Shares in Asiamet Resources Ltd (AIM:ARS, OTC:KMGLF) are oversold, meaning the mine developer could emerge in the cross-hairs of a bidder, according to research from Optiva Securities.
The risked net asset valuation of the Indonesia-focused mine developer's assets is put at £188.8 million or 7.22p a share, the brokerage said.
"The current share price... has been weighed on by project delays and fluctuating investor sentiment," said the broker.
"Optiva’s view is that Asiamet is significantly oversold in this regard, as both macro conditions and project developments are in a stronger place than ever for the company."
Mid-morning the stock was changing hands for 0.92, up 12%.
Optiva points out that Asiamet's BKM copper project alone justifies a near-term target price of 3.47p per share, based on internal net present value calculations.
This projection is bolstered by the copper prices holding steady at $4.43 per pound, significantly above the long-term price assumption of $3.98 per pound used in Asiamet's feasibility studies.
Optiva also notes the strategic benefits of Asiamet's location and the high-grade copper at its BKM and BKZ sites, which could enhance early production phases.
This geographical and geological advantage makes Asiamet an attractive M&A target, especially for existing miners looking to bolster their resources or newcomers aiming to secure copper supplies for transitioning to green energy.
And of course, the sector is in the middle of a copper frenzy with the red metal a primary requirement for next-gen data centres that will power the nascent AI revolution.
Indeed, BHP Group Ltd (LSE:BHP, ASX:BHP)'s £31 billion bid for Anglo American PLC (LSE:AAL) is seen as emblematic of this copper consolidation play.
On Asiamet, Optiva said: "Greenfield opportunities in copper across ASEAN [South East Asia] jurisdictions remain limited, and with required capital outlays typically in excess of $1bn. On this basis, Asiamet’s value proposition is a best-in-class alternative."