Defense Metals Corp. (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) announced that results of crushing and grinding tests on various samples extracted from the Wicheeda rare earth (RE) deposit were positive, reported Noble Capital Markets analyst Mark Reichman in a March 1 research note.
This is another step toward the completion of a prefeasibility study (PFS) of the project in British Columbia slated for Q1/24.
The Canadian exploration company is Outperform rated and now trading at about CA$0.25 per share. Noble's target price on it, in comparison, is CA$0.70 per share. The difference in the two prices implies attractive gains for investors.
The new comminution test data confirmed that Wicheeda ore is amenable to conventional grinding operations, including a semi-autogenous grinding mill-ball circuit, noted Reichman. This is good news for Defense Metals as this method requires "relatively low" energy and supply costs.
Noble Capital believes the upcoming PFS will be "compelling," wrote Reichman.
The values obtained during this testing were similar to previous ones in 2019, generated using a bulk sample and used in the 2021 preliminary economic assessment.
"The [new] results will help determine the design of the crushing and grinding plant" that will be included in the PFS, along with drill results from Defense Metals' 2021 and 2022 programs.
Noble Capital believes the upcoming PFS will be "compelling," wrote Reichman.
"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 analyst added.
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