The Aeris Resources Ltd (ASX: AIS) share price could be one of the best opportunities in the ASX mining share sector.
For readers that haven't heard of it before, it's predominately a copper miner. But, it has exposure to other commodities including gold and zinc.
While its headquarters are in Brisbane, its portfolio (including exploration targets) is across the country in Queensland, Western Australia, New South Wales and Victoria.
The ASX mining share is well-placed for growth
At the end of the FY23 second quarter, it had $67.2 million of cash on the balance sheet and it was debt free. Its balance sheet is in great shape to pursue multiple growth activities.
The business said that it has a "strong pipeline of organic growth projects, an aggressive exploration program and continues to investigate strategic merger and acquisitions opportunities."
In its FY23 second quarter update, it noted resource upgrades at Golden Plateau (Cracow project) and Turbo (Jaguar project). It also mentioned high-grade copper intersections from drilling at Avoca Tank and Kurrajong (Tritton project).
The ASX mining share is also working on other areas to add resources to grow the business. For example, its Barbara exploration efforts will include a mining study that could result in a potential underground operation "of similar scale to Mt Colin".
All of the above bodes well for the future Aeris Resources share price, in my opinion.
Copper demand to boom?
Various reporting suggests that copper demand is going to increase significantly as the world moves towards decarbonisation and electrification.
For example, CNBC noted that electric vehicles, solar, wind power and batteries for energy storage all require copper. An electric vehicle needs 2.5 times as much copper as an internal combustion engine vehicle, according to S&P Global. The growing electricity grid will also need a lot of copper.
S&P Global suggested that copper demand will nearly double to 50 million tonnes by 2035.
To me, this suggests that the copper price could rise as well, though I'm not going to try to predict how far it could go.
Compelling valuation
The Aeris Resources share price has risen close to 40% since this article, which suggested that the copper miner could have a good year in 2023.
I still think that the ASX mining share is on track for pleasing shareholder returns from here.
The forecast on Commsec suggests that Aeris could achieve earnings per share (EPS) of 15.1 cents in FY24 and 15.6 cents in FY25, putting it at under 5 times the estimated earnings for those years.
If those forecasts are correct (or conservative) and if Aeris reaches a price/earnings (P/E) ratio of (just) 6, it would be a share price return of over 20%.
Also, with a possible P/E ratio at such a low number, any dividends would end up being a very large dividend yield, though there's no talk of dividends yet.
Imagine if Aeris keeps making 15 cents per share of EPS and it targets a dividend payout ratio of 50%. A dividend of 7.5 cents per share would be a cash dividend yield of 10.1% and 14.5% assuming the Aussie company generated and attached franking credits.
For now, the ASX mining share's cash is better spent on growth expenditure.
