Testing at Project in Spain Shows High Grades of Zinc, Copper

Source: Streetwise Reports 04/23/2024

Emerita Resources Corp. EMOTF has announced preliminary test results from its ongoing metallurgical testing program at its wholly owned Iberian Belt West (IBW) project in Spain. Find out why one analyst called the company a "very attractive resource stock play."

Emerita Resources Corp. has announced an update and test results from its ongoing metallurgical testing program at its wholly owned Iberian Belt West (IBW) project in Spain.

Preliminary results, including zinc (Zn) concentrates grading 52.4% with a project average zinc recovery of 84%, indicate that commercial grade concentrates can be produced at the project with the same traditional methods used at other operations in the Iberian Pyrite Belt, the company said.

"We have taken a very comprehensive approach to get to this point, which has extended the timeline" Chief Executive Officer David Gower said. "However, this is a very critical component of developing polymetallic deposits, and it is critical to have optimal results. It is important to note, initial results have indicated opportunities to optimize concentrate grade versus metal recoveries within a future economic model."

The IBW project hosts three massive sulfide deposits: La Infanta, La Romanera, and El Cura.

Technical Analyst Clive Maund noted that the stock's current dip is "viewed as presenting what will likely turn out to be the last opportunity to pick up the stock at these sorts of low prices before it moves ahead to break out of the entire pattern against the background of a strengthening broad metals bull market that is expected to include not just gold and silver of course, but also base and industrial metal(s) like copper and zinc."

Maund called Emerita a "very attractive resource stock play at this juncture" and rated it a Strong Buy for all timeframes, "especially now with it being at an excellent entry point."

"The price is currently a little below the midpoint of this long-term trading range, and it is clear that if it should succeed in breaking out the top of it by breaking above the key resistance in the CA$1 area, and this is what is expected to happen sooner rather than later, a major bull market will be 'on the cards.'"

Projected Average Zinc Recovery of 84%

Emerita noted that its projected average zinc recovery of 84% is about 5% to 10% higher than reported results for other mines in the Iberian Pyrite Belt.

Tests on the La Romanera deposit returned a zinc concentrate grade of 49.3% at 85% recovery, and tests of La Infanta deposit have returned 60% Zn concentrate grade with 81% Zn recovery, the company said in its release.

Testing continues, and final results will be released when they are completed.

Copper (Cu)-focused tests of La Romanera (0.67% copper head grade) and La Infanta deposits (0.86% Cu head grade) have shown that commercial-grade copper concentrates of 22.26% Cu and 24.87% Cu with 69.4% and 51.69% copper recoveries, respectively, can be produced, the company said. These results are similar to operating mines in the region and would be expected to improve for ores with significantly higher copper grades.

Both copper concentrates have reported gold and silver content at payable levels of 1.94 grams per tonne gold (g/t Au) and 372.8 g/t silver (Ag) for La Romanera copper concentrate, and 7.06 g/t Au and 1534.6 g/t Ag for La Infanta copper concentrate.

Maund called Emerita a "very attractive resource stock play at this juncture" and rated it a Strong Buy for all timeframes, "especially now with it being at an excellent entry point."

Emerita said test work also showed the potential to produce a lead (Pb) and copper semi-bulk concentrate, increasing a potential payable Pb in concentrate and the potential to improve overall copper recoveries. Project-wide test results averaged 40% Pb and 7.2% Cu at 57% and 36.7% Pb and Cu recoveries, respectively, in semi-bulk concentrate.

These results are comparably higher lead and copper grades and higher lead and copper recoveries than regional operating mines, which are also producing a Cu-Pb bulk concentrate. Individually, La Romanera deposit tests returned Pb/Cu semi-bulk concentrate containing 38.7% Pb and 7.51% Cu with 46.10% Pb and 37.6% Cu recoveries. La Infanta tests returned 44.11% Pb and 6.03% Cu grades in concentrate with 91.6% Pb and 52.2% Cu recoveries.

"We view the results contained within this press release as a baseline and look forward to continuous metallurgical performance improvement as we advance IBW towards a production decision" Gower said.

The Catalyst: Switching to a Clean Economy

Both Zinc and copper are in demand as the world's economies attempt to switch from fossil fuels to cleaner sources — zinc is used in batteries, and electric vehicles (EVs) use as much as four times the copper as gas-powered cars.

According to Mordor Intelligence, the zinc market will be an estimated 13.58 Mt this year and is expected to rise to 14.68 Mt by 2029, a compound annual growth rate (CAGR) of greater than 1.5%.

"The COVID-19 pandemic disrupted the global zinc market, resulting in a reduction in supply due to mine closures and transportation restrictions, as well as a decline in demand from various sectors" the report said. "This resulted in price fluctuations for zinc. Nonetheless, the market rebounded in 2021 due to an increase in demand from the construction and electronics industries."

Growing demand for zinc in Zinc-based batteries and rising urbanization and industrialization are expected to provide opportunities for future market growth, Mordor noted.

Despite some cooling due to slower-than-expected electric vehicle (EV) sales, the global copper market was worth US$304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2032 to US$496.8 billion, Acumen Research and Consulting reported.

"The increasing demand for copper could be met through developments in mining technology, well-organized designs for ore processing, and the discovery of new copper reserves" Acumen's report noted. "According to the United States Geological Survey (USGS), international copper reserves rose by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated to be approximately 3,500 million tons."

Haywood Securities noted in a January 2024 report that based on the time it takes for new copper supply to come online, the market for the metal "will be tightening for the foreseeable future [and] that could eventually lead to a new copper cycle." Haywood noted predictions are for a copper deficit this year, marked by supply shortfall of about 500,000 tons. [OWNERSHIP_CHART-10036]

Ownership and Share Structure

Refinitiv provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 5.61% of the company. According to Refinitiv, Michael Lawrence Guy owns 1.84% of the company with 4.32 million shares, David Patrick Gower owns 1.18% of the company with 2.76 million shares, Joaquin Merino-Marquez owns 0.89% of the company with 2.09 million shares, Catherine Stretch owns 0.68% of the company with 1.60 million shares, Marilia Bento owns 0.43% of the company with 1.00 million shares, Gregory Duras owns 0.28% of the company with 0.65 million shares, Damian J.D. Lopez owns 0.20% of the company with 0.46 million shares, and Ian T. Parkinson owns 0.11% of the company with 0.25 million shares.

Refinitiv reports that institutions own 1.26% of the company, as Merk Investments L.L.C. owns 1.17% of the company with 2.75 million shares, and Palos Management Inc. owns 0.09% of the company with 0.20 million shares.

According to Refinitiv, there are 234.82 million shares outstanding with 221.63 million free float traded shares, while the company has a market cap of CA$90.41 million and trades in a 52-week range of CA$0.26 and CA$0.92.

Important Disclosures:

1. Emerita Resources Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
3. 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.

Contributing Author Disclosures

1. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.