The Australian market has shown modest gains, with the ASX200 edging up 0.12% to 8,531 points, driven by strong performances in IT and consumer staples sectors. In light of these conditions, investors might consider exploring opportunities beyond the usual large-cap stocks. While the term "penny stocks" may seem outdated, these smaller or newer companies can still offer intriguing investment prospects due to their affordability and potential for growth when backed by solid financials.

Click here to see the full list of 1,032 stocks from our ASX Penny Stocks screener.

Let's dive into some prime choices out of the screener.

Simply Wall St Financial Health Rating: ★★★★★★

Overview: Freehill Mining Limited, along with its subsidiaries, is involved in the mining and exploration of mineral resources in Chile and has a market capitalization of A$12.31 million.

Operations: The company generates revenue from its Chilean mining operations, amounting to A$0.69 million.

Market Cap: A$12.31M

Freehill Mining, with a market cap of A$12.31 million, is pre-revenue, generating A$0.69 million from its Chilean operations. The company faces high volatility, with weekly fluctuations increasing over the past year and a highly volatile share price in recent months. Despite being debt-free and having short-term assets exceeding liabilities, Freehill Mining's negative return on equity and unprofitability pose challenges. The board's average tenure of 1.8 years indicates limited experience. Although it has raised additional capital recently, Freehill Mining previously had no cash runway based on last reported free cash flow data as of June 2024.

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: ImExHS Limited provides cloud-based medical imaging solutions both in Australia and internationally, with a market cap of A$18.36 million.

Operations: The company generates revenue from two main segments: Software, contributing A$9.02 million, and Radiology, which accounts for A$15.63 million.