New Rare Earth Resource is Bigger, of Better Quality
Research Report

Defense Metals Corp.'s (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) revised mineral resource estimate for its flagship Wicheeda rare earth elements project in British Columbia is bigger and of higher quality than the previous iteration, reported Mark Reichman, Noble Capital Markets managing director and equity research analyst, in a Sept. 13 research note.

The new total Measured & Indicated resource is "a significant upgrade compared to the previous estimate," Reichman wrote. "With a significantly larger and upgraded mineral resource, Defense Metals is advancing toward what we think will be a compelling preliminary feasibility study," due out in H1/24.

Attractive gain offered

Accordingly, Noble maintained its $0.70 per share target price on British Columbia-based Defense Metals, the share price of which now is about $0.21 per share, noted Reichman. From this current price, the return to target suggests a potential return for investors that is sizable: 233%.

"The current price is an excellent entry point for investors seeking exposure to one of North America's advanced rare earth elements projects," Reichman commented.

The mining explorer-developer remains rated Outperform.

Details of new resource

Reichman reviewed the current Wicheeda resource estimate, which encompasses results of 45 holes drilled over 10,350 meters (10,350m) in 2021 and 2022 and is based on an updated geological model.

The new quantities and grades for each resource category are as follows:

• Measured: 6,400,000 tons (6.4 Mt) averaging 2.86% total rare earth oxides (TREOs)
• Indicated: 27.8 Mt averaging 1.84% TREOs
• Measured & Indicated: 34.2 Mt averaging 2.02% TREOs
• Inferred: 11.1 Mt averaging 1.02% TREOs

Compared to the 2021 version, the recently updated Wicheeda resource estimate reflects 18.2% more TREOs and 31.3% more tons, Reichman pointed out.

"In the months ahead, we expect more information regarding the project's process flowsheet to reinforce [Wicheeda's] commercial value," wrote Reichman. This includes a final flotation report based on extensive hydrometallurgical testing.

Upcoming catalyst

Wicheeda could be expanded even further, Reichman purported, and "has the potential to be a globally significant producer."

Defense Metals has identified but not yet drill tested some prospective targets, including previously identified geologic anomalies in the eastern and western portions of the deposit.

It plans to pursue drill testing at least some of these, starting with the western anomaly this fall, via four holes over 915m. It may follow up with more holes depending on the initial results. New drill data could catalyze the company's stock.