Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCQB; LLJA:FSE) likely will prevail in the legal case over the Aznalcollar project in Spain, purported Clarus Securities Analyst Varun Arora in an Oct. 9 research note. The hearing for the final trial phase took place from March to July 2025, and the verdict is imminent.
"Overall, we think a favorable resolution of the Aznalcollar dispute has potential to conceptually add CA$700–1,200 million (CA$700–1,200M) to the current market cap of about CA$470M, implying a conceptual share price in the range of CA$4–5.75 per share," Arora wrote.
91% Implied Uplift
Clarus Securities' current target price on Emerita, excluding any value for Aznalcollar, is CA$3.15 per share, and in comparison, the explorer was trading at the time of Arora's report at CA$1.65 per share. The difference between these two prices implies a potential return of 91%.
Emerita remains a Speculative Buy.
The company has 289 million shares outstanding, a market cap of CA$477M and a 52-week range of CA$0.55–2 per share.
Basis of Legal Dispute
Arora provided a summation of Aznalcollar and the legal dispute. Boliden ADR (BDNNY:OTCMKTS) ran Aznalcollar as an open-pit mine between 1997 and 1998, during which it produced about 400,000,000 pounds per year of zinc equivalent (Zn eq) at a cash cost of less than US$0.50 per pound of zinc. The tailings dam failed in April 1998, and the operation was shuttered.
The government initiated a tender for restarting the Aznalcollar mine as an underground operation, and the community supported this. The tender was awarded to the consortium, Minorbis-Grupo Mexico, in 2015. Emerita appealed the decision but lost. Later, the Canadian explorer's investigations "revealed commission of criminal activities, resulting in filing of criminal charges against 16 individuals, including high ranking government officials," noted Arora.
Only Qualified Bidder
Clarus believes the long-awaited final verdict will be in favor of Emerita, wrote Arora. According to Spanish law, if a crime is committed during a public tender process, the award is voided and the tender goes to the next qualified bidder. In this case, Emerita was and remains the only qualified bidder.
Also, before all trial hearings, three levels of courts "sided with Emerita in leveling criminal charges on the defendants." Given these factors, Clarus is confident that the final phase of the criminal trial will confirm that crimes were committed during the Aznalcollar tender process.
Strong Rerating Potential
Should Clarus be right and the tender be awarded to Emerita, a share price rerating is expected, noted Arora. Aznalcollar has significant infrastructure and is fully permitted for development.
According to Emerita management, there is a higher-grade subset of 20,000,000 tons (20 Mt) of 12.6% Zn eq with underground potential within Los Frailes' historic resource of 71 Mt of 7.9% Zn eq. Also, there is significant leverage to the silver price, with 54,000,000 ounces (54 Moz) of 84 g/t Zn eq in the higher-grade subset of the global resource, 137 Moz of 60 g/t Zn eq.
Clarus' estimated net present value discounted at 5% (NPV5%) on Aznalcollar is more than double that of its 100%-owned Iberian Belt West (IBW) project, also in Spain: CA$1.5 billion, or about CA$4.25/share (fully funded), versus CA$625M, or CA$1.65/share.
Conceptual Price Target
Arora explained how a resolution of Aznalcollar in Emerita's favor would impact Clarus' price target on the mining junior. Now, Clarus has a 50% ownership risk factor on its estimated Aznalcollar NPV5%, reflecting the legal dispute involving the asset. Also, Clarus has a 0.5x target setting multiple on its estimated combined asset NPV of Aznalcollar and IBW, reflecting the projects' early stage and lack of independent and compliant economic studies.
If the Aznalcollar dispute is resolved in Emerita's favor, Clarus will remove the 50% ownership risk factor and assume a 1x target setting multiple because Aznalcollar is past producing and thus significantly derisked. These changes would result in a valuation of about CA$6/share.
What to Watch For
According to Arora, Emerita has a handful of potential catalysts on the horizon in addition to the final resolution of the Aznalcollar dispute.
Regarding the company's IBW project, one possible share price boosting event is the receipt of an environmental certificate, a major derisking catalyst. Also, more drill results are to come from IBW's El Cura and Romanera given three to four rigs currently are active there. An updated mineral resource estimate and prefeasibility study are due out this quarter. Finally, an exploitation license for IBW, allowing the start of construction, is expected in early 2026.
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Important Disclosures:
portant Disclosures:
- Emerita Resources Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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Disclosures for Clarus Securities, Emerita Resources Corp., October 9, 2025
Clarus Securities Equity Research Disclosures The analyst has visited the Company’s operations in Spain in November 2021. Partial payment or reimbursement was received from the issuer for the associated travel costs. Within the last 24 months, Clarus Securities Inc. has managed or co-managed a public offering of securities of this company. General Disclosure The information and opinions in this report were prepared by Clarus Securities Inc. (“Clarus Securities”). Clarus Securities is a wholly-owned subsidiary of Clarus Securities Holdings Ltd. and is an affiliate of such. The reader should assume that Clarus Securities or its affiliate may have a conflict of interest and should not rely solely on this report in evaluating whether or not to buy or sell securities of issuers discussed herein. The opinions, estimates and projections contained in this report are those of Clarus Securities as of the date of this report and are subject to change without notice. Clarus Securities endeavours to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, Clarus Securities makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to Clarus Securities or its affiliate that is not reflected in this report. This report is not to be construed as an offer or solicitation to buy or sell any security. No part of this report may be reproduced or re-distributed without the written consent of Clarus Securities. Conflicts of Interest The research analyst and/or associates who prepared this report are compensated based upon (among other factors) the overall profitability of Clarus Securities and its affiliate, which includes the overall profitability of investment banking and related services. In the normal course of its business, Clarus Securities or its affiliate may provide financial advisory and/or investment banking services for the issuers mentioned in this report in return for remuneration and might seek to become engaged for such services from any of such issuers in this report within the next three months. Clarus Securities or its affiliate may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. Clarus Securities, its affiliate, and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities discussed herein, or in related securities or in options, futures or other derivative instruments based thereon. Analyst’s Certification Each Clarus Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the Company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. Equity Research Ratings Buy: Attractively valued and expected to appreciate significantly from the current price over the next 12-18 months. Speculative Buy: Expected to appreciate significantly from the current price over the next 12-18 months. Financial and/or operational risk is high in the analyst’s view. Accumulate: Attractively valued, but given the current market price, is expected to appreciate moderately over the next 12 -18 months. Hold: Fairly valued and expected to trade in line with the current price over the next 12-18 months. Sell: Overvalued and expected to decline from the current price over the next 12-18 months. Under review: Pending additional review and/or information. No rating presently assigned. Tender: Company subject to an acquisition bid: accept offer. A summary of our research ratings distribution can be found on our website. Dissemination of Research Clarus Securities’ Equity Research is available via our website and is currently distributed in electronic form to our complete distribution list at the same time. Please contact your Clarus institutional sales or trading representative or investment advisor for more information. Institutional clients may also receive our research via THOMSON and REUTERS.
