3 small-cap resources shares to watch

Alderan Resources Ltd (ASX:AL8) is one of three small-cap shares in the resources sector that I think are worth watching closely…

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While the majority of retail investors will be familiar with mining giants such as BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), I suspect they will be less familiar with the three resources shares listed below.

These three fledgling companies may not be well known, but they certainly have significant potential in my opinion. They are as follows:

Alderan Resources Ltd (ASX: AL8)

This mineral exploration company recently announced the preliminary results of its induced polarisation survey at its Frisco site in the United States. According to the release, the survey appears to have uncovered an extremely large, preserved, and mineralised porphyry copper system at its Cactus Canyon prospect. I believe the potential of this system goes some way to justifying the meteoric rise of its share price this year.

Avz Minerals Ltd (ASX: AVZ)

Much like Alderan Resources, Avz Minerals is still at the exploration stage. Similarly, it has already caused a buzz amongst investors due to its promising drilling results. Drilling results from its Manono lithium project in the Democratic Republic of Congo have revealed the presence of high-grade lithium mineralisation. Considering demand for lithium is expected to grow strongly over the next decade, the company could be sitting on an extremely lucrative asset.

State Gas Ltd (ASX: GAS)

This emerging conventional gas developer is looking to take advantage of the crisis that has hit Australia's domestic gas supply. The company owns a 60% stake and operates petroleum lease 231 in central east Queensland where its primary focus is a conventional shallow gas target in the Cattle Creek Formation. State Gas hit the ASX boards at a listing price of 20 cents per share earlier this month. At the time of writing its shares are 70% higher at 34 cents.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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