Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

TICKERS: DEFN; DFMTF; 35D

Co. Sees Favorable Grinding Results for Rare Earths Project

Share on Stocktwits

Source:

The crushing and grinding (comminution) data from Defense Metals Corp.'s Wicheeda rare earth elements (REE) project will help inform its preliminary feasibility study expected early next year.

Defense Metals Corp. (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) has reported favorable crushing and grinding (comminution) results from multiple samples at its Wicheeda rare earth elements (REE) project in British Columbia.

The results will help determine the design of the crushing and grinding plant in the project's preliminary feasibility study (PFS) expected in the first quarter of 2024.

"Tests on samples and a master composite from drill core confirmed that the ore is amenable to conventional grinding operations, including a conventional semi-autogenous grinding (SAG) mill-ball circuit, resulting in relatively low energy and supply costs," Noble Capital Markets analyst Mar Reichman wrote in an updated note on March 1.

He kept his rating of Outperform for the stock with a CA$0.70 target.

Noble Capital Markets analyst Mark Reichman kept his rating of Outperform for the stock with a CA$0.70 target.

"Crushing and grinding is the first step in processing mined material where ore is reduced to sand-like particles suitable for upgrading by flotation or other means," Reichman wrote. "It accounts for a fairly significant percentage of the mineral processing plant energy requirements, production cost, and carbon emission profile."

The tests were done on 17 variability samples and a master composite. They show "the ore is soft, amenable to conventional grinding operations, and has a low abrasion index," Defense Metals metallurgy advisor John Goode said.

"The data show that a conventional . . .  (SAG) mill-ball mill circuit will work well, and that grinding energy and supply costs will be relatively low," Goode said.

The Catalyst: Positive Implications for Cost

Source: Defense Metals Corp.

The results were very similar to those from a bulk sample taken from Wicheeda in 2019, giving additional confidence in the new data, the company said. Those data were used in preparing for a 2021 Preliminary Economic Assessment of the site.

Comminution turns the ore into particles typically less than 1 millimeter in size. It usually accounts for a "significant percentage" of the energy demand, production cost, and carbon footprint of mineral processing plants, the company said.

The results have positive implications for the project's cost profile, Reichman wrote.

"Defense Metals is advancing toward what we believe will be a compelling preliminary feasibility study that will incorporate data from the 2021 and 2022 drilling programs," he wrote.

"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."

The variability samples and the master composite were studied using industry-standard tests, Defense Metals said.

Busy 2023 for Defense Metals

The company is heading into a busy year as it builds a pilot plant, upgrades Wicheeda’s resource with thousands of meters of drilling, and completes the PFS.

Construction of the hydrometallurgical pilot plant at SG Lakefield in Ontario has started and commissioning is scheduled to start in the second half of March. Pilot operations should be completed by the end of April.

The data from the pilot plant will also be used in the PFS, and the samples will be shared with potential end users.

"We also likely will upgrade or update our resource, and that might be published before the (PFS)," Defense Metals President Luisa Moreno said. "We’ve added more than 10,000 meters of drilling (since the 2021 PEA), so that will be used in the new resource estimation."

The results have positive implications for the project's cost profile, Reichman wrote.

All of this is to catch up with China, which has about 85% of the world’s processing capacity of REEs. The elements are in high demand in the new green economy for purifying water, MRIs, fertilizers, weapons, research, wind turbines, computers, and permanent magnet motors for electric vehicles (EVs).

Defense Metals hopes to produce as much as 10% of the world’s light REEs to reduce that reliance on China.

Analyst Michael Gray of Agentis Capital recently initiated coverage on the company, saying Wicheeda was well-located with access to key infrastructure and "could become a globally significant producer" of REEs. He set a 12-month valuation of CA$3.50 for the stock.

"DEFN is a best-of-breed North American REE developer that is well-positioned to its leverage-growing global REE demand and government support to become part of a North American REE critical metals supply chain," Gray wrote.

The company has also completed flotation tests on variability samples and a master composite from the project. They gave an average of 81% recovery to a concentrate assaying 45% rare earth oxide, results Moreno called "a huge milestone."

Ownership and Share Structure

Streetwise Ownership Overview*

Defense Metals Corp. (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE)

*Share Structure as of 1/23/2023

About 5% of the company’s stock is owned by insiders, including Director Andrew S. Burgess with 2.01% or 4.18 million shares, and CEO Taylor with 1.2% or 2.5 million shares, according to Reuters.

About 5% of the company is owned by institutional entities, including U.S. Global Investors Inc. with 0.72% or 1.5 million shares, Reuters said.

The rest, 90%, is retail.

Defense Metals has a market cap of CA$68.54 million with 207.7 million shares outstanding, 164.9 million of them free floating. It trades in a 52-week range of CA$0.39 and CA$0.165.

Sign up for our FREE newsletter

Disclosures:

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Defense Metals Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Defense Metals Corp. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees, or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Defense Metals Corp., a company mentioned in this article.

Defense Metals Corp. Disclosures:

The information disclosed herein is only summary information about Defense Metals Corp. and the industry in which it operates in. Visit www.sedar.com and www.defensemetals.com to review additional disclosures and filings for Defense Metals Corp.

Independent Preliminary Economic Assessment for the Wicheeda Rare Earth Element Project, British Columbia, Canada, dated January 6, 2022, with an effective date of November 7, 2021, and prepared by SRK Consulting (Canada) Inc. is filed under Defense Metals Corp.’s Issuer Profile on SEDAR (www.sedar.com).

Noble Capital Markets Disclosures:

GENERAL DISCLAIMERS: All statements or opinions contained herein that include the words "we", "us", or "our" are solely the responsibility of Noble Capital Markets, Inc. ("Noble") and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES: This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. ("Noble"). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst's judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.

The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures: The following disclosures relate to relationships between Noble and the company (the "Company") covered by the Noble Research Division and referred to in this research report.

The Company in this report is a participant in the Company Sponsored Research Program ("CSRP"); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.

Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) within the next 3 months.

Noble is not a market maker in the Company.

ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE: Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ 'Best on the Street' Analyst and Forbes/StarMine's "Best Brokerage Analyst." FINRA licenses 7, 24, 63, 87.

CONTINUING COVERAGE: Unless otherwise noted through the dropping of coverage or change in analyst, the analyst who wrote this research report will provide continuing coverage on this company through the publishing of research available through Noble Capital Market's distribution lists, website, third party distribution partners, and through Noble’s affiliated website, channelchek.com.

WARNING: This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to by an investment advisor, that advisor may receive a benefit in respect of transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by . This report may not be reproduced, distributed or published for any purpose unless authorized by .

RESEARCH ANALYST CERTIFICATION: Independence Of View: All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation: No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public appearance and/or research report.

Ownership and Material Conflicts of Interest: Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.




Want to read more about Critical Metals and Base Metals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe