In the fast-paced world of investing, undervalued penny stocks often sit at the edge of risk and reward. While the risks can be high, the rewards — when they come — can be transformational. For bold investors looking to uncover undervalued gems on the Australian Securities Exchange (ASX), a few undervalued penny stocks are beginning to show signs of breakout potential.

Below, we spotlight three high risk stocks that are quietly catching investor attention. These small cap penny stocks offer exposure to exciting sectors — from mining to biotech — with valuations that make them some of the best penny stocks ASX has to offer right now.

1. Tyranna Resources (ASX: TYX): Betting on a Gold Breakout

In a world shaped by inflation and geopolitical volatility, gold is making a powerful comeback. And explorers like Tyranna Resources are poised to benefit.

TYX is focused on developing its gold and copper prospects in Australia. With gold prices hovering above A$2,700/oz, Tyranna’s drilling campaigns are gaining traction. The company currently holds approximately $4.77 million in cash, enabling it to aggressively pursue exploration across its tenements.

Why It Stands Out:

• Exploration Focus: TYX is actively targeting high-potential gold zones through planned drilling programs.
• Strategic Flexibility: It may explore joint ventures or asset sales to unlock value.
• Low-Cost Entry: As one of the best penny stocks ASX, TYX offers a cheap entry into the gold sector for speculative investors.

Gold exploration is inherently speculative, but that’s precisely what draws short-term traders and long-term believers to growth penny stocks like Tyranna. With successful drill results, this penny share could see a rapid valuation surge.

2. Amplia Therapeutics (ASX: ATX): Biotech Brilliance in the Making

Moving beyond mining, Amplia Therapeutics brings a different flavor of risk — and potential reward. Based in Melbourne, Amplia is developing FAK inhibitors for cancer and fibrotic diseases, with its lead candidate narmafotinib (AMP945) advancing through clinical trials.

At the end of March 2025, Amplia reported $10.9 million in cash, a sharp rise from just A$3.4 million a year earlier. The company has minimal fixed asset expenditure and is channeling its resources toward key clinical trials expected to reach critical milestones this year.

Why Investors Are Interested:

• Clinical Momentum: Amplia aims to complete major trial stages in 2025.
• Cash-Rich: Strong reserves reduce dilution risk in the short term.
• Biotech Upside: A successful trial could send this small cap stock soaring.

While it remains a high risk stock, biotech investors are no strangers to binary outcomes. One positive clinical readout can send a company’s valuation skyrocketing. That’s why Amplia is becoming one of the most-watched growth penny stocks on the ASX.

3. Sayona Mining (ASX: SYA): Lithium at a Discount

Lithium has been one of the most talked-about commodities in recent years, and Sayona Mining has positioned itself in the middle of the action. With projects in both Western Australia and Canada, Sayona is looking to become a serious player in the electric vehicle (EV) battery supply chain.

The company reported $254.4 million in revenue in FY2024, reflecting its progress toward becoming a steady lithium producer. However, the recent slump in lithium prices has pressured margins and weighed on investor sentiment — making Sayona one of the more undervalued penny shares on the market today.

Key Fundamentals:

• Merger Synergy: A tie-up with Piedmont Lithium could enhance economies of scale.
• Revenue Generation: Unlike many peers, Sayona is already producing and selling.
• Global Footprint: Access to both Australian and North American markets gives it a geographical edge.

As lithium stocks cool down, Sayona may offer a rare opportunity for long-term investors to buy into the battery metal narrative at discounted levels. Among cheap ASX stocks, Sayona is one of the few with actual revenue — a key factor that separates it from many other speculative names.

Why Penny Stocks Deserve Your Attention

Let’s face it — penny shares are not for the faint of heart. But within the ASX’s lower price brackets, there’s room for agility, innovation, and growth that large-cap names often lack. What makes these three companies compelling isn’t just their price, but their catalysts:

• Tyranna Resources could unlock serious value if gold prices stay strong and drilling programs yield results.
• Amplia Therapeutics is a biotech on the verge of possible clinical breakthroughs.
• Sayona Mining is a revenue-generating lithium producer trading at a discount during a sector cooldown.

For investors looking beyond blue chips and into the realm of speculative opportunities, these growth penny stocks are worth keeping an eye on. Whether you’re seeking exposure to gold, biotech innovation, or the green energy transition — these small cap stocks pack a lot of potential.

Final Thoughts: A Calculated Gamble?

Investing in high risk stocks isn’t about throwing darts — it’s about understanding the risk-reward profile and staying informed. While cheap ASX stocks may be volatile, thorough due diligence can help uncover true value.

These three penny shares — Tyranna, Amplia, and Sayona — show that with the right combination of timing, strategy, and patience, penny stocks can offer real upside. They might not be making headlines like BHP or CSL, but they’re quietly setting the stage for big moves.

So if you’re building a speculative watchlist for 2025, these names should be on it. They’re not just best penny stocks ASX, they’re also stories of resilience, innovation, and untapped growth.

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