals (ASX:SVM,OTCQX:SVMLF)
The second stock mentioned by Rule was Sovereign Metals, a rutile and graphite developer in Malawi. The firm describes itself as the next largest, lowest-cost and lowest-carbon producer of the two critical minerals.
“Nobody cares about graphite. Very few people can spell rutile,” Rule said.
Sovereign’s flagship project is the Kasiya rutile-graphite project, which holds 17.9 million tonnes of rutile; according to the company, it is the world’s largest-known rutile deposit.
It is also the world’s second largest-known flake graphite deposit, with 24.4 million tonnes of graphite.
On June 10, testwork by Japanese firm Toho Titanium confirmed that natural rutile from Kasiya is suitable for high-performance titanium metal production. “It is of a quality that can be used without any issues,” the announcement reads, with the project’s rutile exceeding the >95 percent rutile grade requirement.
Rule underlined that both Australians and North Americans are overlooking Sovereign.
3. Centaurus Metals (ASX:CTM,OTCQX:CTTZF)
Centaurus Metals, which is also in Brazil, is the third ASX stock shared by Rule.
“It’s a junior and it's in the nickel business,” he said, adding that investors currently hate nickel.
“I believe (Centaurus holds) the best undeveloped sulphide nickel deposit in the world,” he said.
Centaurus’ Jaguar nickel sulphide project in Brazil's Carajás mineral province was acquired from mining giant Vale (NYSE:VALE) in April 2020. The company says the project is the “cornerstone” of its ambition to build a diversified Brazilian critical minerals business with best-in-class ESG credentials.
Jaguar’s resource estimate stands at 138.2 million tonnes at 0.87 percent nickel for 1.2 million tonnes of contained nickel.
One more ASX mining stock pick from Rule
Toward the end of the interview, Rule mentioned Emerald Resources (ASX:EMR).
“I have a huge position in Emerald, but I probably wouldn’t enter it today. Still, I have huge built-in gains,” he said.
“That’s something people can take a look at, only if they’re not as fond of hate as I am.”
Watch the full interview with Rule above.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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