Defense Metals Corp.'s (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) upcoming prefeasibility study (PFS) of its Wicheeda rare earth project is expected to be "compelling," given the progress made and the results of exploration work done there thus far, purported Noble Capital Markets analyst Mark Reichman in an August 10, 2022 research note. The PFS is due out in H1/23.
"In addition to significant potential to expand the resource and extend the mine life beyond 19 years, we expect grade enhancement and the meaningful conversion of Inferred to Indicated and potentially Measured resources," Reichman wrote.
The resource used in the Wicheeda preliminary economic assessment (PEA) is 5,000,000 tons of total rare earth oxides averaging 2.95% (Indicated) and 29,500,000 tons of total rare earth oxides averaging 1.83% (Inferred), Reichman reiterated.
The analyst opined that as Defense Metals continues advancing Wicheeda toward the PFS, the project will likely attract companies looking to enter an offtake agreement or form a strategic partnership.
As for the upcoming PFS, Reichman noted, it will include results of Defense Metals' just completed 2022 resource infill and exploration drill program. Efforts consisted of 12 holes over 3,500 meters drilled in the central and northern part of the conceptual open pit area outlined in the mining plan of the Wicheeda PEA. Drill data are currently pending and should become available in the next month or two.
The PFS will also reflect the results of Defense Metals' 2021 diamond drill program conducted at Wicheeda.
Now, with infill and exploration drilling behind it, the Canadian critical metals company is shifting to geotechnical drilling at Wicheeda, noted Reichman.
Defense Metals plans a total of five holes to be placed in the north, south, east, and west walls of the PEA open pit to inform pit slope design for the PFS.
Noble has an Outperform rating and a $0.70 per share target price on Defense Metals, the current share price of which is around $0.19.
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Noble Capital Partners, Defense Metals Corp., August 10, 2022
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