There are always plenty of opportunities to be found in the Australian share market’s ‘micro-cap’ space. Here are two companies from vastly different businesses, valued at virtually the same capitalisation, with what looks to be excellent prospects, and share prices capable of pushing up through the 50-cent level.
AIC Mines
(A1M, 32 cents)
Fast facts:
Market capitalisation: $184 million
12-month total return: –29.7%
Three-year total return: –13.8% a year
Expected FY26 (June) dividend yield: no dividend expected
Expected FY26 (June) price/earnings (P/E) ratio: 7.4 times earnings
Analysts’ price target: 50 cents (Stock Doctor, five analysts)
AIC Mines is building a portfolio of copper and gold mines in Australia through exploration, development and acquisition. It owns the producing Eloise copper mine, a high-grade operating underground mine near Cloncurry in North Queensland and has a nearby development project called Jericho on which it is about to begin work.
Eloise started production in 1996: AIC bought the mine in 2021 for $27 million. In FY25 (year to 30 June), AIC had guidance in the market for full-year FY25 production from Eloise of approximately 12,500 tonnes of copper and 5,000 ounces of gold in concentrate at an all-in-sustaining cost (AISC) of approximately $5.25 a pound of copper (the AISC is the effective break-even point of a mining operation: it is a figure that incorporates not only the “cash cost” of production but all the costs that allow production to be sustained). But the company comfortably exceeded its guidance, producing 12,863 tonnes of copper and 5,955 ounces of gold in concentrate. This represented the second year and eighth quarter in a row that Eloise had achieved or beaten its production guidance.
AIC announced last May that it had approved development of the Jericho copper deposit – just 4 kilometres south of the Eloise mine – through an underground link drive directly from the Eloise decline. Last month, AIC got the project moving further, with the development of the with the awarding of an engineering, procurement, and construction (EPC) contract for the expansion of the Eloise processing facility, to GR Engineering Services (ASX: GNG).
AIC plans to expand the Eloise processing facility to from the current 725,000 tonnes a year of ore throughput capacity to 1.1 million tonnes a year, with a later expansion to 1.5 million tonnes a year capacity. Construction is expected to begin in October 2025, commissioning expected in the December 2026 quarter: this schedule will be co-ordinated with the ramp-up in production at Jericho, where the first development ore is planned to be hit in June 2026. The expansion of the Eloise processing plant and ongoing development of the Jericho deposit is forecast to lift annual production to more than 20,000 tonnes a year of copper in concentrate, from the 2027-28 financial year, and further, to 25,000 tonnes a year by the end of the decade.
With the expansion, economies of scale start to mount. The company’s current AISC guidance of $5.25 a pound stands: when ore throughput of 1.5 million tonnes a year is reached, analysts expect the economies of scale to bring the AISC below $4.50 a pound.
To put that in context, the current copper price is $7.64 a pound.
The $176 million mine and mill expansion is fully funded through equity, a US$40 million (61.2 million) prepayment facility from global commodities trader Trafigura, existing cash, and forecast free cash flow. Copper is the third most widely used metal in the world, and more recently, the market has understood that it will be indispensable in the mooted energy transition, being an essential element in renewable energy systems, and electric vehicles (EVs). Copper has a strong long-term outlook, and AIC Mines is a cheap exposure to a growing producer.
Paradigm Biopharmaceuticals
(PAR, 46.5 cents)
Fast facts:
Market capitalisation: $181 million
12-month total return: 57.6%
Three-year total return: –20.8% a year
Expected FY26 (June) dividend yield: no dividend expected
Expected FY26 (June) price/earnings (P/E) ratio: n/a (loss-maker)
Analysts’ price target: 73 cents (Stock Doctor, one analyst)
Paradigm Biopharmaceuticals is a late-stage drug development company that’s trying to create a superior treatment for osteo-arthritis, a degenerative joint condition. It causes pain, swelling and stiffness, affecting a person’s ability to move freely.
Paradigm has re-purposed a semi-synthetic drug named pentosan polysulphate sodium (PPS) into an injectable form (iPPS), in an anti-inflammatory drug called Zilosul that has shown promising results in clinical trials aimed at showing its potential to treat musculoskeletal disease, and in particular, knee osteoarthritis (OA). Zilosul is aimed at the treatment of pain associated with musculoskeletal disorders driven by injury, inflammation, ageing, degenerative disease, infection or genetic predisposition.
Paradigm has the drug at Phase III stage, the stage that tests the safety, and how well a new treatment works, compared with a standard treatment. Phase III clinical trials are the gold standard to demonstrate the effects of an experimental therapy, compared to the standard therapy, which is what is already used.
The Phase II trial (Phase II studies determine the effectiveness of an experimental drug on a particular disease or condition, in a sample size of 100 to 300 volunteers) demonstrated that iPPS not only alleviates pain and enhances knee functionality in knee OA but also showed promise in improving joint health. In 2024, Paradigm determined the optimal dose of iPPS for the phase III trial and had its trial protocol approved by the US Food & Drug Administration (FDA).
Paradigm raised $16 million in December 2024 to support Phase III site activation and recruitment. The trial (PARA_OA_012) received Australian ethics approval in February and US ethics approval in May, and Paradigm is planning up to 55 US clinical sites (up to ten of them in Australia), with many already preparing for trial start-up. The company has told shareholders to expect the first US patient enrolment in the current quarter (to end of September 2025). Paradigm expects 100% patient recruitment in the first half of calendar 2026, with interim analysis (of the effects of the treatment on the first 50% of participants) anticipated in mid-2026.
Earlier this month, Paradigm secured a US$$27 million (A$41.2 million) funding facility from Obsidian Global Partners (a New York-based alternative investment firm that specialises in funding growth-stage biotech companies) to support the global Phase III clinical trial (PARA_OA_012), evaluating iPPS for the treatment of knee osteoarthritis. This capital injection ensures that Paradigm is fully funded through several key clinical milestones.
Further out, Paradigm is also investigating iPPS for the treatment of other diseases where the anti-inflammatory and tissue regenerative properties of PPS can play an important role, including muco-polysaccharidoses (MPS), a group of rare inherited metabolic diseases that, in children, can cause intellectual disability, physical health problems and developmental delay.
With strong clinical and real-world data supporting iPPS, Paradigm is attempting to address one of the largest unmet needs in musculoskeletal medicine. Osteo-arthritis is a debilitating condition affecting millions of people around the world, and this Australian company is on a mission to solve it. There are limited surgical options for sufferers, and there’s a focus on short-term pain relief, resulting in a high economic burden: osteo-arthritis costs the US healthcare system more than US$136 billion ($208 billion) every year. A safe and effective treatment alternative, with long-term benefits, is urgently needed. Like many life sciences companies, news flow will drive the Paradigm share price; and clearly, and any negative surprises on how the trial is progressing could have a nasty effect. But Paradigm knows its drug well – and Obsidian Global Partners in particular would have conducted very thorough due diligence – and analysts are confident in the results.
