ASX resources penny stocks with 50% discount

In Australia, if a particular stock is available at a market price below AU$1, it is called a penny stock. Thorough research and company due diligence should be done before investing in penny stocks as they have a higher risk to reward ratio.

From the resource industry, several small and medium-sized companies are engaged in the exploration and development of marginal fields.

Related Reading: 92E, RMI, FTZ: ASX penny stocks that gained more than 100% on a yearly basis

Exploration is risky business. This involves significant investment and time to delineate the resources of the earth’s crust. Some of these explorers end up unlocking substantial resources, while many have to abandon their projects or licenses if they fail to reach a commercial level.

Companies exploiting these marginal fields or licenses often have low market capitalization and limited funds to devote to exploration and development.

The continued turmoil in the equity market due to inflation has swallowed up significant investor capital. Several stocks are currently trading at their multi-year lows. Some market analysts believe that now is a good time to enter a particular stock because it is available at relatively low prices, while many believe that the market has not yet bottomed out and investors should wait a little longer before making a decision.

Few things investors should ask themselves before deciding to invest their hard-earned income:

  1. What risk are they willing to take if their investment plan doesn’t work out?
  2. How much money could they invest in a penny stock to limit downside risk?
  3. When do I enter and exit?
  4. Should they invest in blue chip companies with low risk and get moderate returns or take risks and get multiple returns?
  5. Which commodity to target if investing in the resource industry?

There are no right or wrong answers to all of these questions. It depends entirely on the risk-taking capacity of investors and on market trends.

There is a famous saying by Voltaire, ‘history does not repeat itself, man always does’. So if you have invested in penny stocks and made a profit, you will definitely invest in them again.

In this article, the following section lists five penny stocks from the resource industry that are trading at a discount of more than 50% from their 52-week highs.

MinRex Limited resources (ASX: MRR)

MinRex Resources is a diversified mining explorer focused on battery metals, gold, silver and copper.

The Company operates lithium-tin-tantalum projects in the Pilbara region. Its strategy is to hold substantial exploration land in the Tier 1 mining jurisdiction with a multi-commodity type deposit.

MinRex currently holds 352,213 ounces of gold resources at its Sofala gold project in New South Wales.

Paladin Energy Ltd (ASX: PDN)

Paladin Energy is an ASX-listed uranium player with operations in Namibia. The company holds a 75% interest in the Langer Heinrich mine, which produced more than 43 Mlb of U3O8 nowadays.

The company recently executed a fully secured institutional placement of A$200 million and completed a share purchase plan to raise up to A$15 million. The funding will help the company develop and restart its Namibian mine, which was suspended in 2018 due to falling uranium prices.

Castle Minerals Limited (ASX:CDT)

Another ASX-listed diversified explorer is Castle Minerals. The Company operates battery metal, base metal and gold projects in Australia and Ghana. its asset portfolio includes graphite, lithium, gold, lead and zinc.

The company recently launched a drilling campaign at its flagship Kambale graphite project in Ghana.

Dateline Resources Limited (ASX:DTR)

Dateline is a gold-focused mining explorer with operations in the United States. The company has signed an off-take agreement for 100% gold concentrate produced from its Gold Links mine in Colorado.

Dateline produced 40 tonnes of salable gold concentrate that may contain gold and silver valued at A$1.5 million.

Canon Resources Limited (ASX:CNR)

Canon Resources is engaged in nickel exploration and development operations. The company has two nickel projects in Western Australia, the Fisher East and Collurabbie nickel projects.

The Fisher East Nickel project currently has a mineral resource of 116.3 kt of contained nickel. One of the project’s prospects, Muskel, has shown potential for platinum group elements (PGE).

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