In a September 9 research note, Clarus Securities Inc. research analyst Varun Arora, MBA, commented on base and critical metals explorer and developer Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE) who recently announced drill results from five additional holes at the La Infanta area of its Iberia Belt West (IBW) property in southern Spain.
The analyst noted that these latest holes were drilled to depths of less than 100 meters (100m) within the historic 0.8 Mt at 26.5% Zn eq resource which prior testing showed to travel along a 600m strike-length to a depth of around 120m from surface.
The reported highlighted data gathered from Hole IN008 where from a depth of about 75m assay results returned 11.1m of 60.2% Zn eq, comprised of 3.6% Cu, 319 g/t Ag and 0.8 g/t Au, in what was described as the highest ultra-high grade and wide intercept registered to date. Hole IN008 is located approximately 200m from Hole IN003, which previously produced excellent grades and a wide intercept of 5m at 66.7% Zn eq. In addition, Hole IN005 demonstrated 42.9% Zn eq over 2.6 m and Hole IN006 recorded 26.6% Zn eq over 3.2m.
Clarus Securities advised that so far, Emerita Resources has received assay results from 1,253m of drilling in 8 of the 11 holes drilled at the site. Clarus indicated that its weighted average estimates for these 8 holes have come in at 35% Zn eq over 4.45m, compared to historic results from 49 holes that averaged 26.5% Zn eq over widths of 3 to 6m.
The company is still conducting its current drill program and plans to drill two additional infill holes before systematically advancing to step out drilling to depth along strike.
Importantly, surface sample data and gravity imply that the deposit may very possibly extend well past the historic strike and prior established depths. The analyst explained that Emerita's management team is now planning to test the strike over a distance of approximately 1.2 km to downward depths of 300 to 350m.
Remarkably, Clarus stated that if these efforts by the company are indeed successful, the result could be as much as a three- to six-fold increase in the historic resource towards levels measuring 2.5-5.0 Mt at higher than historic grades.
The report noted that the company expects to receive electromagnetic (EM) survey results from depths as great as 400m in the coming weeks that are expected to confirm the depth potential at La Infanta. The analyst mentioned that the EM data is aligning well with gravity surveys conducted and if structure continuity can be identified at these depths it would serve to expand the historic resource by a factor of four as prior efforts only tested to depths of around 120m. The analyst further added that volcanogenic massive sulfide (VMS) ore deposits have been discovered to exist at depths exceeding 1,000m in the Iberian Pyrite Belt.
Clarus anticipates that environmental authorization (AAU) permits will be issued for the entre IBW property including Romanera and El Cura by no later than early October of this year. When the permits are received, Emerita's management plans to deploy two additional rigs at Romanera raising the total rig count to four including two drills actively working at La Infanta many even commission a fifth rig to test several other anomalies identified by the gravity survey.
The analyst noted that a resource update is expected to be published in H1/22 for the company's IBW project located in Huelva Province, Spain. The report is likely to encompass La Infanta, Romanera, and potentially El Cura.
Clarus mentioned that that Emerita Resources is currently well funded and has cash reserves of about CA$26 million on its balance sheet. Clarus pointed out that it believes the 5,000m La Infanta drill program will be expanded.
Clarus reported that Romanera offers significant exploration upside and suggest a combined resource potential of 21 Mt at 13.8% Zn eq for IBW including both Romanera and La Infanta, compared to the 12 Mt. historic resource. The analyst noted that the current estimates do not include any data for the El Cura area which is believed will increase the total IBW project resource.
According to Clarus, "Emerita offers a rare combination of significantly derisked, world-class polymetallic projects with excellent infrastructure on the Spanish side of the Iberian Pyrite Belt."
Clarus Securities rates Emerita Resources Corp. as a "Speculative Buy" with a 12-month price target of CA$4.50/share. The company's shares trade on the TSX Venture Exchange under the symbol EMO and last closed for trading at CA$1.84/share on September 9, 2021.
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Disclosures from Clarus Securities, Emerita Resources Corp., September 9, 2021
Clarus Securities Equity Research Disclosures
Within the last 24 months, Clarus Securities Inc. has managed or co-managed a public offering of securities of the Company. Within the last 24 months, Clarus Securities Inc. has received compensation for investment banking services with respect to the securities of the Company.
The research analyst and/or associates who prepared this report are compensated based upon (among other factors) the overall profitability of Clarus Securities and its affiliate, which includes the overall profitability of investment banking and related services. In the normal course of its business, Clarus Securities or its affiliate may provide financial advisory and/or investment banking services for the issuers mentioned in this report in return for remuneration and might seek to become engaged for such services from any of such issuers in this report within the next three months. Clarus Securities or its affiliate may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. Clarus Securities, its affiliate, and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities discussed herein, or in related securities or in options, futures or other derivative instruments based thereon.
Each Clarus Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the Company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.