Rover Metals Corp. (ROVR:TSX.V; ROVMF:OTCQB; 4X0:FSE) entered option agreements on two district-scale projects, Let's Go in Nevada and Indian Mountain Lake in Canada, reported Fundamental Research analyst Sid Rajeev in a Dec. 1 research note.
Following this news, Fundamental adjusted its model on Rover Metals, incorporating the value of the two projects and accounting for share dilution. This led to a lower fair value estimate on the Canadian resource explorer of CA$0.56, down from CA$1.14. Given that Rover Metals is now trading at about CA$0.09 per share, the difference between the two current figures implies a significant potential return for investors.
In his report, Rajeev summarized the terms of both agreements, briefly described the projects, and noted how Rover Metals plans to advance each one.
High-Grade Lithium
As for Let's Go, the Vancouver, British Columbia-headquartered mining company may acquire 100% of the project for US$2 million (US$2M) of cash and shares paid in stages plus US$0.2M in work commitments.
Let's Go is a never-before-drilled, 6,000-acre lithium project in Southern Nevada, where Rover Metals plans to conduct a CA$200,000, reverse circulation drill program to test high-grade areas, Rajeev relayed. High grades, ranging from 710–1,218 parts per million, were shown to be present via a surface sampling program.
"Due to the proximity of all these projects, we believe that the area is ripe for consolidation," Rajeev wrote.
"Historic water well drilling on the property by the U.S. Geological Survey indicates that mineralization is near surface, implying [the] potential for relatively low opex," Rajeev noted.
In Nevada, Let's Go sits among several advanced-stage lithium projects, some of which have demonstrated strong economics, wrote Rajeev. They include Cypress Development's Clayton Valley, American Lithium's TLC, Spearmint Resources' McGee, Noram Lithium's Zeus, and Iconic Minerals' Bonnie Claire.
"Due to the proximity of all these projects, we believe that the area is ripe for consolidation," Rajeev wrote. "We believe miners/battery manufacturers are actively monitoring juniors for mergers and acquisitions, as they are constantly seeking long-term stable sources of lithium for electric vehicle batteries."
Zinc-Copper-Lead Resource
Regarding Indian Mountain Lake, Rover Metals may acquire a 90% stake in it for US$2M in cash, US$2M in work commitments, and 3.5M shares.
The 30,000-acre property in Canada's Northwest Territories hosts an attractive, historic volcanogenic massive sulfide (VMS)-style resource, including 280,000,000 pounds (280 Mlb) of zinc-lead, 17 Mlb of copper and 5,000,000 ounces of silver at relatively high grades, reported Rajeev.
"We believe the project has resource expansion potential, especially considering that historic resources account for just 3% of the total land package and as VMS deposits tend to occur in clusters," Rajeev wrote.
In the near term, Rover Metals plans to carry out a CA$2M exploration campaign to identify drill targets and within two years, convert the historic resource into an NI 43-101 compliant one.
"We believe the project has resource expansion potential, especially considering that historic resources account for just 3% of the total land package and as VMS deposits tend to occur in clusters," Rajeev wrote.
Accordingly, upcoming catalysts for Rover Metals include exploration results from Let's Go and Indian Mountain Lake, noted Rajeev, along with "positive sentiment for juniors focused on electric vehicle metals."
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Fundamental Research Corp., Rover Metals Corp., December 1, 2022
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