2 Cheap Small Caps That Could Deliver Big Returns
In the world of investing, small caps often get overlooked. Many investors chase the big names, but history has shown time and again that the real multibaggers often start small. When a small-cap company gets its operations right at the same time that commodity markets move in its favor, the cash flow snowball can be powerful.
Right now, gold is holding strong and copper/zinc markets are tightening. That’s a recipe for well-positioned miners to deliver outsized growth. Two such names are Ora Banda Mining (ASX: OBM) and Develop Global (ASX: DVP). Both companies are hitting key milestones, yet their valuations still don’t fully reflect the progress underway. Let’s dive into the details.
Ora Banda Mining (ASX: OBM): Two Underground Engines Driving Growth
Ora Banda has quietly gone from a “one-asset story” to a dual-engine producer, with both Riverina and Sand King underground mines delivering. FY25 was the turning point year that showed just how much leverage the company has to a strong gold environment.
FY25 Highlights
Record production: 92,399 ounces of gold, up 32% YoY.
Revenue: $404.3 million.
EBITDA: $184.6 million.
NPAT: $186.1 million, a 575% YoY surge.
The real kicker was Riverina Underground, which produced 74.8 koz at 4.6 g/t, paying back its capital in just 18 months—an impressive feat. Meanwhile, Sand King reached steady state by June 2025 at around 60 koz p.a., delivering exactly as planned.
Balance Sheet Strengthening
OBM secured a new $50 million revolving credit facility from ANZ and CBA, ensuring liquidity while preserving unhedged exposure to gold prices. This means the company captures full upside from strong gold prices instead of giving away gains to hedging contracts.
Looking Ahead: FY26 Guidance
Management expects 140–155 koz production at an AISC of $2,800–2,900/oz. With two operating underground mines feeding into Davyhurst and ongoing plant optimisations, OBM is on a clear trajectory to scale up.
Why OBM Still Looks Cheap
Despite the operational shift, OBM is still often valued by the market as if it were a single-mine operator. The re-rating potential lies in consistent execution. If FY26 guidance is delivered, investors may start to recognise that OBM is no longer a speculative play, but a multi-engine cash generator.
Develop Global (ASX: DVP): Multi-Asset Catalysts with a Services Edge
Develop Global has a different model from most junior miners. It isn’t just a developer—it blends mine ownership with mining services, creating a steady cash bridge while ramping its own projects. This hybrid approach lowers financing risk and makes execution smoother.
Woodlawn Momentum
The flagship Woodlawn zinc-copper-lead mine in NSW has been steadily building momentum. A recent update lifted project economics, pushing the pre-tax NPV7 up by ~11% to ~$728 million. As execution improves, production and cash flow are moving into the near-term horizon.
Mining Services Cash Flow
Unlike most small caps that burn cash while waiting for projects to ramp, DVP generates revenue from its mining services division. Ongoing work at Bellevue and other sites supports the P&L, provides workforce continuity, and reduces the need for heavy equity raises.
Strategic Flexibility
DVP’s management has a proven track record of opportunistic M&A—such as the Essential Metals scheme in 2023. This shows a willingness to add exposure across the battery and base metals chain when it makes sense. Investors benefit from both a solid base in Woodlawn and the option value of future acquisitions.
Why DVP Still Looks Cheap
Many small-cap developers are priced purely on project execution risk. But DVP’s services business provides diversification and cash to support Woodlawn’s ramp. As the mine stabilises with steady throughput and recoveries, valuation should start converging toward its ~$728 million NPV.
What Investors Should Watch Next
For OBM
- Quarterly grades and ounces from Riverina and Sand King versus FY26 guidance.
- Progress on reducing AISC below FY25 levels.
- Updates on resource growth and plant debottlenecking at Davyhurst.
For DVP
- Woodlawn’s production and cash cost trajectory—confirmation that restart momentum is translating into steady state economics.
- New mining services contracts that help sustain positive operating cash.
- Potential bolt-on acquisitions in the battery or base metals space.
Key Risks to Keep in Mind
Of course, no small-cap story comes without risks.
OBM: Underground mining is inherently variable. Dilution, stoping delays, or cost blowouts could affect AISC. Balancing exploration spend with capital allocation will be key.
DVP: Woodlawn’s restart execution is not risk-free. Metallurgy, dewatering, or grade control issues could impact results. Zinc and copper price volatility is another swing factor.
Final Takeaway
Both Ora Banda Mining and Develop Global have demonstrated that they’re past the “story stock” phase. OBM now has two producing underground mines feeding growing cash flow, while DVP’s unique services-plus-development model helps smooth the ride as Woodlawn ramps.
The beauty of small caps is that valuation gaps can close quickly once consistent performance is delivered. For investors willing to accept the inherent risks, OBM and DVP look like two cheap small caps with the potential to deliver big returns—especially if gold, copper, and zinc markets remain supportive.
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