Source: Streetwise Reports 04/23/2024
Emerita Resources Corp. EMOTF announced preliminary test results from the ongoing metallurgical testing program at the wholly-owned Iberian Belt West (IBW) project in Spain. Find out why one analyst called the company a “very attractive resource stock play.”
Emerita Resources Corp. announced an update and test results from its ongoing metallurgical testing program at its wholly-owned Iberian Belt West (IBW) project in Spain.
Preliminary results, including 52.4% graded zinc (Zn) concentrates with an average project zinc recovery of 84%, indicate that commercial-grade concentrates can be produced at the project with the same traditional methods used in other operations in the Iberian pyrite belt. She said.
“We’ve taken a very global approach to getting to this point, which has taken us a long time,” said CEO David Gower. “However, this is a very critical component of polymetallic deposit development and is critical to achieving optimal results. Importantly, initial results have indicated opportunities to optimize concentrate grade with respect to metal recoveries within a future model economic.”
The IBW project hosts three massive sulfide deposits: La Infanta, La Romanera and El Cura.
Technical analyst Clive Maund noted that the stock’s current decline is “seen as a presentation of what will likely prove to be the last opportunity to pick up the stock at these kinds of low prices before it goes ahead and breaks the entire pattern against the backdrop of a strengthening metals bull market that is expected to include not only gold and silver, of course, but also base and industrial metals such as copper and zinc.”
Maund called Emerita “a very attractive stock at this juncture” and rated it a strong buy across all time frames, “especially now that it’s at an excellent entry point.”
“The price is currently slightly below the midpoint of this long-term trading range, and it is clear that if it were to break out above the key resistance in the CA$1 area, and this is what If expects this to happen sooner rather than later, a major bull market will be “on the cards.”
Expected average zinc recovery of 84%
Emerita noted that the expected average zinc recovery of 84% is approximately 5-10% higher than results reported for other mines in the Iberian Pyrite Belt.
Tests at the La Romanera deposit returned a zinc concentrate grade of 49.3% with a recovery of 85%, and tests at the La Infanta deposit returned a Zn concentrate grade of 60% with a recovery of Zn by 81%, the company said in its statement.
Testing continues and final results will be released once completed.
Tests focused on copper (Cu) from the La Romanera (0.67% copper head grade) and La Infanta (0.86% copper head grade) deposits demonstrated commercial-grade copper concentrates of 22.26 % Cu and 24.87% Cu with 69.4% and 51.69% copper recoveries respectively can be produced, the company said. These results are similar to those achieved by active mines in the region and are expected to improve for ores with significantly higher copper grades.
Both copper concentrates reported gold and silver contents at payable levels of 1.94 grams per tonne gold (g/t Au) and 372.8 g/t silver (Ag) for the La Romanera copper concentrate , and 7.06 g/t Au and 1534.6 g/t Ag for La Infanta copper concentrate.
Maund called Emerita “a very attractive stock at this juncture” and rated it a strong buy across all time frames, “especially now that it’s at an excellent entry point.”
Emerita said the test work also showed the potential to produce a semi-bulk concentrate of lead (Pb) and copper, increasing the potential for payable Pb in concentrate and the potential to improve overall copper recoveries. Project-level test results averaged 40% Pb and 7.2% Cu with recoveries of 57% and 36.7% Pb and Cu, respectively, in the semi-bulk concentrate.
These results are comparably higher lead and copper grades and higher lead and copper recoveries than regional operating mines, which also produce bulk Cu-Pb concentrate. Individually, the La Romanera deposit tests returned a semi-bulk Pb/Cu concentrate containing 38.7% Pb and 7.51% Cu with recoveries of 46.10% Pb and 37.6 % Cu. La Infanta tests returned Pb grades of 44.11% and Cu grades of 6.03% in the concentrate with recoveries of 91.6% Pb and 52.2% Cu.
“We view the results in this press release as a baseline and look forward to continued improvement in metallurgical performance as we move the IBW toward a production decision,” Gower said.
The catalyst: the transition to a clean economy
Both zinc and copper are in demand as world economies try to transition from fossil fuels to cleaner sources: zinc is used in batteries and electric vehicles (EVs) use up to four times as much copper as gas-powered cars.
According to Mordor Intelligence, the zinc market will be estimated at 13.58 Mt this year and is expected to rise to 14.68 Mt by 2029, a compound annual growth rate (CAGR) of more than 1.5%.
“The COVID-19 pandemic has disrupted the global zinc market, resulting in reduced supply due to mine closures and transportation restrictions, as well as a decline in demand from various sectors,” the report said. “This resulted in fluctuations in zinc prices. However, in 2021 the market recovered thanks to increased demand from the construction and electronics industries.”
Growing demand for zinc in zinc-based batteries and increasing urbanization and industrialization are expected to provide opportunities for future market growth, Mordor noted.
Despite some cooling due to slower-than-expected electric vehicle (EV) sales, the global copper market was worth $304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5. 1% from 2023 to 2032. $496.8 billion, Acumen Research and Consulting reported.
“The growing demand for copper could be met through the development of mining technology, well-organized ore processing projects, and the discovery of new copper reserves,” the Acumen report notes. “According to the United States Geological Survey (USGS), international copper reserves increased by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated at approximately 3,500 million tons.”
Haywood Securities noted in a January 2024 report that, based on how long it takes for new copper supply to come online, the market for the metal “will tighten for the foreseeable future.” [and] this could eventually lead to a new copper cycle.” Haywood noted that forecasts are for a copper deficit this year, characterized by a supply shortfall of around 500,000 tonnes. [OWNERSHIP_CHART-10036]
Ownership and share structure
Refinitiv has provided a breakdown of the ownership and share structure of the company, where management and insiders own approximately 5.61% of the company. According to Refinitiv, Michael Lawrence Guy owns 1.84% of the company with 4.32 million shares, David Patrick Gower owns 1.18% of the company with 2.76 million shares, Joaquin Merino-Marquez owns 0 .89% of the company with 2.09 million shares, Catherine Stretch owns 0.68% of the company with 1.60 million shares, Marilia Bento owns 0.43% of the company with 1.00 million shares, Gregory Duras owns 0.28% of the company with 0.65 Million shares, Damian J.D. Lopez owns 0.20% of the company with 0.46 Million shares, and Ian T. Parkinson owns 0.11% of the company with 0 .25 million shares.
Refinitiv reports that institutions own 1.26% of the company, as Merk Investments LLC owns 1.17% of the company with 2.75 Million shares and Palos Management Inc. owns 0.09% of the company with 0 .20 million shares.
According to Refinitiv, there are 234.82 Million shares outstanding with 221.63 Million shares trading with free float, while the company has a market capitalization of CA$90.41 Million and is trading on a 52-week range between CA$0.26 and CA$0.92.
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Information on contributing authors
- Author certification and compensation: [Clive Maund of clivemaund.com] is compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund obtained the UK Technical Analyst Diploma in 1989. The recommendations and opinions expressed in this content accurately reflect the personal, independent and objective views of the author regarding all designated securities discussed. No part of the compensation received by the author has been, is or will be directly or indirectly related to the specific recommendations or opinions expressed
Clivemaund.com information
The above represents the opinion and analysis of Mr. Maund, based on the data available to him, at the time of writing this article. Mr. Maund’s opinions are his own and do not constitute a recommendation or an offer to buy or sell any securities. Because trading and investing in any financial market may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by the appropriate regulatory agencies in your legal jurisdiction, and that you conduct your own due diligence and research when making any type of transaction with financial implications. Although he is a qualified and experienced stock market analyst, Clive Maund is not a registered financial advisor. Therefore, Mr. Maund’s views on the market and stocks cannot be construed solely as a recommendation or solicitation to buy and sell securities.