How to find the next multi-bagger resources stock: Part 2

This is chapter two of Stockhead’s ‘forgotten resources stocks that could conceivably be the next multi-bagger’ series, focusing on the $5m to $10m market cap bracket.

Part 1, which highlighted the sub $5m market cap group,  has already thrown up a couple of decent winners since the story was published last week.

They include Tao Commodities (ASX:TAO), which is no longer a $3m market cap battler after inking an option to buy the ‘Titan’ titanium and zircon mineral sands project in the US.

Meanwhile, graphite play Blackearth Minerals (ASX:BEM) rode Tesla ‘Battery Day’ mania into a decent share price spike.

There are currently ~96 resources stocks on Stockhead’s list with a market cap between $5m and $10m. Where’s the next multi-bagger coming from?

Here’s a list of ASX resources stocks with a market cap between $5m-$10m [Wednesday September 30]

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:

Who’s drilling for the big one?

The only certainty in mineral exploration is this: if you aren’t drilling, you won’t find anything.

There are a number of overlooked sub-$10m market cap juniors drilling right now (or very soon) in the hunt for that elusive ‘company maker’.

A three hole, 1,000m drilling campaign will kick off this month at Fin Resources (ASX:FIN) McKenzie Springs nickel-copper-PGE project, which neighbours Panoramic Resources’ (ASX:PAN) Savannah nickel-copper mine.

WA gold explorer Aldoro Resources (ASX:ARN) is awaiting results from recent drilling at ‘Penny South’, which neighbours Spectrum Metals’ company making Penny West project.

Also spinning the drill bit — or awaiting results — is Bulgarian gold explorer Raiden Resources (ASX:RDN), WA-based Golden Mile Resources (ASX:G88), and Arrow Minerals (ASX:AMD), which is trying to figure out how big the Dassa gold discovery in Burkina Faso really is.

Who’s looking for a new project to make it a multi-bagger?

Buying a new project which captures the investor imagination is one way explorers can get a rerate.

How many of these stocks are running the ruler over potentially company changing acquisitions? Quite a few, as it turns out.

Oakajee Corp (ASX:OKJ) is a quiet WA gold explorer “looking for opportunities” with about $3.1m in the bank at the end of FY20.

Dragon Mountain Gold (ASX:DMG) is “reviewing a number of exploration projects” after a tech-based acquisition fell through.

Industrious West Australian-West African goldie Castle Minerals (ASX:CDT) is looking for fresh ground after farming out a Ghanaian project last year.

The lucrative deal will see private company Iguana Resources spend up to $US11.7m ($16.3m) on exploration over five years to earn an 80 per cent interest.

Castle also has a 4 per cent gold royalty on a licence which “forms a key component” of recent takeover target Azumah Resources’ +1moz Wa Gold project.

Discovery Africa (ASX:DAF) – which had $2.1m in the bank at the end of FY20 – just shelled out $5,000 for a WA gold project, but is still “proactively working to identify and review other new projects”.

Beleaguered mineral sands explorer/shell company Metallica Minerals (ASX:MLM)  also “continues to review several opportunities in the gold/precious metals-copper and other mineral commodity sectors”.

Fellow shell Riedel Resources (ASX:RIE), which has a minor interest in Norwest Minerals’ (ASX:NWM) Marymia gold project, has been reviewing projects since March 2019.

The explorer, which spiked on no news last week, has just gone into a trading halt regarding a “proposed material transaction”. Ooooh.