Defense Metals Corp. (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) has a major milestone on the horizon related to its Wicheeda project in British Columbia, which is well-positioned to become a key North American supplier of rare earth elements, reported Noble Capital Markets analyst Mark Reichman in a Feb. 14 research note.
"Once the project commences commercial production, it is expected to produce about 25,000 tons of rare earth oxide annually, or roughly 10% of current global production," Reichman wrote.
312% potential return
The Vancouver-based company is currently trading at $0.17 per share, a notable discount according to Noble, Reichman noted.
"For all of the interest in rare earths, we are surprised that Defense Metals trades at its current valuation, especially when one considers the Wicheeda project's significant advantages, project improvements and derisking during the last several years," commented the analyst.
He noted the factors working in Wicheeda's favor include its location in a mining-friendly jurisdiction and close to infrastructure as well as its savvy technical team.
Noble's target price on the company is $0.70 per share, and this implies a 312% return for investors.
Defense Metals remains rated Outperform.
Catalyst on the horizon
The upcoming event that could move up Defense Metals' stock is completion of the Wicheeda prefeasibility study (PFS), slated for Q2/24, Reichman highlighted.
The PFS will include results of various tests, already performed, including comminution, beneficiation, environmental, and bench-scale and hydrometallurgical pilot plant.
Also, Defense Metals has sent some mixed rare earth precipitate samples to prospective partners, processors and end users.
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