Catalyst Metals Ltd (ASX: CYL) shares have been among the best performers on the Australian share market over the past 12 months.

During this time, the ASX stock has risen an incredible 600%.

To put that into context, a $5,000 investment into the gold miner's shares a year ago would now be worth $35,000.

But if you thought the gains were over, think again.

Why this high-flying ASX stock could keep rising

Bell Potter has been looking over the company and remains very positive on its outlook. Particularly given its decision to sell the non-core Henty Gold Mine to Kaiser Reef Ltd (ASX: KAU) this month. It said:

CYL announced the sale of its non-core Henty Gold Mine to Kaiser Reef Ltd. Upfront consideration / payments total $33m, comprised of (1) $15m cash, (2) ~$14m worth of KAU shares, and (3) a $4m reimbursement for environmental bonds. Following the transaction, CYL will hold 19.99% of KAU's ordinary shares.

Deferred consideration includes: (1) 50oz of gold per month for 5-years, capped at 3,000oz (at the current spot price A$4,800/oz, is worth $14.4m), and (2) a 0.5% royalty on gold produced from a discovery made at the Darwin Target Zone. Also, CYL gains an option to acquire 50% of KAU's 250ktpa Maldon Gold Processing Plant in Victoria.

The broker highlights that this sale means that the ASX stock can focus on the Bendigo project and the Plutonic expansion. It adds:

In our view, the Bendigo project is underexplored relative to its prospectivity, as CYL focus on the Plutonic expansion, and waits for approvals to shift exploration underground at Bendigo

Time to buy

According to the note, the broker has upgraded the gold miner's shares to a buy rating (from hold) with an improved price target of $5.50 (from $4.45).

Based on its current share price of $4.70, this implies potential upside of 17% for investors over the next 12 months.

Commenting on the transaction and its upgrade to a buy rating, Bell Potter said:

The transaction makes sense as it simplifies the business, and enables greater focus on the expansion and exploration of the flag ship Plutonic Gold Operation, while adding a low cost and rapid option to unlock value at the Bendigo Project.

Our valuation increases on changes to our model, including: (1) we increase our forecast gold prices by FY25: +3%, FY26: +11% and FY27: +10% and increase our long-term gold price to A$3,800/oz (applied from FY28) from A$3,500/oz, and (2) we allow for 2- year mine life extensions to the Plutonic Reserve cases, assuming modest conversion of existing Resources. We expect regular newsflow from the ongoing exploration programme to support increasing market valuations by (1) extending Reserve life at the 4 currently planned mines, and (2) begin to highlight the potential of new deposits to support additional mines.