Stillwater Critical Minerals (PGE:TSX.V; PGEZF:OTCQB; 5D32:FSE) is making encouraging exploration progress at all three of its properties, especially at its flagship Stillwater West project, reported Couloir Capital in an Oct. 3 research note.
"We expect the company to add more resources at Stillwater West via the current drill campaign," Couloir wrote. "This should drive the valuation higher."
Return still attractive
After updating its valuation model on Stillwater, Couloir lowered its fair value price on it to CA$0.35 per share from CA$0.46, the equity research firm reported. In comparison, Stillwater's current price is about CA$0.17 per share.
Even with the revised fair value price, the projected upside for investors in this mining exploration company is still significant, at 106%.
Stillwater is a Buy.
2023 program updates
Couloir provided an update on the exploration efforts underway at Stillwater's projects: Stillwater West, Kluane and Drayton-Black Lake.
"We continue to favor Stillwater's operating jurisdictions and metal mix, which is well suited for the ongoing green energy transition," Couloir wrote.
Expansion drilling in Montana
At its Stillwater West nickel-platinum group elements (PGE)-copper-cobalt plus gold project in Montana, Stillwater completed 2,000 meters (2,000m) of the planned 5,000m for the 2023 drill program, "with initial indications being positive," noted Couloir. This year's campaign also will include geophysical and geological prospecting and mapping surveys.
Exploration goals include expanding the existing NI 43-101 compliant resource from January of this year and potentially upgrading at least some of it from the Inferred category. Also, Stillwater is looking to extend the high-grade mineralization shown in previous drill results.
"[Stillwater's] priority on high-grade structures could significantly impact the company's valuation," wrote Couloir.
Stillwater's drilling to date has been to the west of the DR-Hybrid deposit at Chrome Mountain, one of five key target deposits. Two other targets are the CZ and HGR deposits at Iron Mountain.
"The mineralization remains open to expansion along trend and at depth in all five deposit areas, which are set within 12 kilometers (12 km) of the broader 32-km-long land package in the Stillwater Igneous Complex," wrote Couloir.
Going for Stillwater West, added Couloir, are its prime location in an active, historic and expanding U.S. mining district and the current demand for critical metals. Further, the project is one of the few critical elements projects in the States, particularly with regard to nickel, offering grade and scale in a producing district.
"We believe Stillwater West is well-positioned to rapidly advance as a potential large-scale, low-carbon source of nickel, copper, cobalt, palladium, platinum and rhodium," wrote Couloir.
Earn-in partner busy in Ontario
A 3,600m drill program is in progress at Stillwater's Drayton-Black Lake high-grade gold project in the prolific Rainy River gold district of Ontario, Canada, being carried out by earn-in partner Heritage Mining. It is drill testing three areas: New Millennium, Moretti and Alcona, the latter of which is now done.
"The underexplored nature of the target area combined with high-grade gold mineralization in grab samples points to substantial exploration potential," Couloir wrote.
Early-stage efforts in the Yukon
As for Stillwater's Kluane PGE-nickel-copper project in Canada's Yukon, the 2023 program encompasses field work including geological mapping, drone LiDAR and imagery acquisition; along with prospecting and rock sampling.
Also, Stillwater is examining the potential for carbon sequestration to determine if it could eliminate or reduce the carbon footprint of a potential mining operation at Kluane.
New strategic investor
In other news, mining major, Glencore, invested $4.94 million in Stillwater for a 9.99% ownership stake. The investment was made at a significant premium to Stillwater's market price. Also, with Glencore as a significant stakeholder, Stillwater may tap its extensive technical expertise in global magmatic systems.
"The investment marks a major step for [Stillwater] as it works to advance its flagship Stillwater West project," wrote Couloir.
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