Resurgence in ASX Zinc Stocks Led By BHP

Rising silver prices are driving Zinc stocks higher, more so because of tightening supply due to production cuts and inventory drawdowns. Deficits in the zinc market are further increasing global supply concerns. 

BHP Group Limited (ASX: BHP) 

had a strong FY2025 with revenue of about US$51.3 billion and underlying EBITDA of US$26.0 billion giving it a margin of 53%.Net operating cash flow was US$18.7 billion while net profit stood at US$10.2 billion. The company spent around US$9.8 billion on exploration projects mainly in copper, iron ore, coal and potash. Its balance sheet is still solid with net debt at US$12.9 billion and gearing ratio of 19.8%. In the coming years BHP is pushing big developments like the Jansen potash project in Canada along with copper expansions in Chile and South Australia. With healthy free cash flow and careful use of capital the management is trying to keep high margins and also increase focus on future commodities such as copper, potash and zinc by-products. 

South32 Limited (ASX: S32) 

had a strong FY25 with revenue going up 17% to US$5.78 billion and NPAT reaching US$210 million compared to a loss in last year. The underlying EBITDA was 7% higher at US$1.93 billion while underlying earnings jumped 75% to US$666 million. Operating cash flow came at US$1.34 billion and by the end of June the company had US$1.76 billion in cash. A fully franked final dividend of 2.6 US cents per share was announced which is around 40% payout ratio. Most of the future growth is expected from the Hermosa Taylor zinc-lead-silver project in Arizona where FY26 investment will increase to US$750 million as shaft and plant construction speeds up. 

Polymetals Resources Limited (ASX: POL) 

restarted its operations at the Endeavor Silver Zinc Mine in New South Wales in June quarter of 2025. First ore got processed in early June and commissioning led to production of silver-lead and zinc concentrates. Cash at the end of the quarter was about A$8.3 million. The net cash outflow for the quarter was A$7.1 million and year to date has been A$16.5 million. The company received its first revenues in July through pre-payment under offtake agreements which was a big milestone for them. Work on site refurbishment and plant optimisation is still going on with a target to hit average throughput of 65,000 tonnes each month in second half of 2025. Development is also moving ahead at the Upper North Lode which is expected to bring higher grade silver ore. 

Encounter Resources Limited (ASX: ENR) 

pushed ahead with its critical minerals projects in Q2 2025 mainly at the Aileron Niobium-REE-Copper Project in WA. Regional exploration grew too with the new Joyce discovery plus a A$250k EIS grant backing airborne EM surveys. The company at the Yeneena Copper Project has got back full 100% ownership and is getting ready for RC drilling at BM5. The Jessica Copper Project, which is in partnership with South32 has moved forward with geophysical surveys and drilling is expected to start from October. End of the quarter cash stood at A$18.6 million. Operating cash inflow came at A$80,000 for the quarter while Year to date it was A$750,000 and the company is keeping a funding runway of around 9 quarters.

Aurelia Metals Limited (ASX: AMI) 

had a strong FY25 with revenue coming in at A$343 million and NPAT of A$48.9 million which is a big turnaround from the loss it posted in FY24. EBITDA jumped 69% to A$121.9 million giving a margin of 35.5% and cash flow from operations went up 29% to A$129.7 million. The year closed with A$110.1 million in cash keeping the balance sheet very strong. Gold production stood at 45.4koz together with 16.8kt of zinc, 15.7kt lead and 2.7kt copper all in line with the guidance. Growth spending was A$66.4 million mainly at Federation and also for the Great Cobar Project which is aiming for first output in FY28. With upgrades in the plants, exploration success at Federation and clear copper growth plans Aurelia looks on track to do very well in the future.

(Source: Company Announcements)