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 September 13 research note.
The new total Measured and 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 CA$0.70 per share target price on British Columbia-based Defense Metals, the share price of which now is about CA$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 the 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.
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.
|Want to be the first to know about interesting Critical Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
- Defense Metals Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- 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.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
For additional disclosures, please click here.
Disclosures for Noble Capital Markets, Defense Metals Corp., September 13, 2023
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.