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Much to the relief of its shareholders, Sayona Mining Ltd (ASX: SYA) shares have been on fire in recent weeks.

So much so, the lithium miner’s shares have risen 43% since this time last month.

To put that into context, a $10,000 investment at the end of April would now be worth over $14,000.

Why are Sayona Mining shares racing higher this month?

There may be a couple of reasons for this strong gain.

The first could be some investors believing that the ASX lithium stock has been oversold over the last 12 months.

For example, even after rising 43% over the last 30 days, Sayona Mining shares are down almost 80% since the end of May 2023.

What else?

In addition, there have been a couple of positive announcements out of the company this month that have got investors excited.

The first was the announcement of the discovery and expansion of new mineralised zones at Sayona Mining’s North American Lithium (NAL) operation in Canada.

Management notes that the newly discovered zones are poised to become a focal point for NAL’s assessment of future mining options.

Initial assessments indicate the presence of high-grade lithium mineralisation outside the mineral resources estimate (MRE) pit shell. The company believes this could represent a substantial addition to NAL’s resource portfolio and may contribute to extending NAL’s life of mine.

Sayona’s interim CEO, James Brown, commented:

We are very excited by these new discoveries at North American Lithium which highlights the potential of this asset with high-grade mineralisation defined to the north-west, north-east, south-east and below the existing MRE. The team at NAL will now be working to update the Mineral Resource incorporating these significant results. We look forward to continue testing the mineralisation at NAL with further drilling underway.

Moblan update

Another announcement that may have caught the eye of investors relates to the company’s Moblan Lithium Project, which is also in Canada.

Earlier this week, the company announced the results of 94 new drillholes. Management believes the results reinforce the project’s status as the centrepiece of Sayona’s Eeyou-Istchee James Bay hub in northern Quebec. In addition, management feels the results highlight its potential to expand the existing mineral resource base at Moblan.

Brown commented:

We are delighted with the thick, high-grade drilling results at Moblan confirming it is one of the premier hard rock lithium deposits in North America. Most excitingly, it is clear there remains considerable potential for further expansion of the deposit which is open in all direction.

Moblan forms the centrepiece of our James Bay lithium hub and has an extremely bright future supplying Quebec-produced lithium derivatives into the expanding North American battery and EV sector.

All in all, it has been a great month for Sayona Mining shares and its shareholders. Here’s hoping the company can build on this in June and beyond.

The post Why are Sayona Mining shares up 43% in a month? appeared first on The Motley Fool Australia.

More reading

• Why Cettire, Lendlease, Neuren, and Sayona Mining shares are racing higher today
• Here is the latest lithium price forecast through to 2027
• These are the 10 most shorted ASX shares
• Why did the Sayona Mining share price just leap 5%?
• These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Qantas Airways Limited (ASX: QAN) shares have rallied strongly since the start of March.

During this time, the airline operator’s shares are up approximately 15%.

Whereas over the same period, the ASX 200 index has traded broadly flat.

But despite this outperformance, analysts at Goldman Sachs believe that Qantas shares are undervalued at current levels.

What is the broker saying about Qantas shares?

According to a note out of Goldman Sachs this morning, its analysts have reiterated their buy rating and $8.05 price target on the Flying Kangaroo’s shares.

Based on the current Qantas share price of $5.91, this implies potential upside of 36% over the next 12 months.

To put that into context, a $10,000 investment would turn into approximately $13,600 if Goldman is on the money with its recommendation.

Why is Goldman bullish?

The note reveals that the broker believes the market is undervaluing Qantas’ structurally stronger earnings.

It thinks this has been driven partly by a trade off between investment and capital returns. Goldman sees this as “a buying opportunity” for investors. It explains:

We expect QAN’s earnings capacity to structurally improve (due A$1b+ cost out program), with FY24e PBT 51% ahead of pre-COVID levels. In addition, current ongoing customer investment is gaining traction (improved operating performance), alleviating concerns and key downside risk. The discounted valuation versus peers and its own history implies that the market is pricing in a trade off between investment (fleet and customer) and capital returns (dividends & buybacks), which we view as a buying opportunity.

Dividends to return

Another reason to be positive on Qantas shares is the prospect of its dividends returning soon.

Goldman acknowledges that Qantas has some big spending to do on its fleet in the coming years. However, it believes that the company’s balance sheet will remain strong and allow the company to resume paying dividends and return capital.

Across FY25-27, we forecast A$11.3bn of capex (cumulative), in-line with consensus estimate. Despite this spend and our forecast distributions, we estimate that QAN’s ND:EBITDA will remain below within its target range across the forecast period. In our view, this should allow for continued capital returns to shareholders alongside fleet renewal. Over the three-year horizon (FY25-27e), we forecast total buy-backs and dividend payments of A$1.6bn. This includes A$1.2bn of dividends vs consensus of A$1.1bn.

The broker is forecasting dividends of 30 cents per share in both FY 2025 and FY 2026. Based on its current share price, this will mean above-average dividend yields of 5.1% for both years.

The post Why Qantas shares are cheap and now is ‘a buying opportunity’ appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today
• Holidays on hold: How will this affect ASX travel shares?
• 3 things about Qantas stock every smart investor knows
• 4 super ASX 200 blue chip shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Vanguard Australian Shares Index ETF (ASX: VAS) is a popular way to indirectly invest in S&P/ASX 300 Index (ASX: XKO) shares. Plenty of Aussies may like to receive dividends with franking credits from ASX 300 shares.

Exchange-traded funds (ETFs) allow investors to buy a portfolio of businesses in just one investment. ETFs act as a conduit to pass on the dividends they receive to unitholders of the ETF.

There are plenty of businesses within the ASX 300 that pay fully franked dividends including Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Telstra Group Ltd (ASX: TLS). Does that mean the VAS ETF pays fully franked dividends too?

Franking level of VAS ETF dividend payouts

The Vanguard Australian Shares Index ETF dividend yield is dictated by the yield of the underlying holdings, leading to an overall yield from all of the businesses. For example, the high dividend yield of National Australia Bank Ltd (ASX: NAB) pushes up the VAS yield and the low yield of CSL Ltd (ASX: CSL) shares hurts the ETF’s yield.

According to Vanguard, the VAS ETF had a dividend yield of 3.7% at the end of April when taking into account all of the dividend yields within the ASX 300.

The franking level of the Vanguard Australian Shares Index ETF distributions is influenced by the franking level of its holdings’ dividends.

Some ASX shares within the VAS ETF portfolio don’t pay fully franked dividends, so the ETF is unable to pay fully franked distributions. Examples of unfranked income payers include CSL, Goodman Group (ASX: GMG), James Hardie Industries plc (ASX: JHX) and Resmed CDI (ASX: RMD).

Every three months, the fund pays out the dividends it has received, so the franking credit level varies depending on the ASX shares.

Latest distribution

Let’s briefly look at the latest distribution from the VAS ETF, with Vanguard providing a tax estimate.

For the period ending 31 March 2024, the quarterly payment was 84.79 cents per unit. Of this, 66.3 cents were franked dividends and 9 cents were unfranked dividends. The rest of the distribution comprised other forms of income.   

Vanguard reported 29.33 cents of franking credits per unit were attached to the distribution, which are an additional return to investors and can be accessed when investors do their FY24 tax return.

The next distribution will depend on what dividends the VAS ETF receives from its investments.

The post Does Vanguard Australian Shares Index ETF (VAS) pay fully franked dividends? appeared first on The Motley Fool Australia.

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• 5 ASX ETFs that could be great long term buys
• Forget lottery tickets, I’d buy these ASX shares instead
• $1,000,000 portfolio: One way to achieve 7-figure wealth
• Here’s what $10,000 invested in the Vanguard Australian Shares Index ETF (VAS) at the start of 2023 is worth now
• Could buying the Vanguard Australian Shares Index ETF (VAS) at under $100 help me retire early?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed and Telstra Group. The Motley Fool Australia has recommended CSL and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had a very disappointing session after inflation came in hotter than expected. The benchmark index sank 1.3% to 7,665.6 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set for another tough session on Thursday after a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 50 points or 0.65% lower this morning. In the United States, the Dow Jones was down 1.1%, the S&P 500 fell 0.75% and the Nasdaq tumbled 0.6%.

Oil prices fall

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a tough session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 1% to US$79.01 a barrel and the Brent crude oil price is down 1.1% to US$83.30 a barrel. This decline was driven by concerns over US gasoline demand.

BHP’s Anglo American takeover is off

The BHP Group Ltd (ASX: BHP) share price will be on watch after Anglo American (LSE: AAL) refused to grant the miner an extension for its $75 billion takeover approach. In response to the news, BHP revealed that it “will not be making a firm offer for Anglo American.” BHP CEO, Mike Henry, commented: “While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost and, despite seeking to engage constructively and numerous requests, we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive.”

Gold price drops

It looks set to be a poor session for ASX 200 gold miners such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.9% to US$2,335.5 an ounce. The precious metal came under pressure after the US dollar and treasury yields strengthened.

Buy Qantas shares

Qantas Airways Limited (ASX: QAN) shares could be dirt cheap according to analysts at Goldman Sachs. This morning, the broker has reiterated its buy rating and $8.05 price target on the airline operator’s shares. It said: “The discounted valuation versus peers and its own history implies that the market is pricing in a trade off between investment (fleet and customer) and capital returns (dividends & buybacks), which we view as a buying opportunity.”

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

More reading

• Do yesterday’s inflation numbers mean interest rates are set to rise?
• BHP share price on watch after Anglo American takeover update
• Here are the top 10 ASX 200 shares today
• Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today
• Should you buy BHP shares now before tonight’s Anglo American takeover reveal?

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wesfarmers Ltd (ASX: WES) shares have excelled at delivering capital growth in the past year, boasting a 30% increase over the 12 months, as shown in the chart below.

Capital growth is only one element of a shareholder’s ASX returns, though – dividends also play their part.

While share prices move daily depending on what people are willing to pay, dividends are typically much more consistent. That’s because they are decided by a company’s board of directors and influenced by how much profit the business is generating.

Many investors prefer to focus on dividend returns because they are a ‘real’ return without requiring share sales. Owning a solid, dividend-paying stock may also help investors sleep easier at night.

With that in mind, can Wesfarmers shares tick the ASX dividend box?

Generous dividend payout ratio

A company needs to make a profit before it can pay a dividend. Wesfarmers has been making a profit for decades, so there is no problem there.

Leadership must decide how much of the company’s profit it will pay out as a dividend. This metric is called the dividend payout ratio. Paying out 100% of the net profit after tax (NPAT) may not be sustainable if the business needs to reinvest in its operations to sustain/grow earnings in the future.

Ideally, a business is able to balance rewarding shareholders in the short term with growing the business in the long term.

In the FY24 first-half result, the business reported it generated earnings per share (EPS) of $1.258 (up 3.4% year over year). This enabled Wesfarmers to pay an interim dividend per share of 91 cents, an increase of 3.4% compared to the FY23 interim dividend.

That HY24 dividend represented a dividend payout ratio of 72% of profit, which I believe strikes the right balance between dividend payments and funding growth.

Wesfarmers is investing in its businesses, such as expanding the Kmart brand Anko to international markets, including Canada. The ASX share is also part of a lithium project at Mt Holland, which is utilising capital to get the mine operational.

The last two dividends declared by Wesfarmers total $1.94 per share, which equates to a fully franked dividend yield of around 3% and a grossed-up dividend yield of 4.4%. That’s not bad, but it’s not the biggest yield around.

What are the chances of owners of Wesfarmers shares getting larger ASX dividends in the future?

Intention to grow the dividend

Wesfarmers says it wants to deliver long-term shareholder returns, with part of that being the dividend payout. As part of its capital management, the company said:

With a focus on generating strong cash flows and maintaining balance sheet strength, the Group aims to deliver satisfactory returns to shareholders through improving returns on invested capital.

As well as share price appreciation, Wesfarmers seeks to grow dividends over time commensurate with performance in earnings and cash flow.

The estimate on Commsec suggests the Wesfarmers dividend can grow to $2.12 per share in FY25 and $2.36 per share in FY26. If that happens, the Wesfarmers grossed-up dividend yield could be 5.3%.

With a decent starting dividend yield, potential dividend growth in the next two years and a portfolio of solid businesses like Bunnings, Kmart, and Officeworks, I’d rate Wesfarmers shares as a solid option for ASX dividends.

The post Do Wesfarmers shares pay a decent ASX dividend? appeared first on The Motley Fool Australia.

More reading

• ASX retail shares mixed amid modest April sales growth
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• Why did Goldman Sachs just downgrade Wesfarmers shares?
• Why AIC Mines, Fletcher Building, Nufarm, and Wesfarmers shares are dropping
• 2 ASX retail shares just upgraded by brokers (and 1 downgraded)

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you own Liontown Resources Ltd (ASX: LTR) shares then you may be aware that a major milestone is on the horizon.

That milestone is the commencement of lithium production at the Kathleen Valley Lithium Project in Western Australia.

In fact, the company has started to describe itself as the “world’s next major lithium producer.”

But when will that actually happen? Let’s now see what stage Liontown is at in respect to the development of the Kathleen Valley project.

When will Liontown start producing lithium?

Earlier this month, Liontown announced that it had executed an Engineering, Procurement and Construction (EPC) contract with GR Engineering Services Ltd (ASX: GNG).

This $71 million contract is for the delivery and commissioning of the paste plant facility to support the underground mining operations at Kathleen Valley.

Management notes that the Paste Plant will include two trains capable of producing up to 160m3 of paste per hour. It has been designed to accommodate future expansion of mining operations to 4Mtpa.

Commenting on the contract, Liontown’s CEO, Tony Ottaviano, said:

We are pleased to award the contract for the design and construction of the Paste Plant which will support and further de-risk the planned underground production rates at Kathleen Valley. GRES has designed and constructed multiple paste plant facilities throughout Western Australia and the GRES team has mobilised and commenced initial works at Kathleen Valley.

This important contract means that Liontown is potentially now just a matter of weeks away from producing lithium at Kathleen Valley.

A presentation this week confirms that the project is more than 90% complete on an earned value basis and its process plant is 94% complete. In light of this, Kathleen Valley is on track for its first production in mid-2024. And given that we are rapidly approaching the middle of the year, this means that production won’t be far off.

Liontown is now working on its Dry Plant, including primary crushing through to fine ore bin. Its Wet Plant commissioning has also commenced with SAG mill, air/water service, and floatation.

Should you buy Liontown shares?

Bell Potter thinks investors should be taking advantage on recent share price weakness.

It currently has a speculative buy rating and $1.85 price target on Liontown’s shares. Based on its current share price, this implies potential upside of 36% for investors over the next 12 months.

The broker is very positive on the potential of Kathleen Valley Lithium Project. It said:

LTR’s 100% owned KV lithium project remains highly strategic in terms of its stage of development, long mine life and location. LTR has offtake contracts with top tier EV and battery OEMs (Ford, LG Energy Solution and Tesla). Hancock Prospecting has a 19.9% interest in LTR. LTR is an asset development company; our Speculative risk rating recognises this higher level of risk.

The post Own Liontown Resources shares? Here’s when it will start producing lithium appeared first on The Motley Fool Australia.

More reading

• Here is the latest lithium price forecast through to 2027
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• Guess how much a $3,000 investment in Liontown shares ballooned to in just one month
• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

New research shows 85% of Australians are investing money outside their superannuation funds.

This makes sense given the one big drawback of superannuation is that you cannot access your money until you reach your preservation age. For Gen Xers, Millennials and Gen Zs, that means 60 years.

Saving for retirement is obviously the key goal of superannuation investment. However, new research shows that most Australians who invest outside their super do so for the same reason.

Let’s investigate.

Why invest outside superannuation?

An investor survey by financial advisory firm Findex shows Australians are investing outside their superannuation for many reasons.

The top reasons relate to long-term goals, such as planning for retirement (54%) and building wealth (53%).

Saving for emergencies is the third most common reason (43%) and a key recommendation of The Fool.

Findex also found that 35% of investors were saving for a property purchase, comprising 16% saving for their first home and 19% saving for a real estate investment.

Other motivations for investing outside super include supporting children or other family members (29%), reflecting the rising role of the Bank of Mum and Dad in helping young people buy their first homes.

Amid today’s high interest rates and inflation, paying off a mortgage or other debt is a motivator for 28% of respondents, as is preserving their wealth from the impacts of inflation (26%).

And then there’s the fun stuff.

About 27% of respondents said they were saving for a major purchase outside property, like a car or a holiday. About 22% said they were investing for the simple enjoyment of it.

Another 14% are gathering funds to pay for a milestone occasion in their lives, such as their wedding.

But when the data is broken down by generation, we see different motivations at play.

Generational differences in the motivation to invest

Baby Boomers (born 1945-1964)

By far, the primary motivation to invest outside superannuation is planning for retirement (80%). No other generation is more concerned with retirement planning than the baby boomers. The next biggest motivations are building wealth (51%) and supporting their children or other family members (25%).

Gen Xers (born 1965-1980)

Gen Xers are also investing mainly to plan for their retirement (66%) and build wealth (50%). This age cohort is also the most concerned with supporting their children or other family members (33%).

Millennials (born 1981-1996)

More than any other generation, Millennials are motivated to invest outside superannuation to build wealth (55%), save for emergencies (50%), and pay off their mortgage or other debt (32%). They’re also targeting real estate investment more than any other generational group (28%).

Gen Zs (born 1997-2009)

The youngest cohort of Aussies is primarily motivated to invest to build wealth (52%) and save for emergencies (46%). They are the generation most likely to be saving for a major purchase outside property, like a car or holiday (41%). They’re also the biggest age group saving for their first home (42%) or a milestone occasion (24%).

Gen Zs are also the most concerned with preserving their wealth against inflation (29%).

This follows new data from CommBank showing young people aged 25-29 years have cut their spending more than any other age group. They spent 3.5% less over the past year compared to Australians aged over 75 who spent 6.5% more. Gen Zs also invest for enjoyment more than any other age group (26%).

The post Why invest? Here’s what’s motivating baby boomers and young Australians appeared first on The Motley Fool Australia.

More reading

• Own Liontown Resources shares? Here’s when it will start producing lithium
• Do yesterday’s inflation numbers mean interest rates are set to rise?
• BHP share price on watch after Anglo American takeover update
• Small-cap expert reveals ASX mining stock with 150%+ upside
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Yesterday, the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares were rocked by the latest inflation figures out of the Australian economy, and consequential fears of another hike in interest rates.

As we covered at the time, these figures showed Australian inflation coming at a hot 3.6% for the 12 months to 30 April 2024, well above expectations of a 3.4% rise.

When excluding volatile items like fuel and travel, the number was even higher at 4.1%. That’s well above the Reserve Bank of Australia (RBA)’s official 2-3% target band of where it wants to see inflation.

Thanks to these sobering numbers, ASX shares had a horrid day yesterday, tanking 1.3%. The market consensus over the past few months has arguably been that slowing inflation will eventually result in the RBA lowering interest rates from the current decade-high 4.35% sometime later this year, or perhaps in early 2025.

With inflation coming in hotter than expected, this conventional wisdom could now be in doubt. So it was no real surprise to see the share market react so negatively yesterday.

Remember, ASX shares are directly impacted by interest rates, given higher rates attract money away from the stock market into ‘safer’ investments like term deposits and government bonds.

Australian mortgage holders have already endured one of the steepest interest rate rises in history over the past two years or so. After all, interest rates were still at a record low of 0.1% as recently as April 2022.

So does yesterday’s inflation figures really mean interest rates might actually rise again, rather than fall, as the markets were expecting?

Are interest rates going up following the latest inflation numbers?

Well, unfortunately for anyone with a mortgage or a large loan, one prominent Australian economist thinks that the chances of at least one interest rate hike in 2024 just got stronger.

Speaking to the Australian Financial Review (AFR) this week, Judo Bank economist Warren Hogan reckons the unexpectedly high numbers we’ve just got a look at could “tip” the RBA’s hand when it comes to raising rates. Here’s what he said:

These results will test the RBA’s patience… Inflation is not falling back to target with signs that inflation’s underlying ‘pulse’ might be picking up in 2024.

The RBA was very close to hiking the rate earlier this month. This number could tip them over to raising rates at their next meeting on 18 June.

As we covered earlier, the cash rate is currently still sitting at 4.35%. But Hogan argues that the RBA might need to set it as high as 5% before it can break the back of inflation.

Hogan stated that 5% would be “in line with other similar economies’ interest rates… [Yesterday’s] data and ongoing increases in employment suggest this is still the right view”.

As with most economic projections, anticipating where inflation or interest rates might head to next is no easy task. Plenty of economists have been wrong on rates before (including the former head of the RBA). However, that probably won’t be too reassuring for any mortgage holders today. Let’s see what happens.

The post Do yesterday’s inflation numbers mean interest rates are set to rise? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The BHP Group Ltd (ASX: BHP) share price will be one to watch on Thursday.

That’s because the mining giant has just released an update on its proposed takeover of copper giant Anglo American plc (LSE: AAL).

What’s the latest?

BHP notes that on 22 May the Board of Anglo American granted an extension to the deadline for BHP to make a takeover offer.

The Big Australian welcomed the extension as it provided it with the opportunity to engage with Anglo American about its concerns regarding BHP’s proposal. That proposal would see BHP acquire the miner for approximately $75 billion.

According to the release, since the extension to the deadline was granted, BHP has continued to work extensively to address those matters. This has included several engagements with Anglo American and its advisers.

BHP is ‘confident’

This afternoon, BHP has released an update on its discussions with the Anglo American team and revealed that it is confident it can resolve matters. It said:

BHP is confident that the measures it has proposed to the Board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals. BHP has considered market precedent transactions and believes that the risks are quantifiable and manageable. BHP has already factored the costs associated with these risks into the offer ratio of its proposal.

In addition, BHP has advised that it would be willing to discuss an appropriate reverse break fee. This would be payable by BHP on failure to achieve the necessary anti-trust and regulatory approvals, including in South Africa.

Deadline extension requested

BHP has requested that Anglo American extend the deadline again. It said:

BHP believes that the proposed measures it has put forward provide substantial risk protection for Anglo American shareholders and supplement the significant value uplift that Anglo American shareholders will receive from the potential combination. BHP believes a further extension of the Deadline is required to allow for further engagement on its proposal.

As things stand, there has been no word out of the Anglo American camp. However, with London only just starting to become active, it is possible that there could be a response in the next few hours.

Until then, it will no doubt be a nervous wait for the deal makers at BHP that are aiming to turn the Big Australian into the world’s largest copper player.

The post BHP share price on watch after Anglo American takeover update appeared first on The Motley Fool Australia.

More reading

• Should you buy BHP shares now before tonight’s Anglo American takeover reveal?
• Planning your retirement? Here are the most popular investments outside superannuation
• BHP share price marching higher amid fast approaching $75 billion takeover deadline
• Nvidia shares are now worth more than 17 times the market cap of BHP. What’s next?
• Hoping to retire? I’d buy these ASX 200 dividend shares for passive income

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for some huge returns for your portfolio and have a high tolerance for risk, then it could be worth checking out the small cap ASX mining stock in this article.

That’s because one analyst is tipping its shares to rise over 150% from where they trade today.

Which small cap ASX mining stock could rocket?

The ASX mining stock in question is Meteoric Resources NL (ASX: MEI).

Meteoric Resources is a rare earth company that is progressing its flagship Caldeira Project in Minas Gerais, Brazil.

Management highlights that the Caldeira Project is a true ionic adsorbed clay (IAC) deposit with above industry total rare earth oxide (TREO) grades and excellent metallurgical recoveries using a standard ammonium sulphate (AMSUL) wash flowsheet.

It notes that these grade and recovery characteristics allow a simple flowsheet to be developed to produce a mixed rare earth carbonate (MREC) with an anticipated low capital and operating costs.

In light of this, Meteoric Resources is aiming to become a significant volume, low-cost producer and is committed to supporting and integrating into western supply chain opportunities.

Earlier this month, the company entered into a non-binding memorandum of understanding (MOU) with Neo Performance Materials Inc. (TSX: NEO) for offtake of 3,000 metric tonnes (MT) of TREO per year from the Caldeira Project.

Neo is a manufacturer of advanced industrial materials. These are magnetic powders and magnets, specialty chemicals, metals, and alloys, which are critical to the performance of many everyday products and emerging technologies.

According to the MOU, this offtake will be used by Neo to supply its magnet manufacturing plant in Estonia. Neo will also hold a right of first refusal to purchase additional material when the Caldeira Project produces more than 6,000 MT of TREO per year.

Big returns

According to the Bull, John Edwards from Novus Capital is feeling very positive about the small cap ASX mining stock and has named it as a buy this week.

Commenting on the company, Edwards said:

The company recently upgraded the resource estimate for its Caldeira rare earth element project in Brazil after completing additional infill diamond and aircore drilling. The global mineral resource now stands at 545 million tonnes at 2561 parts per million total rare earth oxides. These results support the Caldeira project’s potential to become a significant long-life supplier of rare earths, which are crucial for global electrification.

Novus Capital currently has a buy rating and 50 cents price target on the ASX mining stock. Based on its current share price of 18.5 cents, this implies potential upside of 170% for investors over the next 12 months.

The post Small-cap expert reveals ASX mining stock with 150%+ upside appeared first on The Motley Fool Australia.

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• Guess which ASX 300 mining stock is surging on a deal with Neo

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Neo Performance Materials. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.