Spanish deposit offers “best bang for the buck” :: InvestMacro

Results from Emerita Resources Corp’s first drilling hole there indicate the potential potential of this high-quality project, according to a Clarus Securities report.

Emerita Resources Corp (EMO: TSX.V; EMOTF: OTCMKTS; LLJ: FSE) The first hole drilled in Romanera, LR002, returned a broad, very high-grade intercept, Clarus Securities analyst Varun Arora reported in a research note on June 23.

“The Romanera offers the best bang for the buck versus other known deposits in the Iberian Belt West,” Arora wrote. “Emerita is trading at a discount of 65-75% to its peers.”

Arora noted that the LR002 prominent hole, drilled by Emerita, confirmed 14.3 m (14.3 m) of massive sulfide intercepts, starting at about 134.2 m at the bottom of the well, as previously observed visually.

LR002 returned 14.3 m of 7.6 grams per ton of gold (7.6 g/t Au), 311 g/ton of silver (Ag), 3% zinc (Zn), 2.9% lead (Pb), and 0.4% copper (Cu). This is equivalent to 15.6 grams/ton of gold equivalent (Au eq) or 25.4% Zn eq.

Within this junction were high-quality intercepts, such as 7.8 m of 17.4 g/t Au eq or 28.4% Zn eq containing 372 g/t Ag. The second was 4.6 M of 14.6 g/t Au eq or 23.8% Zn eq containing 8% Zn and 3.8% Pb.

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These new zinc-equivalent assays of 28.4%, 25.4%, and 23.8% are approximately twice the 12% zinc equivalent, and contain 1g/t of gold and 64g/t of silver, from the highest grade portion of the historical resource.

Arora wrote that regarding the grade of 7.6g/ton of gold returned in LR002, it is a “positive surprise”. First, it indicates that the Romanera’s gold grades can be much higher than those of the historical resource. This can translate into a larger resource and a more economic deposit.

Most of the upper part of the Romanera deposit, 100-200 m, has not been examined for gold historically; Assays were performed only for other metals. So just by including current gold mineralization, Romanera’s resource is likely to be expanded within the deposit’s historical limits, the analyst noted.

In addition, there is a potential upward trend in areas where historical drilling experienced the highest degree of mineralization because it was only drilled at a depth of about 350 m, while other deposits were drilled in the area with an average of about 750 m. Also, “the higher-grade materials indicated by the historical drilling remain wide open in all directions.”

Arora noted that because of all the ways Emerita can expand the Romanera supplier, the project has “high scale potential.” The historical resource is already large at 34 million tons (34 million tons).

“The high-grade intercepts at depth are indicative of the potential for rapidly increasing tonnage, with each 100-meter vertical extension adding 2-4 million tons,” the analyst added. The project “could eventually be a very large underground + 30 million tons deposit of about 12% zinc equivalent (Zn eq).”

Arora noted that Emerita has completed initial drilling holes in the Romanera, for which no checks have been conducted, and is still continuing to drill. Thus, the flow of news in the near term should be constant.

“We expect the positive results of the training sessions, validating history[al] resources and confirm Romanera’s expansion potential to reignite interest in the story and push a reissue to close the rating gap,” Arora wrote.

Clarus has a speculative buy rating and a target price of C$5 per share on Emerita, with a current share price of around C$1.24.

1) Doresa Banning compiled this article for Streetwise Reports LLC and provided services to Streetwise Reports as an independent contractor. She or her family members own the securities of the following companies mentioned in the article: None. She or her family members get paid by the following companies mentioned in this article: None.

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Clarus Securities Inc. Disclosures. , Emerita Resources Corp, 23 June 2022

General Disclosures: The analyst visited the company’s operations in Spain in November 2021. Partial payment or reimbursement was received from the issuer for related travel costs.

During the past 24 months, Clarus Securities Inc. Managing or participating in the management of a public offering of the securities of this company.

Over the past 24 months, Clarus Securities Inc. Compensation for investment banking services in connection with the securities of this company.

The information and opinions contained in this report were prepared by Claros Securities, Inc. (“Claros Securities”). Clarus Securities is a wholly owned subsidiary of Clarus Securities Holdings Ltd. It is a subsidiary company. The reader should assume that Claros Securities or its affiliates may have a conflict of interest and should not rely solely on this report in evaluating the purchase or sale of the securities of the issuers discussed here.

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